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Special Leave Petition (Civil) No. 15327 of 1989.
From the Judgment and Order dated 18.7.
1989 of the Rajasthan High Court in D.B. Civil Writ Petition No. 2161 of 1988.
C.S. Agarwal, H.R. Parekh, S.K. Jain for the Petitioner.
O.P. Vaish, section Rajappa and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is a special leave peti tion directed against the judgment and order of the High Court of Rajasthan, dated 18th July, 1989.
The petitioner herein i.e. Smt.
Kusum Lata Singhal carried on, at all relevant times, business under the name and style of M/s. Lata & Company and she claims to be an authorised stockist of Baba Brand Tobacco manufactured by M/s. 495 Dharampal Premchand Ltd., New Delhi.
Mr. R.K. Singhal is the husband of the petitioner.
In the judgment under appeal, it has been stated that Mr. R.K. Singhal owns a house No. E117, Shastri Nagar in Jaipur and the petitioner lived with her husband at all material times.
Mr. Singhal was a partner in Lata Sales Centre and is said to be a sub dealer of M/s. Lata & Company.
A search under section 134 of the Income Tax Act, (hereinafter called 'the Act ') was conducted at the said premises on 25/26th November, 1987.
During the search, valuables and books of accounts were seized on 26th Novem ber, 1987, and a notice under rule 112A of the Income Tax Rules, 1962 (hereinafter referred to as 'the Rules ') read with sub section (5) of Section 132 of the Act was issued to the petitioner by the Income Tax Officer.
The notice was served on the husband of the petitioner.
In the application under Article 226 of the Constitution of India filed before the High Court, the petitioner claimed return of account books and other valuables which were seized on 26th November, 1987.
The return was claimed be cause, according to the petitioner, the retention of the books and valuables was in violation of the provisions of section 132 of the Act.
The High Court in the judgment under appeal came to the conclusion that the authorisation for search in the instant case under section 132(1) of the Act was not valid or legal.
Therefore, the High Court held that search was bad.
At the time of search the silver and gold ornaments worth about Rs.4,58,1089 were found and some other silver and gold ornaments were also found but these were not seized.
The High Court had directed return of account books to the petitioner on furnishing photostat copies thereof.
The High Court came to the conclusion that the authorisation under section 132(1) of the Act was not in accordance with law and, therefore, the search and seizure of the assets could not be said to have been in accordance with law.
The High Court noted that in view of the fact that by virtue of the power under section 132(7) and the order made under section 132(5) of the Act against the husband of the peti tioner, the valuables etc. could not be ordered to be re turned to the petitioner.
Aggrieved thereby, the petitioner seeks to challenge the said order under Article 136 of the Constitution of India.
Mr. C.S. Agarwal appearing for the petitioner, contended before us that if search and seizure were illegal then the evidence obtained by such search and seizure could be uti lised in subsequent proceedings, but the items of 386 jewellery and goods worth, according to him, over Rs.2,97,000 were liable to be returned.
We are, however, unable to entertain this appeal.
In the instant case the husband of the wife stayed in the same premises.
The author isation of search and seizure in respect of account books and goods which were seized was against the wife but in the proceedings under section 132(5) of the Act the husband Mr. Singhal has contended and claimed that the ornaments in question or the jewellery belonged to him.
Mr. Vaish, learned counsel appearing for the revenue, has drawn our attention to an authorisation issued against the husband Mr. Singhal under sub section (5) of section 132 of the Act.
Indeed, Mr. R.K. Singhal has stated on oath before the authorised officer at the time of search that the same belonged to him and he has claimed the same to be treated as representing his undisclosed income.
Mr. R.K. Singhal, the husband, as his evidence has recorded in the proceedings against him, has disclosed the same and surren dered a total sum of over Rs.4,00,000 consisting of undis closed cash of Rs. 1,16,550 and excessive jewellery worth Rs.2,97,750 received from his possession as his income for the purpose of income tax assessment for the current year, which he claims to have earned from his business.
Therefore, it appears that there is dispute as to who is the owner of the jewellery and ornaments or in other words, to whom do these belong.
If in such a situation the High Court has declined to direct return of items of jewellery and orna ments, such decision cannot be faulted.
Even though the search and seizure has been declared illegal, it cannot be illegal and the question of, dispute about the items not being urged before the High Court, we cannot say that the High Court has committed any error in this case thereby requiring interference by this Court, or, in other words, that injustice has been caused to any party.
It is well settled that the dispute as to the ownership of jewellery in question cannot be reserved in proceedings under Article 226 of the Constitution in the manner sought for by the petitioner.
Mr. Agarwal drew our attention to the decision in Assaina & Anr.
vs Income Tax Officer, Calicut & Ors., wherein the Kerala High Court has observed that the goods which were seized from the custody of a particular person, should normally be returned to the person from whose custody the same had been seized.
The aforesaid may be the position where there is no dispute as to the ownership of the goods in question.
In such a situa tion, return of the goods to the person from whose custody the same are seized, may be possible but the said decision or the observations therein would be no authority in support of the petitioner 's contention in the instant case where there is a dispute.
397 Our attention was also drawn to certain observations of this Court in J.R. Malhotra & Anr.
vs Addl.
Sessions Judge, Jullundur & Ors., ; in support of the propo sition that revenue could not indirectly keep the money seized on the plea that there would be a demand and that the money may be kept by revenue where surrender and seizure was wrong.
We are afraid that the aforesaid observations of this Court are also of no avail in the light of the perspective that we have mentioned hereinbefore.
The said observations were made entirely in a different context.
Our attention was also drawn to the observations of this Court in Commissioner of Commercial Taxes, Board of Revenue, Madras & Anr.
vs Ramkishan Shrikishan Jhaver etc.
; , in support of the proposition that when a search was found illegal, the goods should be returned.
Normally speak ing, that would be so.
This proposition is unexceptional but in the light of the controversy as we have perceived in this case, we are clearly of the opinion that this submission will not be of any assistance in doing justice in this case.
Mr. Agarwal further contended that if the proceedings under Section 132(5) for the original search were held to be invalid then all proceedings thereafter would be invalid and, therefore, the proceedings initiated as a result of that search even against the husband, would be invalid and such a statement of the husband recorded, cannot be utilised any further.
In the instant controversy we are not concerned whether the proceedings against the husband under section 132(5) of the Act are valid or not but irrespective of the validity of the proceedings, the evidence or testimony as mentioned hereinbefore, wherein he has asserted the orna ments and jewellery to be his, cannot be wiped out and does not become non existent.
After all, we are concerned with the contention of the husband that the jewellery in question belongs to him, in this case.
The aforesaid being the factu al matrix, the High Court, in our opinion, was pre eminently justified in declining to direct return of these identical jewellery and other items to the wife.
If that is the posi tion then it cannot be said that the High Court has commit ted any error in law which requires rectification by this Court.
This application for leave under Article 136 of the Constitution is certainly not entertainable.
In the prem ises, this application must be dismissed without any order as to costs.
Interim orders, if any, are vacated.
R.S.S. Petition dis missed.
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The petitioner was carrying on business as a stockist of Baba Brand Tobacco.
The petitioner 's husband, who was a sub dealer of the product, was living with her at all mate rial times.
A search under section 132 of the Income Tax Act was conducted at their house and valuables and books of account seized.
A notice under rule 112A of the Income Tax Rules read with sub section (5) of section 132 of the Act was served on the petitioner.
The petitioner filed an application in the High Court under Article 226 of the Constitution claiming return of account books and other valuables to her.
On the other hand, in the proceedings under Section 132(5) of the Act against the petitioner 's husband, he had claimed that the ornaments belonged to him and that the same could be treated as representing his undisclosed income.
The High Court came to the conclusion that the authori sation for search under section 132(1) of the Act against the petitioner was not in accordance with law and, there fore, the seizure of the assets could not be said to have been in accordance with law.
The High Court however noted that in view of the order made under section 132(5) of the Act against the husband, the valuables could not be ordered to be returned to the petitioner.
Before this Court, it was contended on behalf of the petitioner that if search and seizure were illegal, the items of jewellery were liable to be returned On behalf of the Revenue, it was contended that in a situation where there was a dispute as to who was the owner of the jewellery and ornaments, the decision of the High Court declining to direct their return to the petitioner could not be faulted.
394 Dismissing the special leave petition, the Court, HELD: (1) A dispute as to the ownership of jewellery in question cannot be resolved in proceedings under Article 226 of the Constitution in the manner sought for by the peti tioner.
[397F] (2) In the instant controversy the Court is not con cerned whether the proceedings against the husband under section 132(5) of the Act are valid or not, but irrespective of the validity of the proceedings, the evidence or testimo ny wherein the husband has asserted the ornaments and jewel lery to be his, cannot be wiped out and does not become non existent.
The aforesaid being the factual matrix, the High Court was pre eminently justified in declining to direct return of these items of jewellery and other items to the wife.
If that is the position, then it cannot be said that the High Court has committed any error in law which required rectification by this Court under Article 136 of the Constitution.
[397E G] Assainer & Anr.
vs Income Tax Officer, Calicut, ; J.R. Malhotra & Anr.
vs Additional Sessions Judge, Jullunder, ; and Commissioner of Commercial Taxes, Board of Revenue, Madras vs Ramkishnan Shrikishan Jhaver, ; , distinguished.
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Special Leave Petition (Civil) No. 8461 of 1986.
From the Judgment and Order dated 31.3.1986 of the Central Administrative Tribunal, New Delhi, in Original Appln.
No. 40 of 1986.
356 AND Writ Petition Nos.
1285, 1575/86, 352,361 & 1165 of 1989.
(Under Article 32 of the Constitution of India).
Petitioners in Person in SLP 8461 of 1986 and W.P. No. 1285 of 1986.
Shanti Bhushan, Mrs. Swaran Mahajan, Ms. Anuradha Maha jan, Mrs. Rekha Pandey, Jayant Bhushan, Badri Das Sharma, C.V. Francis, Ramesh Babu, Ms. Santosh Paul and G. Prakash, for the Petitioners in W.P. No. 1575 of 1986, 352,361 and 1165 of 1989.
Kapil Sibal, Additional Solicitor General, R.B. Datar, Mukul Mudgal, C.V. Subba Rao, B.D. Sharma, R.B. Mishra, B.K. Prasad and A.M. Khanwilkar for the Respondents.
N.P. Saxena for the Intervener.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This analogous cluster of five writ petitions and one special leave petition involves a common question of law.
The petitioner in Writ Petition No. 352 of 1989 is the President of the All India Retired Railwaymen (P.F. Terms) Association and the petition has been filed in a representative capacity on behalf of all the members of the Association who retired with Provident Fund benefits.
Writ Petition No. 361 of 1989 has been filed by three indi vidual retired Railway employees who also retired with Provident Fund benefits.
The petitioner in Writ Petition No. 1285 of 1986 retired as Block Inspector of Northern Railway on 7.1.1968, a non pensionable post.
All the petitioners except petitioner No. 5 in W.P. No. 1575 of 1986 retired from Railway service high posts.
Petitioner No. 1 retired as Additional Member, Railway Board on 5.11.1960 with Provident Fund benefits.
Petitioner No. 2 was Member, Railway Board and similarly retired on 1.3. 1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs.675 only.
Petitioner No. 3 similarly retired as General Manager on 5.12.1960.
Petitioner No. 4 retired as Member (Staff) Railway Board and Ex officio Secretary to the Gov ernment of India on 30.6.1977 opting for the Provident Fund Scheme.
Petitioner No. 5 also retired on 19.6.1972 opting for the Provident Fund Scheme.
Petitioner No. 6 retired on 28.8.1962 as Director 357 Health, Railway Board opting for Provident Fund Scheme.
Petitioner No. 7 similarly retired on 17.2.1968 as Director, Railway Board.
Petitioner No. 8 retired as General Manager, Indian Railways on 15.10.1966 with the Contributory Provi dent Fund Scheme.
The petitioners in Writ Petition No. 1165 of 1989are also similarly retired persons.
The petitioner in Special Leave Petition (Civil) No. 8461 of 1986 retired as Assistant Auditor, with Provident Fund benefits.
His claim to switch over to pension after retirement was rejected.
The petitioners are thus retired railway employees who were covered by or had opted for the Railway Contributory Provi dent Fund Scheme.
It is the petitioners ' case that before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme wherein each employee had to contribute till retirement a portion of his annual income towards the Provident Fund and the Railways as the employer would make a matching contribution thereto.
This provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead of making prior contribution to his Provident Fund.
It is stated that the employees who entered Railway service on or after 1.4.1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme.
In so far as the employees who were already in service on 1.4.1957, they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on condition that the matching Railway contribution already made to their Provident Fund accounts would revert to the Railway on exercise of the option.
It is the petitioners ' case that till 1.4.1957 or even sometime thereafter, the pensionary benefits and the alter native Contributory Provident Fund benefits were considered to be more or less equally beneficial, wherefore, employees opted for either of them.
That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 17.9.1960 which gave an option to the employees cov ered by the Provident Fund Scheme to switch over to pension scheme and vice versa.
Mr. Shanti Bhushan, the learned counsel for the petitioners in Writ Petition Nos. 352 and 361 of 1989, submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for computing the pension, by including dearness allowance in the pay for computing pension, by removal of the ceiling on pension, and by intro 358 ducing or liberalising the Family Pension Scheme etc.
The Railway, it is urged, had expressed no intention of extend ing the benefits of this liberalised pension to those em ployees who had already retired.
At the time when the option was given to choose between pension and Provident Fund, the employees had no idea that in future improvements would be made to either of them.
However, it is stated, this Court in D.S. Nakara and Ors.
vs Union of India, ; held that the benefit of any liberalisation in computation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire.
It is submitted, that even though Nakara 's case related to Central Government employ ees, the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations concerned were introduced.
The decision to implement Nakara 's Judgment to Railway employees is admittedly contained in G.O. No. FI (3) EV/83 dated 22.10.1983.
This has, according to the learned counsel, given rise to the "strange situation" namely, that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice, the pensions have thereafter been liberalised manifold to the benefit of the pension retirees, whereas no similar benefits have been extended to those who retired opting for Provident Fund, hereinafter called 'the P.F. retirees '.
It is asserted that due to successive liberalisations of pensions, the pension retirees derived manifold benefits while the P.F. retirees ' benefits remained stagnant.
It is submitted that had the petitioners, all of whom are P.F. retirees, known that pensionary benefits might subsequently be so increased, they would no doubt have opted for pension instead of Provident FUnd, The following twelve notifications given such options are referred to: Date of Notification Cut off date chosen 1.
17.09.60 01.07.59 2.
26.10.62 01.09.62 3.
03.03.66 31.12.65 4.
13.09.68 01.05.68 5.
23.07.74 01. 01.73 359 6.
23.08.79 31.03.79 7 01.09.80 23.02.80 8.
04.10.82 31.08.82 9.
09.11.82 31.01.82 10. 13.05.8 31.01.82 11.
18.06.85 31.03.85 12.
08.05.87 01.01.86 It may be noted that in case of each option the cut off date was anterior to the respective dates of.announcement, and as a result, employees who retired after the cut off date (specified date) and before the notification date were also made eligible for exercising the option despite the fact that they already retired in the meantime.
From the above, the 'main legal point ' that arises, submits Mr. Shanti Bhushan, is that the Railways issued the above noti fication giving option to certain P.F. retirees after the respective cut off dates to opt for the Pension Scheme even after their retirement, but the same options were not given to other similarly situated P.F. retirees beyond the respec tive cut off dates.
This, it is submitted, is clearly dis criminatory and violative of article 14 of the Constitution and deserves to be struck down.
It is contended by the petitioners that each of the above notifications including the last one, dated 8.5.
1987 had given a fresh option to some of the P.F. retirees while denying that option to other P.F. retirees who were identi cally placed but were separated from the rest by the arbi trary cut off date.
Each of the notifications specified a date and provided that the P.F. retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already re tired, and also had already drawn the entire Provident Fund benefits due to them.
It is also contended that the speci fied dates in these notifications having formed the basis of the discrimination between similarly placed P.F. retirees those were arbitrary and un related to the objects sought to be achieved by giving of the option and were clearly viola tive of article 14 and also of the principle laid down in Nakara 's case, which according to counsel, is that pension retirees could not be divided by such arbitrary cut off 360 dates for the purpose of giving benefitS ' to some and not to other similarly situated employees; and that by analogy the rule is equally applicable to the Provident Fund retirees as a class.
Mr. Kapil Sibal, the learned Additional Solicitor Gener al refuting the argument submits that each of the options was meant to give the P.F. retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option.
He relies on the following statements to substantiate his submission.
STATEMENT SHOWING PENSION OPTIONS GIVEN TO RAILWAY EMPLOYEES S1.
No. Option Granted Option Reasons for Rly.
Board 's validity granting letter No. period option date 1 2 3 4 5 1.
I Option F(E) 50/RTI/6 1.4.57 to 31.3.58 Intro dated 16.11.57 (For those duction in service on system 1.4.1957 on Rai lways Extensions F(P) 58.PN 1/6 Extended upto dated 7.3.58 30.6.56 F(P)58.PN 1/6 Extended upto dated 19.6.58 31.12.58 F(P)58.PN 1/6 Extended upto dated 24.12.58 31.3.59 F(P)58.PN 1/6 Extended upto dated 28.3.59 30.9.59 2.
II Option PC 60/RB/2/2 1.7.59 to 15.12.60 Revi dated 17.9.60 (For those in sion service on of Pay Struc ture (2 nd Pay Commiss ion re commenda tion) 361 Extensions PC 60/RB 2/2 Extended upto dated 7.4.61 30.6.61 PC/60/RB 2/2 Extended upto dated 2.11.61 31.12.61 3.
III Option F(P)62.PN 1/2 1.9.62 to 31.3.63 Consequ dated 26.10.62 (For those in ent upon service on 1.9.62 decision to count officiati ng pay for pensionary benefits.
IV Option F(P)63.PN/1/ 1.1.64 to 16.7.66 Introduc 40 dated 17.1.64 tion of family pension scheme.
V Option F(P)65.PN1/41 31.12.65 to In pursuance dated 3.3.66 30.6.66 of decision (for those to liberalise in service on the family 31.12.65 pension Scheme by Extending it to employ ess who die wh ile in service.
VI Option F(E) III.68.PN 1.5.68 to 31.12.68 In pursu 1/2 dated 13.9.88 (for those in ance of service on decision 1.5.68 to change the defi nition of "pay" w.e.
f.1.5.68 for the purpose of pensionary benifits.
362 Extensions F(E)III.68PN Extended upto 1/2 dated 31.1.69 31.3.69 7.
VII Option F(E)III.71.PN 15.7.72 to As a result of 1/3 dated 15.7.72 21.10.72 demandes from (for those orgnised in service labour.
on 15.7.72 8.
VIII Option PC III.73.PN/3 1.1.73 to 22.1.75 Consequet dated 23.7.74 (for those to acceptance in service III Pay Commis on 1.1.73) sions ' Recommen dations.
Extensions PC III.73.PN/3 Extended upto Extended becau dated 18.1.75 & 30.6.76 & se by schedule for 25.6.75 31.12.75 vsrious categories PC III, 73.PN/3 Extended upto were being Pt I 30.6.76 Finalised.
dated 16.12.75 PC III.73 PN/3 Extended upto Pt.
I 31.12.76 dated 30.6.76 PC III 73 PN/3 Extended upto Pt.
I 30.6.76 dated 3.1.77 PC III 73 PN/3 Extended upto Pt.
I 31.12.77 dated 12.7.77 PC III 73 PN/3 Extended upto Pt.
I 30.6.78 dated 17.4.78 PC III 73 PN/3 Option Exercised Pt.
I upto 31.12.78 be dated 20.5.78 considered as valid PC III.78 PN/3 (staff who were in Pt.
I service as on 1.1.73 & dated 27.12.78 retired/died/quited service during the period from 1.1.73 to 31.12.78) 363 9.
IX Option F(E) III.
to On account 1/4 22.2.80 of liberalisa dated 23.8.79 (For those in tion of pen service on sion formula 1.4.79) and introduc tion of slab system.
Extensions F(E) III.
PN Extended upto 1/4 dated 1.9.80 22.2.81 10.
X Option F(E) III 82.
31.8.82 to 28.2.830n account PN 1/7 (For those in of part of DA dated 4.10.82 service on treated as 31.8.82) pay.
Extension F(E)III 82.
PN Extended upto 1/7 dated 13.5.83 31.8.83 % made applicable from 31.1.82 under letter No. F(E) III dated 9.11.82 11.
XI Option F(E) III 85.
31.3.85 to Consequent PN 1/5 17.12.85 upon DA/ dated 18.6.85 (For those inADA upto service on average price 31.3.85 ) index at point 568 treated as pay for retire ment benefits.
XII Option PC IV/87/13/ 1.1.86 to 30.9.87 All CPFbene 881 ficiaries who dated 8.5.87 (for those in were in service service on on 1.1.86 and 1.1.86) who are still in service will be deemed to 364 have come over to pen sion Scheme unless they specifically opt out pension scheme and desire to retain the CPF scheme.
INTRODUCTION OF PENSION SCHEME OF RAILWAYS AND SUBSEQUENT PENSION OPTION (i) Introduction of Pension Scheme Pension Scheme was introduced on the Railways on 16.11.57 and was applicable to the following: (a) To all Railway servants who enter service on and after 16.11.57 and (b) To all non pensionable Railway servants who were in service on 1.4.57 or join Railway Service between 1.4.57 and 16.11.57 and opt for the Pension Scheme.
The scheme was made applicable from 1.4.57 because the financial year commences from April each year.
This option was extended 4 times from time to time and was valid upto 28.3.59.
The extensions were given because there were repre sentations for its extension so that the staff could get time to weigh the merits of the Schemes before they take decision.
(ii) Pension option dated 17.9.
1960 Orders were issued on 2.8.1960 notifying Railway Serv ices (Authorised Pay) Rules, 1960.
Under this notification new pay scales were introduced for Railway Servants.
These new pay scales were effective from 1st July, 1959.
Fresh option was granted on 17.9.60 to Railway employees who were in service on 1.7.59 to come over to the pension scheme.
The last 365 date for exercising the option was 15.12.60.
This was ex tended upto 31.12.60 to enable the concerned employees to come to a considered decision whether to retain the P.F. or opt for the pension scheme.
(iii) Pension Option dated 26.10.62 A decision was taken on 26.10.62 to count the officiat ing pay for the purpose of retirement benefits in case of those who were in service on 1.9.62.
Accordingly, a fresh option was given to staff to come over to pension scheme on 26.10.62.
This option remained open till 31.3.63.
(iv) Pension Option dated 17.
1964 As a result of introduction of Family Pension Scheme 1964, which came into force on 1.1.1964 orders were issued on 17.1.64 to the effect that all Railway employees who were in service could opt for pension scheme within a period of 6 months.
This option was extended upto 16.9.64.
(v) Pension Option dated 3.3.66 Family Pension Scheme was further liberalised for em ployees who die while in service.
In view of this improve ment in Pension Scheme, pension option under Railway Board 's orders dated 3.3.66 was given to employees who were in service on 31.12.65.
Since the liberalisation in Family Pension Scheme came into effect from 1st January, 1966, the option was open for employees who were in service on 31.12.65 and was open upto 30.6.1966.
(vi) Pension Option dated 13.9.68 The definition of 'Pay ' for pensionary benefits was changed from 1.5.68, through Board 's orders dated 13.9.68.
In view of this, a further option was given on 13.9.68 to Railway employees who were in service on and after 1.5.68 to opt for the Pension Scheme.
This option was open upto 31.12.68.
This was further extended upto 31.3.69.
(vii) Pension Option dt. 15.7.
72 On representation from the recognised labour federations that many employees had not clearly understood the liberali sation introduced in the pension scheme, a fresh option was allowed on 15.7.72 to all serving employees.
This was open till 21.10.72.
366 (viii) Pension Option dated 23.7.
74 This option was based on similar orders issued by Minis try of Finance.
The rationale behind this option was that the recommendations of the 3rd Pay Commission became effec tive from 1.1.73 but pay structure of all employees who were in service on 1.1.73 got altered through orders issued piecemeal from time to time.
There were liberalisations in the pension scheme also in the form of increase in the amount of gratuity as also introduction of the concept of Dearness Relief made available to the pensioners.
This option was made available to all employees who were in service on 1.1.73.
Employees who had retired earlier did not get affected in any way by the recommendations of the 3rd Pay Commission and were accordingly not given this option to come over to Pension Scheme.
This option was available upto 22.1.75, a period of 6 months.
The option given vide letter of 23.7.74 was extended from time to time till 31.12.78.
The reason why this exten sion had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories could not be finalised and notified.
Till such time, the revised pay scale admissible to each category was made known, it was impossible for the concerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option.
The pension option had there fore to be extended from time to time in this manner.
The letters authorising extension of the date of option were not very clearly worded with the result that the pen sion option during the periods of extension was granted, even to those who had retired before such extension became admissible but who were in service on 1.1.73.
The clarifica tion was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only, but the cases already decided otherwise may be treated as closed and need not be opened again.
It was subsequently represented by the organised labour that the options actually exercised upto 31.12.78 should be treated valid even though such cases may not have been decided by that date.
This was agreed to and orders issued accordingly.
(ix) Pension Option dated 23.8.
79 A liberalised formula and slab system for calculation of pension 367 effective from 31.3.79 was notified by Railway Board on 1.6.79.
Accordingly, orders were issued on 23.8.79 allowing pension option to those Railway employees who were in serv ice on 31.3.79.
This option was initially open till 22.2.80 but was extended subsequently to enable wider participation upto 22.2.1981.
(x) Pension Option dated 4.
10.82 Orders were issued by Board on 30.4.82 ordering that a portion of Dearness Allowance will be treated as pay for retirement benefits w.e.f. 31.1.82.
Accordingly a fresh option was allowed on 4.10.82 which could be exercised by Railway employees who were in service on 31.1.82.
This option was available upto 31.8.83.
(xi) Pension Option dated 18.6.85 Orders were issued by Railway Board on 17.5.85 merging Dearness Allowance to the price index upto 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36,000 to 50,000 w.e.f. 31.3.85.
Accordingly, another option was granted to the Railway employees who were in service on 31.3.85.
This option was available for a period of 6 months i.e. upto 17.12.1985.
(xii) Pension Option dated 8.5.87 Consequent upon acceptance of the recommendations of the 4th Pay Commission the revised pay scales were notified on 19.9.86 and 14.3.87, effective from 1.1.1986.
Accordingly another pension option was given to the Railway employees who were in service on 1.1.86 vide orders of 8.5.87.
Under these orders those who did not specifically opt out of pension scheme by 17.12.87 would he automatically deemed to have opted for the pension scheme.
We may now examine these options.
The Railway Board 's letter No. F(E) 50 RTI/6 dated November 16, 1967 introduced the pension scheme for railway servants.
It said that the President had been pleased to decide that the pension rules, as liberalised vide Railway Board 's Memo No. E 48 OPC 208 dated 8.7.1950 as amended or clarified from time to time should apply "(a) to all railway servants who entered serv ice on or after issue of that letter and (b) to all non pensionable railway servants who were in service on 1.4.57 or have joined railway service between that date and the date of issue of the order." The Railway servants referred to in para (b) were required 368 to exercise an unconditional and unambiguous option on the prescribed form on or before 31.3.1958 electing for the pensionary benefits or retaining their existing retirement benefits under the State Railway Provident Fund Rules.
It further said that any such employee from whom an option form prescribed for the employee 's option was not received within the above time limit or whose option was incomplete or conditional or ambiguous shall be deemed to have opted for the pensionary benefits and if any such employee had died by that date or on or after 1.4.57 without exercising option for the pensionary scheme, his dues would be paid on the provident fund system.
The period of validity of this option was first extended upto 30.6.58, 31.12.58, 31.3.59 and lastly upto 30.9.59.
There could, therefore, be no doubt that those who did not opt for the pension scheme had ample opportunity to choose between the two.
The second option was given by the Board 's letter No. PC 60/ RB/2/2 dated 17.9.60 to elect the retirement benefits under the Provident Fund Rules or the Pension Rules.
All Railway servants who were in non pensionable service on 15.11.57 prior to the introduction of the pension scheme on the Railways and who were still in service including (IPR) on 1.7.59 were granted this option to have their retirement benefits regulated by the State Railway Provident Fund Rules or the Railway Pension Rules.
Every eligible railway servant was given the option to change over from P.F. benefits to pensionary benefits or vice versa.
It clearly said that Railway servants who did not exercise the option would continue to be eligible for the P.F. benefits or pensionary benefits as the case might be for which he was already eligible.
The option was subject to the special conditions stated therein.
Where the Railway servants opted for pensionary benefits, the part of the Government contribution together with interest thereon and/or special contribution to the Railway servants ' P.F. account had already been paid, the excess of the amount over the gratuity due under the Pension Rules should be refunded to the Government.
It clearly said that: "the option once exercised shall, however, be final and irrevocable irrespective of the decision taken on that issue.
" If a Railway servant opted for P.F. benefits and if the payment of pensionary benefits had already commenced, further payment would be stopped and his P.F. account would be reconstructed as if he had never opted for pensionary benefits.
The period of validity of option was extended upto 30.6.61, and then upto 31.12.61.
This letter clearly indi cated the reason for giving this option as "under the re vised pay structure introduced from 1.7.59, the bulk or whole of the D.A. previously payable 369 have been absorbed into pay and a number of changes are also being made in the rules regarding retirement benefits.
" In pursuance of the 3rd Pay Commission Report, Govern ment decided to give opportunity to opt for liberalised Railway Pension Rules including benefits of Family Pension Scheme, 1964, to Railway employees, who had retained the contributory P.F. Rules and who were in service on 31.3.1979 and retired on or after that date provided they gave in writing their option within six months.
Employees who had retired under the said State Railway P.F. (Contributory) Rules, their option would be valid if they refunded the entire Government contribution and the excess, if any, of special contribution to P.F. received by them over D.C.R.G. due to them under Pension Rules.
In case of deceased employ ees request could be made for option by valid nominee and in the absence.
of him by legal guardian.
Thereafter a number of representations were made and the Government extended the time for giving option for adopting Pension Scheme in place of contributory P.F. Scheme.
As a result of treatment of a portion of ADA as pay for purpose of retirement benefits and consequently enhancement in pensionary benefits, the date for giving option was further extended by 28.2.1983 only for these employees who were in service on 31.8.1982 and who quitted/retired on or after that date.
The date of option was further extended from time to time.
Keeping in view the treatment of entire DA upto the price index line of 568 as pay for retirement benefit with effect from 31.3.85, removal of ceiling limit of Rs. 1500 on pension and raising of ceiling of DCRG from Rs.36,000 to Rs.50,000 the date of option for employees who were in service on 31.3.85 and onwards and still governed by S.R.P.F. (Contributory) Rules, was further extended upto 17.12.1985 provided the amount of death cum retirement gratuity and the excess, if any, of special contribution over the D .C.R.G., was refunded.
The 12th option was as under.
"Government of India/Bharat Sarkar Ministry of Railways/Rail Mantralaya (Railway Board) Machine No. PC IV/87/13/881 No. PC IV/87/Imp.
PW 1 370 The General Managers, RBBIS.
No. 116/87 All Indian Railways, New Delhi, dated 8th May, 1987 Production Units etc.
as per mailing list.
Subject: Change over of Railway employees from the SRPF (Contributory Scheme) to Pension Scheme 'Implementation of the recommendation of the IV Central Pay Commission regard ing.
The Railway employees who are covered by the SRPF (Contributory Scheme) CPF Scheme have been given repeated options in the past to come over the Pension Scheme.
Howev er, some Railway employees still continue under the CPF Scheme.
The Fourth Central Pay Commission has now recommend ed that all CPF beneficiaries in service on January 1, 1986, should be deemed to have come over to the Pension Scheme on that date, unless they specifically opt out to continue under the GPF Scheme.
After careful consideration the President is pleased to decide that the said recommendation shall be accepted and implemented in the manner hereinafter indicated.
All CPF beneficiaries, who were in service on 1.1.86 and who are still in service on the date of issue of these orders, will be deemed to have come over to the Pension Scheme. ? 3.2.
The employees of the category mentioned above will, however, have an option to continue under the CPF Scheme, if they so desire.
The option will have to be exercised and conveyed to the concerned Head of Office by 30.9.87, in the form enclosed, if the employees wish to continue under the GPF Scheme.
1f no option is received by the Head of Office by the above date the employees will be deemed to have come over to the Pension Scheme.
The CPF beneficiaries, ,who were in service on 1.1.1986, but have since retired and in whose cases retire ment benefits have also been paid under the CPF Scheme, will have an option to 'have their retirement benefits calculated under the Pension Scheme provided they refund 371 to the Government the Government contribution to the Con tributory Provident Fund and the interest thereon, drawn by them at the time of settlement of the CPF Account.
Such option shall be exercised latest by 30.9.
CPF beneficiaries, who were in service on 1.1.1986 but were since retired, and in whose cases the CPF Account has not already been paid, will be allowed retirement benefits as if they were borne on pensionable establishments, unless they specifically opt, by 30.9.87, to have their retirement benefits settled under the CPF Scheme.
Cases of CPF beneficiaries, who were in service on 1.1.86, but have since died, either before retirement or after retirement, will be settled in accordance with para 3.3.
or 3.4 above, as the case may be.
Options in such cases will be exercised, latest by 30.9.87, by the widow/widower and, in the absence of widow/widower, by the eldest surviv ing member of the family, who would have otherwise been eligible to family pension under the Family Pension Scheme, if such Scheme were applicable.
The option, once exercised, shall be final.
3.7. . . . . 4.1. . . . . . 4 . 2 In the case of employees referred to above who come over or are deemed to have come over to the Pension Scheme, the Government 's contribution to the CPF together with the interest thereon, credited to the CPF Account of the employee, will be resumed by the Government.
Special contribution to Provident Fund if already paid in these cases, will be adjusted against the death/ retirement Gratuity, payable under these orders.
The employee 's contri bution, together with the interest thereon at his credit in the CPF account, will be transferred to the CRPF (Non Con tributory) Account, to be allotted to him, on his coming over to the Pension Scheme.
4.3. . . . . . . . 5 'A proposal to grant ex gratia payment to the benefici aries, who retired prior to 1.1.1986 and to the 372 families of CPF beneficiaries who died prior to 1.1.1986, on the basis of the recommendations of the Fourth Central Pay Commission, is separately under consideration of the Govern ment.
The said ex gratia payment, if and when sanctioned, will not be admissible to the employees or their families who opt to continue under the CPF Scheme from 1.1.1986 onward.
6. . . . . (G. Chatterjee) Executive Director, Pay Commission Railway Board.
" The learned Additional Solicitor General stated that each option was given for stated reasons related to the options.
On each occasion time was given not only to the persons in service on the date of the Railway Board 's letter but also to persons who were in service till the stated anterior date but had retired in the meantime.
The period of validity of option was extended in all the options except Nos.
3rd, 4th, 5th and 7th.
We find the statements to have been substantiated by facts.
The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given.
Mr. Shanti Bhushan however submits that applying the law laid down in Nakara 's case this Court should simply strike down or read down paragraph 8.1 of the above 12th option dated 8.5.
That paragraph said that aH C.P.F. benefi ciaries who were in service on 1.1.86 and who were still in service on the date of issue of the order would be deemed to have come over to the pension scheme.
It is submitted that once this limiting requirement is removed all the C.P.F. beneficiaries shall be eligible and will be deemed to have come over to the pension scheme.
As the basis or justification for striking or reading down paragraph 3.1 on Nakara 's ratio, it is urged that all the Railway employees numbering about 22 lakhs comprising 16,22,000 in service and about 6 lakhs pensioners constitute one family and must be treated as one class as the Govern ment 's obligation to look after the retired Railway employ ees both under the pension scheme and the provident fund scheme being the same, they could not be treated different ly.
Any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India.
In Nalcara 's case the date arbitrarily 373 chosen was struck down and as a result the revised formula for computing pension was made applicable to all the retired pensioners.
The same principle, it is urged, has to be extended to the provident fund retires also otherwise there would be discrimination.
It is stated that though at the time of choosing between provident fund and pension scheme both the alternative appeared to be more or less equal and the retired provident funders took their lump sum yet subse quently stage by stage the pensioners benefits were in creased in such ways and to such extent that it became more and more discriminatory against the provident funders old and new.
It was because of this discrimination that aucces sive options were given by the Railway Board for the provi dent funders to become pensioners.
Hence the submission that this limitation must go, and all the provident funders must be deemed to have become pensioners subject to the condition that the Government contribution received by them along with interest thereon is refunded or adjusted.
Obviously this gives no importance to the condition in the notifications that option once exercised shall be final and binding and to the fact that in each option a cut off date was there relat ed to the purpose of giving that option: Admittedly, the entire case of the petitioners is sought to be based on the decision in Nakara 's case.
Mr. Kapil Sibal submits that the petitioners ' basic assumption is erroneous inasmuch as Nakara 's case did not hold that when ever there was a liberalisation of pension all other pension retirees and P.F. retirees must be given option and that the older system of pension or Provident Fund was always insuf ficient.
According to counsel the only question decided in Nakara can be gathered from the following paragraph of the report at page 172: "Do pensioners entitled to receive superannuation or retir ing pension under Central Civil Services (Pension) Rules, 1972 ( ' 1972 Rules ' for short) form a class as a whole? Is the date of retirement a relevant consideration for eligi bility when a revised formula for computation of pension is ushered in and made effective from a specified date? Would differential treatment to pensioners related to the date of retirement qua the revised formula for computation of pen sion attract Article 14 of the Constitution and the element of discrimination liable to be declared unconstitutional as being violative of article 14?" The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara 's case and how far that would 374 be applicable to the case of the P.F. retirees.
The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it.
It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required.
" This was what Lord Selborne said in Caledonian Railway Co. vs Walker 's Trustees and Lord Halsbury in Quinn vs Leathem, , (502).
Sir Frederick Pollock has also said: "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision." In other words, the enunciation of the reason or princi ple upon which a question before a court has been decided is along binding as a precedent.
The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particu lar case which gives rise to the decision.
The ratio deci dendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre existing rule of law, either statutory or judge made, and a minor premise consisting of the material facts of the case under immediate considera tion.
If it is not clear, it is not the duty of the court to spell it out with difficulty in order to be bound by it.
In the words of Halsbury, 4th Edn., Vol. 26, para 573: "The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the sub ject matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribu nal 's duty to spell out with difficulty a ratio decidendi in order to bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case.
If more rea sons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi.
" The question then is, has the court said in Nakara that what was applicable to pensioners vis a vis liberalisation of pension was to be equally applicable to P.F. retirees? In Nakara 's case petitioners 1 and 375 2 were retired pensioners of the Central Government, the first being a civil servant and the second being a member of the service personnel of the Armed Forces.
The third peti tioner was a society registered under the Societies Regis tration Act, 1860, formed to ventilate the legitimate public problems and was espousing the cause of the pensioners all over the country.
The first petitioner retired in 1972 and on computation, his pension worked out at Rs.675 per month and with dearness allowance he was drawing monthly pension of Rs.935.
The second petitioner retired at or about that time and at the relevant time was in receipt of a pension plus dearness relief of Rs .981.
The Union of India had been revising and liberalising the pension rules from time to time.
The Central Government servants on retirement from service were entitled to receive pension under the Central Civil Services (Pension) Rules, 1972.
Successive Central Pay Commissions recommended en hancement of pension in different ways.
The first Central Pay Commission (1946 47) recommended raising of the retire ment age to 58 years and the scale of pension to 1/80 of the emoluments of each year of service subject to a limit 35/80 with a ceiling of Rs.8,000 per year for 35 years of service.
The Second Central Pay Commission (1957 58) did not recom mend any increase in the non contributory retirement bene fits.
The Administrative Reforms Commissioner (ARC) 1956 took note of the fact that the cost of living had shot up and correspondingly the possibility of savings had gone down and accordingly recommended that the quantum of pension may be raised to 3/6 of the emoluments of the last three years of service from existing 3/8 and the ceiling to be raised from Rs.675 per month to Rs. 1,000 per month.
Before the Government acted upon it, the Third Central Pay Commission did not examine the question of relief to pensioners because of its terms and recommended no change in the pension formu la except that the existing ceiling to be raised from Rs.675 to Rs. 1,000 per month and the maximum gratuity should be raised from Rs.24,000 to Rs.30,000.
On May 25, 1979, Government of India, Ministry of Finance, issued Office Memorandum No. F 19(3) EV 79 whereby the formula for computation of pension was liberalised but made it applicable.
to Government servants who were in service on March 31, 1979 and retired from service on or after that date.
The formula introduced a slab system for computation of pension which was applicable to employees governed by the 1972 rules retiring on or after the speci fied date.
The pension for the service personnel which would include Army, Navy and Air Force staff was governed by the relevant regulations.
By 376 the Memorandum of the Ministry of Defence bearing No. B/40725/ AG/PS4 C/1816/AD (Pension)/Services dated September 28, 1979, the liberalised pension formula introduced for the government servants governed by the 1972 rules was extended to the armed forces personnel subject to the limitations set out in the memorandum with a condition that the new rules of pension would be effective from April 1, 1979 and may be applicable to all service officers who become/ became non effective on or after that date.
This liberalised 'pension formula was to be applicable prospectively to those who retired on or after March 31, 1979 in case of government servants governed by 1972 rules and in respect of defence personnel those who became/become non effective on or after April 1, 1979.
Consequently those who retired prior to the specified date would not be entitled to the benefits of the liberalised pension formula.
On the above facts the petitioners ' therein contended that this Court would consider the raison d 'etre for payment of pension, namely, whether it was paid for past satisfacto ry service rendered, and to avoid destitution in old age as well as a social welfare or socioeconomic justice measure, the differential treatment for those who retired prior to a certain date and those retiring subsequently, the choice of the date being wholly arbitrary would amount to discrimina tion and violative of article 14; and whether the classifica tion based on fortuitous circumstance of retirement before or subsequent to a date, fixing of which was not shown to be related to any rational principle, would be equally viola tive of article 14.
It was contended that pensioners of the Central Government formed a class for the purpose of pen sionary benefits and there could not be mini classification within the class designated as pensioners.
The Court considered the nature and purposes of pension in the context of a welfare State and found that though unquestionably pension was linked to length of service and the last pay drawn which did not imply the pay on the last day of retirement but average emoluments of 36 months serv ice which under the liberalised scheme was reduced to aver age emoluments of 10 months preceding the date which was expected to be higher than that of the higher average emolu ments of 36 months, coupled with the slab system for compu tation amounted to liberalisation of pension in different ways.
If the pensioners who retired prior to the specified date had to earn pension on the average emoluments of 36 months ' salary just preceding the date of retirement, natu rally the average would be lower and they would be doubly hit because the slab system newly introduced was not avail able to them 377 while the ceiling was at a lower level and thus they would suffer "triple jeopardy, viz., lower average emoluments, absence of slab system and lower ceiling.
" This Court, therefore, wanted to know what was the purpose in prescrib ing the specified date vertically dividing the pensioners between those who retired prior to the specified date and those who retired subsequent to that date and why was the pension scheme liberalised.
Receiving no satisfactory reply the Court observed: "Both the impugned memoranda do not spell out the raison d 'etre for liberalising the pension formula.
In the affida vit in opposition by Shri S.N. Mathut, it has been stated that the liberalisation of pension of retiring Government servants was decided by the Government in view of the per sistent demand of the Central Government employees repre sented in the scheme of Joint Consultative Machinery.
This would clearly imply that the pre liberalised pension scheme did not provide adequate protection in old age and that a further liberalisation was necessary as a measure of econom ic security.
When Government favorably responded to the demand it thereby ipso facto conceded that there was a larger available national cake part of which could be uti lised for providing higher security to erstwhile government servants who would retire.
The Government also took note of the fact that Continuous upward movement of the cost of living index as a sequel of inflationary inputs and dimin ishing purchasing power of rupee necessitated upward revi sion of pension.
If this be the underlying intendment of liberalisation of pension scheme, can any one be bold enough to assert that it was good enough only for those who would retire subsequent to the specified date but those who had already retired did not suffer the pangs of rising prices and falling purchasing power of the rupee?" The Court then proceeded to examine whether there was any rationale behind the eligibility qualification and finding no rationale concluded: "Therefore, this division which classified pensioners into two classes is not based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory." 378 The Court accordingly concluded that the division was thus arbitrary and unprincipled and therefore the classifi cation did not stand the test of article 14.
It was also arbi trary as the Court did not find a single acceptable or persuasive reason for this division and this arbitrary action violated the guarantee of article 14.
The Court observed that the pension scheme including the liberalised scheme to the Government employees was non contributory in ' character.
The payment of pension was a statutory liability undertaken by the Government and whatever became due and payable was 2budgeted for.
The Court specifically observed: "One could have appreciated this line of reasoning where there is a contributory scheme and a pension fund from which alone pension is disbursed.
That being not the case, there is no question of pensioners dividing the pension fund which, if more persons are admitted to the scheme, would pro rata affect the share.
Therefore, there is no question of dividing the pension fund.
Pension is a liability incurred and has to be provided for in the budget.
" The Court further observed: "If from the impugned memoranda the event of being in serv ice and retiring subsequent to specified date is served, all pensioners would be governed by the liberalised pension scheme.
The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommendation of the Third Pay Commission but becoming operative from the specified date.
It does therefore appear that the reading down of impugned memoranda by severing the objectionable portion would not render the liberalised pension scheme vague, unenforceable or unworkable." The Court in Nakara was not satisfied with the explana tion that the legislation had defined the class with clarity and precision and it would not be the function of this Court to enlarge the class.
The Court held in paragraph 65 of the report: "With the expanding horizons of socio economic justice, the Socialist Republic and welfare State which we endeavour to set up and largely influenced by the fact that 379 the old men who retired when emoluments were comparatively low and are exposed to vagaries of continuously rising prices, the falling value of the rupee consequent upon inflationary inputs, we are satisfied that by introducing an arbitrary eligibility criterion: 'being in service and retiring subsequent to the specified date ' for being eligi ble for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being not based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary, we are of the view that the eligibility for liberalised pension scheme of 'being in service on the specified date and retiring subsequent to that date ' in impugned memoranda, Exs.
P 1 and P 2, violates Article 14 and is unconstitutional and is struck down.
Both the memoranda shall be enforced and implemented as read down as under: In other words, exhibit P 1, the words: 'that in respect of the government servants who were in service on March 31, 1979 and retiring from service on or after that date '; and in exhibit P 2, the words: 'the new rates of pension are effective from April 1, 1979 and will be applicable to all service officers who became/become non effective on or after that date '; are unconstitutional and are struck down with this specifi cation that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespec tive of the date of retirement.
Omitting the unconstitution al part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as computed under the liberalised pension scheme from the specified date, irrespective of the date of retire ment.
Arrears of pension prior to the specified date as per fresh computation is not admissible.
" Thus the Court treated the pension retirees only as a homogeneous class.
The P.F. retirees were not in mind.
The Court also clearly observed that while so reading down it was not dealing with any fund 380 and there was no question of the same cake being divided amongst larger number of the pensioners than would have been under the notification with respect to the specified date.
All the pensioners governed by the 1972 Rules were treated as a class because payment of pension was a continuing obligation on the part of the State till the death of each of the pensioners and, unlike the case of Contributory Provident Fund, there was no question of a fund in libera lising pension.
The argument of Mr. Shanti Bhushan is that the State 's obligation towards pension retirees is the same as that towards P.F. retirees.
That may be morally so.
But that was not the ratio decidendi of Nakara.
Legislation has not said so.
To say so legally would amount to legislation by enlarg ing the circumference of the obligation and converting a moral obligation into a legal obligation.
It reminds us of the distinction between law and morality and limits which separate morals from legislation.
Bentham in his Theory of Legislation, Chapter XII, page 60 said: "Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good.
Legislation ought to have precisely the same object.
But although these two arts, or rather sciences, have the same end, they differ greatly in extent.
All actions, wheth er public or private, fall under the jurisdiction of morals.
It is a guide which leads the individual, as it were, by the hand through all the details of his life, all his relations with his fellows.
Legislation cannot do this; and, if it could, it ought not to exercise a continual interference and dictation over the conduct of men.
Morality commands each individual to do all that is advantageous to the community, his own personal advantage included.
But there are many acts useful to the community which legislation ought not to command.
There are also many injurious actions which it ought not to forbid, although morality does so.
In a word legislation has the same centre with morals, but it has not the same circumference.
" In Nakara it was never held that both the pension reti rees and the P.F. retirees formed a homogeneous class and that any further classification among them would be viola tive of article 14.
On the other hand the Court clearly ob served that it was not dealing with the problem of a "fund".
The Railway Contributory Provident Fund is by 381 definition a fund.
Besides, the Government 's obligation towards an employee under C.P.F. Scheme to give the matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystallized and thereafter no statutory obligation continues.
Whether there still remained a moral obligation is a different matter.
On the other hand under the Pension Scheme the Government 's obligation does not begin until the employee retires when only it begins and it continues till the death of the em ployee.
Thus, on the retirement of an employee Government 's legal obligation under the Provident Fund account ends while under the Pension Scheme it begins.
The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension.
It would not, therefore, be reasonable to argue that what is applicable to the pen sion retirees must also equally be applicable to P.F. reti rees.
This being the legal position the rights of each individual P.F. retiree finally crystallized on his retire ment whereafter no continuing obligation remained while on the other hand, as regards Pension retirees, the obligation continued till their death.
The continuing obligation of the State in respect of pension retirees is adversely affected by fall in rupee value and rising prices which, considering the corpus already received by the P.F. retirees they would not be so adversely affected ipso facto.
It cannot, there fore, be said that it was the ratio decidendi in Nakara that the State 's obligation towards its P.F. retirees must be the same as that towards the pension retirees An imaginary definition of obligation to include all the Government retirees in a class was 'not decided and could not form the basis for any classification for the purpose of this case.
Nakara cannot, therefore, be an authority for this case.
Stare decisis et non guieta movere.
To adhere to prece dent and not to unsettle things which are settled.
But it applies to litigated facts and necessarily decided ques tions.
Apart from article 141 of the Constitution of India, the policy of courts is to stand by precedent and not to disturb settled point.
When court has once laid down a principle of law as applicable to certain state of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same.
A deliberate and solemn decision of court made after argument on question of law fairly arising in the case, and necessary to its determina tion, is an authority, or binding precedent in the same court, or in other courts of equal or lower rank in subse quent cases where the very point is again in controversy unless there are occasions when departure is rendered neces sary to vindicate plain, obvious principles of law and remedy continued injustice.
It should be invariably applied 382 and should not ordinarily be departed from where decision is of long standing and rights have been acquired under it, unless considerations of public policy demand it.
But in Nakara it was never required to be decided that all the retirees formed a class and no further classification was permissible.
The next argument of the petitioners is that the option given to the P.F. employees to switch over to the pension scheme with effect from a specified cut off date is bad as violative of article 14 of the Constitution for the same rea sons for which in Nakara the notification were read down.
We have extracted the 12th option letter.
This argument is fallacious in view of the fact that while in case of pension retirees who are alive the Government has a continuing obligation and if one is affected by dearness the others may also be similarly affected.
In case of P.F. retirees each one 's rights having finally crystallized on the date of retirement and receipt of P.F. benefits and there being no continuing obligation thereafter they could not be treated at par with the living pensioners.
How the corpus after retirement of a P.F. retiree was affected or benefitted by prices and interest rise was not kept any track of by the Railways.
It appears in each of the cases of option the specified date bore a definite nexus to the objects sought to be achieved by giving of the option.
Option once exer cised was told to have been final.
Options were exercisable vice versa.
It is clarified by Mr. Kapil Sibal that the specified date has been fixed in relation to the reason for giving the option and only the employees who retired after the specified date and before and after the date of notifi cation were made eligible.
This submission appears to have been substantiated by what has been stated by the successive Pay Commissions.
It would also appear that corresponding concomitant benefits were also granted to the Provident Fund holders.
There was, therefore, no discrimination and the question of striking down or reading down clause 3.1 of the 12th Option does not arise.
It would also appear that most of the petitioners before their filing these petitions had more than one opportunities to switch over to the Pension Scheme which they did not exercise.
Some again opted for P.F. Scheme from the Pension Scheme.
Mr. Shanti Bhushan then submits that the same relief as is being canvassed by the petitioners herein has been upheld by this Hon 'ble Court by dismissing the SLP No. 5973/88 of the Government in the case of Union of India vs Ghansham Das and Ors.
against the Judgment of the Central Administrative Tribunal, Bombay.
The Tribunal 383 had held the same notifications as were impugned herein to be discriminatory and had directed that a flesh option be given to all P.F. retirees subject to refund of the Govern ment contribution to Provident Fund received by adjusting it against their pensionary rights.
Similarly, it is submitted, in a Rajasthan case, both the single Judge and the Division Bench have held that all the retirees would have to be given a flesh option as the notifications giving the option only to some retirees are clearly discriminatory.
This view has, it is urged, again been upheld by this Hon 'ble Court by dismissing the Special Leave Petition No. 7192/87 of the Government by order dated 11.8.87.
We have perused the judgments.
The Central Administra tive Tribunal in Transferred Application No. 27/87 was dealing with the case of the petitioners ' right to revise options during the period from 1.4.69 to 14.7.72 as both the petitioners retired during that period.
The tribunal ob served that no explanation was given to it nor could it find any such explanation.
In State of Rajasthan vs Retired C.P.F. Holder Association, Jodhpur, the erstwhile employees of erstwhile Princely State of Jodhpur who after becoming Government servants opted Contributory Provident Fund wanted to be given option to switch over to Pension Scheme, were directed to be allowed to do so by the Rajasthan High Court relying on Nakara which was also followed in Union of India vs Bidhubhushan Malik, ; , subject matter of which was High Court Judges ' pension and as such both are distinguishable on facts.
That the Pension Scheme and the P.F. Scheme are struc turally different is also the view of the Central Pay Com missions and hence ex gratia benefits have been recommended, which may be suitably increased.
In the report of the Third Central Pay Commission 1973, Vol. 4 at page 49, dealing with State Railway Provident Fund it was said: "49.
Both gazetted and non gazetted Railway employees with a service of not less than 15 years who are governed by the State Railway Provident Fund Scheme are at present allowed a special contribution at the rate of 1/4th of a month 's pay for each completed 6 monthly period of service but not exceeding 15 months ' pay or Rs.35,000, whichever is less.
We have been informed by the Railway Board that for such em ployees the Government contribution and the special contri bution to the Provident Fund 384 together constitute the retirement benefits which in other civil departments are given in the shape of pension and death cum retirement gratuity.
Accordingly, when pensionery benefits to the other civil employees were im proved in 1956 and 1957, the maximum of the special contri bution to the provident fund for the Railway employees was also increased from Rs.25,000 to Rs.35,000.
We have not examined whether and to what extent any further increase in this contribution should be made consequent upon the en hancement of the maximum pension and gratuity being recom mended by us for pensionable employees.
The Government may decide the same as they deem fit.
" In the Report of the Fourth Central Pay Commission, in Chapter 9 the Commission has discussed the State Railway Provident Fund Scheme including Contributory Provident Fund Scheme.
In para 9.1 of the report, the Commission said that the employees who joined railways prior to November 16, 1957 and did not opt for the pension scheme were also covered under the C.P.F. Scheme known as State Railways Provident Fund Scheme (SRPF).
About 50,000 employees were stated to be covered under the C.P.F. Scheme of which the majority were in the railways.
The number of employees who retired under the CPF and SRPF schemes were 1.20 lakhs.
Under the CPF scheme every employee was required to subscribe a minimum of 8 1/3 per cent of his reckonable emoluments to be credited to the fund.
The Government makes a matching contribution.
Both the contributions earned interest at a rate specified by the Government from time to time.
On retirement, employ ees governed under the scheme was paid his contribution, the contribution made by the Government and the interest earned on the total amount.
In para 9.3 of the Report it was stated: "The SRPF scheme in the railways was replaced by the pension scheme as applicable to other Central Government employees, in November, 1957 and those employees who were in service on April 1, 1957 and were governed by the scheme were given an option to come under the pension scheme.
Whenever changes occurred in the pension structure for the Central Government employees an option was given to railway employees still covered by the scheme.
Such options have been given on eleven occasions in the 385 past and the last such option was valid upto December, 1985.
" Comparing the advantage and disadvantage of the schemes the Commission said: "While pension scheme has been improved, enlarged and lib eralised from time to time, there has been no similar im provement in the CPF scheme, excepting through improvement of rates of interest which were modified from 7 per cent on 1974 to 9 per cent in 1983 84, to 10 per cent in 1984 85 and to 12 per cent in 1985 86.
While those governed by the pension scheme are entitled to receive dearness relief sanctioned from time to time to compensate for increase in the cost of living, those under the CPF scheme were not entitled to such relief.
The employees governed by the CPF scheme are also not entitled to the family pension available to those governed by the pension scheme.
The matching gov ernment contribution in the case of CPF employees is paid for the full period of service the restriction of 33 years for those governed by pension scheme does not apply in their case.
Those who have retired under the CPF scheme have a corpus yielding regular return.
In the case of railway employees, special contribution to PF is paid at the time of retirement equivalent to half a month 's salary for each completed year of service subject to a maximum of 16 months ' salary or Rs.60,000 whichever is less.
The amount of special contribution has been raised from time to time as and when the limit on death cum retirement gratuity was changed.
" In para 9.5 of the Report as to ex gratia alternative it is stated: "As the pension scheme was introduced on the railways m ' 1957, those who retired earlier did not have an opportunity to opt for pension.
It was, therefore, decided to give some ex gratia payment to them in consideration of the fact that the retirement benefits were lower than what they would have received if they had retired under the pension scheme.
Since this applied mainly to the low paid employees, the ex gratia payment ranging from Rs. 15 to Rs.22.50 per mensem was sanctioned to those drawing pay upto Rs.500 per month.
They were also given relief on a 386 graded scale subsequently.
The amount of ex gratia payment together with the relief now ranges from Rs. 170 to Rs. 283 per mensem.
" In para 9.6, the Commission said that the P.F. and pension schemes are structurally different.
Accordingly alternative ex gratia reliefs were suggested: "We have received a number of suggestions from individuals, associations and other organisations in respect of the CPF scheme.
It has been stated that the objective of both the schemes, viz., pension scheme and the CPF scheme being the same, there should not be differences in the matter of retirement benefits between the pensioners and the benefici aries of the CPF.
It has been urged that the liberalisation in the pension scheme needs to be appropriately extended to the beneficiaries under the CPF scheme.
Since the schemes are structurally different, equality of benefits under the two schemes is not feasible.
We are, however, of the view that the CPF beneficiaries who have retired on low scales of pay deserve some measure of relief.
We according recommend that all the CPF beneficiaries who have retired prior to March 31, 1985 with a basic pay upto Rs.500 per mensem may be given an ex gratia payment of Rs.300 per mensem which will be in addition to the benefits already received by them under the CPF scheme.
The ex gratia payments and the period ic increases already received by those who retired on pay upto Rs.500 may be so adjusted that the total ex gratia amount is not less than Rs.300.
We further recommend that ex gratia amount of Rs.300 per mensem may be reviewed as and when dearness relief is sanctioned to pensioners." "9.7.
Railways have suggested grant of ex gratia payment to the widows and dependent children of deceased employees covered by CPF scheme at 50 per cent of the rate for ex gratia payment.
We agree and recommend accordingly for those getting pay upto Rs.500 per mensem.
The eligibility of widow and minor children for the purposes of this relief may be same as laid down under the pension rules." "9.8.
In so far as the CPF beneficiaries still in service on 387 January 1, 1986 are concerned, we recommend that they should be deemed to have come over to the pension scheme on that date unless they specifically opt out to continue under the CPF scheme.
The CPF beneficiaries who decide to continue to remain under that scheme should not be eligible on retire ment for ex gratia payment recommended by us for the CPF retirees.
Government may, however, extend the benefit of DCRG to CPF beneficiaries in other departments on the same lines as in railways." "9.9.
Government may also consider the feasibility of giving an option to all other CPF retirees who are not covered under paragraph 9.6 above to come over to the pension scheme with effect from January 1, 1986 subject to their refunding to government the entire amount of government contribution inclusive of interest thereon credited to their Provident Fund account at the time of their retirement.
" We have no doubt about the above recommendations receiv ing due consideration by the Union of India.
The 12th Option already given has to be viewed in this context.
The next question debated is that of financial implica tions.
It is submitted that given the fact that the budget for the year 1990 91 for disbursement of pension is Rs.900 crores (as per page 11 of the Budget of the Railway Revenue and Expenditure of the Central Government for 1990 91), the additional liability which would arise by giving relief to the Petitioners would be insignificant in comparison.
Ac cording to the petitioners as per their affidavit dated 15.9.88, the additional liability would come to Rs. 18 crores per annum and this figure would steadily decrease as the number of P.F. retirees diminishes every year due to the fact that this question arises only with respect to very old retirees, and a substantial number of them pass away every year.
The Government in its affidavit dated 21.9.88 has stated that the additional liability as far as the Railway employ ees are concerned, would be Rs.50 crores a year.
This is based on the assumption that there are 79,000 surviving P.F. retirees.
Apart from the fact that this number of 79,000 was based on calculations made in 1988, and would be greatly reduced by this time, the petitioners submit that the actual number of survivors would only be about 38,000.
Thus, the actual burden would be less than half.
Further, even assum ing that the figure 388 of 79,000 put forth by the Government is correct, the aver age annual expenditure per retiree for pension calculated by the Government is incorrect as the calculation includes the non recurring arrear payments for the year 1987 88.
Taking the correct figures of total pension outlay and total number of beneficiaries the per capita pension expenditure per annum works out to Rs.4521.
Multiplying this by 79,000 (assuming the figures of the Railways to be correct) the annual expenditure comes to Rs.35.71 crores.
This compared to the current budget of pensions of Rs.900 crores, is quite insignificant and can be easily awarded by this Court as was done in Nakara, it is urged.
It is submitted in the alternative that if this Court feels that a positive direction cannot be made to the Gov ernment in this regard, it is prayed that at least an option should no given to the respondents either to withdraw the benefit of switching over to pension from every one or to give it to the petitioners as well, so that the discrimina tion must go.
We are not inclined to accept either of these submis sions.
The P.F. retirees and pension retirees having not belonged to a class, there is no discrimination.
In the matter of expenditure includable in the Annual Financial Statement, this Court has to be loath to pass any order to give any direction, because of the division of functions between the three co equal organs of the Government under the Constitution.
Lastly, the question of feasibility of converting all living P.F. retirees to Pension retirees was debated from the point of view of records and adjustments.
Because of the view we have taken in the matter, we do not consider it necessary to express any opinion.
Mr. C.V. Francis in W.P. No. 1165 of 1989 argued the case more or less adopting the arguments of Mr. Shanti Bhushan.
Mrs. Swaran Mahajan, in W.P. No. 1575 of 1986, submitted that the rule as to commuted portion of the pen sion reviving after 15 years should be applied to P.F. retirees so that the corpus of Provident Fund dues received more than 15 years ago should be treated as committed por tion of pension and be allowed to revive for adjustments against pension.
In the view we have taken in this case it is not necessary to express any opinion on this question.
389 Mr. R.B. Datar for the respondent in W.P. No. 1575 of 1986 and W.P. No. 352 of 1989 more or less adopted the arguments of the learned Additional Solicitor General.
In the result, all the Writ Petitions and the Special Leave Petition are dismissed, but the petitioners being retirees, we make no order as to costs.
R.S.S. ' Petitions dismissed.
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The petitioners are retired railway employees who were covered by the Railway Contributory Provident Fund Scheme.
The Provident Fund Scheme was replaced in the year 1957 by the Pension Scheme.
The employees who entered Railway serv ice on or after 1.4.1957 were automatically covered by the Pension Scheme instead of the Provident Fund Scheme.
The employees who were already in service on 1.4.1957 were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits.
The petitioners had opted for Contributory Provident Fund Scheme.
The petitioners ' case is that till 1.4.1957 or even sometime thereafter, the pensionary benefits and the alter native Contributory Provident Fund benefits were considered to be more or less equally beneficial; at the time when the option was given to choose between pension and Provident Fund, the employees had no idea that in future improvements would be made to either of them; and that as a result of the decision of the Railways to implement the judgment of this Court in D.S. Nakara vs Union of India, ; , and to extend the liberalised pension benefits even to those railway employees who had retired long before the liberali sations of pension were introduced, the pension retirees derived manifold benefits while P.F. retirees ' benefits remained stagnant.
The main legal contention of the petitioners is that the Railways had issued twelve notifications giving option to certain Provident Fund retirees after the respective cut off dates, to opt for the Pension Scheme 353 even after their retirement, but the same options were not given to other similarly situated Provident Fund retirees beyond the respective cut off dates, which was discriminato ry and hence violative of article 14 of the Constitution.
It is further contended that the notifications specifying cut off dates were arbitrary and un related to the objects sought to be achieved by giving of the option, and therefore violative of Article 14 and also of the principle laid down in Naka ra 's case.
According to counsel, the principle is that pension retirees could not be divided by such arbitrary cut off dates for the purpose of giving benefits to some and not to other similarly situated employees.
It is submitted that by analogy the principle is equally applicable to the Provident Fund retirees as a class.
On these grounds, it is prayed that applying the law laid down in Nakara 's case this Court should simply strike down or read down paragraph 3.1 of the 12th option dated 8.5.1987.
That paragraph said that all Contributory Provi dent Fund beneficiaries who were in service on 1.1.86 and who were still in service on the date of the order would be deemed to have come over to the pension scheme.
It is sub mitted that once this limiting requirement is removed all the Contributory Provident Fund beneficiaries shall be eligible and will be deemed to have come over to the pension scheme.
As the basis for striking or reading down paragraph 3.1 on Nakara 's ratio, it is urged that all the Railway employees both in service and pensioners constitute one family and must be treated as one class, and Government 's obligation to look after the retired Railway employees both under the pension scheme and the provident fund scheme being the same, they could not be treated differently, and any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India.
In Nakara 's case the date arbitrarily chosen was struck down and, as a re sult, the revised formula for computing pension was made applicable to all the retired pensioners.
On behalf of the respondents it was contended that the options were meant to give the Provident Fund retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option.
It is further submitted that the petitioners ' basic assumption is erroneous inasmuch as Nakara 's case did not hold that whenever there was a liber alisation of pension, aH other pension retirees and Provi dent Fund retirees must be given the option, and that the older system of pension or Provident Fund was always insuf ficient.
Dismissing the writ petitions and the Special Leave Petition, this Court, 354 HELD: (1) The doctrine of precedent, that is, being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it.
It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propo sitions wider than the case itself required." [374A B] (2) The enunciation of the reason or principle upon which a question before a court has been decided is alone binding as a precedent.
The ratio decidendi is the underly ing principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision.
[382A; 374D] Caledonian Railway Co. vs Walker 's Trustees, and Quin vs Leathern; , (502), referred to.
(3) Apart from Article 141 of the Constitution the policy of courts is to stand by precedent and not to disturb settled point.
When court has once laid down a principle of law as applicable to certain state of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same.
[381F G] (4).
In Nakara 's case it was never required to be decid ed that all the retirees formed a class and no further classification was permissible.
At the same time it was never held in that case that both the pension retirees and the Provident Fund retirees formed a homogeneous class and that any further classification among them could be viola tive of Article 14.
On the other hand, the Court had clearly observed that it was not dealing with the problem of a "fund".
[380H] (5) The Railway Contributory Provident Fund is by defi nition a fund.
Besides, the Government 's obligation towards an employee under Contributory Provident Fund Scheme to give the matching contribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystalized, and thereafter no statutory obligation contin ues.
Whether there still remained a moral obligation is a different matter.
On the other hand, under the Pension Scheme the Government 's obligation does not begin until the employee retires when only it begins and it continues till the death of the employee.
Thus, on the retirement of an employee Government 's legal obligation under the Provident Fund account ends while under the Pension Scheme it begins.
Therefore, the provident fund retirees could not be treated at par with the living 355 pensioners.
There was, therefore, no discrimination, and the question of striking down or reading down clause 3.1 of the 12th option does not arise.
[380H; 381A B; 382F] Union of India vs Ghansham Das & Ors., S.L.P. No. 5973 of 1988 and Union of India vs Bidhubhushan Malik, ; , distinguished.
(6) The rules governing the Provident Fund and its contribution are entirely different from the rules governing pension.
It would not, therefore, be reasonable to argue that what is applicable to the pension retirees must also equally be applicable to Provident Fund retirees.
[381C] (7) An imaginary definition of obligation to include all the Government retirees in a class was not decided and could not form the basis for any classification for the purpose of this case.
Nakara cannot, therefore, be an authority for this case.
[381E] D.S. Nakara vs Union of India, , explained.
(8) The argument is that the State 's obligation towards pension retirees is the same as that towards Provident Fund retirees.
That may be morally so.
But that was not the ratio decidendi of Nakara.
Legislation has not said so.
To say so legally would amount to legislation by enlarging the circum ference of the obligation and converting a moral obligation into a legal obligation.
[380C D] (9) The statements made on behalf of the respondents to the effect that cut off dates had nexus with the reason for granting the particular option, has been substantiated by facts.
The cut off dates were not arbitrarily chosen but had nexus with the purpose for which the option was given.
[382B D] (10) That the Pension Scheme and the Provident Fund Scheme are structurally different is also the view of the Central Pay Commissions, and hence ex gratia benefits have been recommended, which may be suitably increased.
[383E]
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ivil Appeal No. 3704 of 1989.
From the Judgment and Order dated 11.3.1987 of the Bombay High Court in Second Appeal No. 725 of 1980.
437 U.R. Lalit, G.A. Shah, V.N. Ganpule for the Appellants.
D.A. Dave, R. Karanjawala, Ms. M. Karanjawala and Jatin der Sethi for the Respondents.
The Judgment of the Court was delivered by SAWANT.J.
This is a case where the High Court in second appeal has interfered with a pure finding of fact recorded by the First Appellate Court for no worthwhile reason, and ignoring the mandatory provisions of Section 100 of the Civil Procedure Code.
The only question which was involved in the suit was whether the suit properties in which the plaintiff claimed one fifth share, were the ancestral joint family properties or whether they were the self acquired properties of his father, Ramchandra.
The relevant facts are: defendant No. 1, Ramchandra had four sons including the plaintiff, and a daughter.
The three other sons and the daughter are defend ants Nos. 2 to 5.
One of the sons, defendant No. 3 appears to support the plaintiff.
During the pendency of the suit, Ramchandra died and his sons including the plaintiff have been brought on record as his heirs and legal representa tives.
The suit properties consisted of lands being (i) Survey No. 21/1 admeasuring 14 acres 3 gunthas, (ii) Survey No. 20/2 admeasuring 2 acres 36 gunthas, (iii) Survey No. 20/1 admeasuring 3 acres 30 gunthas and two houses all situated at Nizampur, Taluka Saaki, District Dhuiia.
It was the case of the plaintiff in his plaint that a joint family consisting of his father Ramchandra and his brother, Supadu owned several houses, and a land comprised in Survey No. 71 admeasuring about 14 acres.
In the partition between Ram chandra and Supadu, two houses and Survey No. 71 came to the share of Ramchandra The said two houses are included in the suit properties and it is not disputed on behalf of the respondent defendants that they are ancestral properties and the plaintiff has one fifth share in the same.
However, the case of the plaintiff that Survey No. 71 was the ancestral property was vehemently disputed and that has been the sheet anchor of contention of both the parties while the plaintiff claims that rest of the suit properties were purchased by Ramchandra out of the income and subsequently the sale proceeds, of the said land (since admittedly the said land was sold by Ramchandra in 1953), it is the case of the defendants that the said land was in fact purchased jointly by Ramchandra and his brother, Supadu out of their own earnings, and in the partition between Ramchandra and Supadu that land came to the share of Ramchandra.
Hence, according to the defendants, even 438 assuming that the rest of the suit properties were purchased with the help of the income from Survey No. 71, they were the self acquired properties of Ramchandra.
In support of his case that Survey No. 71 was the ancestral property, the plaintiff relied upon the fact that the said survey No. had come to the share.
of Ramchandra in a general partition between him and his brother, Supadu in 1918.
As against this, the defendants contended that Ram chandra 's father Pandu died in 1904 and since the property all along stood in the name of Supadu it showed that it was purchased after Pandu 's death in 1904.
They also relied upon the fact that Ramchandra was a skilled goldsmith and was well known for his artisanship and commanded good business.
His brother was also a goldsmith and both of them had pur chased the said land with the earning in goldsmithery.
It was also their case that Ramchandra 's father, Pandu had only two houses and no other property nor did he carry on any business even of goldsmithery.
Hence, there was no question of purchasing Survey No. 71 out of the income from the ancestral property by Ramchandra and Supadu and the purchase was with the help of the income which they had earned from the business which they were carrying on by their own skill.
It was also shown by the defendants that when Survey No. 71 was sold in 1953, no objection whatsoever was taken to the sale nor permission of any of the sons including that of the plaintiff was deemed necessary for the same.
They further contended that they had hardly any income from Survey No. 71 and the properties which were purchased prior to 1953 could not have been purchased with the help of any such income assuming that it was an ancestral land.
According to them, therefore, the suit properties were purchased only from the income from the business of goldsmithery.
The three of the properties were purchased prior to 1953 while the rest were purchased long after 1953, i.e. in 1961, 1965 and 1967.
Hence, their purchase had no relation to the sale of Survey No. 71 in 1953, again assuming that it was an ancestral property.
It is for these reasons, according to them, that the suit properties except the two houses which were admit tedly the ancestral properties were not the joint family properties in which the plaintiff could claim his share.
The relevant issues were framed including the issue as to whether defendants proved that the suit properties were self acquired and plaintiff had no share in it.
The Trial Court answered the said issue in favour of the plain tiff and decreed the suit against the defendants.
Against the said decision, the defendants appealed and the First 439 Appellate Court after reappreciating the evidence and point ing out the infirmities in the conclusions arrived at by the Trial Court, dismissed the suit except to the extent of the plaintiff 's share in the two ancestral houses.
It may be mentioned here that although Ramchandra, defendant No. 1 died during the pendency of the suit, he had willed out his properties in favour of the defendants and, therefore, the plaintiff had no share in the self acquired properties of Ramchandra which could have been granted to him otherwise.
The First Appellate Court held that the following circumstances showed that the suit properties except the ancestral houses were the self acquired properties of Ram chandra.
The first circumstance was that Survey No. 71 was purchased in the name of Supadu which showed that in all probability the property was purchased after the death of Ramchandra 's father, Pandu.
Secondly, since there was no record to show that Pandu had any lands or was carrying on any business, Survey No. 71 must have been purchased by Ramchandra and Supadu with the help of their earnings.
It was not disputed and in fact it was admitted that Ramchandra was a skilled goldsmith and was carrying on business of goldsmithery along with his brother, Supadu and was earning sufficient income with the help of which he could purchase the properties.
Survey No. 71 further was sold in 1953 without obtaining the consent of the other members of the family.
Had it been the joint family property the vendee would have insisted upon such consent.
The High Court interfered with these findings on grounds which were not even made out by the plaintiff either in the plaint or in his evidence and which were contrary to the admissions of the plaintiff himself.
The High Court held that since the property had come to the share of Ramchandra in general partition, it must be held that it was an ances tral property.
The High Court further held that Survey No. 71 was yielding sufficient income with the help of which the other properties would have been purchased and further the goldsmithery business was an ancestral business and, there fore, the properties purchased with the help of such income should also be held to be joint family properties.
It may be stated here that the learned counsel appearing for the appellant defendants wanted to produce before us documents to show that in fact Survey No. 71 was purchased in the year 1907 by Ramchandra and his brother Supadu after the death of their father, Pandu in 1904, and that in the Revenue records the property always 440 stood in the name of Supadu.
We did not permit him to pro duce the said documents since no explanation whatsoever was available as to why the documents were not produced before the courts below.
However, it was not disputed at any time that the property had all along stood in the name of Supadu and, therefore, the presumption drawn by the First Appellate Court that this showed that in all probability the property was purchased after the death of Pandu cannot be said to be unreasonable.
Secondly, there is no evidence brought on record by the plaintiff with regard to the quantum of income from Survey No; 71.
In fact, the uncontroverted evidence on record shows that Ramchandra who had entered the witness box had no implements and bullocks for cultivating the land and the land was always cultivated with the help of the labour ers who brought their own implements and bullocks.
This shows that the family derived less than normal income from the said land.
Secondly, it was admitted by the plaintiff that Ramchandra was a skilled goldsmith and was well known in the locality as such, and was doing his business as goldsmith and earning sufficient income.
It was not his case further that the goldsmithery was the ancestral business.
However, the High Court ignoring the fact that it was not the case of the plaintiff that goldsmithery was an ancestral business and that it was not his case that the suit proper ties were purchased with the help of the income from the said business held that it was so.
What is further, the plaintiff 's case was that the suit properties were purchased with the income from Survey No. 71.
Thus it is obvious that the conclusions ' which were arrived at by the first Appel late Court were reasonable and legal besides being conclu sions of facts.
There was, therefore, no question of law involved in the second appeal.
Yet the High Court chose to interfere with the finding ignoring the mandatory provisions of Section 100 of the Civil Procedure Code that unless it was satisfied that the case involved a substantial question of law it could not entertain it and that before it could entertain it, the Court had to formulate such question.
We are, therefore, more than satisfied that the High COurt has erred in law in interfering with the decree passed by the First Appellate Court.
We, therefore, allow the appeal, set aside the decision of the High Court and restore the decree passed by the First Appellate Court.
Since the parties belong to one family we pass no order as to costs.
G.N. Appeal al lowed.
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S and R were brothers who carried on the business of gold smithery, and a partition took place between them in 1918.
R got 2 houses and land in Survey No. 71.
Later on, one of the sons of R instituted a suit claiming that Survey No. 71 was an ancestral property and that some of the suit properties were purchased by R out of the income, and subsequently the sale proceeds, of the land.
The defendants, viz., the other children of R contended that Survey No. 71 was purchased by S and R with the income they derived from gold smithery and the suit properties except the two houses which were admittedly the ancestral properties, were not the joint family properties in which the plaintiff could claim his share.
The Trial Court decreed the suit in favour of the plain tiff.
On appeal by the defendants, the First Appellate Court reappreciated the evidence, found infirmities in the conclu sions arrived at by the Trial Court and dismissed the suit except to the extent of plaintiff 's share in the two ances tral houses, on the basis of its finding that the other properties were self acquired properties of R. During the pendency of the suit R died.
By virtue of his will the self acquired properties of R went to the defend ants and the plaintiff was left out.
The plaintiff preferred an appeal before the High Court against the order of the First Appellate Court.
The High Court interfered with the said findings of facts and held that since Survey No. 71 had come to the share of R in general partition, it was ancestral property.
it further observed that since the said property was yielding income with the help of which the other properties could have been purchased and since 436 further the gold smithery business was an ancestral busi ness, the properties purchased with the help of such income should be held to be joint family properties.
Aggrieved, the defendants have filed this appeal.
Allow ing the appeal, HELD: 1.
There was, no question of law involved in the second appeal.
Yet the High Court chose to interfere with the finding ignoring the mandatory provisions of Section 100 of the Civil Procedure Code that unless it was satisfied that the case involved substantial question of law it could not entertain it and that before it could entertain it, the Court had to formulate such question.
[440F] 2.1 It was not disputed at any time that the property in Survey No. 71 had all along stood in the name of Supadu and, therefore, the presumption drawn by the First Appellate Court that this showed that in all probability the property was purchased after the death of his father cannot be said to be unreasonable.
There is no evidence brought on record by the plaintiff with regard to the quantum of income from Survey No.71.
In fact, the uncontroverted evidence on record shows that Ramchandra had no implements and bullocks for cultivating the land and the land was always cultivated with the help of the labourers who brought their own implements and bullocks.
This shows that the family derived less than normal income from the said land.
It was admitted by the plaintiff that Ramchandra was a skilled goldsmith and was well known in the locality as such, and was doing his busi ness as goldsmith and earning sufficient income.
[440A D] 2.2 The High Court ignoring the fact that it was not the case of the plaintiff that goldsmithery was an ancestral business and that it was not his case that the suit proper ties were purchased with the help of the income from the said business held that it was so.
What is further, the plaintiff 's case was that the suit properties were purchased with the income from Survey No. 71.
Thus it is obvious that the conclusions which were arrived at by the First Appellate Court were reasonable and legal besides being conclusions of facts.
[440D E]
|
ivil Appeal Nos.
3392 3394 of 1990.
From the Judgment and Order dated 30.11.
1989 of the Andhra Pradesh High Court in W.A. No. 269/89, dated 30.8.1988 in W.P. No. 12041/84 and dated 26.11.1987 in W.P. No. 194 of 1983.
P.K. Goswamy, Additional Solicitor General, M.K. Ramamurthy, C. Sitaramaiya, M.L. Paul, Kailash Vasdev, Ms. M.M. Rasaily, M.A. Krishnamurthy, Mrs. C. Ramamurthy, T.V.S.N. Chari, Mrs. B. Sunita Rao and Ms. Majula Gupta for the Appearing Parties.
The Judgment of the Court was delivered by KASLIWAL, J.
Special leave granted.
All the above cases are disposed of by one single order as identical questions of law are involved in all these cases.
In order to appreciate the controversy, facts in brief are stated of all these cases.
SLP No. 4176 of 1988: The respondent Vijaya Kumar was appointed as a Proba tionary Officer (Gr.
I Officer) by an Order of the Executive Committee of the Central Board of the State Bank of India on 7.12.71.
The respondent was charge sheeted in respect of gross irregularities and corrupt ?401 practices and was ultimately dismissed from service by an order dated 22.12.88 passed by the Chief General Manager of the Bank.
Shri Vijay Kumar filed a writ petition No. 194/83 before the Andhra Pradesh High Court challenging his order of dismissal.
A Division Bench of the High Court heard the writ petition alongwith writ appeal No. 141/86 and allowed the writ petition but dismissed the writ appeal by order dated 26.11.87.
The State Bank aggrieved against the afore said order of the High Court passed in writ petition No. 194/83 has filed this special leave petition.
The High Court has allowed the writ petition only on one ground that the appointing authority of Vijaya Kumar was Executive Committee of the Bank and as such Chief General Manager being an authority lower than the appointing authority was not compe tent to pass an order of dismissal.
SLP No. 15235 of 1988: In this case the respondent T. Dayakar Rao was appointed as a Clerk in the State Bank of India in the month of Octo ber, 1962.
In the month of July, 1971 he was selected as a Trainee Officer and was given job training at various branches of the Bank for two years.
While he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period 1.9.79 to 15.6.80.
Disci plinary proceedings were initiated on 29.7.82.
On 6.3.84 the Chief General Manager in the capacity of disciplinary au thority passed an order of dismissal.
T. Dayakar Rao filed a writ petition No. 1204/84 in the High Court.
The Division Bench of the High Court by an order dated 13th August, 1988 allowed the writ petition following the decision of Division Bench given in writ appeal No. 141/86 dated 26.11.87.
The Bank aggrieved against the aforesaid order has filed the Special Leave Petition under Article 136 of the Constitu tion.
SLP No. 2069 of 1990: In this case Shri A.K. Soundararajan appellant was appointed as Technical Officer by an order dated 14.6.68 of the Executive Committee of the Central Board of the Bank.
It was mentioned in the Order that Shri Soundararajan would be governed by the State Bank of India (Officers & Assistants) Service Rules.
Post of Technical Officer was considered equivalent to Staff Officer Grade III under the Rules.
He was suspended and given a chargesheet on 23.4.82 and was dismissed by an order dated 31.3.83 passed by the Chief General Manager.
Shri Soundararajan filed a writ petition No. 7108/85 in the High Court challenging his order of dismissal.
Learned Single Judge of the High 402 Court by order dated 31.10.88 allowed the writ petition by following the decision given by the Division Bench in writ petition No. 1204/84 in the case of T. Dayakar Rao.
The State Bank aggrieved against the order of the learned Single Judge filed an appeal before the Division Bench.
The Divi sion Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 25.8.88 made applicable with retrospective effect.
The Division Bench by Order dated 30th November, 1989 allowed the appeal filed by the Bank.
Shri A.K. Soundararajan aggrieved against the Order of the High Court has filed this Special Leave Peti tion.
It would be necessary to narrate the facts of SLP (C) No. 5139/88 (State Bank of India vs Hanumantha Rao) disposed of by an order of this Court dated 30th January, 1990.
Hanumantha Rao was promoted as Grade I Officer on 1.4.1973 by the Executive Committee of the Central Board of State Bank of India.
In 1979 he was posted as the Manager of a branch of the Bank in Warangal District.
In respect of certain alleged acts of misfeasance/malfeasance he was suspended on 17.8.81.
On 4.5.82 a memo of charges was served on Hanumantha Rao by the Chief General Manager of the Bank.
The Chief General Manager of the State Bank of India, local head office Hyderabad dismissed Hanumantha Rao by an order dated 7.1.84.
Hanumantha Rao filed a writ petition No. 5509/84 in the High Court.
Learned Single Judge allowed the writ petition declaring the order of dismissal as incompe tent and invalid.
The Bank aggrieved against the order of the Learned Single Judge filed a Letters Patent Appeal No. 141/86 before the Division Bench.
The Division Bench heard and disposed of the writ appeal No. 141/86 and writ petition No. 194/83 by a common order.
The Division Bench agreed with the conclusion of the learned Single Judge that the order of dismissal passed by the Chief General Manager is incompetent and invalid being violative of the guarantee contained in the proviso to Regulation 55(2)(a) of the State Bank of India General Regulations, 1955.
While dealing with the cross objections filed by Shri Hanumantha Rao the Bench took notice of the fact that the writ petitioner had died on 24.11.87 and as such gave the following direction: "On account of the death of the writ petitioner it is unnec essary for us to go into the merits of the contentions urged by way of cross objections.
There is no question of 403 any enquiry or further enquiry hereafter.
We may mention in this connection that the learned counsel for the petitioner (respondent in this Writ Appeal) offered to file a petition to bring on record the legal representatives of the deceased writ petitioner as respondents in this Writ Appeal since, according to him, they would be entitled in any event to claim the monetary benefits flowing from the orders of this Court.
Now that we have agreed with the learned single Judge that the order of dismissal was incompetent and invalid, we direct that the writ petitioner shall be treated to be under suspension pending enquiry till 24.11.
1987 and all the monetary benefits that he is entitled to on that basis, including the arrears of suspension allowance, shall be paid over to his legal representatives.
Mr. Prasad will file the legal representatives petition within two weeks from today.
Post this Writ Appeal for orders after two weeks.
The Writ Appeal, accordingly, fails and is dis missed, but, in the circumstances, without costs.
" The Bank aggrieved against the aforesaid order filed the SLP No. 5139/88 before this Court.
Taking note of the facts and circumstances of the case of Hanumantha Rao having died on 24.11.87 leaving behind 14 children, this Court on 30th January, 1990 did not consider if fit to interfere with impugned order of the Division Bench.
It was further made clear that even though this Court was not interfering with the impugned order, the questions raised on behalf of the Bank were left open.
The Bank was directed to treat Hanuman tha Rao in service and pay the dues, arrears of salary and other terminal benefits in accordance with law to his legal representatives.
With these observations, the SLP was dis missed.
The question which calls for consideration in all these cases is whether the order of dismissal could be passed by the Chief General Manager who was lower in rank to the Executive Committee who was the appointing authority in these cases.
In order to appreciate this controversy, it would be proper to give reference of the relevant provisions of the (hereinafter referred to as the Act), State Bank of India General Regulations, 1955 (hereinafter referred to as the Regulations) and the State Bank of India (Supervising Staff) Service Rules, 1975 404 (hereinafter referred to as the Rules).
Section 43 of the Act empowers the State Bank to appoint such number of officers, Advisors and Employees as it con siders necessary or desirable for the efficient performance of its functions and to determine the terms and conditions of their appointments and service.
Section 49 of the Act confers power on the Central Government,in consultation with the Reserve Bank to make rules to provide for all matters in which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act.
Section 50(1) of the Act confers powers on the Central Board of Directors of the Bank to make regulations.
Sub section (3) of the Section 50 of the Act empowered the Reserve Bank to make the first regulations with the previous sanction of the Central Government.
In exercise of the powers conferred by sub section (3) of Section 50 of the Act, the Reserve Bank of India with the previous sanction of the Central Government made the State Bank of India General Regulations, 1955.
These regulations have been amended from time to time by the Central Board of Directors by making regulations under subsection (1) of Section 50 of the Act.
Regulation 55(2)(a) deals with the initial appointments and promotions to various categories of employees in the bank.
Initially the appointments of Officers used to be made only by the Executive Committee as provided in Regulation 55(2)(a).
As the bank grew larger in branches, the bank thought fit to vest the power of appointment and promotion to various functionaries of the bank and also gave power to delegate their power of appointment also.
Regulation 55(2)(a) was thus substituted by a resolution dated 18th August, 1971 of the Central Board.
After this resolution for Officers Grade I & II,the appointing authorities were speci fied as the Secretary and Treasurer or the Managing Director respectively depending upon whether the appointment/promo tion is for service in the Circle or the Central office.
The State Bank of India Officers & Assistants Rules which govern the service conditions of Grade I Officer whether they were Probationary Officers or Trainee Officers and Staff Officers followed the scheme of "appointing authority" laid down in the Regulations.
Regulation 55(2)(a) was again amended by a resolution of the Central 405 Board on 11th July, 1972.
By this amendment there was only a terminological regrouping of the earlier regulation rather than any qualitative change.
The State Bank Laws (Amendment) Act, 1973 introduced various amendments and one of the amendments was relating to change of designation of Secre tary and Treasurer as Chief General Manager.
Hence the Central Board vide its resolution dated 29.3.74 for the words "Secretary & Treasurer" substituted "Chief General Manager.
" The service conditions of all Officers came to be brought under a single set of service rules viz. the State Bank of India (Supervising Staff) Service Rules which came into force on 1.7.75.
It would be important to mention that Regulation 55(2)(a) at all relevant period for our purpose recognized the right of the officers or employees of the Bank under the following clause "such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority.
" Clause (f) of Rule 3 of the State Bank of India (Supervising Staff) Service Rules which is relevant for our purposes reads as under: (f) "Appointing Authority" means (i) in the case of Officers Grade II and Grade I and of other employees to whom the salary scales applicable to Officers Grade II and Grade I generally apply with or with out modification, the Chief General Manager concerned or the Managing Director according as the employee is serving in the Circle or in or under Central Office; (ii) in the case of Staff Officers of various grades and of other employees to whom the salary scales applicable to Staff Officers generally apply with or without modification, the Managing Director; (iii) in the case of Senior Staff Appointments and of em ployees to whom the salary, scales applicable to Senior Staff Appointments generally apply with or without modifica tion, the Executive Committee; Sub Rule (1) of Rule 50 relevant for our purposes is also reproduced below: 50(1)(i) The Disciplinary Authority may itself, or shall when so directed by its superior authority, institute disci plinary proceedings against an employee.
406 (ii) The Disciplinary Authority or any Authority higher than it may impose any of the penalties in rule 49 on an employ ee.
It may be further noted that an amendment in Regulation 55 was approved by Central Board at its meeting dated August 25, 1988 which reads as under: 55(1) Save as provided in sub regulation (2) and as may be directed the Central Board, a Local Board may exercise all the powers of the State Bank in respect of the Staff serving in the areas in its jurisdiction.
2(a) The appointing and/or promoting authority for various categories/grades of officers and employees shall be such as the Executive Committee may by general or special order designate from time to time.
(b) No officer or employee of the Bank shall be dismissed, discharged, removed or retired from the service of the Bank or reduced to a lower grade or post or to a lower stage in a time scale by an authority lower than the appointing author ity.
Explanation (For the purpose of clause (b) the term 'appointing authority ' shall mean and include the authority who has been designated as such in respect of such class or grade of officers or employees to which the officer or employee concerned, as the case may be belongs at the time when such Order is passed or any proceeding leading to such Order or termination is initiated. ) (c) Nothing in this sub regulation shall affect the powers of a disciplinary authority appointed or notified under any award, settlement under the , governing, affecting or regulating the service conditions of workmen of the Bank, and for the purpose of clause (b) above, the appointing authority shall be deemed to have been substituted by such disciplinary authority.
(d) The salary and other emoluments to be granted to offi cers and other employees shall be as laid down in the Rules of Service approved by the Central Board and, where no such rules have been laid down, as fixed by the Executive Commit tee.
407 (e) The power to grant pensions to officers and other em ployees leaving the service of the State Bank, other than pensions provided for under the Rules of pension funds respectively applicable to them, shall be reserved to the Central Board.
(f) The grant of gratuities or other financial assistance, either temporary or permanent, to widows, children or other dependents of deceased officers or other employees shall be made by the Executive Committee of the Central Board except where grant of any such gratuity or financial assistance is authorised by any general direction given by the Central Board.
Explanation (The term 'Officers ' in this regulation shall include any employee to whom the rules of service generally applicable to officers, apply with or without modification.) (Sub regulation (2) substituted with effect from 1.10.79).
" The Executive Committee of the Bank passed the following resolution on August 30, 1988: In exercise of the powers conferred by sub section (1) of Section 43 of the (23 of 1955) and amended sub regulation (2)(a) of Regulation 55 of the State Bank of India General Regulations, 1955, the Executive Committee of the Central Board of the State Bank of India hereby makes the following order: The initial appointments and/or promotions to various categories of officers and other employees in the Bank set out in Column I here under shall be made by the authority specified in Column II.
Column I Column II Employees working at branches i) Employees other a) Subordinate the concerned than officers Staff Branch Manager and deputy General Manager ii) Clerical the concerned Staff Regional Manager and Dy.
General Manager.
b) Employees working at LHOs/ 408 Regional Offices and their establishments The concerned Office Manager/ Admn.
Officer at Staff Colleges or Insti tutes Manager Dy.
Chief Manager or, where there is no post of above descrip tions the head of con cerned dept/office.
ii) Officers in The Chief General Manager junior management for appointments/promotions in the Grade Scale I Circle and the Chief General and Middle Manager (Personnel & HRD) in Management Central Office for Central Grade Scale II Office establishment.
iii) Officers in The Deputy Managing Director Middle Management Grade Scale III iv) Officers in The Managing Director Senior Management Grade Scale IV, V v) Officers in Top Recommending Authority: Executive Grade Scale VI, VII The Directors Promotion Committee and special consisting of the Chairman, the scales Managing Director and the Director nominated by the Central Government in terms of clause (e), sub section (1) of Section 19 and the Director nominated by the Reserve Bank of India in terms of clause (f) of sub section (1) of Section 19 of the Act.
Promoting/Appointing Authority: The Executive Committee of the Cen tral Board.
409 All authorisations in respect of appointing authority and/or promoting authority made by the Executive Committee from time to time after 1.10.79 shall be deemed to have been done under the amended regulation 55.
Appointments autho rised by the Chief General Manager (Personnel & HRD) in respect of JMGS I after 1.10.79 are also confirmed hereby.
All the employees of the bank in the cases before us where appointed by the Executive Committee.
Order of dis missal in their cases has been passed by the Chief General Manager.
It is an admitted position that on the date of passing the order of dismissal the Chief General Manager was the appointing authority.
According to the Bank though the employees were appointed by the Executive Committee, but at the time when inquiry was held and the order of dismissal passed, the Chief General Manager had become the appointing authority.
On the other hand the contention on behalf of the employees is that the Executive Committee being the appoint ing authority, no authority lower than the Executive Commit tee can pass the order of dismissal in their cases.
Accord ing to their contention the Chief General Manager, being a lower authority than the Executive Committee, he had no competence to pass the order of dismissal.
Learned counsel for the employees in this regard referred to Article 311 of the Constitution of India and placed reliance on a plethora of cases decided on the basis of guarantee enshrined under Article 311 of the Constitution.
The guarantee clause under Article 311(1) of the Consti tution of India which is relevant for our purpose reads as under: "No person who is a member of a Civil Service of the Union or an All India Service or a Civil Service of a State or holds a Civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
" Now so far as the right which has been conferred on the employees of the State Bank contained in Regulation 55(2)(a) is that such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority.
Thus a comparison of the provi sions contained in Article 311(1) of the Constitution and the right guaranteed to the employees of the State Bank under Regulation 55(2)(a) shows that there is a material difference between the language used in the two provisions.
Under Arti 410 cle 311(1) the words used are "by which he was appointed." In Regulation 55(2)(a) there are no such words "by which he was appointed" and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the appointing authority.
Thus the right guaran teed in case of the officers or employees of the State Bank is that the order of dismissal cannot be passed by an au thority lower than the appointing authority.
A perusal of the relevant Regulations and Rules mentioned above clearly go to show that the Chief General Manager had become the appointing authority of the employees in question under Regulation 55(2)(a) with effect from 1.7.74.
Admittedly the orders of dismissal have been passed long after these amend ments when the Chief General Manager had already become their appointing authority under the Regulations and the Rules.
The right that an officer or employee of the State Bank of India cannot be dismissed from service by an author ity lower than the appointing authority is a creation of statutory rules and regulations.
So far as the right or protection guaranteed under Article 311 of the Constitution is concerned, it applies to members of the Civil Service of the Union or an All India service or a Civil Service of a State or who holds a Civil Post under the Union or a State.
Admittedly the employees of the State Bank do not fall under any one of these categories and they cannot seek any protec tion under Article 311(1) of the Constitution.
The employees of the State Bank can only claim such rights which have been conferred under Regulation 55(2)(a) of the General Regula tions.
The only right conferred under the said provision is that the officers or employees of the State Bank cannot be dismissed by an authority lower than the appointing authori ty.
With the risk of repetition it may be stated that on the date when the order of dismissal has been passed, Chief General Manager had already become the appointing authority and as such the order of dismissal has not been passed by an authority lower than the appointing authority.
Apart from the view taken by us as mentioned above the Regulation 55 has been amended by a resolution of the Cen tral Board dated August 25, 1988 with retrospective effect.
It has now been made clear in the explanation that for the purpose of clause (b) the term appointing authority shall mean and include the authority who has been designated as such in respect of such class or grade of officers or em ployees to which the officer or employee concerned, as the case may be belongs at the time when such order is passed or any proceedings leading to such order or termination is initiated.
This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has 411 been designated as such at the time when such order is passed.
It was contended on behalf of the Learned counsel for the employees that the Bank had no power to amend the Regulations with retrospective effect.
We see no force in this contention.
Section 50(2)(a) of the Act clearly pro vides that all regulations made under this section shall have effect from such earlier or later date as may be speci fied in the regulation.
Thus the regulations can be made to give effect from earlier dates also as may be specified in the regulations.
We find no force in the contention of learned counsel for the employees that they had vested right in this regard and the same could not have been taken away by making regulations with retrospective effect.
There cannot be any vested right in such a matter.
As already mentioned above it was a right conferred under Regulation 55(2)(a) and the same can be amended with retrospective effect also in case the authority competent to make regula tions has been given a right to make regulations with retro spective effect.
It has been held in State of Jammu & Kash mir vs Triloki Nath Khosa & Ors., S.C.R. 1974 Vol.
1771 that it is well settled that a Government servant acquires a 'status ' on appointment to his office and as a result his rights and obligations are liable to be determined under statutory or constitutional authority which for its exercise requires no reciprocal consent.
In Bishun Narain Misra vs The State of Uttar Pradesh and Others, AIR 1965 Vol.
52 SC 1567 it was held that new rule reducing the age of retire ment from 55 years to 53 years could not be said to be retrospective.
The proviso to the new rule and the second notification were only methods to tide over the difficult situation which would arise in the public service if the new rule was applied at once and also to meet any financial objection arising out of the enforcement of the new rule.
The new rule therefore, could not be struck down on the ground that it was retrospective in operation.
In Roshan Lal Tandon vs Union of India & Anr., and Kunj Behari vs Union of India & Ors., AIR 1967 SC Vol.
541889 it was held that the legal position of Government servant is more one of status than of contract.
The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties.
Emolu ment of the Government servant and his terms of service are governed by statute or statutory rules which may be unilat erally altered by he Government without the consent of the employee.
It was further held in the above case that the petitioner had no vested contractual right in regard to the terms of his service and that the same can be altered uni laterally.
We may further add that the prohibition if any to alter the terms and conditions can be found only under the Constitution of India and in case power of the rule or law making authority is not circumscribed or limited by any constitutional 412 mandate then it has power to amend such terms and conditions of service unilaterally without the consent of the employee.
In the cases in hand before us the right whatsoever con ferred on the employees of the State Bank was on the basis of Regulation 55(2)(a) and the Central Board of the Bank was authorised to amend such regulations from any date under Section 50(2)(a) of the Act.
In the result the appeals filed by the State Bank of India in the case of Vijaya Kumar and T. Dayakar Rao are allowed, the impugned orders passed by the High Court are set aside and the cases are remanded to the High Court for deciding the writ petitions on other points in accordance with law.
Now so far as the appeal filed by Sh.
A.K. Sunda rarajan is concerned, the point decided by us shall remain concluded but the appellant would be free to raise other points before this Court which are left undetermined.
This case may now be listed for further hearing and final dispos al at an early date.
In the facts and circumstances of the case, the parties shall bear their own costs.
Y. Lal C.A. No. 3392 & 3393 of 1990 allowed.
C.A. No. 3394 of 1990 ordered to be listed for final heating.
|
A common question of law viz., whether an order of dismissal against an employee, could validly be passed by an authority lower than the appointing authority of the Bank, arises for determination in these three appeals, two by the State Bank of India and the third by an employee.
Respondent, Vijaya Kumar in Civil Appeal 3392 of 1990, was appointed as Probationary Officer by an order of the Executive Committee of the Central Board of the State Bank of India.
He was charge sheeted for gross irregularities and corrupt practices and was dismissed from service by an order passed by the Chief General Manager of the Bank, whereupon, he flied a writ petition before the Andhra Pradesh High Court, challenging the order of dismissal passed against him.
A Division Bench of the High Court heard the writ petition, alongwith writ appeal No. 141 of 1986 (involving a similar point).
The High Court allowed the writ petition.
The State Bank being aggrieved by the said order has filed this appeal after obtaining special leave.
T. Dayakar Rao, respondent in Civil Appeal No. 3393 of 1990 was appointed as a Clerk in the State Bank in October, 1962 and while he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period from 1.9.1979 to 14.6.80.
He was dismissed under orders of the Chief General Manager being the disciplinary authority.
Mr. Rao flied a writ petition in the High Court and the High Court allowed the writ petition following its decision in writ appeal No. 141 of 1986.
Being aggrieved the State Bank has filed the instant appeal with special leave of the Court.
Civil Appeal No. 3394 of 1990 has been filed ,by an employee A.K. 399 Soundararajan, who was appointed as Technical Officer by the Executive Committee of the Central Board of the Bank.
It was specifically mentioned in the Order of appointment that Shri Soundararajan would be governed by the State Bank of India (Officers & Assistants) Service Rules.
Shri Soundararajan was chargesheeted and dismissed under orders passed by the Chief General Manager Thereupon he filed a writ petition in the High Court challenging his order of dismissal.
Learned Single Judge of the High Court allowed the writ petition.
The Bank filed an appeal before the Division Bench.
The Division Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 25.8.1988 made applicable with retrospective effect.
Accord ingly the Division Bench allowed the appeal filed by the Bank, Aggrieved against this order.
Shri Soundararajan has flied Civil Appeal 3394 of 1990 with special leave.
The contention urged by the employees is that the Chief General Manager, being a lower authority than the Executive Committee, he had no competence to pass the order of dis missal whereas the Bank contends that the Chief General Manager had, by virtue of the amendment of Regulation 55(2)(a) made retrospectively, become the appointing author ity of employees in question and as such the orders of dismissal passed by him against the employees long after the amendment are valid.
Allowing the appeals by the State Bank and remanding the two cases to the High Court and directing that the appeal by Soundararajan be listed for final hearing, this Court, HELD: The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties.
Emolu ment of the Government servant and his terms of service are governed by statute or statutory rule which may be unilater ally altered by the Government without the consent of the employee.
[411F G] Under Article 311(1) of the Constitution, the words used are "by which he was appointed" In regulation 55(2)(a) there are no such words "by which he was appointed" and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the ap pointing authority.
[410A] Thus the right guaranteed in case of the officers or employees of the State Bank is that the order of dismissal cannot he passed by an 400 authority lower than the appointing authority.
[410B] The right whatsoever conferred on the employees of the State Bank was on the basis of Regulation 55(2)(a) and the Central Board of the Bank was authorised to amend such regulations from any date under Section 50(2)(a) of the Act.
This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has been designated as such at the time when such order is passed.
[412B; 410H] State of Jammu & Kashmir vs Triloki Nath Khosa & Ors., ; ; Bishun Narain Misra vs The State of Uttar Pradesh & Ors., A.I.R. 1965 Vol.
52 S.C. 1567; Roshan Lal Tandon vs Union of India & Anr. and Kunj Behari vs Union of India & Ors., A.I.R. 1967 S.C. (Vol. 54) 1889, referred to.
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Criminal Appeal No. 387 of 1990.
From the Judgment and Order dated 12.1.1984 of the Gujarat High Court at Ahmedabad in Misc.
Application No. 48 of 1982.
S.H. Sheth and S.C. Patel for the Appellant.
B. Datta, Sunil Dogra and P.H. Parekh for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Leave granted.
The appellant is aggrieved by the judgment of the High Court holding that sanction of the State Government as required under Section 197, Cr.
P.C., is not necessary for taking cognizance of the offences against the appellant on the basis of the complaint filed by the respondent.
The appellant is an employee of the Municipal Corporation, Ahmedabad.
While holding the post of Laboratory Officer, the State Government by a Notification dated 21.12.1966.under Section 8 of the Food Adulteration Act, 1954 appointed the appellant as a Public Analyst for the local area comprised within the limits of the Corporation.
The complaint was filed by the respondent before the Magistrate for the of fences punishable under Sections 465,468 and 201, I.P.C., alleged to have been committed by the appellant while exer cising the functions as Public Analyst.
513 The appellant moved the High Court under Section 482, Cr.
P.C., for quashing the criminal proceedings on the ground that, he being a public servant removable from office only by the State Government the Magistrate could not take cogni zance of the offence alleged to have been committed while discharging the duties as Public Analyst without the requi site sanction under Section 197, Cr.
The High Court rejected this contention and dismissed the petition.
Under Section 197(1), Cr.
P.C., when a public servant not removable from his office save by or with the sanction of the Government, is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction of the Government.
The section extends immunity from irre sponsible, frivolous and vexatious prosecution.
The privi lege of immunity from prosecution without sanction extends only when the accused is a public servant of the kind men tioned therein.
He must be a public servant as defined in Section 21 of the Indian Penal Code and not removable from his office save by or with the sanction of the State Govern ment or the Central Government as the case may be.
The offence must also be one committed by the accused while acting or purporting to act in the discharge of his official duty.
Section 21, I .P.C., reads as under: 21.
"Public servant" The words "public servant" denote a person falling under any of the descriptions hereinafter following, namely: Twelfth .
Every person (a) in the service or pay of the Government or remu nerated by less or commission for the performance of any public duty by the Government; (b) in the service or pay of a local authority, a corporation established by Or under a Central, Provincial or State Act or a Government company as defined in Section 6 17 of the ( 1 of 1956).
Section 197, Cr.
P.C., clearly intends to draw a line between public servants and to provide that only in the case of the higher ranks 514 should the sanction of the government to their prosecution be necessary.
While a public servant holding an office of the kind mentioned in the Section is as such public servant appointed to another office, his official acts in connection with the latter office will also relate to the former of fice.
The words "removable from office" occurring in Section 197 signify removal from the office he is holding.
The authority mentioned in the section is the authority under which the officer is serving and competent to terminate his services.
If the accused is under the service and pay of the local authority, the appointment to an office for exercising functions under a particular statute will not alter his status as an employee of the local authority.
The appellant herein is admittedly the Laboratory Offi cer in the service and pay of the Municipal Corporation of Ahmedabad.
The appointment as Public Analyst by the Govern ment does not confer on him the status of a public servant or an officer under the service and pay of the Government.
He is not remunerated by any fee by the Government.
The appellant was not the employee of the State Government and was not employed in connection with the affairs of the State.
He was not holding any public office in connection with the affairs of the State.
The State Government had merely entrusted him with the functions of a Public Analyst which could be granted and taken by an administrative act.
It was on account of his being employed by the Municipal Corporation that he was appointed as a Public Analyst by the Government.
He is not appointed as Public Analyst in the cadre against any post.
The Prevention of Food Adulteration Act also does not contain any deeming provision to treat the Public Analyst as a public servant.
The appellant is holding an office from which he is removable by the Local Authority and not by the Government.
The cancellation of the appointment as Public Analyst would not amount to removal from office.
Section 197, Cr.
P.C., in this context contemplates the removal of the appellant from the office of the Laboratory Officer and not his transfer or removal from the office of the Public Analyst.
The removal of the appellant from the office of Public Analyst would not affect his office as a Laboratory Officer under the Local Authority and would not amount to removal from office.
The appellant is not therefore a public servant removable only by the State Government.
The High Court was right in its view.
We accordingly dismiss the appeal.
Y. Lal Appeal dismissed.
|
The appellant, an employee of the Municipal Corporation Ahmedabad was holding the post of Laboratory Officer and while he was so holding the post, he by a Notification dated 21.12.1966, issued by the State Government, was appointed as a Public Analyst for the local area within the municipal limits of the Corporation.
The respondent filed a complaint before the Magistrate for offences punishable under Sections 465, 468 and 20 1.
I.P.C. alleged to have been committed by the appellant while exercising his functions as a Public Analyst.
The appellant moved the High Court under Section 482, for quashing the criminal proceedings sought to be initiated against him by the said complaint.
His principle contention was that he being a public servant removable from office only by the State Government, the magistrate could not take cognizance of the alleged offences and that previ ous sanction of the State Government as contemplated under section 197, Cr.
P.C. was necessary.
The High Court rejected the contention of the appellant and dismissed the petition.
He has filed this appeal after obtaining special leave from the Court.
Dismissing the appeal, this Court, HELD: The privilege or immunity from prosecution without sanction extends only when the accused is a public servant of the kind mentioned in Section 197, Cr.
He must be a public servant as defined in Section 21 of the Indian Penal Code and not removable from his office save by or with the sanction of the State Government or the Central Government as the case may be.
The offence must also be one committed by the accused while acting or purporting to act in the discharge of his official duty.
Section 197, Cr.
P.C. clearly intends to draw a line between public servants and to pro vide that only in the case of the higher ranks should the sanction of the Government to their prosecution be neces sary.
[513C D, H] 512 The words "removable from office" occurring in Section 197 signify removal from the office one is holding.
[514B] In the instant case, the appellant was not holding any public office in connection with the affairs of the State.
The State Government had merely entrusted him with the functions of a Public Analyst which could be granted and taken by an administrative Act.
It was on account of his being employed by the Municipal Corporation that he was appointed as a Public Analyst in the cadre against any post.
The Prevention of Food Adulteration Act also does not con tain any deeming provision to treat the Public Analyst as a public servant.
[514D E] The appellant is not therefore a public servant remova ble only by the State Government.
[514G]
|
vil Appeal Nos.
1893 and 1894 of 1989.
From the Judgment and Order dated 24.9.
1987 of the Andhra Pradesh High Court in C.C.C.A. No. 152 of 1984 and C.C.C.A. No. 150 of 1984.
K. Parasaran, Shanti Bhushan, A.D.N. Rao and A. Subba Rao for the Appellants.
M.C. Bhandare, K. Madhava Reddy, Subodh Markandeya, Mrs. Chitra Markandeya, W.A. Nomani, G.S. Giri Rao, A.K. Raina and D. Prakash Reddy for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
The Plaintiffs by Special Leave have filed these appeals against the Judgment of Andhra Pradesh High Court, Hyderabad, dated 24th September, 1987.
The four plaintiffs who are brothers filed the present suit on 17th July, 1979 for specific performance of oral contract for sale of a building known as "Roshan Manzil" located in an area of 4165 .sq.
yards in Saifabad, Hydera bad.
M/s. Gopi Hotel was the tenant in the premises.
Accord ing to the case as set up in the plaint the first plaintiff Brij Mohan learnt some time in the first week of April, 1979 that the defendant No. 1 Smt.
Mahboobunnisa Begum (since deceased) was contemplating the sale of the property in question and that Shri Arif Ali, her Advocate and income tax practitioner was assisting her in finding a purchaser.
Shri Arif Ali had mentioned the above intention of the first defendant to Sh.
Ibrahim Moosa of M/s. J. Moosa & Company who was known to the first plaintiff.
On learning from Shri Ibrahim Moosa the first and second plaintiffs, namely, Brij Mohan and Jagmohan along with Sh.
Ibrahim met Sh.
Arif Ali.
Arif Ali gave the details of the property and also showed the plans of the property to them.
Arif Ali stated that the defendant was expecting the price of Rs. 10,00,000.
The plaintiffs Nos. 1 and 2 offered Rs.7,00,000.
Shri Arif stated that he will ascertain from the defendant her reaction to the said offer.
A fortnight later i.e. in the third week of April, 1979 the plaintiffs Nos. 1 and 2 along with Sh.
Ibrahim Moosa and Sh.
Arif Ali went to the residence of the defendant, who was insisting on the payment of Rs. 10,00,000 as the sale price.
At the said meeting the husband of the defendant was also present.
The plaintiffs Nos. 1 and 2 418 increased their price from Rs.7,00,000 to Rs.8,00,000.
The first defendant said that she would think over and inform the plaintiffs Nos. 1 and 2 through Sh.
Arif Ali.
On 3rd May, 1979 the plaintiffs Nos. 1 and 2 along with Shri Ibra him Moosa met Sh.
Arif Ali.
Arif Ali stated that the defend ant was agreeable to sell the property to plaintiffs only for Rs. 10,00,000 and not a pie less.
Thereupon the plain tiffs agreed to pay Rs. 10,00,000 as the sale price.
Shri Arif Ali after getting the confirmation of acceptence of the said offer of the plaintiffs Nos. 1 and 2 from the first defendant said that the plaintiffs Nos. 1 and 2 should meet the defendants on 6th May, 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporating the oral agreement arrived at.
It was further alleged in the plaint that on 6th May, 1979 the first and second plaintiffs along with Shri Ibrahim Moosa met the first defendant and her husband in the presence of the said Sh.
Arif Ali.
In the said meeting the amount of earnest money to be paid, time for registration of the sale deed etc., were decided.
The said Shri Arif Ali prepared in his own handwriting a draft of the receipt incorporating the terms of the orally concluded agreement for sale.
The draft was scrutinised by the husband of the first defendant who suggested some alterations.
The said Shri Arif Ali thereupon prepared final draft of the receipt in his own hand.
He handed over the first and the final draft to the first plaintiff to get the later typed and duly stamped.
He also delivered the stamp papers to the first plaintiff for being used for typing of the formal agreement of sale.
It was further stated in the plaint that during the said meeting held on 6th May, 1979, the plaintiffs Nos. 1 and 2 were permitted to proceed with the publication of the no tices in the newspapers.
Accordingly, the contents of the publication were got prepared by them bonafidely anticipat ing that the first defendant will execute the receipt after receiving the stipulated earnest money in the course of the day, ie.
6.5.79.
However, for reasons known to herself the first defendant deliberately and wantonly evaded meeting the first and second plaintiffs to receive the advance and execute the receipt.
It was further stated in the plaint that after the public notice was published in the newspapers taking advan tage of her wanton and deliberate act of evasion, the first defendant got a reply notice published in the newspaper and got issued a legal notice dated 8.5.79 through her Advocate, falsely alleging that there was no agreement for sale.
Thereafter the first and second plaintiff made sincere and repeated attempts 419 to convince the first defendant that the false and baseless pleas taken by her were detrimental to the interest of all concerned and there is inexistence a concluded contract for sale of the suit property and that the execution of the agreement of sale was a mere formality as well the receipt for the advance.
Since the first defendant persisted in her illegal conduct.
the plaintiffs got issued a final notice dated 27th June, 1979 calling upon the first defendant to execute the agreement, receive the earnest money and issue a valid receipt within three days of the receipt of the notice thus giving the first defendant one more opportunity.
The plaintiffs neither received any reply nor the first defend ant complied with the demands made in the notice.
It was further alleged in the plaint that the plaintiffs Nos. 1 and 2 had negotiated for the purchase of the property on behalf of themselves and plaintiffs Nos. 3 and 4 who were their younger brothers.
The concluded contract for sale entered into with the first defendant was for the benefit of all the four plaintiffs.
Hence all the four plaintiffs had joined in the filing of the suit.
The second defendant was M/s Gopi Hotel who was the tenant of the first defendant in the suit premises.
The plaintiffs further averred that they have been and are ready and willing to pay to the first defendant the sale consider ation of Rs. 10,00,000.
The plaintiffs undertake to deposit the same in the court at any time during the pendency of the suit or within a time fixed by the Hon 'ble Court for the deposit of the same after passing the decree or at the time of execution and registration of the sale deed.
The plain tiffs on the above allegations sought the relief of specific performance of the agreement of sale in respect of the suit property after payment of sale consideration of Rs. 10,00,000 The first defendant Smt.
Mahaboobunnisa Begum filed a written statement on 21st January, 1980 stating that certain negotiations took place between her and plaintiffs Nos. 1 and 2, but no contract was finalised with them and the negotiations failed.
According to her, under an agreement of sale dated 22nd June, 1979 she agreed to sell the property in question to defendants Nos. 3 and 4, namely, Smt.
Sugra Begum and Smt.
Saira Banu.
It was submitted in the reply that it was wholly incorrect to suggest of an oral contract of sale on 3rd May, 1979 in respect of sale of the suit property, in favour of the plaintiffs.
There was a proposal of sale of the suit property and plaintiffs did approach for negotiations.
However, the allegation of the plaintiffs approaching during first week of April, 1979 with Arif Ali, Income Tax practitioner, was wholly erroneous.
In fact plaintiff No. 1 approached 420 No. 1 with Arif Ali and Ibrahim Moosa for negotiations, and plaintiffs Nos. 1 and 2 came along with them somewhere during the last week of April, 1979 and tried to negotiate, and thereafter, again they approached on 6th May, 1979, but negotiations could not be finalised and the answering de fendant did not agree to sell the suit property to the plaintiffs Nos. 1 and 2.
In fact, details have been men tioned in the counter, filed in I.A. pertaining to injunc tion bearing No. 679/79, which may be read as part of the written statement.
There was no concluded or enforceable contract, arrived at on 3rd May, 1979, as alleged and con tended.
It was further alleged that there was no price settled or agreed and even the payment for advance was not settled and other terms and conditions were not agreed upon, even on 6th May, 1979 and the negotiations failed and noth ing was settled.
There was no concluded contract and the plaintiffs had no cause of action to file the present suit for specific performance.
The parties never intended to have an oral agreement, and the negotiations if any, never re sulted in a concluded contract, and even if the negotiations had been finalised, it had to be reduced into a written agreement, and the writing contemplated was not formal as alleged and contended by the plaintiffs, but was a condition and a term of contract.
The plaintiffs with ulterior motive had taken the plea of oral contract It was further submitted in the written statement that it was true that plaintiffs Nos. 1 and 2 did approach the answering defendant on 6th May, 1979 along with Ibrahim and Arif, and even in the said meeting negotiations failed and the parties did not and could not arrive at a concluded contract; and even in the said negotiations on 6th May, 1979 matters remained unsettled and were not concluded.
It was plaintiff No. 1 who attempted to prepare receipt, it was wholly erroneous to suggest of any draft receipt or a final receipt being prepared after scrutiny made by the husband of the answering defendant.
There was no final document pre pared and there was no final settlement of terms and condi tions of contract.
The answering defendant was not aware of the purchase of stamp paper and she never asked for the purchase of the stamp papers.
The blank stamp papers and incomplete and unsigned draft receipts in no way spell out a concluded contract and the suit is untenable.
It was also alleged in the reply that even on 6th May, 1979 there was no completed or concluded contract and nego tiations failed.
Consequently, the plaintiffs took away the blank incomplete papers, and rushed with utmost haste to get it published in the newspaper, making false allegations of having paid Rs.50,000 as advance under the sale 421 agreement etc., and immediately, the answering defendant sent a suitable reply contradicting the said allegations.
There was no bonafides in their action.
It was done with ulterior motive to cause loss and damage to the defendant.
When no earnest money had been paid or received, the plain tiffs Nos. 1 and 2 had no right to make false allegations and mislead the public and consequently the answering de fendant suffered heavy loss.
The second defendant M/s. Gopi Hotel only took the plea in the written statement that he was a tenant in the build ing.
Defendants Nos. 3 and 4 supported the case of the first defendant and claimed ownership in the suit property by virtue of a registered sale deed dated 19th November, 1979 executed in their favour.
It may be made clear at this stage that according to defendant No. 1 an agreement to sell the property in question was made by the first defendant in favour of defendants Nos. 3 and 4 on 22.6.79.
After the injunction being vacated by the High Court the first defend ant sold the suit property for a sum of Rs. 10,00,000 in favour of defendants Nos. 3 and 4 by a registered sale deed dated 19th November, 1979.
Defendant No. 1 died on 3rd November, 1982 during the pendency of the suit as such defendants Nos.
5 to 9 were impleaded as legal representa tives of defendant No. 1.
The Learned Trial Court recorded the summary of the findings which are reproduced in its own words.
Summary of the findings: "On the facts and circumstances of the case, it is estab lished that the plaintiffs entered into an oral contract of sale with D. 1 on 3.5.79.
The terms settled were that D. 1 should sell the suit property for a sum of Rs. 10,00,000 and D. 1 should obtain permissions from the authority under Land Ceiling Act and also income Tax Act.
The sale deed should be executed within six months from 6.5.79.
It is also settled that vacant possession was not to be given on the date of contract of sale, and the parties are aware that the defend ant No. 2 was only a tenant in the premises.
The only aspect left open on 3.5.79 is that mode of payment should be fixed on 6.5.79.
On 6.5.79 it was agreed that D.1 should receive Rs.50,000 as advance and these terms were reduced into writing in Ems.
A. 1 and A. 2, but, before the ink could dry, the defendant No. 1 on the evening of 422 6.5.79, refused to receive the amount.
This resulted in the breach of contract on the part of D. 1.
So the plaintiffs are entitled to specific performance of oral contract of sale concluded on 3.5.79.
Subsequent sale to defendants 3 and 4 do not create any rights in favour of them and in order to prevent D. 3 and D. 4 from claiming any rights in future, they should also be made to join D. 5 to D. 9 in executing the registered sale deed.
Defendant No. 2 is admittedly not entitled to any proprietary rights in the property and he is only a tenant.
As to whether D. 2 is liable to be evicted or not it is held that the Plaintiffs are entitled to seek eviction at an appropriate time when they become full owners of the property.
Defendants 3 and 4 shall not be liable to contribute any thing towards expenses for the executing of the registered sale deed and defendants 5 to 9 as legal representatives of D. 1 are bound to perform their part of contract by obtaining permission required under the Urban Land Ceiling Acts and Income Tax act and any other Act required execute the sale deed and register the sale upon receiving the entire consideration of Rs. 10,00,000.
The expenses for registration of the sale deed shall be borne out in equal halls by defendants 5 to 9 on the one hand and the plaintiffs on the other hand".
As a result of the above findings the trial court de creed the plaintiffs suit for specific performance.
Two separate appeals, one by defendants Nos. 5 to 9 and the other by defendants Nos. 3 and 4 were filed in the High Court challenging the decree passed by the trial court.
A Division Bench of the High Court by Judgment dated 24th September, 1987 allowed both the appeals and set aside the decree passed by the trial court.
As two separate appeals Nos. 150 and 152 of 1984 were disposed of by one single order the plaintiffs filed the above two civil appeals before this Court by Special Leave.
The High Court observed that the only question which arose for consideration in both the appeals was whether there was a concluded oral contract between the parties, namely, plaintiffs 1 and 2 on one side and the first defend ant on the other, on 3rd May, 1979 as alleged by the plain tiffs? According to the High Court to decide this question, the only available oral evidence was that of P.W. 1 Brij Mohan, P.W. 3 Jagmohan and D.W. 2 Arif Ali.
As regard the negotiations which took place between the parties in the third week of April, 1979, the High court observed that the negotiations which took place between the 423 parties in the third week of April, 1979 were not in dispute and which were to the effect that when the first defendant was insisting on payment of Rs. 10,00,000, plaintiffs 1 and 2 increased their offer from Rs.7,00,000 to Rs.8,00,000 and the first defendant promised them to think over and inform the plaintiffs through Arif Ali.
The High Court then consid ered the bargain that took place between the parties on 3rd May, 1979.
The plaintiffs apart from their own statements as P.W. 1 and P.W. 3 had also examined P.W. 2, the Income Tax Inspector B Ward Circle No. 4, Hyderabad to show that de fendant No. 1 was an income tax and wealth tax assessee and Sh.
Arif Ali, Advocate and Income tax practitioner used to look after her tax matters.
The plaintiffs had also examined P.W. 4, Mohd Yusuf a stamp vendor to prove Exhibit X 25 sales register of stamps and Exhibit X 26 an entry of sale of exhibit A. 3 non judicial stamps for Rs.5 to defendant No. 1 Smt.
Mahboobnissa Begum.
Similarly plaintiffs had examined P.W. 5 Sheikh Ismail another stamp vendor for having sold a stamp Exhibit A 4 to one Abdul Khalik on behalf of Smt.
Mehboobnissa Begum vide entry exhibit X 27 in the register of stamps.
The plaintiffs by the aforesaid evidence wanted to establish that one stamp was purchased by Smt.
Mehboobnissa Begum herself and another through Mohd. Khalik for executing the agreement for sale in favour of plaintiffs.
The High Court in this regard observed that it was not necessary to discuss the evidence of P.W. 4 as to whether the first defendant personally went to him and purchased the stamp paper.
The first defendant who is a lady from aristocratic family would not have gone all the way to Chotta Bazar to purchase a non judicial stamp worth Rs.5.
P.W. 4 deposed that he cannot identify whether the person who came for purchase of the stamp paper was Smt.
Mehboobnissa Begum or not.
It may be that some person by name Smt.
Mehboobnissa purchased the stamp papers.
P.W. 5 simply stated that he sold exhibit A 4 to one Adbul Khalik on behalf of Smt.
Mehboobnissa Begum.
D.W. 2, Arif Ali however said that neither any transaction nor talks took place between the plaintiffs 1 and 2 and himself on 3rd May, 1979.
The High Court did not agree with the submission of the Learned counsel for the plaintiffs made before them that the pur chased of the stamps Exhibit A 3 and A 4 was a strong cri cumstance in favour of a concluded contract.
The High Court in this regard observed that first of all it was not firmly established that the purchase of the stamps was for the purpose of this transaction only.
In view of the evidence of D.W. 2 much weight cannot be given to the evidence of P.Ws. 4 and 5.
The High Court further observed that even assuming that these two stamps were purchased pursuant to the talks that took place between D.W. 2 and P.Ws. 1 and 3 it would not improve the case of the plaintiffs.
The 424 stamps were blank and nothing was engrossed on them.
This circumstances, at the most would show that meeting on 6th May, 1979 was fixed between the plaintiffs 1 and 2 and the first defendant for further negotiations.
The High Court then observed that as regards the meeting which took place on 6th May, 1979 and the fact that the negotiations fell through was admitted by both the parties.
Therefore, the crucial question for determination was whether all the terms of the oral contract were entered into between the parties on 3rd May, 1979 or any terms were left open to be dis cussed and determined in the meeting to be held on 6th May, 1979.
The High Court then considered the argument of the plaintiffs according to whom Exhibit A 1 draft receipt was written by D.W. 2 Sh.
Arif Ali on 6th May, 1979 stating that the suit premises was agreed to be sold for Rs. 10,00,000 and the permission for Urban Land Ceiling Authority will be obtained by the first defendant and the registration will be completed within six months from that date.
The plaintiffs further case was that the first defendant 's husband who was present suggested some alterations basing on which Exhibit A 2 fair draft was prepared and that when the plaintiffs took the agreed advance amount of Rs.50,000 in the evening, the first defendant refused to accept the advance amount and resiled from the contract.
As against the above contentions of the plaintiffs, D.W. 2 Sh.
Arif Ali who is the represen tative of the first defendant deposed that in the meeting between the parties which took place in April, 1979 the vendor did not take the responsibility of obtaining ,clear ance under the Urban Land Ceiling Act.
He denied the sugges tion that in the third week of April, 1979 the first defend ant offered to sell the suit property for Rs. 10,00,000 and that she would obtain the clearance under the Urban Land Ceiling Act.
On the other hand he deposed that when the plaintiffs offered Rs.8,00,000 the first defendant told them that she would consider and communicate her view through D.W. 2 some time later.
The High Court in this regard clear ly observed that the contention of the plaintiffs that even in the third week of April, 1979 before the parties could agree upon the sale price for the suit building, there was discussion about the obtaining of clearance under the Urban Land Ceiling Act and that the first defendant undertook to obtain that clearance certificate cannot be believed.
The High Court further observed as under: "As seen from their own evidence, by the 3rd week of April, 1979 plaintiffs 1 and 2 increased theft offer from Rs.7,00.000 to Rs.8,00,000.
At the time of the earlier 425 negotiations when the plaintiffs offered Rs.7,00,000 (seven lakhs) and the 1st defendant was not willing to accept that offer, there was no stipulation as to who should obtain the clearance under the Urban Land Ceiling Act.
If so, it is unbelievable that in the 3rd week of April, 1979 when still there was a wide gap of Rs.2,00.000 in the price payable for the suit building, the parties would have stipulated about the condition as to who should obtain the permission under the Urban Land Ceiling Act.
Therefore, the evidence of P.Ws. 1 and 3 can be believed to the extent that they approached Arif Ali on 3.5. 1979 and Arif Ali in his turn communicated their willingness to pay the price of Rs. 10,00,000 for the suit premises and the 1st defendant accepted that offer.
" The High Court on the basis of the above finding then held that in order to determine the binding nature of the contract between the parties, the mere acceptance of sale price is not sufficient.
It was not the case of the plain tiffs that the other terms of the contract were also dis cussed by D.W. 2 over the phone and their acceptance was communicated to them by the 1st defendant through D.W. 2.
It was obviously for that reason that a further meeting was fixed at the house of the 1st defendant in the morning of 6th May, 1979 which had admittedly taken place.
The High Court further held that it must be remembered that this agreement is in respect of a valuable property and the main intention was to reduce the terms of agreement into writing and when the parties are very much relying on the alleged oral agreement dated 3rd May, 1979, there would definitely have been a reference in Exhibits A 1 and A 2 to the oral agreement said to have taken place on 3rd May, 1979.
The absence of the same in Exhibits A 1 and A 2 against throws a serious doubt about the alleged agreement, dated 3rd May, 1979.
In any event the mere fact that there was a meeting between the plaintiffs Nos. 1 and 2 and D.W. 2 on 3rd May, 1979 does not establish that there was a con cluded contract between the parties on that day because admittedly the first defendant was not present at that time.
What all had happened according to P.Ws. 1 and 3 is that they offered to pay Rs. 10,00,000 for the suit building and D.W. 2 having contacted the 1st defendant over the phone conveyed to them her acceptance of the price fixed.
In the absence of evidence that the other terms also were discussed over the phone and settled at that time and the 1st defend ant agreed for the terms, it cannot be said that there is a con 426 cluded contract on 3rd May, 1979.
The fixation of price is only one of the terms of the contract and by mere acceptance of the price it cannot be said that there is a concluded contract between the parties in the absence of proof of fixation of other conditions mentioned in Exhibits A 1 and A 2, viz., undertaking by the 1st defendant to obtain per mission from Urban Land Ceiling Authority and the amount of advance to be paid.
It is not the case of the plaintiffs 1 and 2 that prior to 6.5.79 there was an agreement between the parties as to the amount of advance to be paid.
The High Court thus held that in the absence of any consensus being arrived at between the two contracting parties about these important aspects of the agreement it cannot be said that there is a concluded oral contract between the parties on 3.5.79.
It is important to note that even exhibit B 4 an agree ment of sale dated 22.6.79 executed between the 1st defend ant and defendants Nos. 3 and 4 does not impose the condi tion that the 1st defendant, the vendor, should obtain the clearance from the Urban Land Ceiling Authority within the stipulated period of six months.
The High Court in this regard observed that this evidence showed that the conten tion of the 1st defendant that the agreement fell through by reason of the plaintiffs insisting on her obtaining the permission from the Urban Land Ceiling Authority and the expression of her inability to comply with that demand appeared to be correct.
The High Court clearly held that there was no clinching evidence to show that this stipula tion was thought of by the parties on any day prior to 6.5.79.
The High Court, therefore, did not agree with the contention of the Learned Counsel for the plaintiffs that all the terms of contract including the stipulation with regard to the payment of advance amount and that the vendor alone should obtain the permission from the Urban Land Ceiling Authority were settled by 3.5.79 and what was left to be done on 6.5.79 was merely to incorporate the terms already arrived at into a formal document on Exhibits.
A 3 and A 4 stamp papers.
It was further observed that had there been a meeting between plaintiffs Nos. 1 and 2 and the first defendant on 3.5.79 and there was a direct conversation between them, there may be a possibility for drawing such an inference.
But, as observed already, what all had happened on 3.5.79 was that plaintiffs Nos. 1 and 2 expressed their willingness to pay a consideration of Rs. 10,00,000 for the suit building and the first defendant expressed her accept ance of that offer through D .W. 2.
The other terms could not have been settled between the parties in the third week of April, 1979 because by that time there was no agreement between the parties with respect to the sale consideration.
Without the price being settled, and especially when there was a gap of Rs.2,00,000 427 in the price accepted by the first defendant and the price offered by the first plaintiff, the parties would not have discussed the other terms of the agreement such as the advance money to be paid and the responsibility of the vendor to obtain the permission from the Urban Land Ceiling Authority.
It was submitted by the learned counsel for the appel lants that the High Court itself has arrived to a finding that D .W. 2 Sh.
Arif Ali on 3.5.79 after having a talk with defendant No. 1 on phone had conveyed her acceptance to sell the property for a sum of Rs. 10,00,000.
It was submitted that an agreement for sale of immovable property could be made orally and so far as mode of payment of consideration is concerned, can be settled subsequently.
It was submitted that in the facts and circumstances of the present case all the fundamental and vital terms of the contract were settled and concluded on 3.5.79 itself and even if the other details like mode of payment of consideration, obtaining of no objection certificate from Land Ceiling Authorities etc.
remained unsettled, the same could be determined in accord ance with Sec.
55 of the Transfer of Property Act.
Oral contract is permissible and so far as other terms which remain unsettled, the same can be determined by operation of law.
It was contended that the only vital terms for a valid agreement of sale of an immovable property were the identity of the property and the price.
Both these vital terms were settled and concluded on 3.5.79 and when the plaintiffs were always ready and willing to perform their part of the con tract, a decree for specific performance should have been passed in their favour.
It was further contended that the stand taken by the defendant No. 1 and tried to be supported by Sh.
Arif Ali D.W. 2 that no meeting took place on 3.5.79 at all was held not believable by the High Court itself.
It was further contended that the act of purchasing stamps on 3.5.79 by defendant No. 1 and the draft receipts Exhibits A 1 and A 2 prepared by Sh.
Arif Ali D.W. 2 himself clearly lend support to the case of the plaintiffs.
Reliance in support of the above contention was placed on Kollipara Sriramulu vs T. Aswathanarayana & Ors., ; and Nathulal vs Phoolchand, [1970] 2 SCR 854.
On the other hand it was contended on behalf of the respondents that no vital or fundamental terms of the con tract were discussed, agreed or settled on 3.5.79.
It was contended that even if the case of the plaintiffs is be lieved, all that happened on 3.5.79 was that plaintiffs had agreed to purchase the property for Rs. 10 lakhs to which the defendant N. 1 had conveyed her acceptance through D.W. 2.
Neither 428 any earnest/advance money to be paid was settled, nor, any time for the payment of such money or time for execution of agreement of sale or final sale deed and its registration, was settled.
It was argued that even if the time may not be an essence of a term of contract for sale of immovable property, it is a vital term without which no concluded contract can be arrived at.
Admittedly no meeting was held on 3.5.79 in the presence of the defendant No. 1 and it was agreed to have a meeting of the plaintiffs and defendant No. 1 on 6.5.79.
It was also an admitted position that neither any consideration passed nor any documents were signed by the parties on 3.5.79.
So far as 6.5.79 is concerned admit tedly the negotiations failed between the parties on that day.
It was further contended that if the terms had already settled on 3.5.79 itself where was the necessity of execut ing draft receipts on 6.5.79 and in any case if it was a mere formality then the plaintiffs should have brought a typed agreement on the stamps for formal signature of the parties.
It was also argued that the plaintiffs failed to examine Ibrahim Moosa who was an independent and a very important witness in the whole transaction and an adverse inference should be drawn against the plaintiffs for not examining Ibrahim Moosa.
The defendant No. 1 had produced a counter affidavit Exhibit C 1 dated 27.7.79 in reply to injunction application filed by the plaintiffs and she had taken a clear stand that no terms were settled or concluded on 3.5.79.
It was further argued that admittedly the plain tiffs had not paid any earnest/advance money to the defend ant No. 1 towards the alleged transaction but still they malafidely stated in the notice of 7.5.79 published in the Newspaper that an amount of Rs.50,000 had been paid to defendant No. 1.
The defendant No. 1 in these circumstances had immediately got published a contradiction on 8.5.79 and this clearly goes to show the malafide and ulterior motive of the plaintiffs.
It was also argued that any agreement in the third week of April, 1979 to the effect that defendant No. 1 would bring the no objection certificate from the Urban Land Ceiling Authorities was found not proved by the High Court and as such there is no question of applying any principles contained in Sec.
55 of the Transfer of Property Act.
It was also contended that the findings recorded by the High Court are supported by evidence and this Hon.
Court should not interfere against such finding in the exercise of its jurisdiction under Article 136 of the Constitution of India.
It was also argued that Sh.
Arif Ali was not holding general power of attorney on behalf of defendant No. 1 and he had no authority to settle or conclude any terms in respect of a transaction of immovable property on behalf of defendantlll No. 1.
No objection certificate was necessary to be obtained from Urban Land Ceiling Authorities and the defendant No. 1 and her husband being old person 429 had clearly taken the stand that they would not bring such certificate and no final and concluded contract took place on any date.
We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thor oughly perused the record.
We agree with the contention of the Learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing.
However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for sale of immovable property.
Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case.
It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agree ment.
Now we shall examine the facts and circumstances of the present case in order to find whether the plaintiffs have been able to prove that there was a concluded oral agreement between the parties on 3.5.79 in order to seek decree for specific performance of contract in their favour.
Admitted facts of the case are that the transaction in question related to a sale of an immovable property for no less than a sum of Rs. 10,00,000 in May, 1979.3.5.79 is the crucial date on which the oral agreement is alleged to have been concluded.
Admittedly on that date even earnest/advance money had not been settled.
It was also not settled as to when the earnest/advance amount and the balance amount of sale consideration would be paid.
It was also not settled as to when the final sale deed would be executed and regis tered.
No talk with regard to any terms of the oral agree ment took place in the presence of the vendor defendant No. 1 on 3.5.79.
It was also not decided whether actual posses sion or only symbolical possession of the premises in ques tion would be given by the vendor.
No consideration actually passed even on 6.5.79 and negotiations failed.
Apart from the above admitted facts of the case we would consider as to what happened on 3.5.79.
The plaintiffs have alleged in the plaint that in the 3rd week of April, 1979 plaintiffs Nos. 1 and 2 along with Sh.
Ibrahim Moosa and Sh.
Arif Ali went to the residence of the defendant who 430 was insisting on the payment of Rs. 10,00,000 as the sale price.
At the said meeting the husband of the defendant was also present.
The plaintiffs Nos. 1 and 2 increased their price from Rs.7,00,000 to Rs.8,00,000.
The first defendant said that she would think over and inform the plaintiffs Nos. 1 and 2 through Sh.
Arif Ali.
On 3.5.79 the plaintiffs 1 and 2 along with Shri Ibrahim Moosa met Shri Arif Ali.
He stated that the defendant was agreeable to sell the plan schedule property to plaintiffs only for Rs, 10,00,000 and not a pie less.
Thereupon the plaintiffs agreed to pay Rs. 10,00,000 as the sale price.
Shri Arif Ali after getting the confirmation of acceptance of the said offer of the plain tiffs No. 1 and 2 from the first defendant said that the plaintiffs Nos. 1 and 2 should meet the defendants on 6.5.79 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporat ing the oral agreement arrived at.
Then there is an averment with regard to the meeting of 6.5.79 between the first and second plaintiffs along with Shri Ibrahim Moosa and the first defendant and her husband in the presence of Sh.
Arif Ali.
It has been alleged that in the said meeting of 6.5.79 the amount of earnest money to be paid, time for registra tion of the sale deed etc. were decided.
Now it is an admit ted case of the plaintiffs themselves that negotiations failed on 6.5.79 and the defendant No. 1 resiled to sign any of the receipts nor accepted any earnest/advance money nor any agreement was even typed on the stamp papers nor signed by defendant No. 1.
In the oral evidence P.W. 1 Shri Brij Mohan, plaintiff No. 1 stated that in the meeting arranged in the 3rd week of April, 1979 Shri Ibrahim and Shri Arif Ali came to the plaintiff 's shop and then they all went to the residence of defendant No. 1.
The second plaintiff also accompanied them.
The husband of defendant No. 1 Shri Yunus was also present at the meeting.
He was introduced to them as the retired Law Secretary.
Defendant No. 1 insisted for Rs. 10,00,000 as consideration of the suit property and told the plaintiffs that she would obtain the permission from the ceiling au thority.
Shri Brij Mohan then stated that they raised their offer to Rs.8,00,000 defendant No. 1 told them that she would think over for two or three days and inform them through Shri Arif Ali, Thereafter Shri Brij Mohan states regarding the bargain held on 3.5.79.
According to him he himself, second plaintiff and Mr. Ibrahim Moosa went to Shri Arif Ali on 3.5.79.
Shri Arif Ali told them that defendant No. 1 was not willing to sell the suit property for less than Rs. 10,00,000.
And if they were willing to purchase for Rs. 10,00,000 then they were welcome to do so at any time.
Shri Brij Mohan then said that they agreed to purchase the suit property for Rs. 10,00,000 and asked Shri Arif Ali to get the confirmation from 431 defendant No. 1.
Shri Arif Ali spoke to defendant No. 1 on telephone and then informed that defendant No. 1 was willing to sell the property to them for Rs. 10,00,000.
Shri Arif Ali then said that they would buy the stamps for agreement and fixed 6.5.79 morning for a meeting with defendant No. 1.
From a perusal of the above evidence it would be abundantly clear that nothing was settled on 3.5.79 except the fact that the plaintiffs had conveyed their approval to purchase the suit property for Rs. 10,00,000 and Shri Arif Ali after speaking to defendant No. 1 was willing to sell the property for Rs. 10,00,000.
Admittedly at the same time a meeting was fixed with defendant No. 1 on the morning of 6.5.79.
Accord ing to the case set up by defendant No. 1 she had never agreed to obtain the permission from the ceiling Authority.
It would be important to note that no averment was made in the plaint that defendant No. 1 had agreed to obtain the permission from the ceiling Authority in the meeting held in the third week of April, 1979.
However, Shri Brij Mohan plaintiff has sought to introduce this fact for the first time in his statement in the Court that defendant No. 1 had told them in the meeting held in the third week of April, 1979 that she would obtain the permission from the ceiling Authority.
We are unable to accept the above statement of Shri Brij Mohan that in the meeting held in the third week of April, 1979 itself the defendant No. 1 had agreed that she would obtain the permission from the ceiling Authority.
It is an admitted position that till the meeting held in the 3rd week of April, 1979 the plaintiffs had offered Rs.8,00,000 and the first defendant had told them that she would consider and communicate her views through Shri Arif Ali some time later.
We agree with the conclusion of the High Court in this regard that without first determining the sale price, it was quite unlikely that the parties would have bargained as to who should obtain the clearance under the Urban Land Ceiling Act.
It was known.
to the parties that until the clearance under the Urban Land Ceiling Act and the Income Tax clearance, the property will not be registered.
The High Court was right in concluding that it is unbelievable that in the third week of April, 1979 when still there was a wide gap of Rs. 2,00,000 in the price payable for the suit building the parties would have stipu lated about the condition as to who should obtain the per mission under the Urban Land Ceiling Act.
It is further pertinent to mention that even in Exhibits A 1 and A 2 which are drafts of agreement of sale there is no reference to the oral agreement said to have taken place on 3.5.79.
In case all the terms had already been concluded in the oral con tract between the parties on 3.5.79 and only a formal agree ment was to be reduced in writing on 6.5.79, then in that case there ought to have been a mention in the draft agree ment exhibits A 1 and A 2 regarding the oral agreement of 432 3.5.79.
According to the statement of Shri Brij Mohan plain tiff No. 1 ,himself, nothing was discussed with defendant 'No. 1 herself and for that reason a further meeting was fixed at the house of the first defendant in the morning of 6.5.79.
Shri Arif Ali may have been an Income Tax Advocate looking after the income tax and wealth tax matters of defendant No. 1 but he was not a General Power of Attorney holder to negotiate or settle any terms with regard to any transaction of immovable property belonging to defendant No. 1.
It is further important to note that even in the agree ment to sell exhibit B 4 dated 22.6.79 between defendent No. 1 and defendants Nos. 3 and 4, no responsibility had been taken by the defendant No. 1 for obtaining the clearance from the Urban Land Ceiling Authority.
The High Court in these circumstances rightly believed the contention of the defendant No. 1 that the agreement fell through because the plaintiffs insisted that defendant No. 1 should obtain the permission from the Urban Land Ceiling Authority while defendant No. 1 did not agree for the same.
There was no clinching evidence to show that this stipulation was thought of by the parties on any day prior to 6.5.79.
Thus in the above circumstances when the parties were consciously nego tiating about the bringing of no objection certificate from the Urban Land Ceiling Authority and the case put forward by defendant No. 1 in this regard has been believed there is no question of applying the principle contained in Section 55 of the Transfer of Property Act.
The general principle contained in Sec.
55 of the Transfer of Property Act regard ing rights and liabilities of buyer and seller can only apply in the absence of a contract to the contrary and not in a case where the parties consciously negotiated but failed in respect of any term or condition, as a result of which the agreement itself could not be settled or conclud ed.
Once it is held, established in the present case that no agreement was finally concluded or settled on 6.5.79 and negotiations failed and before this date it was never set tled that defendant No. 1 would bring the no objection certificate from Urban Land Ceiling Authority, there is no question of applying general principles contained in Sec.
55 of the Transfer of Property Act.
In Kollipara Sriramula vs T. Aswathanarayana & Ors.
(supra) was a case where in 1953 respondent No. 1 filed a suit alleging that all the partners of the firm except the appellant had entered into an oral agreement with him on July 6, 1952 to sell 137 shares in the site except the 23 shares belonging to appellant No. 1, that 98 shares had actually been sold to him, that 39 shares had not been sold to him and had been instead sold to appellant No. 1.
Re spondent No. 1 in these circumstances claimed specific performance of the agreement to sell the 433 aforesaid 39 shares by their owners and contended that the sale of those shares in favour of appellant No. 1 was not binding upon him.
The Trial Court decided against respondent No. 1 but the High Court decided in his favour.
On the basis of above facts this Court held that the High Court was right in holding that there was an agreement to sell 137 shares in the site to respondent No. 1.
A mere reference to a future formal contract does not prevent the existence of a binding agreement between the parties unless the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed.
The question depends upon the intention of the parties and the special circumstances of each particular case.
The evidence did not show that the drawing up of a written agreement was a pre requisite to the coming into effect of the oral agreement, nor did the absence of a specific agreement as to the mode of payment necessarily make the agreement ineffective, since the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed.
The facts of the above case clearly show that it related to sale of 137 shares and that in pursuance of the agreement partners who owned 98 shares had already executed sale deeds in favour of the plaintiffs/respondents and the other partners owning 39 shares did not do so.
The High Court as well as this Court believed the evidence of the plaintiff/respondent for con veying the entire 137 shares by an oral agreement dated July 6, 1952.
This Court also found that the plaintiff respond ents had built a valuable cinema theatre building on the disputed site and yet very strong reasons to make an out right purchase of the site otherwise he would be placed in a precarious legal position Negotiations for purchase were going on for several years passed and considering this background, the case of the respondent with regard to the oral agreement appeared highly probable.
In the above background this Court on Page 394 observed as under: "It is, therefore, not possible to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written docu ment.
As regards the other point, it is true that there is no specific agreement with regard to the mode of payment but this does not necessarily make the agreement ineffective.
The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed.
" 434 Thus even in the above case the time for completion of the sale was considered as one of the vital terms ' of the contract.
Further in the above case part of the agreement had been performed i.e. partners having 98 shares had al ready executed sale deeds and this Court had believed the oral agreement for sale of 137 shares.
Thus the above case is totally distinguishable and renders no assistance to the appellants in the case before us.
Thus we find no force in these appeals and the same are dismissed.
In the facts and circumstances of the case we make no order as to costs.
R.S.S. Appeals dis missed.
|
The appellants plaintiffs are ' four brothers.
They filed a suit against defendant No. 1, Smt.
Mahboobunnisa.
Begum, (Since deceased and represented by legal heirs) for specific performance of oral contract of sale of a building in Hyd erabad The property was later sold by defendant No.1 to defendants Nos. 3 and 4.
The plaintiffs ' case was that plaintiffs Nos. 1 and 2, on behalf of themselves and their younger brothers, plain tiffs Nos. 3 and 4, had preliminary negotiations for the purchase of the suit property through Shri Arif Ali, advo cate; that eventually on 3rd May, 1979 they met Arif Ali and offered to pay Rs. 10,00,000, which was the price demanded by the owner; that Arif Ali, after getting the confirmation of the said offer from the first defendant on phone, said that the plaintiffs should meet the first defendant on 6th May, 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement of sale incor porating the oral agreement arrived at on 3rd May, 1979; that on 6th May, 1979 the plaintiffs met the first defendant in the presence of Arif Ali and other, wherein the amount of earnest money to be paid, time for registration of the sale deed etc.
were decided; that at that meeting Shri Arif Ali, prepared first and the final drafts of the receipt in his own handwriting and handed over these drafts to the first plaintiff to get the final draft typed and duly stamped; that Arif Ali also delivered the stamp papers to the first plaintiff for typing the formal agreement of sale; that at the meeting held on 6th May, 1979 the plaintiffs Nos. 1 and 2 were also permitted to proceed with the publication of the notices in the newspapers; that after the public notice was published, the first defendant got a reply notice published and got 414 issued a legal notice dated 8.5.79 through her advocate, alleging that there was no agreement for sale; that thereaf ter, the first and second plaintiffs made sincere and re peated attempts to convince the first defendant that there was in existence a concluded contract for sale of the suit property, and that the execution of the agreement of sale was a mere formality.
On these allegations, the plaintiffs sought the relief of specific performance of the agreement.
The first defendant in her written statement stated that certain negotiations had taken place between her and plain tiffs Nos. 1 and 2, but the negotiations had failed.
It was further stated that there was no concluded or enforceable contract between the parties; that no price was settled or agreed upon and even the condition for advance payment and other terms and conditions were not agreed upon; that no final receipt or document had been prepared; and that the first defendant never asked for the purchase of stamp pa pers.
The Trial Court found that on the facts and circum stances of the case, it was established that the plaintiffs had entered into an oral contract of sale with the first defendant on 3.5.79.
The Trial Court accordingly decreed the plaintiffs ' suit for specific performance.
Two separate appeals were filed in the High Court.
A Division Bench of the High Court allowed the appeals and set aside the decree passed by the trial court.
The High Court held that in order to determine the binding nature of a contract between the parties, the mere acceptance of sale price was not sufficient.
The High Court further observed that in the absence of evidence that the other terms also were discussed over the phone and settled on 3.5.79, it could cot be said that there was a concluded contract on 3rd May, 1979, and that it was obviously for that reason that a further meeting was fixed at the house of the 1st defendant on 6th May, 1979.The High Court did not agree with the contention of the plaintiffs that all the terms of contract, including the stipulation with regard to the payment of advance amount and the vendor 's responsibility to obtain the permission from the Urban Land Ceiling Authority, had been settled by 3.5.79 and what was left to be done on 6.5.1979 was merely to incorporate the terms already arrived at into a formal document on stamp paper.
Before this Court lit was contended on behalf of the appellants that an agreement for sale of immovable property could be made orally; that in the facts and circumstances of the case all the fundamental and vital terms of the contract were settled and concluded on 3.5.1979 itself and 415 even if the other details like mode of payment of considera tion, obtaining of no objection certificate from Land Ceil ing Authorities etc.
remained unsealed, the same could be settled subsequently or determined in accordance with sec.
55 of the Transfer of Property Act; that the only vital terms for a valid agreement of sale of an immovable property were the identity of the property and the price; that both these vital terms were settled and concluded on 3.5.79; and that the act of purchasing stamps on 3.5.79 by defendant No. 1 and the draft receipts, prepared by Shri Arif Ali, clearly lent support to the case of the plaintiffs.
Kollipara Sriramulu vs T. Aswathanarayana & Ors., ; and Nathulal vs Phoolchand, [1970] 2 SCR 854, relied upon.
On the other hand, it was contended on behalf of the respondents that no vital or fundamental terms of the con tract were discussed, agreed or settled on 3.5.79; that neither any earnest/advance money to be paid was settled, nor, any time for the payment of such money or time for execution of agreement of sale or final sale deed and its registration, was settled; that even if time may not be an essence of a term of contract for sale of immovable proper ty, it was a vital term without which no concluded contract could be arrived at; that any agreement in the third week of April, 1979 to the effect that defendant No. 1 would bring the no objection certificate from the Urban Land Ceiling Authorities was found not proved by the High Court and as such there was no question of applying the principles con tained in section 55 of the Transfer of Property Act; that a no objection certificate was necessary to be obtained from Urban Land Ceiling Authorities and the defendant No. 1 and her husband being old persons had clearly taken the stand that they would not bring such certificate; and that there fore no final and concluded contract took place on any date.
Dismissing the appeals, this Court, HELD: (1) There is no requirement of law that an agree ment or contract of sale of immovable property should only be in writing.
However, in a case where the plaintiffs come forward to seek a decree for specific performance of con tract of sale of immovable property on the basis of an oral agreement along, heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for sale of immovable proper ty.
Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case.
It 416 has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were con cluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement.
[429B D] (2)From a perusal of the evidence it would be abun dantly clear that nothing was settled on 3.5.79 except the fact that the plaintiffs had conveyed their offer to pur chase the suit property for Rs. 10,00,000 and Shri Arif Ali, after speaking to defendant No. 1 on phone conveyed that she was willing to sell the property for Rs. 10,00,000.
[431B] (3) No averment was made in the plaint that defendant No. 1 had agreed to obtain the permission from the Urban Land Ceiling Authority in the meeting held in the third week of April, 1979.
The High Court was right in concluding that it was unbelievable that in the third week of April, 1979 when still there was a wide gap of Rs.2,00,000 in the price payable for the suit building, the parties would have stipu lated about the condition as to who should obtain the per mission under the Urban Land Ceiling Act.
[431C F] (4) The High Court rightly believed the contention of defendant No. 1 that the agreement fell through because the plaintiffs insisted that defendant No. 1 should obtain the permission from the Urban Land Ceiling Authority while defendant No. 1 did not agree for the same.
[432C] (5) The general principles contained in section 55 of the Transfer of Property Act regarding rights and liabili ties of buyer and seller can only apply in the absence of a contract to the contrary and not in a case where the parties consciously negotiated but failed in respect of any term or condition, as a result of which the agreement itself could not be settled or concluded.
[432E] (6) Once it is held/established in the present case that no agreement was finally concluded or settled on 6.5.79 and negotiations failed, as before this date it was never set tled that defendant No. 1 would bring the no objection certificate from Urban Land Ceiling Authority, there was no question of applying general principles contained in section 55 of the Transfer of Property Act.
[432F] Kollipara Sriramulu vs T. Aswathanarayana & Ors.
, ; , distinguished.
|
(Civil) No. 511 of 1988.
WITH Writ Petition (Civil) No. 975 of 1988.
391 (Under Article 32 of the Constitution of India).
K.V. Sreekumar, (N.P.) for the Petitioners.
V.C. Mahajan, A.K. Panda, Ms. C.K. Sucharita, and Ms. A. Subhashini for the Respondents.
The Court delivered the following Order: One of the matters which arises for consideration in this Writ Petition is as to how the provisions of the inter state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, and particularly of sec tion 20 thereof can be enforced.
In the affidavit filed by the Union of India in the Ministry of labour it has been stated that in view of the scheme contained in section 20(3) of the Act that officer of the Originating State can make enquiries within the Recepient State provided the Recepient State agrees to such Officers of the Originating State operating within that State, the law has not become workable in a proper way.
This is a beneficial legislation for satis fying the provisions of the Constitution and the obligation in international agreements to which India is a party.
We do not think there can be any valid justification for not permitting the officers of the Originating State to hold appropriate enquiries in the Recepient State in regard to persons of the Originating State working as migrant labour in the Recepient State.
We do not think that there is any necessity to hear the other States before making an order for enforcing section 20(3) and to give effect to the legis lative intention contained therein.
Mr. Panda appearing for the State of Orissa has agreed that Orissa State has no objection to officers of any origi nating State holding necessary enquiries within Orissa when it is a Recepient State.
We would, therefore, make a direc tion that to implement the provisions of the Act of 1979 referred to above every State and Union Territory in India would be obliged to permit Officers of originating States of migrant labour for holding appropriate inquiries within the limits of the Recepient States for enforcement of the stat ute and no Recepient State shall place any embargo or hin drance in such process.
Copy of this order shall be sent to the Chief Secretary of every State and Union Territory for compliance.
We are cognizant of the fact that this order has been made with 392 out hearing the States other than Orissa and the Union Territories.
In the event of any State or Union Territory is of the opinion that the direction should be modified, liber ty is given to apply for modification of the order but until it is modified it shall remain in force.
The Writ Petitions are disposed of with this order.
No costs.
T.N.A. Petitions disposed of.
|
In these petitions on the question: as to how the provi sions of the Inter State Migrant Workmen (Regulation of Employment and Condition of Service) Act, 1979 can be en forced.
Disposing the Writ Petitions, this Court, HELD: 1.
Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 is a benefi cial legislation for satisfying the provisions of the Con stitution and the obligation in international agreements to which India is a party.
There is no valid justification for not permitting the officers of the Originating State to hold appropriate enquiries in the Recepient State in regard to persons of the Originating State Working as migrant labour in the Recepient State.
[391D E] 2.
To implement the provisions of the Act every State and Union Territory in India would be obliged to permit officers of originating States of migrant labour for holding appropriate inquiries within the limits of the Recepient States for enforcement of the statute and no Recepient State shall place any embargo or hindrance in such process.
[391G]
|
ivil Appeal No. 2966 of 1979.
From the Judgment and Order dated 31.12.
1977 of the High Court of Himachal Pradesh in R.F.A. No. 7 of 1970.
F.S. Nariman, V.A. Bobde, S.D. Mudaliar and C.K. Rat naparkhi for the Appellant.
K.G. Bhagat, Naresh K. Sharma for the Respondents.
473 The Judgment of the Court was delivered by AHMADI, J.
This appeal by special leave is directed against the judgment of the Division Bench of the High Court of Himachal Pradesh in Regular First Appeal No. 7 of 1970 arising out of Suit NO. 11 of 1987.
The appellant original plaintiff is the second son of late Raja Padam Singh, the ex ruler of Bushahr State.
He filed a suit on 18th November, 1964 principally against the Union of India and the Govern ment of the Union Territory of Himachal Pradesh for a decla ration of his proprietary rights in about 1720 acres of forest land situate in Khatas Nos. 1 & 2, Khataunis Nos.1 to 25 comprising 106 plots, both measured and unmeasured, bearing Khasra Nos. 1, 2, 6, 23, 30, 34, 44, 108,218,222,309,341,409,479,606,433,241,732/280, 736/394 and 728/402 of Chak Addu, tehsil Rampur, in the present district of Mahasu in Himachal Pradesh.
He traced his title to the said lands to a Patta executed by his father on 14th Maghar 1999, Bikrami, i.e. 28th November 1942 A.D., and to the Order No. 5158 of even date directing corresponding mutation changes.
In the said suit Choudhary Gopal Singh & Co., a forest contractor, was added as proforma defendant No. 3 but no relief was claimed against the said party.
The said suit was filed on 18th November, 1964 in the Court of the Senior Sub Judge, Mahasu, but on the upward revision of the suit valuation for the purposes of court fees and jurisdiction the plaint was presented the High Court of Delhi, Himachal Bench, Shimla, and was re numbered as Suit No. 11 of 1967.
The said suit was tried on the original side of the High Court by Jagjit Singh, J. who by his judgment and order dated 6th April, 1970 substantially decreed the suit, in that, he upheld the appellant plaintiff 's claim of owner ship in respect of Khatas Nos. 1 & 2, Khataunis Nos.
1 to 25 comprising 106 plots bearing khasra Nos. 1, 2, 6, 23, 30, 34, 44, 108, 2 18,222,309, 341,409,606, 4 and 33 situate in Chak Addu without prejudice to the application, if any, of Section 27 of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953.
The contesting defend ants Nos. 1 and 2 preferred an appeal, being Regular First Appeal No. 7 of 1970, before the Division Bench of the High Court which came to be allowed on 31st December, 1977.
The Division Bench came to the conclusion that the grant made by the erstwhile ruler was in respect of revenue yielding lands only admeasuring about 263.4 bighas and not in respect of the forest lands.
It, however, took the view that after the execution of the lease deed dated 25th September, 1942, Exh.D 1, in favour of the Government of Punjab, the Raja had no subsisting right in the forest lands in question which he could transfer by way of a grant.
In that view of the matter the appeal was allowed and the suit of the 474 plaintiff was dismissed in toto with costs throughout.
Feeling aggrieved by the said judgment and decree, the original plaintiff has preferred this appeal by special leave under Article 136 of the Constitution.
For the sake of convenience we will refer to the parties by their original position and description in the suit.
We now proceed to set out the relevant facts.
The Raja of Rampur Bushahr had sought the aid of the British Government in the management of his forests with a view to preserving, conserving and protecting the same from large scale illicit and indiscriminate cutting of trees.
Pursuant to this request an agreement dated 20th June, 1864 was executed between the said Raja and the British Govern ment whereunder a fixed royalty was agreed to be paid to the former.
By a subsequent agreement dated 1st August, 1871, the Raja granted his rights in waif and windfall timber to the British Government in consideration of certain payments agreed upon under the said agreement.
The terms of both these agreements were revised in 1877 whereby the British Government agreed to pay a fixed annual sum to the Raja on a fifty years ' lease renewable at the will of the British Government.
This arrangement was further revised in 1929 w.e.f.
1st November, 1928 for a period of twenty five years on agreed terms as to payments, etc.
During the subsistence of the said agreement, the parties executed yet another agreement of lease dated 25th September, 1942, Exh.
D 1, for a term of fifty years w.e.f.
1st April, 1941 superseding all previous agreements.
Under clause (II) thereof, the term 'forest ' was defined to mean and include (a) demarcated forests; (b) forests reserved for the use of the Raja; and (c) undemarcated forests.
Demarcated forests were those which were defined and stated as demarcated forests in the forest settlements of Bushahr State whereas undemarcated forests included (a) all tracts of land bearing tree growth or from which the trees were felled and which paid no land revenue as cultivated land to the Bushahr State; and (b) such other tracts of land, cultivated or uncultivated, as with the previous sanction of the Raja were from time to time included in the existing undemarcated forests or were declared to be undemarcated forests.
By clause (III) of the said document, the Raja granted to the Punjab Government 'the entire and sole control of the whole of the forests of Bushahr excepting those reserved for the use of the Raja '.
The Raja was to receive an annual payment of Rs. 1 lakh to be paid in two equal half yearly installments of Rs.50,000 on 30th April and 3 1st of October of each year.
In addition to the said amount of Rs. 1 lakh he was to receive payment of the whole net surplus on the working of the forests included in the lease.
Thus, according to clause (III) of the lease 475 agreement the Raja granted to the Punjab Government the entire and sole control of the forests of Bushahr, excepting those reserved for his use under clause (II) thereof.
Under Section 1 of the Indian Independence Act, 1947, as from 15th August, 1947, two independent Dominions of India and Pakistan came to be set up.
By virtue of section 4 the Province of the Punjab as constituted under the Government of India Act, 1935, ceased to exist and the same was recon stituted into two new Provinces of West Punjab and East Punjab.
In section 7(1) were set out the consequences of the setting up of the two Dominions, Paragraph (b) whereof said that 'the suzerainty of His Majesty over the Indian States lapses, and with it, all treaties and agreements in force at the date of passing of this Act between His Majesty and the rulers of Indian States '.
The plaintiff 's father Raja Padam Singh having died in April 1947, his eider son Tikka Vir Bhadra Singh born to his first wife Shanta Devi succeeded to the Gaddi under the rule of primogeniture but since he was a minor a council for the administration of Bushahr State was set up to mind the affairs of the State.
On 15th April, 1948 an agreement of merger was signed whereby the Raja of Bu shahr ceded to the Dominion of India 'full and exclusive authority, jurisdiction and powers for and in relation to the governance of the State '.
A centrally administered unit of Himachal Pradesh came into being on that day.
The agree ment of lease dated 25th September, 1942 was formally termi nated by mutual agreement between the East Punjab Government and the Himachal Pradesh Administration on 1st April, 1949.
While the forests of Bushahr were under the control and management of the Government of Punjab, Raja Padam Singh, the plaintiff 's father, executed a document on 14th Maghar 1999.
Bikrami (i.e. 28th November, 1942) whereby he bestowed upon the plaintiff and his mother Rani Sahiba Katochi land admeasuring about 1720 acres.
This original document called the Patta was admittedly lost during the minority of the plaintiff, vide statement of counsel for defendants Nos. 1 and 2 dated 29th May, 1969.
However, the factum of the grant cannot be disputed as it has been referred to in the subse quent two grants executed by the plaintiff 's father on 29th Phagun 1999, Bikrami (i.e. 11th March, 1943 Exh.
P 2) and 24th Maghar 2003, Bikrami (i.e. 10th December, 1946 Exh.
These two subsequent grants Exh.
P 1 and Exh.
P 2 have been proved through the evidence of the scribe ' PW 1 Thakur Chet Ram.
By the execution of the third grant dated 24th Maghar 2003, Bikrami, the half share granted to the Rani Sahiba Katochi under the first grant of 14th Maghar 1999, 476 Bikrami, was transferred to the plaintiff with the Rani Sahiba 's consent.
Thus, the plaintiff became the sole gran tee of the entire area of 1720 acres but as he was a minor his interest was looked after initially by his father who expired in April 1947 and thereafter by his mother Rani Sahiba Katochi as his natural guardian.
After the execution of the first grant of patta the plaintiff 's father made an Order No. 5158 of even date directing his revenue officers to effect consequential changes in the mutation.
P 6 is a copy of the mutation entry which contains the following endorsement: "According to Shri Sarkar 's order No. 5158 dated 14.7.99 (equivalent to 28th November, 1942), the mutation, granting permanent ownership, without condition, of khata khatauni Nos.
1/1 to 20 and 2/21 to 25, plots 106, measuring 263.4 (219.7 plus 43.17) and part of uncultivated Jagir the reve nue and swai of which has been remitted is sanctioned in favour of Rani Sahiba Katochi and Rajkumar Rajinder Singh Sahib in equal shares in its present form.
" The mutation entry Exh.
P 6 does not mention the khasra numbers of the 106 plots.
Khata khatauni No. 1/1 to 20 comprise 82 plots showing an area admeasuring 219.7 bighas as cultivated and 200.8 bighas as uncultivated whereas khata khatauni No. 2/21 to 25 comprise 24 plots showing an area admeasuring 5.6 bighas as cultivated and 38.11 bighas as uncultivated.
The mutation entry, besides mentioning the area of 263.4 bighas, also speaks of 'part of uncultivated Jagir the revenue and swai of which has been remitted '.
Even according to the Division Bench of the High Court it is not in dispute that the measurement of 106 plots is much more than 263.4 bighas.
This stands corroborated by the note of Mr. Raina, the then Conservator of Forests, Shimla Circle dated 24th July, 1960 which discloses that the disputed plots over which the plaintiff has made a claim admeasure about 1819 acres.
By the second grant of 29th Phagun 1999, Bikrami, the plaintiff 's father granted certain additional land, namely, Basa Sharotkhala Pargana Bhatoligarh, jointly to the plaintiff and his mother Rani Sahiba Katochi.
This grant refers to the first grant of 14th Maghar 1999, Bikra mi.
The third grant of 24th Maghar 2003, Bikrami, was exe cuted by the plaintiff 's father with a view to making the plaintiff the sole beneficiary under the first two grants by deleting the name of Rani Sahiba Katochi as a joint grantee with her consent.
There is no dispute that under the afore said three grants taken together the properties mentioned therein were bestowed upon the plaintiff exclusively and the Rani Sahiba Katochi had no share therein, nor did she, at any 477 time, make a claim thereto.
After the execution of the third grant an order No. 258 dated 3rd December, 1946, Exh.
P 14, was made by the plaintiff 's father directing that all the lands and 'bases ' granted under the Patta of 24th Maghar 2003, Bikrami, exclusively to the plaintiff should be shown in his sole name in the records by deleting the name of Rani Sahiba Katochi therefrom.
On the death of the plaintiffs father in April 1947, the Political Agent, Punjab Hill States, Shimla, wrote a letter Exh.
P 50 dated 9th August, 1947 expressing dissatisfaction with the non implementation of the Patta and directed speedy implementation thereof.
In paragraph 3 of the said letter it was stated as under: "There is only one point for decision and that is the valid ity of the patta dated 19th December, 1946 granted by the late Raja Padam Singh.
The Committee have not questioned this and I, therefore, take it to be the true will of the late ruler.
The provision of the Patta are quite clear and reasonable, so 1 order the division of the private property, both movable and immovable, in accordance with its terms, that is to say the possession of the immovable property of the late Ruler specified in the Patta shall at once be mutuated in favour of Rajkumar Rajinder Singh and given in trust to Rani Sahiba katochi on behalf of her minor son . . ".
The grant was ultimately given effect to be the mutation entry No.2299 dated 17/18 12 2003, Bikrami, Exh.
Unfortunately, the plaintiff 's mother who acted as his guardian after the death of her husband in April 1947 also passed away shortly thereafter on 22nd July, 1949 necessi tating the Court of Wards to step in since the plaintiff was still a minor.
While the plaintiff 's estate was under the Superintendence of the Court of Wards a list of his Jagirs was prepared.
This list Exh.
P 18, which is in respect of tehsil Ramput, describes the disputed khasra Nos. 341, 108,222, 34, 479,606 and 4 as unmeasured and forest lands.
On the plaintiff attaining majority his estate was released w.e.f.
1st April, 1956 from the Superintendence of the Court of Wards under the Financial Commissioner 's notification dated 24th March, 1956.
Owing to the existence of certain pillars of the forest department within the areas belonging to the plaintiff, the plaintiff made a representation Exh.
P 25 for the removal of the said pillars from his lands.
As a result of this representation, joint demarcation reports dated 24th June 1958, Exh.
P 5, and 9th December, 1958, Exh.
P 8, were made which disclosed that the dispute related to the boundary in compartment 8 b only but no final decision could be taken 478 as some difference of opinion persisted between the officers of the forest department in this behalf.
The plaintiff thereafter made a further representation dated 11th August, 1959, Exh.
D 2, claiming compensation for the trees cut by the forest department during his minority when the estate was under the Superintendence of the Court of Wards.
As a sequel to this representation Mr. Raina, the Conservator of Forests, wrote a letter dated 27th May, 1960 marked secret, Exh. D 3/4, wherin he stated that the first class forest compartments 10A (Part, 10B (Part), 9A, 9B, 9C and 8C were the property of the forest department and the question of demarcation of these forests did not arise.
He further pointed out that if the possession of these compartments is transferred to the plaintiff the department will have to undergo a loss of Rs. 18.75 lakhs.
Lastly, he warned that if the plaintiff 's claim is accepted numerous such claims will be made by the villagers because of similar entries in the revenue records.
He thought that this was a test case.
He followed this up by his note dated 24th July, 1960, Exh.
D 3/6, wherein he reiterated that except for 263.4 bighas of revenue yielding land the claim of the plaintiff in respect of the remaining 1719 acres was fantastic.
He strongly urged that the plaintiff 's claim should be rejected outright and he and his contractor, defendant No. 3, should not be al lowed to lift the timber of the trees which he was permitted to cut from khasra Nos. 341,606, 222 and 34 under the letter No. Ft/43 124/VI dated 29th February, 1959.
Thereafter the Divisional Forest Officer by his letter No. C II 37/810 dated 25th May, 1960 informed the plaintiff and defendant No. 3 that the timber felled in compartment 9C should not be removed and no further felling of trees should take place in compartments 8C, 9A, 9B and 10A (Part) and lOB (Part) in khasra No. 341.
By a subsequent letter No. CII 37/1181 dated 2nd August, 1960 the plaintiff was informed that the trees felled in compartments 9B and 9C were Government property and could be removed on payment of Rs.3,05,811.70.
An amount of Rs.3,36,000 was later deposited pending finalisation of the dispute.
Certain statutory developments which took place in the meantime may now be noticed.
On 25th February, 1952 the Government of Himachal Pradesh issued a Notification under Section 29 of the declaring that the provisions of Chapter IV of the said enactment shall apply to all forest lands and waste lands in Himachal Pradesh which are the property of the Government or over which the Government has proprietor rights or to the whole or any part of the produce of which the Government is entitled.
This enactment deals with (i) Reserved Forests, (ii) Village Forests and (iii) Protected 479 Forests.
Chapter II comprising Sections 3 to 27 deals with Reserved Forests, Chapter III which consists of a single section 28 refers to Village Forests and Chapter IV compris ing Sections 29 to 34 conncerns Protected Forests.
Section 29(1) empowers the State Government to apply the provisions of Chapter IV to any forest land or waste land which is not included in the Reserved Forests but which is the property of the Government, or over which the Government has proprie tory rights, or to the whole or any part of the forest produce of which the Government is entitled.
According to sub section (2) such forest land and/or waste land comprised in any such notification shall be called a 'protected for est '.
Section 32 empowers the State Government to make rules to regulate the matters catalogued in clauses (a) to (1) thereof in respect of protected forests, which, inter alia, include the cutting, sawing, conversion and removal of trees and timber and collection, manufacture and removal of forest produce from protected forests; the granting of licences to persons felling or removing trees or timber or other forest produce from such forest for the purposes of trade; the payments, if any, to be made by such licencees in respect of such tree, timber or forest produce, etc.
Section 33 pre scribes the penalty for the contravention of the rules.
After the issuance of the Notification Exh.
DW 1/1 under Section 29, the State Government framed the rules under Section 32, Exh.
DW 1/2, of even date.
Under these rules 'First Class Protected Forests ' mean and include those forests which are defined and stated as demarcated forests in the Forests Settlement of Bushahr State viz., Forest Settlement Report of Sutlej Valley and Forest Settlement Report of Rupi, Pabar and Giri Valleys prepared in 1921 and 1911, respectively. 'Second Class Protected Forests ' mean the undemarcated forests or areas other than the demarcated forests and include all tracts of land bearing tree growth or from which the trees have been felled which pay no land revenue as cultivated land.
The Himachal Pradesh Private Forests Act, 1954, (Act No. VI of 1955) came into force from 28th June, 1956.
Section 2 thereof in terms states that the Act shall not apply to any land which is a reserved or protected forest under the .
Section 4 empowers the State Gov ernment to prohibit by notification the cutting, felling, gridling, lopping, burning, stripping off the bark or leaves or otherwise damaging any tree or counterfeiting or defacing marks on trees or timber in such private forests as may be specified.
Under Section 5, after the section 4 notification is issued, the Forest Officer is required within a period of one year from the date of publication of such notification, to demarcate the limit of such forest in accordance 480 with the revenue records and erect such number of boundary pillars at such points of the line of demarcation as may be necessary at Government expense.
Once the notification is issued under Section 4, Section 6 restrains the landlord and all other persons from cutting, collecting, or removing trees, timber or other produce in or from the notified forests in contravention of the provisions made in or under the Act.
Section 11, however, authorises a Forest Officer on the application of the landlord or owner to grant a licence for the felling of trees for such purposes and with such conditions as he may deem proper.
Sub section (3) of that section permits the owner to exercise the option of selling the trees either through the Forest Department or direct to any contractor.
In the latter event the owner must pay 15% fees on the price of the trees calculated in accordance with the prescribed principles.
Section 16 makes a contract entered into by the owner with any person conferring on such person the right to cut, collect or remove trees, timber or fuel from the private forests void unless the owner has first obtained a licence in this behalf under Section 11.
By notification dated 10th June, 1959, Exh.
P 21 published in the Himachal Pradesh Government Gazette dated 25th June, 1959, the plaintiff 's forests in Khasra Numbers 1, 2, 3,218, 606, 149, 263 and 166 situate in Village Addu were declared 'private forests ' under Section 4 of the said statute.
By a similar notification dated 17th September, 1959, Exh.
P 22, published in the Himachal Pradesh Government Gazette dated 26th September, 1959, Khasra Numbers 34, 309, 108, 479, 307, 207 and 3 17 situate in Village Addu were also notified as private forests of the plaintiff under the same provision.
The expression 'Private Forests ' as defined by Section 3(13) of the Act means a forest which is not the property of the Government or over which the State has no proprietary fights or to the whole or any part of the forest produce of which the State is not entitled.
Subsequently, by Corrigendum Exh.
P 29 dated 28th July, 1960, the State Government deleted Khasra Numbers 1, 2, 3, 2 18, 6, 44, 606, 149, 263 and '166 of Village Addu from the notification of 10th June, 1959 and Khasra Numbers 34, 309, 108,479,307,207 and 370 of Village Addu from the notification dated 17th September, 1959 on the ground that they were erroneously notified as they in fact belonged to the Himachal Pradesh Administration.
After the said enactment came into force w.e.f.
28th June, 1956 and before the notifications under Section 4 thereof were issued, the plaintiff had by his application dated 21st May, 1957 applied for permission, presumably under Section 11 of the Act, to fell trees from Khasra Numbers 1, 222 & 606 of Village Addu.
The said permission 481 was granted by Exh.
P 20 and the plaintiff also paid the fee as demanded by Exh.
P 23 dated 23rd August, 1957.
By another application dated 16th February, 1959 the plaintiff sought permission to sell trees from khasra Numbers 34, 222, 34 1, 606 of Khewat No. 1, Khatauni No. 2 which was granted by the Chief Conservator of Forests by his letter Exh.
P 28 dated 19th February, 1959.
By the said letter the plaintiff was informed that the Divisional Forest Officer had been in structed to mark the trees in the said areas silviculturally and to allow him to sell and remove the same through his contractor (defendant No. 3).
However, the attitude of the Government underwent a change after Mr. Raina 's secret letter of 27th May, 1960 and his note dated 24th July, 1960.
The State Government issued a corrigendum dated 28th July, 1960 amending the earlier notifications issued under Section 4; restrained the plaintiff and his agent defendant No. 3, from cutting and lifting the trees from the forest area and compelled deposit of Rs.3,36,000 for removing the trees and was also required to execute a bond.
The plaintiff, there fore, filed the suit which has given rise to this appeal to assert his rights.
The learned Trial Judge on a close scrutiny of the oral and documentary evidence placed on record came to the con clusion that (i) the plaintiff 's father, who in internal matters had sovereign powers, had bestowed the lands in dispute as a perpetual and unconditional grant on the plain tiff and the mere fact that in the mutation entry the area was shown to be 263.4 bighas did not imply that the grant was limited to that much land only.
He held that (ii) in the State of Bushahr only cultivated land was generally measured and forest lands remained unmeasured and, therefore, the area of only revenue yielding cultivated land was mentioned in the mutation entry but that did not mean that the grant was confined to that area only.
He also held that the subse quent grant of 25.10.2003 Bikrami was executed by the plain tiff 's father with the concurrence of Rani Saheba Katochi, with a view to conferring exclusive proprietary rights in the entire grant on the plaintiff.
Further according to the learned Trial Judge, the evidence, considered as a whole, fully established that (iii) the grant was not repudiated but was given effect to by the Political Agent, Shimla, as well as by the revenue authorities of Bushahr State and was recognised by the Dominion of India at the time of the State 's merger.
He found that in the statement of the Zamin dars of Village Addu, Exh.
P 26, it was specifically admit ted that the forest comprised Khasra Nos. 34, 141, 222 and 606 Khewat No. 1, Khatauni No. 2 and was 'owned ' and was 'in possession ' of the plaintiff.
(iv) Assuming that the lands in dispute formed part of forests leased to the Government of Punjab, 482 the learned Judge held that the Raja was not precluded from making the grant and the grants made in favour of the plain tiff were perfectly legal and valid.
After the lease was terminated by mutual consent of the Governments of Himachal Pradesh and East Punjab, the Himachal Pradesh Administration treated the plaintiff as the owner and permitted him various acts as owner and person in possession.
Notifications were issued under Section 4 of the Himachal Pradesh Private Forest Act, 1954 declaring the disputed lands as private forests.
He held that the notification issued under Section 29 of the had no application.
According to him, except for an area of 11 biswas occupied by roads of the Forest Department, the plaintiff was in possession of the remaining forest lands.
The learned Trial Judge, there fore, held that the suit was neither barred by limitation nor on account of Section 34 of .
The other technical objections to the maintainability of the suit were spurned and the learned Trial Judge decreed the suit as stated earlier On appeal the Division Bench of the High Court came to the conclusion that when the plaintiff 's father executed the first grant in favour of the plaintiff he was aware that he had renewed the lease in respect of the forest lands for a period of fifty years and, therefore, he could not have intended to make an absolute grant in respect of the forest lands covered under the lease to the plaintiff.
According to the Division Bench after the execution of the agreement of lease dated 25th September, 1942, (v) the plaintiff 's father had no surviving or subsisting right in the lands covered under the lease and, therefore, the grant in respect of the forest lands was of no consequence and did not confer any right, title or interest in the plaintiff.
At the most the grant could take effect in respect of revenue yielding cultivated land admeasuring 263.4 bighas.
In support of this finding the Division Bench points out (1) that the grant Exh.
P 1 dated 10th December, 1946 refers to the lands by Basa and not Khasra which reveals that reference is only to revenue yielding area in the occupation of tenants; (2) that clause 2 of Exh.
P 2 shows that the intention of the grantor was to secure an annual income of Rs.9,000 for his son which could only be from the revenue yielding lands as the forest lands were already placed at the disposal of the Government of Punjab and (3) that the recital in Exh.
P 2 regarding handing over of the Basajat could be in respect of revenue yielding area only as the forests were already in the pos session of the Punjab Government.
The 'Division Bench also held that the notification under Section 29 of the Indian Forests Act was validly issued and so long as it held the field, no notification could be issued under Section 4 of the Himachal Pradesh Private Forest Act, 1954 and 483 the same were, therefore, rightly corrected by deleting the Khasra Numbers claimed by the plaintiff from the notified forest area.
It, therefore, held that the said two notifica tions issued under Section 1 had no efficacy in law and the permissions granted under Section 11 of the said law can be of no avail to the plaintiff.
As regards the plaintiff 's contention based on the surrender of the lease in 1949, the Division Bench concluded that the exchange of letters Exh.
DW 1/3A dated 25th April, 1949 by Himachal Pradesh Govern ment and Exh.
DW 1/ 3B dated 5/9th May, 1949 by the East Punjab Government revealed that an arrangement was worked out whereunder the East Punjab Government transferred the management and administration of the disputed forests to the Himachal Pradsh Government on certain terms and conditions and there was no completed surrender of the lease.
Adopting this approach, the Division Bench reversed the findings recorded by the learned Trial Judge and dismissed the plain tiff 's suit in toto with costs throughout.
It is against the said Judgment and decree that the plaintiff has moved this Court.
From the above resume of facts and findings recorded by The Courts below, the questions which arise for our determi nation and on which counsel for the rival sides addressed us may be formulated as under: 1.
Whether, by the execution of the Agreements of Lease from time to time beginning with the Agreement of 20th June, 1864 and ending with the Agreement of 25th September, 1942, the erstwhile Rulers of Bushahr State, including the plain tiff 's father, had been divested of their rights, title and interests in the forest lands leased thereunder? 2.
If no, whether the plaintiff 's father was competent to make grants in respect of such forest lands under the Pattas of (i) 14 Maghar 1999 Bikrami (i.e. 28th November, 1942): (ii) 29th Phagun 1999 Bikrami (i.e. 11th March, 1943): and (iii) 24th Maghar 2003 Bikrami (i.e. 10th December, 1946)? 3.
If yes, was the grant confined to the revenue yielding lands admeasuring about 263.4 bighas only or extended to the other unmeasured forest lands also as claimed by the plain tiff? 484 4.
Was the State Government competent to issue the Notifica tion under Section 29 of the ? If yes, what is its effect on the plaintiff 's claim in the suit? and 5.
Was the State Government competent to issue Notifications under Section 4 of the Himachal Pradesh Private Forest Act, 1954? If yes, was the State Government justified in issuing the subsequent Corrigendum of 28th July, 1960? What is the effect of these statutory developments on the plaintiff 's claim? In order to appreciate the circumstances in which the erstwhile Ruler of Bushahr State entered into an agreement with the British Government in 1864, it would be advanta geous to notice a few facts mentioned in H.M. Glover 's Forest Settlement Report of 11th February, 1921.
In Vol. 1, Chapter II of this Report which concerns Bushahr State, the history of Bushahr forests prior to 1850 is set out.
It reveals that at that time large matured trees were plenti ful.
However, there was large scale destruction of these trees due to frequent fires, shifting of cultivation and felling of trees by traders.
The Report mentions: "Every forest cleared by traders was subject to frequent fires either caused by carelessness or by villagers who fired the debris and what was left of the standing crops in order to clear the ground for cultivation; there can be no question that if the Government had not assumed control, the forest would have practically disappeared from all the more accessible slopes.
" It further reveals that the Raja found it difficult to deal with the traders who indulged in destroying the forests by indiscriminate felling of trees and was anxious to protect them.
With this in view he eventually concluded an agreement of lease in 1864 with the British Government whereunder the latter agreed to protect and conserve the forests and pay a fixed royalty for each tree felled.
In 1877 the lease was revised, the British Government agreeing to pay a fixed annual lumpsum.
The lease was renewed in 1928 on revised terms as to payment for a further period of 25 years but before the expiry of that period another agreement of lease Exh.
D 1 was concluded between the Raja and the Government of Punjab on 25th September, 1942.
Clause III of the docu ment recites as under: ' 485 "III.
In consideration of the following payments, the Raja hereby grants to the Punjab Government the entire and sole control of the whole of the forests of Bushahr excepting those reserved for the use of the Raja as defined in Clause II and subject to the definitions and rules prescribed in the Schedule and Appendices attached to this agreement" It becomes clear from the aforesaid clause in the lease deed that the Raja granted 'the entire and sole control ' of the whole forest of Bushahr to the Punjab Government excepting the fights specifically reserved unto him.
This entire and sole control was granted to enable the Punjab Government 'to make more definite provisions for the conservancy of the forests '.
Clause IX of the agreement makes this clear when it says that the whole cost of conserving the forests in cluded in the lease together will all costs of felling and transporting timber for use of the Punjab Government and of maintaining the necessary establishment in such forests shall be borne by the Punjab Government unless otherwise provided for in the lease.
From this clause also it can be seen that the emphasis was on the need to conserve the forests.
The Rules framed in the Schedule to the lease reinforce this view.
Under paragraph 1 of the Schedule (a) breaking up land for cultivation; (b) setting fire to grass tracts in the vicinity of forest or negligently permitting the fire to extend to forests; (c) setting fire to grass, trees, bushwood or stumps; (d) cutting out slabs, torches, etc., from the steam of standing trees, barking and tapping for resin, or otherwise injuring trees; (e) felling or lopping trees; (f) selling timber; and (g) removing dead leaves and surface soil, is prohibited unless expressly permitted by the Divisional Forest Officer.
Even the Raja is not permitted to fell trees and/or remove converted timber from the leased area excepting the specified quantity re quired for State purposes, vide paragraph 5 of the Schedule.
It, therefore, seems clear to us that the paramount object of the lease was to conserve the forests of Bushahr State.
But, by concluding the lease agreement with the Punjab Government, the erstwhile Ruler did not convey all his fights, title and interests in the leased forest lands to that Government.
All that he did was to transfer the control and management of the forests to the Punjab Government with a view to preserving and conserving the forests.
He retained his proprietary interest in the forest lands, subject of course to the limitations concerning the management of the leased area and the fight to the usufruct therefrom.
Had it been the intention of the Raja to divest himself of all his interests in the forests lands there was no need to provide the duration of the lease on the 486 expiry whereof (unless the renewal clause was invoked) the Raja would have a right of re entry.
The lease also provided that in addition to the two half yearly installments of Rs.50,000 each, the Raja was to receive payment of the "Whole net surplus on the working of the forests included in the lease".
This is also consistent only with the position that the Raja retained his proprietory interests in the forest lands.
We, therefore, find it difficult to agree with the Division Bench that by concluding the agreements of lease from time to time the former Rulers of Bushahr State including the plaintiff 's father had divested themselves of all their rights in the leased forests.
We are of the opin ion that the plaintiff 's father had a surviving and subsist ing right in the forest lands which were the subject matter of the lease dated 25th September, 1942 and was competent to grant the same to the plaintiff or anyone else, albeit subject to the terms of the lease.
The first patta was executed by the plaintiff 's father on 14th Maghar 1999 Bikrami whereby he bestowed certain lands jointly on the plaintiff and his mother.
The original patta is admittedly not traced.
The plaintiff 's father had by his order No. 5158 of even date directed corresponding mutation entries to be made in the relevant records.
The endorsement found in the copy of the mutation entry Exh.
P 6 extracted earlier bears testimony to this fact.
This entry shows that the Raja had granted permanent ownership, without condition, of Khata Khatauni Nos.
1/1 to 20 and 2/21 to 25, comprising 106 plots, admeasuring 263.4 bighas and 'part of uncultivated Jagir ' the revenue and swai of which was remit ted.
Therefore, the doubt regarding the making of the grant of 14th Maghar 1999 Bikrami stands repelled.
The existence of this grant is further fortified by the mention thereof in the subsequent two grants dated 29th Phagun 1999 Bikrami and 24th Maghar 2003 Bikrami.
There can, therefore, be no doubt regarding the execution of the patta of 14th Maghar 1999 Bikrami.
The next question is regarding the identity of land granted to the plaintiff under the said grants.
The entry Exh.
P 6 mentions the Khata Khatauni numbers and the total number of the plots but does not mention the khasra numbers.
Secondly, its area is stated to be 263.4 bighas and 'part of uncultivated Jagir '.
The fact that these lands are situated in Chak Addu is not disputed Says Glover 's Report: "For administrative purposes the village and its outlying hamlets have been formed into a 'Chak ', which forms the unit of the land revenue assessment.
" Since the patta in respect of the first grant is admittedly not 487 available, we have to look to evidence aliunde the grant of identify the property settled on the plaintiff.
We have already referred to the Raja 's order No. 5158 on the basis whereof the entry Exh.
P 6 was made.
The plaintiffs witness PW7 Thakur Sen Negi has deposed that in Khewat 2, Khatauni 21, Khasra Nos. 6, 34, 101, 222, 341, 479 and 4 are unmeas ured.
P 15, P 18, P 33, P 38 and D 4, which are en tries from the Jamabandi also show that Khasra Nos. 6, 34, 108, 222, 341, 479, 606 and 4 of khatauni No. 21 are unmeas ured 'Banjar Kadeem '.
This expression according to Glover 's report means "land, recorded as the property of the Zamin dar, that has lain waste since the 1889 settlement and pays on land revenue until recultivated.
When included in 'Chaks ' in demarcated forests it has almost invariably been acquired or exchanged.
" The Division Bench has, after an elaborate examination of the oral as well as the documentary evidence, particularly Exhs.
P 15, P 17, P 18, P 33, P 34, P 36 and P 38, and the notification Exh.
P 22 declaring certain areas as private forests, come to the conclusion that land de scribed as Banjar Kadeem could include forest lands, thereby repelling the submission made by the plaintiff 's counsel to the contrary.
We cannot, therefore, countenance the submis sion made by the learned counsel for the contesting defend ants that the expression Banjar Kadeem does not include forests.
If it were so, the whole controversy based on the submission that the Raja was divested of his rights in respect of the forest lands covered by the agreement of lease and was not competent to make a grant thereof would have ended in favour of the plaintiff.
We, however, do not consider it necessary to examine the correctness or other wise of this finding of the Division Bench, since we propose to proceed on the assumption that the disputed lands form part of the leased area.
But the question still survives whether in addition to the cultivated lands measuring about 263.4 Bighas the plain tiffs father had made a grant in favour of the plaintiff in respect of the disputed forest lands.
We may now examine if the subsequent two grants throw any light on this point.
The second grant Exh.
P 2 was executed on 29th Phagun 1999 Bikrami.
In this document the Jagir granted to the plaintiff under the first Patta has been described as comprising several 'Basas '.
By the second grant one more Basa Sharotk hola pargana Bhatoligarh was granted in perpetuity.
The land revenue and other cesses in respect of these basas were remitted for ever.
The annual income of the Jagir thus grant ed was Rs.9,000 and in addition thereto the State agreed to pay Rs.9,000 in cash as Jagir money, besides agreeing to bear the expense of the plaintiff 's education and marriage.
The third document Exh.
P 1 was executed on 24th Maghar 2003 Bikrami 488 This document also describes the grant made under the first Patta by different Basas.
It further recites that 'the possession of Basa granted to you has already been given and entries have already been made in your favour and you will realise the income from this Jagir . . '.
The argument that as the actual possession of the forests was with the Punjab Government the same could not have been transferred to the plaintiff overlooks the fact in such cases symbolic and dejure possession is transferred to make the grant complete.
Therefore, the above recital in the document is consistent with the grant.
It is, therefore, clear that certain Basas situate in Basajats were given to the plain tiff as his Jagir.
The dispute in the present case mainly concerns a few Khasra numbers of Basa Kotadhar Ghori Samat Pargana Baghi Mastgarh comprising 106 plots.
What then is a Basa? In paragraph 41 of the Assessment Report of Rohru Tehsil of Bushahr State, Exh. D 7, prepared by Mr. Emerson, Manager of Bushahr State, it is stated as under: "The State lands in which the Raja enjoys both superior and inferior rights of ownership are of several descriptions: Firstly, there are the Crown estates or Basas, comprising of some of the most fertile area which former Rulers reserved for their own enjoyment or for the support of their rela tives and dependents.
These were formerly cultivated by bethus, under the supervision of a number of officials who were supposed either to remit the produce to the Headquar ters or to arrange for its loan on extravagant rates of interests to zamindars At present they are leased to con tractors for fixed periods on cash or grain rents, the former predominating.
" According to PW 11 S.R. Jhingta, the power of attorney of the plaintiff, basa land included cultivated forests and grazing lands.
PW3 Roop Singh Negi described basa lands as Banjar lands, arable lands, cultivated lands and forest lands.
PW 10 Sagar Singh produced pattas to show that two basas containing forests were granted by the Raja to his father.
The Division Bench refused to place reliance on the oral testimony of the aforesaid witnesses in view of the aforequoted authoritative definition.
But this definition is not exhaustive and does not specifically rule out the inclu sion of forest lands.
If by the grant the Raja intended to grant only the revenue yielding area of 263.4 bighas there was no need to mention 'and part of the uncultivated Jagir ' in 489 Exh.
It is an admitted fact that the total area of the basa comprising 106 plots is much more than 263.4 bighas.
That means that it includes besides the cultivated area of 263.4 bighas certain unmeasured area also.
The revenue of the cultivated area of 263.4 bighas is a paltry Rs.58 8 3.
It is not shown that the total revenue of cultivated lands in all the basas constituting the grant works out to Rs.9,000 per year.
Besides, if the grant is confined to 263:4 bighas only, the words 'and part of the cultivated Jagir ' are rendered redundant.
Next the concerned Khasra numbers have been described as Banzar Kadeem which includes forests as held by the Division Bench.
All the entries namely Exh.
P 15, P 33, P 36 and P 38 describe the con cerned Khasra numbers as unmeasured.
If the 106 plots in Exh.
P 6 admeasure more than 263.4 bighas, it follows that they also include unmeasured lands referred to as 'part of the uncultivated Jagir '.
Reference to uncultivated Jagir implies existence of land other than cultivated revenue yielding land which may include forests.
According to Punjab Settlement Manual (Fourth Edition) uncultivated land is classified as Banzar Jagir, Banzar Kadeem and Gair Mumkeen.
The Division Bench points out that the definition in the Manual is not to be rigidly construed and would include forest lands which may not be cultivated but may have the potential for cultivation, if forests are removed.
In other words lands covered by forests may be highly fertile and may be reserved by the Ruler for his own use or for the use of his relatives and dependents.
This supports the statement of PW11 S.R. Jhingta that in Tehsil Rampur forests and grass lands were entered as Banzar Kadeem.
This discussion leads us to the conclusion that a Chak comprises Basas, a Basa comprises both cultivated and uncultivated lands, unculti vated land includes Banzar Kadeem which in turn includes unmeasured forests.
The recent revenue Settlement of 1979 80 shows that the disputed Khasra Numbers 34, 222, 34 1 and 606 comprise of 422 plots admeasuring 789 84 85 Hectares out of which 711 2750 Hectares form part of the forests.
It is pertinent to note that the same is shown in the ownership of the plaintiff.
The relevant revenue records of the Bushahr State right from 1915 16 show the disputed Khasra Numbers as unmeasured.
The list of the plaintiffs Jagir prepared by the revenue authorities after the death of his mother also describes the said Khasra numbers as unmeasured forests.
It is also neces sary to remember that the plaintiff was denied the ownership of Khasra Numbers 241, 732/280, 736/394 and 728/402 admeas uring about 11 biswas as they formed part of the forest road.
These four plots though measured did not yield reve nue.
If the Raja desired to grant only revenue yielding lands to the plaintiff he would 490 not have included these four numbers in the grant.
There is, therefore, intrinsic evidence to show that the grant was not limited to only the revenue yielding area of 263.4 bighas.
The subsequent conduct of the parties, as we shall presently show, also lends support to this view.
On the plaintiff attaining majority his estate was released from the Superintendence of the Court of Wards w.e.f.
1st April, 1956.
The list in respect of his movable and immovable properties was prepared before the properties were handed over to the plaintiff.
This list dated 31st January, 1956 shows the total landed estate comprised of 1864 acres.
In 1958 59 the plaintiff had planted 3000 Deod har and Kail trees which was highly appreciated by the Deputy Commissioner, Vide Exh.
Some land was acquired by the State Government for its P.W.D. and the plaintiff was paid Rs. 11,000 as compensation.
The plaintiff had also made applications for permission to fell trees from the disputed khasras which were granted, vide Exhs.
P 20, P 23 and P 28.
Indisputably trees had been felled pursuant to the permis sion so granted.
Next Exhs.
P 41 and P 42 show that the plaintiff sold some part of khasra No. 341 on 16th April, 1960 and 25th June, 1960 to third parties and corresponding changes in mutation were made.
He had also donated some land from the same khasra for a school.
These are acts of owner ship which have not been repudiated.
The disputed Khasra numbers were also the subject matter of two notifications issued under section 4 of the Himachal Pradesh Private Forest Act, 1954, whereby they were notified as 'private forests '.
All this conduct on the part of the defendants 1 and 2 goes to show that they treated the disputed Khasra Numbers as the Jagir of the plaintiff.
It was only in 1960 after Mr. Raina 's secret letter and his subsequent note that the defendants disputed the plaintiff 's ownership in the said Khasra numbers and issued the corrigendum Exh.
P 29 withdrawing the aforesaid two notifications as it was rea lised that it would result in a substantial loss of Rs. 18.75 lakhs.
Till the doubt was raised by Mr. Raina, the State Government throughout treated the disputed Khasra numbers as forming part of the plaintiff 's Jagir.
this conduct evidence lends support to the view that the disputed Khasra numbers were bestowed on the plaintiff under the first Jagir of 14th Maghar 1999 Bikrami.
Counsel for the defendants, however, contended that it was not open to the Court in view of the prohibition con tained in Section 92 of the Evidence Act to take into ac count the subsequent facts and circumstances to determine the extent of the grant under the Patta of 14th Maghar 1999 Bikrami.
He submitted that where a claim is based on a written document, the terms of the document must be inter preted 491 without the aid of extrinsic evidence.
It is true that ordinarily the intention of the parties to a document must be gathered from the language in which the relevant terms and conditions are couched and no oral evidence can be permitted with a view to varying or contradicting the terms of the document.
To put it differently, if the terms of the document are clear and unambiguous, extrinsic evidence to ascertain the true intention of the parties is inadmissible because Section 92 mandates that in such a case the inten tion must be gathered from the language employed in the document.
But if the language employed is ambiguous and admits of a variety of meanings, it is settled law that the 6th proviso to the section can be invoked ;which permits tendering of extrinsic evidence as to acts, conduct and surrounding circumstances to enable the Court to ascertain the real intention of the parties.
In such a case such oral evidence may guide the Court in unraveling the true reten tion of the parties.
The object of admissibility of such evidence in such circumstances under the 6th proviso is to assist the Court to get to the real intention of the parties and thereby overcome the difficulty caused by the ambiguity.
In such a case the subsequent conduct of the parties fur nishes evidence to clear the blurred area and to ascertain the true intention of the author of the document.
If any authority is needed in support of this proposition reference may be made to the case to Abdulla Ahmed vs Animendra Kissen Mitter, ; At page 46 we find the following passage: "The evidence of conduct of the parties in this situation as to how they understood the words to mean can be considered in determining the true effect of the contract made between the parties.
Extrinsic evidence to determine the effect of an instrument is permissible where there remains a doubt as to its true meaning.
Evidence of the acts done under it is a guide to the intention of the parties in such a case and particularly when acts are done shortly after the date of instrument (Vide para 343 of Hailsham Edn. of Halsbury, Vol. 10, p. 274)".
In the present case the Patta of 14 Maghar 1999 Bikrami is admittedly lost.
Reliance was, therefore, placed on Exh.
P 6 which incorporates the order No. 5158 of even date.
The entry in Exh.
P 6 mentions the Khata Khatauni of the 106 plots granted to the plaintiff and the area thereof is shown to be 263.4 bighas and part of the uncultivated jagir Since a doubt arose whether the disputed Khasra numbers formed part of the uncultivated Jagir referred to in Exh .P 6, the parties led oral as well as documentary evidence with a view to enabling the Court to 492 ascertain the extent of the Jajir granted to the plaintiff.
Since the words 'part of the uncultivated Jagir ' were ambi gous extrinsic evidence aliunde the grant became necessary to explain the coverage of those words.
We, therefore, do not see any merit in the objection.
We may now consider the effect of the notification issued under section 29 of the .
Sub section (1) of section 29 permits the State Government to issue a notification declaring the application of the provisions of Chapter IV to any forest land which is not included in a reserved forest but which is the property of Government, or over which the Government has proprietary rights, or to the whole or any part of the forest produce of which the Government is 'entitled '.
The forest land com prised in any such notification is called a 'protected forest '.
Sub section (3) of section 29 reads as under: "No such notification shall be made unless the nature and extent of the fights of Government and of private persons in or over the forest land or waste land comprised therein have been inquired into and recorded at a survey or settlement, or in such manner as the State Government thinks sufficient.
Every such record shall be presumed to be correct until the contrary is proved.
" The proviso to that sub section, however, permits the State Government to issue a notification before completion of such inquiry and record in the event of urgency.
The Division Bench was, therefore, not fight in presuming that an inquiry of the type contemplated by subsection (3) of Section 29 must have preceded the notification.
The possibility of the application of the urgency clause cannot be ruled out.
The inquiry is contemplated to determine the nature and extent of the rights of the Government and of private persons in or over the forest land.
Based on the findings of the inquiry the record is to be prepared.
The learned Trial Judge has observed that 'after the grant no right of the Government in the land in suit was recorded in the Forest Settlement or land revenue settlement or the land revenue records '.
Under sub section (3) such a record shall be presumed to be cor rect until the contrary is proved.
The presumption, there fore, attaches to the record prepared in pursuance of the inquiry.
In the present case, no such record evidencing the fight of the Government in the forest land or forest produce is shown to have been made.
Therefore, the question, of presumption of correctness of record never arose and the plaintiff was not obliged to dislodge the same.
The evidence on the contrary shows that the disputed lands were entered in the revenue records as the 493 private property of the plaintiff.
That should be so because where the land in question forms part of a permanently settled grant, it is ordinarily the private property of the grantee.
That is why by the subsequent notifications issued under section 4 of the Himachal Pradesh Private Forest Act, 1954, the disputed forests were notified as private forests of the plaintiff.
The plaintiff, therefore, sought permis sion, presumably under section 11 of the said Act, for cutting and felling trees situate in his private forests.
If the notification issued under section 29 held the field, the State Government could not have issued the subsequent noti fications under section 4 of the State Act, in view of section 2(b) thereof which in terms states that 'this Act shall not apply to any land which is a reserved or protected forest under the '.
But before the State Government can invoke section 29(1), it must be shown that the requirements of that provision are satisfied.
From the various documents placed on record it is quite clear that the disputed forests did not belong to the Government nor did the Government have any proprietary rights thereon.
But the Division Bench has held that the Government was entitled to the whole or part of the forest produce under the agreement of lease dated 25th September, 1942.
The agreement of lease merely permitted the Government to manage the forests as the Raja found it difficult to prevent the indiscriminate cutting and felling of trees.
To preserve and conserve his forests, the Raja sought the aid of the British Government from time to time.
Under the last agreement of lease, the Raja granted the sole control of the forests to the Punjab Government without transferring or conveying his proprietary interests therein.
The Punjab Government was liable to account for the usufruct as the Raja was entitled to the whole net surplus determined triennially after de ducting from the total revenue from the forests the total expenditure incurred by the Punjab Government over the same period.
Therefore, the Government was not 'entitled ' to the whole or any part of the produce in its own right dehors the lease.
The word 'entitled ' in the context must take colour from the preceding words and must be understood to mean that the Government must have an independent claim or right to the forest produce and not merely a right to collect and deal with the same subject to an obligation to account for the same to the owner.
The word 'entitled ' is used in the sense of the Government having a right or claim to the usufruct in its own right and not as the agent of another.
After we attained independence, the erstwhile ruler of Bushahr State ceded to the Dominion of India whereupon the properties belonging to the State as distinguished from private property devolved on the 494 Himachal Pradesh Administration.
As discussed earlier, the record shows the disputed khasra numbers as the private property of the plaintiff.
The plaintiff exercised proprie tary rights thereon till 1960 when doubts were raised by Raina, who feared that if the plaintiffs claim is conceded the State will have to suffer a loss of Rs. 18.75 lakhs approximately.
Since the Raja exercised supreme fights in internal matters he was entitled to make a grant in respect of property over which he exercised ownership fights as a ruler.
Therefore, once the disputed property was granted to the plaintiff, the latter became the owner thereof.
The suzerainty of the British Crown over the Indian States lapsed as from the appointed day, i.e. 15th August, 1947, by virtue of section 7(1)(b) of the Indian Independence Act, 1947, and with it lapsed (i) all agreements in force between His Majesty and the rulers of Indian States and (ii) all obligations of His Majesty towards the Indian States.
After the merger of the Bushahr State, a separate administrative unit was constituted by the Central Government for Himachal Pradesh.
It appears from the letter Exh.
DW 1/3A dated 25th April, 1949 that the lease agreement was mutually terminated and the management of the forests was taken over by Himachal Pradesh Administration from the East Punjab Government w.e.f.
1st April, 1949 on the stated terms.
The said terms were accepted by the East Punjab government by the Chief Secretary 's letter dated 5/9th May, 1949, Exh.
D 1/3B.
At the date of merger the forests belonging to the State of Bushahr devolved on the Himachal Pradesh Administration except the private forests.
The need to continue the lease for a few private forests was perhaps not felt.
On the termination of the lease the private property reverted to the owners.
However, so far as the plaintiffs forests were concerned they continued under the State 's management since he was a minor.
But on that account the State was not 'ent itled ' to the forests produce from such private forests.
Therefore, the notification issued under section 29 could have no application to such private forests.
The State Government was, therefore, competent to issue the two noti fications under section 4 of the Himachal Pradesh Private Forest Act, 1954, and it was not justified in annulling them on the erroneous premise that the said lands belonged to the State Government.
The Division Bench, therefore, ought not to have reversed the trial court on this point.
In the result this appeal must succeed.
We allow the appeal and set aside the judgment and decree of the Division Bench of the High Court.
We would have been inclined to restore the decree of the Trial Court but counsel for the appellant plaintiff made a statement at the bar that in view of the provisions of the Himachal Pradesh Ceiling on 495 .
Land Holdings Act, 1972, the question of granting such a declaration does not survive.
He, however, submitted that the State Government should be directed to refund the amount of Rs.3,36 lakhs with interest which was deposited by defendant No. 3 in the Treasury under an agreement dated 19th August, 1961, entered into with the President of India through the Secretary, Forest Department.
Clause (VI) thereof provides that in the event the appellant plaintiff succeeds in establishing his title to the trees in question, the said amount would be refunded subject to a deduction of 15% towards royalty.
However, defendant No. 3 filed a suit against the appellant for the recovery of the said amount which suit ended in a compromise decree whereunder the appellant plaintiff paid the 3rd defendant Rs.2.51 lakhs in full and final satisfac tion of his claim reserving unto him the right to recover the deposited amount from the State Bank.
We, therefore, told that the plaintiff appellant is entitled to the refund of Rs.3.36 lakhs with interest at 9% per annum subject to deduction of royalty calculated at 15% The appellant plaintiff has also claimed refund of Rs.4.60 lakhs with interest lying in fixed deposits with the State Bank of India, Shimla in the name of the Registrar of the High Court.
The Division Bench of the High Court by its order dated 14th December, 1970 directed that the trees included in the Local Commissioner 's report dated 7th Decem ber, 1980 be sold by public auction and the sale proceeds be deposited in the State Bank of India, Shimla till the dis posal of the appeal.
Accordingly, the sale proceeds were deposited out of which the appellant plaintiff was permitted to withdraw a sum of Rs.2.60 lakhs after furnishing surety.
The balance of Rs.4.60 lakhs is lying in fixed deposits and the appellant plaintiff is entitled to the refund thereof.
We, therefore, direct that the said amount together with interest accrued thereon shall be refunded to the appellant plaintiff The appellant plaintiff also made a claim in respect of the value of the trees cut and sold by the Forest Department during the year 1951 52 when the appellant was a minor.
The estimated value of these trees is stated to be Rs. 1.50 lakhs.
However, no claim was made in respect thereof in the suit filed by the appellant plaintiff which has given rise to this appeal.
If the appellant plaintiff was entitled to the said amount he ought to have claimed the same in the suit filed in 1964.
We, therefore, do not entertain this claim.
496 The appellant plaintiff has also claimed a refund with interest of the market value of trees totalling 10,505 cut and sold by the Forest Department during the period from 1980 to 1985 notwithstanding the order of this Court dated 17th October, 1979.
However, in view of the fact that Hima chal Pradesh Ceiling on Land Holdings Act, 1972 has since intervened we do not entertain this claim in the present proceedings.
The refusal to entertain this claim will not debar the plaintiff from seeking any relief that is avail able to him under the 1972 Act.
In the ultimate, we direct the State Government to refund Rs.3.36 lakhs with interest at 9% per annum thereon to the appellantplaintiff after deducting royalty at 15%.
We also direct refund of the amount of Rs.4.60 lakhs with interest accrued thereon lying in fixed deposits in the State Bank of India, Shimla under the High Court 's order dated 14th December, 1972.
We grant three months time to comply with above directions.
The appeal is allowed accord ingly but we make no order as to costs.
In view of the above, the CMP will also stand disposed of accordingly.
R.S.S. Appeal allowed.
|
The plaintiff/appellant is the second son of late Raja Padam Singh, the ex ruler of Bushahr State in Himachal Pradesh.
The erstwhile Ruler of Bushahr had sought the aid of the British Government in the management of his forests with a view to preserving, conserving and protecting the same from large scale illicit and indiscriminate cutting of trees.
Pursuant to this request, an agreement of lease dated 20th June, 1864 was executed between the said Raja and the British Government.
The terms of this agreement were revised in 1877 and again 1928.
Before the expiry of its extended term, another agreement of lease was executed between Raja Padam Singh and the Government of Punjab on 25th September, 1942 superseding all previous agreements.
By clause (III) of this agreement the Raja granted to the Punjab Government the entire and sole control of the forests of Bushahr excepting those reserved for his use under clause (II) thereof.
The Raja was to receive in lieu thereof an annual payment of Rs.1 lakh, and further payment of the whole net surplus on the working of the forests included in the lease.
Raja Padam Singh executed a document on 28th November, 1942 whereby be bestowed upon the plaintiff and his mother land admeasuring about 1720 acres, both measured and unmeas ured.
The original document, called the Patta, was admitted ly lost during the minority of the appellant.
The patta had, however, been referred to in the subsequent two grants executed by the Raja on 11th March 1943 and lOth December 1946.
After the execution of the first grant or patta the 470 plaintiff 's father had made an Order No. 5158 directing corresponding mutation changes.
The mutation entry, besides mentioning the area of 263.4 bighas, also speaks of 'part of uncultivated 'Jagir '.
Subsequently, in September, 1959, the plaintiff 's forests were notified as 'private Forests ' under section 4 of the Himachal Pradesh Private Forests Act, 1954.
But in July, 1960 the State Government annulled the notifi cations on the ground that they were erroneously issued and that the lands in fact belonged to the Himachal Pradesh Administration.
The plaintiff filed a suit on 18th November, 1964 for a declaration his proprietary rights in about 1720 acres of forest land, both measured and unmeasured.
The learned Single Judge substantially decreed the suit.
The learned single Judge held that (i) the plaintiff 's father, who in internal matters had sovereign powers, had bestowed the lands in dispute as a perpetual and uncondi tional grant on the plaintiff; (ii) the mere fact that in the mutation entry the areas was shown to be 263.4 bighas did not imply that the grant was limited to that much land only; (iii) in the State of Bushahr only cultivated land was generally measured and forest lands remained unmeasured, and, therefore, the area of only revenue yielding cultivated land was mentioned in the mutation entry; (iv) the evidence, considered as a whole, fully established that the grant was not rependiated but was given effect to by the Political Agent, Simla, as well as by the revenue authorities of Bushahr State and was also recognised by the Dominion of India at the time of the State 's merger; (v) even assuming that the lands in dispute formed part of forests leased to the Government of Punjab, the Raja was not precluded from making the grant and the grants made in favour of the plain tiff were perfectly legal and valid; (vi) after the lease was terminated on 11th April, 1949, the Himachal Pradesh Administration treated the plaintiff as the owner and per mitted him various acts as owner and person in possession; (vii) notifications were issued under Section 4 of the Himachal Pradesh Act, 1954 declaring the disputed land as private forests; and (viii) the notification issued under section 29 of the had no application to such lands.
The Division Bench, allowing the State appeal, inter alia took the view that after the execution of the lease deed dated 25th September, 1942 in favour of the Government of Punjab, the Raja had no surviving or subsisting right in the forest lands in question which he could transfer by way of a grant; at the most the grant made by the erstwhile ruler could take effect in respect of revenue yielding lands only, admeasuring 471 about 263.5 bighas, and not in respect of the forest lands; and that the notification under section 29 of the was validly issued and so long as it held the field, no notification could be issued under section 4 of the Himachal Pradesh Private Forests Act, 1954.
Allowing the appeal, this Court, HELD: (1) The plaintiff 's father had a surviving and subsisting right in the forest lands which the subject matter of the lease dated 25th September, 1942 and was competent to grant the same to the plaintiff or anyone else, albeit subject to the terms of the lease.
[486C] (2) The paramount object of the lease was to conserve the forests of Bushahr State.
By concluding the lease agree ment with the Punjab Government, the Raja did not convey all his rights, title and interest in the leased forest lands to the Government.
All that he did was to transfer the control and management of the forests to the Punjab Government with a view to preserving and conserving the forests.
He however retained his proprietary interest in the forest lands.
Had it been the intention of the Raja to divest himself of all his interests in the forest lands, there was no need to provide the duration of the lease on the expiry whereof (unless the renewal clause was invoked) the Raja would have a right of re entry.
[485G H; 486A] (3) The lease provided that in addition to the two half yearly installments of Rs.50,000 each, the Raja was to receive payment of "whole net surplus" on the working of the forests included in the lease.
This was consistent only with the position that the Raja retained his proprietary inter ests in the forest lands.
[486A B] (4) If the terms of the document are clear and unambigu ous, extrinsic evidence to ascertain the true intention of the parties is inadmissible because section 92 of the Evi dence Act mandates that in such a case the intention must be gathered from the language employed in the document.
But if the language employed is ambiguous and admits of a variety of meanings, it is settled law that the 6th proviso to the section can be invoked which permits tendering of extrinsic evidence as to acts, conduct and surrounding circumstances to enable the Court to ascertain the real intention of the parties.
[491B C] In such a case the subsequent conduct of the parties furnished evidence to clear the blurred area and to ascer tain the true intention of the author of the document.
[491D] 472 Abdulla Ahmed vs Animendra Kissen Mitter, ; , referred to.
Since the words 'part of the uncultivated Jagir ' were ambiguous, extrinsic evidence allunde the grant became necessary to explain the coverage of those words.
[492A] (6) There is intrinsic evidence to show that the grant was not limited to only the revenue yielding area of 263.4 bighas.
If by the grant the Raja intended to grant only the revenue yielding area of 263.4 bighas, there was no need to mention 'and part of uncultivated Jagir ' and these words would be rendered redundant.
The subsequent conduct of the parties lends support to this view.
[488H; 489A] (7) From the various documents placed on record it is quite clear that the disputed forests did not belong to the Government nor did the Government have any proprietary rights therein.
The Government was also not 'entitled ' to the whole or any part of the produce in its own right dehors the lease.
[493C] (8) The word 'entitled ' in the context of section 29 of the must take colour from the preceding words and must be understood to mean that the Government must have an independent claim or right to collect and deal with the same subject to an obligation to account for the same to the owner.
On that account the State was not 'enti tled ' to the forests produce from such private lands.
There fore, the notification issued under section 29 could have uo application to such private forests.
The State Government was, therefore, competent to issue the two notifications under section 4 of the Himachal Pradesh Private Forest Act, 1954 and it was not justified in annulling them on the erroneous premise that the said lands belonged to the State Government.
[493F; 494F G]
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vil Appeals Nos. 1314 to 1318 of 1979.
Appeals by Certificate from the Judgment and Order dated 4.4.1979 of the Judicial Commissioner Goa, Daman & Diu in Special Civil Application (Writ Petition) Nos. 75,76, 77 of 1977, 103 and 111 of 1978.
AND Writ Petition No. 864 of 1988.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Additional Solicitor General, T.V.S. Krishnamoorthy Iyer, S.S. Ray, Y.S. Chitaley, Joachin Dias, A.B. Nadkarni, Arun Madan, Ms. A. Subhashini, section Ganesh and R. Swamy for the Appellants/Petitioners.
Manohar section Usgaocar, F.S. Nariman, G.L. Sanghi, M.N. Phadke, R.F. Nariman, S.K. Mehta, Atul Nauda, Aman Vachher, Mrs. Nineti Sharma, S.M. Usgaocar and M.K. Dua for the Respondents.
SHARMA, J.
The civil appeals No. 1314 to 1318 of 1979 by certificate are directed against the decision of the Judi cial Commissioner of Goa, Daman and Diu, declaring the Goa, Daman and Diu Agricultural Tenancy (5th Amendment) Act, 1976, as unconstitutional.
The respondents are landlords in Goa.
The lands were in possession of the tenants who were cultivating the same and paying rent to the respondents.
The respondents were divested of their title in the lands by the provisions of the impugned Act which came in force in 1976 vesting the same in the tenants.
The respondents filed five writ applications in the court of the Judicial Commissioner challenging the validity of the Amendment Act.
The writ petitions were allowed by the impugned judgment.
It has been held that the Act violates Articles 14 and 19 of the Consti tution and the protection of Article 31A is not available as the scheme of the Act does not constitute agrarian reform.
It has been contended on behalf of the respondent writ petitioners that the landlords in Goa are generally small land holders and their condition is not better than that of the tenants and in that view the Act divesting the landlords of their title in the land and veting the same in the tenants suffers from the vice of illegal discrimination.
A similar Act was earlier passed by the Maharashtra Legisla ture also which has been found to be constitutionally valid.
The writ petitioners have, before the court below, success fully argued that the decision in that case is not applica ble inasmuch as the Maharashtra Act contains provisions fixing ceiling to which the other provisions are subject to, while there is no such restriction in the present Act.
The result is that although the Maharashtra Act had to be upheld as a measure of agrarian reform and thus protected by Arti cle 31A of the Constitution, the present Act cannot be so interpreted.
During the pendency of these appeals the impugned Amendment Act along with the main Act were included in the 9th Schedule of the Constitution and the assent of the President was received on the 26th of August, 1984.
Lakshmibai Narayan Patil, the writ petitioner in the three of the cases in the court of Judicial Commissioner (respond ent in Civil Appeals No. 1314, 1315 and 1316 of 1979) has challenged the constitutional amendment as illegal and ultra vires by filing an application under Article 32 of the Constitution which has 501 been numbered as Writ Petition No. 864 of 1988.
By the impugned Amendment Act, Chapter IIA has been included in the Goa, Daman and Diu Agricultural Tenancy Act, 1964 (hereinafter referred to as the Act), Chapter III has been deleted and some consequential changes have been made in some other sections.
Chapter IIA deals with "Special rights and privileges of tenants" as indicated by the head ing.
Broadly speaking, by the provisions of section 18A of this Chapter the land belonging to a landlord not in his culti vating possession on the tiller 's day gets transferred to the tenant inpossession for a price to be paid to the land lord.
The expression 'tenant ' has been given a larger mean ing under the Act by section 4.
By the second proviso of section 4 a sub tenant cultivating any land on or after 1.7.
1962 has to be deemed to be a lawfully cultivating tenant notwithstand ing the fact that the creation of sub tenancy might have been prohibited by any law, and the tenant prior to the creation of the sub tenancy (who may be referred to as intermediary tenant) is not to be treated as a tenant.
The price of the land in question has to be determined and the payment made in accordance with the provisions of Chapter IIA.
Separate provisions have been made with respect to special cases where tenant is a minor or has been evicted by the landlord before the tiller 's day.
The provisions of section 18 J provide for the resumption and disposal of the land not purchased by the tenant by reason of purchase being ineffec tive under section 18C or section 18H or due to the failure of the tenant to take steps under section 18B within time.
A revenue officer described as Mamlatdar is vested with the power to dispose of such land in the manner provided in sub section (2) of section 18J.
Such land has to be disposed of in the order of priority, whereunder 75% of such land is to be disposed of by sale to persons belonging to Scheduled Castes or Scheduled Tribes and thereafter the remaining land to serv ing members of the Defence Forces of the country or ex servicemen or freedom fighters who agree to cultivate the land personally.
If the land still remains undisposed of, it first goes to agricultural labourers and thereafter to landless persons.
If some of the land still remains avail able, it has to be sold to a co operative farming society.
Section 18 K puts a restriction on transfer of the land which the tenant acquires by purchase under the Chapter.
Only with the previous sanction of the Mamlatdar any trans fer whether by sale, gift, exchange, mortgage, lease or assignment can be made.
If the land owner is himself cultivating it, there being no tenant or a deemed tenant he continues to be in possession without any curtailment of his rights.
On the other hand, in a case where the tenant 502 after getting a tenancy from the landlord inducts another person as a sub tenant who cultivates the same, the benefits of the impugned provisions go to him and not to the tenant.
The object of the Amending Act is thus clearly to vest the land in the tiller.
The right of any person to receive merely rent is taken away for a price.
The respondents who are landlords, have challenged the Amendment Act whereby Chapter IIA has been inserted in the Act on the ground of illegal discrimination.
The argument is that in absence of provisions for ceiling the impugned Act bestows undeserved benefit on the tenants at the cost of the landlords, without reference to the respective areas in their possession.
The Amendment was enforced as also the impugned judgment was delivered before the deletion of Clause (f) of Article 19(1) from the Constitution and one of the grounds which has been successfully urged before the High Court is based on Article 19(1)(f).
So far Article 31A of the Constitution is con cerned, the case of the respondents which has found favour with the court below is that the provisions of the impugned Amendment Act cannot be held to be a step by way of agrarian reforms and, therefore, cannot have the protection of the Article.
This is the main thrust of the argument of Mr. R.F. Nariman in this Court also.
He has strenuously contended that for extending the protection of Article 31A(1)(a) to any particular law it is necessary that the law contains adequate measure against concentration of wealth in the hands of a few.
It is claimed that fixation of ceiling is the heart and soul of agrarian reform without which it does not survive.
It has been observed in the impugned judgment that from the transcripts of newspapers produced by the writ petitioners and the statements alleged to have been made by the late Chief Minister that there were very few big land holders in Goa, it can be assumed that the landlords in Goa are small holders of land.
Certain statements made in the affidavit filed before the Court were also referred to in this connection.
An attempt was made in this Court also to urge that there could not be many big landlords in Goa and therefore their deprivation of the lands cannot be deemed to be a step towards fair distribution.
It was contended that in many a case, a cultivating tenant in possession of lands under different landlords may be having far larger area of land than his landlords and there cannot be any justifica tion in clothing such a tenant with title to the land at the cost of his comparatively poor landlords.
The argument proceeded, that so far the holdings of the tenants are concerned.
a necessity of placing ceiling on the holdings cannot be denied in view of the affidavit filed on behalf of the State stating that further legislation for that purpose was in contemplation.
Mr. R.F. Nariman emphasized the fact that no such law has been 503 brought in force till now.
To the last part of the argument it was tightly pointed out by the learned counsel for the appellants that since the Amendment Act was struck down by the Judicial Commissioner 's Court as ultra vires, further amendment in the Act by way of introducing provisions for ceiling had to await this Court 's judgment in the present civil appeals.
Before proceeding with the main argument of Mr. R.F. Nariman and the cases relied upon by him, it may be useful to briefly refer to the nature of the right of the landlords and the tenants under the Act before the insertion of Chap ter IIA by the impugned Amendment Act.
The rights of a tenant were heritable and Sections 8 and 9 prohibited the termination of his tenancy and his eviction except where the himself surrendered his right to the landlord or where the landlord established one of the grounds specified in this regard.
By an Amendment in 1966.
the tenant was given, by section 13A, the first option to purchase the land in case the landlord proposed to sell it.
By Chapter III the landlord was permitted to resume the land, subject to the ceiling of an area of 2 hectares in case of paddy land and 4 hectares in other lands, on the ground of bona fide requirement for personal cultivation; but this right was also dependent on the fulfilment of certain conditions.
This Chapter was to come into force only on a notification for the purpose which was never issued.
By the impugned Amendment Act this Chapter was omitted from the Act.
In effect the right of resumption contemplated by the Act never vested in the landlords before it disappeared from the statute book.
It may be stated here that the 1964 Act is not under attack and the challenge is confined to its 5th Amendment whereby Chapter IIA has been included and Chapter III deleted.
The statement of objects and reasons was placed before us wherein it has been mentioned that there was a similar legislation in force in the neighbouring State of Maharash tra.
The reference obviously is to the Bombay Tenancy and Agricultural Lands (Amendment)Act, 1956, mentioned in para graph 2 above, introducing similar amendments in the Bombay Tenancy and Agricultural Lands Act,1948.
In Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp 1 SCR 489, the validity of the Act was upheld by a Constitution Bench of this Court.
It has been contended that the Maharashtra A mending Act including provisions fixing ceiling which effec tively prevented accumulation of large areas of land in possession of the tenants; and since there is no similar safeguard in the present 5th Amendment Act, the aforesaid decision does not come to its rescue 504 and leads to the conclusion that in absence of similar provi sions the Act cannot be sustained.
The learned counsel for the respondents relied upon the observation of several decisions of this Court in support of his contention that provisions regarding ceiling are essential for a statute enacted as a measure of agrarian reform and in their absence the same cannot claim pro tection of Article 31A of the Constitution.
Article 31A(1)(a) declares that no law providing for "the acquisition by the State of any estate or of any rights therein or the extinction or modification of any such rights", shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19.
The 5th Amend ment Act has received the assent of the President as re quired by the first proviso.
The expression 'estate ' is undisputedly applicable in the present case in view of the provisions of clause (2) of the said Article.
Although Article 31A(1)(a) does not by express language restrict its application to a particular nature of law, it is now well settled that the protection of the Article is limited to the laws which serve the purpose of agrarian reform, and Mr. R.F. Nariman is right in relying upon the observations at page 90IF of the judgment in Godavari Sugar Mills Ltd. and Others vs S.B. Kamble and Others, [1975] 3 SCR page 885.
The learned counsel has further urged that the other observa tions in this judgment support his main argument also that in absence of provisions for ceiling a statute cannot be held to be for agrarian reform.
We are unable to agree.
In that case the constitutional validity of the Act amending certain provisions of the Maharashtra Agricultural (Ceiling and Holdings) Act was under challenge and it was sought to be saved inter alia with the aid of Article 3 1A.
While discussing the scope of Article 3 1A, the Court at page 902F relied upon the decision in Balmadies Plantations Ltd. and Another vs State of Tamil Nadu, ; , in the following terms: "In the case of Balmadies Plantations Ltd. & Anr.
vs State of Tamil Nadu it was held while dealing with the provisions of Gudalur Janmam Estates (Abolition and Conver sion into Ryotwari) Act that the object and general scheme of the Act was to abolish intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the state.
The Act, as such, in its broad outlines was held to be a measure of agrarian reform and protected by article 31A." 505 At page 903H it was observed that in a sense agrarian reform is wider than land reform.
At page 905 the conclusion was summarised under 8 heads, and Mr. R.F. Nariman strongly relied on the last proposition stating, "(8) A provision fixing ceiling area and providing for the disposal of surplus land in accordance with the rules is a measure of agrarian reform.
" It cannot be denied that the appropriately enacted statutes having provisions for fixing ceiling of holdings do fall in the category of legislation for agrarian reform, but the proposition relied upon, does not say and cannot be inter preted as holding that it is such an essential feature of agrarian reform without which a law cannot be included in that category.
The observations at page 902F in respect of the judgment in Balmadies Plantations case, quoted earlier rather negative such an assumption.
The case of Sri Ram Ram Narain Medhi (supra) has not only been distinguished in the impugned judgment but has been relied upon for supporting the writ petitioner 's argu ment.
Reliance has been placed on the observations at page 495 of the reported judgment to the effect that the object of the Maharashtra Act, which was under consideration in that case.
was to bring about such distribution of the agricultural lands as best to subserve the common good and this object was sought to be achieved by fixing ceiling on areas of holdings.
It, however, does not follow that fixing ceiling area of land which can be held by a person is a basic and essential requirement of land reform.
Since the challenge against the Maharashtra Act was being directed to the provisions fixing ceiling it became necessary to consid er and decide the effect of those provisions pointedly.
But on a careful consideration of the entire judgment, there does not remain any element of doubt that a proper statute even without including provisions regarding ceiling may be entitled to the protection of Article 31A provided it is otherwise a measure of agrarian reform.
As mentioned earli er, the Court was deciding the question of constitutional validity of the 1956 Act which amended the Bombay Tenancy and Agricultural Lands Act enacted in 1948.
The original 1948 Act did not contain the provisions of ceiling which were later introduced by the impugned amendment.
If the stand of the respondents be assumed to be correct, the 1948 Act could not have been in absence of the provisions of ceiling, held to be a step in agrarian reform.
But the Court at page 492 stated that: 506 "The 1948 Act had been passed by the State Legislature as a measure of agrarian reform . " With respect to the 1956 Amendment Act, it was said at page 493 that, "With a view to achieve the objective of establish ing a socialistic pattern of society in the state within the meaning of Articles 38 and 39 of the Constitution, a further measure of agrarian reform was enacted by the State Legisla ture, being the impugned Act, hereinbefore referred to, which was designed to bring about such distribution of the ownership and control of agricultural lands as best to subserve the common goods thus eliminating concentration of wealth and means of production to the common detriment." (emphasis added) The use of the expression "further measure ' as mentioned above and the repetition of the said expression again at page 495 emphasise the fact that the original Act also was a measure of agrarian reform.
Thus the decision, instead of helping the respondents lends support to the appellants ' argument.
Mr. R.F. Nariman cited a number of other decisions dealing with the validity of provisions fixing ceiling and the Court upheld those provisions on the ground that they were measures of agrarian reform, but they do not support the reverse proposition as put forward on behalf of the respondents.
All these decisions are, therefore, clearly distinguishable and we will mention briefly some of them which were heavily relied on by Mr. Nariman.
In the case of Sonapur Tea Co. Ltd. vs Must.
Mazi runnessa; , , writ petitions were filed in the High Court challenging the validity of the Assam Fixation of Ceiling on Land Holding Act, 1957.
The High Court in dis missing the petitions held that the impugned Act was pro tected by Article 31A as it was a measure of agrarian re forms and imposed limits on lands to be held by persons in order to bring about its equitable distribution.
The main question which was canvassed before this Court was whether the expression "the rights in relation to an estate" in the Article could cover the impugned Act, and it was answered in the affirmative by holding that the said expression is of a very wide amplitude.
At page 729 this Court observed thus: 507 "This Article has been construed by this Court on several occasions in dealing with legislative measures of agrarian reforms.
The object of such reforms generally is to abolish the intermediaries between the State and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the State." The 5th Amendment Act impugned in the cases before us satis fies this test.
Similar was the position in Purushothaman Nambudiri y.
The state of Kerala, [1962] Supp. 1 SCR 753.
The case of Fida Ali and Others vs State of Jammu and Kash mir; , , was also considering a statute pro viding a scheme for agrarian reform which included provi sions in respect of ceiling.
While upholding the Act the provisions fixing ceiling were upheld but the other observa tions in the judgment clearly indicate that the same cannot be assumed to be a condition precedent.
Personal cultivation by the holder of land was emphasised as an important aspect in the following words at page 345G: "The golden web, throughout the warp and woof of the Act, is the feature of personal cultivation of the land.
The expression 'personal cultivation ' which runs through sections 3, 4, 5, 7 and 8 is defined with care under section 2(7) in a detailed manner with a proviso and six explana tions.
From a review of the foregoing provisions it is obvious that the Act contains a clear programme of agrarian reforms intaking stock of the land in the State which is not in personal cultivation (section 3) and which though in personal cultivation is in excess of the ceiling area (section 4).
" In the ultimate paragraph of the judgment it was pointed that for framing a scheme for agrarian reforms it is not necessary or feasible to follow a set pattern in different parts of the country.
It was observed, "On the other hand, the predominant object under lying the provisions of the Act is agrarian reforms.
Agrar ian reforms naturally cannot take the same pattern through out the country.
Besides the availability of land for the purpose, limited in scope in the nature of things, the scheme has to fit in with the local conditions, variability of climate, rainfall, peculiarity of terrain, suitability and profitability of multiple crop patterns, vulnerability of floods and so 508 many other factors in formulating a scheme of agrarian reforms suitable to a particular State".
The decision, therefore, indicates that a flexible approach has to be adopted in deciding as to the nature of agrarian reform to be taken, rather than laying down a strait jacket rule for universal application.
The observations in Datta traya Govind Mahajan and Others vs State of Maharashtra and Another, ; , were also made while examining an Act fixing ceiling of holdings and in justification of the impugned provisions it was observed that the policy in this regard was initiated following the report of the Agricultur al Labour Inquiry conducted in the 1960s and in implementa tion of this policy the Act under consideration was passed.
The implication is that the fixation of ceiling was not essentially involved in agrarian reform but it had to be resorted to in the State of Maharashtra following the con clusion arrived at in the Agricultural Labour Inquiry. 13.
The learned counsel for the respondents also placed two cases wherein Article 31A was held to be inapplicable.
In K.K. Kochuni and Others vs The State of Madras and Oth ers, , the question of Article 31A did arise but in absolutely different context.
The immediate predeces sor of the petitioner K.K. Kochini was the sthanee of the properties attached to the various sthanee held by him.
On his death in 1925, the petitioner being the senior member became the sthanee and the respondents No. 2 to 17 being the junior members of the tarwad did not get any interest in the properties.
In an earlier litigation which was commenced following the passing of an Act in 1932, the petitioners ' exclusive right was established up to the Privy Council stage.
It was held that the Members of the tarwad had no interest therein.
After the title of the sthanee was thus established, the Madras Legislature passed the impugned Act in 1955, which declared that every sthanam satisfying cer tain conditions mentioned in the Act would be deemed and would always be deemed to have properties belonging to the tarwad.
The petitioner K.K. Kochuni challenged the Act as ultra vires before this Court by an application under Arti cle 32 of the Constitution.
Two other petitions were also filed, one by his wife and daughters with respect to certain other properties gifted to them and the other by his son.
In support of the constitutional validity of the Act it was argued on behalf of the respondents that the petitioner 's sthanam was an estate within the meaning of Article 31A and, therefore, enjoyed the protection under that Article.
The argument was that a law relating inter se the rights "of a proprietor in his estate and the junior members of his family was also covered by the wide 509 pharseology used in clause (2)(b) of Article 31A.
This Court rejected the plea, holding that: "The definition of "estate" refers to an existing law relat ing to land tenures in a particular area indicating thereby that the Article is concerned only with the land tenure described as an "estate".
The inclusive definition of the rights of such an estate also enumerates the rights vested in the proprietor and his subordinate tenure holders.
The last clause in that definition, viz., that those rights also include the rights or privileges in respect of land revenue, emphasizes the fact that the Article is concerned with land tenure.
It is, therefore, manifest that the said Article deals with a tenure called "estate" and provides for its acquisition or the extinguishment or modification of the rights of the land holders or the various subordinate ten ure holders in respect of their rights in relation to the estate.
The contrary view would enable the State to divest a proprietor of his estate and vest it in another without reference to any agrarian reform.
It would also enable the state to compel a proprietor to divide his properties, though self acquired, between himself and other members of his family or create interest therein in favour of persons other than tenants who had none before." The Court, thus held that Article 31A (1)(a) will not apply to an Act which does not contemplate or see to regulate the fights inter se between the landlords and tenants leaving all their characteristics intact.
The Court further consid ered the judgment in Sri Ram Ram Narain 's case (supra) and distinguished it on the ground that under the Bombay Act certain fights were conferred on the tenants in respect of their tenements which they did not have before.
The other case of San jeer Coke Manufacturing Company vs Bharat Coking Coal Ltd. and Another, ; , relied upon by Mr. Nariman is also of no help as the same was dealing with certain legislation in regard to mines and minerals.
The question of interpreting Article 31A (1)(a) did not arise there at all.
As has been discussed above.
the title to the land shall vest in the tiller and the landlord shall get the compensation.
Earlier also his right to resume the land for personal cultivation was considerably restricted by the provisions of the 1964 Act.
As a result of the impugned Amendment Act he has been divested of this limited right 510 for a price, and the tiller shall no more be under a threat of dispossession.
The impugned provisions must therefore be accepted as a measure of land reform.
We reject the argument of the respondents that in absence of provisions fixing ceiling on the area of land which can be held by a person a statute cannot be accepted as a measure of land reform.
The 5th Amendment Act is, therefore, entitled to the protection of Article 3 IA and it cannot be struck down on the ground of violation of Articles 14 and 19 of the Constitution.
The judgment of the Judicial Commissioner declaring the Act as ultra vires is accordingly set aside and the writ petitions filed by the respondents are dismissed.
Consequently it is not necessary to deal with the writ petition (W.P. No. 864 of 1988) filed in this Court under Article 32 challenging the inclusion of the impugned Act in the 9th Schedule of the Constitution and the same is rejected.
In the result, Civil Appeals No. 1314 1318 of 1979 are allowed, but, in the circumstances, the parties are directed to bear their own costs throughout.
R.S.S. Appeals allowed Petition dismissed.
|
The respondents in the civil appeals and the petitioner in the writ petition were landlords in Goa, whose lands were in the possession of the cultivating tenants.
Prior to the enactment of the Goa, Daman and Diu Agricultural Tenancy (5th Amendment) Act, 1976 the nature of the rights of the landlords and tenants were governed by the Goa.
Daman and Diu Agricultural Tenancy Act, 1964.
By Chapter III of the 1964 Act the landlord was permitted to resume his land for bona fide personal cultivation, subject to a ceiling.
Chap ter III, however, was to come into force only on a notifica tion for the purpose, which was never issued.
The impugned 5th Amendment omitted Chapter III from the 1964 Act and in its place included Chapter IIA.
By the provisions of section 18A of Chapter IIA the land belonging to a landlord not in his cultivating possession on the tiller 's day got trans ferred to the tenant in possession for a price to be paid to the landlord.
The respondents filed writ applications in the Court of the Judicial Commissioner challenging the validity of the 5th Amendment Act.
The writ petitions were allowed by the Judicial Commissioner who held that the Amendment Act vio lated Articles 14 and 19 of the Constitution and that the protection of Article 31A was not available as the scheme of the Amendment Act did not constitute agrarian reform.
498 During the pendency of the present appeals the impugned Amendment Act along with the main Act were included in the 9th Schedule of the Constitution.
The writ petition filed in this Court under Article 32 has challenged this constitu tional amendment as illegal and ultra vires.
Before this Court it was contended on behalf of the respondentslandlords that fixation of ceiling was the heart and soul of agrarian reform; that provisions regarding ceiling were essential for a statute enacted as a measure of agrarian reform and in their absence the same could not claim protection of Article 31A of the Constitution; that in the absence of provisions for ceiling the impugned Amendment Act had bestowed undeserved benefit on the tenants at the cost of the landlords, without reference to the respective areas in their possession.
In this connection it was submit ted that in many a case, a cultivating tenant in possession of lands under different landlords might be having far larger area of land than his landlords and there could not be any preference to clothing such a tenant with title to the land at the cost of his comparatively poor landlords.
Allowing the appeals and dismissing the writ petition this Court, HELD: (1) It is well settled that the protection of Article 31A is limited to the laws which serve the purpose of agrarian reform.
[504D] (2) It cannot be denied that the appropriately enacted statutes having provisions for fixing ceiling of holdings do fall in the category of legislation for agrarian reform, but that proposition does not say and cannot be interpreted as holding that fixing ceiling areas is a basis and essential feature of agrarian reform without which a law cannot be included in the category.
A proper statute even without including provisions regarding ceiling may be entitled to the protection of Article 31A provided it is otherwise a measure of agrarian reform.
[505C, F] Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 SCR 489; Godavari Sugar Mills Ltd. vs S.B. Kamble & Ors., ; and Balmadies Plantations Ltd. & Ant.
vs State of Tamil Nadu; , , referred to.
(3) The title to the land shall vest in the tiller and the landlord shall get the compensation.
Earlier also his right to resume the land for personal cultivation was con siderably restricted by the provisions of the 1964 Act.
As a result of the impugned 5th Amendment Act he has been 499 divested of this limited right for a price, and the tiller shall no more be under a threat of dispossession.
The im pugned provisions must therefore be accepted as a measure of land reform.
[509G H; 510A] (4) The argument of the respondents that in absence of provisions fixing ceiling on the area of land which can be held by a person a statute cannot be accepted as a measure of land reform is, accordingly, rejected.
The 5th Amendment Act is.
therefore, entitled to the protection of Article 31A and it cannot be struck down on the ground of violation of Articles 14 and 19 of the Constitution.
[510A B] Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 SCR 489; Sonapur Tea Co. Ltd. vs Must.
Mazirunnes sa; , ; Purushothaman Nambudiri vs The State of Kerala, [1962] Supp. 1 SCR 753; Fida Ali & Ors.
vs State of Jammu & Kashmir, ; ; Dattatraya Govind Mahajan vs State of Maharashtra, ; ; K.K. Kochuni vs The State of Madras, and Sanjeev Coke Manufacturing Company vs Bharat Coking Coal Ltd. & Anr., ; , distinguished.
|
ivil Appeal No. 3492 of 1990.
From the Judgment and Order dated 3.8.1988 of the Jammu & Kashmir High Court in L.P.A. No. 110 of 1988.
N.S. Mathut, Ramesh C. Pathak, G. Venkatesh Rao and Baby Lal for the Appellant.
E.C. Agarwala, Ms. Purnima Bhatt, V.K. Pandita and Atul Sharma, for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Special leave granted.
The School of Buddhist Philosophy, Leh (hereinafter called the 'School ') is an affiliate institution of the Sampurnanand Sanskrit University, Banaras.
The management of the School is in the hands of a society called Central Institute of Buddhist Studies, Leh which is registered under the Jammu and Kashmir Registration of Societies Act.
Ap pointments to various posts in the School are regulated by the rules framed by the Board of management in the year 1973.
The academic and other qualifications for the post of Principal under the rules, are as under: 517 "Academic Qualification At least Master 's Degree in Humanities or Social Sciences, with knowledge of Rules and Regulations, procedures and Accounts.
Experience Minimum experience of 7 years, out of which at least 2 years should be in administration such as administrative Asstt.
and not less than 3 years in teaching in Higher Secondary and/or Degree classes.
" The qualifications for the post of Administrative Officer under the 1973 rules are identical.
M.L. Mattoo (Respondent No. 1), who was functioning as the Administrative Officer, was given the additional charge of the post of Principal by an order dated March 26, 1973 issued by the Ministry of Education and Social Welfare, Government of India, New Delhi.
The Board of Management in its meeting held on August 22, 1978 decided that apart from the qualifications pre scribed under the Rules, the person selected for the post of Principal should have a thorough academic background in Buddhist Philosophy.
Pursuance to the said decision the qualifications/experience for the post of Principal pre scribed under the Rules were revised as under: "Essential: (a) A consistently good academic record possessing eminent scholarship in Buddhist Philosophy as a subject of specialisation at M.A. or Doctoral level.
or Acharya Degree with research experience to Buddhist Philoso phy or equivalent.
or An equivalent degree of traditional monastic education in Buddhism.
518 (b) Evidence of research work and/or public work in the field.
Desirable: (a) 5 years teaching experience in Buddhist Philosophy and allied subject at the degree level.
(b) 5 years of administrative experience.
" The Board of Management constituted a selection commit tee to appoint a suitable person as Principal of the School.
By an order dated January 9, 1979 one Shri Tashi Pal jot, who fulfilled the revised qualifications, was appointed as Principal of the School.
Aggrieved by the said appointment M.L. Mattoo filed Civil Writ Petition No. 256 of 1979 in the High Court of Jammu and Kashmir on the ground that he was removed from the additional charge without affording an opportunity of heating to him and further that he was not considered by the selection committee.
He contended that selection was liable to be quashed being violative of Arti cle 16 of the Constitution of India.
The writ petition was resisted by the Management on the ground that it was not a 'State ' under Article 12 of the Constitution of India and as such the writ petition was not competent.
At the hearing of the writ petition the counsel for the Management conceded that the society was a 'State ' within Article 12 of the Constitution of India and as such the writ petition could not be dismissed on that ground.
The High Court rejected the contention of M.L. Mattoo that he was entitled to an oppor tunity of hearing or Article 311 was attracted.
The High Court, however, allowed the writ petition on the ground that the petitioner was not considered for the post of Principal and as such his right under Article 16 of the Constitution of India stood infringed The operative part of the High Court judgment is as under: "Mr. V.K. Gupta has on the authority of Ajay Hasia 's case (supra) frankly conceded that the society being an instru mentality or agency of Government of India, was 'state ' for the purpose of Part III of the Constitution as such, the petitioner had a fundamental right to be considered for the post alongwith the third respondent.
He not having been so considered, and it also being admitted that he possessed the requisite qualifications, the rule of equality enshrined in Articles 14 and 16 of the Constitution stood clearly violat ed.
That being so, as in fact it is, the impugned order 519 passed by the second respondent appointing the third re spondent as the Principal of the School has to be quashed.
" Thereafter the Management advertised the post of Princi pal to be filled by direct recruitment on the basis of revised qualifications.
The advertisement was published in the 'Kashmir Times ' of January 5, 1982.
M.L. Mattoo filed another writ petition being Civil Writ Petition No. 29 of 1982 challenging the advertisement on the ground that the revised qualifications had not been validly prescribed and as such the post of Principal could only be filled on the basis of the pre revised qualifications.
According to him the revised qualifications were advertised only to make him ineligible for the post.
The main thrust of Mattoo 's argument was that his earlier writ petition was decided by the High Court on October 29, 1981 wherein the counsel for the Management conceded that he possessed the requisite qualifications for the post of Principal.
Admit tedly Matto does not possess the revised qualifications.
According to him the earlier writ petition was filed in the year 1979 and had the qualifications been revised by amend ing the rules in 1978, the counsel for the management would have certainly brought the same to the notice of the Court and since it was not done there was factually no amendment to the rules.
The High Court accepted the contention of Mattoo and allowed the writ petition by its judgment dated June 9, 1988 on the following reasoning: "It is stated in para No. 13 of their counter that qualifi cations were changed in August, 1978 with the approval of the Govt.
of India.
This statement is not accepted for two reasons one, that this was not the defence of the respond ents in writ petition No. 256/1979 in which petitioner 's eligibility was granted by the High Court for the post of Principal; and second, that after the decision of the High Court granting eligibility to the petitioner for the post of Principal in writ petition No. 256/1979, the respondents plea on the basis of some policy or note whereby qualifica tions were changed in 1978 prior to the filing of the writ petition No. 256/1979 cannot be now pressed into service nor would be permitted to be made because same will be barred by doctrine of constructive res judicata.
" The High Court quashed the advertisement dated January 5, 520 1982 and restrained the management from filling the post of Principal on the basis of the impugned advertisement.
The management has come up to this Court in appeal against the above said judgment of the High Court of Jammu and Kashmir.
The learned counsel for the appellant has invited our attention to the proceedings of the meeting of the manage ment of the School held on August 22, 1978.
It was decided in the said meeting that the person selected for the. post of Principal of the School must have academic background in Buddhist Philosophy in addition to the qualifications pre scribed under the Rules.
Thereafter the amended qualifica tions which have been reproduced above were prescribed by the Board of Management.
3 It is not disputed that the recruitment Rules could be altered by the Board of Management at any time with the sanction of the Government of India.
Mr. E.C. Agarwala appearing for the respondent M.L. Mattoo has, however, contended that the recruitment rules were never amended and in any case there was no sanction of the Government of India regarding the amended Rules.
Learned counsel for the appellant has invited our atten tion to the affidavit of Dr. (Mrs.) Kapila Vatsyayan, Chair man, Board of Management of the School filed before the High Court.
Dr. Kapila Vatsyayan is the Additional Secretary to Government of India in the Ministry of Education and Cul ture.
Para 13 of the affidavit is as under: "When in the year 1978, the question of appointment of a Principal of the school on regular basis was under the consideration of the Board of Management, it was held that keeping in view the objects of the school being a research Institution to propogate Buddhist Philosophy a thorough academic background in Buddhist Philosophy was considered as one of the essential qualifications for the post of Princi pal of the School as will be evident from the extract from brief note on Agenda item I considered in the meeting of the Board of Management held on 22nd August, 1978 Annexure IV.
Shri Tashi Paljore was appointed as Principal as stated in para No. 5 of the petition as he possessed this qualifica tion and was selected by a duly appointed Selection Commit tee.
The contention of the petitioner that this qualifica tion has been added now after the decision of writ petition No. 256 of 1979 is incorrect.
As 521 stated above, the qualifications were changed in August 1978 with the approval of Govt.
of India.
These qualifications are obviously very necessary for the fulfilling of the objectives of the Schools of Buddhist Philosophy, Leh (Ladakh).
In the absence of these qualifications, the very object for which the Institution exists is bound to be defeated.
The qualification has been provided the interest of the Institution and for the attain ment of the object for which it exists, namely imparting and propagating Buddhist Philosophy.
The Recruitment Rules of 1975, Annexure 'D ' to the petition were framed by the Board at that time.
Under the Rules and Regulations of the Board, the Board of Management is competent to amend the same. ' ' it is obvious from the affidavit of Dr. Kapila Vatsyayan reproduced above that the qualifications for the post of Principal were revised by amending the Rules and the revised qualifications were approved by the Government of India.
No. 1 rejoinder was filed by M.L. Mattoo to the above affidavit, The High Court was not justified in disbelieving the contents of the affidavit.
The rules are not statutory.
The Board of Management is fully competent to alter or amend the rules in any manner and at any time.
The affidavit by the Chairman of the Board of Management who is additional Secre tary to Government of India to the effect that the rules were amended in 1978 with the approval of the Government of India, should have put an end to the controversy.
We have no hesitation in holding that the qualifications for the post of Principal of the School stood validly revised by the amendment of the Rules in August, 1978.
Since respondent No. 1 Shri M.L. Mattoo does not possess the revised qualifica tions, he is not eligible to be considered for the said post.
In the earlier writ petition No. 256/1979 the question as to whether the qualifications for the post of Principal had been revised was not before the High Court.
The main contention of the Management, before the High Court, was that the Management society was not a 'State ' under Article 12 and as such no writ petition was competent.
At the hear ing the counsel for the management, however, conceded that the society was a 'State ' under Article 12 of the Constitu tion of India.
It is no doubt that the High Court has men tioned that it 522 was admitted by the counsel for the Management that Mattoo possessed the requisite qualifications for the post but we do not understand how in the face of categoric affidavit of Dr. Kapila Vatsyayan such a statement could be made before the High Court.
We, therefore, hold that the qualifications/experience for the post of Principal were validly revised by amending the Rules in August, 1978.
The advertisement issued on January 5, 1982 was in accordance with the Rules and the High Court was not justified in quashing the same.
We, therefore, allow the appeal, set aside the judgment of the High Court and dismiss the writ petition filed by M.L. Mattoo before the High Court.
There shall be no order as to costs.
Y. Lal Petition dismissed.
|
Appointments to various posts in School of Budhist Philosophy, Leh, were governed by the Rules framed by the Board of management in the year 1973.
According to the said rules, the qualifications prescribed for the post of Princi pal as also for the Administrative Officer were identical.
In March 1973, one M.L. Mattoo, Respondent No. 1, who at that time was working as the Administrative Officer of the School was given the additional charge of the post of Prin cipal.
Thereafter the Board of management at its meeting held on 22.8.1978, decided that qualifications prescribed for the post of Principal should be revised, so as to make it obligatory for the Principal to have a thorough academic knowledge of Buddhist Philosophy the primary object of the institution being research and propagation of Budhist phi losophy.
A selection committee was constituted by the Board of management to appoint a suitable person as Principal of the school and one Tashi Paljor, was appointed as Principal.
Being aggrieved by the said appointment, Respondent No. 1, filed a writ petition in the High Court contending that he was removed from the additional charge without affording him an opportunity of being heard and further that he was not considered by the selection committee.
The High Court re jected the first contention but allowed the writ petition on the ground that he was not considered for the post of Prin cipal and thus his right under Article 16 was infringed.
Thereupon the management advertised the post of Principal to be filed by direct recruitment on the basis of the revised qualifications.
Respondent Mattoo challenged the advertise ment by means of a writ petition on the ground that the revised qualifications were not validly prescribed and as such the post of Principal could only be filled in on the basis of the pre revised qualifications.
He based his con tention on the concession made by the counsel for the man agement, when his earlier petition was heard, that the petitioner possessed the requisite qualifications.
According to him the rules have not been amended.
The High Court accepted the contention of Mattoo 516 and allowed the writ petition, quashed the impugned adver tisement and directed the management not to make appointment on the basis of the advertisement in question.
Hence this appeal by the Board of management of the school.
Allowing the appeal, this Court, HELD: The Board of management is fully competent to alter or amend the rules in any manner and at any time.
[521E] The qualifications/experience for the post of Principal were validly revised by amending the rules in August 1978.
The advertisement issued on January 5, 1982, was in accord ance with the Rules and the High Court was not justified in quashing the same.
[522B] Since respondent No. 1 does not possess the revised qualifications, he is not eligible to be considered for the said post.
[521F]
|
as a populist measure to describe some provisions in the Finance Bill in the explanatory memorandum while introducing the Bill in the Parliament can neither be determinative of, nor can it camouflage the true object of the legislation.
It is not unlikely that the phrase 'welfare measures ' was used to emphasise more on the effect of the provisions thereunder on the taxpayer for populism.
[457G] & ORIGINAL JURISDICTION: Writ Petition No. 136 of 1989.
(Under Article 32 of the Constitution of India).
Narayan B. Shatye, Mukul Mudgal, Venkatesh Rao, Sudhir Gopi for the Petitioners.
A.B. Divan, V. Gauri Shankar, S.C. Manchanda, Ashok Sagar, Ms. Amrita Mitra, Ms. A. Subhashini, Ravinder Narain, section Sukumaran, M.K. Shashidharan, section Rajappa for the Respond ents.
The Judgment of the Court was delivered by VERMA, J.
This petition under Article 32 of the Consti tution challenges the constitutional validity of clause (10 C) inserted in section 10 of the Indian Income tax Act, 1961 (hereinafter referred to as 'the Act ') by the Finance Act, 1987 with effect from 1.4.1987.
Section 10 deals with incomes not included in total income for the purpose of taxation under the Act.
The effect of clause (10 C) so inserted in section 10 of the Act is that any payment re ceived by an employee of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to the economic viability of such company and other relevant cir cumstances, approve in this behalf, is not included in the total income of such employee resulting in grant of tax exemption to that extent to him.
The petitioners contend that the denial of this benefit to an employee of a private sector company at the time of his voluntary retirement amounts to an invidious distinction between public sector employees and private sector employees in the matter of taxation and is arbitrary and unintelligible amounting to hostile discrimination.
The initial submission on behalf of the petitioners was that the aforesaid clause (10 C) of section 10 of the Act is constitutionally invalid for this reason.
However, during the course of arguments the 447 stand of the petitioners was modified to contend that the provision must be so construed as to apply to all employees equally, whether of the public or private sector, in order to uphold its validity.
The question, therefore, is whether there is any such hostile discrimination as alleged by the petitioners and if so, is it possible to construe the provi sion in the manner suggested on behalf of the petitioners to apply it equally to all employees of the public as well as private sectors? The first petitioner is an employee of second respond ent Peico Electronic and Electricals Limited, a private sector company and the second petitioner is a registered trade union representing the employees of the second re spondent company.
Counsel for the second respondent company sought to support the petitioners ' case.
Counsel for the first respondent supporting the validity of the provision indicated that employees of the public sector constituted a distinct class for the purpose of taxation so that there was no discrimination between employees of the same class if the real object of the provision is borne in mind.
We shall refer to the arguments of the two sides in some detail later.
Chapter III of the Indian Income Tax Act, 1961 relates to "incomes which do not form part of the total income".
Section 10 in Chapter III deals with "incomes not included in total income".
It provides that in computing the total income of a previous year of any person, any income falling within any of the clauses therein shall not be included.
The several clauses in section 10 specify different incomes which would ordinarily be included in the total income of the assessee for the purpose of taxation but for such a provision.
Clause (10 C) of Section 10 is as under: "(10 C): any payment received by an employee ' of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to the economic viability of such company and other relevant circumstances, approve in this behalf.
" We may now summarise the arguments advanced before us.
Shri Shetye for the petitioners first contended that the reason given for enacting clause (10 C) as indicated in the memorandum explaining provisions of the Finance Bill, 1987 is that the tax benefit is given as a welfare measure.
He argued, if so, all employees whether of private or of public sector are in the same class and are entitled equally to the 448 benefit of a welfare measure for employees.
His next conten tion is that, if that be the only stated basis of the clas sification, it has no rational nexus with the object of the provision and it violates Article 14 of the Constitution.
Learned counsel for the petitioners referred to certain other clauses in section 10 of the Act which apply equally to all employees irrespective of the category of their employer, to suggest that all such measures being for bene fit of employees, no further classification of the employees is permissible with reference to the category of their employer.
It was further urged that consequently the exclu sion of non public sector employees is not only discrimina tory but also arbitrary.
On this basis it was contended that instead of striking down the provision as invalid which while denying the benefit to the public sector employees would not also serve any useful purpose for the private sector employees, the court should adopt a positive and constructive approach and the provision so construed as to extend its benefit to all employees irrespective of the category of their employer to uphold its validity.
Shri Dewan for the second respondent, a private sector company, supported learned counsel for the petitioners.
He contended that if there be any such discrimination then the question to ask is: whether the Parliament intended to confine the benefit of this welfare measure only to employ ees of the public sector? He further contended that it is possible to read the provision in such a manner as to extend its benefit to all employees instead of confining it only to the public sector employees.
In reply, Dr. Gauri Shankar for the first respondent contended that the employees of public sector constitute a distinct class for this purpose in view of the fact that the public sector undertakings have a distinct character and role in the national economy.
He argued that to make the public sector undertakings economically more viable and thereby contribute more to the national economy, it has become necessary to streamline and trim the higher echelons by inducing the unwanted personnel to leave voluntarily with a "golden hand shake" instead of resorting to retrenchment which involves several complication including protracted litigation which is not conducive to the wellbeing of the public sector undertakings.
He argued that this problem does not exist in the private sector where the higher employees can leave or be asked to leave, without corresponding diffi culties, experienced in the public sector.
This provision is meant essentially for employees at the higher levels in the public sector undertakings whose economic status cannot be equated with their counterpart in the 449 private sector.
For this reason equating the two sets of employees for the tax benefit was urged to be unjustified, there being an intelligible differentia between them.
Dr. Gauri Shankar also contended that the real object of the enactment was to streamline the public sector by reducing overstaffing at the higher level and the consequent tax exemption to the retiring employee was merely the effect or fall out of the real object.
The provision was meant to induce the unwanted personnel to seek voluntary retirement and thereby promote the real object of streamlining the ailing public sector.
To support his argument, he produced material indicating the historical background and factual matrix including material to show the great disparity in the emoluments and perquisites, i.e., compensation package of the private sector and the public sector employees particu larly at the higher levels.
The main question for decision is the discrimination alleged by the petitioners.
The principles of valid classi fication are long settled by a catena of decisions of this Court but their application to a given case is quite often a vexed question.
The problem is more vexed in cases falling within the grey zone.
The principles are that those grouped together in one class must possess a common characteristic which distinguishes them from those excluded from the group; and this characteristic or intelligible differentia must have a rational nexus with the object sought to be achieved by the enactment.
It is sufficient to cite the decision in Re The Special Courts Bill, 1978 and to refer to the propositions quoted at p. 534 537 therein.
Some of the propositions are stated thus: "2.
The State, in the exercise of its governmental power, has of necessity to make laws operating differently on different groups or classes of persons within its territory to attain particular ends in giving effect to its policies, and it must possess for that purpose large powers of distin guishing and classifying persons or things to be subjected to such laws.
The Constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula.
Therefore, classification need not be constituted by an exact or scien tific exclusion or inclusion of persons or things.
The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classifi cation in any given case.
Classification is justified if it is not palpably arbitrary.
450 4.
The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same reme dies should be made available to them irrespective of dif ferences of circumstances.
It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed.
Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.
The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience.
It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive.
The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation.
In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be rounded on ' an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act.
The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them.
In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon person arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legisla tion, provided such classification is not arbitrary in the sense above mentioned.
451 11.
Classification necessarily implied the making of a distinction or discrimination between persons classified and those who are not members of that class.
It is the essence of a classification that upon the class are cast duties and burdens different from those resting upon the general pub lic.
Indeed, the very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality ,n no manner determines the matter of constitutionality." (emphasis supplied) It is well settled that the latitude for classification in a taxing statute is much greater; and in order to tax something it is not necessary to tax everything.
These basic postulates have to be borne in mind while determining the constitutional validity of a taxing provision challenged on the ground of discrimination.
The scope for permissible classification in a taxing statute was once again considered in a recent decision.
of this Court in P.H. Ashwathanarayana vs State of Karnataka, [1989] Suppl.
1 SCC 696.
After a review of earlier deci sions, it was stated therein as under: "It is for the State to decide what economic and socialpoli cy it should pursue and what discriminations advance those social and economic policies.
In view of the inherent com plexity of these fiscal adjustments, courts give a larger discretion to the legislature in the matter of its prefer ences of economic and social policies and effectuate the chosen system in all possible and reasonable ways . . " (emphasis supplied) In Federation of Hotel and Restaurant Association of India vs Union of India, , it was said as under: ".
The test could only be one of palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience." ".
A reasonable classification is.
one which includes all who are similarly situated and none who are not.
In order to ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law." (emphasis supplied) 452 This Court has held in Kerala Hotel and Restaurant Association & Ors.
vs State of Kerala & Ors.
, ; as under: "The scope for classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification, in the background of the fiscal policy of the State to promote economic equality as well . . ' ' "Thus, it is clear that the test applicable for striking down a taxing provision on this ground is one of palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience, and the courts should not interfere with the legislative wisdom of making the classification unless the classifica tion is found to be invalid by this test." (emphasis supplied) It is useful to refer also to the decision of this Court in 1.
T.O. vs N. Takin Roy Rymbai, a similar question relating to validity of classification in another clause of section 10 of the In come Tax Act, 1961 arose for consideration.
This Court while upholding the validity of the classification summarised the principles applied, as under: ". it must be remembered that the State has, in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerably wide discretion in the matter of classification for taxation purposes.
Given legislative competence, the legislature has ample freedom to select and classify persons, districts, goods, properties, incomes and objects which it would tax, and which it would not tax.
So long as the classification made within this wide and flexi ble range by a taxing statute does not transgress the funda mental principles underlying the doctrine of equality, it is not vulnerable on the ground of discrimination merely be cause it taxes or exempts from tax some incomes or objects and not others.
Nor is the mere fact that a tax falls more heavily on some in the same category, by itself a ground to render the law invalid.
It is only when within the range of its selection, the law operates unequally and cannot be justified on the basis of a valid classification, that there 453 would be a violation of Article 14.
(see East India Tobacco Co. vs Andhra Pradesh; Vivian Joseph Ferriera vs Municipal Corporation of Greater Bombay; Jaipur Hosiery Mills vs State of Rajasthan)" (emphasis supplied) We must, therefore, look beyond the ostensible.
classi fication and to the purpose of the law and apply the test of 'palpable arbitrariness ' in the context of the felt needs of the times and societal exigencies informed by experience to determine reasonableness of the classification.
It is clear that the role of public sector in the sphere of promoting the national economy and the context of felt needs of the times and societal exigencies informed by experience gained from its functioning till the enactment are of significance.
There is no dispute that the impugned provision includes all employees of the public sector and none not in the public sector.
The question is whether those left out are similarly situated for the purpose of the enactment to render the classification palpably arbitrary.
It is only if this test of palpable arbitrariness applied in this manner is satis fied, that the provision can be faulted as discriminatory but not otherwise.
Unless such a defect can be found, the further question of construing the provision in such a manner as to include all employees and not merely employees of public sector companies, does not arise.
It is first necessary to discern the true purpose or object of the impugned enactment because it is only with reference to the true object of the enactment that the existence of a rational nexus of the differntia on which the classification is based, with the object sought to be achieved by the enactment, can be examined to test the validity of the classification.
In Francis Bennion 's Statu tory Interpretation, 1984 edition, the distinction between the legislative intention and the purpose or object of the legislation has been succinctly summarised at p. 237 as under: "The distinction between the purpose or object of an enact ment and the legislative intention governing it is that the former relates to the mischief to which the enactment is directed and its remedy, while the latter relates to the legal meaning of the enactment.
" There is thus a clear distinction between the two.
While the purpose or object of the legislation is to provide a remedy for the malady, the legislative intention relates to the meaning or exposition 454 of the remedy as enacted.
While dealing with the validity of a classification, the rational nexus of the differentia on which the classification is based has to exist with the purpose or object of the legislation, so determined.
The question next is of the manner in which the purpose or object of the enactment has to be determined and the materi al which can be used for this exercise.
For determining the purpose or object of the legisla tion, it is permissible to look into the circumstances which.
prevailed at the time when the law was passed and which necessitated the passing of that law.
For the limited purpose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady.
In A. Thangal Kunju Musaliar vs
M. Venkitachalam Potti & Anr., ; , the State ment of Objects and Reasons was used for judging the reason ableness of a classification made in an enactment to see if it infringed or was contrary to the constitution.
In that decision for determining the question, even affidavit on behalf of the State of "the circumstances which prevailed at the time when the law there under consideration had been passed and which necessitated the passing of that law" was relied on.
It was reiterated in State of West Bengal vs Union of India, 1 that the Statement of Objects and Reasons accompanying a Bill, when introduced in Parliament, can be used for 'the limited purpose of under standing the background and the antecedent state of affairs leading up to the legislation. ' Similarly, in Pannalal Binjraj vs Union of India, ; challenge to the validity of classification was repelled placing reliance on an affidavit filed on behalf of the Central Board of Revenue disclosing the true object of enacting the impugned provision in the Income Tax Act.
Not only this, to sustain the presumption of constitu tionality, consideration may be had even to matters of common knowledge; the history of the times; and every con ceivable state of facts existing at the time of legislation which can be assumed.
Even though for the purpose of con struing the meaning of the enacted provision, it is not permissible to use these aids, yet it is permissible to look into the historical facts and surrounding circumstances for ascertaining the evil sought to be remedied.
The distinction between the purpose or object of the legislation and the legislative intention, indicated earlier, is significant in this exercise to emphasise the availability of larger mate rial to the Court for reliance when determining the purpose or object of the legislation as distinguished from the meaning of the enacted provision.
455 We propose to utilise these permissible aids for dis cerning the purpose or object of the legislative provision in order to examine the validity of the classification made therein.
Strong reliance has been placed on behalf of the peti tioners on the Memorandum explaining the provisions in the Finance Bill, 1987, wherein the explanatory note relating to clause 4(a) of the Bill proposing insertion of clause (10 C) in Section 10 of the Income tax Act, 1961 appears under the heading 'Welfare Measures '.
It may be mentioned that this heading is only in the explanatory memorandum and not in the 'Notes on Clauses ' appended to the 'Statement of Objects and Reasons ' of the Bill.
(See [1987] 165 ITR (Statutes) at pp. 119, 122 & 155).
We would presently show that the petition ers cannot draw support from this heading in the explanatory memorandum.
Moreover, an explanatory memorandum is usually 'not an accurate guide of the final Act '.
(See Francis Bennion 's Statutory Interpretation, 1984 Ed.
at p. 529).
It was urged that the impugned provision being described as a welfare measure in the explanatory memorandum, the object of the enactment was the welfare of the employees and, therefore, no further classification of the employees could be made.
It was argued that the heading 'welfare measures ' is, therefore, decisive of the object of its enactment.
In our opinion, this cannot be accepted.
The Statement of Objects and Reasons (See (1987) 165 ITR (Stat utes) at p. 119) is as under: "The object of the Bill is to give effect to the financial proposals of the Central Government for the financial year 1987 88.
The Notes on Clauses explain the various provisions contained in the Bill.
" Thereafter, the Notes on clauses in the Finance Bill, 1987 are from pp. 119 151.
The Note relating to this clause at p. 122 is as under: "Clause 4 seeks to amend section 10 of the Income Tax Act.
Sub Clause (a) of this clause proposes to insert a new clause (10 C) in this section.
Under the proposed amendment, any payment received by an employee of a public sector company at the time of his voluntary retirement in accord ance with any scheme which the Central Govern 456 ment may, having regard to.
the economic viability of the public sector company and other relevant circumstances, approve in this behalf, shall be exempt from tax.
This amendment will take effect from 1st April, 1987, and will, accordingly apply in relation to the assessment year 1987 88 and subsequent years.
" No where in the 'Notes on Clauses ' the proposal in the Bill is described as a welfare measure.
It is then in the memo randum explaining the provisions in the Finance Bill, 1987 that the provisions are divided under different heads, one of which is 'welfare measures '.
The subheading relating to this proposal is mentioned as 'Exemption of compensation received by public sector employees on voluntary retire ment '.
It is mentioned in paragraph 13 of the explanatory memorandum that a number of public sector undertakings have formulated voluntary retirement schemes for their employees; that under section 10(10 B) of the Income Tax Act any com pensation received by a workman at the time of his retrench ment is exempt upto the specified limit; and that this limit of exemption under section 10 (10 B) is, however, not ap plicable in respect of compensation received under certain schemes approved by the Central Government.
By enacting section 10 (10 C), the proposal obviously was to extend the same benefit to the payment made under these approved schemes as was existing for compensation under approved scheme given by section 10 (lOB).
The heading of 'welfare measures ' applies also to paragraph 14 in the memorandum relating to modification of provisions relating to deduction in respect of donations to certain funds etc.
It is, there fore, clear that in this explanatory memorandum the headings are fairly wide and matters collected under the same heading may be diverse not giving a true indication of the object of the provision.
It is also significant that the proposal to amend sec tion 10 by inserting a new clause (10 C) therein was con tained in sub clause (a) of clause 4 of the Finance Bill, while sub clause (b) of clause 4 of the Finance Bill pro posed to insert a new item in sub clause (iv) of clause (15) of section 10 to provide that interest payable by the public sector companies on certain specified bonds and debentures will not form part of the tax payer 's total income subject to the specified conditions.
This was in pursuance of a series of public sector bonds being floated which are in tended to yield tax free return to the holders of such bonds.
The effect of the amendment so made yielding tax free return to the holders of public sector bonds is similar to the amendment by 457 insertion of a new clause (10 C), the effect of which is to grant tax exemption to employees of the public sector in respect of the amount received under the voluntary retire ment scheme approved by the Central Government.
Both these proposals relating to the amendment of section 10 were in sub clauses (a) and (b) of clause 4 of the Finance Bill.
Ordinarily in the memorandum explaining the provisions in the Finance Bill both the sub clauses of clause 4 should have been, therefore, mentioned under the same heading being of essentially the same nature.
It is interesting to note that the proposal in clause 4(b) was mentioned in paragraph 17 of the explanatory memorandum under the heading 'Incen tives for growth and modernisation ' with the sub heading 'Measures for raising resources for the public sector '.
Admittedly, the effect of this provision was to grant a tax benefit to the holders of the public sector bonds by amend ing section 10 in this manner but the real object for giving that benefit to the tax payer was to provide an incentive for growth and modernisation by adopting a measure for raising the resources for the public sector.
If the proposal in sub clause of clause 4 of the Finance Bill fell in this category, there is no reason why the proposal in sub clause (a) of the same clause of the Bill, both sub clauses relat ing to amendment of section 10, can be treated differently merely because in the explanatory memorandum the two sub clauses are under different headings.
This distribution of the sub clauses of the same clause in the Finance Bill under different heads in the explanatory memorandum is sufficient to show that no particular significance can be attached to the heading 'welfare measures under which the proposal to insert clause (10 C) in section 10 of the Act was placed in that memorandum.
We see no reason why insertion of clause (10 C) in section10 cannot also be described as incentive for growth and modernisation being a measure for improvement of the public sector.
Obviously the incentive given thereby is to the employees of the public sector companies to resort more readily to the voluntary retirement scheme which would enable improvement of public sector by streamlining its staff.
A catch phrase possibly used as a populist measure to describe some provisions in the Finance Bill in the explana tory memorandum while introducing the Bill in the Parliament can neither be determinative of, nor can it camouflage the true object of the legislation.
It is not unlikely that the phrase 'welfare measures ' was used to emphasise more on the effect of the provisions thereunder on the tax payer for populism.
In view of the fact that the challenge is based on the initial 458 assumption of equality between all employees of the public sector and the private sector, it will be useful to refer to the nature and role of the public sector undertakings vis a vis those of the private sector along with the histor ical background and surrounding circumstances leading to enactment of the impugned provision.
For this purpose, we would first refer to the counter affidavit of Shri S.K. Abrol, Officer onSpecial Duty, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, New Delhi, which states the reasons for insertion of clause (10 C) in section 10 of the Income Tax Act, 1961.
The coun ter affidavit states with reference to some other clauses of section 10 of the Act that the legislature for purposes of exemption from income tax has always differentiated between private sector employees and those in the public sector and Government employment.
It states further as follows: "As submitted in the paragraph above, sectionl 10 (10 C) was introduced by the Finance Act, 1987 w.e.f.
1.4.1987 and the legislature in its wisdom sought to restrict these benefits to only the employees in the public sector.
The reason for introducing this provision is contained in the Circular of the Central Board of Direct Taxes explaining the Finance Act, 1987, relevant extract from which is reproduced hereun der: 15.1.
At present under section 10 (10B) any com pensation received by a workmen at the time of his retire ment is exempted upto the amount calculated in accordance with section 25F of the Industrial Disputes Act or Rs.50,000, whichever is less.
The limit is, however, not applicable in respect of compensation received under certain schemes approved by the Central Government.
15.2 A number of public sector undertakings.have formulated voluntary retirement schemes for their employees.
With a view to extend relief to such employees, the Finance Act, 1987, by introducing new clause (10C) in section 10, provides exemption in respect of any payment received by them at the time of their voluntary retirement in accordance with any scheme which the Central Government may approve, having regard to the economic viability of the public sector company and other relevant circumstances.
This exemption will be available to any employee whether a workman or an executive.
459 15.3.
This amendment shall come into force w.e,f.
1.4.1987 and will, accordingly, apply to assessment year 1987 88 and subsequent year. ' "It is submitted that for all purposes, the private sector and the public sector have been treated differently and are known to be different classes.
The Industrial Policy Resolu tion, 1956, which reviewed the earlier Industrial Policy, clearly distinguished industries in the public sector and those in the private sector.
The Industrial Policy Resolu tion mentioned that for adoption of socialist pattern of society as the national objective, the requirement was that industries of basic and strategic importance, or in the nature of public utility service, should be in the public sector.
The Industrial Policy Resolution placed the indus tries in three different categories; . .
Thus, this categorisation of industries into public sector, private sector was on the basis of Articles 38 and 39 of the Consti tution of India, as has been mentioned in the Industrial Policy Resolution, 1956." "The respondent submits that there were certain basic distinctions between the undertakings in the private sector and in the public sector as has been observed by this Hon ' ble Court in the case of R.D. Shetry vs International Air port Authority of India; , A public sector undertaking is either established by a statute or incorpo rated under law.
Public Sector Undertakings are wholly controlled by Government not only in their policy making but also in carrying out the functions entrusted to them by law establishing it or by charter of their in corporation.
As such public sector undertakings are bound by any directions that may be issued by Government from time to time in re spect of policy matters.
The entire share capital of the public sector undertakings is held by the Government and it is under the direct control and supervision of Government.
The pay scales of the employees in the public sector are fixed by the administrative Ministry inconsultation with the Bureau of Public Enterprises, who exercise complete control over the actions of public sector undertakings.
The public sector undertakings are answerable to the Parliament through their administrative Ministries.
The entire budget of the public sector undertakings is controlled by the 460 administrative Ministries.
The Comptroller and Auditor General audits the accounts of the public sector undertak ings and any leakages etc.
are brought to the notice of Parliament.
The recruitment and conduct rules of the public sector employees are subject to overall control of Govern ment through Bureau of Public Enterprises . . " " . .
Section 10 (10C), while extending the benefit to employees of public sector has, as its basis, exempted incomes received from Government through public sector undertakings.
The distinction is based on intelligent differentiation and the object of this differentiation is to promote the interests of the employees of public sector undertakings so as to bring this at par with the private sector employees whose emoluments and other conditions of service are not governed by any statute or are not under any control." "The respondent submits that the legislature is aware of the differentiation between the public sector undertakings and private sector undertakings.
and in its wisdom. has chosen to restrict the benefit only to the public sector employees . . " "The respondent submits that the extension of the benefit of section 10 (10C) of the Income Tax Act to the employees of the private sector is likely to be misused by way of fre quent payment to the employees in the garb of voluntary retirement benefits and it will not be possible to provide necessary safeguards in law to check such practices.
This would defeat the very purpose of the Scheme of Voluntary Retirement, besides leading to large scale revenue loss." (emphasis supplied) The counter affidavit filed on behalf of respondent No. 1 disclosing the reasons which led to the insertion of clause (10C) in section 10 of the Act confining the benefit granted thereby only to employees of the public sector indicates that the purposes of the legislation include reduction in the existing gap between the lower compensation package in public sector and the higher compensation package of the counterpart in private sector in addition to prevent ing misuse of the benefit in private sector which is not subject to the control of administration by Government like that in the public sector.
It is evident from the material produced before us that the compensation package in the public 461 sector, particularly at the higher levels, is much lower than that in the private sector.
Some insight into the existing state of the public sector undertakings and their viability with suggestions for improvement are found in the First Dr. L.K. Jha Memorial Lecture, delivered on the 6th December, 1988, by Shri R.N. Malhotra, Governor, Reserve Bank of India, on "Growth and Current Fiscal Challenges".
While giving an overview of the progress during the last four decades, the speaker referred to the 'performance of the public sector ' as under: "The public sector which now accounts for about half the total national investment has made crucial contributions to the development of the economy by expanding the infrastruc ture, establishing basic industries and producing goods and services of strategic importance.
The public sector has, however, not been able to generate surpluses commensurate with its share in plan outlays.
" On "planning and resources" and "financing of public sector", he said: "An analysis of the financing pattern of public sector plan expenditures indicates that over time the shares of balance from current revenues and additional resource mobilisation have been declining while reliance on borrowed funds has been rising . . " Therefore, he referred to the deterioration in the finances with reference to the growing expenditure, as under: " . .
Interestingly, about two thirds of the savings of these enterprises represent provisions for depreciation which are supposed to cover replacement costs, Though sever al of these enterprises are operating efficiently, The savings of public sector enterprises as a group are not commensurate with the investment made in them.
According to the public enterprises survey, the capital employed in the Central Public Sector Enterprises amounted to about Rs.52,000 crores at the end of 1986 87.
About 100 of these units made losses amounting to Rs. 1,708 crores and 109 units were making after tax profit of Rs.3,478 crores of which Rs.2,142 crores came from the oil sector.
The rate of 462 return was 6.0 per cent before tax and 3.4 per cent after tax.
If the oil sector which benefits from the oil price policy is excluded, the rate of return would be negative . .
There is imperative need for substantial improvement in the working and profitability of public sector undertakings.
" Referring to the existing state of "public debt", he said: "The Long Term Fiscal Policy (LTFP) had raised concern about increasing reliance on borrowings to finance the budgetary outlays and had suggested containment of domestic borrowings including those from the Reserve Bank . .
In the event, the level of borrowings has been much higher than that envisaged in the Seventh Plan . .This has happened de spite the fact that some public sector enterprises, previ ously dependent on the budget, were allowed to raise re sources directly from the capital market through bond float ations of the order of Rs.2,000 crores each year from 1986 87 . .
Growing levels of borrowing by the Government and public sector undertakings raise two major concerns.
First, whether the present level of Government borrowing is sus tainable? Unless there are adequate surpluses in the revenue account which can be utilised for debt servicing, the budge tary deficit would widen.
The increased borrowings for debt servicing would create the vicious circle of progressively higher interest burdens and still higher borrowing.
The second issue is whether the increasing level of Government borrowing coupled with that of public sector undertakings would result in crowding out of private sector investments.
Since the total investment in the economy is shared about equally between the public and private sectors, it is impor tant to ensure that the 'requirements of the private sector are also adequately met so that the overall growth targets of the national economy are achieved. ' ' Dealing with the efficiency issues, he said as under: "I shall now refer briefly to the efficiency issues with special reference to the public sector . .
The persist ence of a high ICOR would, however, indicate considerable scope of improvement in efficiency . . 463 Cost and time over runs are major contributors to the high ICOR . .
The public sector has rendered great service in providing infrastructure and establishing basic and strategic industries.
Managerial skills in that sector are generally of a high order.
The aim should there fore be to promote productivity and profitability of this sector by introducing the requisite policy changes and improvements.
One of the important aims of this sector which needs reiteration is its financial viability.
Efficient use of manpower is imperative.
This is difficulty to ensure if overmanning persists along with restrictive practices which resist technological change and systems improvement . . " (emphasis supplied) The factual matrix and historical background appearing from the above material prove that the public sector needs toning up.
One of its affliction is overmanning or surplus staff, the obvious remedy of which is streamlining, by removing the non productive and unwanted personnel, if possible, without any complication.
Retrenchment is often an unsafe course to adopt.since it may lead to protracted litigation and uncertain outcome.
We cannot overlook this well known, though unfortunate fact.
A safe mode to relieve the public sector of its unpro ductive and surplus manpower is to induce those persons to seek voluntary retirement under a scheme providing some incentive or inducement for seeking voluntary retirement.
Clause (10 B) of section 10 of Incometax Act, 1961, does grant tax exemption in respect of any compensation received at the time of retrenchment upto the prescribed limit.
That limit, however, does not apply to compensation received under certain schemes approved by the Central Government.
It is, therefore, reasonable that same benefit be also extended in respect of any payment received by an employee of the public sector on his voluntary retirement under a scheme similarly approved by the Central Government.
The public sector 's role visualised on advent of freedom was as an 'instrument of development and national strength ', a 'key to our self reliance ', 'catalyst of social change ' and for attaining 'commanding heights of the economy ' in keeping with our national aim of Welfare State and a social ist economy.
Unfortunately, inspite of a 464 strong rationale for setting up and promoting public sector in the national economy, it has not so far fully justified the legitimate expectation and a large number of the public sector undertakings are losing concerns.
A study into the causes which all the public sector has shown that one of its drawbacks is overstaffing.
Streamlining the public sector to get rid of its unproductive and unwanted personnel is, therefore, a felt need.
A scheme whereby such unwanted personnel can be induced to leave voluntarily granting some incentive for doing so is, therefore, ultimately beneficial to the health and prosperity of the public sector and conse quently to the national economy.
These factors alone are sufficient to provide an intelligible differentia between public and private sectors and its rational nexus with the object of improving the performance of public sector, pro moting national economy.
It is useful to remember that the country having opted for mixed economy, the healthy and vigorous functioning of the public sector undertakings is conducive to the benefit of the private sector as well, in addition to promoting the well being of the national economy.
A point of view emerging currently is that just as public sector undertakings are outside the purview of the Monopolies and Restrictive Trade Practices Act by virtue of the exemption conferred on them, the Income tax Act should confer similar exemption to it from tax liability by suitable amendment in section 10 of the Act as is given to local authorities, housing boards, etc.
This view is supported on the ground that the exemption from tax liability or public sector undertakings would ultimately benefit the consumers of the products of the public sector undertakings.
This is not an irrelevant cir cumstances to indicate that according to the general percep tion, there is a distinction between the public and private sectors.
In some earlier decisions of this Court, the public sector has been treated as a distinct class for the purpose of exemption under Statutes.
In Hindustan Paper Corporation Ltd. vs Government of Kerala & Ors., ; , a provision granting exemp tion to Government companies and cooperative societies alone for selling forest produce at less than selling price fixed under the Kerala Forest Produce (Fixation of Selling Price) Act, 1978 was held to be constitutionally valid and not violative of Articles 14 and 19(1)(g) of the Constitution of India.
It was held that the Government or public sector undertakings formed a distinct class.
In this context, it was held as under: " . .
As far as Government undertakings and companies are concerned, it has to be held that they form a class by 465 themselves since any profit that they may make would in the end result in the benefit to the members of the generalpub lic.
The profit, if any, enriches the public coffer and not the private coffer.
The role of industries in the public sector is very sensitive and critical from the point of view of national economy.
Their survival very often depends upon the budgetary.
provision and not upon private resources which are available to the industries in the private sector . . " (emphasis supplied) Similarly, in M. Jhangir Bhatusha etc.
vs Union of India & Ors. etc.
, 1982 Judgments Today 2 SC 465, a concession in import duty granted to the State Trading Corporation was upheld on the ground that public policy can support the differentiation.
It is clear that the Government or the public sector undertakings have been treated as a distinct class separate from those in the private sector and the fact that the profit earned in the former is for public benefit instead of private benefit, provides an intelligible differentia from the social point of view which is of prime importance for the national economy.
Thus, there exists an intelligible differentia between the two categories which has a rational nexus with the main object of promoting the national econom ic policy or the public policy.
This element also appears in the impugned enactment itself wherein 'economic viability of such company ' is specified as the most relevant circumstance of grant of approval of the scheme by the Central Govern ment.
This intrinsic element in the provision itself sup ports the view that the main object thereof is to promote and improve the health of the public sector companies even though its effect is a benefit to its employees.
As already indicated, clause (10 C) of section 10 of the Act itself mentions economic viability of a public sector company as the most relevant circumstance to attract the provision.
The economic status of employees of a public sector company who get the benefit of the provision is also lower as compared to their counterpart in the private sec tor.
If this be the correct perspective as we think it is in the present case, the very foundation of the challenge to the impugned provision on the basis of economic equality of employees in both sectors is non existent.
Once the stage is reached where the differentiation is rightly made between a public sector company and a private sector company and that too essentially on the ground of economic viability of the public sector company and other relevant circumstances, the 466 argument based on equality does not survive.
This is inde pendent of the disparity in the compensation package of employees in the private sector and the public sector.
The argument of discrimination is based on initial equality between the two classes alleging bifurcation thereafter between those who stood integrated earlier as one class.
This basic assumption being fallacious, the question of any hostile discrimination by granting the benefit only to a few in the same class denying the same to those left out does not arise.
We shall now refer to some other clauses of section 10 of the Act to which reference was made at the hearing in support of the rival contentions.
Sub clause (i) of clause (10) of section 10 confines the benefit thereunder only to the Government servants, defence personnel and employees of a local authority.
Sub clause (i) of clause (10 A) similarly confines the benefit to Government servants, defence person nel and employees of a local authority or a corporation established by a statute.
Clause (10 A) also makes a dis tinction between the Government employees and other employ ees.
Clause (10 B) also removes the limit in respect of any payment as retrenchment compensation under a scheme approved by the Central Government.
Some other clauses in section 10 of the Act further show that the scheme of section 10 con templates a distinction between employees based on the category of their employer.
Accordingly, clause (10 C) therein is not a departure from the existing scheme but in conformity with some clauses earlier enacted therein.
Once the impugned provision contained in the newly inserted clause (10 C) of section 10 of the Income Tax Act, 1961 is viewed in the above perspective keeping in mind the true object of the provision, there is no foundation for the argument that it is either discriminatory or arbitrary.
There is a definite purpose for its enactment.
One of the purposes is streamlining the public sector to cure it of one of its ailments of overstaffing which is realised from experience of almost four decades of its functioning.
In view of the role attributed to the public sector in the sphere of national economy, improvement in the functioning thereof must be achieved in all possible ways.
A measure adopted to cure it of one of its ailments is undoubtedly a forward step towards promoting the national economy.
The provision is an incentive to the unwanted personnel to seek voluntary retirement thereby enabling the public sector to achieve the true object indicated.
The personnel seeking voluntary retirement no doubt get a tax benefit but then that is an incentive for seeking voluntary retirement and at any rate that is the effect of the provision or its fall out and not its true 467 object.
It is similar to the incentive given to the taX payers to invest in the public sector bonds by non inclusion of the interest earned thereon in the tax payer 's total income which promotes the true object of raising the re sources of the public sector for its growth and modernisa tion.
The real distinction between the true object of an enactment and the effect thereof, even though appearing to be blurred at times, has to be borne in mind, particularly in a situation like this.
With this perspective, keeping in view the true object of the impugned enactment, there is no doubt that employees of the private sector who are left out of the ambit of the impugned provision do not fall in the same class as employees of the public sector and the benefit or the fall out of the provision being available only to the public sector employees cannot render the classification invalid or arbitrary.
This classification cannot, therefore, be faulted.
Some of the cases cited by the petitioners in support of the contention of equality of employees in the public and private sectors in the present context also are inapplica ble.
The decision in Hindustan Antibiotics vs Workmen, ; related to wage fixation and is distin guishable.
S.K. Dutta, I.T.O. vs Lawrence Singh Ingty, distinguished and explained in relied on by us.
Moreover, which also related to a provision in Section 10 of Income tax Act, 1961 itself says as under: "Classification for purposes of taxation or for exempting from tax with reference to the source of the income is integral to the fundamental scheme of the Income tax Act.
Indeed, the entire warp and woof of the 1961 Act has been woven on this pattern." " . .
Suffice it to say that classification of sources of income is integral to the basic scheme of the 1961 Act.
It is nobody 's case that the entire scheme of the Act is irrational and violative of article 14 of the Constitution.
Such an extravagent contention has not been canvassed before us.
Thus, the classification made by the aforesaid sub clause (a) for purposes of exemption is not unreal or un known.
It conforms to a well recognised pattern.
It is based on intelligible differentia.
The object of this differentia tion between income accruing or received from a source in the specified areas and the income accruing or received from a source outside such areas, is to benefit not only the members of the Scheduled Tribes residing in the specified 468 areas but also to benefit economically such areas . . " The other submission of the petitioners is to read the provision in a manner which would cover all employees in cluding employees of the private sector within the ambit of the impugned provision.
This further question does not arise in view of our conclusion that there is no discrimination made out.
We may, however, mention that the Finance Bill, 1987 while inserting a new clause (10 C) in section 10 of the Income tax Act simultaneously inserted a new clause (36 A) in section 2 of the Act with effect from 1.4.1987 defining 'public sector company ', which expression has been used in the newly inserted clause (10 C) of section 10.
In view of the simultaneous definition of 'public sector compa ny ' in the Act, there can be no occasion to construe this expression differently without which a private sector compa ny cannot be included in it.
It is, therefore, not possible to construe the impugned provision while upholding its validity in such a manner as to include a private sector company also within its ambit.
Consequently, the writ petition is dismissed, but in the facts and circumstances of the case, there shall be no order as to costs.
All the interim orders shall stand vacated.
T.N.A. Petition dismissed.
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By Finance Act, 1987, clause (10 C) was inserted in section 10 of the Income Tax Act, 1961.
The effect of this clause was to grant tax exemption to employees of the public sector in respect of the amount received under the voluntary retirement scheme approved by the Central Government.
The petitioners an employee of a private sector company and the trade union of the said private company flied a writ petition in this 442 court challenging the validity of clause (10 C) contending; (i) the denial of benefit of tax exemption to employees of private sector company being arbitrary and discriminatory, the impugned clause was unconstitutional as violative of Article 14: (ii) the heading 'Welfare Measures ' to the Memorandum explaining the provisions in the Finance Bill 1987 proposing insertion of clause (10 C) in section 10 of the Income Tax Act, 1961 was decisive of the object of its enactment; the tax benefit being in the nature of welfare measure the impugned clause must be so construed as to apply to all employees equally, whether of the public sector or private sector in order to uphold its validity.
Dismissing the petition, this Court, HELD: There is a distinction between the public and private sectors.
The Government or the public sector under takings are as a distinct class separate from those in the private sector and the fact that the profit earned in the former is for public benefit instead of private benefit, provides an intelligible differentia from the social point of view which is of prime importance for the national econo my.
Thus, there exists an intelligible differentia between the two categories which has a rational nexus with the main object of promoting the national economic policy or the public policy.
This element also appears in the impugned enactment itself wherein 'economic viability of such compa ny ' is specified as the most relevant circumstance for grant of approval of the scheme by the Central Government.
This intrinsic element in the provision itself supports the view that the main object thereof is to promote and improve the health of the public sector companies even though its effect is a benefit of its employees.
The economic status of em ployees of a public sector company who get the benefit of the provision is also lower as compared to their counterpart in the private sector.
Viewed in this perspective, the very foundation of the challenge to the impugned provision on the basis of economic equality of employees in both sectors is non existent.
Once the stage is reached where the differen tiation is rightly made between a public sector company and a private sector company and that too essentially on the ground of economic viability of the public sector company and other relevant circumstances, the argument based on equality does not survive.
This is independent of the dis parity in the compensation package of employees in the private sector and the public sector.
The argument of dis crimination is based on initial equality between the two classes alleging bifurcation thereafter between those who stood integrated earlier as one class.
This basic assumption being fallacious, the question of any hostile discrimination by granting the benefit only to a few in the same class denying the same to those left out does not arise.
[465D H; 466A B] 443 2.
The purposes of the impugned legislation include reduction in the existing gap between the lower compensation package in public sector and the higher compensation package of the counterpart in private sector in addition to prevent ing misuse of the benefit in private sector which is not subject to the control of administration by Government like that in the public sector.
One of the purposes is streamlin ing the public sector to cure it of one of its ailments of overstaffing.
The provision is an incentive to the unwanted personnel to seek voluntary retirement thereby enabling the public sector to achieve the true object indicated.
The personnel seeking voluntary retirement no doubt get a tax benefit but then that is an incentive for seeking voluntary retirement and at any rate that is the effect of the provi sion or its fallout and not its true object.
The real dis tinction between the true object of an enactment and the effect thereof, even though appearing to be blurred at times, has to be borne in mind, particularly in a situation like this.
[466F H; 467A B] 2.1 Keeping in view the true object of the impugned enactment, there is no doubt that employees of the private sector who are left out of the ambit of the impugned provi sion do not fall in the same class as employees of the public sector and the benefit of the fall out of the provi sion being available only to the public sector employees cannot render the classification invalid or arbitrary.
The other clauses in section of the Act further show that the scheme of section 10 contemplates a distinction between employees based on the category of their employer.
This classification cannot, therefore, be faulted.
[67B C] Hindustan Paper Corporation Ltd. vs Government of Kerala vs Union of India & Ors.
, Judgments Today ; L.K. Jha Memorial Lecture, delivered on the 6th December 1988, by Shri R.N. Malhotra, Governor, Reserve Bank of India, on "Growth and Current Fiscal Challenges", re ferred to.
Hindustan Antibiotics vs Workmen, ; and S.K. Dutta, 1.
T.O. vs Lawrence Singh Ingty, , distinguished and held inapplicable.
R.D. Shetty vs International Airport Authority of India, ; , cited.
2.2 In view of the simultaneous definition of 'public sector company ' in the Income Tax Act, there can be no occasion to construe this 444 expression differently without which a private sector compa ny cannot be included in it.
It is, therefore, not possible to construe the impugned provision while upholding its validity in such a manner as to include a private sector company also within its ambit.
[468C D] 3.
The principles of valid classification are that those grouped together in one class must possess a common charac teristic which distinguishes them from those excluded from the group; and this characteristic or intelligible differen tia must have a rational nexus with the object sought to be achieved by the enactment.
[449D] Re The Special Courts Bill, 1978, , referred to.
The latitude for classification in a taxing is much greater; and in order to tax something it is not necessary to tax everything.
These basic postulates have to be borne in mind while determining the constitutional validity of a taxing provision challenged on the ground of discrimination.
1451C] P.H. Ashwathanarayana vs State of Karnataka, [1989] (Supp.) 1 S.C.C. 696; Federation of Hotel and Restaurant Association of India vs Union of India, [1989] 178 I.T.R. 97; Kerala Hotel and Restaurant Association & Ors.
vs State of Kerala & Ors.
, ; and 1. T.O. vs N. Takin Roy Rymbai, SC, referred to.
East India Tobacco Co. vs Andhra Pradesh, ; ; Vivian Joseph Ferriera vs Municipal Corporation of Greater Bombay, ; and Jaipur Hosiery Mills vs State of Rajasthan, ; , cited.
The Court should, therefore, look beyond the obsten sible classification and to the purpose of the law and apply the test of 'palpable arbitrariness ' in the context of the felt needs of the times and societal exigencies informed by experience to determine reasonableness of the classifica tion.
[453B] 5.1 It is necessary to discern the true purpose or object of the impugned enactment because it is only with reference to the true object of the enactment that the existence of a rational nexus of the differentia on which the classification is based, with the object sought to be achieved by the enactment, can be examined to test the validity of the classification.
[453E F] 445 5.2 There is a clear distinction between the legislative intention and the purpose or object of the legislation.
While the purpose or object of the legislation is to provide a remedy for the malady, the legislative intention relates to the meaning or exposition of the remedy as enacted.
While dealing with the validity of a classification, the rational nexus of the differentia on which the classification is based has to exist with the purpose of object of the legis lation, so determined.
[453H; 454A] Francis Bennion 's Statutory Interpretation, 1984 edi tion, page 237, referred to.
For determining the purpose or object of the legisla tion, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law.
For the limited pur pose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady.
[454B C] A.
Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr., ; ; State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and Pannalal Binjraj vs Union of India, ; , referred to.
6.1 To sustain the presumption of constitutionality, consideration may be had even to matters of common knowl edge; the history of the times; and very conceivable state of facts existing at the time of legislation which can be assumed.
Even though for the purpose of construing the meaning of the enacted provision, it is not permissible to use these aids, yet it is permissible to look into the historical facts and surrounding circumstances for ascer taining the evil sought to be remedied.
The distinction between the purpose or object of the legislation and the legislative intention is significant in this exercise to emphasise the availability of larger material to the Court for reliance when determining the purpose or object of the legislation as distinguished from the meaning of the enacted provision.
[454F H] 7.
An explanatory memorandum is usually 'not an accurate guide of the final Act '.
[455C] Francis Bennion 's Statutory Interpretation, 1984 Edn.
page 529,referred to. 446
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vil Appeal Nos.
4397 98 of 1989 etc.
From the Judgment and Order dated 30.11.1988 of the Central Administrative Tribunal at New Delhi in O.A. Nos. 838 of 87 and 1502 of 1987.
606 K. Sibal, Additional Solicitor General, A. Subba Rao, C.V.S. Rao and M.S. Ganesh for the appellants.
Respondent No. 1 in person.
D.K. Garg, R.P. Oberoi and D.B. Vohra for the respondents.
The judgment of the Court was delivered by R.M. SAHAI, J.
Seniority in services is usually irksome.
But the nature of dispute amongst officers in Class 'A ' of Indian Defence Estates Service, who were promoted from Class 'B ' of Military and Cantonment service where they were working as Assistant Military Estates Officers (AMEO) and Assistant Military F. states Officers (Technical) (AMEOT), is slightly, unusually.
That is why apart from correctness or otherwise of directions issued by the Tribunal (Central Administrative Tribunal, New Delhi) for re determining seniority one of the issues debated was if this Court in exercise of its powers under Article 136 of the Constitution of India should interfere with orders of Tribunal if sub stantial justice has been done between parties.
To this may be added, yet, another, namely, if the Union of India should have approached this Court by way of Special Leave Petition not for sake of justice or injustice, legality or illegality of any provision but because it may have to pay few thou sands, may be few lakhs more.
But, first, manner of appointment of two group of offi cers and rules by which they were governed from time to time may be noticed as even though initially posts of both AMEO and AMEOT were sanctioned and created by the President in 1962 and they were governed for some time by different set of rules but were brought in common stream in 1976 and were promoted in Class 'A ' before fresh rules were enforced in 1983 and 1985, yet entire thrust of attack to justify dif ferential treatment to AMEOT was rounded on difference in method of their selection.
AMEOS were included in Class II of Military Land and Cantonment Service (Class I and II) Rules, 1951 for the first time in 1964.
Relevant amendment by notification issued in 1964 was incorporated in 1951 Rules when it was amended in 1968.
Amended Rule 4(v)(c) read as under: "Class II of the Service shall consist of Executive Officers Class II, Assistant Military Estates Officers and such other posts, as may, by order of the Government be declared to be included in Class II cadre of the Service." 607 Manner of appointment to this class was provided by Rule 5(b) which is extracted below: "(b) Appointment to Class II Cadre of the Service shall be made in the following manner, namely: (1) upto 20% of vacancies in Class II, by promotion from among the serving Class III staff of the Military Lands and Cantonments Service having service and educational qualifi cations specified in sub rules (c) and (e); (2) upto 20% of vacancies by direct recruitment made by a selection from among serving employees of Cantonment Boards having service and educational qualifications specified in sub rules (d) and (e); (3) the remaining vacancies from among the candidates who qualify at the Examination and are recommended by the Com mission but who fail to secure Class I appointment in any of the Central Services. 'Provided that (i) for a period of five years commencing from the 29th January, 1966, 30 per cent of the permanent vacancies to be filled by direct recruitment in any year shall be reserved for being filled in by the Emer gency Commissioned Officers of the Armed Forces of the Union who were commissioned on or after the 1st November, 1962, and who were released at any time thereafter." In 1981 service known as Military Lands and Cantonment Service (Group A) was constituted.
75% of the substantive vacancies, in this Group 'A ', junior scale, were to be filed by direct competition and 25% by promotion from a panel prepared on the basis of selection on merit in ratio 1:1 from amongst Cantonment Executive Officer Group 'B ' and Assistant Military Estates Officer Service (Group B) who had not rendered less than 3 years regular service.
AMEO (Technical) on the other hand were officers who were released from Engineering Service of Army after 1962.
Since there was increase in work load and they were to be absorbed as well they were appointed on recommendation of UPSC (Union Public Service Commission) in 1964 and 1965 against posts which were created from time to time by the Military Land and Cantonments Department as is clear 608 from various orders issued in 1963, 1967 and 1970 which have been extracted in the order of Tribunal to demonstrate that the Director, Military Lands and Cantonment, Ministry of Defence, issued letters conveying the sanction of the Presi dent to the creation of various posts in the Military Lands & Cantonment Service which included Assistant Military Estates Officers (Technical).
Although the appointment letter issued to each officer mentioned that the post was temporary yet each was appointed on probation of two years.
The word "Technical" appears to have been added because they were engineers.
Otherwise there was neither difference in pay nor in work as the AMEOT were appointed to work as AMEO as well.
AMEOT were thus qualified persons holding rank in Army.
To say that they were lesser in merit than AMEO, only, because they had not appeared in competitive examination was being uncharitable to them.
To misfortune of AMEOT they were neither included in the Class II cadre of 1951 Rules nor any other rule was applied to them.
Presumably because of method of recruitment.
All the same it was very unsatisfactory that posts of AMEOT were being created and selections made in pursuance of advertise ment issued by the UPSC yet they were not being provided any statutory basis.
Realising this rules were framed under Article 309 in 1968, but these rules again did not provide for promotions, seniority etc.
However, the anomoly was finally removed, when officers appointed prior to 1967 or under 1968 Rules as AMEOT were included in Class II of 1951 Rules by amending Rule 3 in 1976 which read as under: "3.
The Service shall be constituted by officers appointed (i) in accordance with these rules; (ii) in accordance with the Military Lands and Cantonments Service (Assistant Military Estates Officers Technical) Recruitment Rules, 1968; and (iii) in consultation with the Commission, as Assistant Military Estates Officer (Technical), prior to the 1st January, 1967.
" Thus from this date officers appointed as AMEOT either under the 1968 Rules or prior to it became members of Mili tary Lands and Cantonment Service (MLC) to whom 1951 Rules applied.
On that there is no dispute.
But what about 1964 to 1976? Should they be 609 deemed to have served under no rules as claimed by AMEOS and strangely even by Union, or they were governed by Central Civil Services (Temporary)Rules 1965 (CCS Rules).
And if so what was its effect on their promotion and seniority.
For this one of the appointment letter issued to AMEOT contain ing terms and conditions is extracted below: MEMORANDUM Subject: Recruitment to the post of Assistant Military Estate Officer (Technical) Military/Lands & Cantonments Service.
On the recommendation of the Union Public Service Commission, the President is pleaded to offer Shri Mahandra Pal Singh, a temporary post of Assistant Military (Estate Officer Technical) in the Military Lands & Cantonment Serv ice Under Ministry of Defence.
xxx xxx xxx The terms and conditions of appointment are as follows: (i) The post is temporary.
In the event of its becoming permanent his claim for permanent absorption will be Consid ered in accordance with the rules in force.
(ii) He will be on probation for a period of two years from the date of appointment which may be extended at the discre tion of the competent authority.
Failure to complete the period of probation to the satisfaction of the competent authority will render him liable to discharge from service or reversion to his parent department in case he is holding a permanent posts.
XXX XXX XXX (iv) The appointment may be terminated at any time on one month 's notice given by either side, viz., the appointee or the appointing authority, without assigning any reasons, or by reverting the individual to his parent department, in case he is holding a lien.
The appointing authority, howev er, reserves the right of terminating the services of the appointee forthwith or before the expiry of the stipulated 610 period of notice by making payment to him of a sum equi .
valent to the pay and allowance for the period of notice or the unexpired portion thereof.
(v) He will be subject to conditions of service as applica ble to temporary civilian Government servants paid from Defence Services Estimates in accordance with the orders issued by Govt.
of India from time to time.
He will be subject to Field Service Liability Rule, 1957.
" What stands out Clearly from it is that they were appointed in Military Lands and Cantonment Service (MLC) under Minis try of Defence.
That is clear from the order creating the posts from time to time.
Letter dated 27th April, 1963 is extracted below: "To The Director, Military Lands & Cantts.
New Delhi.
Subject: Establishment of the New Eastern Command Sanction of Staff.
Sir, Consequent on the establishment of the New Eastern Command and re organisation of the existing Eastern Command into Central Command, I am directed to convey the sanction of the President to the creation of the following posts in the Military Lands and Cantts.
Services: 1.
Director, Military Lands & Cannts.
Asstt.
Director, ML & C. 1 3.
Military Estates Officer (Bihar & Orissa) 1 4.
Asstt.
Estates Officer, (Technical Class II) 2" Therefore it is too late to claim that they were not ap pointed to Military Land and Cantonment Service under Minis try of Defence.
Was their status effected or nature of employment altered because 611 Central Civil Service (Temporary service) 1965 Rules applied to them.
These rules applied to 'service under the Govern ment of India in the Ministry of Defence . paid out of the Defence Service Estimates '.
Purpose of the rule was not to create a cadre or grade of temporary employees but to provide statutory basis to employees of different depart ments mentioned in it and accord them a quasi permanent status if they fulfilled the requirements mentioned in Rule 3.
Seniority, promotion etc.
were to be governed by the rules under which the temporary employee was appointed.
Therefore, seniority of an employee and its determination depended on service in the cadre to which he belonged or to which he was appointed.
That the AMEOT were appointed to MLC service cannot be disputed.
Nor it can be disputed that they were appointed to posts which were created by the President and its sanction was conveyed by the Director of MLC.
The only shortcoming was that there was no declaration that these posts were included in Class II Cadre.
That also stood removed in 1976.
Since it included every AMEOT whether appointed under 1968 Rules or even prior to it all those AMEOT who were appointed in 1964 or 1965 also become member of service to whom 1951 Rules applied.
Automatic consequence of it was that seniori ty of AMEOT was to be determined under Rule 11 of 1951 Rules on length of regular service in the cadre.
That is what the tribunal held.
And rightly.
Whether service rendered by the respondents between 1964 to 1976 was regular or it could be deemed to be regular as held by the Tribunal is different.
Assuming, the Tribunal committed error in applying 1951 Rules to service of AMEOT prior to 1976, does it call for any interference? Is the order not just and fair? Effect of Tribunal 's order is that it cured the injustice perpetrated due to absence of exercise of power by the Government under Rule 4(v)(c) of 1951 Rules as it stood amended since 1964.
Substantial justice being one of the guidelines for exercise of power by this Court the order is not liable to interfer ence.
What is baffling is filing of the SLP by Union Govern ment.
Not because of any injustice to AMEO as that has been taken care of by Tribunal by protecting all those who are working but because if it works out seniority of AMEOT from back date it may have to pay substantial amount and creation of superanuary posts may further entail cost.
Justice is alert to differences and sensitive to discrimination.
It cannot be measured in terms of money.
A government of a welfare state has gruelling task of being fair and just and so justice 612 oriented in its approach and outlook.
Mere rectification of its mistakes or omissions by Courts and Tribunals should not prompt parties or it to approach this Court by Special Leave merely for taking a chance or to protect some vested inter est except for sake of justice or for laying down law for benefit of Court and its guidance.
Neither was in this case.
Injustice to respondents is apparent as admittedly these officers were promoted in Class 'A ' in 1978 and are working since then uninterruptedly yet when review DPC were held in pursuance of the judgment given by Allahabad High Court and seniority list was published in 1987, they were ignored as they were working as ad hoc resulting in pushing up AMEOS who were junior to them.
AMEOs were granted seniority from the date of appointment in MLC service whereas similar benefit was denied to AMEOT as they were working as ad hoc.
To remove this irritant Tribunal directed that they shall be deemed to be holding regular posts.
Officers working since 1964 without any flaw could not be treated as ad hoc.
In any case once review DPCs were held it was incumbent on it to include these persons and if necessary to evaluate their services or get it evaluated by appropriate authority regu larise them and then determine seniority.
But in ignoring them in 1987 even when they had become member of MLC service was arbitrary and unjustified.
Two other objections one about delay and other about nonjoinder raised, again, by Union Govt. may be examined.
As regards former suffice it to say that the occasion to ap proach Tribunal arose when seniority of respondents was disturbed and panels recommended in 1972 and 1979 were redrawn in 1987 and seniority were refixed in Group 'B ' with effect from March 1968.
Therefore objection of claim being slate or belated cannot be accepted.
Nor there is any sub stance in defect due to non joinder of parties.
Objection stands answered by the ratio in Col. D.D. Joshi & Others vs Union of India & Others, ; ; where it was held that it was not necessary to implead all parties if chal lenge was to validity of rule.
As regards Ranga Reddy & Others vs State of Andhra Pradesh., relied on behalf of the appellant in support of the submis sion that the order passed by the Tribunal was vitiated in the absence of interested parties cannot be accepted as some of those officers who were directly affected or were immedi ately likely to be effected got themselves impleaded before the Tribunal.
Therefore, the defect, if any, stood removed.
Moreover the Tribunal protected interests of all 613 these persons who were working at present by directing that they shall not be disturbed.
Non impleadment of these who may be effected in future could not render the petition vulnerable.
In the result both the appeals fail and are dismissed.
The respondents shall be entitled to costs from Union of India.
Y. Lal Appeals dismissed.
|
The dispute in these appeals by special leave relates to the inter se seniority of officers in Class 'A ' of the Indian Defence Estate Service.
Class 'A ' of the said service com prised of officers promoted from two different channels viz., Assistant Military Estate Officers and Assistant Military Estate Officers (Technical) of the Military and Cantonment Service Class 'B '.
The manner of selection and appointment of these categories of officers is different.
Whereas Assistant Military Estate Officers were promoted from among the service Class III staff of the military Lands and Cantonments Service; Assistant Military Estate Officers (Technical) were appointed on the recommendations of the Union Public Service Commission, from amongst the officers who were released from Engineering Service of Army after 1962.
There was however no difference in the performance of their duties.
AMEOS were included in Class II of Military Land and Cantonment Service (Class I and II) Rules 1951 for the first time in 1964, by virtue of a notification issued in 1964 and was incorporated in 1951 Rules when it was amended in 1968.
But no such notification was issued in the case of AMEOS (Technical) until 1976; nor any other rule was applied to them.
In other words selections and appointments of AMEOS (Technical) was made without any statutory basis.
To avoid the anomoly, AMEOT were included in Class II of 1951 Rules in 1976.
Thus from this date officers appointed as AMEOT either under the 1968 Rules or prior to it became members of Military Land and Cantonment Service to whom 1951 Rules applied.
But no provision was made for the period of service rendered from 1964 to 1976, which affected their seniority and promotion.
According to the appellant Union, the service rendered during this period has to be deemed as ad hoc.
Respondents being aggrieved filed a Petition before the Central Administrative Tribunal.
The Tribunal allowed the Petition and held that the seniority of AMEOT was to he determined under Rule 11 of 1951 Rules on length of regular service in the cadre and accordingly directed the appellant Union to re determine 605 the seniority of officers.
Hence this appeal by the Union of India.
Dismissing the appeal, this Court, HELD: Seniority of an employee and its determination depends on service in the cadre to which he belonged or to which he was appointed.
[611B] Effect of Tribunal 's order in the instant case is that it cured the injustice perpetrated due to absence of exer cise of power by the Government under Rule 4(v)(c) of 1951 Rules as it stood amended since 1964.
Substantial justice being one of the guidelines for exercise of power by this Court the order is not liable to interference.
[611F] Justice is alert to differences and sensitive to dis crimination.
It cannot be measured in terms of money.
A Government of a welfare state has gruelling task of being fair and just and so justice oriented in its approach and outlook.
|611H] Mere rectification of mistakes or omissions by Courts and Tribunals should not prompt parties to approach this Court by Special Leave merely for taking a chance or to protect some vested interest except for sake of justice or for laying down law for benefit of Court and its guidance.
AMEOS were granted seniority from the date of appointment in MLC service whereas similar benefit was denied to AMEOT as they were working as ad hoc.
To remove this irritant Tribu nal directed that they shall be deemed to be holding regular posts.
Officers working since 1964 without any flaw could not be treated as ad hoc.
In any case once review DPCs were held it was incumbent on it to include these persons and if necessary to evaluate their services or get it evaluated by appropriate authority to regularise them and then determine seniority.
But ignoring them in 1987 even they had become member of MLC service was arbitrary and unjustified.
[612A D] Col. D.D. Joshi and Ors.
vs Union of India and Ors. ; ; Ranga Reddy and Ors.
vs State of Andhra Pradesh,
|
ivil Appeal No. 186 of 1976.
Appeal by Certificate from the Judgment and Order dated 27.10.1975 of the Kerala High Court in O .P.
No. 3743 of 1973.
Ajit Pudussery and B .P.
Singh for the Appellant.
A.S. Nambiar, K.R. Nambiar, V.J. Francis and N.M. Popli for the Respondents.
The Judgment of the Court was delivered by RAY, J.
The appellant who is owner of land comprised in R.S. Nos. 44/11 and 44/20 in village Thottapuzhasseri in Alleppey District, assailed the validity of the declaration made under Section 6 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) made by the 2nd Respondent, Board of Revenue, Kerala State on 25.9.1973 and published in Kerala Gazette dated October 16, 1973 stating that the lands de scribed therein are needed for a public purpose namely for a playground for M.M.A. High School and directing the Revenue Divisional Officer, Changannur to order for acquisition of the same.
The grounds on which the challenge was made in the writ petition inter alia were that the property in question was mortgaged with the Maramon Marthomite Church, as the Church refused to return the property on accepting the money, the appellant filed a suit for redemption of the mortgage which was ultimately decreed and appellant got 537 possession of the property on October 8, 1973.
During the pendency of the suit the church authority moved the educa tional authorities as well as the Sub Collector for acquisi tion of the property for the school in order to wreak ven geance on the petitioner appellant.
It has also been alleged that the purported proposal to acquire the said property was made mala fide.
The land was situated about 3 furlongs away from the school and it was not convenient to be used as playground of the school, that there were more suitable land available for purpose of playground, that the land was required by the owner for purpose of constructing buildings for his sons.
The appellant raised all those objections within the prescribed time on receiving notice under section 5 of the said Act.
No notice was issued to the Education Department as required under Rule 5(b) & (c) of the Kerala Land Acquisition Rules and the objection made by the appel lant was decided by the respondents without hearing the Government Department or its representative.
As such the impugned declaration is illegal and bad and the proceeding for acquisition is also illegal and unwarranted.
The writ petition being O.P. No. 3743 of 1973 was dismissed by the High Court holding that there was no violation of the provi sions of Rule 5(b) & (c) of said Rules nor there was in fringement of Rule 6.
The instant appeal is on a certificate granted by the High Court under Section 133(1) of the Constitution of India.
The sole question that has been agitated before this Court by the learned counsel for the appellant is that provisions of Rule 5(b) & (c) of Kerala Land Acquisition Rules, 1963 are mandatory and the notice of the date of hearing of objection filed by a person interested in the land has to be given to the Departmental Officer requiring the land and failure to serve such notice will invalidate the declaration made under Section 6 of the Kerala Land Acquisition Act, 1961 in short the said Act.
Several deci sions have been cited at the Bar in support of this conten tion.
The provisions of Section 5 read with Rule 5(b) & (c) of the said Rule have not been complied with in hearing objections.
The learned counsel for the respondent has, on other hand, submitted that the proposal for acquisition of the land in question for play ground of the said school was made at the instance of the Manager of the School, the 3rd re spondent.
The said proposal was considered by the Education Department which certified that the acquisition was for a public purpose viz for playground of the said school and also that the school agreed to place the necessary funds for payment of compensation for acquisition of the said land.
538 The appellant on receiving the notice under Section 3 of the said Act filed an objection to the proposed acquisition of the said lands in accordance with the provision of Sec tion 5 of the said Act as well as under Rule 3 of the Land Acquisition Rules, 1963.
The 1st respondent did not issue any notice of the objection filed by the appellant (peti tioner) to the Education Department as required under Sec tion 5 of the Act and Rule 5(b) & (c) and 6 of the Rules framed under the said Act though notice was issued to Re spondent No. 3, the Manager, M.M.A. High School, Maramon.
The 1st respondent, Sub Collector (Land Acquisition Officer) after hearing the petitioner appellant and his lawyer as well as the representation of the 3rd respondent submitted a report to the respondent No. 2, Board of Revenue, Kerala State recommending for the acquisition of the said land for the purpose of playground for the said High School.
The Board of Revenue, the respondent No. 2, after considering the report made a declaration under Section 6 of the said Act stating that the land specified in the notification under Section 3 of the Act is needed for a public purpose and the said declaration was published in the Kerala Gazette dated 16th October, 1973 and directed the Revenue Divisional Officer, Changannur to take order for acquisition of the lands.
It is convenient to mention that the procedure for requisition for acquiring land has been laid down by the Government in the Land Acquisition Manual.
Sub Clauses (a) & (b) of Clause (i) of Section 1 of Chapter 6 of the Manual is in these terms: "(i)(a) Application in all cases in which land is required by a department of Government other than the Revenue Depart ment should be sent by the Departmental Officer authorised in this behalf in the prescribed form (Form 2Appendix II) to the District Collector or to the Special Land Acquisition Officer, if any, appointed for the purpose.
In the applica tion it should be specifically stated whether the sanction of the competent authority exists for the work for which the land is required and for the acquisition of the land and whether necessary funds have been provided in the budget for meeting the cost of acquisition.
(b) Application from associations or private institutions other than educational institutions, should be sent in the prescribed form to the District Collector.
When land is required by a private educational institution, the Manager of the institution should send an application in the pre scribed form to the District Educational Officer concerned 539 who will forward it to the District Collector with a certif icate from the departmental officer authorised in this be half, to the effect that the acquisition is necessary as the land is required for a public purpose and that the private educational agency has agreed to meet the expenditure It is evident from this procedure that in case of land being required by the private educational institution.
the Manager of the institution shall send the application for acquisition of the land, The Education Department has to consider the application and to give a certificate to the effect that there was a public purpose for which the pro posed acquisition is asked for and the private educational institution is agreeable to meet the entire expenditure for acquisition of the said property.
In the instant case Educa tion Department after considering the requisition made by the Manager of the said school certified about the public purpose for which the land in question is required to be acquired and also that the school authority is ready and willing to meet the entire costs of the acquisition.
As has been stated hereinbefore that the appellant, the owner of the said plots of land submitted his objection to the appli cation for acquisition mainly on four grounds inter alia that the proposal for acquisition of the land has been made by the Manager of the said school malafide in as much as the said land was mortgaged previously with the Church authori ties and subsequently the mortgage was redeemed on the basis of a decree passed by the court in a suit and the said land was taken possession of by the applicant in execution of the said decree.
Secondly, this land is situated about 3 furlongs away from the said school and so it is not conven ient to use the land for a play ground of the school, third ly, there are other lands available in the locality which can be conveniently used for this purpose, fourthly, it has been stated in the objection petition that the land in question remains submerged during certain part of the year and so the same is not convenient for the purpose of play ground of the school.
The 3rd respondent on receiving notice of the objections appeared before the Sub Collector.
Re spondent No. 1 and reiterated that the objections are all without any basis and the land was needed for the playground of ' the school and the said land is being used for this purpose for a period of about10 years.
The respondent No. 1 after inspecting the site and after considering the objec tions and hearing the appellant and his lawyer submitted a report recommending for acquisition of the said land.
It will be evident from the inquiry report made under Section 3 of the said Act that the lands is in possession of the School and it is being used as its playground for the last 10 years.
The Management of the said School has no other alternative but to request 540 for acquisition of the said land for the above purpose.
it is also staled in the report that the proposed land is at a distance of 3 furlongs and there is no other convenient and suitable land more nearer to the school.
On considering this report the respondent No. 2, Board of Revenue made a declaration which has been notified in the Kerala Gazette on October 16, 1973 and directed proceeding for acquisition of the said land.
It is, therefore, clear that the Manager of the school submitted a requisition to the Education Department for a certificate as to the public purpose for acquisition of the said land for play ground o[ the school and also to the effect that the school has agreed to meet the entire expend iture in due compliance with the procedure laid down in the Kerala Land Acquisition Manual.
The Education Department made the necessary recommendations.
The proposal tot the acquisition of the plot was made at the instance of the Manager of the said private educational institution the respondent No. 3 and not by the Education Department.
Sec tion 5 enjoins that any person interested in any land which has been notified under sub clause 1 of Section 3 as being needed or likely to be needed for a public purpose may, within 30 days after publication of the notification, object to the acquisition of the land.
It has been further provided therein that objections shall be made to the Collector in writing and the Collector on receiving the objections shall give the objector an opportunity of being heard either in person or by counsel and shall after hearing all such objec tions and after making such further enquiry, if any, as he thinks necessary either made a report in respect of the land which has been notified under Sub Section 1 of Section 3 or make different reports in respect of different parcels of such land to the Board of Revenue where the notification under Sub clause 1 of Section 3 has been made and published by the Collector.
Rule 3 of the Kerala Land Acquisition Rules clearly states that after publication of the notifica tion under Section 3, the Collector shall issue a notice stating that the land is needed or is likely to be needed, as the case may be, for a public purpose and requiring all persons interested in the land to lodge before the Collector within 30 days after the issue of the notification, a state ment in writing of their objections, if any, to the proposed acquisition Rule 5(b) enjoins that after receiving the objections from a person interested in the land within prescribed time the Collector shall fix a date for hearing the objections and "give notice, thereof to the objector as well as to the departmental officer or company or the local 541 authority requiring the land, where such department is not the Revenue Department.
On a perusal of this provision it is clear that notice of the date of hearing of the objections has to be served not only on the objector but also to the Departmental Offi cer or Company or the local authority requiring the land, that is, where the requisition for acquisition of the land is made by the Departmental Officer, the Departmental Offi cer who requires the land for acquisition has to be served with a notice of the date of hearing of objections.
In the instant case the requisition was made not by the Education Department but by the Manager of M.M.A. High School, Mara mon.
The Education Department merely certified about the requirement of the land in question for a public purpose i.e. for playground of the school and that the entire cost of the requisition is agreed to be borne by the school.
The sole question agitated in regard to the validity of the declaration is that no notice of the date of hearing of objection has been served on the Education Department and as such the Education Department has no opportunity to consider the objections raised by the appellant and also to say whether the land in question was suitable for acquisition or whether other lands are available for this purpose for which the proposed acquisition is required to be made and non service of such a notice invalidates the declaration made under Section 6 of the Act by respondent No. 2.
It is only the private school as well as the owner of the land who are required to be informed as to the date when the objections will be heard under Section 5 of the said Act and only they are to be heard.
The High Court has rightly held that in the instant case there has been no violation of Rule 5(b) & (c) of the Rules.
The High Court has further held that there has not been any infringement of Rule 6.
It has also been held that it is inappropriate to issue notice to the Education Officer or Departmental Officer who certified about the public purpose as well as readiness of the School authority to pay the entire money for acquisition and failure to issue such a notice to the Departmental Officer would not amount to violation of the principles of natural justice and in fringement of the said Rule 5(b) & (c) of the said Rules.
We have mentioned hereinbefore that the proposal for acquisi tion of the land was made by the Manager of the school for the purpose of playground of the school and the requisition was thus made at the instance of the school.
The Education Department merely certified about the public purpose and also about the willingness on the part of the school author ity to bear the entire cost of acquisition.
The land is not sought to be acquired at the instance of the Depart 542 mental Officer and as such it has been rightly found by the High Court that non service of notice of hearing of the date of objection on the Education Department does not per se infringe the provisions of Rule 5(b) & (c) of the Kerala Land Acquisition Rule, 1963.
We do not find any flew in the judgment rendered by the High Court.
Several decisions have been cited at the Bar to impress upon us the point that Rule 5 (b) & (c) read with Section 5 of the said Act are mandatory and non compliance therewith will render the declaration invalid and the entire acquisi tion proceedings on the basis of the said declaration will be illegal and unwarranted.
In the case of Lonappan vs Sub Collector, Palghat, AIR 1959 Kerala, 343 one Appu moved the authorities of the Education Department to acquire 1.12 acres of land in R.S. No. 125/7 for the construction of a building and for a play ground and a garden for his school.
On the recommendation of the Education Department the Gov ernment issued a notification under Section 4(1) of the Land Acquisition Act proposing to acquire an area 1.12 acres in the said survey for this school.
Notice was issued to the appellant calling for appellant Lonappan, the owner of the land, for filing objections, if any, under Section 5 A of the Land Acquisition Act to the proposed acquisition and in that notice it was stated that the enquiry under Section 5 A would be held on 23.9.
The Sub Collector after hearing the appellant and his objections overruled his objections and recommended acquisition.
The appellant thereafter made application under Article 226 of the Constitution for a writ of certiorari and for other directions for quashing the proceedings and for granting other reliefs, on the ground that under Section 5 A the Sub Collector was bound by Rule 3 to give notice of those objections to the Education Depart ment at whose instance step for acquisition has been taken.
It was held that the object of Rule 3(b) of the Rules made by the Madras Government under Section 55(1) of the Act for giving notice to the concerned department before hearing of objections filed under Section 5 A is not merely to give the department an opportunity to maintain or support its origi nal requisition but also to provide an opportunity for the original requisition being reviewed or reconsidered by the department in the light of the objections raised by the owner of the land and other persons interested in it.
In State of Madras and Ors.
vs Periakkal and Ors., AIR 1974 Madras 383 the land acquisition proceedings were start ed at the instance of the Harijan Welfare Department for the purpose of constructing houses for the Harijans.
Notice of the date of hearing of the objections filed by the respond ent, owner of the land was not given to 543 the Harijans Welfare Department at whose instance the pro ceedings for acquisition were initiated under Rule 3(b) of the Rules made under Section 55(i) of the Land Acquisition Act.
It was held that under Rule 3(b) it is incumbent on the Collector to give notice of objection to the department requiring the land and copies of the objections had to be given to such other departments.
This is for enabling the department to file on or before the date fixed by the Col lector a statement by way of answer to the objections and also depute a representative to attend the enquiry.
This has to be done in order to give an opportunity to the department requiring the land to traverse the objections, if any, filed by the person interested in the land, so that in the light of the reply of the department, a decision may be arrived at for the purpose of making the declaration under Section 6.
It has been held that the Rule being not mandatory its effect is that in the absence of service of such notice acquisition proceedings are not invalidated.
In State of Mysore & Ors.
vs V.K. Kangan & Ors., ; at 371.
The land was sought to be acquired for an Engineering College at the instance of the Education Depart ment of the State of Mysore, Section 4 notification was issued in the year 1960.
After an enquiry into the objec tions filed under Section 5 A the Land Acquisition Officer sent his report to the Government.
Government overruled the objections and issued a notification under Section 6.
The Education Department at whose instance the land was sought to be acquired was not given notice as required by Rule 3(b) of Madras Land Acquisition Rules.
The respondents filed a Writ Petition in the High Court challenging the validity of both the notifications on the ground that the Education Department was not consulted.
The High Court upheld the contention of the respondents and quashed the notifications issued under Sections 4 and 6 of the Act on the ground that if the Department concerned filed any reply pursuant to the notice issued, the objector would know what the Department has stated by way of reply and at the stage of hearing of objections, the objector might adduce evidence or address arguments to meet what is stated in such reply.
The objector could further urge before the Government that the reasons given by the department in reply to the objections should not be accepted.
It was held that Section 5 A requires the Collector to make a report after hearing the objections.
It does not mean that a rule cannot be framed which would enable the department concerned to place its view point before the Collector when considering the objection under Section 5A.
The proceedings of the Collector are quasi judicial and it is only proper that he should be apprised of the attitude of the department requiring the land in the light of the objections filed.
It would be 544 helpful to the Government in making the decision to have before it the answer to the objection by the department in order to appreciate the rival view points.
Rule 3(b) is not ultra vires Section 5A.
It has been held that Rule 3(b) was enacted for the purpose of enabling the Collector to have all the relevant materials before him for coming to a conclusion to be incor porated in the report to be sent to the Government in order to enable the Government to make proper decision.
Rule 3(b) is mandatory and non service of the notice on the Government Department at whose instance the requisition for acquisition was initiated, the notification under Sec tion 6 becomes bad and as such the same was quashed.
This decision is not applicable to the instant case for the simple reason that the requisition was not made at the instance of the Government Department but at the instance of the Manager, private school and the Education Department merely has given a note certifying that the purpose of the requisition is a public purpose and that the school agreed to bear the entire costs.
In these circumstances it cannot be contended that the requisition has been made by the Education Department or by its officer for acquisition of the land in question.
There fore, in our considered opinion the ruling cited above is not applicable to the instant case.
In the premises aforesaid the only conclusion that follows is to dismiss the appeal.
In the facts and circum stances of the case the parties will bear their own costs.
Y. Lal Appeal dismissed.
|
The appellant owned land hearing R.S. Nos. 44/11 and 44/20 in village Thottapuzhasseri in Kerala State.
Respond ent 3, M.M.A. High School moved an application under Sub clauses (a) and (b) of Clause (i) of Section 1 of Chapter 6 of the Land Acquisition Manual before the State 's Education Department praying that the aforesaid land be requisitioned for a public purpose for construction of a playground for the school.
The State authorities after complying with the requirements of the Kerala Land Acquisition Act, 1961, issued a declaration under Section 6 of the Act stating the lands described therein were needed for a public purpose viz. construction of a playground for the school.
The appel lant challenged the validity of the declaration by filing a writ petition before the High Court, contending, that (i) the proposal to acquire the property was mala fide; (ii) that the declaration was bad as no notice was issued to the Education Department as required by Rule 5(b) and (c) of the Kerala Land Acquisition Rules and (iii) that the appellant needed the property for construction of houses for his sons.
The High Court dismissed the writ petition holding that there was no violation of the provisions of Rule 5(b) and (c) of the Rules nor was there any infringement of Rule 6.
Hence this appeal by the appellant by certificate.
Dismissing the appeal, this Court, HELD: The requisition in the instant case, was not made at the instance of the Government Department but at the instance of the Manager, private school and the Education Department merely has given a note certifying that the purpose of the requisition is a public purpose and that the school agreed to bear the entire costs.
[544C D] It cannot therefore be contended that the requisition has been made by the Education Department or by its officer for acquisition of the land in question.
[541C] 536 The High Court has rightly held that there has been no violation of Rule 5(b) and (c) or 6 of the Rules.
[541F] That it is inappropriate to issue notice to the Education Officer or Departmental Officer who certified about the public purpose as well as readiness of the school authority to pay the entire money for acquisition and failure to issue such a notice to the Departmental Officer would not amount to violation of the principles of natural justice and in fringement of the said Rule 5(b) and (c) of the said Rules.
[541 F G] Lonappan vs Sub Collector, Palghat, AIR 1959 Kerala 343; State of Madras and Ors.
vs Periakkal and Ors., AIR 1974 Madras 383 and State of Mysore and Ors.
vs V.K. Kangan and Ors., ; at 371, referred to.
|
Criminal Appeal No. 96 of 1979.
From the Judgment and Order dated 9.11.1977 of the Patna High Court in Criminal Appeal No. 332 of 1971.
Khanna for the Appellants.
D. Goburdhan for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This appeal by special leave is di rected against the judgment and order dated 9.11.1977 of the High Court of Patna whereby the conviction and sentences of the appellants for the offences under Sections 302,394 and 34, I .P.C., have been confirmed.
The three appellants are brothers.
The deceased, Bigna Bedia, lived with his wife Sohagia Bedia and sons in village Karmatola.
The incident happened on the night of 5/6.9.
Bigna was sleeping 574 along with his son Jhalku in the verandah while Sohagia was sleeping along with Malku on cot.
At about midnight, the intrud ers entered the house by cutting the tatti and attacked Sohagia and her husband.
Binga Bedia sustained fatal injuries and died instantaneously.
Sohagia was injured.
The intruders took away the utensils and two she goats kept at one end of the verandah.
Jiwan Bedia, the brother of the deceased, on being informed by Jhalku and Lalku about the incident reached the house and after making enquiries, he lodged the first information report at the police station at about 10.00 A.M in the next morning.
The crime was registered against unidentified persons.
In the course of the investigation these appellants were arrested and were finally charge sheeted.
There had been ill feeling between the appellants on the one hand and the deceased and his wife on the other, though the appellants are the sons of the eider sister of Sohagia.
The prosecution case is that on account of enmity, the three appellants committed the crime.
Sohagia claimed to be an eye witness.
According to this witness, the three appellants were armed.
Gurja had a tangi, Birja had a lathi and Mukund had a pharsa.
On entering the house Gurja and Birja dealt blows on Sohagia with the weapons they had.
She got injured and cried.
On hearing the alarm, the deceased was awakened from sleep and when he was trying to get up, all the three appellants left her and killed her husband.
P.W. 14 asserted that Gurja had been flashing a torch and that she had iden tified all the three appellants.
She also stated that she became unconscious and regained consciousness only the next day when the police arrived at the scene.
According to the prosecution, P.W. 14 is the only eye witness.
Lalku and Jhalku who ran to the house of P.W 1 had not seen the as sailants.
The trial court accepted the testimony of P.W. 14 corroborated by the medical evidence and other circumstances as the basis for the conviction.
The High Court agreed with the trial court in holding that the prosecution has succeed ed to bring home the guilt of all the appellants.
The learned counsel for the appellants urged before us that the testimony of P.W. 14 suffers from serious infirmi ties casting reasonable doubt as to the identity of the assailants and the conviction is therefore unwarranted.
The circumstances relied on by the learned counsel is that in the first information report the identity of the accused had not been revealed.
It is argued that if P.W. 14 had identi fied the assailants, it would have been possible for P.W. 1 to disclose the identity of the accused at the time the first information report was lodged and the circumstances are such that the statements 575 of P.W. 14 are inspired and the prosecution has introduced the theory of unconsciousness of P.W. 14 only in an attempt to explain away the lacuna.
To appreciate this contention, it is necessary to scrutinise the first information report in detail.
P.W. 1, Jiwan Bedia, is the full brother of the deceased.
He has been residing in village Jawabera which is at a distance of about half a kilometer from Karmatola.
Lalku and Jhalku reached his house at about midnight and raised hulla that some thieves had entered their house and killed their father and were also killing their mother.
On hearing this, P.W. 1 got up and went to village Jawabera where he informed his gotias about the incident.
Then taking Sawna Bedia, Jhopra Bedia and others along with him he went to the house of Bigna Bedia.
There he did not find any thief.
On entering the house, he found Bigna Bedia lying dead with bleeding injuries on his head and legs.
The wife of Bigna was also injured with a cut injury on her face.
He learnt there from the wife and both the sons of Bigna that 5 or 6 persons had entered the house by cutting the tatti and had inflicted injuries on Bigna and his wife with tangi, bhujali etc.
and they also removed the lock and peg and took away utensils and two she goats from the house.
P.W. 1 then went to the villagers of Karmatola and told them about this incident.
P.W. 1 also contacted the Mukhia of the village Hindebilli and others before going to the police station.
P.W. 1 in narrating the incident in the Fard byan stated that he learnt from the wife and sons of the deceased that 5 or 6 persons had entered the house and committed the crime and details could be furnished by the widow and the sons of the deceased.
P.W. 1, no doubt, in cross examination supported the version of P.W. 14 that Sohagia was lying unconscious when he reached the house at night and she narrated the incident after regaining consciousness the next day when the police reached there.
The statement of P.W. 1 at the earliest point of time belies the truth of what he has deposed before the court.
He had been categoric that he made enquiries with the wife and sons of the deceased before proceeding to the police station and asserted that 5 or 6 unknown persons had committed the crime.
It clearly indicates that an attempt had been made by the prosecution to introduce the case of unconsciousness of P.W. 14 to explain the infirmity.
It may be that P.W. 14 on account of the shock could not have been so eloquent and depressed, but P.W. 1 had been in the house the whole night and he had contacted all the concerned persons and also made enquiries.
The statement in exhibit p. 6 that details would be given by the wife and sons who were present in the house also affirms that he could not gather any 576 useful information regarding the identity of the assailants.
The courts below have failed to appreciate the evidence of P.W. 14 in the correct perspective in the light of the clinching evidence in the case.
The circumstances that the identity of the assailants was unknown until the police arrived at the scene is clear indication that P.W. 14 or her children had not identified the assailants at the time of the occurrence.
It could be that on account of enmity and ill will their suspicion has turned against these appellants and inspired by that suspicion, the investigation had been misdirected.
We do not therefore consider it safe to sustain the conviction when there is reasonable doubt regarding the participation of the appellants.
The benefit of doubt must necessarily go to the appellants.
In the result, the appeal is allowed.
The convictions and sentences are set aside.
The bail bonds shall stand canceled.
P.S.S. Appeal allowed.
|
The appellants were convicted for offences under sections 302,394 and 34 IPC.
They were alleged to have entered the house of the deceased at midnight and attacked him and his wife, PW 14, with sharp edged weapons.
He sustained fatal injuries and died instantaneously.
His wife was injured.
Their two sons ran to the house of uncle PW 1, at a distance to inform him of the incident.
They had not seen the assail ants.
By the time PW 1 reached the scene the assailants had fled.
He had been in the house the whole night and contacted all the concerned persons.
In the FIR that he lodged at about 10 a.m. the next morning the assailants were not named.
The prosecution case was that the appellants had commit ted the crime on account of enmity.
PW 14, who claimed to be an eye witness, deposed that she had identified the appel lants.
She also stated that she became unconscious and regained consciousness only the next day when the police arrived.
PW 1 supported her version.
The trial court accepted the testimony of PW 14.
The High Court agreed with it.
In this appeal by special leave, it was contended for the appellants that if PW 14 had identified the assailants, it would have been possible for PW 1 to disclose the identi ty of the accused at the time the first information report was lodged, and that the prosecution had introduced the theory of unconsciousness of PW 14 only in an attempt to explain away the lacuna Allowing the appeal, the Court, HELD: 1.
It is not safe to sustain the conviction when there is 573 reasonable doubt regarding the participation of the appel lants in the crime.
The benefit of doubt must necessarily go to them.
The statement of PW 1 at the earliest point of time belies the truth of what he had deposed before the court.
He had been categoric in the FIR that he had made enquiries with the wife and sons of the deceased before proceeding to the police station and asserted that five or six unknown persons had committed the crime.
He had also stated that details could be furnished by the widow and sons of the deceased.
This affirmed that he could not gather any useful information regarding identity of the assailants.
All the same, in cross examination he supported the version of PW 14 that she was lying unconscious when he reached the house at night and she narrated the incident after regaining con sciousness when the police reached there.
It clearly indi cates that an attempt had been made by the prosecution to introduce the case of unconsciousness of PW 14 to explain the infirmity.
[576F; G] 3.
The circumstance that the identity of the assailants was unknown until the police arrived at the scene showed that PW 14 or her children had not identified the assailants at the time of the occurrence.
The courts below have failed to appreciate her evidence in the correct perspective in the light of the clinching evidence.
[576B]
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ivil Appeal No. 2335 of 1989.
From Order No. 766/88 C dated 24.10.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. B/847/85 C. V. Sreedharan, N.M. Poppli and V.J. Francis for the Appel lant.
Ashok H. Desai, Solicitor General, Ms. Randharangaswami and P. Parmeswaran for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an appeal from the order of the Customs, Excise & Gold (Control) Appellate Tribunal (hereinafter called 'the CEGAT ') dated 24th Octo ber, 1988 under section 35 L(b) of the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ').
The appeal which the CEGAT disposed of had been filed by the Collector of Central Excise, Guntur against the order of the Collector of Central Excise (Appeals), Madras dated 6th February, 1985.
The short question which arises in this appeal is whether the lamination of duty paid kraft paper with polyethylene resulting in 'polyethylene laminated kraft paper ' would amount to 'manufacture ' and excisable under law or not.
It appears that the Collector (Appeals) in his order following his earlier order in respect of the appellant herein had taken the view that polyethylene laminated or coated kraft paper obtained from duty paid kraft paper is not liable to duty again.
632 The Collector of Central Excise, (Appeals), Madras had followed the decision of the Division Bench of Andhra Pra desh High Court in the case of Standard Packagings, Nellore vs Union of India, for reaching the aforesaid finding and held that the appellant would be eligible to claim refund of duty paid by them in this re gard.
Lamination, indisputably by the well settled principles of excise law, amounts to 'manufacture '.
This question, in our opinion, is settled by the decisions of this Court.
Reference may be made to the decision of this Court in Empire Industries Ltd. & Ors.
vs Union of India & Ors.
, ; Reference may also be made to the decision of this Court in Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., We are, there fore, of the opinion that by process of lamination of kraft paper with polyethylene different goods come into being.
Laminated kraft paper is distinct, separate and different goods known in the market as such from the kraft paper.
Counsel for the appellant sought to contend that the kraft paper was duty paid goods and there was no change in the essential characteristic or the user of the paper after lamination.
The fact that the duty has been paid on the kraft paper is irrelevant for consideration of the issue before us.
If duty has been paid, then benefit of credit for the duty paid would be available to the appellant under rule 56 A of the Central Excise Rules, 1944.
The further contention urged on behalf of the appellant that the goods belong to the same entry is also not relevant because even if the goods belong to the same entry, the goods are different identifiable goods, known as such in the market.
If that is so, the manufacture occurs and if manu facture takes places, it is dutiable. 'Manufacture ' is bringing into being goods as known in the excise laws, that is to say, known in the market having distinct, separate and identifiable function.
On this score, in our opinion, there is sufficient evidence.
If that is the position, then the appellant was liable to pay duty.
We are, therefore, clearly of the opinion that the order of the CEGAT impugned in this appeal does not contain any error.
The appeal, therefore, fails and is accordingly dismissed.
There will, however, no order as to costs.
G.N. Appeal dis missed.
|
To a question whether lamination of duty paid kraft paper with polyethylene resulting in 'polyethylene laminated paper ' would amount to 'manufacture ' and excisable under Excise Law, the Collector of Central Excise (Appeals) an swered in the negative, and held that the appellant was eligible to claim refund of duty paid by it.
In reaching this finding he followed the decision in Standard Packag ings, Nellore vs Union of India, AP.
Against the said order, the Collector of Central Excise preferred an appeal before the Customs, Central Excise and Gold (Control) Appellate Tribunal.
The Tribunal reversed the order of the Collector (Appeals) and held that the appellant was liable to duty.
Aggrieved, the appellant has preferred this appeal under Section 35 L(b) of the .
It was contended that duty was already paid on kraft paper and there was no change in the essential characteristic or the user of the paper after lamination, and that both the goods belong to the same entry.
Dismissing the appeal, HELD: 1.1.
By process of lamination of kraft paper with polyethylene different goods come into being.
Laminated kraft paper is distinct, separate and different from the kraft paper.
Lamination, indisputably by the well settled principles of excise law, amounts to manufacture.
[632C D] 631 1.2. 'Manufacture ' is bringing into being goods as known in the excise laws, that is to say, known in the market having distinct, separate and identifiable function.
[632F] 1.3.
Even if the goods belong to the same entry, the goods are different identifiable goods, known as such in the market.
If that is so, manufacture occurs, and if manufac ture takes place, it is dutiable.
[632F] Empire Industries Ltd. & Ors.
vs Union of India & Ors.
, ; and Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., , relied on.
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Special Leave Petition (Civil) No. 123 17 of 1987.
From the Judgment and Order dated 2.9.1987 of the Madhya 619 Pradesh High Court in Misc.
Petition No. 3308 of 1985.
M.K. Ramamurthy and A.K. Sanghi for the Petitioners.
Vinod Bobde, P.S. Nair and K.V. Sreekumar for the Respond ents.
The following Order of the Court was delivered This petition for special leave is against the judgment dated 2.9.1987 of the High Court of Madhya Pradesh dismiss ing the petitioners ' writ petition (M.P. No. 3308 of 1985).
The petitioners demand regularisation of their services claiming to be daily rated workmen for a long time in the mines of the Diamond Mining Project, Panna of the National Mineral Development Corporation Ltd. Their demands are of regularisation and "equal pay for equal work" on the ground that they are discharging the same duties as the regular workers.
The management has throughout denied the petition ers ' claim and alleged that, in fact, the petitioners have been continued on rolls on humanitarian grounds for several years, even though there is no work for them; and as such, there is no question of regularising the petitioners and giving them the pay of regular workers when in fact they are not doing any work for a long time.
The High Court rejected the petitioners ' claim and came to the following conclusion: "The petitioners are not regular employees, they do not have any specific job to do, they are surplus to the establish ment and merely kept on the roll on humanitarian ground.
The respondents are also running in heavy losses during the last three years and it is not possible to absorb the petitioners immediately as regular workmen.
In fact, the petitioners are being paid their daily wages in spite of their being no work available for them.
" Aggrieved by dismissal of the writ petition, the petitioners have filed this petition for special leave to appeal under Article 136 of the Constitution.
In response to notice of this petition, a counter affi davit has been filed on behalf of respondent No. 2 reiterat ing the stand taken before the High Court.
It has been stated therein that there is no vacancy in the establishment to absorb the petitioners and the accumulated loss to 620 the establishment as on 31st March, 1988 is Rs. 10,29,40,583.
A copy of the balance sheet has also been enclosed with the counter affidavit.
It has been stated that the petitioners being surplus to the requirement of the Project, they cannot be regularised and their retention on the rolls is purely on humanitarian grounds so far.
Further facts have been stated in support of their contention.
It has also been stated that a Voluntary Retirement Scheme offering considerable amount to these daily rated workmen has been framed, which is Annexure R V to the counter affi davit.
This document shows the amount of retrenchment com pensation and the ex gratia payment offered to the 63 daily rated workmen under this Scheme.
The 54 petitioners are included therein.
It was stated at the hearing before us that 9 out of these 63 daily rated workers mentioned in Annexure R V have accepted this Scheme of Voluntary Retire ment and respondent No. 2 is prepared to give benefit of the same even to those who may not have agitated their claim.
We do not find any ground to interfere with the High Court 's decision in view of the clear findings supported by evidence that there are no vacancies or work available in the establishment for absorption of the petitioners and that for quite some time they have been continued on rolls and paid in spite of there being no work for them.
On these facts, the question of directing their absorption and regu larisation does not arise.
The principle of regularisation of a daily rated workman and payment 'to him of the pay equal to that of a regular workman arises only when the daily rated workman is doing the same work as the regular workman and there being a vacancy available for him, he is not absorbed against it or not even paid the equal pay for the period during which the same work is taken from him.
On the clear findings in this case, this is not the position.
This petition must, therefore, fail.
In spite of our above conclusion, keeping in view the offer made on behalf of respondent No. 2 in the counter affidavit together with Annexure R V thereto which was reiterated at the heating before us, we direct that all the 63 daily rated workmen including the 54 petitioners herein mentioned in the aforesaid Annexure R V to the counter affidavit be given the benefit of the Voluntary Retirement Scheme framed by respondent No. 2 and they be paid the specified amounts in addition to their all other dues.
Subject to this direction, the special leave petition is dismissed.
No costs.
P.S.S. Petition dismissed.
|
The petitioners, claiming to be daily rated workmen of the respondent Corporation in a writ before the High Court demanded regularisation of their services and equal pay for equal work on the ground that they were discharging the same duties as the regular workers.
Their claim was contested by the respondents on the ground that there was no work for them for a long time and they had been continued on rolls on humanitarian grounds.
The High Court rejected their claim.
In their counter affidavit to the special leave petition it was stated on behalf of the respondents that there was no vacancy in the establishment to absorb the petitioners, that they were surplus to the requirement of the project and that it had proposed a scheme of voluntary retirement for their benefit which some of them had accepted.
Dismissing the special leave petition, the Court, HELD: 1.
The principle of regularisation of a daily rated workmen and payment to him of the pay equal to that of a regular workman arises only when he is doing the same work as the regular workman and there being a vacancy available for him, he is not absorbed against it or not even paid the equal pay for the period during which the same work is taken from him.
[620E F] 2.
In the instant case, there were no vacancies or work available in the establishment for absorption of the peti tioners.
The question of directing their absorption and regularisation, therefore, does not arise.
However, they be given the benefit of the voluntary retirement scheme and paid the specified amounts in addition to other dues.
[619H; 620A; G]
|
ivil Appeal No, 307 of 1987.
From the Judgment and Order dated 16.10.1985 of the Allahabad High Court in C.M.W. No. 3689 of 1984.
G.B. Pai, Ms. Urmila Kapoor and section Janani for the Appellant.
Prithivi Raj, Vishnu Mathut and Ms. section Dikshit for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
When the service of an employee is terminated consequent upon the employer accepting the resignation voluntarily tendered by the employee, does the termination so brought about amount to 'Retrenchment ' within the meaning of Section 2(s) read with Section 6N of the Uttar Pradesh , is the question which we are called upon to decide in this appeal by special leave.
The facts relevant to be stated for the disposal of this appeal are as under: Ram Singh was employed by the appellant company on 10th March, 1960 and was posted in the Bradma machine section of the company.
His duties were to attend to the printing of shares, pay sheets, registers, ESI cards etc.
, relating to the appellant company.
On 1st November, 1970 he addressed a letter of resignation to the Manager of the appellant compa ny in the following words: "R/Sir, I regret to bring to your kind notice that my family circum stances do not permit me to continue my service and hence I am compelled to sever my connections with these Mills imme diately.
I, therefore, request your goodself kindly to arrange for the payment of all my dues at an early date.
" Two days thereafter he wrote another letter to the Manager of the company which reads as under: 526 "R/Sir, Since I have already tendered my resignation from my serv ices, I request you kindly to depute somebody in the Bradma Office taking charge and learning the work, so that the entrusted work may be carried on smoothly.
Thanking you so much for making early arrangement as re quested.
" A copy of this letter was endorsed to the Special Executive of the appellant company for information and necessary action.
On receipt of the above letters, the Manager of the appellant company replied as under: "The resignation tendered by you vide your letter dated 1st instant, is hereby accepted with effect from 16th instant.
Please hand over charge of the Company 's properties in your possession to Shri R.S. Mathur and collect payment in full and final settlement from the Mills Pay Office." After the receipt of this letter the charge of the Bradma Section was handed over by the employee to the said R.S. Mathur on 15th November, 1970.
The amount due to the employee by way of salary, allowances, etc., upto 16th November, 1970 was worked out but the actual payment was received by the employee on 22nd December, 1970.
He was also paid his service gratuity at the end of February, 1971.
It appears that the employee raised an industrial dispute and sought a reference under Section 4K of the State Act.
The employee 's demand for a reference was initially rejected by the State Government on 12th November, 1973 but it came to be accepted subsequently on 28th November, 1974.
The appel lant company thereupon filed a writ petition challenging the said reference made by the State Government but the High Court dismissed the petition on 7th September, 1981.
Pursu ant to the reference, the Labour Court made an Award in favour of the employee on 25th January, 1984.
The Labour Court came to the conclusion that the employee 's resignation was not voluntary and, therefore, his services had been wrongly terminated with effect from 15th November, 1970.
He was ordered to be reinstated.
Against this Award of the Labour Court the appellant approached the High Court under Article 226 of the Constitution.
The High Court came to the conclusion that the employee had tendered his resignation voluntarily 527 and without any threat or coercion.
It also took the view that the claim for overtime wages was an after thought.
However, considering the definition of 'retrenchment ' in Section 2(s), the High Court came to the conclusion that the termination of service of the employee fell within the said definition and as the appellant company had failed to ob serve the requirements of section 6N, the termination of service was clearly invalid.
The approach to the High Court is reflected in the following passage of its Judgment: 8"The contention raised is that there was no act of the employer in this connection and hence this may not be said to be a case of retrenchment of the respondent.
To this I do not find possible to agree.
There is no denial that the respondent had been in continuous service for not less than one year within the meaning of Section 6N.
According to Section 2(s), retrenchment covers termination by the employ er of the service of a workman for any reason whatsoever.
To this there are exceptions applicable where the termination is by way of punishment inflicted as a result of a discipli nary_ action or voluntary retirement of the workman or retirement of the workman on attaining the age of superannu ation.
The provision is in pari materia with section 2(00) of the Central Act.
The case does not fail within any of these exceptions.
Voluntary retirement of a workman may not stand in need of acceptance by the employer; this may be hedged in with certain conditions such as those relating to certain number of years having been put in service and the like, but resignation may be tendered at any time though it requires acceptance to be effective.
There is retrenchment under law where the services of a workman stand terminated for any reason whatsoever.
This may not be a consequence directly flowing from an act of the employer.
The material factor would be whether there is determination of the rela tionship of employer and workman between the parties.
If as a consequence this relationship has ceased or has been brought to an end, there is the resultant termination of the services of the workman.
" In support of this view reliance was placed on the decisions of this Court in The State Bank of India vs N. Sundara Money, ; ; Hindustan Steel Ltd. vs The Presid ing Officer, Labour Court, Orissa & Others, ; , Delhi Cloth and General Mills LId.
vs Shambhu Nath Mukherji and Others, ; ; Santosh 528 Gupta vs State Bank of Patiala, ; and L. Robert D 'Souza vs Executive Engineer, Southern Railway and Another, ; Reliance was also placed on the decision of the Kerala High Court in Corporation of Cochin vs Jalaji & Others, Proceeding further the High Court concluded as under: " . . the present is a case where there was act of the employer also before the termination became effective.
As discussed above, the resignation tendered by the respondent could not take effect without the acceptance on the part of the employer.
The acceptance was accorded on November 4, 1970, expressly in writing.
This clearly is an act of the employer which put a seal to the matter and brought about cessation of the relationship of the employer and the work man.
Therefore, there is no escape from the conclusion that it was a case of retrenchment.
It remains to be seen on relevant material whether in fact there was compliance made of the requirement of section 6N." However, the order of reinstatement passed by the Labour Court, Kanpur was set aside and the matter was remanded to the Labour Court for a decision on the question whether there was an infraction of section 6N. The High Court, however, made it clear that "the issue of resignation shall not be open to read judication".
In other words, the only question which the Labour Court was required to consider was whether the retrenchment was in conformity with section 6N of the State Act.
Feeling aggrieved by this order the appel lant company has approached this Court under Article 136 of the Constitution.
The State Act, i.e., Uttar Pradesh was enacted to provide powers to prevent strikes and lock outs, to settle industrial disputes and for other incidental matters.
Section 2(s) defines the term 'Retrench ment ' as under: "2(s): 'Retrenchment ' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as punishment inflicted by way of discipli nary action, but does not include (i) voluntary retirement of the workmen; or 529 (ii) retirement of the workmen on reaching the age of super annuation if the contract of employment between the employer and workman concerned contains a stipulation in that behalf.
" This definition is in pari materia with the definition of 'retrenchment ' found in section 2(00) of the Central Act i.e. as it stood prior to its amendment by Act LIX of 1984.
Section 6N the State Act reads as under: "6N. Conditions precedent to retrenchment of workman.
No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given one month 's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice wages for the period of the notice; Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days ' average pay for every completed year of service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the State Government.
" This section substantially reproduces section 25F of the Central Act.
In the Central Act the proviso came to be omitted by Act LIX of 1984 and instead clause (bb) came to be added to section 2(00).
The first question which we must consider is whether in the background of facts stated earlier it can be said that the services of the employee were terminated by way of 'retrenchment ' as understood by 530 section 2(s) and, if yes, whether the employer was required to comply with the provisions of section 6N of the State Act.
It becomes clear on a plain reading of the definition of the term 'retrenchment ' that it comprises of two parts; the first part is the inclusive part which defines retrench ment whereas the second part is in the nature of an excep tion and excludes two types of cases from the scope and ambit of the said definition.
Under the first part termina tion of an employee 's service by the employer for any reason whatsoever, otherwise than by way of punishment inflicted as a disciplinary measure, amounts to retrenchment.
Under the second part cases of (i) voluntary retirement & (ii) retire ment on superannuation are excluded from purview of the first part of the definition.
Termination of service can be brought about in diverse ways by an employer but every termination is not retrenchment, as for example, termination of service by way of punishment for proved misconduct.
The words 'for any reason whatsoever ' are undoubtedly words of wide import and hence termination of service by the employer will attract the definition of retrenchment unless it is shown to be penal in nature brought about by way of disci plinary action or as falling within one of the two exclusion clauses extracted earlier.
In order to counter the employ ee 's contention that he was retrenched from service on the employer having communicated the acceptance of his resigna tion, the employer has placed reliance on the first clause, namely, that the workman had voluntarily retired from serv ice.
The letter dated 1st November, 1970 written by the employee to the Manager of the appellant company expressing his desire to resign his job shows that it was a voluntary act on the part of the employee.
This was followed by anoth er letter of 3rd November, 1970 whereby the workman request ed the company to depute someone to take charge of the Bradma office so that he gets acquainted with the work to ensure a smooth take over.
It was on this request of the employee that the appellant company accepted his resignation by the letter of 4th November, 1970 with effect from 16th November, 1970.
From this correspondence it is crystal clear that the employee desired to sever his relations with the appellant company on account of his family circumstances.
But for this request made by the employee there was no reason for the appellant company to terminate the contract of service on its own.
Just as an employer has a right to terminate the service of an employee, an employee too has a fight to put an end to the contract of employment by inform ing his employer of his intention to give up the job.
This fight is specifically conferred by clause 21 of the Standing Orders certified under Section 5 of the Industrial Employ ment (Standing Orders) Act, 1946.
This clause reads as under: 531 "Any permanent clerk desirous of leaving the company 's service shall give one month 's notice in writing to the Manager unless he has a specific agreement providing for a longer or shorter notice.
If any permanent clerk leaves the service of the company without giving notice, he shall be liable to be sued for damages." Similar clause with reduced notice period is also to be found in the certified Standing Orders for operatives.
Therefore, one of the ways of terminating the contract of employment is resignation.
If an employee makes his inten tion to resign his job known to the employer and the latter accepts the resignation, the contract of employment comes to an end and with it stands severed the employer employee relationship.
Under the common law the resignation is not complete until it is accepted by the proper authority and before such acceptance an employee can change his mind and withdraw the resignation but once the resignation is accept ed the contract comes to an end and the relationship of master and servant stands snapped.
Merely because the em ployer is expected to accept the employee 's resignation it cannot be said that the employer has brought about an end to the contract of employment so as to bring the case within the first part of the definition of retrenchment.
A contract of service can be determined by either party to the con tract.
If it is determined at the behest of the employer it may amount to retrenchment unless it is by way of punishment for proved misconduct.
But if an employee takes the initia tive and exercises his right to put an end to the contract of service and the employer merely assents to it, it cannot be said that the employer has terminated the employment.
In such cases the employer is merely acceding to the employee 's request, may be even reluctantly.
Here the employee 's role is active while the employer 's role is passive and formal.
The employer cannot force an unwilling employee to work for him.
Under clause 21 of the certified Standing Orders all that the employee is required to do is to give the employer a notice to quit and on the expiry of the notice period his service would come to an end.
A formal acceptance of the employee 's desire by the employer cannot mean that it is the employer who is putting an end to the contract of employ ment.
It would be unfair to saddle the employer with the liability to pay compensation even where the service is terminated on the specific request of the employee.
Such an intention cannot be attributed to the legislature.
We are, therefore, of the opinion that where a contract of service is determined on the employee exercising his right to quite, such termination cannot be said to be at the instance of the employer 532 to fall within the first part of the definition of retrench ment in section 2(s) of the State Act.
The High Court has placed reliance on ,four decisions of this Court to which we may now advert.
In Sundara Money 's case the employment was for a fixed duration of 9 days, on the expiry whereof the service was to end.
This condition was imposed unilaterally.
The employment was to terminate not because the employee did not desire to serve but because of the unilateral condition imposed by the employer.
The initiative for the termination, therefore, came from the employer attracting the wide terminology of section 2(00).
In Hindustan Steel Ltd. the termination of service was by efflux of time.
Placing reliance on the law laid down in Sundara Money 's case and the proviso to section 25F(a), this Court held that the termination of service was by way of retrenchment.
In the case of Delhi Cloth Mills the employ ee 's name was taken as automatically removed from the rolls of the company under the Standing Orders for continued absence without prior intimation.
The striking off the name was clearly an act of the employer resulting in termination of service amounting to retrenchment.
Santosh Gupta 's was a case of termination of service on account of her failure to pass the prescribed test.
That was the reason for terminat ing her service.
All the same it was the employer 's action which resulted in the termination of her service attracting section 2(00).
In the case of Robert D 'souza the termination was rounded on the ground of unauthorised absence from duty which clearly was an act of the employer.
In all the. above cases on which the High Court placed reliance, no question of termination of service on the employee voluntarily ten dering his resignation arose for consideration.
These cases are, therefore, not helpful since they turn on their own special facts.
None of them deals with a case of voluntary resignation tendered by an employee.
We may now examine the question from another angle, namely, whether an employee whose resignation has been accepted by the employer falls within the first exclusion clause to the definition of the term 'retrenchment '.
There can be no doubt that a resignation must be voluntarily tendered for if it is tendered on account of duress or coercion, it ceases to be a voluntary act of the employee expressing a desire to quite service.
In the present case the High Court has come to the conclusion that the employee had tendered his resignation voluntarily.
Does termination of service brought about by the acceptance of resignation fall with the expression 'voluntary retirement '? The meaning of the term 'resign ' and 'retire ' in different dictionaries is as under: 533 TABLE Name of the Meaning of 'Resign ' Meaning of 'Retire ' Dictionary Black 's Law Formal renouncement to terminate employ Dictionary or relinquishment ment or service upon (5th Edn.) of an office.
reaching retirement age.
Shorter Ox To relinquish, The act of retiring ford English surrender, give up or withdrawing to Dictionary or hand over (some or from a place or (Revised thing); esp., an from a place or Edn. of 1973) office, position, position.
right, claim, etc.
To give up an office or position; to retire.
The Random To give up an office To withdraw from of House Dic , position etc.; to fice business or tionary relinquish (right, active life claim, agreement etc.) From the aforesaid dictionary meanings it becomes clear that when an employee resigns his office, he formally relin quishes or withdraws from his office.
It implies that he has taken a mental decision to sever his relationship with his employer and thereby put an end to the contract of service.
As pointed out earlier just as an employer can terminate the services of his employee under the contract.
So also an employee can inform his employer that he does not desire to serve him any more.
Albeit, the employee would have to give notice of his intention to snap the existing relationship to enable the employer to make alternative arrangements so that his work does not suffer.
The period of notice will depend on the period prescribed by the terms of employment and if no such period is prescribed, a reasonable time must be given before the relationship is determined.
If an employee is not permitted by the terms of his contract to determine the relationship of master and servant, such an employment may be branded as bonded labour.
That is why in Central Inland Water Transport Corporation vs Brojonath Ganguly, [1986] 3SCC 156 at page 228 this Court observed as under: 534 "By entering upon a contract of employment a person does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign.
A resignation by an employ ee would, however, normally require to be accepted by the employer in order to be effective." In the present case the employee 's request contained in the letter of resignation was accepted by the employer and that brought an end to the contract of service.
The meaning of term 'resign ' as found in the Shorter Oxford Dictionary includes 'retirement '.
Therefore, when an employee volun tarily tenders his resignation it is an act by which he voluntarily gives up his job.
We are, therefore, of the opinion that such a situation would be covered by the ex pression 'voluntary retirement ' within the meaning of cluase (i) of Section 2(s) of the State Act.
In Santosh Gupta 's case Chinnappa Reddy, J. observed as under: "Voluntary retrenchment of a workman or the retrenchment of the workman on reaching the age of superannuation can hardly be described as termination, by the employer, of the service of a workman".
(Here the word 'retrenchment ' has reference to 'retirement '.) above observation clearly supports the view which com mends to us.
We are, therefore, of the opinion that the High Court was not right in concluding that because the employer accepted the resignation offer voluntarily made by the employee, he terminated the service of the employee and such termination, therefore, fell within the expression 'retrenchment ' rendering him liable to compensate the em ployee under section 6N.
We are also of the view that this was a case of 'volun voluntary retirement ' within the mean ing of the first exception to section 2(s) and therefore the question of grant of compensation under section oN does not arise.
We, therefore, cannot allow the view of the High Court to stand.
For the above reasons we allow this appeal, set aside the orders of the Courts below and hold that the employee is not entitled to any compensation under section 6N of the State Act.
The appeal is allowed accordingly.
No costs throughout.
Lal Appeal allowed.
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One Ram Singh was appointed by the appellant company on 10.3.1960.
On 1.11.1970, he addressed a letter of resigna tion to the Manager of the company saying that owing to his family circumstances, it was no longer possible for him to continue in service and that he was compelled to sever his connections with the company.
He made a demand of all his dues.
He wrote another letter two days later that someone should be posted in the section where he was working in order that he may learn the work are: printing of shares, pay sheets and pay registers etc.
The appellant company conveyed the acceptance of the resignation with effect from the 16th November, 1970 and paid all his dues on 22.12.1970.
The amount of gratuity was also paid later.
Ram Singh there after raised an industrial dispute and sought a reference under Section 4K of the U.P. Industrial Dispute Act, 1947.
Initially his demand was not accepted by the State Govern ment but later the State Government accepted his demand on 28.11.1974 whereupon the appellant company filed a writ petition in the High Court challenging the said reference made by the State Government but the High Court dismissed the petition.
The Labour Court thereafter made an award on the reference, in favour of the employee.
It came to the conclusion that the employee 's resignation was not voluntary and therefore his services had been wrongly terminated and accordingly he was directed to be reinstated.
The appellant challenged the validity of the said award under Article 226 of the Constitution before the High Court.
The High Court came to the conclusion that the employee had tendered his resignation voluntarily but it held that termination of the service of the employee fell within the definition of 'r etrenchment ' as contained in Section 2(s) and as the appel lant company had failed to comply with the requirement of Section 6N, the termination of service was invalid.
The High Court accordingly set aside the order of reinstatement passed by 524 the Labour Court and remanded the matter to the Labour Court for a decision on the question whether there was infraction of the provisions of Section 6N. Being aggrieved by that order of the High Court, the appellant company has filed this appeal after obtaining special leave.
Allowing the appeal, this Court, HELD: Where a contract of service is determined on the employee exercising his right to quit, such termination cannot be said to be at the instance of the employer to fail within the first part of the definition of retrenchment in Section 2(s) of the U.P. Industrial Disputes Act.
[531H; 532A] A contract of service can be determined by either party to the contract.
If it is determined at the behest of the employer it may amount to retrenchment unless it is by way of punishment for proved misconduct.
But if an employee takes the initiative and exercises his right to put an end to the contract of service and the employer merely assents to it, it cannot be said that the employer has terminated the employment.
In such cases the employer is merely acced ing to the employee 's request, may be even reluctantly.
Here the employee 's role is active while the employer 's role is passive and formal.
The employer cannot force an unwilling employee to work for him.
[531E F] When an employee resigns his office, he formally relin quishes or withdraws from his office.
it implies that he has taken a mental decision to sever his relationship with his employer and thereby put an end to the contract of service.
[533E] In the present case the employee 's request contained in the letter of resignation was accepted by the employer and that brought an end to the contract of service.
[534B] This was a case of 'voluntary retirement ' within the meaning of the first exception to section 2(s) and therefore the question of grant of compensation under section 6N did not arise.
The employee is not entitled to any compensation under section 6N of the State Act.
[534F] The State Bank of India vs
N. Sundara Money; , ; Hindustan Steel Ltd. vs The Presiding Officer, Labour court, Orissa and Ors., ; ; Delhi Cloth and General Mills Ltd. vs Shambhu Nath Mukherji and others; , ; Santosh (Gupta vs State Bank of Patiala, ; ; L. Robert D 'souza vs, Executive Engineer, Southern Railway and Anr., [1982] 1SCC 645 and 525 Corporation of Cochin vs Jalaji and Ors., [1984] 1 LLJ
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Criminal Appeal No. 328 of 1979.
From the Judgment and Order dated 2.1.1979 of the Alla habad High Court in Government Appeal No. 663 of 1973.
Pramod Swarup for the Appellant.
Manoj Swarup, Prashant Choudhary and Dalveer Bhandari for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Khanjan Pal, the appellant, was con victed by the High Court for the offence punishable under Section 302, I.P.C. and sentenced to undergo imprisonment for life, in reversal of the order of acquittal passed by the Sessions Judge, Agra.
The brief facts of the case are as under: The appellant, Khanjan Pal, and the deceased, Deep Singh, were working in the bangles welding factory of Data Ram in Mohalla Rajputana, Thana Firozabad.
The prosecution case was that while working in the factory at about 2.30 P.M. on 8.4.1972, the appellant 608 said to the deceased that he had illicit relationship with one Tara.
Deep Singh said that he considered Tara to be his sister.
The altercation ensued between the appellant and the deceased and in the course of the altercation, the appellant stabbed the deceased with a knife and this incident was witnessed by P.W. 2, Ram Pratap Singh, and P.W. 4, Maharaj Singh besides Umrao Singh, P.W. 1.
The injury sustained by the deceased was a punctured wound penetrating into chest cavity.
The occurrence was reported at the police station by Umrao Singh, father of the deceased at 3.00 P.M. the same day.
In the course of the investigation, blood stained shirt was seized from the appellant and sent for chemical examina tion.
The certificate was to the effect that it was stained with human blood.
The trial court acquitted the appellant discarding the testimony of the eye witnesses mainly for the reasons that the occurrence could not have happened at the alleged time and place as the place of occurrence was not mentioned in the first information report, the postmortem report referred to the presence of undigested food in the abdomen of the deceased, the presence of Umrao Singh (P.W. 1), Ram Pratap Singh (P.W. 2), and Maharaj Singh (P.W. 4) was doubtful in the light of the conduct of P.W. 3, Data Ram and that since the attendance register was not produced, it was doubtful whether the factory was opened on that day or not.
The appellant was therefore given the benefit of doubt by the trial court.
The High Court on a careful analysis of the entire evidence dislodged the finding of the trial court, accepted the testimony of P.W. 2 and P.W. 4 and concluded that the prosecution had established the charge against the appel lant.
We have been taken through the judgments ' and the relevant records of the case.
We are satisfied that the High Court had interfered with the order of acquittal for cogent reasons and that the conclusion of the High Court that the appellant has caused the death of the deceased, Deep Singh, by stabbing with a knife in the manner alleged by the prose cution is unassailable.
The approach by the trial court was clearly wrong and the finding is perverse.
The testimony of the two independent eye witnesses had not been properly appreciated.
Their presence at the scene could not at all be doubted in the light of what P.W. 3 has deposed.
They are probable witnesses and there had not been any infirmity in their evidence as rightly pointed out by the High Court.
The evidence of P.W. 1, rejected by the trial court was also not accepted by the High Court.
The reasoning adopted by the trial court, in our opinion, was so perverse that the High Court was justified in upsetting the finding and 609 arriving at an independent conclusion which is fully sup ported by the evidence on record.
We do not, therefore, see any merit in the contention advanced on behalf of the appel lant that the conviction is wrong.
however, agree with the learned counsel for the appellant that on the basis of the facts proved, the offence is not murder punishable under Section 302, I.P.C., and that the act of the appellant as proved would fail only under Section 304 Part II, I.P.C. The appellant had in statement under Section 3 13, Cr.P.C., admitted that there had been an altercation between the two and the deceased received the injury in the course of a scuffle.
The evidence clearly established that the whole incident was a sudden development and that the appellant had acted at the spur of the moment and without any pre meditation.
There had been no ill will or enmity between the two.
A casual remark made by the appellant provoked the deceased and the altercation ensued which culminated in the stabbing with knife.
The appellant used the knife only once and did not act in any cruel man ner.
It was in the sudden quarrel in heat of passion that the appellant inflicted the injury on the deceased without any intention to cause death but having knowledge that such act was likely to cause the death of the deceased.
In such circumstances.
the act of the appellant falls under Excep tion 4 to Section 300, I.P.C., and the appellant is liable to be convicted only under Section 304, Part II, I.P.C. We accordingly alter the conviction to one under Section 304, Part II, I.P.C. We are told that the appellant had already undergone imprisonment for over one year.
He had been released on bail by order of this Court dated 16.7.
The appellant, a young man who had been at large for over nearly 12 years, in our opinion, cannot be committed to prison for any further period at this stage.
To meet the ends of justice, we direct the appellant to pay a fine of Rs.50,000 in addition to the term of imprisonment he has already suffered.
We, thus modify the sentence awarded by the High Court.
We also direct that the fine, if realised, shall be paid to P.W. 1, Umrao Singh, the father of the deceased and other legal heirs of Deep Singh.
In case of default in payment of fine, the appellant shall undergo further imprisonment for one year.
The appeal is partly allowed.
G.N. Appeal partly allowed.
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The appellant was charged with the murder of a co worker at the factory in which they were working.
The Trial Court discarded the testimony of eye witnesses and other circum stances and acquitted the appellant, by giving him the benefit of doubt.
On appeal, the High Court accepted the testimony of the eyewitnesses and convicted the appellant under Section 302 IPC and sentenced him to undergo life imprisonment.
This appeal is against the High Court 's judgment.
Allowing the appeal in part, HELD: 1.
The High Court had interfered with the order of acquittal for cogent reasons and that the conclusion of the High Court that the appellant has caused the death of the deceased, by stabbing with a knife in the manner alleged by the prosecution is unassailable.
The approach by the trial court was clearly wrong and the finding is perverse.
The testimony of the two independent eye witnesses had not been properly appreciated.
Their presence at the scene could not at all be doubted in the light of what P.W. 3 has deposed.
They are probable witnesses and there had not been any infirmity in their evidence.
[608F G] 2.
However, the offence is not murder punishable under Section 302 IPC, and that the act of the appellant as proved would fail only under Section 304 Part II, IPC.
The appel lant had admitted that there had been an altercation between the two and the deceased received the injury in the course of a scuffle.
The evidence clearly established that the whole incident was a sudden development and that the appel lant had acted at the spur of the moment and without any pre meditation.
607 There had been no ill will or enmity between the two.
A casual remark made by the appellant provoked the deceased and the altercation ensued which culminated in the stabbing with knife.
The appellant used the knife only once and did not act in any cruel manner.
It was in the sudden quarrel in heat of passion that the appellant inflicted the injury on the deceased without any intention to cause death but having knowledge that such act was likely to cause the death of the deceased.
[609B D] 3.
The conviction is altered to one under Section 304, Part II, IPC.
Appellant had already undergone imprisonment for over one year.
He had been released on bail by order of this Court.
The appellant, a young man who had been at large for over nearly 12 years, cannot be committed to prison for any further period at this stage.
[609E] 4.
To meet the ends of justice, it is directed that the appellant should pay a fine of Rs.50,000 in addition to the term of imprisonment he has already suffered.
This amount would be paid to the father of the deceased and other legal heirs.
In case of default in payment of fine, the appellant should undergo further imprisonment for six months.
[609F G]
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ivil Appeal No. 671 of 1985.
From the Judgment and Order dated 24th August, 1984 of the Calcutta High Court in Appeal from Appellate Decree No. 263 of 1979.
N.S. Nesargi and Dr. Meera Agarwal for the Appellant.
Rajan Mahapatra and Rathin Das for the Respondents.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The matter arises under the West Bengal Premises Tenancy Act, 1956 ( 'Act ' for short).
The appellant is the tenant occupying the premises belonging to the respondent 612 on a monthly rent of Rs.475.
The respondent landlady filed a Suit No. T.S. 84/73 on the ground of default of rent for the period from May to August, 1973.
The appellant deposited the rent and made an application under Section 17(2) of the Act.
The trial court vide its order dated 27.2.74 held that the rent payable is only Rs.450 per month and directed the appellant to deposit the balance of arrears of rent within 15 days.
At this stage a compromise memo was filed and the suit was compromised in terms of the compromise memo.
In the memo it was mentioned that the default was of the first instance and that there would be no decree for khas posses sion.
It appears the appellant again committed default in payment of rent from June to December, 1975 (both months inclusive).
The respondent landlady filed Title Suit No. 3/76 after giving notice for eviction.
In that suit the appellant filed a petition under Section 17(2) and Section 17(2A) of the Act.
By Order No. 26 dated 23.3.77 the trial court decided that the rent payable was Rs.475 per month and the appellant was asked to deposit the arrears at the rate of Rs.3 15 per month by the 15th of each month commencing from April, 1977.
The appellant contested the suit and filed a written statement claiming benefit under Section 17(4) of the Act pleading that it was the first default.
The respond ent landlady contested the same stating that no such relief can be granted as per the proviso to the Section since such a relief was already granted once and that at any rate the appellant did not comply with the order while making the deposit of the arrears by 15th of each month and on that ground also no relief can be granted under Section 17(4).
The trial court decreed the suit and the first appellate court as well as the High Court dismissed the appeals pre ferred by the appellant.
In this appeal firstly it is contended that though there was delay in paying the installments as per Order dated 23.3.77 passed under Sections 17(2) and 17(2A) the Court did not order striking off the defence as provided under Section 17(3) and therefore the delay must be deemed to have been condoned and consequently it must be held that the appellant made the deposits as required by sub sections (2) and (2A) of Section 17 and hence he is entitled to claim relief under Section 17 (4).
The second contention is that the default which is the subject matter of Title Suit No. 3/76 should be treated as the first default inasmuch as the relief granted in Title Suit No. 84/73 in respect of the default for the period from May to August, 1973 was not one under Section 17(4) since the suit was decreed by way of compromise.
When this matter came up before another Bench of this Court consisting of two Hon 'ble Judges, in support of the second contention, 613 reliance was placed on Jagan Nath vs Ram Kishan Das & Anr., ; , (a decision of three Judges) where a similar provision in the Delhi Rent Control Act, 1958 was considered in a case where the earlier suit was withdrawn.
The Bench felt that the provision was construed in a narrow and technical sense and referred this matter to a Bench of three Judges and that is how this matter has come up before us.
All the three courts below have held that the appellant did not make the deposits before 15th day of each month as per the order dated 23.3.77 passed under Section 17(2) and Section 17(2A).
Unless such a deposit is duly made no relief can be granted under Section 17(4) of the Act.
At this stage it becomes relevant to refer to the provisions of Section 17.
Section 17 reads as under: "section 17.
When a tenant can get the benefit of protection against eviction (1) On a suit or proceeding being insti tuted by the landlord on any of the grounds referred to in Section 13, the tenant shall, subject to the provisions of sub section (2) within one month of the service of the writ of summons on him or where he appears in the suit or pro ceeding without the writ of summons being served on him, within one month of his appearance deposit in court or with the Controller or pay to the landlord an amount calculated at the rate of rent at which it was last paid, for the period for which the tenant may have made default including the period subsequent thereto up to the end of the month previous to that in which the deposit or payment is made together with interest on such amount calculated at the rate of eight and one third per cent, per annum from the date when any such amount was payable up to the date of deposit, and shall thereafter continue to deposit or pay, month by month, by the 15th of each succeeding month a sum equivalent to the rent at that rate.
(2) If in any suit or proceeding referred to in subsection (1) there is any dispute as to the amount of rent payable by the tenant, the tenant shall within the time specified in sub section ( 1), deposit in court the amount admitted by him to be due from him together with an applica tion to the Court for determination of the rent payable.
No such deposit shall be accepted unless it is accompanied by an application for determination of the rent payable, On receipt of such application, the Court shall 614 (a) having regard to the rate at which rent was last paid, and the period for which default may have been made, by the tenant, make, as soon as possible within a period not ex ceeding one year, a preliminary order, pending final deci sion of the dispute, specifying the amount, if any, due from the tenant and thereupon the tenant shall, within one month of the date of such preliminary order, deposit in court or pay to the landlord the amount so specified in the prelimi nary order; and (b) having regard to the provisions of this Act, make, as soon after the preliminary order as possible, a final order determining the rate of rent and the amount to be deposited in Court or paid to the landlord and either fixing the time within which the amount shall be deposited or paid or, as the case may be, directing that the amount already deposited or paid be adjusted in such manner and within such time as may be specified in the order.
(2A) Notwithstanding anything contained in subsec tion (1) or sub section (2), on the application of the tenant, the Court may, by order, (a) extend the time specified in sub section (I) or sub section (2) for the deposit or payment of any amount re ferred to therein; (b) having regard to the circumstances of the tenant as also of the landlord and the total sum inclusive or interest required to be deposited or paid under subsection (1) on account of default in the payment of rent, permit the tenant to deposit or pay such sum in such installments and by such dates as the Court may fix; Provided that where payment is permitted by in stallments such sum shall include all amounts, calculated at the rate of rent for the period of default including the period subsequent thereto upto the end of the month previous to that in which the order under this sub section is to be made with interest on any such amount calculated at the rate 615 specified in sub section (1) from the date when such amount was payable upto the date of such order.
(2B) No application for extension of time for the deposit or payment of any amount under clause (a) of subsec tion (2A) shall be entertained unless it is made before the expiry of the time specified therefore in sub section (1) or sub section (2), and no application for permission to pay in installment under clause (b) or sub section (2A) shall be entertained unless it ' is made before the expiry of the time specified in sub section (1) for the deposit or payment of the amount due on account of default in the payment of rent.
(3) If a tenant fails to deposit, or pay any amount referred to in sub section (1) or sub section (2) within the time specified therein or within such extended time as may be allowed under clause (a) of sub section (2A), or fails to deposit or pay any installment permitted under clause (b) of sub section (2A) within the time fixed therefore, the Court shall order the defence against delivery of possession to be struck out and shall proceed with the hearing of the suit.
(4) If a tenant makes deposit or payment as re quired of sub section (1), sub section (2) or sub section (2A) no decree or order for delivery of possession of the premises to the landlord on the ground of default in payment of rent by the tenant shall be made by the Court but the Court may allow such costs as it may deem fit to the land lord: Provided that a tenant shall not be entitled to any relief under this sub section if, having obtained such relief once in respect of the premises, he has again made default in the payment of rent for four months within a period of twelve months.
" The learned counsel for the appellant submits that assuming that there was delay in making the deposit of installments of the rent as per the said order, the follow up action by the Court as contemplated under Section 17(3) namely strik ing off the defence has not been ordered and therefore it should be presumed that the delay was condoned or deemed to have been condoned.
We are unable to agree with this submis sion of the learned counsel for the appellant.
As already 616 mentioned, the appellant filed petition under Sections 17(2) and 17(2A) pending the present suit disputing the amount of rent and also seeking permission to deposit the rent by way of installments.
The rent was held to be Rs.475 per month and the same was directed by the Court to be paid by monthly installments before 15th of each month but the appellant did not make the deposits duly.
Admittedly no application was made for extension of time.
Section 17(2) provides that if in any suit there is dispute as to the amount of rent pay able the tenant within the time specified shall deposit in court the amount admitted by him to be due from him with an application for determination of rent.
Section 17(2A) pro vides for extension of the specified time and also to depos it the rent by way of installment under the orders of the Court.
Section 17(2B) lays down that no application for extension of time shall be entertained unless it is made before the expiry of the specified time under sub section(1) or sub section (2) and it further lays down that no applica tion for permission to pay in installments under clause (b) of sub section (2A) shall be entertained unless it is made before the expiry of the time specified.
Section 17(3), on which reliance is placed by the appellant lays down that if a tenant fails to deposit, or pay any amount referred to in sub section (1) or sub section (2) ' within the time speci fied therein or within such extended time as may be allowed under clause (a) of sub section (2A), or fails to deposit or pay any installment permitted under clause (b) of sub sec tion (2A), the Court shall order the defence against deliv ery of possession to be struck out shall proceed with the hearing of the suit.
We have already noted that no applica tion for extension of time was made.
The mere fact that the court has not passed an order striking off the defence as contemplated under Section 17(3) because of the tenant 's failure to deposit within the time specified in the order passed under Sections 17(2) and 17(2A) does not necessarily lead to a presumption that the time was extended.
On the other hand Section (2B) which is a mandatory provision laid down that no application for extension of time for the deposit or payment of any amount under clause (a) of sub section (2A) shall be entertained unless it is made before the expiry of the time specified in sub section (1).
There fore in the absence of such application it be contended that the Court is deemed to have condoned the delay.
That being the position it must be held that the appellant tenant to make the deposit of the rent as per Order No. 26 dated 25, 3.77 passed under Section 17(2) and 17(2A).
Since such a deposit is the condition precedent for seeking relief under Section 17(4) the appellant who has not fulfilled the same cannot claim the said relief.
On this ground alone the orders of the courts below have to be confirmed.
In this view of the matter we do not propose to go into the 617 second contention in this appeal.
It may be decided in any other appropriate case where the question directly arises.
The premises in question is in Calcutta City where accommo dation problem is very acute.
Therefore the appellant is given time till 31st March, 1991 to vacate the premises on filing the usual undertaking within three weeks from today.
The appeal is accordingly dismissed.
In the circumstances of the case there will be no order as to costs.
T.N.A. Appeal dis missed.
|
The respondent landlady filed a suit for eviction of the appellanttenant on the ground of default in payment of rent.
The appellant deposited the rent and made an application under section 17(2) of the West Bengal Premises Tenancy Act, 1956.
The Trial Court determined the rent payable and di rected deposit of the arrears of rent.
The suit was subse quently compromised.
The appellant again committed a default in payment of rent and the respondent filed another suit for eviction.
The appellant filed petition under section 17(2) and (2A), disputing the amount of rent and also seeking permission to deposit rent by installments.
The Trial Court decided the rent payable and directed the appellant to deposit the arrears of rent in monthly installments by the 15th of each month.
Thereupon the appellant tenant claimed protection under section 17(4) which was resisted by the landlady on the ground that (i) the protection cannot be granted as per the proviso to section 17(4), since he has already been granted relief once in the earlier suit, and (ii) Appel lant 's non compliance with the Court 's order in depositing the rent disentitled him from claiming relief under section 17(4).
The Trial Court decreed the respondent 's suit and the first appellate Court as well as the High Court confirmed the same by dismissing the appeals preferred by the appel lant.
611 In the appeal to this Court it was contended on behalf of the appellant that since the follow up action of the Court under section 17(3) viz. striking off the defence has not been ordered, it should be presumed that the delay in depositing the rent was condoned thereby entitling the appellant to relief under section 17(4).
Dismissing the appeal, this Court, HELD: The mere fact that the Court has not passed an order striking off the defence as contemplated under Section 17(3) because of the tenant 's failure to deposit within the time specified in the order passed under Section 17(2) and 17(2A), does not necessarily lead to a presumption that the time was extended.
On the other hand Section 17(2B) which is a mandatory provision lays down that no application for extension of time for the deposit or payment of any amount under clause (a) of sub section (2A) shall be entertained unless it is made before the expiry of the time specified in sub section (1).
[615H; 616C] In the instant case no application for extension of time was made by the appellant.
Therefore, in the absence of such application it cannot be contended that the Court is deemed to have condoned the delay.
[616G] Since deposit of rent as per Court 's order under Section 17(2) and (2A) is the condition precedent for seeking relief under section 17(4) the appellant who has not fulfilled the same cannot claim the said relief.
The orders of the Court below are therefore confirmed.
[616H]
|
ivil Appeal No. 5025 of 1985.
From the Judgment and Order dated 25.3.1985 of the Delhi High Court in C.W.P. No. 686 of 1985.
Arun K. Sinha for the Appellant.
N.S Hegde, Additional Solicitor General, T.C. Sharma and Mrs. Sushma Suri for the Respondents.
The Judgment of the Court was delivered by 700 K. RAMASWAMY, J.
1.
This appeal by special leave under article 136 of the Constitution arises against the decision of the Delhi High Court in C.W.P. No. 686 of 1985 dated March 25, 1985.
The appellant was working as an Assistant Grade IV of the Indian Foreign Service, Branch 'B ' in Indian High Commission at London.
On November 8, 1978 he was transferred to the Ministry of External Affairs, New Delhi, but he did not join duty as commanded, resulting in initiation of disciplinary proceedings against him on August 23, 1979.
Pending the proceedings, on February 26, 1980 the appellant sought voluntary retirement from service and by proceedings dated October 24, 1980 he was allowed to retire but was put on notice that the disciplinary proceedings initiated against him would be continued under rule 9 of Civil Serv ices Pension Rules, 1972 for short 'Rules '.
His main defence in the explanation was that his wife was ailing at London and, therefore, he sought for leave for six days in the first instance and 30 days later, which was granted, but as she did not recover from the ailment, he could not undertake travel.
So he sought for more leave, but when it was reject ed, he was constrained to opt for voluntary retirement.
After conducting the enquiry the Inquiry Officer submitted his report dated May 19, 1981.
The gravemen of charges as stated earlier are that the appellant absented himself from duty from December 15, 1978 without any authorisation and despite his being asked to join duty he remained absent from duty which is wilful contravention of Rule 3(i)(ii) and 3(i)(iii) of the Civil Services Conduct Rule 1964.
The Inquiry Officer found that "it is however difficult to say whether his absenting himself from duty was entirely wilful".
In the concluding portion he says that both the articles of charges have been established, the circumstances in which the appellant violated the rules require a sympa thetic consideration while deciding the case under Rule 9 of the Rules.
The President, on consideration of the report, agreed with the findings of the Inquiry Officer and in consultation with the Union Public Service Commission decid ed that the entire gratuity and pension otherwise admissible to the appellant was withheld on permanent basis as a meas ure of punishment through the proceedings dated November 24,.
When the appellant challenged the legality there of, the High Court dismissed the writ petition in limine on the ground that it would not interfere in its discretionary jurisdiction under article 226 of the Constitution.
The contention of Mr. Kapoor, learned counsel for the appellant is that the appellant having been allowed to retire voluntarily the authorities are devoid of jurisdic tion to impose the penalty of withholding gratuity and pension as a measure of punishment and the 701 proceedings stand abated.
We find no substance in the con tention.
Rule 9(2) of the Rules provided that the departmen tal proceedings if instituted while the Government servant was in service whether before his retirement or during his re employment, shall, after the final retirement of the Government servant, be deemed to be proceedings under this rule and shall be continued and concluded by the authority by which they were commenced in the same manner as if the Government servant had continued in service.
Therefore, merely because the appellant was allowed to retire, the Government is not lacking jurisdiction or power to continue the proceedings already initiated to the logical conclusion thereto.
The disciplinary proceedings initiated under the Conduct Rules must be deemed to be proceedings under the rules and shall be continued and concluded by the authori ties by which the proceedings have been commenced in the same manner as if the Government servant had continued in service.
The only inhibition thereafter is as provided in the proviso namely "provided that where the departmental proceedings are instituted by an authority subordinate to the President, that authority shall submit a report record ing its findings to the President".
That has been done in this case and the President passed the impugned order.
Accordingly we hold that the proceedings are valid in law and they are not abated consequent to voluntary retirement of the appellant and the order was passed by the competent authority, i.e.the President of India.
His further contention that the appellant must be found to have committed "grave misconduct" or "negligence" within the meaning of Rule 8(5)(2) of the Rules which alone gives power and jurisdiction to the authority to withhold by way of disciplinary measure the gratuity and payment of pension: Public employee holding a civil post or office under the State has a legitimate right to earn his pension at the evening of his life after retirement, be it on super annuation or voluntary retirement.
It is not a bounty of the State.
Equally too of gratuity, a statutory right.
earned by him.
Article 141 of the Constitution accords right to as sistance at the old aged or sickness or disablement.
In D.S. Nakara & Ors.
vs Union of India, ; the Con stitution Bench of this Court held that pension is not only compensation for loyal service rendered in the past, but also by the broader significance in that it is a social welfare measure rendering socioeconomic justice by providing economic security in the fall of life when physical and mental prowess is ebbing corresponding to ageing process and, therefore, one is required to fall back on savings.
One such saving in kind is when one had given his best in the hey day of life to his employer, in days of invalidity, economic security by way of periodical 702 payment is assured.
Therefore, it is a sort of stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service.
Thus pension is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation for service rendered.
In one sentence one can say that the most practical raison d 'etre for pension is the inability to provide for one self due to old age.
One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon.
At page 190 D it is stated that pension as a retire ment benefit is in consonance with and furtherance of the goals of the Constitution.
The goals for which pension is paid themselves give a fillip and push to the policy of setting up a welfare State because by pension the socialist goal of security from gradle to grave is assured at least when it is mostly needed and least available, namely in the fall of life.
Therefore, when a Government employee is sought to be deprived of his pensionary right when the had earned while rendering services under the State, such a deprivation must be in accordance with law.
Rule 9(1) of the rules provides thus: "The President reserves to himself the right of withholding or withdrawing a pension or part thereof, whether permanent ly or for a specified period, and of ordering recovery from a pension of the whole or part of any pecuniary loss caused to the Government, if, in any departmental of judicial proceedings, the pensioner is found guilty or grave miscon duct or negligence during the period of his service includ ing service rendered upon re employment after retirement.
Provided that the Union Public Service Commission shall be consulted before any final orders are passed.
Provided further that where a part of pension is withheld or withdrawn, the amount of such pension shall not be reduced below the amount of rupees sixty per mensum.
" Therefore, it is clear that the President reserves to himself the right to withhold or withdraw the whole pension or a part thereof whether permanently or for specified period.
The President also is empowered to order recovery from a pensioner of the whole or part of any pecuniary loss caused to the Government, if in any, proceeding in the departmental enquiry or judicial proceedings, the pensioner is 703 found guilty of grave misconduct or negligence during the period of his service including service rendered upon re employment after retirement.
Rule 8(5), explanation (b) defines 'grave misconduct ' thus ' "The expression 'grave misconduct ' includes the communica tion or disclosure of any secret official code or password or any sketch, plan, model, article, note, document or information, such as is mentioned in Section 5 of the Offi cial Secrets, Act, 1923 (19 of 1923) (which was obtained while holding office under the Government) so as to prejudi cially affect the interest of the general public of the security of the State.
" In one of the decisions of the Government as compiled by Swamy 's Pension Compilation, 1987 Edition, it is stated that: "Pensions are not in the nature of reward but there is a 2binding obligation on Government which can be claimed as a fight.
Their forfeiture is only on resignation, removal or dismissal from service.
After a pension is sanctioned its continuance depends on future good conduct, but it cannot be stopped or reduced for other reasons.
It is seen that the President has reserved to himself the right withhold pension in whole or in part therefore whether permanently or for a specified period or he can recover from pension of the whole or part of any pecuniary loss caused by the Government employee to the Government subject to the minimum.
The condition precedent is that in any departmental enquiry or the judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his service of the original or on re employment.
The condition precedent thereto is that there should be a find ing that the deliquent is guilty of grave misconduct or negligence in the discharge of public duty in office, as defined in Rule 8(5), explanation (b) which is an inclusive definition, i.e. the scope is wide of mark dependent on the facts or circumstances in a given case.
Myriad situation may arise depending on the ingenuinity with which misconduct or irregularity was committed.
It is not necessary to further probe into the scope and meaning of the words 'grave miscon duct or negligence ' and under what circumstances the find ings in this regard are held proved.
It is suffice that charges in this case are that the appellant was guilty of wilful misconduct in not reporting to duty after his trans fer from Indian High Commission at London to the Office of External Affairs Ministry, Government of India, New Delhi.
The Inquiry Officer found that though the appellants dere licted his duty to report to duty, it is not 704 wilful for the reason that he could not move due to his wife 's illness and he recommended to sympathetically consid er the case of the appellant and the President accepted this finding, but decided to withhold gratuity and payment of pension in consultation with the Union Public Service Com mission.
As seen the exercise of the power by the President is hedged with a condition precedent that a finding should be recorded either in departmental enquiry or judicial proceed ings that the pensioner committed grave misconduct or negli gence in the discharge of his duty while in office, subject of the charge.
In the absence of such a finding the Presi dent is without authority of law to impose penalty of with holding pension as a measure of punishment either in whole or in part permanently or for a specified period, or to order recovery of the pecuniary loss in whole or in part from the pension of the employee, subject to minimum of Rs.60. 7.
Rule 9 of the rules empowers the President only to with hold or withdraw pension permanently or for a specified period in whole or in part or to order recovery of pecuniary loss caused to the State in whole or in part subject to minimum.
The employee 's right to pension is a statutory fight.
The measure of deprivation therefore, must be correl ative to or commensurate with the gravity of the grave misconduct or irregularity as it offends the right to as sistance at the evening of his life as assured under article 41 of the Constitution.
The impugned 'order discloses that the President withheld on permanent basis the payment of gratui ty in addition to pension.
The fight to gratuity is also a statutory right.
The appellant was not charged with nor was given an opportunity that his gratuity would be withheld as a measure of punishment.
No provision of law has been brought to our notice under which, the President is empow ered to withhold gratuity as well, after his retirement as a measure of punishment.
Therefore, the order to withhold the gratuity as a measure of penalty is obviously illegal and is devoid of jurisdiction.
In view of the above facts and law that there is no finding that appellant did commit grave misconduct as charged for, the exercise of the power is clearly illegal and in excess of jurisdiction as the condition precedent, grave misconduct was not proved.
Accordingly the appeal is allowed and the impugned order dated November 24, 1981 is quashed but in the circumstances parties are directed to bear their own costs.
N.P.V. Appeal allowed.
|
Disciplinary proceedings were initiated against the appellant for wilful contravention of Rules 3(1)(i) and 3(1)(iii) of the Central Civil Services (Conduct) Rules.
1964 by absenting himself from duty without authorisation and in not reporting to duty at New Delhi office on transfer from London office.
Pending proceedings, he was allowed to retire voluntarily but was put on notice that the discipli nary proceedings would be continued under rule 9 of the Civil Services Pension Rules, 1972.
Thereafter, on comple tion of the enquiry, the President of India in consultation with the Union Public Service Commission, decided to with hold the entire gratuity and pension otherwise admissible to the appellant, on permanent basis, as a measure of punish ment.
The appellant 's writ petition challenging the legality of the order was dismissed by the High Court, in limine.
In the appeal by special leave, before this Court, on behalf of the appellant it was contended that since the appellant had been allowed to retire voluntarily, the pro ceedings stood abated, and the authorities were devoid of jurisdiction to impose the penalty of withholding gratuity and pension as a measure of punishment, and that for award ing the said punishment the appellant must be found to have committed grave misconduct or negligence within the meaning of Rule 8(5), Explanation (b).
698 Allowing the appeal, this Court, HELD: 1.
Rule 9(2) of the Central Civil Services (Pen sion) Rules, 1972 provided that the departmental proceedings if instituted while the Government servant was in service, whether before his retirement or during his re employment, should, after the final retirement of the Government serv ant, be deemed to be proceedings under the rule and should be continued and concluded by the authority by which they were commenced in the same manner as if the Government servant had continued in service.
[701A B] In the instant case, merely because the appellant was allowed to retire, the Government is not lacking jurisdic tion or power to continue the proceedings already initiated to the logical conclusion thereto.
The only inhibition is that where the departmental proceedings are instituted by an authority subordinate to the President, that authority should submit a report recording its findings to the Presi dent.
That has been done, and the President passed the order under challenge.
Therefore, the proceedings are valid in law and are not abated consequent to voluntary retirement of the appellant and the order was passed by the competent authori ty, i.e. the President of India.
[701B D] 2.1 Public employee holding a civil post or office under the State has a legitimate right to earn his pension at the evening of his life after retirement be it on superannuation or voluntary retirement.
It is not a bounty of the State.
Equally too of gratuity, a statutory right, earned by him Article 41 of the Constitution accords right to assistance at the old age of sickness or disablement.
Therefore, when a Government employee is sought to be deprived of his pension ary right which he had earned while rendering services under the State, such a deprivation must be in accordance with law.
[701F G; 702D] D.S. Nakara & Ors.
vs Union of India, ; , relied on.
2.2 Under Rule 9(1) of the Central Civil Services (Pension) Rules, 1972, the President has reserved to himself the right to withhold pension in whole or in part, whether permanently or for a specified period, or he can recover from pension of the whole or part of any pecuniary loss caused by the Government employee to the Government subject to the minimum.
However, the exercise of the power is hedged with a condition precedent that a finding should be recorded either in departmental enquiry or judicial proceedings that the pensioner com 699 mitted grave misconduct or negligence in the discharge of his duty while in office, as defined in Rule 8(5), Explana tion (b), which is an inclusive definition, i.e. the scope is wide of mark, dependent on the facts or circumstances in a given case.
In the absence of such a finding, the Presi dent is without authority of law to impose penalty or with holding pension as a measure of punishment either in whole or in part, permanently or for a specified period.
[702G H; 704B; 703E F] In the instant case, the Inquiry Officer found that though the appellant derelicted his duty to report to duty, at New Delhi on transfer from London, it was not wilful for the reason that he could not move due to his wife 's illness and he recommended to sympathetically consider the case of the appellant and the President accepted this finding, but decided to withhold gratuity and payment of pension perma nently, in consultation with the Union Public Service Com mission.
[703G H; 704A] The employee 's right to pension is a statutory right.
The measure of deprivation therefore, must be correlative to or commensurate with the gravity of the grave misconduct or irregularity as it offends the right to assistance at the evening of his life as assured under Article 41 of the Constitution.
The right to gratuity is also a statutory right.
The appellant was not charged with nor was given an opportunity that his gratuity would be withheld as a measure of punishment.
There is no provision of law under which the President is empowered to withhold gratuity as well, after his retirement as a measure of punishment.
Therefore, the order to withhold the gratuity as a measure of penalty is illegal and devoid of jurisdiction.
Since there is no find ing that appellant did commit grave misconduct as charged for, the exercise of the power is clearly illegal and in excess of jurisdiction as the condition precedent, grave misconduct, was not proved.
[704D G]
|
ence No. 1 of 1983.
(Under Article 3 17(1) of the Constitution of India).
R.N. Mittal, Pradeep Gupta, Prakash Chandra, Mrs. Rekha Dayal, Mrs. Sarla Chandra and Girish Chandra for the Peti tioners.
Ashok Desai, Additional Solicitor General, G.L. Sanghi, A. Subba Rao, Ms. A subhashini, S.K. Mehta, Aman Vachher, Atul Nanda and C.M. Nayyar for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This is a reference under Article 317(1) of the Constitution made by the President of India to this Court for inquiry and report on the complaint of Smt.
San tosh Chowdhary, Chairman of 582 the Punjab Public Service Commission alleging misbehaviour on the part of Sri Gopal Krishna Saini, a Member of the Commission.
According to the case of Smt.
Chowdhary, a number of candidates for certain appointments were interviewed at Patiala on 24.11.
1982 till about 1.15 p.m.
Thereafter Smt.
Chowdhary along with Sri Saini and the other three Members of the Commission left the Committee room and proceeded towards the complainant 's office when a very unpleasant incident took place.
Sri Saini had been absent on the previ ous two days and Smt.
Chowdhary, the Chairman, enquired from him the reason.
She also asked him to inform her in advance whenever in the future he had to remain absent.
According to her further case, Sri Saini did not take the advice in the right spirit and suggested that the Chairman may put the same in writing on which she wanted a clarification as to the matter she was being asked to put in writing.
She al leges that thereupon Sri Sain, without any provocation or any further conversation gave a full blooded hard slap across her face which not only stunned her but left her in great physical shock and pain.
Other Members of the Commis sion who were just behind her were also shocked by this conduct.
One of the Members led her to her office and the other two Members also later followed but Sri Saini disap peared from the scene.
It is said that she sent her com plaint in the form of a confidential letter addressed to Dr. M. Chenna Reddy, the then Governor of Punjab, with a copy to Sri Darbara Singh, the then Chief Minister of Punjab.
Before proceeding further with the other details leading to the present Reference it may be stated that Smt.
Chowdhary was appointed a Member of the Punjab Public Serv ice Commission in February 1975 and as the Chairman on 28.4.1980.
Sri Saini was appointed a Member on 30.5.
After the Gensral Elections in Punjab Sri Darbara Singh became the Chief Minister 0f the State in early June, 1980.
The GovernOr was not available in Punjab and, there fore, it is said that the complaint was forwarded to the Government of India by the Chief Minister on 25.11.1982.
The alleged incident did not get any publicity for sometime and a news item appeared in one of the daily papers for the first time on 11.12.1982.
Sir Saini thereafter received a charge sheet dated 15.12.1982 from the Chief Secretary asking for his reply.
Besides taking several technical objections, Sri Saini denied the, story of Smt.
Chowdhary.
The other three Members of the Commission, namely, Sri H.S. Deol, Sri M.S. Brar and Sri W.G. Lall, gener 583 ally supported the complainant 's allegation.
The present Reference was made by the President of India after consider ing the reply of Sri saini and the statements of Sri Deol, Sri Brar and Sri Lall.
After the receipt of the Reference, this Court di rected notice tO be served on all the five Members of the Commission and they filed their sworn statements.
Affidavits were also filed by several other persons who claimed to have knowledge of the incident or of its alleged background.
The Attorney General for India and the Advocate General of Punjab also appeared to assist the Court.
It was contended on behalf of Sri Saini that since the alleged incident if assumed to be true, may lead to his indictment of having committed a criminal act or in any event an act which may expose him to civil action, the reference should not have been made by the President without fully satisfying himself (by getting the matter investigated) that a prima facie case was made out.
It was argued that this Court should not make an inquiry into allegations involving disputed facts as that may prejudice a future action in the ordinary civil or criminal court.
After considering the questions raised by Sri Saini at some length, this Court by its judgment dated 17.8.1983 overruled the objections and directed the District and Sessions Judge, Delhi to nominate an Additional District and Sessions Judge for the purpose of recording evidence and transmitting the same to this Court.
Accordingly evidence which was led before the Additional District and Sessions Judge has been forwarded to this Court.
The case, however, was not promptly listed for final disposal under the wrong impression that it could be disposed of only by a Constitu tion Bench which was not available on account of more urgent cases.
Before the Additional District Judge a large number of witnesses were examined at considerable length.
A number of documents and affidavits also form part of the records.
There does not appear to be any dispute that some incident did take place on 24.11.
1982 soon after 1,00 p.m. in the Public Service Commission building at Patiala.
Sri Saini was absent earlier which led to some discussion between the complainant Chairman and the respondent Sri Saini.
The parties however differ as to what actually happened at that stage.
According to the case of the complainant, she has reiterated her earlier version as disclosed in the com plaint.
Mr. R.N. Mittal, the learned counsel appearing for Shri Saini, has however attempted to suggest that her evi dence and the evidence of other witnesses relied upon by her are not fully 'consistent and that their case has been developing from stage to stage indicating its unreliable nature.
A simi 584 lar comment is made on behalf of the complainant on the evidence led by Sri Saini.
We will have to deal with the evidence at some length.
R.N. Mittal also contended that several impor tant documents were not filed in the proceeding by State of Punjab and the Public Service Commission inspite of repeated requests which has prejudiced Sri Saini.
An application was moved before this Court for a direction to produce a number of documents which was registered as C.MP.
No. 37191 of 1983 and was disposed of by the order dated 9.12.
1983 at pages 1023 1024 of Vol.
VI of the paper book).
While dealing with some of the documents it was observed that the petitioner (Sri Saini would be at liberty to contend during the hearing of the Reference case that he has been prejudiced in his defence by reason of the fact that he was not allowed to inspect them and if this Court accepts that contention it may become necessary to allow the petitioner to inspect those documents and to recall certain witnesses for further examination.
When the case was taken up before us, Sri Mittal reiterated the stand of Sri Saini and explained the nature of the documents sought to be produced for inspec tion.
We examined the matter closely at considerable length and we do no agree with Sri R.N. Mittal that the petitioner (Sri Saini) was entitled to inspect the documents referred to above and the refusal in this regard has prejudiced him.
Sri R.N. Mittal next contended that the reference must be treated to have become infructuous and need not be answered.
As provided in Article 3 16(2), the tenure of office of a Member of a Public Service Commission is six years (subject to reduction of the period in case of the Member reaching the age of superannuation earlier, which is not the case here).
The term of office of Sri Saini was to expire in May, 1986.
The contention of Sri Mittal is that since his tenure expired in 1986, Sri Saini cannot now be removed from his office and it is, therefore, futile to examine the evidence recorded in the case in pursuance of the earlier order of this Court, and to record a finding on the correctness or otherwise of the allegations made against him.
Referring to the provisions of Article 316, dealing with the appointment and term of office of Members, the learned counsel emphasised the fact that the period of six years has been rigidly fixed making it clear that the period cannot be extended and the Member on the expiration of his term would be ineligible for re appointment.
Reliance was placed on several decisions dealing with disciplinary pro ceedings against the government servants, and it was argued that the same principle should be applicable to Members of the Public Service Commissions.
Reference was made to the decisions in R.T. Rangachari 585 vs Secretary of State, AIR 1937 P.C. 27; State of Assam and Others vs Padma Ram Borah, AIR 1965 SC 473; Dinesh Chandra Sangrna vs State of Assam and Others, ; ; B.J. Shefat vs State of Gujarat and Others, ; and C.L. Verma vs State of Madhya Pradesh and Another, J.T. An examination of these decisions would show that the cases depended on the interpretation and effect of the relevant service rules dealing with the conditions of serv ice including provisions in regard to retirement and compul sory retirement.
So far the present case is concerned, the conduct of a Member of the Public Service Commission ' is in question which has been considered important enough to be directly dealt with by the Constitution itself.
The effi ciency and purity of administration are greatly dependent on the right choice of the candidates to be entrusted with official duty; and to ensure that suitable persons, in whom the public may have full faith are selected, it was consid ered necessary to have a body with members of integrity, sincerity, and practical wisdom capable of commanding the confidence of the people for examining the merits of the candidates and make available to the appointing authorities their conclusion.
Taking into account the possibility of their being subject to pressure, they were given special protection by the Constitution under Article 3 17 providing that they except in cases covered by Clause (3) can be removed from their office only by an order of the President on the ground of misbehaviour ' after an inquiry by the Supreme Court in this regard.
The fact that the apex Court of the country was entrusted with such a duty indicates the great importance which has been attached to the office of the Member of the Commission.
Under clause (2) of Article 3 17, authority to suspend the Chairman or Member of the Commission pending an inquiry by the Supreme Court has been vested with the Governor in the case of a State Commission.
If the position is examined in this background it is diffi cult to suggest that the conduct of a member of the Commis sion under scrutiny of this Court in a reference made by the President can be ignored on account of the tenure being over.
The Regulations framed under Article 3 18 by the Governor do not and cannot deal with removal and suspension of a Member of the Commission since they are exclusively covered by Article 3 17.
Part V of the Punjab State Public Service Commission (Conditions of Service) Regulations, 1958, provides for the payment of pension with the proviso that a Member who has been removed from office shall not be entitled to the same, So far as the government servants are concerned, there are specific set of.
rules in regard to pension, inter alia dealing with cases in which government servants are found guilty of serious charges committed on the eve of their retirement.
The rules governing many serv ices also 586 provide for extending the period of service of the govern ment servant with a view to complete a pending disciplinary proceeding.
In the case of a Member of the Commission, the Constitution, while dealing with the removal of a Member, does not provide for such contingencies.
The issue, there fore, must be treated as a live one even after the expiry of a Member 's tenure.
The President of India has requested this Court to investigate into the conduct of a Member and this Court ought to convey its conclusions rather than refuse to answer the question.
During the hearing of the case, we enquired from Sri Mittal, the learned counsel for Sri Saini, whether, in the event of this proceeding being dropped as suggested on his behalf, he is ready to give up his claim for salary for the period he was under suspension and for pension, and Sri Mittal after taking instructions from Sri Saini, who was present in Court throughout the arguments, stated that the respondent would not give up his claim and would demand arrears of his salary and pension.
The case of a government servant is, subject to the special provisions, governed by the law of master and serv ant, but the position in the case of a Member of the Commis sion is different.
The latter holds a constitutional post and is governed by the special provisions dealing with different aspects of his office as envisaged by Articles 3 15 to 323 of Chapter II of Part XIV of the Constitution.
In our view the decisions dealing with service cases relied upon on behalf of the respondent have no application to the present matter and the reference will have to be answered on the merits of the case with reference to the complaint and the respondent 's defence.
The evidence which has been led in this case is voluminous.
The details dealing with the admission of evi dence had been considered by this Court earlier and after considering the relevant Constitutional provisions, the Codes of Civil and Criminal Procedure and the Supreme Court Rules, an order in this regard was passed on 17.8.1983.
There is no grievance by the parties before us on this aspect, excepting the contention on behalf of Sri Saini that he has been prejudiced in his defence on account of non availability of a number of documents, with which we do not agree.
We have gone through the entire evidence in the case and have heard elaborate arguments by the learned counsel representing the parties.
The questions which have now to be answered are: (i) Whether Sri Saini had slapped Smt.
Chowdhary and, if so, in what circumstances? 587 (ii) Whether Sri Saini acted in a manner which rendered him liable to be removed from his office of Member of the Punjab Public Service Commission? 12.
The allegation of Smt.
Chowdhary which she made in her letter dated 24.11.
1982 has been mentioned earlier.
The letter was drafted by her in her office room immediately after the incident.
Immediately thereafter the other three Members, Sri Deol, Sri Brar and Sri Lall drafted a joint letter addressed to the Governor, which reads as follows: "With great regret we saw a dastardly happening today in the Commission premises.
When we were walking down the corridor from the Committee Room after the days inter views with the candidates, Mr. G.K. Saini was walking ahead with Mrs. Santosh ChoWdhary, the Chairman.
She was apparent ly inquiring from him about his absence from the interviews on the previous two days.
Just outside the Chairman 's of fice, Mr. Saini asked the Chairman to give him in writing.
Mr. Saini without any provocation slapped her right across the face.
This dastardly incident has left us all completely stunned and shocked.
Apart from anything else, this tran scends all civilised behaviour not only to the Chairman of the Commission but also to a lady who deserves the highest courtesy.
We would like to place on record our great sense of shock at this uncivilised and criminal behaviour.
We humbly submit that we would not like to sit on the Commission with Mr. G.K. Saini.
We strongly urge that action may kindly be taken to have him removed from such a high office forthwith.
" It was decided by all four of them, that is, the Chairman and the three Members, to report the matter personally to the Governor and with that view they all proceeded to Chand igarh.
The Governor was, however, not available before the 1st of December, 1982, and the matter was reported to the Chief Minister Sri Darbara Singh and the letters were handed over to him.
The Chief Minister called Sri K.D. Vasudeva, Chief Secretary, and directed him to take necessary action.
Sri Deol, Sri Brar and Sri Lall also made statements before the Chief 588 Secretary on solemn affirmation on 20.12.
1982 which were recorded by the Chief Secretary and signed by the Members respectively.
According to the statements before the Chief Secretary, Sri Deol, and Sri Lall suggested to Sri Saini that he should immediately apologise to Smt.
Chowdhary but he refused to do so: In the meantime Sri Brar accompanied Smt.
Chowdhary into her room where the other two Members also joined them, after leaving behind Sri Saini in his room.
;if Deol further stated that when he asked Sri Saini as to why did he behave in the rude and uncultured manner, he replied in Punjabi that 'this is the way we do it".
They all insisted that without any provocation from Smt.
Chowd hary Sri Saini had slapped her, In respect to the better dated 15.12.1982 of the Chief Secretary, Sri Saini, vide letter dated 24.12.1982, besides taking preliminary objec tion to the said letter which was in substance a show cause notice, placed his version of the incident in the following words: "On 24.11.1982, when we came out of the Committee Room, she took me ahead of all other Members since she said that she wanted to talk to me alone, so that other members could pot hear.
I followed her.
She demanded explanation as to why | had not attended the meetings on the preceding two days.
I told her that 1 had informed her in advance.
But she insisted that the application should have been submitted and got sanctioned from her in advance.
I told her that she was proceeding against the decision of the Public Service Com mission taken around July 1981 by all the members.
I told her to give in writing, so that I could seek a fresh man date.
I told her that the Chairman alone could not overrule the decision of all the members.
She felt I was challenging her seniority.
She lost temper and was going to attack me with a raised hand, when I caught her hand to avoid attack and insult.
It is absolutely incorrect that I gave any slap or in any other manner attacked her.
The other members, who were at some distance, reached later.
Some candidates, who had come for interview that day and some office staff had reached earlier and separated us.
Sarvshri H.S. Deol and W.G. Lall took me aside and asked me to go to the Chairman, who, they said was a lady.
I told them that I have been wronged but they should not 589 add insult to injury by making me to go to the Chairman." He told the Chief Secretary that he came from a renowned family of lawyers and that his eider brother had held a judicial post for three decades and had retired from the post of District and Sessions judge.
He was himself a lawyer of 18 years standing and was of a cool temperament never losing his temper which would be supported by the members of the public.
He further said that his relations with Smt.
Chowdhary, who was his neighbour, were most cordial, and the two families were on visiting terms.
When his son was in volved in a road accident Smt.
Chowdhary was very sympathet ic and helpful to him and the two had been going to the office on many occasions in the same car.
However, the unfortunate incident happened mainly due to the temperament of the Chairman.
She suffers from a complex that she is the 'boss ' and nobody could express an honest difference of opinion even on trifling matters.
In the past she had been behaving in a wholly unreasonable manner with the Members of the Commission including one Sri Mitha, retired earlier, and Sri Deol, the sitting Member.
All this can be proved from the records available at the Governor 's Secretariat.
Ex plaining as to why the other Members were supporting Smt.
Chowdhary, the respondent stated that they became hostile to him as he had refused to apologise to the lady.
He also pointed out that although they had indicated in their earli er letters that they did not like sitting with him, as a matter of fact, they continued holding the interviews of the candidates along with the respondent.
After service of notice issued by this Court all these five persons as also Sri Darbara Singh, Chief Minis ter, and the Chief Secretary and a number of other.
persons who claimed to have information of the incident filed their affidavits before this Court.
Sri Saini filed a long affida vit along with annexures which is included at pages 19 to 90 in Vol.
I of the paper book.
He also filed separate counter affidavits explaining his stand with reference to the state ments made by the other persons so far they went against him.
The counter affidavit of Smt.
Chowdhary in reply to Sri Saini 's affidavit is also a detailed one and is included at pages 1 34 of Vol.
II of the paper book.
Other further affidavits filed by many persons described as counter affi davits or rejoinder affidavits or affidavits in reply were filed before this Court in 1983.
Apart from denying the version of the incident as presented in the complaint petition and the affidavits of the Chairman, Sri Saini has attempted to give the background in which the present accusation 590 has been made against him.
According to his case, there were two groups in the ruling Congress Party in Punjab, one led by Giani Zail Singh, who later became the President of India, and the other of Sri Darbara Singh.
Sri Saini was appointed a Member of the Public Service Commission on 30.5.1980, that is, just a day before the General Elections for the State, in which Sri Darbara Singh emerged as the leader.
He took charge of the office of Chief Minister on 6.6.
1980 and was disappointed to find that the constitution of the Commission was complete with the Chairman and five Members.
In August, 1982 Sri D.S. Sodhi one of the Members retired and Sri Darbara Singh wanted to have his nominee in his place.
The Governor, Sri Chenna Reddy, however, declined to fill up the 6th post and Sri Darbara Singh was, there fore, piqued at the situation.
He became determined to get his nominee appointed even if it required some manoeuvre for creating the vacancy.
In the meantime some misunderstanding developed between Sri Darbara Singh and the wife of Sri Saini, Smt.
Krishna Chaudhary, who is a social worker.
Kirshna had led a deputation of the villagers of certain locality to the then Prime Minister Mrs. Indira Gandhi, and the Chief Minister felt that this was a move against him and he threatened her publicly.
Both the Chief Minister and Smt.
Krishna have been examined as witnesses in this case and have been cross examined at considerable length.
Mr. Mittal, the learned counsel for the respondent, developed the theory of a conspiracy in his argument on the basis of the evidence led in the case and argued that Sri Darbara Singh hatched out the conspiracy to get the respondent removed from his office, to which Smt.
Chowdhary became a colluding party.
When a minor incident took place on 24.11.
1982 she exploit ed the situation to her advantage with a view to please the Chief Minister, and the Members being impressed by the drama enacted by her, fell for her story.
It was argued by the learnedcounsel that the original complaint petition of Smt.
Chowdhary which was drawn up like an F.I.R. was not trace able on the records of the Governor 's Secretariat and could not be filed as evidence.
Referring to its zerox copy it was pointed that the same did not bear any official number of the office of the Public Service Commission; and, the en dorsements made thereon were also characterised as suspi cious.
Governor was to return to Punjab by the end of the month, but waiting for a single day the Chief Minister decided to take immediate hasty step on the complaint and directed the Chief Secretary accordingly.
Relying on the evidence which indicates that Smt.
Chowdhary along with the other three Members and a stenographer, travelling with his typewriter in another car, all proceeded from Patiala to Chandigarh, it was urged that if the complaint petition and 591 the joint petition of the three Members had already been drafted at Patiala, where was the necessity of two car loads of people along with a typewriter to proceed to Chandigarh.
The argument is that Smt.
Chowdhary took care of taking the three Members to meet the Chief Minister and get committed to their story.
thus closing their way to return to the truth.
The evidence of several other witnesses examined in support of the defence of Sri Saini 's version of the inci dent was also relied upon.
The learned counsel for the respondent placed the subsequent statements of the three Members of the Commission and contended that they show a clear departure from their original stand.
Similar criticism has been made against the evidence of Smt.
Chowdhary also.
In our view, there is no vital difference in their statements made from time to time which may render their evidence doubtful.
But before we proceed to examine the evidence in detail on this aspect, we would briefly indicate the nature of the other evidence led in the case.
A number of affidavits were attached to main affida vit of Sri Saini filed in this case on 1.3.1983.
In these affidavits sworn on 28.2.
1983 and 1.3.1983, some of the deponents claimed to be eyewitnesses of the incident, and they denied the story of slapping of the Chairman by the respondent.
They are Ujagar Singh, Avtar Singh, Labh Singh and Hakam Singh.
According to their version it was the Chairman who was shouting at the respondent and had raised her hand in air.
Hakam Singh subsequently did not support his earlier statement and according to the case of the respondent supported by a second affidavit of Ujagar Singh, he had been won over through the police.
The respondent had also attached an affidavit of his wife stating that she being a social worker had met the Prime Minister to press the grievance of certain villagers which enraged the Chief Minister.
The Chief Minister subsequently threatened her with a warning that she would be set right.
This story has been again supported by the affidavits of Labh Singh, Baksh ish Singh, Niranjan Singh, Mahendra Singh and Swaran Singh.
Two advocates Santokh Singh Gil and Hari Mohan Singh Pal stated on affidavits that Sri Saini came from a respectable family and was known for his cool temper and good manners.
Some of the deponents later disowned the statements in the affidavits; and another affidavit was filed on behalf of the respondent stating that this was the result of an attempt by the other side to win over the witnesses through the police.
This allegation has been denied by the police witnesses M.S. Bhuller and Narender Pal Singh.
592 17.
So far the case of the respondent about the actual incident is concerned, he has narrated his version in sever al affidavits filed in this proceeding.
With respect to what actually happened soon after 1.00 p.m. on 24.11.1982, he admits that there was some unpleasant incident, but the story given out by Chairman and the other Members is incor rect.
It is claimed that it was a minor affair which was later blown out of proportion with a view to harm him and get the post occupied by him vacated.
Mr. Mittal has con tended that if it were not so, the newspapers would have reported the story immediately after 24.11.1982, but the incident was not reported in any paper before 11.12,.
1982 when the daily newspaper "Indian Express" for the first time stated that it was a case of heated exchange between the Chairman and the respondent outside the Committee Room.
The report has been fully quoted in the respodent 's reply which further stated that some Members and employees of the Com mission were witness to the angry exchange and although the Chairman refused to talk on the issue, her husband when contacted, described the incident as a minor one.
The state ments of the respondent as to what exactly happened may be at this stage considered.
According to his reply sent to the Chief Secretary, the Chairman was expressing her displeasure on his absence on the previous two days and was insisting that an application should have been submitted and sanction obtained from her in advance.
This part of the respondent 's statement has been quoted in paragraph 12 above.
The re spondent reminded her of the decision taken by tile Commis sion in July 1981 to the contrary and told her that if she wanted to overrule the decision she should say so in writ ing.
This reply agitated her and she lost temper and was going to attack him with a raised hand which he caught to avoid the attack.
Besides this, he did not do anything else.
The other Members who were a little behind, reached the place where this incident happened, later.
Some candidates who had come for interview and some members of the office staff intervened and separated them.
In his subsequent affidavit filed before this Court the respondent however said in paragraph 1 that the reference had been made "on an allegation against the deponent which as a fact never oc curred and what was only a heated exchange of words between the deponent and the Chairman of the Public Service Commis sion, Punjab on 24.11.
1982 at about 1.15 p.m. has been blown out of proportion by the interested parties for secur ing their personal ends.
" The respondent then quoted the report which appeared in the "Indian Express" mentioning only the heated exchange Towards the end of paragraph 3 of his affidavit he further argued that, "if it was actually a case of physical assault like "slapping" a dignitary like a Chairman of an august body i.e. the Commission, the reporter could not have ignored 593 that fact just to report it as a "minor" incident and only as "heated exchange".
This is not consistent with either his earlier statement or with the detailed account mentioned in the affidavit where he once more stated that he "noticed one hand of the Chairman going high up in the air and the depo nent, with the state of mind that he was in at that time after a humiliating interrogation by the Chairman, thought that the raised hand of the Chairman might not come upon the deponent as a blow and as such the deponent just intercepted that raised hand of the Chairman by raising his own hand and bringing her raised hand down by that effort.
" The respond ent, however, is not emphatic in claiming that the Chairman had really intended any physical harm or insult to him by her raised hand.
The following statement in his affidavit is relevant in this connection: "If the Chairman really intended to give a blow to the deponent by her raised hand then the deponent was fully justified to make an attempt at warding off that intended blow to save himself from further humiliation publicly and if the raised hand of the Chairman was not intended for a blow at me but was only an involuntary mannerism on her part in that moment of her great excitement induced by her own self by a mistaken belief in her own importance being de flated by a supposed subordinate in authority then also the deponent 's action was justified by the attending circum stances when nothing but an ill motive on the part of the Chairman could be conjectured and concluded in that moment of confusion, on the part of the deponent".
The main witnesses of the unfortunate incident are the Chairman, the respondent and the remaining three Members of the Commission, and they are consistent about a physical impact between the.Chairman and the respondent.
The other witnesses relied upon by the respondent who denied any physical contact between them cannot be believed, and we do not propose to discuss their evidence at length.
Dr. Vinod Gupta and Dr. Satyadev Saini asserted in their affidavits that the Chairman was shouting at the respondent and there after went to her room.
Dr. Saini described the tone of the Chairman as insulting.
He said that after the intervention of some persons, she went to her room.
Even the respondent does not simplify the entire happening as the two doctors have attempted to do.
They appear to have been biased against the Chairman and were making false statement to protect the respondent.
Dr. Gupta in his cross examination insisted that although he was getting only a stipend for the house job and was 594 anxious to get a service, he and his colleague Dr. Saini decided to travel to Delhi, engage a lawyer and pay for the affidavits that were filed.
The claim is that they were doing it as members of the public in response to call for justice, but their statements in cross examination expose their hostile attitude towards the Chairman We have no hesitation in rejecting their evidence as unreliable.
The affidavits of the other persons and their evidence do not do any credit to them and we will close this chapter by reject ing their statements as undependable.
The main issue with respect to the actual incident must, therefore, be decided on a consideration of the affidavits of the respondent, and the affidavits and evidence of the Chairman anal the other three Members of the Commission in their cross examination So far the respondent is concerned, he first decided to examine himself as a witness but later declined to do so.
After the case was closed by the Additional District and Sessions Judge an application was made on his behalf stating that he had changed his mind and that he was on his way to the Court for being examined as a witness, but somehow his arrival was delayed.
The Additional District and Sessions Judge did not reopen the matter and we think rightly.
We do not believe that the respondent had really intended to appear as a witness to be cross examined and the belated application was filed merely by way of an excuse.
the re spondent was within his rights not to appear in the proceed ing as a witness, specially because on the allegation made against him he was entitled to consider himself in the position of an accused in a criminal case.
But he should have boldly taken this stand in the proceeding and should not have vacillated from one stand to another and from one excuse to another from time to time.
As a respectable member of the Bar and as a Member of the Public Service Commission one would expect from him a straight forward approach and we do not appreciate his attempt to invent an alibi.
It has been argued on behalf of the respondent that the issue must be examined in the background of the circum stances indicating a deep conspiracy to oust the respondent from the Commission hatched out at the instance of the Chief Minister by the Chairman and others.
Reliance was placed on the affidavit of his wife Smt.
Krishna Chaudhary (who has been referred to during the hearing as Smt.
Krishna so as to avoid the confusion between her name and the name of the Chairman) which was filed along with the main affidavit of the respondent.
She is a social worker and has been render ing public service in various capacities detailed in her affidavit.
She has stated about her visit to the residence of the Chief Minister, Sri Darbara Singh, in the company of her husband and the Chairman.
She says that 595 on seeing her and her husband the Chief Minister lost his cool and declared that the Public Service Commission would be dissolved.
From the manner in which the attack proceeded, it was clear to her that the "outburst was directed against her husband", the present respondent.
At the end of the meeting the Chief Minister asked the respondent to align with the Chairman and follow her instructions.
She has described another incident when she had to face the wrath of the Chief Minister earlier.
She was espousing the cause of certain villagers and in that connection led a delegation to the Prime Minister Smt.
Indira Gandhi.
The Prime Minister after giving n patient hearing to her, sent a telex massage to the Chief Minister instructing him to do the needful, and accordingly Sri Darbara Singh paid a visit to the village in question in March 1981.
There he made a pointed inquiry from the villagers as to who had led and prompted them to go to the Prime Minister instead of approaching him.
When he learnt that it was Smt.
Krishna who had gone to the Prime Minister with their case, the Chief Minister shouted at her expressing his deep displeasure.
She appeared before the Additional District and Sessions judge for cross examina tion.
Her deposition in the case attempted to evade many questions which she thought would show her in bad light.
Asked about her unsuccessful attempt to get a party ticket for the election to the State Assembly, she first stated that she had never made an application, but later she had to correct it by accepting that she had asked for the party ticket from Anandpur Saheb Constituency which was refused.
From the evidence on the record it is clear that members of both the families of the respondent and his wife 's father have been respectable Congressmen of Punjab, and their presence in the public life of the State cannot be ignored.
But when Smt.
Krishna was asked about various details of her association in the political field she did not come out with straight forward answers.
She had been arrested and put in custody for about 2 months during the Janata Party regime in the country in 1977 1979 along with Sri Darbara Singh and several other Congress workers.
With a view to evade the questions which were being put to her about her company and the manner in which she conducted herself during that peri od, she first said that she did not recollect when she underwent the imprisonment and that the other persons men tioned by the cross examining lawyer "might have been" also there.
Another line which was pursued in her cross examina tion was about her and her husband 's financial position.
About receiving donations for social work, she claimed that she stopped collecting donations after her husband became a Member of the Public Service Commission.
Several questions were asked about the income of her husband from his law practice as well as that derived from his ancestral proper ties but she evaded to give the necessary 596 information.
She said that she did not have any idea as to the extent of the family properties and the income available therefrom.
Nor could she say whether her husband was paying income tax or not before he became a Member of the Commis sion.
However, pursued further she had to admit that the income from the properties could not be substantial.
We are not here concerned with the actual properties belonging to the respondent or his income, but the manner in which Smt.
Krishna answered the questions put to her in her cross examination becomes relevant as it shows that she did not have unflinching respect for truth and that she is capable of making a statement which may suit her.
Reliance has also been placed on the affidavits of several other persons in support of her story about the threat publicly given to her by the Chief Minister.
For the reasons briefly indicated below they also cannot be believed.
One of the affidavits supporting the version of Smt.
Krishna was by Labh Singh filed in this Court along with the counter affidavit of the respondent.
The affidavit runs in five paragraphs and the deponent mentioned several dates in relation to the incident on five occasions, but in his cross examination he conceded that he was totally illiterate except for putting his signature in Urdu, and that he had no idea about the English calendar month either, which has been used in his affidavit.
In his affidavit he has described the present case correctly as a reference under Article 3 17(1) of the Constitution.
But in his cross examination he admit ted his complete ignorance about the Constitution as also about the nature of the present proceeding.
When a pointed question was asked in this regard, he said that what he meant to say in the counter affidavit was that Sri Darbara Singh was a liar.
He had also to say that he did not know what was typed in the affidavit.
His statements clearly indicate that he was under the influence of the respondent and his wife and was lending his name to the affidavit without having any idea of its contents.
He does not have any respect for truth as indicated by his contradictory statements made in regard to his alleged relationship with the respondent and about the alleged incidents in which Sri Darbara Singh is said to have given an open public threat to Smt.
Krishna.
Identical affidavits sworn by Bakshish Singh, Mahinder Singh and Sarwan Singh were also filed.
Sarwan Singh was also cross examined at considerable length and his statements are equally undependable.
He was Sarpanch for sometime and was attached to the family of the respondent for decades.
He admitted his association with Smt.
Krishna for 25 30 years.
Another person by the name of Niranjan Singh claimed to have been a witness of the threat by Sri Darbara Singh.
The witness was cross examined at 597 length.
He has not faired better than the others.
We are not impressed by the affidavits of the others, and we do not consider it necessary to deal with their evidence individu ally except mentioning that there has been some controversy as to whether there was an attempt on the part of the Chair man through the State Police authorities to influence the witnesses.
Affidavits and counter affidavits have been filed by the parties in support of their respective stands.
None of these affidavits inspires confidence.
Sri Darbara Singh has filed his affidavit denying all the allegations made against him about his annoyance with Smt.
Krishna and the alleged threat to her; or his prejudice to the respondent and complicity in any conspiracy.
He stated that Smt.
Krish na never saw him nor did he receive any direction or message from the Prime Minister in regard to any grievance of the villagers and there was no question of his having threatened Smt.
Krishna.
He appeared as a witness and was cross exam ined at length.
His deposition is at pages 8 13 879 of Vol.
V of the paper book, portion of which was read by the learned counsel for the parties during the hearing.
A large number of questions in regard to the internal politics of the Congress Party in Punjab were put to him.
It was sug gested that he and Giani Zial Singh were heading two rival factions of the Congress Party.
The Chief Minister evaded such questions by saying that there is a single Congress Party known as Congress(I).
We do not consider his reluc tance to discuss the internal matter of the Party as unnatu ral and we cannot draw any inference against him on that account.
There is nothing in his deposition indicating that his denial of the allegations made against him by the re spondent and his wife is not worthy of acceptance.
The story of his outburst against the respondent in presence of other persons and against Smt.
Krishna in the presence of a large number of villagers is neither natural nor supported by the circumstances; and the evidence led is wholly undependable.
For this conclusion we are not depending on the evidence of the Chairman with respect to the alleged interview when Sri Darbara Singh is said to have expressed his displeasure to Sri Saini.
It has been argued on behalf of the respondent that the complaint petition of the Chairman and the joint letter of the other three members of the Commission were not draft ed at Patiala and came into existence later at Chandigarh after a deliberation by all the collaborators of the con spiracy.
As has been mentioned earlier, the argument is that while the Governor was away on leave, the matter should have awaited his return and should not have been rushed through by sending the complaint to the President of India for immediate action.
It has also been said that the issue was not placed 598 even before the Cabinet before taking these steps and it was only belatedly that a post facto resolution in this regard was got passed by the Cabinet.
We have given our anxious consideration to all these aspects and we do not find any merit in the argument of the learned counsel for the re spondent that the theory of conspiracy is fit to be accept ed.
We, therefore, reject the case of Sri G.K. Saini of a conspiracy to get him removed from the office of a Member of the Commission.
The main question is as to whether the allegation of the Chairman about Sri Saini giving her a slap is correct or not.
Chowdhary was cross examined for several weeks and her statement is at pages 1 181 in Vol.
III of the paper book.
Her family and the family of her husband are quite respectable and have been taking keen interest in the State politics.
Her father became a Member of the Rajya Sabha in 1975.
Earlier he was a Deputy Minister in the erstwhile State of Papsu and later of Punjab.
Her father in law was also a Member of the Lok Sabha since 1980.
Earlier he was a Member of the State Assembly for several decades.
The Chair man was married in 1968, passed her B.Ed.
examination in 1971 and soon thereafter became a Member of the Public Service Commission.
Mr. Mittal contended that she was an inexperienced young person not well equipped for work of the Commission, muchless for the office of the Chairman and was pushed forward because of her connections with the Congress Party.
It has been suggested by the learned counsel that her father or some other member of her family must have been instrumental in getting the present Reference made, but we do not find any reason to assume so and we will have to judge her statement independent of this consideration.
We also accept her case that she was not a tool in the hands of Sri Dabara Singh and did not take any step at his behest or with a view to please him. 23.
The evidence in the case, however, does indicate that the Chairman was attempting to exercise her power in an authoritarian manner and lost her patience even with her colleagues if she was not readily obeyed.
She claims that it is the prerogative of the Chairman of the Commission to announce the results of interviews with candidates but as a matter of grace she consulted her colleagues before so doing.
On more than one occasion in the past she got annoyed with the other Members and attempted to get them removed from the Commission.
In their letter to the Governor of Punjab Sri Mitha, the then Member of the Commission, and Sri Deol detailed the misbehavior on her part and alleged that she was in the habit of threatening the Members to 599 accept her commands whether right or wrong, while boasting of being capable to get any Member, who did not obey her, removed and otherwise harassed.
In paragraph 24 of his affidavit Sri Saini has stated that Smt.
Chowdhary had made a complaint against Sri Mitha and Sri Deol to the Governor raising untenable charges, but the Governor in his wisdom admonished her for the frivolous nature of the charges.
In her reply to the said statement Smt.
Chowdhary argued that the incident was not relevant for the purpose of the present inquiry, but in dealing with the factual aspect she did not deny its correctness.
In his cross examination Sri Deol stated how two years earlier, when he was also absent for a couple of days, the Chairman sent him a note telling him that he had absented without prior information, and to which he had reacted by a query about the rule in this regard.
Ultimately the matter had to be discussed in a "meeting or the Members".
Sri Saini has also asserted in his affidavits that a decision was taken on this issue in a meeting of the Members of the Commission, but the Chairman still continued to deal with the question of absence of the Members in her own way.
So far as the complaint of Sri Mitha and Sri Deol to the Governor against Smt.
Chowdhary is concerned, the prevaricative answers given by her during this part of her cross examination leave an indelible impression that she does not associate any merit with being frank and straight forward.
She however admitted that sometime in November, 1980 she had made a complaint against Sri Mitha and Sri Deol to the Governor (page 74, Vol III of the paper book).
She further stated that she was not.
given a copy of the com plaint made against her, but she had to accept that around February 1982 when she and the other Members of the Commis sion met the Governor on an invitation by the latter for a cup of tea, Sri Mitha complained that whenever she was personally on an Interview Board and an expert had to be appointed, she would never consult the other Members.
Ac cording to her version the Governor upheld her stand by declaring that it was her prerogative as the Chairman of the Commission.
The manner in which she contradicted herself on matters of details about the said complaint reinforces the conclusion that not all her testimony can be taken at its face value.
However, that does not conclude the case.
The other three Members of the Commission have pledged their oath in support of the allegation that the respondent had slapped the Chairman.
The circumstances in which the things proceeded also corroborated their version.
Over and above all this, the statements made by the respondent himself go to support to a great extent Smt.
Chowdhary 's case of physi cal assault.
Let us now consider the evidence of Sri Brar, Sri Deol and Sri Lall.
600 24.
Mr. Brar had served the Indian Army for 38 years before he retired as a Major General.
He was the General Officer Commanding, Punjab, Himachal and Haryana, and there is no ground for doubting his verasity as a witness.
Mr. Deol was the Head of the Department of Political Science at G.H.G. Khalsa College, Ludhiana before his appointment as a Member of the Commission, and appears to be a reliable person.
According to the case of the respondent, Mr. Deol had himself earlier protested against the manner of func tioning of the Chairman which in his opinion amounted to misbehaviour.
The Chairman also had made a complaint against him to the Governor on the basis of some frivolous charges.
It cannot, therefore, be legitimately suggested that he was either such a close friend of the Chairman or under her thumb so as to concoct a story and send a letter to the Governor immediately after the unfortunate incident.
Al though many suggestions were thrown to him and to Mr. Brar in their crossexamination for the purpose of an argument that they should be disbelieved, we do not find any sub stance therein.
We are satisfied that what prompted them to act in the present case was not their interestedness in the Chairman or any prejudice against the respondent, but their disapproval and shock at the physical violence in which the respondent indulged in the open corridor of the Commission building.
So far as Mr. Lal is concerned, in the opinion of Sri Saini, he did not have requisite qualification for being appointed as a Member.
According to the case of the respond ent, Mr. Lall may have been prejudiced against him on ac count of his (respondent 's) view on Sri Lall 's eligibility to hold the office, but that does not explain his conduct in joining the other two Members in their complaint against Sri Saini.
Mr. Mittal elaborately dealt with the direct evi dence of the incident and urged that there were discrepan cies in the statements of these three witnesses sufficient to discredite their testimony.
We are not in a position to agree with him and we proceed to briefly indicate our rea sons.
Let us now consider the evidence with respect to the details of the incident.
Admittedly the Chairman, the re spondent and the other three Members of the Commission were, in the Committee room on 24.11.
1982, interviewing candi dates for appointment to certain posts.
The sitting contin ued till about 1.15 p.m. when all the aforesaid five persons along with Dr. P.R. Sondhi (Retired Director, Haryana Health Service), who was assisting the Commission as an expert, came out of the Committee Room through the doors opening into the cor 601 ridor.
A plan of the building has been placed on the records of this case.
Admittedly the entire party of six started moving in the same direction towards the office of the Chairman.
The Chairman indicated her intention to talk to Sri Saini about his absence, in privacy; and the two pro ceeded further, forming a separate group, and the other Members discretely slowed down their pace.
Dr. P.R. Sondhi has not appeared as a witness in the case.
When the respond ent and the Chairman were near the doors of the office of the Chairman, the physical act of the incident took place.
Earlier the Chairman had expressed her displeasure on the absence of Sri Saini.
Sri Saini insisted that he had in formed the office in advance, and that she must put in writing whatever she had to say.
According to the evidence of the Chairman, she asked Sri Saini as to what was there to put in writing and she was going to complete the sentence by adding that she would put in writing whatever Sri Saini would suggest, but before she could do so, she received from Sri Saini a hard slap across her face.
She says that this happened when she was politely talking to Sri Saini.
We are not inclined to accept her statement that the respondent had slapped her "without any provocation" as stated in her complaint petition and in her first affidavit filed before this Court, and that she was talking to him "politely" as mentioned in her cross examination.
The version of the respondent with respect to the manner in which she was asking for his explanation may be correct.
She was used to her arrogant ways and authoritarian manner while talking even with her colleagues, and hence the statement of Sri Saini may be correct that she was assuming a "bossy posture" and "was insisting on a spot oral explanation" from him.
The respondent was a lawyer of 17 years standing when he was appointed a Member of the Commission.
The evidence does not indicate that he was schizophrenic, prone to be excited without a cause and it would therefore be very unnatural to assume.
that although the Chairman was talking to him po litely and did not give any reason for provocation whatsoev er the respondent hit her.
All the three Members of the Commission are unani mous and emphatic in stating that the respondent did slap the Chairman hard on her face.
They also say that this was without provocation.
By this part of their statement we understand that there was no physical provocation on the part of the Chairman.
Mr. Mittal, the learned counsel for the respondent, strenuously contended that their evidence also suggest that the Chairman was not talking rudely or in a bossy manner with the respondent when the latter hit her, and this is very unnatural.
We have gone through their affidavits as well as their statements in the cross examina tion.
The affidavit and evidence of each of 602 these witnesses have to be considered in their totality and a part of a sentence in their deposition cannot be allowed to be picked up in isolation and analysed and scanned as a statutory provision.
In their joint letter written to the Governor soon after the incident they stated thus: "Mr. G.K. Saini was walking ahead with Mrs. Santosh Chowd hary, the Chairman.
She was apparently inquiring from him about his absence from the interviews on the previous two days".
(emphasis supplied) Sri Brar was asked in his cross examination about the use of the word "apparently" and he explained that while discussing the general details of the conversation Sri Lal and Sri Deol were not sure of having heard the first portion of conversa tion.
Sri Deol stated that the Chairman asked Sri Saini to come ahead and therefore they, that is, the other Members, slowed down in their pace.
In the statement recorded by the Chief Secretary, Sri Lall also said that the Chairman and the respondent were walking ahead and they "over heard" the Chairman.
The picture which emerges is that the talk between the Chairman and the respondent was not meant for others and they were not talking very loudly.
It is, therefore, not expected that the Members could hear every single word which passed between the two.
If their voice was not raised and they were not shouting at each other, one would not assume that there was a quarrel going on.
In this background the Members in their joint letter used the word "apparently".
Their statement that the attack on the Chairman was without any provocation was based on the physical side of the entire incident and was an expression of opinion with regard to it.
Although, however, they could not hear their talk properly, which was going on not in high pitched or raised voice, it cannot be suggested that they were not in a position to watch as to what the two were actually doing.
It was day time and from the plan which is on the records of the case it is clear that the place where all this was happening was not poorly lighted.
The total distance between the Committee Room and the office of the Chairman was 66 feet and the distance between the two groups could not be so long so as to place the Members of the Commission as not to be sure about the physical activities of the two ahead.
Their im pression as to what they actually saw cannot be confused with what they could make out of the discussion going on between the two.
The consistent evidence also indicates that the Chairman and Sri Saini were walking ahead while ap proaching the office room and before the assault took place they had reached the door and were standing there.
The witnesses, however, did not stop 603 and continued walking towards the Chairman and the respond ent.
The suggestion of Mr. Mittal, appearing on behalf of the respondent, that if they could not hear the talk going on between the parties properly, they could also not see the physical side of the incident cannot be accepted.
The three witnesses were cross examined at great length and were subjected to a very large number of searching questions, and we do not find any material coming out of the same on the basis of which they can be discredited.
We accordingly rely upon their evidence which indicates that although they were not able to properly hear the talk going on between the Chairman and Sri Saini and picked up only fragments of discussion, they clearly watched their physical activities without any chance of mistake.
Their version of the physical part of the incident must, therefore, be accepted which is to a great extent corroborated by the respondent 's state ments and the affidavits themselves.
Accordingly, we hold that the Chairman did not attack or intimidate Sri Saini with physical violence, and Sri Saini losing his self con trol at the arrogance of the Chairman in her talk with him slapped her as alleged.
It has been contended by Mr. Mittal that from the evidence of Sri Brar and Sri Lall it appears that their group almost reached the point where the Chairman and Sri Saini were standing and except for a very short distance between the two groups they ultimately formed one single group in which the relative position of the Chairman and Sri Saini was such, as stated by Mr. Lall in his cross examina tion, that it was not possible for the respondent to hit the Chairman hard on her face.
For the basis on which any such inference can be drawn, one has to indulge in a lot of imagination.
The statements relied upon do not lead to this conclusion.
Besides, the description given by the three witnesses in this regard cannot be scanned with a micro scope nor the available evidence is sufficient to determine with geometrical precision the exact points where everybody stood at the crucial moment.
So far the version of Sri Saini is concerned, we agree with him that it was not a completely unprovoked situation in which he had hit the Chairman.
But we do not accept his statement as correct that the provoca tion was not limited to a verbal duel and extended to the Chairman raising her hand as if to assault him, justifying him to slap her.
Mr. Mittal has also relied upon certain circum stances which according to him disproved the case of the complainant.
Great emphasis has been led on the statement of Smt.
Chowdhary 's husband to the Press describing the inci dent as a minor one.
This is a natural conduct.
If a lady occupying the high position of a Chairman of a Public Serv ice 604 Commission is physically assaulted, it is expected that people closely related to her and interested in maintaining her high dignity would like to hush up the matter rather than give it a wide publicity.
It is, therefore, not possi ble to discredit the story of assault on the basis of the newspaper report.
It has been next argued that having regard to the incident taking place in the open corridor of the building and the position of the room or the rooms where the members of the staff sit, it was to be expected that at least some members of the staff must have witnessed what had happened but none has come as a witness to support the allegation.
This also is not an unexpected conduct on their part.
There is nothing unnatural if they decided not to involve themselves in their individual capacities in a dispute of this nature.
Besides, there is a resolution on the record of this proceeding passed by the members of the staff collectively condemning the incident in general terms.
It has been suggested on behalf of the respondent that this has been obtained by the Chairman by exercising her influ ence.
If some of the employees of the Commission had come to the witness box, the same criticism would have been made by the respondent against their evidence.
We are also conscious of the fact that Sri Sondhi who was assisting the Commission as an expert has not been examined in the case.
This merely indicates that he was not willing or available to support either party.
The consistent evidence of the three Members of the Commission further indicates that an attempt to bring about a reconciliation by persuading the respondent to tender an apology was made but failed.
The Chairman was under great stress both physical and mental and she had to be consoled by her colleagues.
We would at this stage again emphasise that no special reason can be suggested for the Members to cook up a false story, specially when they had also earlier tasted the arrogance of the Chairman, and complaints and countercomplaints between her and at least one of them had reached even the ears of the Governor.
Now the question is whether Sri Saini deserved to be re moved on account of his conduct.
Persons occupying high public offices should maintain irreproachable behaviour.
A certain minimum standard of code of conduct is expected of them.
What may be excusable for an uneducated young man cannot be tolerated if a Member of Public Service Commission is involved.
Besides, it has to be remembered that the respondent and the Chairman were not thrashing out a person al matter or a private dispute.
They were discussing a question involving their office and this in broad day light in the open corridor of ? 605 the Commission 's building.
Whatever the provocation offered by the Chairman, the respondent was not justified in losing his cool to the extent of indulging in physical violence.
That the violence should have been directed against a lady makes his conduct all the more reprehensible.
In our view, Sri Saini miserably failed in maintaining the standard of conduct expected of a Member of the Commission and thereby brought great disrepute to his office.
Hence our answer to the question referred by the President is that Sri Saini 's conduct amounted to misbehavior within the meaning of Arti cle 317(1) of the Constitution and it rendered him liable to be removed from his office of the Member of the Punjab Public Service Commission.
|
The President of India made a reference under Article 317(1) of the Constitution to this Court for inquiry and report on the conduct of the respondent, a Member of the Punjab State Public Service Commission.
In a letter addressed to the Governor of the State, with a copy to the Chief Minister, the Chairman of the Punjab State Public Service Commission complained that on 24.11.1982, while she was proceeding to her office from the Committee Room, along with the respondent and three other members.
after interviewing candidates for certain appoint ments, the respondent, without any provocation, gave a full blooded hard slap across her face, when she was discussing with him regarding his absence on previous days.
The other three members, who were just behind her, also addressed a joint letter to the Governor about the incident.
Since the Governor was not available in the State, the Chairman and the three members reported the matter to the Chief Minister, and handed over the letters to him.
The Chief Minister forwarded the complaint to the Government of India and directed the Chief Secretary to take necessary action in the matter.
The Chief Secretary recorded the statements of the members.
Thereafter, the respondent received a charge sheet from the Chief Secretary asking for his reply.
Besides taking several objections, the respondent denied the version of the Chairman and claimed that during the course of the discussions, when the Chairman lost her temper and was going to attack her with a raised hand, he caught her hand to avoid attack and insult.
The other three members generally supported the Chairman 's allegations.
After considering the reply of the respondent and the statements 578 of the three other members, the President of India made the Reference.
This Court directed notice to be served on all the five members of the Commission and they ,filed their sworn state ments.
Affidavits were also filed by several other persons who claimed to have knowledge of the incident or of its background.
Overruling the objections of the respondent that since the incident, if assumed to be true, may lead to his indict ment of having committed a criminal act or in any event an act which may expose him to civil action, the Reference should not have been made by the President without fully satisfying himself (by getting the matter investigated) that a prima facie case was made out and that this Court should not make an enquiry into allegations involving disputed facts as that may prejudice a future action in the ordinary civil 'or criminal court, this Court directed the District and Session Judge, Delhi to nominate an Additional District and Session Judge for the purpose of recording evidence and transmitting the same to this Court.
Accordingly, the evi dence which was led before the Additional District and Sessions Judge was forwarded to this Court.
It was contended on behalf of the respondent that the Reference must be treated to have become infructuous and need not be answered because the respondent 's tenure had already expired and he could not be removed from his office and it was futile to examine the evidence recorded in the case in pursuance of the order of this Court and to record a finding on the correctness or otherwise of the allegations made against him, that the period of six years had been rigidly fixed making it clear that the period should not be extended and the member, on the expiration of his term would be ineligible for reappointment and that the principle as applicable to the Government servants in the disciplinary proceedings should be made applicable to the members of the Public Service Commission also.
It was also contended that the evidence of complainant and other witnesses relied upon by her were not fully consistent and that their case had been developing from stage to stage which indicated its unreliable nature, and that several important documents were not filed in the proceeding by the State and Public Service Commission in spite of repeated requests, which had preju diced the respondent.
Answering the Reference, this Court, HELD: 1.1 The conduct of a Member of the Public Service 579 Commission has been considered important enough to be di rectly dealt with by the Constitution itself.
The efficiency and purity of administration are greatly dependent on the right choice of the candidates to be entrusted with official duty; and to ensure that suitable persons, in whom the public may have full faith are selected, it was considered necessary to have a body with members of integrity, sinceri ty and practical wisdom capable of commanding the confidence of the people for examining the merits of the candidates and make available to the appointing authorities their conclu sion.
Taking into account the possibility of their being subject to pressure, they were given special protection by the Constitution under Article 317 providing that they except in cases covered by Clause (3) can be removed from their office only by an order of the President on the ground of misbehaviour after an inquiry by the Supreme Court in this regard.
The fact that the apex Court of the country was entrusted with such a duty indicates the great importance which has been attached to the office of the Member of the Commission.
Under clause (2) of Article 317, authority to suspend the Chairman or Member of the State Commission pending an inquiry by the Supreme Court has been vested with the Governor.
Hence, the conduct of a Member of the Commis sion under scrutiny of this Court in a reference made by the President cannot be ignored on account of the tenure being over.
[585B E] 1.2 The Regulations flamed under Article 318 by the Governor do not and cannot deal with removal and suspension of a Member of the Commission since they are exclusively covered by Article 317.
The Constitution, while dealing with the removal of a Member of the Commission does not provide for extending the term of a Member pending enquiry into his conduct.
The issue, therefore, must be treated as a live one even after the expiry of a Member 's tenure.
The President of India has requested the Court to investigate into the con duct of a Member and this Court ought to convey its conclu sions rather than refuse to answer the question.
[583F G; 586A B] 1.3 The case of a government servant is, subject to the special provisions, governed by the law of master and serv ant, but the position of Member of the Commission is differ ent.
The latter holds a constitutional post and is governed by the special provisions dealing with different aspects of his office as envisaged by Articles 315 to 323 of Chapter II of part XIV of the Constitution.
The reference will have to be answered on the merits of the case with reference to the complaint and the respondent 's defence.
[586D E] 580 R.T. Rangachari vs Secretary of State, AIR 1937 P.C. 27; State of Assam and Others vs Padma Ram Sarah, AIR 1965 SC 473; Dinesh Chandra Sangma vs State of Assam and Others, ; ; B.J. Shefat vs State of Gujarat and Oth ers; , and C.L. Verma vs State of Madhya Pradesh and another, J.T. , distinguished.
2.1 There is no dispute that some incident did take place on 24.11.1982 in the Public Service Commission build ing.
The respondent was absent earlier which led to some discussion between the complainant Chairman and the respond ent.
According to the Chairman 's evidence, she received a hard slap across her face, although she was talking to the respondent politely.
Her statement that the respondent had slapped her without any provocation and that she was talking to him politely cannot be accepted.
The version of the respondent with respect of the manner in which she was asking for his explanation may be correct.
She was used to her arrogant ways and authoritarian manner while talking even with her colleagues, and hence the statement of the respondent that she was assuming a bossy posture and was insisting on an on the spot oral explanation from him may be correct.
[583F; 582D; 601D E] The evidence on record does indicate that the Chairman was attempting to exercise her power in an authoritarian manner and lost her patience even with her colleagues if she was not readily obeyed and on more than one occasion in the past she got annoyed with the other Members and attempted to get them removed from the Commission.
However, the other three Members of the Commission have pledged their oath in support of the allegation that the respondent had slapped the Chairman.
The circumstances in which the things proceed ed also corroborated their version.
Over and above all this, the statements made by the respondent himself go to support to a great extent the complainant 's case of physical as sault.
[598F G; 599F G] All the three Members of the Commission are unanimous and emphatic in stating that the respondent did slap the Chairman hard on her face.
They also say that this was without provocation, which means that there was no physical provocation on the part of the Chairman.
The three witnesses were cross examined at great length and were subjected to a very large number of searching questions.
There is no mate rial coming out of the same on the basis of which they can be discredited.
Though it was not a completely unprovoked situation in which respondent had hit the Chairman, his statement that the provocation was not limited to a verbal duel and extended to the Chairman raising her hand 581 as if to assault him, justifying him to slap her cannot be accepted as correct.
The Chairman did not attack or intimi date respondent with physical violence and the respondent losing his self control at the arrogance of the Chairman in her talk with him, slapped her.
[601F G; 603A B; D] 2.2 Persons occupying high public offices should main tain irreproachable behaviour.
A certain minimum standard of code of conduct is expected of them.
What may be excusable for an uneducated young man cannot be tolerated if a Member of a Public Service Commission is involved.
Besides, the respondent and the Chairman were not thrashing out a person al matter or a private dispute.
They were discussing a question involving their office and this in broad day light in the open corroder of the Commission 's building.
Whatever the provocation offered by the Chairman, the respondent was not justified in losing his cool to the extent of indulging in physical violence.
That the violence should have been directed against a lady makes his conduct all the more reprehensible.
The respondent miserably failed in maintain ing the standard of conduct expected of a Member of the Commission and thereby brought great disrepute to his of fice.
Hence the respondent 's conduct amounted to misbeha viour within the meaning of Article 317(1) of the Coustitu tion and it rendered him liable to be removed from his office of the Member of the Punjab Public Service Commis sion.
[604G H; 605A B] 3.
The refusal to produce the documents prayed for by the respondent has not prejudiced him since he was not entitled to those documents.
|
it Petition (Civil) No. 623 of 1989.
(Under Article 32 of the Constitution of India).
Rangarajan and San jay Parokh for the Petitioner.
G.B. Pai, V.K. Sharma and R.K. Maheshwari for the Respondents.
The Judgment of the Court was delivered by 755 OJHA, J.
The gravamen of the grievance of the petitioner is that even though she retired on 3 ist October 1977 on reaching the age of superannuation and even though she was entitled to pension, gratuity and other retirement benefits, the respondents have kept her deprived therefrom without any justification for all these long years.
She has made a prayer that the respondents may be directed to make the requisite payments to her at least now when she was almost at the fag end of her life.
Brief facts necessary for the decision of this petition are that the petitioner joined R.M. Arya Girls Patshala, New Delhi, which was an aided recognised school, as a primary teacher in the year 1952 and had been making contribution towards compulsory Provident Fund.
On 17th October, 1975, the Administrator of the Delhi Administration in consultation with the Accountant General, Central Revenues, issued a notification in exercise of the power conferred on him by Rule 126 of the Delhi School Education Rules, 1973 (hereinafter referred to as the Rules) laying down detailed procedure for disbursement of pension and gratuity and accounting of General Provident Fund to the employees of the aided schools under the Delhi Education Act 1973 (for short the Act) and the Rules flamed thereunder.
The sad notification, inter alia, provided: "Further rule 126 of the Delhi School Education Rules 1973 lays down that the Administrator shall, in consultation with the A.G.C.R. specify the detailed procedure for accounting of provident fund and payment of pension and gratuity to the employees of the aided schools.
In order to implement the provision referred to above the detailed procedure is prescribed hereafter.
In regard to matters not specified in the procedure the provi sions of the Central Civil Services (Pension) Rules, 1972 as amended from time to time and other general provisions of the Act/ Rules shall apply.
The employees of the aided schools shall be enti tled to pension and/or gratuity in accordance with the provisions and procedure applicable to the employees of the similar categories of Delhi Administration under the exist ing pension rules as contained in the Central Civil Services (Pension) Rules, 1972 as amended from time to time.
These rules shall be applicable to these employees of the aided schools who were appointed on or after the commencement of the Act/Rules and also to the existing 756 employees who opt for the pension and gratuity within the stipulated period in the prescribed proforma.
" The school in which the petitioner was working being an aided school under the Act and the notification aforesaid being applicable to its employees the petitioner made the requisite option in the prescribed proforma on 29th January 1976 which was duly countersigned by the Education Officer on 2nd April 1976.
After her retirement, the petitioner made several representations for payment of pension and gratuity etc.
to the authorities concerned but each time the peti tioner did not get any better response than an information that her case was under active consideration.
By his letter dated 27th February, 1987, i.e. after nearly 10 years of the petitioner 's retirement, the Joint Director of Education (FIN.) Old Secretariat, Delhi, conveyed to her an additional information apart from the usual one namely that her case was under active consideration, that further action in the matter will be taken by the Department soon after the pro posal is approved by the Government of India.
By a subse quent letter dated September 29, 1987, the petitioner was informed by the Education Officer that the Directorate of Education had referred the case to Government of India on 26th March, 1987 for policy decision.
Ultimately the Direc torate Of Education, Delhi Administration, promulgated the decision of pension scheme in the primary aided schools on 6th December 1988.
This decision, inter alia, provided for payment of grant in aid to the local authorities concerned for the implementation of the pension scheme already noti fied vide notification dated 17th October, 1975.
The last paragraph of the decision provides that "pensionary benefits under these orders would apply with immediate effect, i.e. from the date of issue of these orders".
The prayer made in this petition has been opposed by the New Delhi Municipal Committee by filing a counter affidavit.
The objection raised by the said Committee is that since the pension scheme was finally promulgated in 1988 and has provided therein that the pensionary benefits were to apply from the date of issue of the requisite order in this behalf namely 6th December, 1988, the petitioner who retired on 31st October, 1977 that is more than 11 years before the final promulgation of the scheme was not entitled to any of the benefits claimed by her simply on the ground that she had opted for pension before her retirement in pursuance of the scheme notified on 17th October 1975 which was in the process of finalisation at the time of her retirement.
It has also been contended on behalf of the said Committee that since modalities for grant in aid to the local authorities con 757 cerned for the implementation of the pension scheme were provided for by order dated 6th December 1988 the petitioner was not entitled to any pension before this date in any view of the matter.
Having heard learned counsel for the parties, we are of the opinion that the pleas raised on behalf of the Municipal Committee have no substance.
As seen above, the requirement under the notification dated 17th October, 1975 with regard to the school, the employees of which were entitled to the benefits of the said notification was that it should be an aided school under the Act.
The term "aided school" as defined in Section 2(d) of the Act means a recognised pri vate school which is receiving raid in the form of mainte nance grant from the Central Government, Administrator or local authority or any other authority assigned by the Central Government, Administrator or a 1ocal authority.
In paragraph 1 of the petition under the caption "Facts" it has been specifically stated that R.M. Arya Girls Patshala was granted permanent recognition on 1.4.1936 and was also given grant in aid.
The averments made in this behalf in sub paragraphs (b) and (c) ot paragraph III of the counter affidavit do not seem to seriously challenge what has been stated in paragraph 1 of the petition.
It is, therefore, apparent that the school in which the petitioner was working was such, the employees of which were entitled to the bene fits/ conferred by the notification dated 17th October, 1975.
The said notification as already pointed out above, inter alia, provided that in regard to matters not specified in the procedure the provisions of the Central Civil Serv ices (Pension), Rules, 1972 as amended from time to time shall apply.
Rule 35 of these Rules provides that a superan nuation pension shall be granted to a Government servant who is retired on his attaining the age of compulsory retire ment.
Rule 83 of these Rules, on the other hand, inter alia, lays down that the pension shall become payable from the date on which a government servant ceases to be borne on the establishment.
Since these Rules will apply to the petition er as contemplated by notification dated 17th October 1975, she is obviously entitled to get pension with effect from the date on which she/ceased to be borne on the establish ment of the school in which she was working consequent upon reaching the age of superannuation.
Rule 126 of the Rules under which the notification dated 17th October, 1975 had been issued gives the power to specify procedure for payment of pay and allowances, pension and gratuity etc.
to the Administrator in consultation with the Accountant General, Central Revenues.
The very opening words of the said notifi cation make it abundantly clear that the said notification had been issued in exercise of the powers conferred by Rule 126 of the Rules by the Administrator 758 in consultation with the Accountant General, Central Reve nues.
The notification having thus been issued by the compe tent authority and the petitioner who was an existing em ployee of an aided school on the date of the issue of the said notification having opted for the pension and gratuity within the stipulated period in the prescribed proforma which was duly counter signed by the Education Officer, she obviously became entitled to the benefits conferred by the said notification.
This is so all the more in view of the fact that the notification dated 17th October, 1975 did not contemplate finalisation of the modalities about contribu tion towards pension fund as a condition precedent to the entitlement of the benefits under the said notification.
The finalisation of the said modalities was a matter of details among the authorities concerned and could have no bearing on the entitlement to the benefits of the notification dated 17th October, 1975.
Such finalisation could not even defer the date of the entitlement: Likewise the said notification did not contemplate any approval by the Government of India as a condition precedent to its enforceability.
In this connection, it is also of significance that no statutory provision has been brought to our notice which made approval by the Government of India of the notification dated 17th October, 1975 issued by the competent authority as a condition precedent to the enforce ability of the said notification.
As seen above, for nearly 10 years after her retirement the petitioner was being informed in reply to her various representations that her case was under active consideration.
It is only in 1987 that the plea that further action in the matter will be taken by the Department soon after the proposal is approved by the Government of India was raised and the case was referred by the Directorate of Education to the Government of India on 26th March 1987 for policy decision.
Why it became necessary to do so in 1987 is a matter of anybody 's guess.
If, at all, it only indicates the callous attitude of the authorities concerned towards the fate of retired employees of aided schools in the matter of grant of pension and other retire ment benefits to them.
For ought we know, but for the sin cere effort made by the Indian Council for Legal Aid and Advice in this case, which apparently deserves commendation, the agony which the petitioner must have suffered during the long years after her retirement may have remained unnoticed and unmitigated.
No acceptable justification having been given for denying the pension to the petitioner from the date of her retirement as also the other retirement benefits the petitioner is obviously entitled to these benefits.
In the result, this petition succeeds and is allowed.
The respon 759 dents are directed to pay to the petitioner pension admissi ble to her in pursuance of the notification dated 17th October, 1975 with effect from the date of her retirement and also to pay to her the other retirement benefits.
They are further directed to finalise the requisite formalities in this behalf within three months and to issue payment orders immediately thereafter.
The petitioner shall be entitled to her costs from respondents 1 and 2 which is assessed at Rs.2,000.
G.N. Petition allowed.
|
The petitioner joined as a primary teacher in 1952 in an aided recognised school.
She was making contribution towards compulsory provident fund.
In 1975, the Delhi Administra tion, in consultation with the Accountant General, Central Revenue, issued a notification under Rule 126 of the Delhi School Education Rules, 1973, laying down detailed procedure for disbursement of pension and gratuity as also accounting of General Provident Fund in respect of the employees of aided schools.
The petitioner opted for the aforesaid scheme in 1976, which was duly counter signed by the Education Officer.
After the petitioner retired in 1977, she made a number of representations to the authorities concerned for payment of pension and gratuity.
She got a reply in 1987 that her case had been referred to the Government for policy deci sion.
Ultimately, Delhi Administration promulgated the pension scheme in the primary aided schools on and effective from 6th December, 1988.
The petitioner in her Writ Petition before this Court relied on the scheme announced by the Delhi Administration and the option exercised by her.
She claimed that to deprive her of the pension and gratuity under the said scheme was without any justification.
On behalf of the respondents it was contended that the scheme was brought into force only in 1988 by the said notification whereby the modalities for grant in aid to the local authorities were finalised and since the petitioner retired from service in 1977, she was not entitled to pen sion prior to the said notification.
Allowing the Writ Petition, this Court, HELD: 1.
The school in which the petitioner was working was an 754 aided school within the meaning of section 2(d) of the Delhi Education Act and its employees were entitled to the bene fits conferred by the notification dated 17th October, 1975.
[757B C] 2.
Since the Central Civil Services (Pension) Rules, 1972 would apply to the petitioner as contemplated by noti fication dated 17th October, 1975, she is obviously entitled to get pension with effect from the date on which she ceased to be borne on the establishment.
of the school in which she was working consequent upon reaching the age of superannua tion.
[757F G] 3.
The said notification having been issued by the competent authority and the petitioner, who was an existing employee of an aided school on the date of the issue of the said notification, having opted for the pension and gratuity within the stipulated period in the prescribed proforma which was duly countersigned by the Education Officer, she obviously became entitled to the benefits conferred by the said notification.
This is so all the more in view of the fact that the notification dated 17th October, 1975 did not contemplate finalisation of the modalities about contribu tion towards pension fund as a condition precedent to the entitlement of the benefits under the said notification.
The finalisation of the said modalities was a matter of details among the authorities concerned and could have no bearing on the entitlement to the benefits of the notification dated 17th October, 1975.
Such finalisation could not even defer the date of the entitlement.
[758A C] 4.
The respondents are directed to pay to the petitioner pension admissible to her in pursuance of the notification dated 17th October, 1975 with effect from the date of her retirement and also to pay to her the other retirement benefits.
They are further directed to finalise the requi site formalities in this behalf within three mouths and to issue payment orders immediately thereafter.
[758H; 759A B]
|
: Criminal Appeal Nos. 703, 7 12 of 1989 and 13 of 1990.
From the Judgment and Order dated 27.10.1989 of the Designated Court/Judge at Jalgaon in Crl.
Appln.
No. 524 of 1989 in T.A.D.A. Case No. 9 of 1989 dated 2.9.1989 in Crl.
Appln.
No. 357 of 1989.
WITH Special Leave Petition (Crl.) No. 2459 of 1989.
From the Judgment and Order dated 15.11.1989 of the Bombay High Court in Crl.
Appln.
No. 687 of 1989.
Appellant in person in Crl.
A. No. 703 of 1990.
B.A. Masodkar, U.R. Lalit and G.B. Sathe for the Appel lant Petitioners.
V.N. Patii and A.S. Bhasme for the Respondents.
S.K. Pasi for the Intervenor.
The Judgment of the Court was delivered by AHMADI, J.
These three appeals arise out of the charge levelled by the police against the five petitioners of the above special leave 637 petition under Section 3 of the Terrorists and Disruptive Activities (Prevention) Act, 1987, (hereinafter called 'the Act '), Sections 302, 307 read with Sections 147, 148 and 149 IPC and Section 37 of the Bombay Police Act, 1951, for the murder of one Raju alias Avtar Singh, son of the appellant of Criminal Appeal No. 703/89, and for injuries caused to his companion Keshav Vitthal, the first informant.
The facts giving rise to these proceedings are as under: On the afternoon of the 12th July, 1989 when Raju and his companion Keshav were proceeding on a motor cycle at about 3.00 p.m. they were intercepted by the accused Jiten dra and one another known as a wrestler.
Following some altercation and heated exchange of words between them, the other three accused persons arrived at the spot.
Two of them were armed with knives and the third possessed an iron rod.
On seeing them Keshav who was on the pillion seat took to his heels whereupon Raju who was in the driver 's seat aban doned the motor cycle and ran in another direction.
Two of the accused persons ran after Raju while the others includ ing the wrestler chased Keshav.
On being over taken accused Vijay gave a knife blow on the chest of Keshav and his companion Santosh dealt blows with the iron rod.
Thereafter all the three fled from the scene of occurrence.
The Other two who had chased Raju are alleged to have killed him as he was found lying in an unconscious condition on the road.
Both the injured were removed to the hospital.
Raju suc cumbed to the injuries soon after reaching the hospital.
Keshav, however, responded to medical treatment and has survived to give evidence.
On the same day at about 5.30 p.m. the first information report was lodged by the injured Keshav.
On the basis there of an entry was made in CR No. 138 of 1989 and a case under Section 302 and 307 read with Sections 147, 148 and 149 IPC and Section 37 of the Bombay Police Act was registered.
The accused were arrested on 15th July, 1989 and were taken on remand for 9 days which period was extended upto 29th July, 1989 on which data the Investigating Officer invoked Section 3 of the Act.
On 3rd August, 1989 the accused moved an application in the Designated Court, Jalgaon, for bail, inter alia, contending that the provisions of the Act had been wrongly and maliciously invoked.
The said application was heard and decided by the Designated Court on 2nd Septem ber, 1989 which took the view that Section 3 of the Act was wrongly applied.
Against that order the State of Maharashtra has preferred Criminal Appeal No. 712/89.
As the accused were directed to approach the regular court, they moved two bail applications before the Fourth Additional Sessions Judge, Ahmad 638 nagar.
The said bail applications were, however, rejected on 25th September, 1989.
Against the said rejection the accused approached the High Court.
While those matters were pending in the High Court, the prosecution submitted a charge sheet against the accused in the Designated Court at Jalgaon.
Thereupon the High Court rejected the applications.
The accused again approached the Designated Court for bail.
The Designated Court once again came to the conclusion that, in the facts and circumstances of the case, Section 3 of the Act had no application and discharged the accused on that count under Section 227 of the Code of Criminal Procedure, 1973 (hereinafter called 'the Code ').
By the said impugned order of 27th October, 1989 the case was ordered to be transferred to the Court of Sessions, Ahmadnagar, on the other charges and the accused were granted liberty to move that court for bail.
Against the said order Criminal Appeal No. 703/89 has been preferred by Raju 's father while the State of Maharashtra has filed Criminal Appeal No. 13/90.
Thereupon, the accused approached the High Court for bail but the High Court rejected their application and directed early hearing of the case.
Special leave petition No. 2459/ 89 is preferred by the original accused against the said order.
The Act was enacted to make special provisions for the prevention of, and for coping with, terrorist and disruptive activities and for matters connected therewith or incidental thereto.
Section 2(d) defines the expression 'disruptive activity ' to have the meaning assigned to it in section 4.
Section 2(h) defines the expression 'terrorist act ' to have the meaning assigned to it under section 3(1) of the Act.
The relevant part of Section 3(1) provides that whoever, with intent (i) to overawe the Government as by law estab lished or (ii) to strike terror in the people or any section of the people or (iii) to alienate any section of the people or (iv) to adversely affect the harmony amongst different sections of the people, does any act or thing by using any of the lethal weapons mentioned therein in such a manner as to cause death of/or injuries to any person or persons, commits a terrorist act.
Section 3(2) lays down the penalty for the commission of such an act.
Section 4(1) prescribes the penalty for indulging in any disruptive activity.
Sec tion 4(2) defines a disruptive activity to mean any action taken in whatever manner (i) which questions, disrupts or is intended to disrupt, whether directly or indirectly, the sovereignty and territorial integrity of India, or (ii) which is intended to bring about or supports any claim, whether directly or indirectly, for the cession of any part of India or the secession of any part of India from the Union.
Section 6 provides enhanced penalty for aiding any terrorist or disruptionist.
Part III of the Act creates the machinery for trying 639 terrorists and disruptionists charged with the commission of any offence under the Act.
Section 9 empowers the Central Government as well as the State Governments to constitute by notification one or more Designated Courts for such area or areas, or for such case or class or group of cases as may be specified in the notification.
Section 9(6) provides that a person shall not be qualified for appointment as a Judge or an Additional Judge of a Designated Court unless he is immediately before such appointment a Sessions Judge or an Additional Sessions Judge in any State.
Section 11 says that every offence punishable under the provisions of the Act or the rules made thereunder shall be tried by a Designated Court constituted under Section 9(1) of the Act.
Section 12(1) is relevant for our purpose and reads as under: "When trying any offence, a Designated Court may also try any other offence with which the accused may, under the Code, be charged at the same trial if the offence is con nected with such other offence.
" Section 14 sets out the procedure and powers of Designated Courts.
Sub section 3 of the Section 14 is relevant for our purpose.
It reads as under: "Subject to other provisions of this Act.
Designated Court shall for the purpose of any offence have all the powers of a Court of Sessions and shall try such offences as if it were a Court of Sessions so far as may be in accordance with the procedure prescribed in the Code for the trial before a Court of Sessions.
" Section 16 offers protection to witnesses.
Section 17 gives procedence to trials by Designated Courts.
Section 18 empow ers the Designated Courts to transfer cases to regular Courts.
This Section reads as under: "Where, after taking cognizance of any offence, a Designated Court is of opinion that the offence is not triable by it, it shall, notwithstanding that it has no jurisdiction to try such offence, transfer the case for the trial of such of fence to any court having jurisdiction under the Code and the court to which the case is transferred may proceed with the trial of the offence as if it had taken cognizance of the offence.
" Section 19 provides for an appeal to the Supreme Court both on facts 640 and on law from any judgment, sentence or order, other than an interlocutory order, of a Designated Court.
Section 20(1) makes an offence under the Act or the rules, a cognizable one.
Sub section (8) of section 20 lays down that notwith standing anything contained in the Code, no person accused of an offence punishable under the Act or any rule made thereunder shall, if in custody, be released on bail or on his own bond unless the public prosecutor has been given an opportunity to oppose his release and where he opposes his release, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.
Section 21 mandates the Designated Court to presume, unless the contrary is proved, that the accused has commit ted an offence under Section 3(1) if one of the four things set out in clauses (a) to (d), is proved.
Section 22 permits identification of the offender on the basis of his photo graph.
Section 28 empowers the Central Government to make rules on any of the matters set out in clauses (a) to (f) of sub section (2) thereof.
Such rules have to be laid before both the Houses of Parliament.
This in brief is the scheme of the Act.
Under Section 14(3) of the Act a Designated Court is conferred with the powers of a Court of Sessions and is required to try any offence under the Act 'as if it were ' a Court of Sessions.
The procedure which it must follow at the trial is the one prescribed in the Code fox the trial of cases before a Court of Sessions.
This is of course subject to the other provisions of the Act which means that if there is any provision in the Act which is not consistent with the procedure stipulated in the Code for such trials, it is the procedure in the Act that shall prevail.
The procedure for trial before a Court of Sessions is set Chapter XVIII of the Code.
Section 225 places the public prosecutor in charge of the conduct of the prosecution.
Section 226 requires him to open the prosecu tion case by describing the charge against the accused and stating by what evidence he proposes to bring home the guilt against the accused.
Once that is done the Judge has to consider whether or not to frame a charge.
Section 227 of the Code reads as under: "If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the sub . missions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing.
" 641 Under this section a duty is cast on the judge to apply his mind to the material on record and if on examination of the record he does not find sufficient ground for proceeding against the accused, he must discharge him.
On the other hand if after such consideration and hearing he is satisfied that a prima facie case is made out against the accused, he must proceed to frame a charge as required by Section 228 of the Code.
Once the charge is framed the trial must ordinari ly end in the conviction or acquittal of the accused.
This is in brief the scheme of Sections 225 to 235 of the Code.
Section 227, introduced for the first time in the New Code, confers a special power on the Judge to discharge an accused at the threshold if 'upon consideration ' of the record and documents he considers 'that there is not suffi cient ground ' for proceeding against the accused.
In other words his consideration of the record and document at that stage is for the limited purpose of ascertaining whether or not there exists sufficient grounds for proceeding with the trial against the accused.
If he comes to the conclusion that there is sufficient ground to proceed, he will frame a charge under section 228, if not he will discharge the accused.
It must be remembered that this section was intro duced in the Code to avoid waste of public time over cases which did not disclose a prima facie case and to save the accused from avoidable harassment and expenditure.
The next question is what is the scope and ambit of the 'consideration ' by the trial court at that stage.
Can he marshal the evidence found on the record of the case and in the documents placed before him as he would do on the con clusion of the evidence adduced by the prosecution after the charge is framed? It is obvious that since he is at the stage of deciding whether or not there exists sufficient grounds for framing the charge, his enquiry must necessarily be limited to deciding if the facts emerging from the record and documents constitute the offence with which the accused is charged.
At that stage he may sift the evidence for that limited purpose but he is not required to marshal the evi dence with a view to separating the grain from the chaff.
All that he is called upon to consider is whether there is sufficient ground to frame the charge and for this limited purpose he must weigh the material on record as well as the documents relied on by the prosecution.
In the State of Bihar vs Ramesh Singh, ; this Court observed that at the initial stage of the framing of a charge if there is a strong suspicion evidence which leads the Court to think that there is ground for presuming that the accused has committed an offence then it is not open to the Court to say that there is no sufficient ground for 642 proceeding against the accused.
If the evidence which the prosecutor proposes to adduce to prove the guilt of the accused, even if fully accepted before it is challenged by cross examination or rebutted by the defence evidence, if any, cannot show that the accused committed the offence, then there will be no sufficient ground for proceeding with the trial.
In Union of India vs Prafulla Kumar Samal & Anr., ; , this Court after considering the scope of section 227 observed that the words 'no sufficient ground for proceeding against the accused ' clearly show that the Judge is not merely a post office to frame charge at the behest of the prosecution but he has to exercise his judi cial mind to the facts of the case in order to determine that a case for trial has been made out by the prosecution.
In assessing this fact it is not necessary for the court to enter into the pros and cons of the matter or into weighing and balancing of evidence and probabilities but he may evaluate the material to find out if the facts emerging therefrom taken at their face value establish the ingredi ents constituting the said offence.
After considering the case law on the subject, this Court deduced as under: "(1) That the Judge while considering the question of fram ing the charges under section 227 of the Code has the un doubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.
(2) Where the materials placed before the court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial.
(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application.
By and large however if two views are equally possible and the Judge is satisfied that the evidence adduced before him while giving rise to some suspicion but not grave suspicion against the accused he will be fully within his right to discharge the accused.
(4) That in exercising his jurisdiction under section 227 of the Code of Judge which (sic) under the present Code is a senior and experienced Judge cannot act merely as a Post office or a mouth piece of the prosecution, but has to con 643 sider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on.
This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
" Again in Supdt. & Remembrancer of Legal Affairs, West Bengal vs Anil Kumar Bhunja & Ors., ; this Court observed in paragraph 18 of the Judgment as under: "The standard of test, proof and judgment which is to be applied finally before finding, the accused guilty or other wise, is not exactly to be applied at the stage of Section 227 or 228 of the Code of Criminal Procedure, 1973.
At this stage, even a very strong suspicion rounded upon materials before the Magistrate which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged, may justify the framing of charge against the accused in respect of the commission of that offence".
From the above discussion it seems well settled that at the Sections 227 228 stage the Court is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence.
The Court may for this limited purpose sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case.
The Act is a penal statute.
Its provisions are drastic in that they provide minimum punishments and in certain cases enhanced punishments also; make confessional state ments made to a police officer not below the rank of a Superintendent of Police admissible in evidence and mandates raising of a rebuttable presumption on proof of facts stated in clauses (a) to (d) of sub section (1) of Section 21.
Provision is also made in regard to the identification of an accused who is not traced through photographs.
These are some of the special provisions introduced in the Act with a view to controlling the menace of terrorism.
These provi sions are a departure from the ordinary law since the said law was found to be inadequate and not sufficiently effec tive to deal with the special class of offenders indulging in 644 terrorist and disruptive activities.
There can, therefore, be no doubt that the Legislature considered such crimes to be of an aggravated nature which could not be checked or controlled under the ordinary law and enacted deterrent provisions to combat the same.
The legislature, therefore, made special provisions which can in certain respects b.e said to be harsh, created a special forum for the speedy disposal of such cases, provided for raising a presumption of guilt, placed extra restrictions in regard to the release of the offender on bail, and made suitable changes in the procedure with a view to achieving its objects.
It is well settled that statutes which impose a term of imprisonment for what is a criminal offence under the law must be strict ly construed.
In Usmanbhai Dawoodbhai Memon & Ors.
vs State of Gujarat, ; this Court in paragraph 15 of the judgment observed as under: "The Act is an extreme measure to be resorted to when the police cannot tackle the situation under the ordinary penal law.
The intendment is to provide special machinery to combat the growing menace of terrorism in different parts of the country.
Since, however, the Act is a drastic measure, it should not ordinarily be resorted to unless the govern ment 's law enforcing machinery fails.
" To put it differently the ratio of the decision is that the provisions of the Act need not be resorted to if the nature of the activities of the accused can be checked and con trolled under the ordinary law of the land.
It is only in those cases where the law enforcing machinery finds the ordinary law to be inadequate or not sufficiently effective for tackling the menace of terrorist and disruptive activi ties that resort should be had to the drastic provisions of the Act.
While invoking a criminal statute, such as the Act, the prosecution is duty bound to show from the record of the case and the documents collected in the course of investiga tion that facts emerging therefrom prima facie constitute an offence within the letter of the law.
When a statute pro vides special or enhanced punishments as compared to the punishments prescribed for similar offences under the ordi nary penal laws of the country, a higher responsibility and duty is cast on the Judge to make sure there exists prima facie evidence for supporting the charge levelled by the prosecution.
Therefore, when a law visits a person with serious penal consequences extra care must be taken to ensure that those whom the legislature did not intend to be covered by the express language of the statute are not roped in by stretching the language of the law.
But that does not mean that the judicial officer called upon to decide whether 645 or not a case for framing a charge under the Act is made out should adopt a negative attitude.
He should frame a charge if the prosecution shows that the material placed on record and the documents relied on give rise to a strong suspicion of the accused having committed the crime alleged against him.
We may now proceed to apply the law stated above to the facts of the present case.
The prosecution case against the five accused persons is that they formed an unlawful assem bly, killed Raju and injured keshav 'with intent to strike terror in the people or any section of the people ' i.e. the residents of the locality, by the use of lethal weapons such as knives and iron rods and thereby committed offences punishable under Section 3(1) of the Act read with the offences under the Penal Code and the Bombay Police Act.
When the complaint was lodged by the injured Keshav on 12th July, 1989 no offence under section 3(1) of the Act was registered.
The offence under section 3(1) of the Act was introduced for the first time on 29th July, 1989.
That means that between 12th July, 1989 and 29th July, 1989 the Inves tigating Officer collected evidence which enabled him to register an offence under section 3(1) of the Act.
When the first bail application was disposed of on 2nd September, 1989, the Designated Court came to the conclusion that prima facie section 3(1) of the Act had no application.
In taking that view the Designated Court examined the statements of witnesses on which reliance was placed to support the prose cution case that section 3(1) of the Act was attracted.
It may be stated that accused Santosh Rathod runs a cycle repair shop.
On the day previous to the occurrence the deceased Raju had gone to the cycle shop as his tube was punctured.
At that time accused Jitendra and some others were present at the cycle shop and in their presence accused Jitendra is alleged to have stated as under: "Presently Raju and Keshav are having dominance in the town.
We would become dadas of the town upon taking lives out of them.
Then there would not be any rival to us in this town.
Upon commission of murder of Raju and Keshav on account of tenor the people would be scared.
" This is unfolded in the statements of Raju Narain, Sukharam Shinde and Bhau Saheb.
Thus according to the prosecution the genesis of the crime was to gain supremacy in the underworld by eliminating the members of the rival gang.
Ram Lokhande speaks about the incident in question and states that he had heard the assailants stating that on the elimination of Raju and Keshav they will become the Dadas and 646 no one will dare to raise his voice against them.
Bhika spoke about the previous incident on the same day at about 11.30 a.m. which shows that there was rivalry between the two gangs.
Mr. Masodkar, the learned counsel for the State Government, as well as the appellant of criminal Appeal No. 703/89, therefore, contended that the acts of violence were perpetrated with intent to strike terror in the people at large and in particular the residents of the locality in which the crime was committed.
Our attention was also drawn to certain statements of witnesses to the effect that some of the accused persons were related to the members of the Shiv Sena party.
The Designated Court came to the conclusion that the material placed before it and the statements re corded by the Investigating Officer did not disclose the commission of an offence under Section 3(1) of the Act.
According to the Designated Court the intention of the accused persons was not to strike terror in the people or a section of the people but only to eliminate Raju and Keshav with a view to gaining supremacy in the underworld.
The learned Judge presiding over the Designated Court then proceeds to add as under: "True it is that few people might have been terror striken and terror might have been the fall out of naked act, but to strike the terror amongst people was not the object of this naked act.
If at all people are getting terror striken, it is those few people who live by the crime and not the people law abiding majority of citizens.
Going by these statements there is nothing more to this crime than a strife between two warring factions staking claim to the supremacy of underworld." The learned Judge also came to the conclusion that there was nothing on record to show that the Government 's law enforc ing machinery had failed and it had become necessary to resort to the drastic provisions of the Act with a view to combating the menace of terrorism.
We have carefully considered the statements of the witnesses on which the prosecution relies in support of its contention that the accused had committed an offence under section 3(1) of the Act.
We think that the Designated Court was right in coming to the conclusion that the intention of the accused persons was to eliminate Raju and Keshav for gaining supremacy in the underworld.
A mere statement to the effect that the show of such violence would create terror or fear in the minds of the people and none would dare to oppose them cannot constitute an offence under section 3(1) of the Act.
That may indeed 647 be the fail out of the violent act but that cannot be said to be the intention of the perpetrators of the crime.
It is clear from the statement extracted earlier that the inten tion of the accused persons was to eliminate the rivals and gain supremacy in the underworld so that they may be known as the bullies of the locality and would be dreaded as such.
But it cannot be said that their intention was to strike terror in the people or a section of the people and thereby commit a terrorist act.
It is clear that there was rivalry between the party of the accused on the one hand and Raju and Keshav on the other.
The former desired to gain suprema cy which necessitated the elimination of the latter.
With that in view they launched an attack on Raju and Keshav, killed the former and injured the latter.
Their intention was clearly to eliminate them and not to strike terror in the people or a section of the people.
It would have been a different matter if to strike terror some innocent persons were killed.
In that case the intention would be to strike terror and the killings would be to achieve that objective.
In the instant case the intention was to liquidate Raju and Keshav and thereby achieve the objective of gaining suprema cy in the underworld.
The consequence of such violence is bound to cause panic and fear but the intention of commit ting the crime cannot be said to be strike terror in the people or any section of the people.
We are, therefore, of the view that the Designated Court was fully justified in taking the view that the material placed on record and the documents relied on did not prima facie disclose the commis sion of the offence punishable under section 3(1) of the Act.
It was next contended by the learned counsel for the State of Maharashtra that under section 12(1), when trying the offence under the Act, the Designated Court was entitled to try any other offence with which the accused were charged at the same trial since the offences punishable under the Penal Code and the Bombay Police Act were committed in the course of the same incident.
Section 12(.1) no doubt empow ers the Designated Court to try and offence punishable under any other statute along with the offence punishable under the Act if the former is connected with the latter.
That, however, does not mean that even when the Designated Court comes to the conclusion that there exists no sufficient ground for framing a charge against the accused under sec tion 3(1) of the Act it must proceed to try the accused for the commission of offences under other statutes.
That would tantamount to usurping jurisdiction.
Section 18, therefore, in terms provides that where after taking cognizance of any offence the Designated Court is of the opinion that the offence is not triable by it, it shall, notwithstanding that it has no jurisdiction to try such offence, 648 transfer the case for the trial of such offence to any court having jurisdiction under the Code.
Therefore, when the Designated Court came to the conclusion that there was no prima facie evidence to frame a charge under section 3(1) of the Act, it was justified in transferring the case to the Court of Sessions, Ahmadnagar, which alone had jurisdiction under the Code.
Once the Designated Court came to the con clusion that the evidence was not sufficient to frame a charge under section 3(1) of the Act, the Designated Court had no alternative but to resort to Section 18 and transfer the case to the competent court under the Code.
We, there fore, do not see any merit in the contention of the learned counsel for the State of Maharashtra that even after the Designated Court came to the conclusion that no ground was made out under section 3(1) of the Act, it was duty bound by virtue of section 12(1) of the Act to proceed with the trial for the other offences under the Penal Code and the Bombay Police Act.
We think the course adopted by the Designated Court in transferring the case to the Sessions Court in clearly in keeping with section 18 of the Act.
Before we part we may state that Mr. Lalit the learned counsel for the accused tried to urge before us that the provisions of the Act were intended to deal with political terrorism intended to undermine the security of the State and not to ordinary law and order problems.
We do not con sider it necessary to go into this larger question because, in our opinion, the Designated Court was fight in coming to the conclusion that this was a case of inter gang rivalry not attracting Section 3(1) of the Act.
In the above view that we take all the three appeals fail and are dismissed.
Mr. Lalit the learned counsel for the accused stated that since the High Court has directed expeditious disposal of the case he would not press the special leave petition directed against the High Court 's order refusing bail.
In view of the said statement, the Special leave petition No. 2459/89 will stand disposed of as not pressed.
We may, however, state that the Sessions Court to which the case stands transferred should endeavour to complete the trial as early as possible, preferably within four months from the date of receipt of this Court 's order.
T.N.A. Petition disposed of.
|
The accused petitioners were charged under section 302 and 307 read with Sections 147, 148 and 149 of the Indian Penal Code and Section 37 of the Bombay Police Act, 1951.
Subsequently they were also charged under section 3 of the Terrorist and Disruptive Activities (Prevention) Act.
They moved the Designated Court for grant of bail contending that the provisions of the 1987 Act were wrongly and mali ciously invoked and the Designated Court held that section 3 of the Act was inapplicable.
The State of Maharashtra has preferred an appeal to this Court against the said order of the Designated Court.
Since the accused were directed to approach the regular court, they moved bail applications before the Sessions Judge, Ahmadnagar which were rejected.
Thereafter, they approached the High Court and during the pendency of their bail applications before the High Court, the prosecution submitted a charge sheet against them in the Designated Court under section 3 of the 1987 Act.
Conse quently the High Court rejected their bail applications and the accused again approached the Designated Court for bail.
The Designated Court again held that the material 634 placed before it and the statement recorded by the Investi gating Officer did not disclose the commission of an offence under section 3 of the Act.
Accordingly, it discharged the accused under section 227 of the Code of Criminal Procedure, 1973 and transferred the case to court of Sessions for trial of other offences under the Penal Code and the Bombay Police Act.
Against this order of the Designated Court, two appeals have been filed in this Court; one by the deceased 's father and the other by the State.
After transfer of their case to the regular court.
the accused persons approached the High Court for bail which was rejected.
The accused persons have filed a Special Leave Petition in this Court against the High Court 's order refusing the bail.
Dismissing the appeals and disposing of the petition, this Court.
HELD: 1.
A mere statement by the accused persons to the effect that the show of violence would create terror or fear in the minds of the people and none would dare to oppose them cannot constitute an offence under section 3(1) of the Act.
That may indeed be the fail out of the violent act but that cannot be said to be the intention of the perpetrators of the crime.
[646H; 647A] 1.1 While invoking a criminal statute, such as the Terrorist and Disruptive Activities (Prevention) Act,1987, the prosecution is duty bound to show from the record of the case and the documents collected in the course of investiga tion that facts emerging therefrom prima facie constitute an offence within the letter of the law.
[644F] 1.2 In the instant case it is clear from the statement of the accused persons that their intention was to liquidate rivals and thereby achieve the objective of gaining suprema cy in the underworld.
The consequence of such violence is bound to cause panic and fear but the intention of commit ting the crime cannot be said to be to strike terror in the people or any section of the people.
Therefore, the Desig nated Court was fully justified in taking the view that this was a case of inter gang rivalry only and that the material placed on record and the documents relied on did not prima facie disclose the commission of the offence punishable under section 3(1) of the Act.
[647D E] 2.
Section 12(1) of the Terrorist and Disruptive Activi ties (Prevention) Act, 1987 empowers the Designated Court to try any offence punishable under any other statute along with the offence punishable under the Act if the former is connected with the latter.
That, however, does not mean that even when the Designated Court comes to the con 635 clusion that there exists no sufficient ground for framing a charge against the accused under Section 3(1) of the Act it must proceed to try the accused for the commission of of fences under other statutes.
Thai would tantamount to usurp ing jurisdiction.
Section 18, therefore, in terms provides that where after taking cognizance of any offence the Desig nated Court is of the opinion that the offence is not tri able by it, it shall, notwithstanding that it has no juris diction to try such offence, transfer the case for the trial of such offence to any Court having jurisdiction under the Code, Therefore, when the Designated Court came to the conclusion that there was no prima facie evidence to frame a charge under section 3(1) of the Act, it was justified in transferring the case to the Court of Sessions, which alone had jurisdiction under the Code.
The course adopted by the Designated Court in transferring the case to the Sessions Court for trial of offences under other statutes is clearly in keeping with section 18 of the Act.
[647F H; 648A C] 3.
Statutes which impose a term of imprisonment for what is a criminal offence under the law must be strictly con strued.
[644C] Usmanbhai Dawoodbhai Memon & Ors., vs State of Gujrat, ; referred to.
3.1 When a statute provides special or enhanced punish ments as compared to the punishments prescribed for similar offences under the ordinary penal laws of the country, a higher responsibility and duty is cast on the Judge to make sure there exists prima facie evidence for supporting the charge levelled by the prosecution.
Therefore.
when a law visits a person with serious penal consequences extra care must be taken to ensure that those whom the legislature did not intend cover by the express language of the statute are not roped in by stretching the language of the law.
But that does not mean that the judicial officer called upon to decide whether or not a case for flaming a charge under the Act is made out should adopt a negative attitude.
He should frame a charge if the prosecution shows that the material placed on record and the documents relied on give rise to a strong suspicion of the accused having committed the crime alleged against him.
[644G H; 645A] 4.
The Court while considering whether to discharge the accused or to frame a charge against him i.e. at the stage of sections 227 228 of the Code of Criminal Procedure, 1973 is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom taken at their face.
value disclose the existence of all the ingredients constituting the alleged offence.
Since the Trial Court is 636 at the stage of deciding whether or not there exists suffi cient grounds for framing the charge, its enquiry must necessarily be limited to deciding if the facts emerging from the record and documents constitute the offence with which the accused is charged.
At that stage it may sift the evidence for that limited purpose but it is not required to marshal the evidence with a view to separating the grain from the chaff.
All that it is called upon to consider is whether there is sufficient ground to frame the charge and for this limited purpose it must weigh the material on record as well as the documents relied on by tile prosecu tion.
[643E; 641F G] State of Bihar vs Ramesh Singh, ; ; Union of India vs Prafulla Kumar Samal & Anr., ; and Supdt. & Remembrancer of Legal Affairs, West Bengal vs Anil Kumar Bhunja & Ors., ; , referred to.
|
vil Appeal Nos.
6247~48 of 1983.
From the Judgment and Order dated 3.7.1980 of the Orissa High Court in Original Jurisdiction Case Nos. 91 and 155 of 1977.
Kapil Sibal, Additional Solicitor General, Dilip Tandon and CVS Rao for the Appellant.
Mrs. Bharati Anand (N.P.) for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
These appeals by special leave are from the Judgment of the High Court of Orissa, Cuttack dated July 3, 1980 in two writ applications under Article 226 of the Constitution of India allowing the applications and quashing the penalty imposed on the writ petitioner under the of 1962 (hereinafter referred to as 'the Act ').
A commercial vessel M.V. Jag Darshan arrived at Paradip Port on March 29, 1976.
It was being rummaged by the customs officers from April 6, 1976 to April, 13, 1976.
In course of the rummage the customs officers recovered various contra band goods worth more than Rs. 1,40,000 (Rupees one lac forty thousand), seized some quantity and detained the vessel by issue of a proper notice to the Master of the vessel with a copy to the second respondent Sri V.L. Choud hary, Deputy Conservator of Paradip Port Trust.
At the instance of Sri V.L. Choudhary and another the vessel was shifted to the reads i.e. far away anchorage of paradip port which was far in the high sea.
As a result of the shifting, despite the detention order, the rummaging operation was interrupted as the customs staff had to leave the vessel and the vessel had to remain unguarded for nearly 38 hours.
It was alleged that the contraband goods then somehow disap peared from the vessel.
Sri V.L. Choudhary was asked to show cause as to why for his failure to comply with the provi sions of the Act and for abetment of the commission of offence of smuggling by his deliberate obstructions to the customs officers in the recovery of smuggled goods from the detained vessel M.V. Jag Darshan in violation of section 133 of the Act he should not be proceeded against and as to why penalty should not be imposed on him under section 117 and 151 of the Act.
In reply to the notice the second respondent Sri V.L. Choud hary 708 took the plea that the Collector of Customs and Central Excise had no jurisdiction to initiate proceedings against him as what he had done was in discharge of his duties under the Paradip Port Rules and that the provisions of section 151 of the Act were not attracted in his case.
The Collector rejecting the pleas imposed a penalty of Rs. 1,000 upon Sri.
V.L. Choudhary under section 117 of the Act.
The operative part of the order said: "I, therefore, impose a penalty of Rs. 1,000 (Rs. one thou sand) on Sri V.L. Choudhary, Deputy Conservator of Paradip Port, under section 117 of the customs act, 1962.
The penalty should be deposited into any Government Treas ury/State Bank of India within a fortnight from the date of receipt of this order under head 1037 Customs Miscellane ous, Receipts, Fines, Rent, etc.
" The order of the Collector was challenged in two writ petitions under Article 226 of the Constitution of India in the High Court of Orissa.
The High Court quashed the penalty and allowed the writ petitions on two grounds.
First, that the impugned order in each case in categorical terms showed that the jurisdiction had been exercised under sections 133 and 151 of the Act; section 137 of the Act made provision for cognizance of offences and section 133 had been included therein, and as such section 133 must be referring to Court and not to the Collector as the punishing authority, where fore, the Collector was not competent to impose punishment for the offence under that section.
Secondly, section 151 required the officers mentioned therein to assist the Cus toms Officers, but the two officers were employee of the Port Trust and were not officers mentioned in clauses (d) or (e) of that section as the former referred to officers of the Central or State Government employee at any port or airport and clause (e) referred to such other officers of the Central or State Government or local authority as were specified by the Central Government in this behalf by noti fication in the official gazette so as to bring the two officers under clause (e).
Mr. Kapil Sibal, learned Additional Solicitor General of India, has not seriously assailed the finding that the officers did not come under section 151 of the Act.
His main submissions assailing the finding as to applicability of section 133 of the Act are that section 133 both creates an offence and also prescribes a penalty, and though the section is refera ble to Court in so far as prosecution and punishment is concerned for 709 the offence, there would be no bar to deal with that offence under section 117 of the Act.
Counsel submits that even assuming but not admitting that section 133 referred only to Court and the offence could not otherwise be dealt with, Sri V.L. Choud hary having abetted the contravention of the provisions of the Act he made himself liable to penalty of not exceeding Rs. 1,000 under section 117 of the Act and the penalty was right ly imposed on him by the Collector; and the High Court ought not to have set aside the penalty.
Counsel further submits that under the there would be no double jeopardy if in an appropriate case one has been prosecuted and pun ished under the sections in Chapter XVI of the Act and also subjected to penalty under the provisions other than those in Chapter XVI of the Act for offences including those in Chapter XVI of the Act.
None appears for the respondents.
T,, weigh the submissions, we may examine the relevant provisions of the Act.
Admittedly, 'offence ' has not been defined in the Act.
Chapter XVI in sections 132 to 140A deals with "Offences.
and Prosecutions".
Section 132 constitutes false declaration, false documents, etc.
an offence.
Section 133 constitutes obstruction of officer of customs an of fence.
Similarly, by section 134, refusal to be ex rayed, by section 135, evasion of duty or prohibition are constituted of fences.
It may be noted that section 135(1) is 'without prejudice to any action that may be taken under this Act. ' This clear ly envisages any action that may be taken under this Act over and above the prosecution and punishment prescribed under this Section.
Section 137 deals with "Cognizance of Offences by Courts".
Section 138 says that offences are to be summarily tried, except those stated under the section.
Section 138A provides for presuming the existence of culpa ble mental state where such a state is necessary.
Chapter XIV in sections 111 127 deals with confiscation of goods and conveyance and imposition of penalties.
Section 120 provides for confiscation of smuggled goods notwith standing any change in form etc.
Section 122 deals with adjudication of confiscations and penalties.
Under this section, in every case under this Chapter in which anything is liable to confiscation or any person is liable to a penalty, such confiscation or penalty may be adjudged by appropriate customs authorities.
Section 123 deals with burden of proof in certain cases and in some cases puts in on the owner or possessor of the goods.
Section 127 says that the award of any confiscation or penalty under this Act by an officer of Customs shall not prevent the infliction of any punishment to 710 which the person affected thereby is liable under the provi sions of Chapter XVI of the Act or under any other law.
This clearly shows that there will be no double jeopardy if for the same transaction, act or occurrence there is an award of any confiscation or penalty under the relevant provisions of the Act and also infliction of any punishment under the provisions of Chapter XVI of the Act or under any other law.
Section 117, included in Chapter XIV, deals with penalties for contravention etc.
not expressly mentioned.
It says: "Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding Rs. 1,000.
Though included in Chapter XIV, section 117 provides for penalties for contravention of any provision of the Act, an abetment of any such contravention or failure to comply with any provision of the Act with which it was one 's duty to comply but no express penalty is elsewhere provided.
For such contravention or failure a penalty of not exceeding Rs. 1,000 has been prescribed.
From the foregoing provisions, we find that for the same transaction, act or occurrence in an appropriate case, there may be prosecution and punishment under Chapter XVI and confiscation of goods and conveyances and also imposition of penalty not exceeding one thousand rupees for contravention of any of the provisions of the Act or abetment of any such contravention and or failure to comply with any provisions of the Act with which it was one 's duty to comply where no express penalty is elsewhere provided for such contravention or failure.
It may also be possible that an act or event which entails punishment under Chapter XV1 may be itself or with other ingredients also amount to a contravention of any of the provisions of the Act or abetment of any such contra vention.
Where the same act or event constitutes an offence under Chapter XVI and at the same time constitutes a contra vention or abetment of contravention of any of the provi sions of the Act or failure to perform any duty prescribed under the Act or amounts to non compliance with any of the provisions of the Act, there will be possibility of prosecu tion and punishment under Chapter XVI of the Act and any other provision of law and at the same time confiscation and penalty under Chapter XIV of the Act.
711 As regards the allegations in the case, under section 106(1) of the Act where the proper officer has reason to believe that any vessel in India or within the Indian customs waters has been, is being, or is about to be, used in the smuggling of any goods or in the carriage of any goods which have been smuggled, he may at any time stop any such vessel and (a) rummage and search any part of the vessel (b) examine and search any goods in the vessel.
Under section 110(1) if the proper officer has reason to believe that any goods are liable 10 confiscation 'under the Act, he may seize such goods.
Section 111 provides for confiscation of improperly imported goods.
Under the facts alleged in this case, the vessel could, therefore, lawfully be detained, rummaged and the goods suspected seized.
It was alleged that the shifting of the vessel was on order of the second respondent and that because of the shifting to the reads away in the deep sea the proper officers had to leave the vessel with the seized goods and the vessel had to remain unguarded for 38 hours during which period the contraband goods happened to be illegally disposed of.
Section 133 reads: "133.
Obstruction of officer of customs: If any person intentionally obstructs any officer of customs in the exer cise of any powers conferred under this Act, such person shall be punishable with imprisonment for a term which may extend to six months, or with fine, or with both.
" There may be scope for holding that there was intention al obstruction on the part of the second respondent if the allegations are proved.
In Santosh Kumar vs State, ; it was held that where there was an order for seizure it would amount to obstruction under section 186 IPC if the goods were not allowed to be removed.
On the authority of Hinchliffe vs Sheldon, [1955] 1 WLR 1207 it can be said that the obstruction is not confined to physical obstruction and it includes anything which makes it more difficult for the police or public servant to carry out their duties.
But the question is did it also amount to abetment of contravention of any of the provisions of the Act? Was there any abetment to alleged smuggling of the goods seized and those which could have been seized? the Collectors orders, though there was discussion of offence under section 133 and failure to perform duty under section 151, the order itself was passed ex facie under the provi sions of section 117 of the Act.
On perusal of the impugned judgment of the High Court.
we do not find 712 any discussion on this aspect of the matter and there is no indication as to whether this was urged or not before the High Court.
Since the learned Additional Solicitor General has emphasised this aspect and we are inclined to agree with him to the extent indicated above, and as the second re spondent is not represented before us, we are inclined to set aside the impugned order and remand the cases to the High Court for fresh disposal in accordance with law in the light of the observations made hereinabove after giving opportunities to the parties for making their submissions on the basis of the evidence already on record; and we order accordingly.
G.N. Appeal allowed.
|
A commercial vessel which arrived at Paradip Port was rummaged by the Customs Officers and contraband goods worth more than Rs.1,40,000 were recovered.
The officers also detained the vessel by issue of a notice to the Master of the vessel with a copy to the second respondent, the Deputy Conservator of Paradip Port Trust.
At the instant of the second respondent and another, the vessel was shifted to the reads far away from the port in the high sea.
This resulted in the interruption of the rummaging operation and the vessel being left unguarded for about 38 hours, during which period it was alleged that the contraband goods disappeared from the vessel.
The second respondent was asked to show cause as to why he should not be proceeded against and why penalty should not he imposed on him, under Sections 117 and 151 of the .
In his reply, the second respondent took the plea that the Customs and Central Excise Authorities had no jurisdiction to initiate proceedings against him and that section 151 of the Act was not attracted.
Rejecting his plea, the Collector imposed a penalty of Rs.1,000 under section 117 of the Act.
The said order of the Collector was challenged in the High Court by way of writ petitions.
The High Court allowed the writ petitions and quashed the penalty.
This appeal, by special leave, is against the orders of the High Court quashing the penalty, On behalf of the appellant it was contended that Section 133 706 creates an offence and also prescribes a penalty, and though the section s referable to Court in so far as prosecution and punishment is concerned for the offence, there would be no bar to deal with that offence under section 117 of the Act.
It was also contended that there would be no double jeopardy if in an appropriate case one has been prosecuted and punished under the sections in Chapter XVI of the Act and also sub jected to penalty under the provisions other than those in Chapter XVI if the Act for offences including those in Chapter XVI of the Act.
Allowing the appeal, HELD: 1.
Where the same Act or event constitutes an offence ruder Chapter XVI and at the same time constitutes a contravention or abetment of contravention of any of the provisions of the Act or failure 0 perform any duty pre scribed under the Act or amounts to noncompliance with any of the provisions of the Act, there will be possibility of prosecution and punishment under Chapter XVI of the Act and any other provision of law and the same time confiscation and penalty under Chapter XIV of the Act.
[710G H] 2.
In the instant case, the vessel could, therefore, lawfully be detained, rummaged and the goods suspected seized.
There may be cope for holding that there was inten tional obstruction on the part of he second respondent if the allegations are proved.
Where there was an order for seizure it would amount to obstruction under section 186 IPC if the goods were not allowed to be removed.
Obstruction is not confined to physical obstruction and it includes anything which makes it more difficult for the police or public servant to carry out their duties.
[711B; F] Santosh Kumar vs State. ; and Hinchliffe vs sheldon, [1955] 1 WLR 1207, referred to.
In the Collector 's order, though there was discussion of offence under section 133 and failure to perform duty under section 151, the order itself was passed ex facie under the provi sions of section 117 of the Act.
There is no discussion in the High Court 's order on this aspect of the matter and here is no indication as to whether this was urged or not before the High Court.
Further, since the second respondent is not represented before his Court, the said order is set aside and the cases remanded to the High Court for fresh disposal in accordance with law in the light of the observations made hereinabove after giving opportunities to the parties or making their submissions on the basis of the evidence al ready on record.
[711H; 712A B]
|
Special Leave Petition (Civil) No. 5775 of 1990.
From the Judgment and Order dated 30.11.1989 of the Allahabad High Court in C. Misc.
W.P. No. 2431 of 1989.
737 Dr. L.M. Singhvi and Pramod Dayal for the Petitioners.
T.S. Krishnamoorthy lyer and D.M. Nargolkar for the Respondents.
The following Order of the Court was delivered On the facts and circumstances of the case including the facts set out in the counter affidavit filed by R.B. Sahi we are not inclined to interfere with the impugned order passed by the Allahabad High Court.
Very briefly stated respondent No. 1 is the owner of a Petrol Pump which is set up on a site in Dehradun, of which respondent No. 1 is the lessee.
The 'No Objection Certifi cate ' granted for conducting the said Petrol Pump.was can celled by respondent No. 5, the District Magistiate of Dehradun, and that order was upheld by the Commissioner.
The Division Bench of the Allahabad High Court by the impugned judgment set aside the order of the Commissioner.
The spe cial leave petition is directed against the said order as we have already observed we see no reason to interfere with the actual order passed by the Division Bench but we would like to make a clarification regarding the interpretation of Rule 151 of the Rules framed in 1976 under the Petroleum Act.
Rule 144 of the said Rules deals with the issue of a 'No Objection Certificate ' for a new license for running a Petrol Pump.
Rule 151 deals with the cancellation of the 'No Objection Certificate ' and the said rule reads as follows: (1) "A no objection certificate granted under Rule 144 shall be liable to be cancelled by the District Authority or the State Government, if the District Authority or the State Government is satisfied, that the licensee has ceased to have any right to use the site for storing petrol; Provided that before cancelling a no objection certificate, the licensee shall be given a reasonable opportunity of being heard.
(2) A District Authority or a State Government cancelling a no objection certificate shall record in writing the reasons for such cancellation and shall immediately furnish to the licen 738 see and to the licensing authority concerned a copy of the order cancelling the no objection certificate.
" The High Court has rightly observed that the District Authority under Rule 151 can cancel the No Objection Certif icate only when the licensee ceases to have any fight to use the site for storing petrol.
However, there are certain subsequent observations made by the High Court in the im pugned judgment which might lead to an inference that so long as the licensee continues to have lease hold rights on the site, the 'No Objection Certificate ' cannot be cancelled at all.
That does not appear to be the correct position in law.
On a reading of sub rule (1) of Rule 151 it is clear that a 'No Objection Certificate ' granted under Rule 144 can be cancelled wherever the licensee ceases to have any right to use the site for storing petrol and that right could be lost by a licensee either by his tenancy or right to the use of the site coming to an end or for any other reason where by, in law, the right to use the site for storing petrol ceases.
In view of the clarification which we have made, Dr. Singhvi, learned counsel for the petitioner states that he does not wish to press the petition.
The Special Leave petition is, therefore, dismissed.
N.P.V. Petition dismissed.
|
The No Objection Certificate granted to Respondent No. 1 Corporation under Rule 144 of the Petroleum Rules 1976 for running a petrol pump set up by it on a lease hold site was cancelled by respondent No. 5, the District Magistrate under Rule 151 of the Rules.
This order was upheld by the Commis sioner, but was set aside by the High Court, on appeal.
Hence the special leave petition against the High Court 's order.
Dismissing the special leave petition, this Court, HELD: The High Court was right in holding that the District Authority under Rule 151 of the Petroleum Rules, 1976 can cancel the No Objection Certificate only when the licensee ceases to have any right to use the site for stor ing petrol.
However, certain subsequent observations made by the High Court in the judgment might lead to an inference that so long as the licensee continues to have leasehold rights on the site, the 'No Objection Certificate ' cannot be cancelled at all.
That is not the correct position in law.
[738B C] On a reading of sub rule (1) of the Rule 151 it is clear that a 'No Objection Certificate ' granted under Rule 144 can be cancelled wherever the licensee ceases to have any right to use the site for storing petrol and that right could be lost by a licensee either by his tenancy or right to the use of the site coming to an end or for any other reason where by, in law, the right to use the site for storing petrol ceases.
[738C D]
|
ivil Appeal No. 4499 of 1986.
From the Judgment and Order dated 11.8.1986 of the Punjab and Haryana High Court in R.S.A. No. 974 of 1985 and Civil Misc.
No. 1034 C of 1985.
Harbans Lal, Dr. Meera Agarwal, (N.P.) and R.C. Mishra for the Appellant.
S.K. Mehta, Aman Vachher and Atul Nanda for the Respond ents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Disinherited daughter, under a Will alleged to have been executed by her father one day before his death bequea 815 thing all his property in favour of sons of her only sister, has assailed validity of orders of three courts below for failure to apply the rule that presumption of due execution of a pious and solemn document like Will stood rebutted due to existence of suspicious circumstances which the propound er could not rule out specially when he had taken active part in its execution.
Soft cornor for grand children or likeability for a son or daughter or their issues is not uncommon to our society.
Rather at times it becomes necessary either to provide for the lesser fortunate or to avoid the property from passing out of the family.
But when disputes arise between heirs of same degree, and the beneficiary even chooses to deny the blood ties, and that too unsuccessfully, then court 's re sponsibility of performing its duties carefully and pains takingly multiplies.
Unfortunately it was not properly comprehended by any of the courts, including the High Court which was swayed more by happy marriage of appellant, a consideration which may have been relevant for testator but wholly irrelevant for courts as their function is to judge not to speculate.
Although freedom to bequeath one 's own property amongst Hindus is absolute both in extent and person, including rank stranger, yet to have testamentary capacity or a disposing state of mind what is required of propounder to establish is that the testator at time of disposition knew and understood the property he was dispos ing and persons who were to be beneficiaries of his disposi tion.
Prudence, however, requires reason for denying benefit to those who too were entitled to bounty of testator as they had similar claims on him.
Absence of it may not invalidate a Will but it shrouds the disposition with suspicion as it does not give any inkling to the mind of testator to enable the Court to judge if the disposition was voluntary act.
Taking active interest by propounder in execution of Will raises another strong suspicion.
In H. Venkatachalliah vs
N. Themmajamma; , it was held to render the Will infirm unless the propounder cleared the suspicion with clear and satisfactory evidence.
Mere execution of Will, thus, by producing scribe or attesting witness or proving genuiness of testator 's thumb impressions by themselves was not sufficient to establish validity of Will unless suspi cious circumstances, usual or special, are ruled out and the courts ' conscience is satisfied not only on execution but about its authenticity.
See Kalyan Singh vs Smt.
Chhoti & Ors., [1989] Judgment Today page 439.
Coming now to facts it has been found by all the three courts below that testator was a migrant from West Pakistan who after migration resided in village Rupena, was ill for sometime and lived with his 816 daughter and her sons who are the beneficiaries six months prior to his death.
It was further found that appellant was also one of the daughters.
No finding was recorded that she or her sons had any sore or sour relations with testator.
But the most important finding was that even though the testator could sign yet he put his thumb mark on it.
It was found to be genuine.
The execution was thus held beyond doubt.
But it was sufficient to put the courts on alert specially when the professional scribe fetched by benefici ary 's father admitted that when he reached beneficiary 's residence where the Will was executed, he found testator covered with a quilt in the afternoon of August with whom he did not talk nor enquire about his health.
Unfortunately none of the Courts paid any attention to these probably because they were swayed with due execution even when this Court in Venkatachalliah 's case (supra) had held that, proof of signature raises a presumption about knowledge but the existence of suspicious circumstances rebuts it.
Importance of these aspects would have become apparent if they had examined the Will which speaks for itself but which was taken for granted.
Relevant part of it is extracted below: "They served me with money and the core of their heart.
I am happy with their service.
Therefore I make this Will without any pressure or influence that during my life time I shall be owner of all my property both moveable and immovable i.e. land, house etc.
After my death my entire property, land, houses, shops, factory, machinery, residential house, resi dential goods, deposit in Bank or Post office (i.e. whatever is in my name in Punjab or any part of India, it will be in the ownership of and in possession of my grand sons (daugh ters/sons) Harmesh Singh, Mohan Lal, Sohan Lal son of Gurdev Singh son of Raunaq Singh in equal shares.
No body else who may be my near relations or distantly related will have any right in my property".
What strikes immediately is professionalism of the recital.
Grave doubt arises if recital of each and every item which could be visualised, was as a result of professional exper tise or the old man was so unwell and died on the next day that he could not speak resulting in speculative narration of property depending on imagination what he must have been possessed of.
Mention of house, factory, machinery and bank deposit was meaningful.
House had already been sold.
No evidence was led that he was possessed of another house or that he had any factory or machinery or bank deposits.
Explanation of learned counsel that omission was as the respondent had challenged the very relation 817 ship of appellant could not remove the suspicion created by the recital that bequest was made not by an independent man after understanding or on his dictation, but was work of a scribe or beneficiary 's father who did not take any chance and attempted to rope in every possible property that could have been conceived of.
Happy marriage or financially well settlement of appellant could not add to genuineness of Will.
The High Court in recording this finding, completely misdirected itself.
More so, when no finding of dire circum stances of respondent to help out of which testator dis inherited the other daughter was recorded by any courts.
Ratio in Malkani vs Jamadar, AIR 1987 SC 767 was relied on to dissuade this Court from interfering, both, because the finding that Will was genuine, was a finding of fact and omission to mention reason for dis inheriting the daughter or taking prominent part by beneficiary by itself was not sufficient to create any doubt about the testamentary capac ity was because of misunderstanding of the correct import of the decision and the circumstances in which it was rendered.
Property in Malkani 's case (supra) was land.
Beneficiary was nephew as against marned daughter.
Anxiety in village to protect landed property or agricultural holdings from going out of family is well known.
Even though it cannot be said to be hard and fast rule yet when dis inheritance is amongst heirs of equal degree and no reason for exclusion is dis closed, then the standard of scrutiny is not the same and if the courts below failed to be alive to it as is clear from their orders then their orders cannot be said to be beyond review.
Although this Court does not normally interfere with findings of fact recorded by courts below, but if the find ing is recorded by erroneous application of principle of law, and is apt to result in miscarriage of justice then this Court will be justified in interfering under Article 136.
For the reasons stated above, the appeal succeeds and is allowed.
The order and judgment of all the three courts below, are set aside and the suit filed by the appellant for declaration that the Will executed by her father was in valid, shall stand decreed.
The appellant shall be entitled to its costs.
G.N. Appeal al lowed.
|
The appellant 's father executed a Will, just one day prior to his death, bequeathing all his property in favour of the sons of appellant 's only sister.
The testator was ill and lived with the beneficiaries six months prior to his death.
Though the testator could sign, he put his thumb impression on the Will.
The disinherited daughter challenged the genuineness of the Will on the ground that there were suspicious circum stances and the propounder took active part in the execution of the Will.
The Courts below right up to High Court held that the execution of the Will was beyond doubt.
Aggrieved, she has preferred this appeal, by special leave.
Allowing the appeal, this Court, HELD: 1.1 Although freedom to bequeath one 's own proper ty amongst Hindus is absolute both in extent and person, including rank stranger, yet to have testamentary capacity or a disposable mind what is required of propounder to establish is that the testator at the time of disposition knew and understood the property he was disposing and per sons who were to be beneficiaries of his disposition.
Pru dence, however, requires reason for denying benefit to those who too were entitled to bounty of testator as they had similar claims on him.
Absence of it may not invalidate a Will but it shrouds the disposition with suspicion as 814 it does not give any inkling to the mind of testator to enable the Court to judge if the disposition was voluntary act.
Taking active interest by propounder in execution of Will raises another strong suspicion.
Mere execution of Will by producing scribe or attesting witnesses or proving genu ineness of testator 's thumb impressions by themselves was not sufficient to establish validity of Will unless suspi cious circumstances, usual or special, are ruled out and the Court 's conscience is satisfied not only on execution, but its authenticity.
[815D G] H. Venkatachalliah vs
N. Themmajamma; , and Kalyan Singh vs Smt.
Chhoti & Ors., , relied on.
1.2 Happy marriage or financially well settlement of appellant could not add to genuineness of Will.
The High Court in recording this finding, completely misdirected itself.
More so, when no finding of dire circumstances of respondent to help out of which testator dis inherited the other daughter, was recorded by any courts.
[817A B] 2.
Although this Court does not normally interfere with findings of fact recorded by courts below, but if the find ing is recorded by erroneous application of principle of law, and is apt to result in miscarriage of justice then this Court will be justified in interfering under Article 136.
[817E F] Malkani vs Jamadar, AIR 1987 SC 767, distinguished.
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on (Civil) No. 577 of 1988.
(Under Article 32 of the Constitution of India).
S.R. Bhat and R. Venkataramani for the Petitioner Dr. B.S. Chauhan for the Respondents and Shobha Dikshit for he State of U.P.
The Judgment of the Court was delivered by 741 SABYASACHI MUKHARJI, CJ.
A letter written to this Court was treated as a writ petition under Article 32 of the Constitution of India.
The letter written by Chhetriya Pardushan Mukti Sangharsh Samiti.
Sarnath, alleged environ mental pollution in the area.
It was also alleged therein that the Jhunjhunwala Oil Mills and a refinery plant are located in the green belt area, touching three villages and the Sarnath temple of international fame.
The smoke and dust emitted from the chimneys of the Mills and the effluents discharged from these plants were alleged to be causing environmental pollution in the thickly populated area and were proving a great health hazard.
It was further stated that the people were finding it difficult to eat and sleep due to smoke and foul smell and the highly polluted water.
It was further alleged that the lands in the area had become waste, affecting crops and the orchards damages.
Diseases like TB, jaundice and other ailments were stated to be spreading in an epidemic form.
The growth of children was affected.
It was further alleged that the schools, nursing homes, leprosy homes and hospitals situated on the one kilometer long belt touching the oil Mills and the plant were adversely affected.
It was stated that licences had been issued to one richman Dina Nath for these industrial units thereby risking the lives of thousands of people without enforcing any safety measure either to cure the effluents discharged from the plants or to check the smoke and the foul smell emitted from the chimneys.
The whole area was expected to be ruined due to any explosion or gas leak age.
In that background, the petitioner prayed for necessary directions to check the pollution, and also enclosed a printed leaflet alleging real practices and corruption on the part of the proprietor of these industrial units apart from polluting the atmosphere.
As mentioned hereinbefore, the complaint was made by the said Samiti stated to be a social organisation about envi ronmental pollution and ecological imbalance being caused by the two plants and thereby exposing the population to health hazards and life risk which was, therefore, considered to be a matter of great public importance.
It is necessary to recognise the danger in order to strike a balance between the quality of life to be preserved and the economic devel opment to be encouraged.
Dealing with this aspect in M.C. Mehta vs Union of India & Ors., , it has been stated that whenever applications for licences to establish new industries are made in future, such applica tions should be refused unless adequate provision has been made for the treatment of trade effluents flowing out of the factories.
So, this letter was treated as a writ petition and notice was issued, 742 counter affidavits was filed on behalf of respondent No. 3 being the proprietor of Jhunjhunwala Oil Mills.
Reference was made to the decision of this Court in Bandhua Mukti Morcha vs Union of India & Ors., ; wherein this Court underlined the importance of satisfactory verifi cation of allegations.
The Court was asked to be ever vigi lant against abuse of its process and there was need for appropriate verification.
There is a statute for controlling pollution.
It is wellsettled that if there is a statute prescribing a judicial procedure governing a particular case, the court must follow such procedure.
It is not open to the court to by pass the statute and evolve a different procedure at variance with it.
It is further asserted on behalf of the respondents that between the petitioner Sita Ram Pandey and respondent No. 3, there was a long rivalry.
According to respondent No. 3, the petitioner is an anti social element and his only aim was to extract money from the people like respondent No. 3 as in the present case.
It has further been stated that there has been criminal proceeding against the petitioner and several items have been marked in the affidavit in opposition.
The particulars make out a rather disgraceful state of affairs.
It has been alleged that Mr. Sita Ram Pandey for the last so many years was blackmailing the people, and a case u/s 500 of the I.P.C being Case No. 121/88 was filed.
It has been further averred that respondent No. 3 has complied with the provisions of the Air (Prevention and Control of Pollution) Act, 1981 and of the water (Prevention & Control of Pollution) Act, 1974 and there is no complaint of any kind from any person, body or authority.
The correspondence, in this connection, has been set out.
It further appears that as early as 1980, the petitioner had made various complaints to the A.D.M. (Supply), Distt.
Varanasi, alleging that respondent No. 3 was accused of smuggling of coal and diesel blackmailing.
It was dismissed.
It further appears that there was no complaint from anybody apart from the present petitioner by any authority as to the non compliance of any statute by respondent No. 3.
The orders passed by the Pollution Control Board which had been annexed, also indicate that there are no instance of viola tion of the said Acts.
Time was sought on behalf of respondents for filing a rejoinder which, unfortunately, has not been filed, and no satisfactory explanation has been given therefore.
Certain letters alleged to have been written on behalf of the peti tioners were sought to be placed before us in the Court today.
743 Having considered the facts, circumstances, nature of the allegations and the long history of enemit and animosi ty, we are of the opinion that prima facie the provisions of the relevant Act, namely, the Air Pollution Control Act have been complied with and there is no conduct which is at tributable to respondent No. 3 herein leading to pollution of air or ecological imbalances calling for interference by this Court.
Article 32 is a great and salutary safeguard for preser vation of fundamental rights of the citizens.
Every citizen has a fundamental right to have the enjoyment of quality of life and living as contemplated by Article 21 of the Consti tution of India.
Anything which endangers or impairs by conduct of anybody either in violation or in derogation of laws, that quality of life and living by the people is entitled to be taken recourse of Article 32 of the Constitu tion.
But this can only be done by any person interested genuinely in the protection of the society on behalf of the society or community.
This weapon as a safeguard must be utilised and invoked by the Court with great deal of circum spection and caution.
Where it appears that this is only a cloak to "feed fact ancient grudge" and enemity, this should not only be refused but strongly discouraged.
While it is the duty of this Court to enforce fundamental rights, it is also the duty of this Court to ensure that this weapon under Article 32 should not be misused or permitted to be misused creating a bottleneck in the superior Court preventing other genuine violation of fundamental rights being considered by the Court.
That would be an act or a conduct which will defeat the very purpose of preservation of fundamental rights.
Having regard to the ugly rivalry here, we have no doubt that between the contestants, the Court was misled and we must, therefore, proceed with caution.
There was no funda mental right violation or could be violative if the allega tions of the so called champions on behalf of the society are scrutinised.
We must protect the society from the so called 'protectors '.
This application is legally devoid of any merit or principles of public interest and public pro tection.
This application certainly creates bottlenecks in courts, which is an abuse of process of this Court.
We have, therefore, no hesitation in dismissing this application with the observations made herein.
G.N. Petition dis missed.
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The Petitioner, representing a Social Organisation, has written a letter alleging environment pollution in some villages and the adjoining Sarnath Temple.
The letter was treated as Writ Petition under Article 32 of the Constitu tion of India.
It was alleged that the smoke and dust emit ted from the Chimneys of Respondent No. 3, viz., an oil Mill and a refinery plant in the area, and the effluents dis charged by the plants has been causing serious environmental pollution in the thickly populated area, leading to epidemic diseases.
It was further alleged that even the flora was badly affected by pollution.
Petitioner prayed for direc tions to check the pollution.
On behalf of Respondent No. 3, it was contended that it had complied with the provisions of Air (Prevention and Control of Pollution) Act, 1981 and the and there was no com plaint whatsoever.
It was further stated that the petitioner was an anti social element and his only aim was to blackmail and extract money from people like Respondent No. 3, and that a criminal case has already been filed against him, for such activities.
Dismissing the writ petition, HELD: 1.
Article 32 is a great and salutary safeguard for preservation of fundamental rights of the citizens.
Every citizen has a fundamental right to have the enjoyment of quality of life and living as contemplated by Article 21 of the Constitution of India.
Anything which 740 endangers or impairs by conduct of anybody either in viola tion or in derogation of laws, that quality of life and living by the people is entitled to be taken recourse of Article 32 of the Constitution.
But this can only be done by any person interested genuinely in the protection of the society on behalf of the society or community.
This weapon as a safeguard must be utilised and invoked by the Court with great deal of circumspection and caution.
Where it appears that this is only a cloak to "feed fat ancient grudge" and enemity, this should not only be refused but strongly discouraged.
While it is the duty of this Court to enforce fundamental rights, it is also the duty of this Court to ensure that this weapon under Article 32 should not be misused or permitted to be misused creating a bottleneck in the superior Court preventing other genuine violation of fundamental rights being considered by the Court.
That would be an act or a conduct which will defeat the very purpose of preservation of fundamental rights.
[743B E] Bandhu Mukti Morchay.
Union of lndia & Ors.; , , referred to.
This petition is legally devoid of any merit or principles of public interest and public protection.
There was no fundamental right violation or could be violative if the allegations of the so called champions on behalf of the society are scrutinised.
[743G] 2.2.
Prima facie the provisions of the relevant Act, namely, the Air Pollution Control Act have been complied with and there is no conduct which is attributable to re spondent No. 3 herein leading to pollution of air or ecolog ical imbalances calling for interference by this Court.
The orders passed by the Pollution Control Board also indicate that there were no instances of any violation.
There was no complaint from anybody apart from the petitioner, or any authority as to the non compliance of any statute by Re spondent No. 3.
[743A B; 742G]
|
nch of two members in their reasoned order pointed out what they perceived to be an error of law in the earlier decision and stated the points for the President to make a, reference to a larger Bench.
Accordingly the Bench of two members acted within their power is stating the points of law which required clarification and the President acted equally within the bounds of his power in constituting a larger Bench to hear and decide those points.
[795E; 796C] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3955 of 1990.
From the Judgment and Order dated 7.12.1989 of the Delhi High Court in C.W. No. 1060 of 1987.
Dr. V. Gauri Shanker, C.V. Subba Rao, section Rajappa and M. Chandershekharan (N.P.) for the Appellants.
G.L. Sanghi.
Raju Ramachandran, Dhruv Mehta and R.K. Sanghi for the Respondent.
792 The Judgment of the Court was delivered by THOMMEN, J.
Special Leave is granted.
This appeal by the Union of India arises from the Judg ment dated 7.12.1989 of the Delhi High Court in Civil Writ No. 1060 of 1987 setting aside Orders dated 22.10.1986 and 4.3.1987.
The former order was made by a Bench of two mem bers of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter called the 'Tribunal ') and the latter order was made by the President of the Tribunal.
By their Order dated 22.10.1986, the Bench of two members of the Tribunal stated that they doubted the correctness of an earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. Bombay & Anr.
vs Collector of Cus toms, Bombay & Anr., and directed that the case of the present respondent, Paras Laminates (P) Ltd., be placed before the President of the Tribunal for referring it to a larger Bench of the Tribunal.
The President by his Order dated 4.3.
1987 referred the case to a larger Bench of five members.
These two orders were struck down by the High Court stating that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 Judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline.
In Bakelite Hylam, (supra) a Bench of three members had held that the goods in question fell under Tariff Item 84.60 as claimed by the importer in the Bills of Entry.
In the present case, the importer claimed in its Bills of Entry that the goods imported by it fell under Tariff Item 84.60.
But the customs authorities rejected the contention of the importer and classified the goods under Tariff Item 73.15(2).
The importer appealed to the Collector of Customs, but without success.
In its second appeal before the Bench of two members, the importer relied upon the earlier deci sion in Bakelite Hylam (supra) and contended that an identi cal classification ought to have been adopted by the Customs Authorities for identical goods.
The Bench of two members, however, referred the case to the President of the Tribunal for referring the same to a larger Bench.
The order of the Bench of two members and that of the President have been struck down by the High Court by the impugned judgment for the reasons stated above.
Mr. V. Gauri Shanker, appearing for the appellant Union of India, submits that section 129 C of the contains 793 express provisions enabling the President of the Tribunal to constitute larger Benches to resolve conflicts in opinion arising between members of a Bench or between Benches of the Tribunal.
The Tribunal has ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf.
Counsel contends that the Tribunal has inherent or incidental or ancillary powers to effectuate the statutory powers expressly granted to it.
Counsel submits that the statute must be so construed as to make the confer ment of power efficacious and meaningful.
To deny the power of a Bench of two members to doubt the correctness of an earlier decision and to refer the case to the President for being heard by a larger Bench is to fetter the jurisdiction expressly vested in the Tribunal and thus stifle the growth of law evolving from the decisions of the Tribunal exercis ing judicial powers like a Court, albeit within the statuto ry limits of its jurisdiction.
Mr. G.L. Sanghi, appearing for the respondent (the importer) submits that the Tribunal is a creature of the statute.
Its jurisdiction is limited to the specific powers conferred by the statute.
It has no inherent jurisdiction and its powers are not plenary and are limited to the ex press provisions contained in the statute.
While the powers of a civil court are plenary and unlimited unless expressly curtailed by statute, the powers of a tribunal are the result of express grant and cannot exceed the bounds limited by the constituting statute.
In the present case the powers of the Tribunal are expressly specified in the and those powers, counsel says, do not contain any provision enabling the President to refer a case to a larger Bench whenever a doubt about an earlier decision is ex pressed by another Bench of the same Tribunal.
According to Mr. Sanghi, the Bench should have followed the earlier decision even if the members doubted its correctness, and should have left it to this Court to correct the error, if any.
The Tribunal is constituted by the Central Government under section 129 of the Act.
One of the members of the Tribunal is appointed by the Central Government as its President.
Section 129 C says that the powers and functions of the Tribunal may be exercised and discharged by Benches constituted by the President from amongst its members.
Subject to certain exceptions, a Bench shall consist of one judicial member and one technical member [section 129c(2)].
Sub section (5) of section 129 C provides for a reference of a case by the President in the event of differences in opinion arising amongst members on any point.
This sub section reads: 794 "(5) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ and the case shall be referred by the President for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it: Provided that where the members of a Special Bench are equally divided, the point or points on which they differ shall be decided by the President.
" Sub section (6) Section 129C says that the Tribunal shall have the power to regulate its own procedure.
It reads: "(6) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or the discharge of its functions, including the places at which the Benches shall hold their sitting.
" Sub sections (7) and (8) of this Section provide that the Tribunal shall, for certain specific purposes, be deemed to be a civil court.
There is no doubt that the Tribunal functions as a court within the limits of its jurisdiction.
It has all the powers conferred expressly by the statute.
Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers.
Certain powers are recog nised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised, the powers of the Tribunal are no doubt limited.
Its area of jurisdiction is clearly defined, but within the bounds of its jurisdiction, it has all the powers expressly and im pliedly granted.
The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all 795 such acts or employing all such means as are reasonably necessary to make the grant effective.
As stated in Maxwell on Interpretation of Statutes, (eleventh edition) "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.
" See also: Income Tax Officer, Camanore vs M.K. Mohammed Kunhi, ; , 819.
It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question.
This is particularly true when the earlier decision is rendered by a larger Bench.
The ration ale of this rule is the need for continuity, certainty and predictability in the administration of justice.
Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters.
Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the adminis tration of justice.
It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings being to light what is perceived by them as an erroneous decision in the earlier case.
In such circum stances, it is but natural and reasonable and indeed effica cious that the case is referred to a larger Bench.
This is what was done by the Bench of two members who in their reasoned order pointed out what they perceived to be an error of law in the earlier decision and stated the points for the President to make a reference to a larger Bench.
That the President has ample power to refer a case to a larger Bench is not in doubt in view of sub section (5) of section 129 C, which we have set out above.
That provision clearly says that in the event of the members of a Bench differing in opinion on any point, and the members are equally divided, the case shall be referred to the President for hearing on any such point by one or more of the members of the Tribunal, and such point shall be decided according to the opinion of the majority of the members.
It is true that sub section (5) refers to difference of opinion arising amongst members of a Bench in a particular case, and not specifically where the members of a Bench doubt the correctness of an earlier decision.
However, section 129 C confers power of reference upon the 796 President.
That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to What they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree.
In such cases, it is necessary for the healthy functioning of the Tribunal that the Presi dent should have the requisite authority to refer the case to a larger Bench.
That is a power which is implied in the express grant authorising the President to constitute Bench es of the Tribunal for effective and expeditious discharge of its functions.
In our view, the Bench of two members acted within their power in stating the points of law which required clarifica tion and the President acted equally within the bounds of his power in constituting larger Bench to hear and decide those points.
In the circumstances, we set aside the impugned judgment of the High Court.
The appeal is allowed with costs here and in the High Court.
T.N.A. Appeal allowed.
|
The respondent imported certain goods and claimed in its Bills of Entry that the imported goods fell under Tariff Item No. 84.60.
The Customs Authorities rejected the claim by holding that the goods were classifiable under Tariff Item No. 73.15(2).
The respondents preferred an appeal before the Collector of Customs which was also dismissed.
Thereafter, the respondent filed a second appeal before the Customs, Excise and Gold (Control) Appellate Tribunal con tending that in view of the earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. Bombay E.L.T. 240 an identical classification ought to have been adopted by the Customs authorities for identical goods.
By its order dated 22.10.1986 a Bench of two members of the Tribunal stated that they doubted the correctness of the earlier decision of a Bench of the three members of the Tribunal and they referred the case to the President of the Tribunal for constituting a larger Bench.
By its order dated 4.3.1987 the President of the Tribunal referred the case to a larger Bench of five members.
The respondent filed a writ petition in the High Court challenging the orders of the Bench of two members and that of the President of the Tribunal, which struck down both the orders by holding that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline.
In appeal to this Court, it was contended on behalf of the Union of India that Section 129 C of the empowers the Presi 790 dent of the Tribunal to constitute larger Benches to resolve conflicts in opinion arising between members of a Bench or between Benches of the Tribunal.
The Tribunal has ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf.
On behalf of the respondent, it was contended that the Tribunal is a creature of the Statute.
Its jurisdiction is limited to the specific powers conferred by the statute.
It has no inherent jurisdiction and its powers are not plenary and are limited to the express provisions contained in the statute.
Allowing the appeal, this Court, HELD: 1.
There is no doubt that the Tribunal functions as a. Court within the limits of its jurisdiction.
It has all the powers conferred expressly by the statute.
Further more, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers.
Certain powers are recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised.
[794F G] 1.1 Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.
[795A] Maxwell on Interpretation of Statutes, Eleventh edition and Income Tax Officer, Cannanote vs M.K. Mohammad Kunhi, 15, referred to. 2.
It is true that sub section (5) refers to difference of opinion arising amongst members of a Bench in a particu lar case, and not specifically where the members of a Bench doubt the correctness of an earlier decision.
However, section 129 C confers power of reference upon the President.
That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree.
In such cases, it is necessary for the healthy functioning of the Tribunal that the President should have the requisite authority to refer the case to a larger 791 Bench.
That is a power which is implied in the express grant authorising the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions.
[795H; 796A B] 2.1 It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question.
This is particularly true when the earlier decision is rendered by a larger Bench.
The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice.
Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters.
Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the adminis tration of justice.
It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case.
In such circum stances, it is but natural and reasonable and indeed effica cious that the case is referred to a larger Bench.
[795B E]
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ivil Appeal No. 3006 of 1981.
From the Judgment and Order dated 28.7.1981 of the Himachal Pradesh High Court in C.W.P. No. 94 of 1981.
M.V. Goswami for the Appellant.
Nemo for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
"Nautor land" under Rule 3 of the Himachal Pradesh Nautor Land Rules, 1968 (hereinafter called 'Rules ') means the right to utilize with the sanction of the competent authority, waste land owned by the Government outside the towns, outside the reserved and demarcated protected forests, and outside such other areas as may be notified from time to time by the State Government.
Gopinder Singh applied for the grant of nautor land measuring 14 bighas 12 biswas situated in village Kanal for cultivation.
The Revenue Assistant Chopal vide his order dated June 29, 1972 sanctioned nautor land measuring 11 bighas 1 biswas situated in village Kanal to him on payment of Rs.552.50 as Nazarana.
The Forest Department filed an appeal against the said order before the Deputy Commissioner Simla which was accepted and the order of the Revenue As sistant Chopal sanctioning nautor land in favour of Gopinder Singh was set aside.
Gopinder Singh filed further appeal to Divisional Com missioner, Himachal Pradesh at Simla who accepted the same and vide his order dated September 9, 1974 restored the grant of nautor land to Gopinder Singh.
The Forest Depart ment filed revision petition before the Financial Commis sioner (Revenue Appeals) Himachal Pradesh who accepted the revision petition and set aside the order dated September 9, 1974 of the Divisional Commissioner sanctioning nautor land to Gopinder Singh.
He further ordered that the amount of Nazarana Should.
be refunded to Gopinder Singh and the land resumed to the State.
The Financial Commissioner accepted the appeal on the following two grounds: 799 (1) Gopinder Singh felled the trees on the land without waiting for necessary approval of the Divisional Forest Officer and as such he took the law in his own hands.
(2) Being a teacher in a Government school drawing month ly emoluments of more than Rs.650 p.m. his economic condi tion was reasonably good and as such he was not eligible for the grant of nautor land under the Rules.
Against the order of the Financial Commissioner Gopinder Singh filed Civil Writ Petition under Article 226 of the Constitution of India before the High Court of Himachal Pradesh at Simla which was dismissed in limine on July 28, 1981.
This appeal by special leave is by appellant Gopinder Singh against the orders of the Financial Commissioner and of the High Court.
Rule 7 of the Rules lays down the categories of persons eligible for the grant of nautor land.
The said rule is as under: "Eligibility for nautor land.
Save for the widow and the children of a member of an armed force or semi armed force, who has laid down his life for the country (whose widow and children will be eligible for grant anywhere within the Tehsil subject to the conditions mentioned in the Wajib ul arj in respect of the areas where the land applied for is situated) no one who is not the resident in the estate in which the land applied for is situate, shall be eligible for the grant.
Every resident of the estate in which the land applied for lies will be eligible in the following order of preference: (a) Such persons who have less than ten bighas of land, whether as owners, or as tenants, or as lessees, either individually or collectively, or have an income of less than Rs.2,000 per annum from all sources including lands.
Provid ed that in this category a dependent of one who has laid down his life for the defence of the country shall get preference over his counterparts; (b) Scheduled Castes and Scheduled Tribes applicants; (c) The dependants of those who have laid down their lives for the defence of the country.
Service for the defence of 800 the country will mean service in a uniformed force as well as in the capacity of civilian, so long as the death occurs on a front, be it military or civil; (d) Serving personnel in the armed forces and Ex servicemen; (e) Panchayats, and (f) others; Provided that a bona fide landless resident of Spite shall be eligible for the grant of land in Nautor within the spiti Sub Division.
" The learned counsel appearing for the appellant has relied on first part of clause (a) of Rule 7 to show that the appellant was having less than 10 bighas of land and as such as was eligible for the grant of nautor land.
He fur ther contended that even though he may be having an income of more than Rs.2,000 per annum as a teacher, he being eligible under the first part, the second part of clause (a) of Rule 7 is not attracted in his case.
According to him first and the second part of clause (a) of Rule 7 are inde pendent to each other and there being 'or ' in between the two parts these have to be read disjunctively.
He contends that 'or ' has to be given its ordinary meaning and it cannot be read as 'and '.
We have carefully examined the provisions of clause (a) of Rule 7 reproduced above.
The clause reads "such persons who have less than 10 bighas of land . or have an income of less than 2,000 per annum from all sources including lands.
" There is thus inherent evidence in the clause itself to show that the two parts cannot be read disjunctively.
The second part makes it clear that an income of less than Rs.2,000 per annum should be from all sources including lands.
It is thus obvious that a person who has got less than 10 bighas of land but has an income of more than Rs.2,000 from the said land, is not eligible for allotment of nautor land under clause (a).
Even otherwise if we inter pret the clause the way learned counsel for the appellant wants us to do it would produce absurd result.
A person have two bighas of land but otherwise earning Rs.20,000 per annum would be eligible for allotment of nautor land if we accept the appellant 's interpretation.
The object of granting nautor land under the rules is to help poor and unprovided for residents of Himachal Pradesh.
Considering the nature, scope and the clear intention of the framers of the Rules it is 801 necessary to read the word "or" in between the first and the second part of clause (a) as "and".
The appellant 's income was admittedly more than Rs.2,000 per annum and as such his claim for nautor land was rightly rejected.
We, therefore, do not agree with the contentions raised by the learned counsel for the appellant.
The appeal is, therefore, dismissed with no order as to costs.
P.S.S. Appeal dis missed.
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Clause (a) of Rule 7 of the Himachal Pradesh Nautor Land Rules, 1968 makes every resident of the estate having less than ten bighas of land or having an income of less than Rs.2,000 per annum from all sources including lands, eligi ble for grant of land in nautor.
The grant of nautor land to the appellant teacher was set aside by the Financial Commissioner in revision.
The High Court dismissed the writ petition in limine.
In the appeal by special leave it was contended for the appellant that the word 'or ' occurring in between the first and the second part of cl.
(a) of Rule 7 has to be given its ordinary meaning and it cannot be read as 'and ' that the two parts of the clause were, therefore, independent of each other and had to be read disjunctively, and that he being eligible under the first part, even though having an income of more than Rs.2,000 per annum as a teacher, the second part of cl.
(a) was not attracted.
Dismissing the appeal, the Court, HELD: 1.
A person who has got less than 10 bighas of land but has an income of more than Rs.2,000 per annum from all sources including the said land is not eligible for allotment of nautor land under cl.
(a) of Rule 7 of the Himachal Pradesh Nautor Land Rules, 1968.
[800G] 2.
The object of granting nautor land under the Rules is to help poor and unprovided for residents of the State.
Considering the nature, scope and the clear intention of the framers of the Rules it is necessary to read the word 'or ' in between the first and the second part of clause (a) as 'and '.
The two parts cannot, therefore, be read disjunctive ly.
The second part makes it clear that an income of less than Rs.2,000 per annum should be from all sources including lands.
[800H; 801A] 798 3.
The appellant 's income in the instant case being more than Rs.2,000 per annum he was not entitled to the grant of nautor land.
[801A]
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No. 847 of 1987.
(Under Article 32 of the Constitution of India).
Rajinder Sachar, K.R. Nagaraja, P.K. Rao, R.S. Hegde, V.A. Babu and R. Rajappa for the Petitioners.
K.N. Bhat, Vijay K. Verma and Ms. Madhu Moolchandani for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
This Petition under Article 32 of the Constitution of India has been filed by the Syndicate Bank Scheduled Castes and Scheduled Tribes Employees Association representing the interest of Scheduled Castes and Scheduled Tribes Employees of the Syndicate Bank all over India as well as by three other Assistant Managers of the Syndicate Bank.
The case as set up in the petition is that Group 'A ' Officers posts which are Class I posts contain different grades called Junior Management Grade Scale I, Middle Man agement Grade Scale II, Middle Management Grade Scale III and like this upto Grade Scale VII.
The criteria for promo tions from Junior Management Grade Scale I to Middle Manage ment Grade Scale II and so on is based on a promotion policy dated 17.9.1985 flamed in this regard by the Bank.
According to the petitioners the Syndicate Bank is a Nationalised Bank owned and controlled by the Central Government.
All the policy decisions and major internal administration are regulated and governed by and under Rules issued by the Central Government from time to time.
In order to implement the principles enshrined in the Constitution of India grant ing benefit to members belonging to Scheduled 716 Castes and Scheduled Tribes, the Central Government evolved the concept of quota system in the ratio of 15% and 7 1/2% reservation for Scheduled Castes and Scheduled Tribes re spectively both at the time of recruitment as well as at the time of promotions in all Government organisations.
It has been further alleged by the Petitioners that 14 leading banks of the country were nationalised in the year 1969 and the Government ought to have extended the said policy of reservation in the banking sector also w.e.f. 1969.
However, the reservation policy was extended to the banking industry initially in the year 1972, but that re mained restricted in respect of appointments made by direct recruitment only.
Later on by a D.O.
Letter No. 10/24/74 SCT (B) dated 31.12.1977 the Central Government called upon the banks to implement the reservation policy in the matter of promotions posts also.
In the matter of promotions within the Officers cadre, the respondent bank did not maintain any roster and did not follow the reservation policy on an erroneous impression that the reservation in promotional cadres made through selection method is barred.
The peti tioners in this regard have submitted that by an Officer Memorandum issued by the Home Ministry as long back as on 26.3.1970 clearly provided reservations for Scheduled Castes and Scheduled Tribes Officers for their promotion within Class I posts and also in cases of Officers who drew a basic pay of Rs.2,000 per month or less.
Subsequently Department of Personnel and Administrative Reforms also issued an O.M. No. 1/10/ 74 Esstt (SCT) dated 23.12.1974 to all Ministries on.
the same lines as contained in the earlier O.M. issued by the Ministry of Home Affairs dated 26th March, 1970.
The Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) issued a Circular dated 30th May, 1981 addressed to all the 26 Nationalised Banks existing at that time in the matter of reservation for Scheduled Castes and Scheduled Tribes in respect of promo tion.
In the aforesaid letter after making a reference to the Department 's letter D.O. No. 10/24/75 SCT (B) dated 31.12.1977 Ministry of Home Affairs O.M. No. 1/9/69 Esstt (SCT) dated 26.3.1970 and Department of Personnel and Admin istrative Reforms O.M. No. 1/10/74 Esstt (SCT) dated 23.12.74 it was stated that as per the above Government orders there is no reservation for Scheduled Castes and Scheduled Tribes in 'Promotion by Selection ' within the Officers cadre.
It was further stated in the above circular that certain concessions and facilities are to be provided to the Scheduled Castes and Scheduled Tribes Officers in order to improve their chances for selection to the Higher categories of posts in the Officers cadre in accordance with the orders contained in the 717 aforesaid O.Ms of Ministry of Home Affairs.
It was further stated that it has been decided that the concessions men tioned in Para 2 of Home Ministry 's Office Memorandum dated 26.3.1970 would be available to the SC/ST Officers in Public sector Bank/Financial Institutions in 'Promotions by Selec tions ' to posts within the Officers cadre upto Scale III.
All the banks were requested to implement the Government instructions contained in the Officer Memorandums of Minis try of Home Affairs and Department of Personnel and Adminis trative Reforms dated 26.3.1970 and 23.12.1974 respectively in the existing scheme of promotions with such procedural modifications as may be necessary.
The case of the petitioners further is that the Central Government wrongly and erroneously interpreted the above circulars and in taking the view that there was no reserva tion in the promotional posts within the officers cadre.
In identical circumstances the Ministry of Steel and Mines in a letter dated April 8, 1982 addressed to the Chairman of the Steel Authority of India Limited and letter dated August 19, 1982 from the Steel Authority of India to the Chief Person nel Manager Bokaro Steel Plant took the view that the Sched uled Castes and Scheduled Tribes personnel were not entitled to the benefit of reservation in the matter of promotion of selection posts within Group 'A '.
The Bihar State Harijan Kalyan Parishad came before this Court by special leave challenging the above view taken by the Steel Authority of India and the Union of India.
This court in Bihar State Harijan Kalyan Parishad vs Union of India & Ors., ; granted special leave.
This Court held in the above case that a close perusal of the directive and in particular paragraph 9 which dealt with the concessions to employees of Scheduled Castes and Scheduled Tribes in promotions by selection method makes it abundantly clear that the rule of reservation is also applicable to promotions by selection to posts within Group 'A ' which carry an ultimate salary of Rs.2250 per month or less but the procedure is slightly different than the case of other posts.
It was further held in the above case that while the rule of reservation applies to promotions by selection to posts within group 'A ' carry ing a salary of Rs.2250 per month or less, it is prescribed that only those officers belonging to the Scheduled Castes and Scheduled Tribes will be considered for promotion who are senior be within the zone of consideration.
Thereafter a Select List depending upon the number of vacancies would be drawn up in which also those officers belonging to Scheduled Castes and Scheduled Tribes would be included who are not considered unfit for promotion.
Their position in the Select List would be that assigned to them by the 718 departmental Promotion Committee on the basis of the record of service.
In other words their inclusion in the Select List would not give them seniority, merely by virtue of their belonging to the Scheduled Castes and Scheduled Tribes over other officer 's placed above them in he Select List made by Departmental Promotion Committee.
The court bus quashed the List dated April 8, 1982 and August 19, 1982 and directed the respondents to give effect to paragraph 9 of the Presidential directive w.e.f.
the date of the directive.
Subsequently a Miscellaneous Petition No. 3637/86 was also filed in view of a misunderstanding of the above Judgment by the Authorities.
The Court by order dated 21st January, 1987 deciding the above miscellaneous petition and made the following observations: "We wish to clarify the position by stating that the Sched uled Castes/Scheduled Tribes Officers who are senior enough to be within zone of consideration for promotion should be included in the Select List against the vacancies available to the members of Scheduled Castes/ Scheduled Tribes accord ing to the rosters, provided they are not considered unfit for promotion.
Paragraph 2 of the Presidential Directive should be strictly adhered to and effect shall be given on the basis of scales of pay that obtained prior to 1975 as mentioned in that paragraph.
The officers promoted as a consequence of our order will be entitled to be paid salary and allowances from the respective dates with effect from which they should have been promoted." After the above decision of the Supreme Court which applied in all force to the case of the present petitioners, a meeting took place between the representatives of Syndi cate Bank SC/ST employees Association and the Management of Syndicate Bank on 16th and 17th April, 1986.
In the afore said meeting the representatives of the management were fully convinced with the stand taken by the representatives of Syndicate Bank SC and ST employees Association and after agreeing in principle, they assured to take up the matter very strongly again with the Government of India, Ministry of Finance (Banking Division) for their approval.
The peti tioners thereafter made frantic efforts and also submitted representations but no relief was granted to the petition ers.
It may be mentioned that Minister of State for Finance, Government of India in his letter dated November 22, 1986 addressed to Shri Banwarilal Bairva Member of Parliament clearly admitted as regards the reservation for SC/ST em ployees in Indian Overseas Bank that he had checked up his reply to the Lok Sabha 719 starred question No. 342 answered on 5th August.
1986 and had" ' got further clarifications from the bank of the subject.
It was further stated in the above letter as fol lows: "In respect of promotions.
the bank was maintaining rosters for only such category of posts to which the reservations were being applied by the bank.
Since as per the Brochure on reservations for SCs/STs are available in promotions within the officers cadre only if they are based on seniority, and the bank considered the method of promotions followed by it as one based on selection.
it did not consider maintenance of rosters necessary.
During the course of discussions between the officials of the bank and Banking Division, it was revealed that the procedure followed by the bank for effecting promotions within the officers cadre was the one falling within the categorisation of seniority.
The bank was immediately advised to maintain rosters even for these promotions within the Officers cadre and to provide for reservations for the SCs/STs.
The bank has accepted its mistake and has already agreed to provide for reservations and also to calculate the backlog from 1978 when the reser vations in promotions were first introduced in the banks.
" It may be also mentioned that the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) vide letter No. F. No. 10/72/86 SCT (B) dated 28.11.1986 addressed to all the nationalised banks also clarified the position in regard to reservations for SC/ST in promotions as under: "It may be recalled that instructions were issued by the Government on 3.5.1980 advising bank to apply the provisions of carry forward interchange, and lapsing of vacancies in promotions also because of certain factors even though strictly speaking these provisions are not applicable to promotions by selection.
In doing so, the posts filled by selection method were specifically categorised as those where promotions are made on the basis of a written examina tion followed by interview and/or on the basis of the inter view.
On the other hand promotions based on the assessment of the confidential reports of the officers were classified as those based on seniority, subject to fitness.
The banks are, therefore, requested to review the method 720 of promotions followed by them and ensure that wherever the rosters are to be maintained for determining the number of vacancies reserved for SC/ST.
This is done scrupulously.
The results of the review may be intimated to the Government by 15th December, 1986.
While intimating the information, the methodology adopted for effecting promotions from various cadres/scales should be specifically intimated".
The grievances of the petitioners is that despite the aforesaid unequivocal directions from the Government, the bank failed to make reservations for the Scheduled Castes/Scheduled Tribes employees.
The petitioners made representations to the respondents in this regard in which it was reiterated that after decision of the Supreme Court in Bihar State Harijan Kalvan Parishad vs Union Of India & Ors., (supra) and further order of clarification dated 21st January, 1987, the petitioners were entitled to the same treatment.
However the grievances of the petitioners were not redressed and a view was taken by authorities of the respondent/bank that there was no direction for the Govern ment of India for prescribing reservation policy for offi cers cadre and that they were following the selection method or promotion in the case of Officers posts.
The Union of India flied a counter affidavit contesting the stand taken by the petitioners.
So far as the bank is con cerned they did not any separate reply in detail but took the stand that the Syndicate banks was a Nationalised bank and was under the Administrative control of the Government of India, Banking Division as such the bank is guided in the discharge of its functions by any directions issued by B anking Division, Ministry of Finance, Government of India from one to time.
Reference was made to Regulation 17(1) according to which promotions to all grades of officers in the Bank were required to be made in accordance with the policy laid down by the Board from to time having regard to the guidelines of the Government, if any.
in view of these circumstances it was stated in the counter affidavit that they fully adopt all the submissions of fact and law made by the Government of India in its counter affidavit.
We have heard Mr. R. Sachar, Learned counsel for the peti tioner.
K.N. Bhat, for the Syndicate Bank and Mr. R. Rajap pa, for the Union of India.
It may be stated at the outset that though the union of India in its reply had taken several grounds for contesting the petition, but the Learned Counsel appearing for the Union of 721 India conceded before us and made a statement that he was not pressing the grounds taken in the counter affidavit filed by the Union of India and they would abide by any directions given by this Hon 'ble Court.
Mr. Bhat appearing on behalf of the Bank also submitted that the Bank was bound by the decisions taken by the Government of India, Ministry of Finance Banking Division and the Bank was not at fault in not granting relief to the petitioners in as much as the Government of India was not clear in its policy of reserva tion.
The attitude of the Government of India is clearly discernible from its counter affidavit filed in the present case.
It was thus prayed that this Hon 'ble Court should not hold the Bank responsible for not granting an appropriate relief to the petitioners at its own end and for dragging the petitioners unnecessarily in this litigation.
Mr. Sachar contended that the Ministry of State for Finance, Government of India in his letter dated November 22, 1986 addressed to Shri Banwari Lal Bairva Member of Parliament made it clear that during the course of discus sions between the officials of the bank and banking division regarding reservations for SC ST employees of the Indian Overseas Bank, it was revealed that the procedure followed by the bank for effecting promotions, within the officers cadre was the one falling within the categorisation of seniority.
The bank was immediately advised to maintain rosters even for these promotions within the officers cadre and to provide for reservations for the SCs STs.
It was further mentioned in the above letter that the bank accepted its mistake and had already agreed to provide for reserva tions and also to calculate the backlog from 1978 when the reservations in promotions were first introduced in the banks.
In another letter issued by the Banking division of the Ministry of Finance dated 28.11:86 addressed to the Chairmen and Managing Directors of 20 nationalised banks it was mentioned as under: "It may be recalled that instructions were issued by the Government on 3.5.80 advising banks to apply the provisions of carry forward, interchange, and lapsing of vacancies in promotions also because of certain factors even though strictly speaking these provisions are not applicable to promotions by selection.
In doing so, the posts filled 'by selection method were specifically categorised as those where promotions are made on the basis of a written examina tion followed by interview and/or on the basis of the inter view.
On the other hand promotions based on the 722 assessment of the confidential reports of the officers were classified as those based on seniority subject to fitness.
" The banks were, therefore, requested to review the method of promotions followed by them and ensure that wher ever the rosters are to be maintained for determining the number of vacancies reserved for SC/ST, this be done scrupu lously.
Mr. Sachar brought to our notice the promotion policy in respect of officers of the Syndicate Bank issued on 17.9.85 annexed with the writ petition as Annexure L at point number 3 follows: 3. "The Promotion Policy identifies the following four factors as relevant for ascertaining the suitability of officers for promotion from one scale to another: (a) Seniority for promotions upto SMGS IV (b) Educational and Professional Qualifications for movement to Middle Management Grade Scale II only.
(c) Performance in the grade/scale.
(d) Potential as identified in the interview for movement to Middle Management Grade Scale III and above".
It was thus submitted that from a reading of the two letters dated 22.11.86 and 28.11.86 together with the promo tion policy issued by the Syndicate Bank it was clear that for promotions from one scale to another upto SMG IV was based on seniority and the Syndicate Bank as such ought to have made promotions upto SMGS IV by giving benefit of reservation to SC/STs in the employment of the bank.
It was also contended by Mr. Sachar that upto 1979, the Syndicate Bank made promotions of officers from one scale to another purely on the basis of officers completing five years of service as on 31st December of previous year.
No promotions were made in 1979, 1980 and 1981.
Since 1982 the promotions within the officers cadre were being made on the basis of the following policy: The minimum eligibility service and factor weightage shall be as follows: 723 Movement Minimum Points Points Maximum Maximum from eligibility for the points points service as senio educa for for on 31st rity tional perfor potential December & Profe mance as iden of Previous ssional in the fied in Year qualifi scale the inter cation view JMGS to 7 years in 60 10 30 Nil MMGS II JMGS I MMGS II 5 years in 50 30 20 to MMGS MMGS II III MMGS III 5 years in 20 50 30 to SMGS MMGS III IV SMGS IV 3 years in 60 40 to TEGS V SMGS IV SMGS V to 2 years in 60 40 TEGS VI SMGS V TEGS VI to 3 years in 60 40 TEGS VII TEGS VI It was contended that from the above policy, it would be clear that there was no written test and interview for promotions from Gr.
I to Gr.
II and that 60% of the marks had been fixed for seniority.
The above policy further makes it clear that the seniority was considered a predominant factor.
The Government of India in its office memorandum dated 27.11.72 had provided for reservation of 15% and 71/2% for SC and ST candidates respectively, and the Government of India Banking Division, had made the reservation policy applicable in the case of promotional posts also vide its D.O. Letter No. 10/24/74 SCT (B) dated 31.12.77.
Thus, there remains no ambiguity and the respondent bank ought to have given benefit of reservation policy from 1st January, 1978 to the members of SCs/STs in the cadre of officers.
Mr. 724 Sachar also submitted that as already mentioned above in the matter of employees of the Indian Overseas Bank rosters for calculating the vacancies reserved for the SCs/STs had been applied in the case of promotions within the officers cadre.
It was further argued that the principle of contemporanea ex position i.e. interpreting the statute or any other document by reference to the exposition it has received from contem porary authority, has to be applied in case of employees of the Syndicate Bank also while effecting promotions within the officers cadre.
Reliance in support of the above conten tion is placed on Desh Bandhu Gupta & Company & Others vs Delhi Stock Exchange Assn.
Ltd.; , We find no force in the above contention of Mr. Sachat.
A perusal of the promotion policy goes to show that for the purpose of promotions in the cader of officers from JMGS to MMGS II and from MMGS II to MMGS III and then upto scale VII, is not based on seniority alone.
Apart from the points for seniority other factors based on selective process were also important and as such it cannot be held that such promotions in the higher scale were based solely on seniori ty.
A perusal of the criteria laid down in the promotion policy already extracted above clearly goes to show that apart from points for seniority, points for educational and professional qualification, points for performance in the scale and points for potential as identified in the inter view have also to be assessed while making appointment by promotion.
Merely because in the case of promotion from JMGS to MMGS II points for seniority being mentioned as 60, it cannot be said that such promotion in scale II may be con sidered as promotion otherwise than by the method of selec tion.
In our view unless the promotion is based on seniority alone and other factors based on merit such as educational and professional qualifications, performance in the scale, written examination or interview have no material bearing it cannot be considered as a promotion based on seniority.
A perusal of the policy shows that it is a hybrid system of promotion in which upon scale IV points are given for sen iority as well as for other factors also which are based on a sort of selection process depending upon the educational qualifications, performance in the scale and interview.
While in the case of promotion from scale IV to scale VII there are no points given for seniority at all.
Thus taking in view the entire scheme of promotion policy, we think that promotions in the officers cadre from JMGS I to Scale VII shall be considered as promotions on selection basis.
Howev er the rule of reservation for SCs/STs will apply to ap pointments made by promotion on selection basis, subject to a procedure somewhat different from usual procedure adopted in filling up 725 posts reserved for SCs and STs on selection basis alone for appointments to be made by direct recruitment.
Mr. Sachar then submitted that in case the above policy of promotion is not considered as based on seniority, or otherwise than by selection, the petitioners are to be governed by the principles already laid down in Bihar State Harijan Kalyan Parishad vs Union of India & Ors., (supra).
It was contended that in identical case though relating to employees of Steel Authority of India Ltd., this Court interpreted paragraph 9 of the Presidential directive in the case of promotions within group 'A ' which provided as under: "In promotions by selection to posts within Group 'A ' which carry an ultimate salary of Rs.2250 per month, or less, the Scheduled Caste/Scheduled Tribe officers, who are senior enough in the zone of consideration for promotion so as to be within the number of vacancies for which the Select List has to be drawn up, would be included in that list provided they are not considered unfit for promotion.
Their position in the select list would, however be the same as assigned to them by the Departmental Promotion Committee on the basis of their record of service.
They would not be given, for this purpose one grading higher than the grading otherwise as signable to them on the basis of their record of service".
It was held in the above case that a close perusal of the directive and in particular paragraph 9 which deals with "concessions to employees of SC/ST in promotions by selec tion methods" 'makes it abundantly clear that the rule of reservation is also applicable to promotion by selection to posts within group 'A ' which carry ultimate salary of Rs.2250 per month or less but that the procedure is slightly different than in the case of other posts.
We find force in this alternative submission made by Mr. Sachat.
Even though the promotional posts are based on selection method, the rule of reservation will apply to posts within group 'A ' and the benefit of reservation policy to members of SC and ST cannot be denied on the ground that promotional posts are to be filled by method of selection.
We find no distinction in the case of employees in the officers group in JMGS I of the Bank from the officers falling in group 'A ' under the Steel Authority of India Ltd., for the purpose of applying reservation policy.
Gov ernment of India committed a clear mistake in 726 not applying the principle already decided in Bihar State Harijan Kalyan Parishad 's case (supra) to the employees of the Syndicate Bank and in not giving a clear direction in this regard to the management of Syndicate Bank.
There can be no manner of doubt that the management of the Syndicate Bank was not at fault as they were bound by the instructions and policy laid down by the Banking division of the Finance Ministry of the Government of India and in the absence of a clear direction from the Government of India, it was not possible for them to grant relief to the SC/ST employees of the bank.
As already mentioned above the Union of India had wrongly taken a contrary stand in its counter filed to the present petition, and clearly in derogation to the principle already decided in the case of Bihar State Harijan Kalyan Parishad, (supra) by this Court.
In the result this petition is allowed.
The orders of the respondents dated 15th June, 1987 and 25th June, 1987 are declared as illegal.
It is further decided that though group 'A ' posts are selection posts still the reservation policy is applicable to such posts and the respondents are directed to compute the backlog of untilled reserved quota available to the SC/ST officers in the promotional posts with effect from 1.1.
1978, the date of introduction of reservation policy in the respondent bank.
The respondents are further directed to grant promotion to the SC/ST employ ees of the Syndicate Bank with all consequential benefits of salary and allowances from the respective dates w.e.f. which they should have been promoted, after applying the roster system in their favour.
We grant three months ' time to carry out these directions.
The petitioners would be entitled to costs to be paid by the respondent Union of India.
R.N.J. Petition allowed.
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The Syndicate Bank Scheduled Castes and Scheduled Tribes Employees Associated representing the interests of SC/ST employees throughout the country and three Assistant Manag ers of the Bank have filed this petition under article 32 of the constitution of India.
Their case is as follows: That Group 'A ' Officers posts are class I posts with Grade Scale I to Grade Scale VII.
Criteria for promotion from Grade I to the next Grade and onwards is regulated by a promotion policy dated 17.9.1985.
Being a nationalised Bank all policy decisions are controlled and governed by rules framed by the Central Government from time to time.
In order to implement the principles enshrined in the Constitution of granting benefit of members of Scheduled Castes and Scheduled Tribes, the Government has evolved the policy of reservation for them in the ratio of 5% and 7 1/2% respectively both at the time of initial recruitment as well as at the time of promo tions in all government establishments.
Though this policy was extended to the Banking Industry in 1972 it remained restricted to appointments by direct recruitment only.
Later the Central Govt.
by its D.C. letter dated 31.12.1977 ad dressed to all the nationalised banks required them to implement the reservation policy to promotional posts also.
But the respondent bank did not follow the policy within the Officers cadre on the mistaken impression that the reserva tion in promotional cadres through selection is barred.
To this the petitioners submitted that the Home Ministry 's O.M. issued as early as on 26.3.1970 clearly provided 714 reservations for SC & ST Officers ' promotion within class I posts including officers drawing a basic pay of Rs.2,000 per month or less.
This was later followed by O.M. dated 23.12.1974 issued by the department of Personnel and Admin istrative Reforms to all the Ministries on the same lines.
However the Ministry of Finance, Department of Economic affairs (Banking Division) issued a circular dated 30.5.1981 to all the nationalised banks that there is no reservation for Scheduled Castes and Scheduled Tribes in 'Promotion by Selection ' within the officers cadre; that the concessions to SC & ST employees mentioned in Home Ministry 's O.M. dated 26.3.1970 would be available to them in ' Promotion by Selection ' to posts within the officers cadre upto scale III only and all the banks were required to implement instruc tions contained in Home Ministry 's O.Ms.
dated 26.3.1970 and 23.12.1974 with such modifications as may be necessary in the light of the circular dated 30.5.1981.
The petitioners have contended that the Central Government wrongly and erroneously interpreted these circulars in taking the view that there was no reservation in the promotional posts within the officers cadre.
Finally they say that despite the unequivocal directions from the Govt.
of India, Ministry of Finance contained in its letter dated 28.11.1986 to all the nationalised banks clarifying the position in regard to reservations for Scheduled Castes and Scheduled Tribes for promotions and the decision of this Court in Bihar State Harijan Kalyan Parishad vs Union of India & Ors., which applied in all force to the case of the petitioners, the Respondent Bank failed to make reservations within the officers cadre and continues to follow the selection method of promotion which has lead to the filing of this Petition.
Allowing the Writ Petition, this Court, HELD: Even though the promotion posts are based on selection method, the rule of reservation will supply to posts within group 'A ' and the benefit of reservation policy to members of SC and ST cannot be denied on the ground that promotional posts are to be filled by method of selection.
Government of India committed a clear mistake in not apply ing the principle already decided in Bihar State Harijan Kalyan Parishad 's case to the Syndicate Bank and in not giving it a clear direction this regard.
[725G H; 726A] There can be no manner of doubt that the management of the Syndicate Bank was not at fault as they were bound by the instructions and policy laid down by the government of India and in the absence of a clear direction from the Government it was not possible for them to grant relief to the SC/ST employees of the bank.
[726B] 715 Though Group 'A ' posts were selection posts still the reservation policy is applicable to such posts and the respondents are directed to compute the backlog of unfilled reserved quota available to SC/ST officers in the promotion al posts with effect from 1.1.1978, the date of introduction of reservation policy in the respondent bank.
The respond ents are further directed to grant promotion to the SC/ST employees of the Syndicate Bank with all consequential benefits of salary and allowances from the respective dates they should have been promoted, after applying the roster system in their favour.
[726D E] Bihar State Harijan Kalval Parishad vs Union of India & Ors. ; , followed.
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Civil Appeal No. 1407 of 1983.
From the Judgment and Order dated 1.12.1983 of the Madras High Court in C.R.P. No. 2978 of 1981.
G. Ramaswamy and section Srinivasan for the Appellant.
A.T.M. Sampath for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
Applications were invited by the Regional Transport Authority, Pudukkottai (in short 'the R.T.A. ') for grant of one stage carriage permit on the route, Pudukkot tai Kottaipattinam, the total length of the route being 70 kms.
There were in all 15 applicants including the appel lant, S.V. Sivaswami Servai, and respondent No. 1, Hafez Motor Transport (firm).
On 26.10.1979, the R.T.A. took up the case of all the applicants for consideration.
The R.T.A. rejected the application of respondent No. 1 and some other applicants on the only ground that each of them had been granted one other permit in the same sitting and, therefore, the R.T.A. did not deem it fit to consider their claim for grant of the permit.
Out of the remaining applicants who were allotted equal marks, the R.T.A. found the appellant more suitable for the grant.
Accordingly, the R.T.A. granted the permit to the appellant for a period of three years on 26.10.1979.
The respondent No. 1 and some others, feeling aggrieved by the R.T.A. 's Order in appellant 's favour, preferred the appeals to the State Transport Appellate Tribunal, Madras (in short 'the S.T.A.T. ').
By the Order dated 5.9.1981, the S.T.A.T. set aside the R.T.A. 's Order granting, the permit to the appellant and granted the permit in favour of respondent No. 1.
This led to two civil revi sion petitions in the High Court of Madras (hereinafter referred to as 'the High Court '), one by appellant and the other by another unsuccessful applicant.
The High Court, by an interim Order dated 22.9.1981, stayed operation of the S.T.A.T. 's Order and directed that the appellant as well as respondent No. 1 be allowed to operate on the route.
Ulti mately, the High Court dismissed 805 both the revision petitions by its Order dated 1.12.1983.
The appellant filed a petition for grant of special leave on 7.12.1983 which was allowed giving rise to this appeal.
By virtue of the interim Order of this Court, the situation existing during pendency of the revision in the High Court has been continued with the result that the appellant as well as respondent No. 1 have been continuing to operate on the route throughout obviously on account of renewal being granted to them from time to time because of this Court 's interim Order.
The result is that the permit granted in October 1979 for three years expired long back and yet not merely one of these claimants for the permit, but both of them have been operating on the route all these years.
It is obvious that the grant of permit by the R.T.A. to the appellant refusing to consider the claim of respondent No. 1 and some other applicants on merits solely on the ground that they had been granted one other permit in the same sitting is clearly untenable.
The grant of a permit for another route to the respondent No. 1 and some others could only be a relevant circumstance while assessing the compara tive merits of all the applicants, but by itself it could not be decisive or sufficient to refuse consideration Of their claim.
The S.T.A.T. would have been justified in interfering with the R.T.A. 's Order on this ground and either remanding the matter to the R.T.A. or considering the same itself on merits.
The S.T.A.T. missed this aspect, even though it made a comparison of the merits of all the appli cants.
Shri G. Ramaswamy, learned counsel for the appellant showed that the S.T.A.T. has committed several errors in making the comparison which include a misreading of the past operational record described as 'history sheet ' of the rival claimants.
The High Court, while deciding the revision petitions, has also not proceeded on the correct basis.
Shri A.T.M. Sampath, learned counsel for the respondent No. 1 made an attempt initially to support the S.T.A.T. 's Order granting the permit to the respondent No. 1 which was upheld by the High Court.
However, after some arguments, both counsel made a common request to remand the matter to the R.T.A. for a fresh decision on merits taking into account the comparative merits of all the applicants.
They also requested that in view of the remand to the R.T.A. for a fresh decision on merits, no observations need be made herein on the comparative merits of the claimants or the merits of the rival contentions initially advanced to us.
We are of the opinion that in the circumstances of this case, this would be the appropriate course to adopt.
We have, however, some difficulty in accepting the other common request made by both the learned counsel.
Both sides agreed that there is necessity for two permits on the route and, therefore, we may direct that both 806 parties, who have been operating on the route by Orders of the High Court or this Court, should be allowed to ply their stage carriages on the route.
Reliance is placed by them on M. Chinnaswarny vs
Dhandayuthanpani Roadways (P) Ltd., wherein a similar Order was made on the basis of an agreement of both the sides.
The Order made in this case is a brief order based entirely on the agreement of the parties, the relevant portion of which is as under: "It is represented by Shri M.K. Ramamurthi appearing for the appellant that from about 1960, for the last 16 years, both the parties had been plying their stage carriages on the said route.
Although the permit to be granted was only one, but by orders of court or other authority both the parties had been allowed to ply their buses.
It seems to be so obvious that in public interest if two stage carriages have been plying on the route for the last 16 years there is no reason to confine it to one.
Both sides agree that there is necessity for two permits on the route.
In that view we consider the dispute to be academic.
We direct that the status quo of both parties being allowed to ply their stage carriages on the route taking appropriate permits from the authorities concerned will continue.
With this direction, the appeal is dismissed.
" It was stated at the Bar that this decision was followed in Civil Appeal No. 1133 of 1970 decided on 9.12.1981 wherein the Order made is as under: "We have heard learned counsel for the parties and it seems to us that having regard to the particular circumstances of this case, the order should be that which was passed by this Court in M. Chinnaswamy vs M/s. Dhandayuthanpani Roadways (P) Ltd., AIR 1977 SC 2095.
During the pendency of the appeal in this Court, this Court made an order on April 21, 1970, directing that the appellant and respondent No. 1 should be permitted to ply their stage carriages on the route, and ever since the order of 1970 these two stage carriages have been plying continuously under permits which have been renewed from time to time under the .
There is every justification for permitting the present situation to continue.
In the circumstances, we direct that the status quo shall continue and both the parties will be allowed to ply their stage 807 carriages in accordance with law under appropriate permits issued in their favour pursuant to the interim order dated April 21, 1970." Recently, a similar Order has been passed in Civil Appeal No. 136 of 1980 decided on 13.7.1990 which reads as under: "The authorities concerned will consider the case of the parties herein for grant of permit in accordance with law and also in accordance with the directions in the decision of this Court in M. Chinnaswamy vs M/s. Dhandayuthanpani Roadways (P) Ltd., reported in AIR 1977 SC 2095.
In the meantime, status quo as on today will continue.
Both the parties will ply their vehicles on the route in question.
Counsel for both the parties are present here and they have no objection to the order passed above.
The appeal is disposed of in the above terms.
No costs.
" With respect, we are unable to accept this common re quest made to us in the present case.
It is obvious from the above quoted orders on which the common request is based that in none of them, any point of law was considered or decided and the Order permitting both the claimants to operate on the route, even though the permit to be granted was only one, was made without adverting to the legal impli cations of such an Order.
In the first place, grant of a permit is to be made primarily with reference to the object of serving the interests of the general public and it cannot be treated as a dispute relating to grant of a permit be tween the rival claimants only.
It is not in the nature of a lis for adjudication of conflicting interests of private individuals alone It is, therefore, not a matter which can be decided merely on the basis of an agreement between the two rival claimants who alone out of several claimants remain in the lis at this stage.
The question of grant of permit is to be decided primarily by the R.T.A. having regard primarily to the interests of the general public and other prescribed relevant factors.
That apart, under Section 47(3) of the , the R.T.A. is first required to determine the number of stage carriages for the route and then to grant permits according to that determina tion made earlier.
Grant of any permit in excess thereof was not permissible without first making a fresh determination and increasing the number, if necessary.
It is, therefore, obvious that an order of this kind cannot be made unless the grant of a permit to both the rival claimants would be within the limit fixed by 808 the R.T.A. at the relevant time.
There is nothing in any of these above quoted orders to indicate that this aspect was even adverted to or that there was material to indicate that the consent order so made was within.
the limit fixed by the R.T.A. If at all the indication is to the contrary that a permit which could be granted was for plying only one stage carriage on the route whereas the consent order made had the effect of permitting two stage carriages instead of one.
Moreover.
if the claimants had the benefit of plying their stage carriages for several years on the basis of interim orders of the Court or other authorities long after the period of the permit had expired, that does not appear to us to be a valid reason for perpetuating that act and confining the grant only to the litigants before us when claimants for the permit were many and are likely to be many in case the question of grant at this point of time is decided afresh.
With respect, we are, therefore, unable to accede to this common request and to confine the operation of this route only to the two claimants before us in a lis between them which commenced more than a decade earlier.
Admittedly, the applicants for permit before the R.T.A. were many more and when the matter is to be considered afresh by the R.T.A., everyone of them is entitled to a fresh consideration of his claim on merits.
As already stated, our inability to pass a consent order in terms of the above quoted orders is for some of the reasons already indicated.
For the reasons given by us, the above quoted consent orders cannot be treated as precedents for such a situation.
Consequently, the appeal is allowed, the impugned Orders of the R.T.A., the S.T.A.T. and the High Court are set aside and the matter is remanded to the R.T.A., Pudukkottai, for a fresh consideration and decision of the claim of all the applicants for grant of the permit on merits in accordance with law.
The interim orders, permitting the appellant and the respondent No. 1 to ply their stage carriages on the route, stand vacated.
However, it would be expedient that the R.T.A. decides the matter afresh at an early date and it also makes arrangement for operation of the route during the intervening period in accordance With law to avoid any inconvenience to the travelling public.
No costs.
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The appellant and 14 others, including respondent No. 1 applied for grant of a stage carriage permit.
The R.T.A. rejected the applications of respondent No. 1 and some others on the only ground that each of them had been granted one other permit in the same sitting, and granted the permit to the appellant for a period of three years.
On appeal by respondent No. 1 and some others, the State Transport Appel late Tribunal, set aside the R.T.A. 's order and granted the permit in favour of respondent No. 1.
The appellant and another unsuccessful applicant filed two civil revision petitions.
The High Court, by an interim order, stayed the Tribunal 's order and directed that the appellant as well as respondent No. 1 be allowed to operate on the route, but ultimately dismissed both the revision petitions.
The appellant filed a special leave petition before this Court.
By virtue of this Court 's interim order, the appel lant and respondent No. 1 were continuing to operate on the route throughout; as a result, though the permit granted for three years expired long back, both the claimants had been operating on the route all these years.
On behalf of the parties common request was made for remanding the matter to the R.T.A. for fresh decision on merits and for a direction to allow both the parties to ply their stage carriages on the route on the ground that there was necessity for two permits on the route.
Allowing the appeal, this Court, HELD: 1.1 The grant of a permit is to be made by the R.T.A. primarily with reference to the object of serving the interests of the general public and other relevant factors.
It cannot be treated as a dispute relating to grant of a permit between the rival claimants only.
It is not in the nature of a lis for adjudication of conflicting interests of 803 private individuals alone.
That apart, under Section 47(3) of the , the R.T.A. is first re quired to determine the number of stage carriages for the route and then to grant permits according to that determina tion made earlier.
Grant of any permit in excess thereof was not permissible without first making a fresh determination and increasing the number, if necessary.
[807E G] 1.2 Therefore, an order allowing two claimants, to ply their stage carriages on a single route on the basis of agreement between them that there is necessity for two permits cannot be made unless the grant of a permit to both the rival claimants would be within the limit fixed by the R.T.A. at the relevant time.
The grant of a permit is not a matter which can be decided merely on the basis of an agree ment between the two rival claimants who alone out of sever al claimants remain in the lis at this stage.
[807H & F] M. Chinnaswamy vs M/s. Dhandayuthanpani Roadways (P) Ltd., ; Civil Appeal No. 1133 of 1970 decid ed on 9.12.1981 and Civil Appeal No. 136 of 1980 decided on 13.7.1990, distinguished.
1.3 The fact that the claimants had the benefit of plying their stage carriages for several years on the basis of interim orders of the Court or other authorities long after the period of the permit had expired, is not a valid reason for perpetuating that act and confining the grant only to the litigants before the court when claimants for the permit were many and are likely to be many in case the question of grant at this point of time is decided afresh.
Admittedly, the appellants for permit before the R.T.A. were many more and when the matter is to be considered afresh by the R.T.A. everyone of them is entitled to a fresh consider ation of his claim on merits.
[808B D] 1.4 The grant of permit by the R.T.A. to the appellant refusing to consider the claim of respondent No. 1 and some other applicants on merits solely on the ground that they had been granted one other permit in the same sitting is clearly untenable.
The grant of a permit for another route to the respondent No. 1 and some others could only be a relevant circumstance, while assessing the comparative merits of all the applicants, but by itself it could not be decisive or sufficient to refuse consideration of their claim.
The orders of the R.T.A. the Tribunal and the High Court are set aside and the matter remanded to the R.T.A. for a fresh consideration and decision of the claim of all the applicants on merits in accordance with law.
[805C D; 808F1 804 [The Court vacated the interim order permitting the appellant and respondent No. 1 to ply their stage carriages on the route and directed the R.T.A. to make arrangement for operation of the route till the matter is decided afresh, to avoid inconvenience to the traveling public.] [808F G]
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tion (Criminal) No. 687 of 1990.
(Under Article 32 of the Constitution of India).
Mehta, Ms. Shalini Soni and P.H. Parekh for the Peti tioner.
929 D.A. Dave, A. Sachthey, C.B. Nath, B.K. Jad, Ashish Verma and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
We allowed the Writ Petition vide our Order dated 7.8.90 and released the detenu for the reasons to be given later.
We accordingly proceed to give the reasons.
The petitioner was detained under Section 3(1) of the Gujarat Prevention of Anti Social Activities Act, 1985 ( 'Act ' for short) by an Order dated 13.3.90 passed by the Commissioner of Police, Ahmedabad City.
The grounds were served within time.
The said order is challenged in this Writ Petition.
It is mainly contended that the detaining authority has not applied his mind in passing the detention order inasmuch as the relevant material has not been taken into account at the time of passing the order.
Even other wise, according to the learned counsel, there are absolutely no grounds which warrant detention.
It is also further submitted that the provisions of the Act are not attracted even if all the averments in the grounds are accepted.
To appreciate this contention it becomes necessary to refer to the contents of the grounds in brief.
The detenu is a resident of Ahmedabad City.
There is a reference in the grounds to about three crimes registered in various police stations and they are Crime Nos.
122/86, 70/88 and 96/90.
In all these cases it is alleged that the detenu and his associates armed with deadly weapons like Swords, Dhariya and fire arms committed offences punishable under Sections 307, 45 1, 143, 147, 148 I.P.C. and Section 25(1) of the Arms Act.
So far as the first two crimes are concerned admittedly the detenu was acquitted.
In Crime No. 96/90, in which investigation is pending, bail was granted.
Then there is a reference to 8 crimes under the provisions of the Prohibition Act registered in Kagdapith Police Sta tion on the basis whereof he is described as a 'bootlegger ' within the meaning of Section 2(b) of the Act.
Some ended in conviction and some are pending in trial but admittedly the detenu does not figure in any one of these cases.
Thereafter it is stated in the grounds in general that the detenu was having dangerous weapons and with the aid of his associates, has been subjecting innocent citizens to physical beating causing physical injuries and that he and his associates have been threatening and beating the peace loving citizens and people residing and doing their business in the said area are afraid and an atmosphere of fear, danger and terror prevails and 930 that the detenu comes within the meaning of 'dangerous person ' as defined under Section 2(c) of the Act The detain ing authority has also referred to an earlier detention order dated 20.8.85 passed against the detenu and noted that he was released by the High Court.
Then the detaining au thority proceeds to mention that taking action under Section 59(1) of the Bombay Police Act, 1951 is not possible and also is not appropriate under the circumstances.
In the concluding paragraph it is particularly mentioned that the detenu was a strong headed 'dangerous person ' and he was using the dangerous weapons creating an atmosphere of ter ror.
Towards the end it is specifically mentioned that in respect of Crime No. 96/90 registered with the Sattelite Police Station.
the Chief Judicial Magistrate had remanded him to the judicial custody till 15.3.90 and there are chances of his being released, therefore to prevent him from acting prejudicially to the maintenance of public order, the detention was ordered.
Section 2(b) of the Act defines 'bootlegger ' which reads thus: "bootlegger" means a person who distills, manufactures, stores, transports, imports, exports, sells or distributes any liquor, intoxicating drug or other intoxicant in contra vention of any provision of the Bombay Prohibition Act, 1949, (Bom.
XXV of 1949) and the rules and orders made thereunder, or any other law for the time being in force or who knowingly expends or applies any money or supplies any animal, vehicle, vessel or other conveyance or any recepta cle or any other material whatsoever in furtherance or support of the doing of any of the things described above by or through any other person, or who abets in any other manner the doing of any such thing;" Unless there is material to show that the detenu committed any one of the acts mentioned in the definition, he can not come within the meaning of 'bootlegger '.
Though in the grounds there is a reference to 8 crimes under the provi sions of the Prohibition Act, the detenu, as already men tioned, does not figure in any one of these cases.
There is no material whatsoever of his involvement in any manner in any of these prohibition cases.
Therefore, he can not be said to be a bootlegger.
Now we shall consider whether he comes within the mean ing of 'dangerous person ' as defined in Section 2(c) of the Act which reads as under: 931 "2(c) "dangerous person" means a person, who either by himself or as a member of or leader of a gang, habitually commits, or attempts to commit or abets the commission of offences, punishable under Chapter XVI or Chapter XVII or Chapter XXII of the Indian Penal Code (45 of 1860), or any of the offences punishable under Chapter V of the (54 of 1959)".
As per this definition, a person, who 'habitually ' commits or attempts to commit or abets the commission of offences mentioned therein either by himself or as a member of or leader of a gang is a "dangerous person".
The expression 'habitually ' is very significant.
A person is said to be a habitual criminal who by force of habit or inward disposi tion is accustomed to commit crimes.
It implies commission of such crimes repeatedly or persistently and prima facie there should be a continuity in the commission of those offences.
In Vijay Narain Singh vs State of Biharand Ors., the majority explained the meaning of the word 'habitually ' thus: "The expression 'habitually ' means 'repeatedly ' or 'persist ently '.
It implies a thread of continuity stringing together similar repetitive acts.
Repeated, persistent and similar, but not isolated.
individual and dissimilar acts are neces sary to justify an inference of habit.
It connotes frequent commission of acts or commissions of the same kind referred to in each of the said sub clauses or an aggregate of simi lar acts or commissions".
Rashidmtva (C) Chhava Ahmedmiya Shaik vs Police Commission er, Ahmedabad and Another, [1989] 3 SCC 321 is yet another case where the scope of Section 2(c) of the Act came up for consideration before this Court and it is held that: "Therefore, this solitary incident would hardly be suffi cient to conclude that the detenu was habitually committing or attempting to commit or abetting the commission of of fences.
" It is submitted that in the instant case except Crime No. 96/90 there is no other case pending and the other two crimes which are referred to in the grounds ended in acquit tal and the definition of 'dangerous person ' in Section 2(c) does not include cases under the Prohibition Act.
Therefore the detenu is not a habitual offender so as to come 932 within the meaning of 'dangerous.person '.
We find considera ble force in this submission.
We have gone through the entire record.
The learned counsel appearing for the State could not place any material from which it can be inferred that the petitioner was a habitual offender.
No doubt a lengthy counter is filed in which it is repeatedly averred in general that the detenu was indulging in prejudicial activities but as already mentioned, only Crime No. 96/90 is pending investigation and from this alone we can not infer that the petitioner is a dangerous person ' within the mean ing of Section 2(c) of the Act.
To satisfy ourselves we have also carefully perused the FIR in Crime No. 96/90 and the complaint annexed to the same.
The main allegation against the detenu was that he, out of sudden excitement, fired the revolver and as a result of which one Mehbub Khan received injury on his leg and again he fired a shot into the air and that he and his associates were moving around in a jeep threatening the people in the area.
But in the order passed by the learned Sessions Judge on 13.3.90 while releasing the petitioner on bail, it is noted that the said Mehbub Khan had no fire arm injury at all and as a matter of fact, the public prosecutor conceded the same.
The learned Sessions Judge has also noted that no medical evidence is produced to prove that any one was injured during the alleged occur rence.
If such is the only crime pending in which the detenu is alleged to have participated in, it can by no stretch of imagination be said that he comes within the meaning of 'dangerous person ' and the conclusions drawn by the detain ing authority are bereft of sufficient material as required under Section 2(c) of the Act.
This betrays non application of mind by the detaining authority.
Consequently, the grounds on which the detention order is passed, are irrele vant and non existing.
These are the reasons which weighed with us for not upholding the detention.
G.N. Petition allowed.
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The Petitioner was detained under section 3(1) of the Gujarat Prevention of Anti Social Activities Act, 1985.
The grounds were served within time and referred to 3 crimes registered in various police stations, on the allegation that the petitioner and his associates armed with deadly weapons committed offences punishable under sections 307,451,143, 147 and 148 IPC, and section 25(1) of the Arms Act.
The grounds also referred to 8 crimes under the provi sions of the Prohibition Act where he was described as a bootlegger.
Earlier detention under the Act and release by the High Court were also mentioned.
It was specifically mentioned that in one of the three cases, the petitioner was remanded to judicial custody and since there were chances of his being released, the detention was ordered to prevent him from acting prejudicially to the maintainance of public order.
In this Writ Petition, the Petitioner has challenged the validity of the detention order passed by the Commissioner of Police.
It was contended on behalf of the petitioner that the detaining authority has not applied his mind inasmuch as relevant material has not been taken into account and there were absolutely no grounds warranting detention.
This Court allowed the Petition on.
7.8.1990 for reasons to be given later.
Giving reasons for allowing the Writ Petition, HELD: 1.
A person is said to be a habitual criminal who by force 928 of habit or inward disposition is accustomed to commit crimes.
It implies commission of such crimes repeatedly or persistently and prima facie there should be a continuity in the commission of those offences.
[931C D] Vijay Narain Singh vs State of Bihar and Ors., and Rashidmiya @ Chhava Ahmedmiya Shaik vs Police Commissioner, Ahmedabad and Anr., 1, relied on.
Unless there is material to show that the detenu committed any one of the acts mentioned in the definition, he can not come within the meaning of 'Bootlegger '.
Though in the grounds there is a reference to 8 crimes under the provisions of the Prohibition Act, the detenu, does not figure in any one of these cases.
There is no material whatsoever of his involvement in any manner in any of these prohibition cases.
Therefore, he can not be said to be a bootlegger.
[930F G] 3.
Admittedly, the detenu was acquitted in two of the three criminal cases against him.
The third case, viz., Crime No. 96/90 was pending investigation and the detenu was granted bail.
this is the only case pending against him, and the main allegation was that he, out of sudden excitement, fired the revolver and as a result of which one Mehbub Khan received injury on his leg and again he fired a shot into the air and that he and his associates were moving around in a jeep threatening the people in the area.
But in the order passed by the learned Sessions Judge on 13.3.90 while releasing the petitioner on bail, it is noted that the said Mehbub Khan had no fire arm injury at all and as a matter of fact, the public prosecutor conceded the same.
The learned Sessions Judge has also noted that no medical evi dence is produced to prove that any one was injured during the alleged occurrence.
If such is the only crime pending in which the detenu is alleged to have participated in, it can by no stretch of imagination be said that he comes within the meaning of 'dangerous person ' and the conclusions drawn by the detaining authority are bereft of sufficient material as required under Section 2(c) of the Act.
This betrays non application of mind by the detaining authority.
Conse quently, the grounds on which the detention order is passed.
are irrelevant and non existing.
[932B E]
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ivil Appeal No. 2368 of 1986 Etc. 656 From the Judgment and Order dated 30.5.1986 of the Delhi High Court in CW No. 1295 of 1986.
K.K. Venugopal, A.K. Ganguli, Yogeshwar Prasad, P.R. Seetharaman, S.K. Gupta and A.K. Srivastava for the Appel lants.
Soli J. Sorabjee, Attorney General, Kapil Sibbal, Addi tional Solicitor General.
G.L. Sanghi, section Ganesh, Mrs. Sushma Suri, EMS Anam, Atul Namda.
Aman Vachher, S.K. Mehta, Kailash Vasdev and S.R. Srivastava for the Respondents.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
The common question which arises for consideration in these appeals, by special leave, and the writ petition filed under Article 32 of the Constitution is, whether a person who was inducted as a tenant in premises, which are public premises for the purpose of the (hereinafter referred to as the 'Public Premises Act '), and whose tenancy has expired or has been terminated, can be evicted from the said premises as being a person in unautho rised occupation of the premises under the provisions of the Public Premises Act and whether such a person can invoke the protection of the Delhi Rent Control Act, 1958 (hereinafter referred to as the 'Rent Control Act ').
In short, the ques tion is, whether the provisions of the Public Premises Act would override the provisions of the Rent Control Act in relation to premises which fall within the ambit of both the enactments.
Civil Appeals Nos. 2368 and 2369 of 1986 relate to the premises which are part of a building situated at 5 Parlia ment Street, New Delhi.
The said building originally be longed to Punjab National Bank Ltd., a banking company.
Ashoka Marketing Ltd. (Appellate No. 1 in Civil Appeal No. 2368 of 1986) and M/s Sahu Jain Services Ltd. (Appellant No. 1 in Civil Appeal No. 2369 of 1986) were tenants of premises located in the said building since July 1st, 1958.
As a result of the enactment of the Banking Companies (Acquisi tion and Transfer of Undertakings) Act.
1970 (hereinafter referred to as the 'Banks Nationalisation Act '), the under taking of the Punjab National Bank Ltd., was transferred and vested in Punjab National Bank a body corporate constituted under the provisions of the said Act and the aforesaid appellants became the tenants of Punjab National Bank.
By notices dated May 18, 1971 issued under Section 106 of the Transfer of Property Act, the tenancies of both the appel lants were terminated by 657 Punjab National Bank, with effect from, November, 30, 1971.
Thereafter, the said Bank initiated proceedings under the Rent Control Act against both the appellants.
In those proceedings an objection was raised by the said appellants that proceedings for eviction under the Rent Control Act were not maintainable in view of the provisions contained in the Public Premises Act.
During the pendency of the said proceedings under the Rent Control Act, proceedings were initiated by the Estate Officer against the appellants under the provisions of the Public Premises Act and while the said proceedings under Public Premises Act were pending the earlier proceedings initiated under the Rent Control Act were dismissed by the Additional Rent Controller, Delhi, by orders dated August 6, 1979.
In the proceedings, under the Public Premises Act, the Estate Officer passed orders for eviction against the appellants and the appeals filed by the appellants against the said orders of the Estate Officer were dismissed by the Additional District Judge.
Delhi.
The appellants filed writ petitions under Article 226 of the Constitution, in the Delhi High Court.
The said writ peti tions were dismissed by the High Court by orders dated May 30, 1986.
Aggrieved by the said orders of the High Court, the appellants have filed these appeals after obtaining special leave to appeal.
Civil Appeal No. 3725 of 1986 relates to an office room in the Allahabad Bank Building situated at 17, Parliament Street, New Delhi.
The said building belongs to Allahabad Bank, a body corporate constituted under the provisions of the Banks Nationalisation Act.
The said premises were let out to Pt.
K.B. Parsai, the appellant in this appeal, for a period of three years with effect from, February 1, 1982.
After the expiry of the said period eviction proceedings under the provisions of the Public Premises Act were initi ated to evict the appellant and in those proceedings the Estate Officer passed an order dated March 29, 1986.
The appellant filed a writ petition under Article 226 of the Constitution, wherein he challenged the validity of the order passed by the Estate Officer.
The said writ petition was dismissed by the Delhi High Court by order dated August 7, 1986.
The appellant has filed this appeal against the said decision of the Delhi High Court after obtaining Spe cial Leave to Appeal.
Writ Petition No. 864 of 1985, relates to premises in the building located at 10, Darya Ganj, New Delhi.
The said building originally belonged to Bharat Insurance Company Limited, as Insurance Company which was carrying on life insurance business.
M/s Bennett Coleman & Co. Ltd., (peti tioner No. 1 in the writ petition) was in occupation of a part of the said property as a tenant under M/s Bharat 658 Insurance Co. Ltd. since 1948.
The life insurance business was nationalised under the whereby the Life Insurance Corporation was established and the life insurance business carried on by the various insurance companies, including M/s Bharat Insurance Company Ltd., was nationalised and vested in the Life Insurance Corporation.
As a result petitioner No. 1 became a tenant of the Life Insurance Corporation.
The Life Insurance Corpora tion gave a notice under Section 106 of the Transfer of Property Act terminating a tenancy of petitioner No. 1 with effect from, August 31, 1953 and thereafter proceedings for eviction were initiated against petitioner No. 1 under the provisions of the Public Premises Act and notices dated December 15, 1984 were issued by the Estate Officer under Section 4(1) and Section 7(3) of the Public Premises Act.
Feeling aggrieved by these notices the petitioners have filed the writ petition.
Before we proceed to deal with the submissions of the learned counsel for the appellants in the appeals and for the petitioners in the writ petition (hereinafter referred to as 'the petitioners ') it would be relevant to advert to the legislative history of Public Premises Act.
The Public Premises Act was preceded by two such enact ments.
The first enactments was the Government Premises (Eviction) Act, 1950 (hereinafter referred to as 'the 1950 Act ') which was enacted by Parliament to provide for the eviction of certain persons from Government premises and for certain matters connected therewith.
It was confined, in its application, to premises (a building or a part of a build ing) belonging to or taken on lease or requisitioned by the Central Government and it empowered the competent authority tO evict a person in unauthorised occupation of such prem ises after issuing a notice to such person.
The 1950 Act did not define the expression "unauthorised occupation" and it also did not prescribe the procedure to be followed by the competent authority before passing the order of eviction.
There was a provision for appeal to the Central Government against the order of the competent authority.
The 1950 Act was declared as unconstitutional by the Calcutta High Court (in Jagu Singh vs M. Shaukat Ali, and by the Punjab High Court (in Satish Chander & Anr.
vs Delhi Im provement Trust, Etc., AIR 1958 Punjab 1) on the ground that it imposed unreasonable restriction on the fight of the citizens to acquire, hold and dispose of property guaranteed under Article 19(1)(f) of the Constitution, and by the Allahabad High Court (in Brigade Commander, Meerut Sub Area vs Ganga Prasad, on the ground that it was violative 659 of the rights to equality guaranteed under Article 14 of the Constitution.
Thereupon Parliament enacted the Public Premises (Evic tion of Unauthorised Occupants) Act, 1958 (hereinafter referred to as 'the 1958 Act ').
In the 1958 Act, the defini tion of Public Premises was enlarged to include, in relation to the Union Territory of Delhi, premises belonging to Municipal Corporation of Delhi, or any municipal committee or notified area committee and premises belonging to Delhi Development Authority.
In the 1958 Act, the expression "unauthorised occupation" was defined.
It also laid down the procedure to be followed by the Estate Officer for evicting a person in unauthorised occupation of public premises and it made provision for filing an appeal against every order of the Estate Officer before the District Judge or such other Judicial Officer in that district of not less than ten years standing as the District Judge may designate in that behalf.
In Northern India Caterers Private Limited vs The State of Punjab & Anr., ; Section 5 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act, 1959 was held to be void by this Court on the ground that the said provision conferred an additional remedy over and above the remedy by way of suit and that by providing two alternative remedies to the Government and in leaving it to the unguided discretion of the Collector to resort to one or the other and to pick and choose some of those in occupa tion of public properties and premises for the application of the more drastic procedure under Section 5, the said provision was violative of Article 14 of the Constitution.
The provisions contained in the Punjab Act were similar to those contained in the 1958 Act.
Keeping in view the deci sion of this Court in Northern India Caterers Private Limit ed 's case (supra), Parliament enacted Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1968 whereby the 1958 Act was amended and Section 10E was intro duced and a bar was created to the jurisdiction of civil court to entertain any suit or proceeding in respect of eviction of any person in unauthorised occupation of any public premises or the recovery of the arrears of the rent or damages payable under the provisions of the 1958 Act.
The Delhi High Court (in P.L. Mehra etc.
vs D.R. Khanna, etc., AIR 1971 Delhi 1)held that whole of the 1958 Act was void under Article 15(2) being violative of the provisions of Article 14 of the Constitution and the amendment of 1968 was ineffective This led to the enactment of the Public Premises Act by Parliament in 1971.
It was brought into effect from 16th September, 1958, 660 the date on which the 1958 Act came into force.
The provi sions of the Public Premises Act are similar to those con tained in the 1958 Act.
The definition of 'public premises ' contained in Section 2(e) of the Public Premises Act has been widened so as to include premises belonging to or taken on lease by or on behalf of a company, as defined in Section 3 of the , in which not less than fifty one per cent of the paid up capital is held by the Central Government as well as premises belonging to or taken on lease by or on behalf of any corporation (not being a compa ny, as defined in Section 3 of the in 1956, or a local authority) established by or under a Central Act and owned and controlled by the Central Government.
It contains certain additional provisions, providing for offences and penalties (Section 11), liability of heirs and representa tives (Section 13) recovery of rent etc.
as an arrear of land revenue (Section 14) and bar of jurisdiction of Courts (Section 15).
The validity of the Public Premises Act was upheld by this Court in Hari Singh & Ors.
vs The Military Estate Officer & Anr., 15.
The Public Premises Act was amended in 1980 by the Public Premises (Eviction of Unauthorised Occupants) Amend ment Act, 1980, whereby the definition of 'public premises ' in Section 2(e) was amended to include premises belonging to or taken on lease by or on behalf of certain autonomous and statutory organisations, viz., any University established or incorporated by any Central Act, any Institute incorporated by the , any Board of Trustees constituted under the major Port Trusts Act, 1963, and the Bhakra Management Board and as well as premises belonging to or taken on lease by any Company which is subsidiary of a Company as defined in Section 3 of the in which not less than fifty one per cent of the paid up capital is held by the Central Govern ment.
By the said Amending Act of 1980, the total period taken in eviction proceedings was also sought to be cur tailed by reducing the period for showing cause against notice of eviction, the period within which an unauthorised occupant should vacate the premises after eviction order has been passed and the period for filing an appeal against the order of an Estate Officer.
By the said Amending Act of 1980 provisions were also made, by inserting Sections 5A, 5B and 5C, to deal with the squatting or spreading of goods on or against or in front of any public premises and removal of unauthorised constructions or encroachments on public prem ises.
The Public Premises Act was further amended in 1984 by the Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1984 whereby certain further amendments were made to provide for increased penalties and 661 making the offences under the Act cognisable and to enable the Estate Officers to exercise their powers under the Act effectively.
As stated in the preamble, the Public Premises Act has been enacted to provide for the eviction of unauthorised occupants from public premises and, for certain incidental matters.
In Section 2, various expressions have been de fined.
The definitions of the following expressions which are of relevance are reproduced as under: "(c) "Premises" means any land or any building or part of a building and includes (i) the garden, grounds and out houses.
if any, appertaining to such building or part of a building, and (ii) any fitting affixed to such building or part of a building for the more beneficial enjoyment thereof;" "(e) "Public Premises" means (1) any premises belonging to, or taken on lease or requisi tioned by, or on behalf of, the Central Government, and includes any such premises which have been placed by that Government, whether before or after the commencement of the Public Premises (Eviction of Unauthorised Occupants) Amend ment act, 1980 under the control of Secretariat of either House of Parliament for providing residential accommodation to any member of the staff of that Secretariat; (2) any premises belonging to, or taken on lease by, or on behalf of, (i) any company as defined in Section 3 of the (1 of 1956) in which not less than fifty one per cent of the paid up share capital is held by the Central Government or any Company which is a subsidiary (within the meaning of the Act) of the first mentioned company, (ii) any corporation (not being a company as defined in Section 3 of the ( 1 of 1956), or a local authority) established by or under a Central Act and owned or controlled by the Central Government, 662 (iii) any University established or incorporated by any Central Act, (iv) any Institute incorporated by the Institutes of Tech nology Act, 1961 (59 of 1961); (v) any Board of Trustees constituted under the (38 of 1963); (vi) the Bhakra Management Board constituted under Section 79 of the Punjab Recoganisation Act, 1966 (31 of 1966) and that Board as and when renamed as the Bhakra Beas Management Board under Sub section (6) of Section 80 of the Act; and (3) in relation to the Union Territory of Delhi (i) any premises belonging to the Municipal Corporation of Delhi, or any municipal committee or notified area committee and (ii) any premises belonging to the Delhi Development Author ity, whether such premises are in the possession of, or leased out by the said Authority." "(g) "Unauthorised Occupation", in relation to any public premises, means the occupation by any person of the public premises without authority for such occupation, and includes the continuance by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been expired for any reason whatsoever." Section 3 makes provision for appointment by Central Govern ment of gazetted officer of Government or officers of equal rank of the statutory authority as Estate Officers.
Section 4 relates to issue of show cause against order of eviction and provides as under: "(1) If the Estate Officer is of opinion that any persons are in unauthorised occupation of any public premises and that they should be evicted, the Estate Officer shall issue in the manner hereinafter provided a notice in writing calling 663 upon all persons concerned to show cause why an order of eviction should not be made.
(2) The notice shall (a) specify the grounds on which the order of eviction is proposed to be made; and (b) require all persons concerned, that is to say, all persons who are, or may be, in occupation of, or claim interest in, the public premises , (i) to show cause, if any, against the proposed order on or before such date as is specified in the notice, being a date not earlier than seven days from the date of issue thereof; and (ii) to appear before the Estate Officer on the date speci fied in the notice alongwith the evidence which they intend to produce in support of the cause shown, and also for personal hearing, if such hearing is desired.
(3) The Estate Officer shall cause the notice to be served by having it affixed on the outer door or some other con spicuous part of the public premises and in such other manner as may be prescribed, whereupon the notice shall be deemed to have been duly given to all persons concerned.
(4) Where the Estate Officer knows or has reasons to believe that any persons are in occupation of the public premises, then, without prejudice to the provisions of subsection (3), he shall cause a copy of the notice to be served on every such person by post or by delivering or tendering it to that person or in such other manner as may be prescribed.
" Section 5 relates to eviction of unauthorised occupants and provides as under ' "(1) If, after considering the cause, if any, shown by any person in pursuance of a notice under Section 4 and any evidence produced by him in support of the same and after personal hearing, if any, given under clause (b) of sub 664 section (2) of Section 4, the estate officer is satisfied that occupation of public premises is unauthorised, the estate officer may make an order of eviction, for reasons to be recorded therein, directing that the public premises shall be vacated on such date as may be specified in the order, by all persons who may be in occupation thereof or any part thereof, and cause a copy of the order to be af fixed on the outer door or some other conspicuous part of the public premises.
(2) If any person refuses or fails to comply with the order of eviction on or before the date specified in the said order or within fifteen days of the date of its publication under sub section (1) whichever is later, the estate officer of any other officer duly authorised by the estate officer in this behalf may after the date so specified or after the expiry of the period aforesaid, whichever is later, evict that person from, and take possession of the public premises and may, for that purpose, use such force as may be neces sary." Section 5A provides for removal of unauthorised construc tions/structures or fixtures, cattle or other animal from public premises.
Section 5B deals with demolition of unau thorised constructions.
Section 5C empowers the Estate Officer to seal unauthorised constructions.
Section 6 pro vides for disposal of property left on public premises by unauthorised occupants.
Section 7 empowers the Estate Offi cer to require payment of rent or damages on account of use and occupation of public premises alongwith interest by the person found in unauthorised occupation.
Section 8 lays down that an Estate Officer shall, for the purpose of holding any inquiry under the Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying to suit in respect of certain matters, viz. summoning and enforcing the attendance of any person and examining him on oath, requiring discovery and production of documents; and any other matter which may be prescribed.
Section 9 provides for an appeal from every order of the Estate Offi cer in respect of any public premises passed under Sections 5, 5B, 5C and 7 to an appellate officer who shall be a district judge of the district in which the public premises are situated or such other judicial officer in the district of not less than ten years ' standing as the district judge may designate in this behalf.
It also prescribes the period of limitation for filing such appeals and also lays down that the appeal shall be disposed of by the appellate offi cer as expeditiously as possible.
Sections 10 attaches finality to the orders 665 made by an Estate Officer or appellate officer and provides that the said orders shall not be called in questions in any original suit application or execution proceeding and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act.
Section 11 provides for offences and penalties and Section 11A lays down mat the offences under Section 11 would be treated as cognizable offences under the Code of Criminal Procedure, 1973.
Section 15 relates to bar of jurisdiction and it provides as under: "No court shall have jurisdiction to entertain any suit or proceeding in respect of (a) the eviction of any person who is in unauthorised occu pation of any such public premises, or (b) the removal of any building, structure of fixture or goods, cattle or other animal from any public premises under Section 5 A, or (C) the demolition of any building or other structure made, or ordered to be made, under Section 5B, or (cc) the sealing of any erection or work or of any public premises under Section 5 C, (d) the arrears of rent payable under sub section (1) of Section 7 or damages payable under sub section (2), or interest payable under sub section (2 A) of that section, (e) the recovery of (i) costs of removal of any building, structure or fixture or g.gods.
cattle or other animal under Section 5 A, or (ii) expenses of demolition under Section 5 B, or (iii) costs awarded to the Central Government or statutory authority under sub section (5) of Section 9, or (iv) any portion of such rent, damages, cost of removal, expenses of demolition or costs awarded to the Central Government or the statutory authority.
" 666 In exercise of the powers conferred by Section 18 of the Public Premises Act, the Central Government has made the Public Premises (Eviction of Unauthorised Occupants) Rule, 1971 (hereinafter referred to as the 'Public Premises Rules ').
Rule 5 of said Rules relates to holding of in quiries and Rule 9 relates to procedure in appeals.
We will first deal with the contentions urged by the learned counsel for the petitioners with regard to the scope of the definition of the expression 'Public Premises ' con tained in Section 2(e) and 'unauthorised occupation ', con tained in Section 2(g) of the Public Premises Act.
As mentioned earlier, the appeals relate to premises belonging to nationalised Banks, viz. Punjab National Bank and Allahabad Bank, constituted under the provisions of the Banks Nationalisation Act.
It has been urged by Shri Yogesh wer Prasad, that the premises belonging to a nationalised bank do not fall within the ambit of the definition of 'Public Premises ' contained in Section 2(e) of the Public Premises Act, for the reason that nationalised bank is not a company as defined in Section 3 of the and it is also not a corporation established by or under a Central Act.
The submission of the learned counsel for the respondent banks is that the nationalised bank is a corpora tion established by a Central Act, viz. the Banks Nationali sation Act, and the premises belonging to a nationalised bank are 'public premises ' under Section 2(e)(2)(ii) of the Public Premises Act.
The question which, therefore, requires to be considered is whether a nationalised bank is a corpo ration established by or under a Central Act and is owned or controlled by the Central Government.
The nationalised banks have been established under the Banks Nationalisation Act, wherein the nationalised banks have been described as 'corresponding new bank '.
In sub section (i) of Section 3 of the Banks Nationalisation Act, it has been provided that on the commencement of the said Act, there shall be constituted such corresponding new banks as are specified in the First Schedule.
In subsection (2) of Section 3, it is laid down that the paid up capital of every corresponding new bank constituted under sub section (1) shall, until any provision is made in this behalf in any scheme made under Section 9, be equal to the paid up capital of the existing bank in relation to which it is the corre sponding new bank.
Sub section(3) of Section 3 provides that the entire capital of the new bank shall stand vested in, and allotted to the Central Government.
Sub section (4) of Section 3 lays down that every corresponding new bank shall be a body corpo 667 rate with perpetual succession and a common seal with power, subject to the provisions of the said Act, to acquire, hold and dispose of property, and to contract, and may sue and be sued in its name.
From the aforesaid provisions contained in Section 3 of the Banks Nationalisation act it is evident that the nationalised banks have been established under the provisions of the said Act and the same are distinct juris tic persons with perpetual succession and the power to acquire, hold and dispose of property and to contract and having the right to sue and be sued in their own name and further that the entire capital of the said banks is vested in the Central Government, meaning thereby, that the said banks are owned by the Central Government.
Shri Yogeshwer Prasad has pointed out that, in view of Section 3(4) of the Banks Nationalisation Act, the nationa lised bank is a body corporate and not a corporation and that there is a distinction between a body corporate and a corporation inasmuch as a body corporate includes bodies, such as companies, co operative societies, etc., which are not corporations.
Reliance has been placed in this regard on the decision of Delhi High Court in Oriental Bank of Com merce and Another vs Delhi Development Authority and Anoth er, We find no substance in this contention.
In English law a corporation has been defined as "a body of persons or an office which is recognised by the law has having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question." (See Halsbury 's Laws of England, Fourth Edition, Volume 9, Para 1201).
Generally speaking, corporations are of two kinds; corporation aggregate and corporation sole.
A corporation aggregate has been described as an incorporated group of co existing persons and a corporation sole as an incorporated series of successive persons, (Salmond on Jurisprudence, 12th Edition P 308.
The distinctive feature of a corporation are that it has the capacity of continuous existence and succession, notwithstanding changes in its membership and it possesses the capacity of taking, holding and conveying property, entering into contracts.
suing and being sued, and exercising such other powers and priviledges conferred on it by law of its creation just as a natural person may (See S.S. Dhanoa vs Municipal Corporation, Delhi & Ors.
, ; Corporations aggregate may be public or private.
A public corporation is a corporation formed for a public purpose e.g. local government authori ties, and it is usually incorporated by a public general Act of Parliament.
A private corporation is a corporation formed for profit 668 e.g. a limited company, and it is usually incorporated under a statutory enactment.
After the second world war there has been development of a new pattern of public corporations in England as an instrument of planning in the mixed economy.
The general characteristics of such a public corporation is that it is normally created by a special statute; it has no shares and no shareholders either private or public, and its shareholder, in the symbolic sense, is the nation represent ed through Government and Parliament; the responsibility of the public corporation is to the Government, represented by the competent Minister and through the Minister to Parlia ment; the administration of the public corporation is en tirely in the hands of a board which is appointed by the competent Minister; and it has the legal status of a corpo rate body with independent legal personality.
(See W. Fried man: The New Public Corporations and the Law [1947] 12 Mod.
LR 234 236.) There is a similar growth of this type of public corporation in other countries.
This trend is also evident in our country since independence and a number of such public corporations have been constituted by Acts of Parliament.
The distinction between such a public corporation and a corporation generally known in law has been explained in the following observations of Denning L.J., as he then was: "The Transport Act, 1947, brings into being the British Transport Commission, which is a statutory corporation of a kind comparatively new to English law.
It has many of the qualities which belong to corporations of other kinds to which we have been accustomed.
It has, for instance, defined powers which it cannot exceed; and it is directed by a group of men whose duty it is to see that those powers are proper ly used.
It may own property, carry on business, borrow and lend money, just as any other corporation may do, so long as it keeps within the bounds which Parliament has set.
But the significant difference in this corporation is that there are no shareholders to subscribe the capital or to have any voice in its affairs.
The money which the Corporation needs is not raised by the issue of shares but by borrowings and its borrowing is not served by debentures; but is guaranteed by the Treasury.
If it cannot repay, the loss falls on the Consolidated Fund of the United Kingdom; that is to say, on the taxpayer.
There are no shareholders to elect the direc tors or to fix their remuneration.
There are no profits to be made or distributed." (Tamfin vs Hannaford, 669 Reference has already been made to the provisions of the Banks Nationalisation Act which show that the nationalised bank has been constituted as a distinct juristic person by the Act and it is owned by the Central Government.
There are other provisions in the Banks Nationalisation Act which show that the general superintendence, direction and management of the affairs of the business of the bank is vested in a Board of Directors constituted by the Central Government and the Central Government has the power to remove a person from the membership of the Board of Directors (Section 7(2) & 7(3) and in the discharge of its functions the Bank is to be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, give (Section 8).
This indicates that the nationalised bank has all the attributes of the new pattern of public corpora tion.
Merely because the expression 'body corporate ' has been used in relation to the nationalised banks in Section 3(4) of the Banks Nationalisation Act and the expression 'corpo ration ' has not been used, does not mean that the nationa lised bank is not a corporation.
The expression 'body corpo rate ' is used in legal parlance to mean a 'public or private corporation ' (Black 's Law Dictionary p. 159).
Shri Yogeshwer Prasad has urged that in order to consti tute a corporation there must exist persons, i.e. members, composing it, and that this element is missing in the natio nalised banks inasmuch as the Banks Natiolisation Act does not provide for any membership to these banks.
This conten tion is without any merit because, as noticed earlier, in the new pattern of public corporations which have developed, there are no shares and no shareholders, either public or private, and its shareholder, in the symbolic sense, is the nation represented through Government and Parliament.
A similar contention was raised before the High Court of Australia in the Bank of New South Wales & Ors.
vs The Commonwealth, in relation to the Common wealth Bank established as a body corporate by the Common wealth Bank Act, 1945.
While rejecting this contention, Latham C.J. has observed: "The Commonwealth Parliament has declared that the bank is a corporation and the Court must on this, as on many previous occasions, accept that the bank (though it has no corpora tors) exists as a new kind of juristic person." (p. 227) 670 Similarly Dixon J. has observed: "Although the Commonwealth Bank is declared to be a body corporate there are no corporators.
I see no reason to doubt the constitutional power of the Federal Parliament, for a purpose within its competence, to create a juristic person without identifying an individual or a group of natural persons with it, as the living constituent or constituents of the corporation.
In other legal systems an abstraction or even an inanimate physical thing has been made an artificial person as the object of rights and duties." (p. 36 1) It may also be mentioned that in R.C. Cooper vs Union of India, ; this Court, while referring to nationalised banks constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969, has treated the nationalised banks as corporations.
While construing the expression 'corporation ' in Section 2(e) (2)(ii) of the Public Premises Act it cannot be ignored that the object of the legislation in enlarging the defini tion of 'public premises ' in Section 2(e) is to make avail able the machinery of the Act for evicting unauthorised occupants not only from the premises belonging to the Cen tral Government but also from premises belonging to Compa nies, Corporations and statutory bodies in which the Central Government has a substantial interest.
Under Section 2(e)(2)(i) premises belonging to a company incorporated under the , in which not less than fifty one per cent of the paid up capital is held by the Central Government, are to be treated as public premises.
It could not be the intention of Parliament that premises belonging to public corporations whose entire paid up capital vests in the Central Government and who are the instrumentalities of State would be excluded from the ambit of the definition of 'public premises '.
In our opinion,.
therefore, the expres sion 'corporation ' in Section 2(e)(2)(ii) of the Public Premises Act would include public corporations of the new pattern constituted under the Central Acts wherein the entire paid up capital vests in the Central Government.
Shri Yogeshwere Prasad has placed reliance on the deci sion of this Court in S.S. Dhanoa 's case (supra) wherein this Court has considered the question whether the Co opera tive Store Ltd., a cooperative society registered under the Bombay Co operative Societies is a corporation established by or under a Cen tral, Provincial or State Act, for the purposes of clause Twelfth of Section 21 of the Indian Penal Code.
This Court has observed that a corporation established by or under an Act of legislature could only mean a body corporate which owes its existence and not merely its corporate status to the Act and a distinction has been drawn between a corpora tion established by or under an Act and a body incorporated under an Act.
It has been held that the Co operative Store Ltd., which is a society registered under the Bombay Co operative Societies Act, 1925, is not a statutory body because it is not created by a statute and that it is a body created by an act of a group of individuals in accordance with the provisions of a Statute.
This decision does not lend any assistance to the contention of Shri Yogeshwer Prasad.
In Oriental Bank of Commerce 's case (Supra) the over ruled question for consideration was, whether the Chairman of a nationalised bank is a public servant and sanction under Section 197 of Code of Criminal Procedure was neces sary to prosecute him.
M.L. Jain, J. has held that the nationalised bank is a body corporate and not a corporation within the meaning of clause Twelfth of Section 21 I.P.C. and, therefore, the Chairman of the nationalised bank is not a public servant under Section 21 I.P.C.
The learned Judge has further held that even if the nationalised bank is a corporation, the Chairman of the said bank is not in the service or pay of the bank and further (in the facts of the case) it could not be said that the Chairman was acting or purporting to act in the discharge of official duty.
Sachar, J. did not consider it necessary to deal with the question, as to whether the nationalised bank is a corporation because he was of the view that Section 197 Cr.
P.C. was not at tracted.
For the reasons mentioned earlier, the judgment of Jian, J. insofar as it draws a distinction between a 'body corporate ' and a 'corporation ' and laws down that the natio nalised bank, though a 'body corporate ' is not a corpora tion, cannot be upheld.
The other reason given by Jain, J. is that the nationalised bank is merely a personified insti tution having no members and is, therefore, not a corpora tion.
This view also cannot be sustained.
We have already pointed out that in order to constitute a corporation it is not necessary that there should be shareholders or members and that in the new pattern of public corporation that has developed there are no shareholders or members.
Keeping in view the provisions of the Banks Nationalisa tion Act we are of the opinion that the nationalised bank is a corporation established by a Central Act and it is owned and controlled by the 672 Central Government.
The premises belonging to a nationalised bank are public premises under Section 2(e)(2)(ii) of the Public Premises Act.
We are, therefore, unable to accept the contention of Shri Yogeshwar Prasad that premises belonging to a nationalised bank do not fall within the ambit of the definition of 'public premises ' contained in Section 2(e) of the Public Premises Act.
Shri Yogeshwer Prasad has also urged that 'public prem ises ' as defined in Section 2(e) of the Public Premises Act, must be confined to premises let out for residential pur poses only and should not cover premises let out for commer cial purposes and that if premises let out for commercial purposes are included, Section 2(e) would be rendered uncon stitutional as being violative of the provisions of Articles 14, 19(1)(g) and 21 read with Articles 39 and 41 of the Constitution.
The submission of Shri Yogeshwer Prasad is that a construction which would sustain the constitutionali ty of the provisions of Section 2(e) should be preferred over a construction which would render them constitutional.
We find no force in this contention.
There is no warrant for confining the scope of the definition of 'public premises ' contained in Section 2(e) to premises used for residential purposes only and to excluded premises used for commercial purposes from its ambit.
In Hari Singh vs Military Estate Officer, (Supra) a similar contention was advanced and it was argued that the expres sion 'premises ' in Public Premises Act would not apply to agricultural land.
This Court rejected that contention with the observation: "The word 'premises ' is defined to mean any land.
Any land will include agricultural land.
There is nothing in the Act to exclude the applicability of the Act to agricultural land.
" We are also unable to hold that the inclusion of prem ises used for commercial purposes within the ambit of the definition of 'public premises ', would render the Public Premises Act as violative.of the right to equality guaran teed under Article 14 of the Constitution or right to free dom to carry on any occupation, trade or business guaranteed under Article 19(1)(g) of the Constitution or the right to liberty guaranteed under Article 21 of the Constitution.
It is difficult to appreciate how a person in unauthorised occupation of public premises used for commercial purposes, can invoke the Directive Principles under Article 39 and 41 of the Constitution.
As indicated in the 673 statement of Objects and Reasons the Public Premises Act has been enacted to provide for a speedy machinery for the eviction of unauthorised occupants of public premises.
It serves a public purpose, viz. making available, for use, public premises after eviction of persons in authorised occupation.
The need to provide speedy machinery for evic tion of persons in unauthorised occupation cannot be con fined to premises used for residential purposes.
There is no reason to assume that such a need will not be there in respect of premises used for commercial purposes.
No dis tinction can, therefore, be made between premises used for residential purposes and premises used for commercial pur poses in the matter of eviction of unauthorised occupants of public premises and the considerations which necessitate providing a speedy machinery for eviction of persons in unauthorised occupation of public premises apply equally to both the types of public premises.
We are, therefore, unable to accept the contention of Shri Yogeshwer Prasad that the definition of public premises contained in Section 2(e) of the Public Premises Act should be so construed as to exclude premises used for commercial purposes from its ambit.
Shri A.K. Ganguli, has urged that a person who was put in occupation of the premises as a tenant and who was con tinued in such occupation after the expiry or the termina tion of his tenancy cannot be regarded as a person in unau thorised occupation under Section 2(g) of the Public Prem ises Act.
The submission of Shri Ganguli is that, the occu pation of a person who was put in possession as a tenant is juridical possession and such an occupation cannot be re garded as unauthorised occupation.
In support of this sub mission, Shri Ganguli has placed reliance on the decision of the Bombay High Court in Brigadier K.K. Verma & Anr.
vs Union of India & Anr., A.I.R. 1954 Bombay 358 which has been approved by this Court in Lallu Yeshwant Singh vs Rao Jag dish Singh & Ors., ; The definition of the expression 'unauthorised occupa tion ' contained in Section 2(g) of the Public Premises Act is in two parts.
In the first part the said expression has been defined to mean the occupation by any person of the Public premises without authority for such occupation.
It implies occupation by a person who has entered into occupa tion of any public premises without lawful authority as well as occupation which was permissive at the inception but has ceased to be so.
The second part of the definition is inclu sive in nature and it expressly covers continuance in occu pation by any person of the public premises after the au thority (whether by way of grant or any other mode of trans fer) under which he was allowed to occupy the premises has 674 expired or has been determined for any reason whatsoever.
This part covers a case where a person had entered into occupation legally under valid authority but who continues in occupation after the authority under which he was put in occupation has expired or has been determined.
The words "whether by way of grant or any other mode of transfer" in this part of the definition are wide in amplitude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act.
The definition of unauthorised occupation contained in Section 2(g) of the Public Premises Act would, therefore, cover a case where a person has en tered into occupation of the public premises legally as a tenant under a lease but whose tenancy has expired or has been determined in accordance with law.
Brigadier K.K. Verma & Anr.
vs Union of India & Anr.
(Supra) was decided under the provisions of the Government Premises (Eviction) Act, 1950, which did not contain the definition of the expression 'unauthorised occupation '.
In that case it has been held that under the Indian law, the possession of a tenant who has ceased to be a tenant is protected by law and although he may not have the right to continue in possession, after the termination of the tenan cy, his possession is juridical and that possession is protected by statute, and therefore, an erstwhile tenant can never become a trespasser and his possession cannot be regarded as unauthorised occupation.
The learned Judges have also observed that unless the legislature had given indica tion of a clear intention that by the expression 'unautho rised occupation ' it meant not only person who had no title at all but also persons who are titled at the inception and whose title came to an end, it would not be proper to give an interpretation to the expression 'unauthorised occupa tion ' which would run counter to the principles of law which have been accepted in this country.
After this decision the legislature intervened and introduced the definition of the expression 'unauthorised occupation ' in the , which defi nition has been reproduced in Section 2(e) of the Public Premises Act and in the said definition the legislature has taken care to make an express provision indicating that the expression 'unauthorised occupation ' includes the continu ance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever.
In the circumstances the petitioners cannot derive any assistance from the decision of the Bombay High Court in Brigadier K.K. Verma 's case (supra).
675 Shri Ganguli has placed reliance on the decision of A.P. Sen, J. in Express Newspapers Pvt. Ltd. & Ors.
vs Union of India & Others, [1985] Suppt.
3 S.C.R. 382 and has submitted that in that case the learned Judge has held that cases involving relationship between the lessor and lessee fall outside the purview of the Public Premises Act.
We have carefully perused the said decision and we are unable to agree with Shri Ganguli.
In that case A.P. Sen, J. has observed that the new building had been constructed by the Express Newspapers Pvt. Ltd. after the grant of permission by the lessor, and, therefore, the Express Newspapers Pvt.
Ltd. was not in unauthorised occupation of the same within the meaning of Section 2(g) of the Public Premises Act.
It was also held by the learned Judge that the Express Building constructed by the Express Newspapers Ltd. with the sanction of lessor on plots Nos. 9 and 10 demised on perpetual lease can, by no process of reasoning, be regarded as public premises belonging to the Central Government under Section 2(e) of the Public Premises Act, and therefore, there was no question of the lessor applying for eviction of the Express Newspapers Pvt. Ltd. under the provisions of the Public Premises Act.
The aforesaid observations indicate that the learned Judge did not proceed on the basis that cases in volving relationship of lessor and lessee fall outside the purview of the Public Premises Act.
On the other hand the said observations show that the learned Judge has held that the provisions of the Public Premises Act could not be invoked in the facts of that case.
Another submission that has been urged by Shri Ganguli is that the question whether a tease has been determined or not involves complicated questions of law and the estate officer, who is not required to be an officer well versed in law, cannot be expected to decide such question and, there fore, it must be held that the provisions of the Public Premises Act have no application to a case when the person sought to be evicted had obtained possession of the premises as a lessee.
It is true that there is no requirement in the Public Premises Act that the estate officer must be a person well versed in law.
But, that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorised occupation of persons who obtained possession of the said premises under a lease.
Section 4 of the Public Premises Act requires issuing of a notice to the person in unauthorised occupation of any Public Premises requiring him to show cause why an order of eviction should not be made.
Section 5 makes provisions for production of evidence in support of the cause shown by the person who has been served with a notice under Section 4 and giving of a personal hearing by the estate officer.
Section 8 provides that an estate 676 officer, shall, for the purpose of holding any enquiry under the said Act have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying a suit in respect of the matters specified therein namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring discovery and production of documents; and (c) any other matters which may be prescribed.
Rule 5(2) of the Public Premises (Eviction of Unautho rised Occupants) Rules, 1971, requires the estate officer to record the summary of evidence tendered before him.
Moreover Section 9 confers a right of appeal against an order of the estate officer and the said appeal has to be heard either by the district judge of the district in which the public premises are situate or such other judicial officer in that district of not less than ten years ' standing as the dis trict judge may designate in that behalf.
In shows that the final order that is passed is by a judicial officer in the rank of a district judge.
A similar contention was raised before this Court in Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Others, ; wherein the validity of the provisions of Chapter VA of the Bombay Municipal Corporation Act, ' 1888 and the Bombay Government Premises (Eviction) Act, 1955 were challenged before this Court and the said contention was negatived.
Aligiriswami, J. speaking for the majority, has observed as under: "Even though the officers deciding these questions would be administrative officers there is provision in these Acts for giving notice to the party affected, to inform him of the grounds on which the order of eviction is proposed to be made, for the party affected to file a written statement and produce documents and be represented by lawyers.
The provi sions of the Civil Procedure Code regarding summoning and enforcing attendance of persons and examining them on oath, and requiring the discovery and production of documents are a valuable safeguard for the person affected.
So is the provision for appeal to the Principal Judge of the City Civil Court in the city of Bombay, or to a District Judge in the district who has got to deal with the 677 matter as expeditiously as possible, also a sufficient safeguard as was recognised in Suraj Mail Mehta 's case.
" Having dealt with the submissions of learned counsel for the petitioners on the applicability of the provisions of Public Premises Act, we may come to the main question in volved in these matters, namely, whether the provisions of the Public Premises Act override the provisions of the Rent Control Act.
For appreciating the submissions of the learned counsel on this question it is necessary to examine the provisions of both the enactments.
The relevant provisions of the Public Premises Act have already been set out.
We may briefly refer to the provisions of the Rent Control Act.
The Rent Control Act has been enacted by Parliament to provide for the control of rents and evictions and of rate of hotels and lodging houses and for the lease of vacant premises to Government, in certain areas in the Union Terri tory of Delhi.
It extends to the areas included within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board and to such urban areas within the limits of the Municipal Corporation of Delhi as are specified in the First Schedule to the Act (Section 1(2).
The expression 'premises is defined in Section 2(i) as under: "Premises means any building or part of a building which is or, is intended to be, let separately for use as a residence or for commercial use or for any other purpose, and in cludes: (i) the garden, grounds and outhouses, if any,, appertaining to such building or part of the building; (ii) any furniture supplied by the landlord for use in such building or part of the building; but does not include a room in a hotel or lodging house.
" Section 3, which excludes the applicability of the Act to certain premises, provide as under: "Nothing in this Act shall apply: (a) to any premises belonging to the Government; (b) to any tenancy or other like relationship created by a 678 grant from the Government in respect of the premises taken on lease, or requisitioned, by the Government Provided that where any premises belonging to Government have been or are lawfully let by any person by virtue of an agreement with the Government or otherwise, then, notwith standing any judgment, decree or order of any court or other authority, the provisions 'of this Act shall apply to such tenancy.
(c) to any premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees; or (d) to any premises constructed on or after the commencement of the Delhi Rent Control (Amendment) Act, 1988, for a period of ten years from the date of completion of such construction." Chapter II (Sections 4 to 13) contains provisions re garding rent including fixation of standard rent.
Chapter III (Sections 14 to 25) contains provisions for control of eviction, of tenants.
Section 14 gives protection to tenants against eviction and provides that an order for eviction of a tenant can be passed only on one or more of the grounds mentioned in clauses (a) to (1) of sub section (1).
Special provisions have been made for recovery of immediate posses sion of premises in Sections 14A to 14D in respect of cer tain classes of landlords.
Section 22 contains a special provision for recovery of possession of premises where the landlord is a company or a body corporate or a local author ity or a public institution if the premises are required for the use of employees of such landlord or, in the case of a public institution, for the furtherance of its activities.
In Chapter IIIA (Sections 25 A to 25 C) provisions have been made for summary trial of certain applications for eviction on the ground of bona fide requirement of the landlord.
Chapter IV (Sections 26 to 29) contains provisions relating to deposit of rent.
Chapter V (Sections 30 to 34) contains provisions relating hotels and lodging houses.
Chapter VI (Sections 35 to 43) contains provisions relating to appoint ment of controllers and their powers and functions and appeals.
Section 42 makes provisions for execution of orders passed by the Controller or in appeal, as a decree of civil court.
Section 43 attaches finality to the order passed by the Controller and the order passed in appeal.
Chapter VII (Sections 44 to 49) contains provisions regarding special obligations of landlords and 679 penalties.
Chapter VIII (Sections 50 to 57) contains miscel laneous provisions.
Under Section 50 jurisdiction of civil courts is barred in respect of matters specified therein.
Section 54 saves the operation of certain enactments, name ly, , the and the Delhi Tenants (Temporary Protection) Act, 1956.
On a comparison of the provisions of the Public Premises Act and the Rent Control Act it will be found that: 1.
By virtue of Section 1(2) of the Public Premises Act, the said Act is applicable throughout the territory of India, whereas, view of Section 1(2) of the Rent Control Act, the said Act is confined in its application to areas included within the limits of the New Delhi Municipal Com mittee and the Delhi Cantonment Board and to such urban areas within the limits of the Municipal Corporation of Delhi as are specified in the First Schedule and any other urban area included within the limits of the Municipal Corporation of Delhi to which provisions of the said Act are extended by the Central Government by notification in the Official Gazette.
(2) Under Clauses (c) of Section 2 of the Public Premises Act, the expression 'premises ' has a wider connotation and it includes open land as well as building or part of a building.
Under the Rent Control Act the expression 'prem ises ' as defined in clause (i) of Section 2 has a narrower connotation to mean any building or a part of building and it does not cover open land.
In view of the definition of the expression 'public premises ' contained in clause (e) of Section 2 of the Public Premises Act, the said Act, in addition to the premises belonging to or taken on lease or requisitioned by, or on behalf of, the Central Government, is applicable to premises belonging to or taken on lease by or on behalf of the compa nies and statutory bodies mentioned in clauses (2) and (3) of Section 2(e).
The Rent Control Act, on the other hand, is applicable to all premises except premises belonging to the Government or to any tenancy or other like relationship created by a grant from the Government in respect of the premises taken on lease, or requisitioned, by the Government (Section 3).
In view of the amendment introduced in Section 3 by the Delhi Rent Con 680 trol Act is not applicable to premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees and premises constructed on or after the commencement of the said Amendment Act, for a period of ten years from the date of completion of such construction.
The provisions of the Public Premises Act are applica ble to Public Premises in occupation of a person having no authority for such occupation, including a person who was allowed to occupy the public premises under a grant or any other mode of transfer and who has continued in occupation after the authority under which he was allowed to occupy that premises has expired or has been terminated.
The provi sions of the Delhi Rent Control Act are applicable only to persons who have obtained possession of the premises as tenants and whose tenancy is continuing as well as persons who after the expiration or termination of the tenancy have continued in occupation of the premises.
As a result of this comparison it can be said that certain premises, viz. building or parts of buildings lying within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board and in urban areas within the limits of the Municipal Corporation of Delhi, which belong to or are taken on lease by any of the companies or statuto ry bodies mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act and which are in occupation of a person who obtained possession of the said premises as a tenant and whose tenancy has expired or has been terminated but who is continuing in occupation of the same, would ex facie fall within the purview of both the enactments.
The question which, therefore, arises is whether the occupant of such premises can seek the protection available under the provisions of Rent Control Act and he can be evicted from the premises only in accordance with the said provisions and proceedings for eviction of such a person cannot be initiat ed under the provisions of the Public Premises Act.
Shri Venugopal and other learned counsel representing the petitioners have urged that the Rent Control Act is a self contained code providing for regulating the relation ship of landlords and tenants and it makes comprehensive provisions with regard to control of rents as well as evic tion of tenants and that the provision of the Rent Control Act, being special in nature insofar as lease hold proper ties in Delhi are concerned, would prevail over the provi sions of the Public 681 Premises Act which are in the nature of general provisions relating to eviction of unauthorised occupants from Govern ment premises in the whole country.
In support of this submission the learned counsel for the petitioners have placed reliance on Sections 22 and 54 and the non obstante clause contained in Section 14(1) of the rent Control Act.
It has also been urged by the learned counsel for the peti tioners that the Public Premises Act does not contain any machinery for the termination of the tenancy and that in view of the decision of this Court in V. Dhanapal Chettiar vs Yesodai Ammal, ; , the jural relationship of landlord and tenant can come to an end only on the pass ing of an order of eviction by a competent court in accor ding with the provisions of the Rent Control Act and that in the absence of an order of eviction under the provisions of the Rent Control Act no proceedings can be initiated against a person who came into occupation of the premises as a tenant and who is continuing in occupation of the said premises after the contractual tenancy has expired or has been terminated.
The learned Attorney General and Shri G.L. Sanghi, appearing on behalf of the respondents in the appeals, have urged that the Public Premises Act is in the nature of a special enactment making provision for speedy and expedi tious recovery of possession of public premises from persons in unauthorised occupation of the same whereas the Rent Control Act is general enactment regulating the relationship of landlord and tenant and since the Public Premises Act is a special enactment it would override the provisions of the Rent Control Act.
It has also been urged that the Public Premises Act is a later enactment, having been enacted in 1971, whereas the Rent Control Act was enacted in 1958, and, therefore, the Public Premises Act would prevail over the Rent Control Act.
It has been urged that Section 15 of the Public Premises Act which bars the jurisdiction of other Courts is in the nature of a non obstante clause which gives overriding effect to the provisions of the Public Premises Act.
The learned Addl.
Solicitor General, appearing for the respondents in the writ petitions, has adopted a different line of argument.
He has contended that the Public Premises Act had been enacted by Parliament in exercise of its legis lative power under Article 246(1) read with entries 32, 95 and 97 of List I of the Seventh Schedule to the Constitution whereas the Rent Control Act has been enacted by Parliament in exercise of its legislative power under Article 246(4) read with entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and since the Public Premises Act has been enacted in 682 exercise of the legislative power under Article 246(1) of the Constitution, it would prevail over the Rent Control Act enacted in exercise of legislative power under Article 246(4) of the Constitution.
At this stage, it may be mentioned that in Jain Ink Manufacturing Company vs Life Insurance Corporation of India & Another, ; decided by a bench of three Judges, it has been held that the Public Premises Act over rides the provisions of the Delhi Rent Control Act.
In that case it has been observed that the scope and object of the Public Premises Act is quite different from that of Rent Control Act and while the Public Premises Act operates in a very limited field in that it applies only to a limited nature of premises belonging only to particular sets of individuals, a particular set of juristic persons like Companies, Corporations or the Central Government, whereas the Rent Control Act is of much wider application and it applies to all private premises which do not fall within the limited exceptions indicated in Section 2 of the Public Premises Act and the object of the Rent Control Act is to afford special protection to all the tenants or private landlords or landlords who are neither a Corporation nor Government or Corporate Bodies.
It was, therefore, held that the Public Premises Act is a special Act as compared to the Rent Control Act and it overrides the provisions of the Rent Control Act.
The learned counsel for the petitioners have assailed the correctness of the said decision and have submitted that it needs reconsideration.
As regards rent control legislation enacted by the State legislatures the position is well settled that such legisla tion fall within the ambit of entries 6, 7 and 13 List III of the Seventh Schedule to the Constitution (See: Indu Bhushan Bose vs Rama Sundari Devi & Another, ; ; V Dhanpal Chettiar 's case (supra); Jai Singh Jairam Tyagi etc.
vs Mamanchand Ratilal Agarwal & Others, ; and Accountant and Secretarial Services Pvt. Ltd. & Another vs Union of India & Others, ; The Rent Control Act has been enacted by Parliament in relation to the Union Territory of Delhi in exercise of the legislative power conferred under Article 246(4) of the Constitution which empowers Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
The Public Premises Act deals with Government property as well as property belonging to other legal entities men tioned in clauses (2) 683 and (3) of Section 2(e) of the Public Premises Act.
In so far as it relates to eviction of unauthorised occupants from premises belonging to or taken on lease or requisitioned by or on behalf of the Central Government the Public Premises Act would fall within entry 32 of List I being law with respect to a property of the Union.
The property belonging to the various legal entities mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act cannot be regarded as property of the Union and the Public Premises Act cannot be held to have been enacted under entry 32 of List I in respect of the said properties.
In Accountant and Secretarial Services Pvt. Ltd. and Another vs Union of India and Others, (supra) this Court has held that the Public Premises Act, in relation to properties other than the properties belonging to the Central Government has been enacted under the concurrent list.
The learned Additional Solicitor General has placed reliance on the decision of this Court in Smt.
Saiyada Mossarrat vs Hindustan Steel Ltd., ; wherein it has been held that with regard to the subject matter of speedy eviction of unautho rised occupants from properties belonging to a Government company, wherein the Central Government has more than fifty one per cent of the paid up capital, the source of authority can be traced to entry 97 read with entry 95 of Union List (List 1).
This Court has, however, affirmed the decision of the Division Bench of Madhya Pradesh High Court in L.S. Nair vs Hindustan Steel Ltd., AIR 1980 MP 106 wherein it has been held that insofar as the Public Premises Act deals with a lessee or licence of premises belonging to a Government company, the subject matter of the Act would be covered by entries 6, 7 and 46 of List III.
After quoting the observa tions of the Madhya Pradesh High Court in this regard, this Court has observed: "Learned counsel for the petitioner has not been able to show that there is any infirmity in the reasoning of the High Court." This shows that the decision of this Court is rounded on the view mentioned above.
Since the Act was held to be covered by entries 6, 7 and 46 of List III, it was not necessary to invoke the residuary power of legislation under entry 97 of List I.
The observations made by this Court that the source of authority in the matter of speedy eviction of unautho rised occupants from properties belonging to a Government company wherein the Central Government has more than fifty one per cent of the paid up share capital can, in any case, be traced to entry 97 read with entry 95 of List I are obiter in nature only.
There is, therefore, no inconsistency between the decisions of this Court in Accoun 684 tant and Secretarial Services Pvt.
Ltd. (supra) and Smt.
Saiyada Mossarrat case (supra) inasmuch as in both the decisions it is held that the Public Premises Act insofar as it deals with a lessee or licencee of premises other than premises belonging to the Central Government has been enact ed in exercise of the legislative powers in respect of matters enumerated in the Concurrent List.
We are in agree ment with this view.
This means that both the statutes, viz. the PubLic Premises Act and the Rent Control Act, have been enacted by the same legislature, Parliament, in exercise of the legis lative powers in respect of the matters enumerated in the Concurrent List.
We are, therefore, unable to accept the contention of the learned Additional Solicitor General that the Public Premises Act, having been enacted by Parliament in exercise of legislative powers in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers in respect of matters enumerated in the Concurrent List.
In our opinion the question as to whether the provisions of the Public Premises Act override the provisions of the Rent Control Act will have to be considered in the light of the principles of statutory interpretion applicable to laws made by the same legisla ture.
One such principle of statutory interpretation which is applied is contained in the latin maxim: leges posteriors priores conterarias abrogant, (later laws abrogate earlier contrary.
laws).
This principle is subject to the exception embodied in the maxim: generalia specialibus non derogant, (a general provision does not derogate from a special one).
This means that where the literal meaning of the general enactment covers a situation for which specific provision is made by another enactment contained in an earlier Act, it is presumed that the situation was intended to continue to be dealt with by the specific provision rather than the later general one (Benion: Statutory Interpretation p. 433 34).
The rationale of this rule is thus explained by this Court in the J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh & Others, ; "The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers Judges but springs from the common understanding of man and women that when the same person gives two directions 685 one covering a large number of matters in general and anoth er to only some of them his intention is that these latter directions should prevail as regards these while as regards all the rest the earlier directions should have effect." (p. 94) In U.P. State Electricity Board & Ors.
vs Hari Shankar Jain & Ors., ; this Court has observed: "In passing a special Act, Parliament devotes its entire consideration to a particular subject.
When a General Act is subsequently passed, it is logical to presume that Parlia ment has not repealed or modified the former Special Act unless it appears that the Special Act again received con sideration from Parliament." (p. 366) In Life Insurance Corporation vs
D.J. Bahadur; , Krishna Iyer, J. has pointed out: "In determining whether a statute is a special or a general one, the focus must be on the principal subject matter plus the particular perspective.
For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with liner points of law." (p. 1127) The Public Premises Act is a later enactment, having been enacted on 23rd August, 1971, whereas the Rent Control Act was enacted on 31st December, 1958.
It represents the later will of Parliament and should prevail over the Rent Control Act unless it can be said that the Public Premises Act is a general enactment, whereas the Rent Control Act is a special enactment and being a special enactment the Rent Control Act should prevail over the Public Premises Act.
The submission of learned counsel for the petitioners is that the Rent Control Act is a special enactment dealing with premises in occupation of tenants, whereas the Public Prem ises Act is a general enactment dealing with the occupants of Public Premises and that insofar as public premises in occupation of tenants are concerned the provisions of the Rent Control Act would continue to apply and to that extent the provisions of the Public Premises Act would not be applicable.
In support of this submission reliance has been placed on the non obstante clauses contained in Section 14 and 22 of the Rent Control Act as well as the provisions contained in Sections 50 and 54 of the said Act.
On the 686 other hand the learned counsel for the respondents have urged that the Rent Control Act is a general enactment dealing with the relationship of landlord and tenant gener ally, whereas the Public Premises Act is a special enactment making provision for speedy recovery of possession of Public Premises in unauthorised occupation and that the provisions of the Public Premises Act, a later Special Act, will, therefore, override the provisions of the Rent Control Act in so far as they are applicable to Public Premises in occupation of persons who have continued in occupation after the lease has expired or has been determined.
The learned counsel for the respondents have placed reliance on Section 15 of the Public Premises Act which bars the jurisdiction of all courts in respect of the eviction of any person who is in unauthorised occupation of any Public Premises and other matters specified herein.
It has been submitted that the said provision is also in the nature of a non obstante clause which gives overriding effect to the provisions of the Public Premises Act.
Thus each side claims the enactment relied upon by it is a special statute and the other enact ment is general and also invokes the non obstante clause contained in the enactment relied upon.
The Rent Control Act makes a departure from the general law regulating the relationship of landlord and tenant contained in the Trnasfer of Property Act inasmuch as it makes provision for determination of standard rent, it specifies the grounds on which a landlord can seek the evic tion of a tenant, it prescribes the forum for adjudication of disputes between landlords and tenants and the procedure which has to be followed in such proceedings.
The rent Control Act can, therefore, be said to be a special statute regulating the relationship of landlord and tenant in the Union Territory of Delhi.
The Public premises Act makes provision for a speedy machinery to secure eviction of unau thorised occupants from public premises.
As opposed to the general law which provides for filing of a regular suit for recovery of possession of property in a competent Court and for trial of such a suit in accordance with the procedure laid down in the Code of Civil procedure, the Public Prem ises Act confers the power to pass an order or eviction of an unauthorised occupant in a public premises on a designat ed officer and prescribes the procedure to be followed by the said officer before passing such an order.
Therefore, the Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises.
In other words, both the enactments, namely, the Rent Con trol Act and the Public Premises Act, are special statutes in relation to the matters dealt with therein.
Since, the Public premises Act is a special statute and not a general enactment the 687 exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act.
We arrive at the same conclusion by applying the princi ple which is followed for resolving a conflict between the provisions of two special enactments made by the same legis lature.
We may in this context refer to some of the cases which have come before this Court where the provisions of two enactments made by the same legislature were found to be inconsistent and each enactment was claimed to be a special enactment and had a non obstante clause giving overriding effect to its provisions.
In Shri Ram Narain vs The Simla Banking and Industrial Co. Ltd., ; this Court was considering the provisions contained in the Banking Companies Act, 1949 and the .
Both the enactments contained provisions giving overriding effect to the provisions of the enactment over any other law.
This Court has observed: "Each enactment being a Special Act, the ordinary principle that a special law overrides a general law does not afford any clear solution in this case" (p. 613) "It is, therefore, desirable to determine the overriding effect of one or the other of the relevant provisions in these two Acts, in a given case, on much broader considera tions of the purpose and policy underlying the two Acts and the clear intendment conveyed by the language of the rele vant provisions therein." (p. 615) Similarly in Kumaon Motor Owners ' Union Ltd. and Another vs The State of Uttar Pradesh, 1 there was conflict between the provisions contained in Rule 131(2)(gg) and (i) of the Defence of India Rules, 1962 and Chapter IV A of the Motor Vehicle Act, 1939.
Section 68 B gave overriding effect to the provisions of Chapter IV(A) of the Motor Vehicle Act whereas Section 43 of the Defence of India Act, 1962, gave overriding effect to the provisions contained in the Defence of India Rules.
This Court held that the Defence of India Act was later than the Motor Vehicles Act and, therefore, if there was anything repugnant, the provisions of the later 688 Act should prevail.
This Court also looked into object behind the two statutes, namely, Defence of India Act and Motor Vehicles Act and on that basis also it was held that the provisions contained in the Defence of India Rules would have an overriding effect over the provisions of the Motor Vehicles Act.
In Sarwan Singh & Another vs Kasturi Lal, ; , the question for consideration was, whether the provi sions of Section 14A and Chapter IIIA of the Rent Control Act will prevail over those contained in Sections 19 and 39 of the .
Section 14A and 25A of the Rent Control Act contained non obstante clauses but in Section 54 of the Rent Control Act it was expressly provided that nothing in the said Act shall effect the provisions of the .
Moreover in Section 19 of the mere was non obstante clause and Section 39 of the said Act gave overrid ing effect to the provisions of the said enactment over any other Jaw.
This Court has observed: "When two or more laws operate in the same field and each contains a non obstante clause stating that its provisions will override those of any other law, stimulating and inci sive problems of interpretation arise.
Since statutory interpretation has no conventional protocol, cases of such conflict have to be decided in reference to the obeject and purpose of the laws under consideration." (p. 433) After examining the special and specific purpose under lying the enactment of Section 14A and Chapter IIIA of the Rent Control act and the fact that the Rent Control Act was a later enactment this Court held that the provisions of the Rent Control Act would prevail over those contained in the .
The principle which emerges from these decisions is that in the case of inconsistency between the provisions of two enactments, both of which can be regarded as Special in nature, the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein.
We propose to consider this matter in the light of this principle.
The statement of objects and reasons for the enactment of the 689 Rent Control Act, indicates that it has been enacted with a view: (a) to devise a suitable machinery for expeditious adjudica tion of proceedings between landlords and tenants; (b) to provide for the determination of the standard rent payable by tenants of the various categories of premises which should be fair to the tenants, and at the same time, provide incentive for keeping the existing houses in good repairs, and for further investment in house construction; and (c) to give tenants a larger measure of protection against eviction.
This indicates that the object underlying the Rent Control Act is to make provision for expeditious adjudication of disputes between landlords and tenants, determination of standard rent payable by tenants and giving protection against eviction to tenants.
The premises belonging to the Government are excluded from the ambit of the Rent Control Act which means that the Act has been enacted primarily to regulate the private relationship between landlords and tenants with a view to confer certain benefits on the ten ants and at the same time to balance the interest of the landlords by providing for expeditious adjudication of proceedings between landlords and tenant.
As mentioned earlier, the Public Premises Act has been enacted with a view to provide for eviction of unauthorised occupants from public premises.
In the statement of objects and reasons for this enactment reference has been made to the judicial decisions whereby by the 1958 Act was declared as unconstitutional and it has been mentioned: "The court decisions, referred to above, have created seri ous difficulties for the Government inasmuch as the proceed ings taken by the various Estate Officers appointed under the Act either for the eviction of persons who are in unau thorised occupation of public premises or for the recovery of rent or damages from such persons stand null and void.
It has become impossible for Government to take expeditious action even inflagrant cases of unauthorised occupation of public premises and recovery of rent or damages for such unauthorised occupation.
It is, therefore, considered imper ative to restore a speedy machinery for the eviction of persons who are in unauthorised occupation 690 of public premises keeping in view at the same time the necessity of complying with the provision of the Constitu tion and the judicial pronouncements, referred to above." This shows that the Public Premises Act has been enacted to deal with the mischief of rampant unauthorised occupation of public premises by providing a speedy machinery for the eviction of persons in unauthorised occupation.
In order to secure this object the said Act prescribes the time period for the various steps which are enquired to be taken for securing eviction of the persons in unauthorised occupation.
The object underlying the enactment is to safeguard public interest by making available for public use premises belonging to Central Government, Companies in which the Central Government has substantial interest, Corpora tions owned or controlled by the Central Government and certain autonomous bodies and to prevent misuse of such premises.
It would thus appear that, while the Rent Control Act is intended to deal with the general relationship of landlords and tenants in respect of premises other than government premises, the Public Premises Act is intended to deal with speedy recovery of possession of premises of public nature, i.e. property belonging to the Central Government, or Compa nies in which the Central Government has substantial inter est or Corporations owned or controlled by the Central Government and certain corporations, institutions, autono mous bodies and local authorities.
The effect of giving overriding effect to the provisions of the Pubic Premises Act over the Rent Control Act, would be that buildings belonging to Companies Corporations and Autonomous bodies referred to in Section 2(e) of the Public Permises Act would be excluded from the ambit of the Rent Control Act in the same manner as properties belonging to the Central Govern ment.
The reason underlying the exclusion of property be longing to the Government from the ambit of the Rent Control Act, is that Government while dealing with the citizens in respect of property belonging to it would not act for its own purpose as a private landlord but would act in public interest.
What can be said with regard to Government in relation to property belonging to it can also be said with regard to companies, corporations and other statutory bodies mentioned in Section 2(e) of the Public Premises Act.
In our opinion, therefore, keeping in view the object and purpose underlying both the enactments viz., the Rent Control Act and the Public Premises Act, the provisions of the Public Premises Act have to be construed as overriding the provi sions contained in the Rent Control Act.
691 As regards the non obstante clauses contained in Sec tions 14 and 22 and the provisions contained in Sections 50 and 54 of the Rent Control Act, it may be stated that Par liament was aware of these provisions when it enacted the Public Premises Act contained a specific provision in Sec tion 15 barring jurisdiction of all courts (which would include the Rent Controller under the Rent Control Act).
This indicates that Parliament intended that the provisions of the Public Premises Act would prevail over the provisions of the Rent Control Act inspite of the above mentioned provisions contained in the Rent Control Act.
It has been urged by the learned counsel for the peti tioner that there is no conflict between the provisions of the Rent Control Act and the Public Premises Act and that both the provisions can be given effect to without one overriding the other.
In this regard, it has been pointed out that since no provisions has been made in the Public Premises Act for the termination of the lease, the provi sions of the Rent Control Act can be held applicable upto the stage of termination of the lease, and thereafter, proceedings can be initiated for eviction under the provi sions of the Public Premises Act.
In support of this submis sion, reliance has been placed on Dhanpal Chettiar 's case (supra), wherein it has been held that in view of the spe cial provisions contained in the State Rent Control Acts, it is no longer necessary to issue a notice under Section 106 of the Transfer of Property Act to terminate the tenancy because inspite of the said notice the tenant is entitled to continue in occupation by virtue of the provisions of the said Acts.
In the said case, it has been further laid down that the relationship between the landlord and tenant con tinues till the passing of the order of eviction in accord ance with the provisions of the Rent act, and therefore, for the eviction of the tenant in accordance with the law, an order of the competent Court under the Rent Control Act is necessary.
This would mean that in order to evict a person who is continuing in occupation after the expiration or termination of his contractual tenancy in accordance with law, two proceedings will have to be initiated.
First, there will be proceedings under Rent Control Act before the Rent Controller followed by appeal before the Rent Control Tribu nal and revision before the High Court.
After these proceed ings have ended they would be followed by proceedings under the Public Premises Act, before the Estate Officer and the Appellate Authority.
In other words, persons in occupation of public premises would receive greater protection than tenants in premises owned by private persons.
It could not be the intention of Parliament to confer this dual benefit on persons in occupation of public premises.
692 It has also been urged that in Section 22 of the Rent Control Act, special provision has been made for recovery of possession of premises belonging to a company or other body corporate or any local authority or any public institution and that premises belonging to companies, corporations and autonomous bodies mentioned in clauses (2) and (3) of Sec tion 2(e) of the Public Premises would be covered by the said provision and that in view of this special provision it is not necessary to have a further provision in the Public Premises Act for the recovery of possession belonging to those bodies, and therefore, the provisions of the Public Premises Act should be confined in their application to premises other than premises covered by the Rent Control Act.
Section 22 of the Rent Control Act provides as under: "Where the landlord in respect of any premises is any compa ny or other body corporate of any local authority or any public institution and the premises are required for the use of employees of such landlord or in the case of a public institution for the furtherance of its activities, then, notwithstanding anything contained in Section 14 or any other law, the Controller may, on an application made to him in this behalf by such landlord, place the landlord in vacant possession of such premises by evicting the tenant and every other person who may be in occupation thereof, if the Controller is satisfied (a) that the tenant to whom such premises were let for use as a residence at a time when he was in the service or employment of the landlord, has ceased to be in such service or employment; or (b) that the tenant has acted in contravention of the terms, express or implied, under which he was authorised to occupy such premises; or (c) that any other person is in unauthorised occupation of such premises; or (d) that the premises are required bona fide by the public institution for the furtherance of its activities.
Explanation For the purpose of this section, "public in stitution" includes any educational institutional, library, hospital and charitable dispensary but does not include any 693 such institution set up by any private trust.
" The said special provision shows that, it enables recov ery of possession or premises of which the landlord is a company or other body corporate or any local authority or any public institution in certain circumstances viz., if the premises are required for the use of the employees or such landlord.
In the case of public institutions possession can also be obtained under this provision if the premises are required for the furtherance of its activities.
In other words, recovery of possession is permissible under this provision only in certain circumstances and for certain purposes.
Inspite of this provision Parliament has consid ered it necessary tO extend the Public Premises Act to premises belonging to companies, corporations and statutory bodies mentioned in Clauses (2) and (3) of Section 2(e) by widening the definition of the expression "public premises" in Section 2(e) of the Public Premises Act.
The scope and ambit of the aforesaid power conferred under the Public Premises Act cannot be restricted by reference to the provi sion contained in Section 22 of the Rent Control Act.
It has been urged by the learned counsel for the peti tioners that many of the corporations referred to in Section 2(e)(2)(ii) of the Public Premises Act, like the nationa lised banks and the Life Insurance Corporation, are trading corporations and under the provisions of the enactments whereby they are constituted these corporations are required to carry on their business with a view to earn profit, and that there is nothing to preclude these corporations to buy property in possession of tenants at a low price and after buying such property evict the tenants after terminating the tenancy and thereafter sell the said property at a much higher value because the value of property in possession of tenants is much less as compared to vacant property.
We are unable to cut down the scope of the provisions of the Public Premises Act on the basis of such an apprehension because as pointed out by this Court in M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay, ; "Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigour of the Rent Act, must be informed by reason and guided by the public interest.
All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act 694 as private landlords, must be judged by that standard." These observations were made in the context of the provi sions of the Bombay Rents, Hotel and Lodging Houses Rates (Control) Act, 1947 whereby exemption from the provisions of the Act has been granted to premises belonging to the Bombay Port Trust.
The consequence of giving overriding effect to the provisions of the Public Premises Act is that premises belonging to companies and statutory bodies referred to in Clauses (2) and (3) of Section 2(e) of the Public Premises Act would be exempted from the provisions of the Rent Con trol Act.
The actions of the companies and statutory bodies mentioned in Clauses (2) and (3) of Section 2(e) of the Public Premises Act while dealing with their properties under the Pubic Premises Act will, therefore, have to be judged by the same standard.
For the reasons aforesaid, we are unable to accept the contention of the learned counsel for the petitioners that the provisions contained in the Public Premises Act cannot be applied to premises which fall within the ambit of the Rent Control Act.
In our opinion, the provisions of the Public Premises Act, to the extent they cover premises falling within the ambit of the Rent Control Act, override the provisions of the Rent Control Act and a person in unauthorised occupation of public premises under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act.
In Civil Appeal No. 3723 of 1966, Shri Yogeshwer Prasad sought to raise contentions relating to the particular facts of that case, namely, that the termination of the lease of the appellant is vitiated by mala fides and that the said appellant could not be held to be a person in unauthorised occupation of the premises and further that the proceedings have not been taken in accordance with the provisions of the Public Premises Act.
We find that in this case the appellant filed a writ petition in the High Court directly against the order passed by the Estate Officer without filing an appeal against the said order before the Appellate Authority.
The High Court has held that the question of mala fides is a disputed question of fact and the same could not be gone into in proceedings under Article 226 of the Constitution.
We are in agreement of the said view of the High Court.
As regards the other contentions we are of the view that the appellant cannot be permitted to agitate matters which could be agitated by him in appeal before the Appellate Authority.
In Civil Appeals Nos. 2368 and 2369 of 1986 the learned counsel 695 for the respondents have raised a preliminary objection with regard to the maintainability of these appeals on the ground that the appellants, on account of their conduct, are not entitled to invoke the jurisdiction of this Court under Article 136 of the Constitution.
The submission of the learned counsel is that before initiating proceedings under the provisions of the Public Premises Act the respondent Bank, viz. the Punjab National Bank, had initiated proceed ings under the Rent Control Act for the eviction of the appellants had in those proceedings the appellants had filed an objection with regard to the maintainability of the eviction proceedings under the Rent Control Act before the Additional Rent Controller and thereupon the Respondent Bank initiated proceedings for eviction of the appellants under the Public Premises Act and thereafter the proceedings initiated by the respondent Bank under the Rent Control Act were dismissed by the Additional Rent Controller by orders dated the 6th August, 1989.
The learned counsel of the respondents have urged that the appellants, having raised the objection against the maintainability of the proceedings for eviction under the Rent Control Act on the ground that proceedings could only be maintained under the provisions of the Public Premises Act and having got them dismissed, cannot turn round and raise an objection that the proceed ings for eviction under the Public Premises Act are not maintainable and the proceedings can only be taken under the Rent Control Act.
The learned counsel for the appellants have submitted that special leave to appeal was granted by this Court after notice to the respondents and at that stage the respondents had raised this objection but this Court granted special leave and it is not permissible for the respondents to agitate this question now.
The orders dated the 6th August, 1989 which were passed by the Additional Rent Controller in the proceedings for eviction initiated by the respondent Bank under Rent Control Act against the appellants in these appeals have been placed on record by the respondents and from the said orders it appears that in the proceedings initiated under the Rent Control Act the appellants had raised a plea that the premises in question had been declared public premises under the Public Premises Act and in view of that the proceedings under the Rent Control Act were not competent.
The said orders also show that the Additional Rent Controller dismissed the proceed ings for eviction under the Rent Control Act on the view that the Public Premises Act is applicable to premises in question and his jurisdiction was excluded.
This would show that the proceedings which were initiated by the Respondent Bank for the eviction of the appellants under the Rent Control Act were dismissed as not maintainable on the ground that the Rent Control Act was not applicable to the premises and the premises are governed by the provisions of the 696 Public Premises Act.
This finding was recorded by the Addi tional Rent Controller in view of the objection raised by the appellants with regard to the maintainability of those proceedings.
In other words, the appellants succeeded in those proceedings on the basis of their plea that the prem ises were not governed by the Rent Control Act and were governed by the provisions of the Public Premises Act.
Having got the proceedings under the Rent Control Act dis missed the appellants are now raising the plea that the proceedings under the Public Premises Act are not maintain able and that the only remedy available is under the Rent Control Act.
This conduct of the appellants would have disentitled them from invoking the jurisdiction of this Court under Article 136 of the Constitution.
Since we are of the view that the appellants cannot succeed on the merits, we do not propose to dismiss the appeals on this preliminary ground.
In the result the appeals and the writ petition are dismissed.
There will be no order as to costs.
The appellants in Civil Appeals Nos. 2368 and 2369 of 1986 had been dispossessed from the premises in their occu pation after the dismissal of their appeals by the Addition al District Judge.
During the pendency of these appeals interim orders were passed by this Court whereunder posses sion of a part of the premises was restored to the appel lants.
Since these appeals have been dismissed the appel lants in both the appeals are directed to handover the possession of the portion of the premises in their occupa tion to the Respondent Bank within one month.
In Civil Appeal No. 3725 of 1986 and Writ Petition No. 864 of 1985, this Court had passed interim orders staying the eviction of the petitioners in those matters.
Since the appeal and the writ petition are being dismissed the said interim orders shall stand vacated.
R.S.S. Petitions dismissed.
|
The appellants/petitioners were tenants in the premises belonging to the respondent Banks/Life Insurance Corporation of India.
Their tenancy had expired or had been terminated by the respondents and eviction proceedings initiated against them under the provisions of the .
Writ peti tions under Article 226 were filled by the appellants in the High Court challenging the orders of eviction passed against them, which were dismissed; hence these appeals.
The writ petitioners moved this Court directly under Article 32 of the Constitution against the notices of termination of tenancy issued to them.
The Public Premises Act of 1971 was preceded by two enactments the Government Premises (Eviction) Act 1950, and the Public Premises (eviction of unauthorised occupants) Act, 1958 which were declared unconstitutional by different High Courts.
Jagu Singh vs M. Shaukat Ali, ; Satish Chander & Anr.
vs Delhi Improvement Trust, AIR 1958 Punjab 1; Brigade Commander, Meerut Sub Area vs Ganga Pra sad, ; P.L. Mehar etc.
vs D.R. Khanna, etc., AIR 1971 Delhi 1 and Northern India Caterers Private Ltd. vs State of Punjab & Anr.
, ; 650 This led to the enactment of the Public Premises Act in 1971.
The validity of this act was upheld by this Court in Hari Singh vs The Military Estate Officer, ; Before this Court, the contentions were advanced by the parties mainly on two questions (i) whether the provisions of the Public Premises Act were applicable to the Premises belonging to a nationalised bank; and (ii) whether the provisions of the Public Premises Act override the provi sions of the Delhi Rent Control Act.
In regard to the applicability of the Public Premises act, it was inter alia contended that the premises belonging to a nationalised bank or insurance company did not fall within the ambit of the definition of 'Public Premises ' contained in Section 2(e) of the Public Premises Act for the reason that the nationalised bank was not a company as defined in Section 3 of the and it was also not a corporation established by or under a Central Act.
On the other hand, it was contended that the respond ents being nationalised bank, was a corporation established by a Central Act, viz., the Bank Nationalisation Act, and the premises belonging to a nationalised bank were 'public premises ' under section 2(e)(2)(ii) of the Public Premises Act.
In regard to the second question, each side claimed that the enactment relied upon by it was a special statute and the other enactment was general, and also invoked the not obstante clause contained in the enactment relied upon.
In this connection, it was argued on behalf of the respondents that the Public Premises Act having been enacted by Parlia ment in exercise of legislative power under Article 246(1) of the Constitution in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers under Article 246(4) in respect of matters enumerated in the concurrent list.
Dismissing the appeals and the writ petition, this Court, HELD: (1) The provisions of the Public Premises Act, to the extent they cover premises failing within the ambit of the Rent Control Act, override the provisions of the Rent Control Act, and a person in unauthorised occupation of public premises under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act.
[694D E] (2) After the second world war there has been develop ment of a new pattern of public corporation in England as an instrument of plan 651 ning in the mixed economy.
The general characteristics of such a public corporation is that it is normally created by a special statute; it has no shares and no share holders, either private or public, and its share holder, in the symbolic sense, is the nation represented through Government and Parliament; and it has the legal status of a corporate body with independent legal personality.
There has been a similar growth of this type of public corporation in other.
countries.
This trend is also evident in our country.
since Independence and a number of such public corporations have been constituted by Acts of Parliament.
[668A C] (3) The expression 'Corporation ' in Section 2(e)(2)(ii) of the Public Premises Act would include public corporations of the new pattern constituted under the Central Acts where in the entire paid up capital vests in the Central Govern ment.
[670G] S.S. Dhanoa vs Municipal Corporation, Delhi, ; , distinguished.
(4) In order to constitute a corporation it is not necessary that there should be shareholders or members and that in the new pattern of public corporation that has developed there are no shareholders or members.
[671G] Bank of New South Wales & Ors.
vs The Common wealth, ; and R.C. Cooper vs Union of India, ; , referred to.
Oriental Bank of Commerce vs Delhi Development Authori ty, , overruled.
(5) Provisions of the Banks Nationalisation Act show that the nationalised Bank has been constituted as a dis tinct juristic person by the Act and it is owned by the Central Government.
They further indicate that the nationa lised bank has all the attributes of the new pattern of public corporation.
[667B] (6) The object of the legislation in enlarging the definition of 'public premises ' in Section 2(e) of the Public Premises Act is to make available the machinery of the Act for evicting unauthorised occupants not only from the premises belonging to the Central Government but also from premises belonging to Companies, Corporation and statu tory bodies in which the Central Government has a substan tial interest.
[670D E] 652 (7) Under Section 2(e)(2)(i) premises belonging to a company incorporated under the , in which not less than fifty one percent of the paid up capital is held by the Central Government, are to be treated as public enterprises.
It could not be the intention of Parliament that premises belonging to public corporations whose entire paid up capital vests in the Central Government and who are the instrumentalities of State would be excluded from the ambit of the definition of 'public premises '.
[670E G] (8) Keeping in view the provisions of the Banks Nation alisation Act the nationalised bank is a corporation estab lished by a Central Act and it is owned and controlled by the Central Government.
The premises belonging to a nationa lised bank are public premises under Section 2(e)(2)(ii) of the Public Premises Act.
[671 H; 672A] (9) There is no warrant for confining the scope of the definition of 'public premises ' contained in section 2(e) to premises used for residential purposes only and to exclude premises used for commercial purposes from its ambit.
[672D] Hari Singh vs Military Estate Officer, ; , referred to.
(10) No distinction can be made between premises used for residential purposes and premises used for commercial purposes in the matter of eviction of unauthorised occupants of public premises and the consideration which necessitate providing a speedy machinery for eviction of persons in unauthorised occupation of public premises apply equally to both the types of public premises.
[673B C] (11) The definition of the expression 'unauthorised occupation ' contained in Section 2(g) of the Public Premises Act is in two parts.
The second part of the definition is inclusive in nature and expressly covers continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoev er.
The words "whether by way of grant or any other mode of transfer" in this part of the definition are wide in ampli tude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act.
[673F; G H; 674B] Brigadier K.K. Verma vs Union of India, AIR 1954 Bom 358, distinguished.
653 Lallu Yeshwant Singh vs Rao Jagdish Singh & Ors., ; , and Express Newspapers Pvt. Ltd. & Ors.
vs Union of India & Ors.
, [1985] Suppl.
3 SCR 302, referred to.
(12) It is true that there is no requirement in the Public Premises Act that the Estate Officer must be a person well versed in law.
But, that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorised occupation of persons who obtained possession of the said premises under a lease when the Public Premises Act and the Rules framed thereunder provide for a right of appeal of the District Judge against an order of the Estate Officer.
which shows that the final order that is passed is by a judicial officer.
[675F H] Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors., ; , referred to.
(13) As regards rent control legislations enacted by the State legislatures, the position is well settled that such legislation fail within the ambit of entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution.
[682E] Indu Bhushan Bose vs Rama Sundari Devi & Anr.
, ; ; V. Dhanpal Chettiar 's vs Yesodai Ammal, ; ; Jai Singh Jairam Tyagi Etc.
vs Mamanchand Ratilal Agarwal & Ors., ; ; Accountant and Secretari al Services Pvt. Ltd. & Anr.
vs Union of India & Ors.
, ; , referred to.
(14) The Rent Control Act has been enacted by Parliament in relation to the Union Territory of Delhi in exercise of the legislative power conferred under Article 246(4) of the Constitution which empowers Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
[682G] (15) The Public Premises Act deals with Government property as well as property belonging to other legal enti ties mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act.
In so far as it relates to eviction of unauthorised occupants from premises belonging to or taken on lease or requisitioned by or on behalf of the Central Government, the Public Premises Act would fail within entry 32 of List I being law with respect to a property of the Union.
The property belonging to the various legal entities mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act cannot be regarded as property of 654 the Union and the Public Premises Act cannot be held to have been enacted under entry 32 of List I in respect of the said properties.
In so far as it deals with a lessee or licensee of premises other than premises belonging to the Central Govt; the Public Premises Act has been enacted in exercising the legislative power in respect of matters enumerated in the concurrent list.
[682H; 683A C] (16) Both the statutes, viz. the Public Premises Act and the Rent Control Act, have been enacted by the same legisla ture, Parliament, in exercise of the legislative powers in respect of the matters enumerated in the Concurrent List.
[684C] Accountant and Secretarial Services Pvt. Ltd. vs Union of India And Ors., ; ; Smt.
Saiyada Mossarrat vs Hindustan Steel Ltd.; , and L.S. Nair vs Hindustan Steel Ltd., AIR 1980 MP.
106, referred to.
(17) The Rent Control Act makes a departure from the general law regulating the relationship of landlord and tenant contained in the Transfer of Property Act inasmuch as it makes provision for determination of standard rent, it specifies the grounds on which a landlord can seek the eviction of a tenant, it prescribes the forum for adjudica tion of disputes between landlords and tenants and the procedure which has to be followed in such proceedings.
The Rent Control Act can, therefore, be said to be a special statute regulating the relationship of landlord and tenant in the Union Territory of Delhi.
[686D F] (18) The Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises.
[689E] Jain Ink Manufacturing Company vs Life Insurance Corpo ration of India & Anr., ; , referred to.
(19) Both the enactments, namely, the Rent Control Act and the Public Premises Act, are special statutes in rela tion to the matters dealt with therein.
Therefore, the exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act.
[686H; 687A] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh, ; ; U.P. State Elec tricity Board vs Hari 655 Shankar Jain; , and Life Insurance Corpora tion vs D.J. Bahadur; , , referred to.
(20) In the case of inconsistency between the provisions of two enactments, both of which can be regarded as Special in nature.
the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein.
[688G] Shri Ram Narain vs The Simla Banking and Industrial Co. Ltd.; , ; Kumaon Motor Owners ' Union Ltd. vs The State of Uttar Pradesh, ; and Sarwan Singh vs Kasturi Lal; , , referred to.
(21) Keeping in view the object and purpose underlying both the enactments viz., the Rent Control Act and the Public Premises Act, the provisions of the Public Premises have to be construed as overriding the provisions contained in the Rent Control Act.
[690H] The Parliament was aware of the non obstante clauses contained in Section 14 and 22 and the provisions contained in Sections 50 and 54 of the Rent Control Act when it enact ed the Public Premises Act containing a specific provision in Section 15 barring jurisdiction of all courts (which would include the Rent Controller under the Rent Control Act).
This indicates that Parliament intended that the provisions of the Public Premises Act would prevail over the provisions of the Rent Control Act inspite of the above mentioned provisions contained in the Rent Control Act.
[691A B] (23) The scope of the provisions of the Public Premises Act cannot be cut down on the basis of an apprehension that the corporations may be induced to earn profits by purchas ing property in possession of tenants at a low price and after buying such property evict the tenants after terminat ing their tenancy and thereafter sell the said property at a much higher value.
Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public inter est.
[693F; E G] M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay, ; , referred to.
|
Civil Appeal No. 156(N) of 1976.
From the Judgment and Order dated 3.12.1974 of the Allahabad High Court in Writ Petition No. 418 of 1974.
Ms. Rachna Gupta and Ms. Rani Chhabra for the Appellant.
729 R. Bana for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
This Civil Appeal by Special Leave is directed against the Judgment of the High Court of Judica ture at Allahabad (Lucknow Bench) dated 3.12.1974.
The High Court by a common order disposed of number of Writ Petitions but we are concerned with Writ Petition No. 418/74 filed by Dr. Bhagwan Din Misra who is respondent No. 1 before us.
Brief facts of the case are that in the month of August, 1973 an advertisement appeared in the daily Newspaper "National Herald" inviting applications for the post of Reader in 'Linguistics ' in the Department of Hindi of the University of Lucknow.
Interview of the candidates was held on 8.4.74 at 3.00 p.m. by a Selection Committee consisting of five members viz. the Vice Chancellor of the University, Dr. K.N. Shukla, Head of the Department of Hindi and Modern Indian Languages Lucknow University, Dr. Bhagirath Misra, Head of the Department of Hindi Saugar University, Saugar, Dr. Harbanslal Sharma, Head of the Department of Hindi, Aligarh Muslim University, Aligarh and Shri Shyam Sunder, Head of the Department of Hindi Bihar University, Muzaffar pur.
It may be noted that the three experts from outside as mentioned above were experts in Hindi Literature and not Linguistic experts.
The Selection Committee after interview ing the various candidates recommended the name of the appellant, Dr. Triloki Nath Singh for being appointed to the post of Reader Linguistics in Hindi Department and the respondent No. 1, Dr. Bhagwan Din Misra was placed in the second position.
Dr. Bhagwan Din Misra, respondent No. 1 filed a writ petition in the High Court inter alia stating that the Selection Committee was not a legally constituted Committee and its recommendation should not be acted upon.
The writ petition was contested on behalf of the University as well as by the appellant.
The High Court held that the prospectus of the University showed that 'Linguistics ' was a separate subject of study.
There were two courses in M.A. Part I and Part II, one in Hindi Language and Literature, and, the other in Linguistics.
The High Court observed that even candidates, having passed the B.A. examination in Sanskrit or English, or M.A. Examination in Sanskrit or English were also eligible for admission in M.A. in Linguistics in the Department of Hindi.
Linguistics was thus a separate subject of study and even graduates, who might not have passed the 730 B.A. Examination with Hindi, were entitled to be admitted and awarded the degree of M.A. in Linguistics.
The Chancel lor under Statute 17 1 of the University was required to nominate experts out of the panel of experts in the subject of 'Linguistics '.
The High Court further held that having regard to the fact that 'Linguistics ' was a separate subject of study in the University of Lucknow and the Chancellor had drawn a panel of experts in 'Linguistics ', the nomination of experts out of the panel drawn for the subject of Hindi suffered from a serious legal infirmity, substantially affecting the constitution of the Selection Committee, which could not have been cured under Section 66(a) of the Uttar Pradesh State Universities Act, 1973 (hereinafter as the Act of 1973) and as such the recommendation of the Selection Committee was liable to be quashed.
The High Court as a result of the above findings allowed writ petition No. 418/74 and quashed the recommendation of the Selection Committee dated 8th April, 1974 for appoint ment to the post of Reader in 'Linguistics ' in the Depart ment of Hindi.
Dr. Triloki Nath Singh has thus filed the present appeal challenging the order of the High Court.
We have heard counsel for both the parties.
It may be mentioned that the Lucknow University neither filed any appeal against the order of the High Court nor any counsel appeared on its behalf before us.
Learned counsel for the appellant contended that under Explanation II to sub section (5) of Section 31 of the Act of 1973 the experts drawn out of the panel of experts in Hindi could make selection of Reader in 'Linguistics ' in the Department of Hindi.
It was further contended that in view of the fact that a Reader in 'Linguistics ' was to be appointed in the Depart ment of Hindi as such experts in Hindi Language and Litera ture were also qualified to act as experts for the selection of Reader in 'Linguistics '.
Learned counsel tried to seek support from the papers taught for M.A. in Linguistics as well as for M.A. in Hindi in order to convince that some papers were common to both the subjects, and as such there was nothing wrong or illegal in case the experts of Hindi Language and Literature were appointed for the selection of Reader in Linguistics.
On the other hand learned counsel for the respondent No.1 supported the Judgment of the High Court.
It was sub mitted by him that Linguistics was a separate subject of study for M.A. Part I and Part II and merely because the post of Reader in Linguistics was in the 731 Department of Hindi, it would not make any difference and the experts of Hindi Language and Literature cannot be appointed as experts in the Selection Committee for the selection of Reader in Linguistics.
We have considered the arguments advanced by learned counsel for both the parties and have perused the record.
There is no controversy between the parties that the pro spectus of Lucknow University Department of Hindi and Modern Indian Languages prescribed the courses of study for M.A. Part I and Part II in the subject of Hindi Language and Literature, and Linguistics separately.
The prospectus of Lucknow University, Department of Hindi and Modern Indian Languages prescribed the following courses of study for M.A. Part I and Part II for Hindi Language and Literature and the other for Linguistics M.A. Parts I and II There shall two courses in M.A. Parts I and II one in Hindi Languages and Literature and the other in Linguistics.
Students may choose either of these two courses.
M.A. part I (Language and Literature) Paper I Prachin Hindi Kavya Paper II Madhyayugeen Kavya Paper III Basic and Modern Indian Language Paper IV History Hindi Literature and Criticism Paper V Adhunik Hindi Gadya M.A. and Part II (Language and Literature) There shall be four papers and a viva voce test.
Paper I Linguistics and Historical Grammar of Hindi Paper II Vishesh Kavi Paper III Adhunik Kavya Paper IV Essay or Thesis or Folk Literature.
M.A. Part I (Linguistics) Paper I Introduction to the principle of General Linguistics 732 Paper II Phonetics and Phonemics Paper III Descriptive Grammar of Hindi Paper IV Applied Linguistics.
M.A. Part 11 (Linguistics) There will be four papers and a viva voce test.
Paper I Morphology and syntex Paper II Comparative and Historical Linquisitics with special reference to Indo Aryan and Hindi Language.
Paper III Dialectology with special reference Hindi Area.
Paper IV Essay or Thesis.
The above courses of study show beyond any manner of doubt that Hindi Language and Literature and, Linguistics are two different and separate subjects.
It is also impor tant to note that even graduates who have not passed the B.A. examination with Hindi could be admitted and awarded the degree of M.A. in Linguistics.
Merely because the Lin guistics is also a subject of study in one paper of Hindi, it cannot be said that Linguistics and Hindi Language and Literature fall under the same subject of study in the University.
It is an admitted position that separate Panel of Experts was drawn for the subjects of Hindi and Linguis tics.
As the Learned counsel for the appellant has strenuously placed reliance on Explanation II to sub section (5) of Section 31 of the Act of 1973 it is necessary to reproduce the same.
Sub Section (5) of Section 31 reads as under: "31.(5)(a) A panel of six or more experts in each subject of study shall be drawn up by the Chancellor after consulting the corresponding Faculty in Indian Universities or such academic bodies or research institutions in or outside Uttar Pradesh as the Chancellor may consider necessary.
Every expert to be nominated by the Chancellor under sub section (4) shall be a person whose name is borne on such panel.
(b) The Board of each Faculty shall maintain a standing panel of sixteen or more experts in each subject of study, and every expert to be nominated by the Vice 733 Chancellor under sub section (4) shall be a person whose name is borne on the panel.
(c) A panel referred to in clause (a) or clause (b) shall be revised after every three years.
" Explanation/ For the purposes of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree or for Part I or Part II thereof shall be deemed to be a separate subject of study.
Explanation 11 Where the post of teacher to be selected is common to more than one subject of study, the expert may belong to either of such subjects of study.
The High Court while considering a similar argument made before it held that Explanation II could be availed of by the Chancellor when he has drawn a fresh panel of experts in each subject of study under sub section (5)(a).
The High Court further held that Explanation II cannot be divorced from the substantive provision contained in sub section (5)(a).
It cannot stand independently of and separate from the sub section.
The Explanation must be read so as to harmonise and clear up any ambiguity in the main sub sec tion.
The High Court thus concluded that Explanation II was wholly inapplicable to the instant case and the question had got to be determined whether the experts who constituted the Selection Committee were the experts drawn out of the panel, under Clauses 168 and 169 of the Statutes.
The High Court then observed that according to the prospectus of the Uni versity Linguistics was a separate subject of study in the University of Lucknow and the Chancellor had a panel of experts on Linguistics drawn under Statutes 168 and 169, the nomination of experts out of the panel drawn for the subject of Hindi suffered from a serious legal infirmity substan tially affecting the constitution of the Selection Committee which could not have been cured by Section 66(a) of the Act.
We are examining the matter in a slightly different manner.
Even if the panel already constituted by the Chan cellor prior to the coming into force of the Uttar Pradesh State Universities Act, 1973, is treated as a panel consti tuted under sub section (5)(a) of Section 31 of the Act of 1973 Explanation II does not render any help to the appel lant.
We are in complete agreement with the High Court that subject of Hindi Language and Literature and the subject of Linguistics are entirely 734 separate subjects of study.
This is clearly borne out from Explanation 1 to sub section (5)(a) of Section 31 of the Act of 1973.
Explanation I lays down in a clear manner that for the purpose of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree or for Part I or Part II thereof shall be deemed to be a separate subject of study.
The prospectus of the University makes it abundantly clear that separate courses of study are prescribed for M.A. Part I or Part II in respect of Hindi on the one hand and Linguistics on the other.
Explanation II lays down that where the post of teacher to be selected is common to more than one subject of study, in that case the expert may belong to either of such subjects of study.
The advertisement issued in the present case was placed before us and which clearly made a mention at Serial No. 24 "One Reader in Linguistics in the Depart ment of Hindi".
At Serial No. 23 there was a separate men tion "There Readers in Hindi".
The qualifications essential for the above posts as mentioned in the advertisement reads as under: "QUAlIFICATIONS: ESSENTIAL: First or high Second Class Master 's Degree and Doctorate in the subject concerned with a good academic record and experience of teaching honours/postgraduate classes for not less than five years and published research work of high standard in the subject concerned.
The essen tial degree qualification for the post of Readers in Faculty of Law will be LL.M. degree.
" The above provision laying down essential qualifications also goes to show that first or high second class degree and doctorate in the subject concerned was an essential qualifi cation.
As already mentioned above posts were mentioned separately for three Readers in Hindi and one Reader in Linguistics in the Department of Hindi.
Explanation II could only apply in a case where the post of teacher to be select ed was common to more than one subject of study.
Advertise ment no where provided that one Reader in Linguistics in the Department of Hindi was to be selected as common to more than one subject of study.
Merely because the post of Reader in Linguistics was required in the Department of Hindi, it cannot be held that such Reader in Linguistics was to teach the subject of Linguistics as well as the subject of Hindi Language and Literature.
It may also be noted that from a perusal of the above advertisement alongwith the prospectus of the University clearly goes to show that for the post of 735 Reader in Linguistics it was necessary to have an essential qualification of first or high second class Master 's degree and Doctorate in the subject of Linguistics.
Explanation II can apply in a case where one common teacher is to be se lected for more than one subject of study and in that con tingency it provides that the expert may belong to either of such subjects of study.
In the case in hand before us the advertisement did not mention that the post of one Reader in Linguistics in the Department of Hindi was common with any other subject of study.
Thus the appointment of all the experts in the present case of subject of Hindi for the selection of one Reader in Linguistics in the Department of Hindi was totally wrong and illegal.
In view of the discussion made above, we do not find any ground in the appeal to interfere with the Order of the High Court.
In the result this appeal fails and is rejected with no order as to costs.
R.S.S. Appeal failed.
|
A Selection Committee consisting of five Members was constituted to recommend names for appointment to the post of Reader in 'Linguistics ' in the Department of Hindi of the University of Lucknow.
The Selection Committee after inter viewing the candidates recommended the name of the appellant while respondent No. 1 was placed in the second position.
Respondent No. 1 filed a writ petition in the High Court challenging the recommendations of the Selection Committee on the ground that the Selection Committee was not legally constituted because three experts on the Committee were experts in Hindi Literature and not Linguistic experts.
The High Court allowed the petition and inter alia held that under Statute 171 of the University, the Chancellor was required to nominate experts out of the panel of experts in the subject of 'Linguistics ', which was a separate subject of study in the University; that the nomination of experts out of the panel drawn from the subject of Hindi suffered from a serious legal infirmity; and that Explanation II to sub section (5) of Section 31 of the U.P. State Universities Act, 1973 was wholly inapplicable to the instant case.
Before this Court it was contended on behalf of the appellant that in view of the fact that a Reader in 'Lin guistics ' was to be appointed in the Department of Hindi as such experts in Hindi Language and Literature were also qualified to act as experts for the selection of Reader in 'Linguistics '.
Respondent No. 1, while supporting the judgment Of the High Court, submitted that Linguistics was a separate sub ject of study for M.A. Part I and Part II and merely because the post of Reader in Linguistics was in the Department of Hindi, it would not make any difference and the experts of Hindi Language and Literature could not be 728 appointed as experts in the Selection Committee for the selection of Reader in Linguistics.
Dismissing the appeal, this Court, HELD: (1) The prospectus of the University makes it abundantly clear that separate courses of study are pre scribed for M.A. Part I or Part II in respect of Hindi on the one hand and Linguistics on the other.
[734B] (2) The subject of Hindi Language and Literature and the subject of Linguistics are entirely separate subjects of study.
This is clearly borne out from Explanation I to sub section (5)(a) of section 31 of the Universities Act.
[733H; 734A] (3) Explanation I lays down in a clear manner that for the purpose of this sub section, a branch of subject in which a separate course of study is prescribed for a post graduate degree, or for Part I or Part II thereof, shall be deemed to be a separate subject of study.
[734A] (4) It is an admitted position that separate Panels of Experts were drawn for the subjects of Hindi and Linguis tics.
[732E] (5) In the instant case, the advertisement no where provided that one Reader in Linguistics in the Department of Hindi was to be selected as common to more than one subject of study.
Merely because the post of Reader in Linguistics was required in the Department, it cannot be held that such Reader in Linguistics was to teach the subject of Linguis tics as well as the subject of Hindi Language and Litera ture.
[734G H] (6) Explanation II to sub section (5) of section 31 of the Universities Act can only apply in a case where one common teacher is to be selected for more than one subject of study and in that contingency it provides that the expert may belong to either of such subjects of study.
[735A B]
|
vil Appeals Nos. 578485 of 1983.
From the Judgment and Order dated 2.3.1983 of the Andhra Pradesh High Court in W.A. Nos. 170 and 171 of 1982.
WITH Special Leave Petition (Civil) No. 1679 of 1989 and Transfer case No. 29 of 1989.
From the Judgment and Order dated 13.6.1988 of the Andhra Pradesh High Court in Writ Petition No. 5498 of 1983.
T.S. Krishnamurthy lyer, Dr. V. Gouri Shankar, Meeraj Khayyam, R.N. Keshwani.
M. Qamaruddin, P.N. Mishra and Mrs M. Qamaruddin for the Appellant.
Dr. L.M. Singhvi, S.K. Shashtri, D.N. Mishra and T.V.S.N Chart for the Respondents.
C. Sitaramaiah and G. Prabhakar for the State of Andhra Pradesh.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The appeals are by special leave 1he transferred writ petition by respondent No. 1 in the Civil Appeals is writ petition before the Andhra Pradesh High Court being 6500 of 1983 in a connected proceedings.
The special leave petition is by the 785 owner of some lands which form the subject matter of acqui sition.
On 5.6.1975 21.10 acres of land located at Bagh Amberpet in Hyderabad said to be belong to Syed Azam and members of his family were notified to be acquired under section 4(1) of the Land Acquisition Act for a housing project undertaken by the Hyderabad Municipal Corporation in collaboration with HUDCO.
Enquiry under section 5A of the Act was dispensed with by a separate notification issued along with the preliminary notification.
On 25.4.1978, notification under section 6 of the Land Acquisition Act was made.
Tulsi Cooperative Housing Society on the plea that it had entered into a contract of purchasing the very property from the owners had applied for exemption under the Urban Land Ceiling Act.
On 17.10.1978, prayer for exemption was refused.
On 11.9.1980 exemption was, however, granted.
Thereupon two writ petitions were filed before the High Court one by Tulsi Cooperative Hous ing Society and the other by the owners of the property for quashing of the acquisition proceedings.
The learned Single Judge upheld the acquisition but the writ appeal of Tulsi Cooperative Housing Society were allowed by a Full Bench of the High Court as a result of which the acquisition proceed ings were held to be inoperative.
Bagh Amberpet Welfare Society had entered into arrange ment with the Hyderabad Municipal Corporation for being assigned land for construction and was, therefore, interest ed in the acquisition.
The civil appeals are by that Society challenging the decision of the Full Bench of the High Court in the two writ appeals filed by Tulsi Cooperative Housing Society.
On 23.6.1983, the exemption which had been granted on 11.9.
1980 was withdrawn by the State Government.
Syed Azam, one of the owners, challenged the withdrawal of the exemption by filing a writ petition before the High Court.
The High Court took note of the position that the dispute was already pending in this Court and, therefore, by its order dated 13.6.1988, dismissed the petition without entering into the merits.
That has led the owner to move this Court by special leave.
Tulsi Cooperative Housing Society also moved the High Court by filing Writ Petition No. 6500/83 against the with drawal or ' the exemption.
That petition was pending adjudi cation before the High Court and at the instance of the parties this Court directed transfer of that case to this Court to be heard along with the pending matters.
This is how Transferred Writ Petition No. 29/89 forms part of this group of litigation.
786 On 7.8.1985, this Court desired that the dispute should be settled amicably and accordingly certain proposals were examined.
As already noticed, the acquisition was of 20.10 acres of land.
18 acres and 3 gunthas belonged to the Azam family and at one stage each of the two Cooperative Socie ties had agreed to take 9 acres and 1 1/2 gunthas thereof.
The Secretary to Andhra Pradesh Government in the Urban Development Department responded to the settlement by say ing: "Since the compromise is arrived at between both the ag grieved parties before the Requisitioning Officer based upon the opportunity given by the Supreme Court, the State Gov ernment need not intervene in regard to land acquisition.
Necessary and just orders under the circumstances of the case may be passed on the basis of the compromise deed filed by both the Societies at the earliest possible to enable them to build houses.
" This Court, however, gave time to the counsel for the State of Andhra Pradesh to take instructions as to the application of the Urban Land Ceiling Act as exemption granted under section 20 had been withdrawn in June, 1983.
The State of Andhra Pradesh thereafter did not accept the compromise by taking the stand that proceedings under the Urban Land Ceiling Act were pending and in view of the fact that there was no exemption, the property was liable to vest in Government under the Act as surplus land.
This Court on August 23, 1988, made an order, the rele vant part of which is extracted: "We are not impressed by the stand taken by the writ peti tioners that there was justification for their not approach ing the court for six years after the section 4(1) notification, when they wanted to challenge the denial of the hearing under section 5A of the Act and the proceedings itself otherwise.
We agree with the learned Single Judge that the explanation not being acceptable, the writ petition has been rightly dismissed.
On this analysis the appellate judgment of the High Court cannot be sustained and the acquisition proceed ings have to be revived.
" This order virtually disposed of the appeals but as the parties were negotiating a settlement the Court did not record a formal disposal of the dispute.
787 If the settlement does not fructify, the effect of our decision that the acquisition proceedings are to revive, would be that the claim to the land by Tulsi Cooperative Housing Society would come to an end.
In that event, at the most that Society would only be entitled to such compensa tion as may be awardable in law.
If the acquisition proceeds the Bagh Amberpet Welfare Society and the Municipal Corpora tion would have to work out their mutual rights.
Apart from these, the two writ petitions challenging the withdrawal of the exemption by order dated 23.6.1983 would also have to be disposed of on the merits.
The owner 's application has been dismissed upon the High Court taking the view that the matter was before this Court and, therefore, the High Court would not entertain the dispute.
The challenge by Tulsi Cooperative Housing Society against the said withdrawal was before the High Court for adjudication.
In view of the fact that the owner 's writ petition was dismissed not on merits but on other considerations, we are of the view that the said dismissal should be vacated and that writ petition should be heard along with Writ Petition No. 6500/83 as a common question arises for determination.
We, therefore, set aside the order of the High Court dated 13th of June, 1986, and direct that the said writ petition shall be disposed of afresh on merits.
We are of the view that the entire litigation should go back to the High Court for appropriate disposal.
The trans ferred writ petition, therefore, shall also go back to the High Court and shall be dealt with as Writ Petition No. 6500 of 1983.
The two petitions challenging the withdrawal of exemption shall be clubbed together and be heard.
The pro posals undertaken relating to a settlement in regard to the 18 acres and 3 gunthas of land may be considered by the High Court in the light of all relevant material and circum stances.
If the High Court is of the opinion that the matter should be settled and the entire land of the owners amount ing to 18 acres and 3 gunthas should be divided between the two Societies, it will be free to do so if Government also agrees thereto.
Since that arrangement would be with the consent of the State Government it would in such an event be open to the High Court to nullify the acquisition.
The observations which we have made at different stages during the pendency of the proceedings in this Court may not be taken to be expression of opinion on the merits and the High Court would be free to deal with the matter in its own discretion and in accordance with law.
In the event of the settlement not coming through the acquisition proceedings would continue under the law and be concluded by the Land Acquisition Officer in accordance with law.
In the event of the 788 acquisition working out, the two write petitions against the withdrawal of exemption would not be sustainable as the land would vest in Government as a result of acquisition.
It would be open to the Government or the acquiring authority to take into account the effect of the laws of urban ceil ing.
The civil appeals are remitted to the High Court limited to the consideration of the proposals for settlement in the light of the observations hereinabove.
Otherwise, they must be taken to have been concluded in this Court on our finding that acquisition proceedings are valid and shall be entitled to continue.
The special leave petition of Azam is disposed of with a direction that the writ petition in the High Court shall be re heard.
The transferred writ petition is remitted to the High Court to be disposed of as Writ Petition No. 6500 of 1983.
The hearing of the writ petitions would depend upon the fate of the settlement as indicated above.
There would be no order for costs in this Court.
Money, if any, in deposit in the Registry of this Court to the credit of the parties shall be transferred to the High Court and shall be subject to such directions as the High Court may issue upon a final decision of the relevant issues arising in the proceedings.
G.N. Appeals and Petitions disposed of.
|
For the purposes of a housing project, some land was acquired by way of a notification under the Land Acquisition Act.
The Respondent Society claiming that it had entered into a contract with the owners for purchasing the very property, applied for exemption under the Urban Ceiling Act.
The exemption prayed for was refused initially, but was granted later.
Both the Respondent Society and the owners of the said land filed Writ Petitions before the High Court for quashing of the acquisition proceedings.
The acquisition was upheld by Single Judge, but on appeal by Respondent Society, the Full Bench held the acquisition proceedings to be inopera tive.
Against these orders, the appellant Society which had entered into an agreement with the Municipal Corporation, and as such interested in the acquisition, has preferred the appeals.
Meanwhile, the State Government withdrew the exemption granted under the Urban Ceiling Act.
One of the owners filed a Writ Petition before the High Court challenging the with drawal.
The High Court took note of the fact that the mat ters were pending in this Court and dismissed the petition.
Aggrieved against the order of dismissal, a petition for special leave has been filed.
The Respondent Society also moved the High Court by way of a Writ Petition challenging the withdrawal of exemption, which was pending and this Court transferred the same to itself, to be heard with the pending cases.
On 7.8.1985, this Court gave time to Counsel to consider various compromise proposals.
However, the desired compro mise did not come through.
On 23.8.1988 this Court passed an order holding that the 783 acquisition proceedings have to be revived.
However, no formal disposal was recorded since a settlement was being negotiated.
Even after about 2 yrs.
the settlement did not fructify.
Remitting the matters to the High Court, HELD: 1.
If the settlement does not fructify, the effect of the decision that the acquisition proceedings are to revive, would be that the claim to the land by Respondent Society would come to an end.
In that event, at the most that Society would only be entitled to such compensation as may be awardable in law.
If the acquisition proceeds the appellant Society and the Municipal Corporation would have to workout their mutual rights.
Apart from these, the two writ petitions challenging the withdrawal of the exemption by order dated 23.6.1983 would also have to be disposed of on merits.
In view of the fact that the owner 's writ peti tion was dismissed not on merits but on other considera tions, the said dismissal should be vacated and that writ petition should be heard along with Writ Petition No. 6500/83 as a common question arises for determination.
The order of the High Court dated 13th of June, 1988, is set aside and the High Court is directed to dispose of the Writ Petition afresh on merits.
[787B D] 2.
If the High Court is of the opinion that the matter should be settled and the entire land of the owners amount ing to 18 acres and 3 gunthas should be divided between the two Societies, it will be free to do so if Government also agrees thereto.
Since that arrangement would be with the consent of the State Government it would in such an event be open to the High Court to nullify the acquisition.
The observations made at different stages during the pendency of the proceedings in this Court may not be taken to be expres sion of opinion on merits and the High Court would be free to deal with the matter on its own discretion and in accord ance with law.
[787F G] 3.
In the event of the settlement not coming through, the acquisition proceedings would continue under the law and be concluded by the Land Acquisition Officer in accordance with law.
In the event of the acquisition working out, the two writ petitions against the withdrawal of exemption would not be sustainable as the land would vest in Government as a result of acquisition.
It would be open to the Government or the acquiring authority to take into account the effect of the laws of urban ceiling.
[787H; 788A] 4.
The civil appeals are also remitted to the High Court limited to 784 the consideration of the proposals ' for settlement in the light of the observations made in this Judgment.
Otherwise, they must be taken to have been concluded in this Court on the finding that acquisition proceedings are valid and shall be entitled to continue.
The special leave petition is disposed of with a direction that the writ petition in the High Court shall be re heard.
The transferred writ petition remitted to the High Court for disposal, [788B C] 5.
Money, if any, in deposit in the Registry of this Court to the credit of the parties shall be transferred to the High Court and shall be subject to such directions as the High Court may issue upon a final decision of the rele vant issues arising in the proceedings.
[788D]
|
vil Appeal No. 3 169 of 1981.
From the Judgment and Order dated 7.5.1981 of the Alla habad High Court in Second Appeal No. 1018 of 1974.
Jagan Mohan Rao and R. Ramachandran (N.P.) for the Appellant.
Subodh Markandeya, Mrs. Chitra Markandeya, W.A. Nomani and G.S. Giri for the Respondent.
779 The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
This is a case where an order of dismissal passed in a departmental enquiry was challenged in civil court and ultimately has found its way to this Court after a long litigation for over 16 years.
The re spondent was a bus conductor in U.P. State Road Transport Corporation (Corporation ' for short).
A trap was laid against him and a disciplinary enquiry was initiated and dismissal order was passed on 23rd March, 1965.
He filed a civil suit questioning the same.
One of the main plea taken by the respondent was that certain important documents were not made available to him during the enquiry and this caused serious prejudice to him.
The trial court dismissed the suit and an appeal preferred by him was also dismissed by the appellate court.
Relentless as he was, he carried the matter to the High Court by way of second appeal and his plea was accepted by the High Court and the second appeal was al lowed.
Aggrieved by the said judgment, the Corporation has approached this Court.
On behalf of the Corporation it is contended that the High Court has grossly erred in interfering in a second appeal with the concurrent findings and that the plea of the respondent that relevant documents were not supplied to him during the enquiry has no substance.
One of the main issues framed before the trial court was whether all the way bills, carbon copies of the tickets issued on the said dates and carbon copy of checking report were not shown to the delinquent employee by the investigat ing officer and if so what would be its effect? The charge against the respondent was that he erased the waybills and resold some already sold tickets.
During the enquiry the delinquent employee was permitted to inspect the documents but he intended to inspect the carbon copies and made a request by way of a letter.
However, the carbon copies of the way bills dated 7th, 8th and 10th January, 1963 which are the relevant dates and carbon copies of the checking report were not shown to him.
The plea of the delinquent employee has been that from the carbon copies he would have shown that he could not have carried on such erasure or made false entries and non supply of them had caused great preju dice.
As already mentioned, the trial court as well as the first appellate court did not accept this plea and held that no prejudice was caused inasmuch as he was shown the origi nals and also on the ground that he did not later insisted on those carbon copies being shown to him.
The High Court, however, in an elaborate judgment referred to the various documents 780 and it ultimately reached the conclusion that the important documents have been purposely withheld which resulted in prejudice to the employee.
In this appeal, the learned counsel for the Corporation contended that where failure to produce the carbon copies of some of the documents did not cause any prejudice and that at any rate it is a question of fact, the High Court erred in interfering in the second appeal.
To satisfy ourselves we wanted to peruse the judg ments of the trial court as well as of the first appellate court but the Corporation has not placed a copy of the appellate court judgment before us.
We have perused the trial court judgment and we find at more than one place that the learned District Munsif has observed that the employee could have insisted on production of these documents.
The High Court no doubt has considered this aspect in detail and in doing so has referred to the contents of the various documents.
From this alone it cannot be said that the High Court has not kept in view the scope of second appeal.
Since the employee has been throughout pleading that he did not make the erasures or any other false entry, it naturally became necessary to see whether they were also found in carbon copies.
From this point of view the High Court con sidered the various figures and entries in the originals in which such erasures and entries are alleged to have been made by the employee and eventually observed that the entire enquiry was based on some of these documents and if a carbon copy of the way bills had been shown, the authority may well have been convinced that the charge levelled against him was not correct, and that, therefore the non supply of these documents has caused prejudice.
Having examined the findings arrived at by the High Court, we are unable to say that the High Court has committed any error which warrants interfer ence under Article 136 of the Constitution.
The High Court decreed the suit for pendente lite and future pay and allowances and this was passed on 7th May, 1981.
It can therefore be seen that for the last 25 years this litigation went on i.e. from the date of dismissal till today.
Admittedly the respondent has already reached the age of superannuation some years ago.
During these years the respondent must have sought some employment or the other and the learned counsel also could not seriously dispute the same.
Under these circumstances the question is whether again the parties should be driven to go through the indefi nite execution proceedings.
On the question of granting lump sum amount towards the backwages and allowances till the date of his retirement we have also heard both sides.
Under somewhat similar circumstances this Court in Sohan Singh vs Union of India and Another, granted lump 781 sum amount instead of driving the parties to go to the executing court for further relief.
That was a case where the service of an airman in the Air Force was not extended for a period of six years as per the regulation and the matter ultimately came up before this Court.
Taking into consideration the facts and circumstances this Court held that the employee should be compensated by payment of a lump sum amount in lieu of the benefits to which he would have been otherwise entitled if he had continued in service for the extended period of six years.
Without going into the merits of the actual claim this Court awarded a sum of Rs.35,000 by way of compensation.
In the instant case also we are of the view that ends of justice require that such a relief should be granted.
Taking into consideration all these aspects including that the respondent would have been entitled for some retirement benefit, we award Rs.35,000 and direct the U.P. State Road Transport Corporation, the appellant herein, to pay this amount to the respondent within two months from today.
Since the amount would be received in lump sum by the respondent, it may attract the levy of income tax.
But since the amount represents the salary and allowances over the last so many years the respondent may make an application under Section 89 of the Income Tax Act for spreading over this lump sum amount.
We may also point out that in similar circumstances, this Court, in Sundaram Motors Pvt. Ltd. vs Ameerjan and Another, where the compensation by way of lump sum amount was awarded, observed that the same should be spread over and gave a direction to the concerned Income Tax Officer to give immediate relief under Section 89 with out further enquiry.
Accordingly We direct the Corporation to pay the lump sum amount of Rs.35,000 without deducting income tax.
Since the respondent is entitled for relief under Section 89 of the Income Tax Act, he shall make an application to the concerned Income Tax Officer who shall give the necessary relief without any further enquiry.
The appeal is disposed of accordingly.
In the circumstances of the case there will be no order as to costs.
N.P.V. Appeal disposed of.
|
The respondent, a bus conductor in the appellant State Road Transport Corporation, was dismissed on the charge that he had erased the way bills and resold some already sold tickets.
He filed a suit challenging the dismissal order on the ground that carbon copies of certain important documents were not made available to him during the enquiry and this had caused serious prejudice to him.
The trial court dis missed the suit and the first appellate court also dismissed his appeal.
However, the High Court allowed his second appeal, and held that the important documents had been purposely withheld, which had resulted prejudice to the employee.
The appellant Corporation filed a Special Leave Petition before this Court, contending that the High Court had gross ly erred in interfering in second appeal with the concurrent findings, and that the failure to produce the carbon copies of some of the documents did not cause any prejudice and.
at any rate, it was a question of fact.
Disposing of the appeal, by special leave, this Court, HELD: 1.
The High Court has not committed any error which warrants interference.
1780E] The respondent 's plea has been that from the carbon copies he would have shown that he could not have carried on the erasures or made false entries and, therefore; non supply of these carbon copies had caused great prejudice to him.
However, the trial court and the first appellate court held that no prejudice was caused since he was 778 shown the originals.
The High Court no doubt has considered this aspect in detail and in doing so referred to the con tents of various documents.
From this alone it cannot be said that the High Court has not kept in view the scope of second appeal.
[779G H; 780A B] Since the employee has been throughout pleading that he did not make the erasures or any other false entry, it naturally became necessary to see whether they were also found in carbon copies.
Therefore, the High Court considered the various figures and entries in the originals in which such erasures were alleged to have been made by the employee and eventually observed that the entire enquiry was based on some of these documents, and if a carbon copy of the docu ments had been shown, the authority may well have been convinced that the charge levelled against him was not correct, and that, therefore, the non supply of these docu ments had caused prejudice.
[780 D E] 2.
The litigation is going on for the last 25 years and the respondent has already reached the age of superannua tion.
Hence the parties need not be driven to go through the indefinite execution proceedings again for backwages and allowances and ends of justice require that a lump sum compensation should be granted.
Accordingly, a lump sum amount of Rs.35,000 is awarded and the amount should be paid to the respondent without deducting the income tax.
The respondent may make an application under Section 89 of the Income Tax Act, 1961 for spreading over this amount, and the concerned Income Tax Officers should also give the necessary relief without any further enquiry.
[780F; 781C E] Sohan Singh vs Union of India & Anr., and Sundaram Motors Pvt. Ltd. vs Ameerjan & Ant., , relied on.
|
ivil Appeal Nos.
4339 4341 of 1990.
From the Judgment and Order dated 30.5.90 of the Allaha bad High Court in W.P. No. 1841 of 1990.
Kapil Sibbal, Satish Chandra, Ms. Shobha Dikshit, R.K. Virmani and N.D. Garg for the appearing parties.
The Judgment of the Court was delivered by RANGANATHAN, J.
These three petitions can be disposed of by a common order.
Since we have heard counsel at some length we grant special leave in these petitions and proceed to dispose of the appeals.
In the Moti Lal Nehru Medical College (M.L.N. College) at Allahabad there are 8 seats for a post graduate course in Obstetrics and Gynecology.
Of these, 6 seats are reserved for institutional candidates and two are reserved for exter nal candidates.
The principal of the college has filled up all the 8 seats by admitting institutional candidates and without considering the cases of any external candidate.
Among the institutional candidates Dr. Juhi Jain and Dr. Padma Panjwani, who had obtained the highest percentage of marks, have been admitted and Dr. Vandana Singh, who had applied for admission as an external candidate, was not considered.
Dr. Vandana Singh, therefore, approached the Allahabad High Court, which upheld her contention and held that the two seats in question should have been filled up in accordance with a notification published by the State Gov ernment on 26th April, 1986 (amending a previous notifica tion dated 15.12.
1982) which provided as follows: "In every speciality, seventy five percent seats in a par ticular medical college shall be reserved for the candidates who have passed the M.B.B.S examination from that college and against the remaining twenty five percent seats, candi dates who have passed M.B.B.S. examination from other Medi cal Colleges and are bona .fide resident of Uttar Pradesh.
shall be eligible for admission on the basis of merit along with the candidates who have passed the M.B.B .S. examina tion from that very college.
The court, therefore, set aside the admission of Dr. Juhi Jain and 877 Dr. Padma Panjwani and directed the principal of the Medical College to consider the cases of Dr. Vandana Singh and other external candidates, who were eligible for admission to the "open" twenty five per cent seats on merits and in accord ance with law.
The Principal of the Medical College, Dr. Juhi Jain and Dr. Padma Panjwani have preferred these appeals.
It has been submitted that the High Court has overlooked that the admis sions in question were to the second year or the post gradu ate degree course and were being considered under the terms of a residency scheme dated 22.8.89.
As per the terms of this scheme, 25% of the seats in the course (here, two seats) were to be filled in by candidates on the basis of an examination conducted by the All India Institute of Medical Sciences.
However, no such examination had been conducted by All India Institute and the college instead of leaving the seats vacant, decided to fill them up by internal candidates on the basis of merit.
In doing this, the principal of the college was only complying with the terms of a decision rendered by the Allahabad High Court in the case of Dr. R.P. Pandey, (Writ Petition No. 8181 of 1989) and a precedent approved by the Directorate General of Health Services, Medical Examination Cell, Nirman Bhavan, New Delhi, which in a letter to the principal of an Agra College, had, when unable to recommend candidates on the basis of an All India examination for a particular course released these seats in favour of internal candidates.
It has been submitted on behalf of Dr. Juhi Jain that, even assuming that the appli cation of Dr. Vandana Singh had to be considered, the High Court should have restricted itself to quashing the admis sion to one of the two seats and upheld the admission of Dr. Juhi Jain, who had secured higher marks than Dr. Padma Panjwani.
It is submitted on behalf of Dr. Padma Panjwani that even assuming that Dr. Vandana Singh 's application merited consideration, the interests of all the three candi dates could have been safeguarded by directing the State Government to create one additional seat and accommodate all the three candidates.
Reliance is placed in this respect on certain observations made by this Court in the case of one Mridula Avasthi; , Finally, it has also been submitted, on behalf of the appellants, that Dr. Vanda na Singh was not eligible for admission even on the terms of the notification dated 26.4.86 since she was not a bona fide resident of Uttar Pradesh.
It is stated that she had passed her M.B.B.S. examination from the State of Bihar and had also taken admission in a post Graduate Diploma Course in Gynecology and Obstetrics at Darbhanga Medical College, Laneriasarai, Bihar, a fact which she had concealed from her writ petition.
878 We have today passed a detailed judgment in regard to certain admissions made pending implementation of the resi dency scheme introduced by the State of U.P. in our judgment in a batch of appeals preferred by Dr. Harihar Prasad Singh & Ors.
as well as the State of Uttar Pradesh, [1990] 3 SCR 895 (Civil Appeal, Nos.
and, for reasons that will be appar ent later, the judgment in the present appeals will have to be read along with the judgment in the said appeals for a full and proper understanding of the issues involved.
That other decision 'turned on the interpretation of paragraph 5 of the residency scheme and also pertained to admissions to the second year of the post graduate degree course.
The scheme contained a transitory provision in para 5 in respect of certain persons who were house officers between 1987 and 1989.
the related batch of appeals raised a controversy pertaining to 75% of the seats in the second year of the post graduate courses which were reserved for institutional candidates.
Here the question arises in respect of the remaining 25% of the seats reserved for "external" candi dates.
To understand the point at issue, we shall briefly touch upon those aspects of the residency scheme which we had no occasion to consider in the batches of appeals above referred to but which are material for the purposes of these appeals.
By the notification dated 22.8.89 a scheme called the residency scheme was introduced, which dealt, inter alia, with the question of admission to post graduate specialities in medicinal courses.
These cases, like the other batches, have proceeded on the assumption that, so far as institu tional candidates are concerned, admissions to the second year of a degree course could be granted to persons like Dr. Juhi Jain and Dr. Padma Panjwani who had completed the M.B.B.S. degree examination, done one year of internship and had been working as house officers in the State of U.P. on 22.8.89.
There was a further controversy in those cases as to whether even persons who had been working as house offi cers since 1.8.1987 would be eligible for admission to this course and we have, by our judgment in the connected ap peals, answered this question in the affirmative.
That question would become relevant here only if we do not agree with the view taken by the High Court here.
We shall, there fore, keep that issue aside for the time being and shall deal with it later.
To continue the narration regarding the scheme, it provided for admission, to the three year post graduate course, of candidates who had passed the M.B.B.S. examina tion and completed one year 's internship.
Seventy five per cent of the admission to these courses was 879 to be available to institutional candidates on the basis of an entrance examination; the balance of twenty five per cent of the seats was to be filled up on the basis of an all India entrance examination.
This provision was in tune with certain directions given by this Court from time to time for regulating admission to medical colleges in various parts of the country.
This Court had in particular directed that while 75% seats in each medical college all over the country could be filled in by local or institutional candidates, the balance of 25% should be filled up on an all India basis.
Elaborate directions were also given by this Court to enable the All India Medical Institute (A.I.I.M.S.) to conduct a competitive test for selecting the candidates for these seats reserved on an all India basis.
The scheme obviously referred to the all India competitive entrance examination to be conducted by the A.I.I.M.S. every year.
Indeed such an examination had been held by he A.I.I.M.S. in January Febru ary 1989 and the candidates recommended had been taken into the medical colleges in U.P. as per the regulations then existing.
However, since the new scheme came into being in the middle of the year, there was no possibility of either a local entrance examination nor an all India examination being held to regulate the admissions to the new course.
C1.3(f) however provided that, for the 75 % institutional seats, competitive entrance examination shall be enforced from the fresh batch and that before its enforcement the admission to institutional seats in residency shall be done on the basis of the merit of the M.B.B.S. examination.
It was, however, silent in regard to the balance 25% seats.
The question arose, therefore, as to what was to be done in respect of the remaining 25% seats.
To meet the situation, the Direction of Medical Education issued directions, on 3.10.89, to the following effect: "Since there will be no admission of external students this year against 25 % open seats, therefore, after merging these open seats with 75% additional seats, the admission of students of 1982 supplementary batch and 1983 regular batch should be done against the entire 100% seats by making their combined merit.
" Accordingly, it seems admissions to 100% seats in the first year of the three year post graduate scheme was thrown open fully to internal candidates, the admissions being decided on the basis of their merit in the M.B.B.S. examination.
We are, however, not concerned with that issue here.
We are here concerned with admissions to the second year of the 880 residency scheme.
The scheme made a provision in the second sub para of para 5 for the adjustment of 'persons serving in U.P. as house officers by absorbing them into the second year of the residency scheme.
The provision has been set out and its implications discussed elaborately in our judgment in the allied batches of appeals and need not be repeated here.
It is not quite clear whether the second sub para of para 5 of the scheme covers all the seats in the second year of the course or only 75% thereof.
However, it is apparently understood only as pertaining to the 75% seats reserved for institutional candidates and, as there was no other provi sion in regard to the balance of 25% of the seats, it was decided that those seats should also be filled in only by institutional candidates.
However, in the meanwhile, an advertisement had been issued by the Principal of M.L.N. Medical College, Allahabad on 21.9.89.
This advertisement pertained only to the filling up of the seats comprising the 75% reserved for institutional candidates.
There was no advertisement regarding the rest Dr. Vandana Singh applied for admission to the second year of the degree course.
In this state of affairs it is perhaps possible to dispose of the matter before us by holding that the application of Dr. Vandana Singh can only be treated as one in response to the advertisement of 21st September, 1989 and so could not have been entertained as she was not an institutional candidate and that she has no locus standi, on the basis of that application, to challenge the admission of other institu tional candidates.
It is also possible to interpret the second sub para of para 5 of the scheme as covering the entirety of the seats for the second year of the course and not merely 75% of them.
In this view also, the application of Dr. Vandana Singh would have to be rejected.
It could, however, be argued that as the High Court has proceeded on the footing that para 5 pertains only to 75% of the seats, quite irrespective of the basis of her applica tion, Dr. Vandana Singh has a right to insist that under the scheme 25% of the seats should be thrown open for all India competition and that the admissions based on a different basis were rightly quashed.
If we assume this postulate to be correct and go strictly by the terms of the notification, admissions should be on the basis of an all India examina tion.
There was, however, no immediate possibility of any such examination being held for admission to the course for 1989 90.
In this state of affairs, one possible view which the High Court has taken is that these seats must be kept reserved for external candidates and the college must now take steps to invite external candidates in accordance with the terms contained in the notification dated 26.4.86 if that notification were applicable and select them in the order of merit.
The college, however, 881 took the view that since no all India candidates were avail able on the basis postulated in the scheme, it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In fact the State claims that this course of action has been approved by the decision of the High Court in the case of Dr. R.P. Pandey.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candi dates on the basis of merit.
If this be so, such advertise ment cannot be continued to persons who are residents of U.P. as was envisaged by the notification dated 26th April, 1986.
That notification had been issued at a time when the concept of all India reservation for 25% Of the seats had not been adumbrated by this Court.
Even if we assume that the High Court was right in saying that external candidates were eligible for admission, that eligibility cannot be restricted only to those who had already applied indeed, Dr. Vandana Singh appears to have been the only one who had applied to the course in the M.L.N. College but should be thrown open to all external candidates fulfilling the quali fications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for applica tion from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
In our opinion, the State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an all India examination, and such an examination is conducted by All India Institute of Medical Sciences every year for all medical colleges in India.
In our opinion, the decision taken by the State Government and the college was a practi cal one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a soli tary application from an external candidate.
For the reasons stated above, we are of the opinion that the High Court erred in quashing the admissions made on the grounds given by it, We uphold the rejection of Dr. Vandana Singh 's application.
In the view we have taken it is not necessary to express any opinion as to whether, even on the basis of the notification dated 26.4.86, Dr. Vandana Singh is eligible for consideration for admission to the course or she disqualified from such consideration for the reasons urged on behalf of the State, Dr. Juhi Jain and Dr. Padma Panjwani.
882 For the reasons mentioned above, we set aside the order of the High Court and hold that the application of Dr. Vandana Singh was rightly rejected by the college.
We should, however, like to point out that, in the connected batch of appeals, we have upheld that interpretation by the High Court of Para 5 of the scheme and held that the eligi bility for admission of institutional candidates is not confined to those who were on house jobs as on 22.8.89 but would also extend to those institutional candidates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifica tions and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as of Dr. Juhi Jain and Dr. Padma Panjwani to 25% of the seats had been made by excluding institutional candidates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selections of Dr. Juhi Jain and Dr. Padma Panjwani will be valid only if they come through successfully on merits on such reconsideration.
We have, therefore, to agree with the High Court that the admissions of Dr. Juhi Jain and Dr. Padma Panjwani should also be set aside but direct that the admissions be redone in the light of our observations in these two judgments.
These appeals are disposed of accordingly.
We, however, make no order as to costs.
|
For the academic year 1989 90, the appellant College had 8 seats in the post graduate course in Obsterics and Gyne cology.
Of these, six were reserved for institutional candi dates, and two for external candidates.
The Principal filled up all the eight seats by admitting institutional candidates without considering the case of any external candidate.
One of the external candidates approached the High Court by way of a Writ Petition.
The High Court set aside the admission of two .institutional candidates who were admitted against the quota for external candidates, and directed the Princi pal to consider the case of the petitioner and other exter nal candidates who were eligible for admission to the 'open ' 25% seats on merits, in accordance with law.
Aggrieved, the Principal and the two institutional candidates whose admis sion was set aside by the High Court, have preferred these appeals, by special leave.
Disposing of the appeals, HELD 1.
The appellant College, took the view that since no All India candidates were available on the basis postu lated in the Residency Scheme it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In that the State claims that this course of action has been approved by the decision of the High Court in a case before it.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candidates on the basis of merit.
If this be so, such advertisement cannot be confined to persons who are residents of U.P. as was envisaged by the notifica tion dated 26th April, 1986.
That notification been issued at a time when the 875 concept of All India reservation for 25% of the seats had not been adumbrated by this Court.
Even if it is assumed that the High Court was right in saying that external candi dates were eligible for admission, that eligibility cannot be restricted only to those who had already applied but should be thrown open to all external candidates fulfilling the qualifications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for appli cations from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
The State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an All India examination, and such an examination is conducted by the All India Institute of Medical Sciences every year for all medical colleges in India.
The decision taken by the State Government and the college was a practical one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a solitary application from an external candidate.
[881A F] 2.
On a proper interpretation of Para 5 of the Residency Scheme the eligibility for admission of institutional candi dates is not confirmed to those who were on house jobs as on 22.8.89 but would also extend to these institutional candi dates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifications and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as the admission of the two candidates to 25% of the seats had been made by excluding institutional candi dates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selection of the two institutional candidates in question will be valid only if they come through successfully on merits on such reconsideration.
The High Court was right in holding that their admissions should be set aside.
The admission be redone in the light of the observations in these two judgments.
[882B E] Dr. Harihar Prasad Singh & Ors.
vs Principal, Moti Lal Nehru Medical College & Ors.
, [1990] 3 SCR 895 referred to.
|
ivil Appeal No. 5336 & 5337 of 1983.
From the Judgment and Decree dated 15.7.
1982 of the Andhra Pradesh High Court in W.A. No. 194 of 1981.
P.P. Rao, section Sitaramayya, K. Parasaran, T.V.S.N. Chari, Ms. B. Sunita Rao, Ms. Manjula Gupta, B. Parthasarthi, A. Subba Rao, A.D.N. Rao and K.R. Choudhary for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
These matters have a chequered history.
The appellants as well as most of the contesting respondents were appointed as Junior Engineers in the Andhra Pradesh Electricity Subordinate Service on emergency basis between 1959 and 1963.
While they were in service on April 24, 1963, the Andhra Pradesh Public Service Commission (hereinafter referred to as the "Commission") invited applications for regular appointment by direct recruitment to 246 posts of Junior Engineers and on December 21, 1963, the Commis 916 sion forwarded a list of selected candidates to the State Government.
This list was, however, not arranged according to merits and therefore according to seniority inter se among the candidates.
On April 15, 1964, the Commission forwarded to the Government the list of selected candidates arranging their names according to merits and seniority and after complying with the reservation prescribed by Rule 22(ii)(c) of the Andhra Pradesh State and Subordinate Serv ice Rules (hereinafter referred to as the "Rules") by which the relevant service was governed.
On August 11, 1964, the State Government amended the said Rules by deleting the said Rule 22(ii)(c) with retrospective effect from April 1, 1964.
This amendment was effected to comply with the decision of this Court in M.R. Balaji & Ors.
vs State of Mysore, ; Supp. 1 SCR.
In spite of the fact that the Rules were so amended on August 11, 1964 with retrospec tive effect, the State Government on April 29, 1965 gazetted the list of selected candidates as was sent to them by the Commission on April 15, 1964.
The result was the list as gazetted was in breach of the said Rules.
After the gazette notification, on April 29, 1965, the Chief Engineer of the Government appointed all the said candidates to the posts of Junior Engineers who included the appellants and the re spondents and others according to the order of seniority communicated by the Commission.
The candidates so appointed were put on probation for a total period of two years.
The seniority as notified in the said list was chal lenged by a Writ Petition No. 2 146 of 1966 in the High Court of Andhra Pradesh in November 1966 by 10 Junior Engi neers belonging to the non reserved category on the ground that the same was in breach of law since it was contrary both to the said decision of this Court as well as to the Rules as they stood amended on August 11, 1964 w.e.f. April 1, 1965.
The learned Single Judge disposed of the said Writ Petition on the assurance of the Government contained in their Memo.
No. 3373 E/70 dated July 17, 1970 addressed to the Government Pleader that the seniority list would be revised in compliance with the amended Rules so far as the petitioners were concerned.
Unfortunately, the learned Judge did not appreciate the discrimination to which the said assurance was to lead, since the assurance related only to the petitioners before him and had excluded the rest of the Junior Engineers similarly situated.
The matter, however, rested there.
On December 28, 1972, the State Government gave an option to all the Junior Engineers including the petitioners and the respondents to choose between the government service and a permanent 917 transfer to the Andhra Pradesh State Electricity Board.
Before the transfers could be effected, it appears that there was a correspondence between the Government and the Commission for changing the seniority list pursuant to the assurance given by the State Government to the learned Single Judge.
The Commission opined that the seniority list could not be altered in respect of only 10 petitioners in the said Writ Petition and had to be altered in respect of all the candidates selected, to comply with the amended Rules.
Accordingly, the Commission on June 27, 1973 sent the corrected seniority list to the State Government.
The Gov ernment accepted the said list, and on July 23, 1973 direct ed its Chief Engineer to circulate the said revised list and to invite objections to the same within a stipulated period. 'Accordingly, the Chief Engineer by his Memo.
dated August 8, 1973 circulated.the said seniority list and invited objections from all the concerned Junior Engineers.
Most of them including the respondents submitted their objections by October 1, 1973 on and from which date those of the Junior Engineers including the petitioners and respondents who had exercised their option to join the Electricity Board, were transferred to the Board.
The Government transferred the Junior Engineers who had opted for service with the Board by its Order of Novem ber 7, 1973 w.e.f. October 1, 1973 as stated above.
That order being G.O.M. No. 1166 assumes importance in the present case since the contents of paragraph 6(3) and 6(4) of the said document are relied on by the High Court as well as both sides in support of their respective contentions.
The said contents may be reproduced here at the outset: "6(3).
The transfer is on 'as is ' basis and the names in the Annexure are not arranged in the order of seniority on that basis; 6(4).
On transfer to the Andhra Pradesh State Electricity Board, the individuals will carry with them the seniority as it existed under Government as on 1.10.73 without prejudice of the seniority of the persons referred to in sub para (1) above, who may be transferred to the Board by a subsequent order of the Government and the seniority with reference to the position between 1.11.1956 to 1.10.1973 is liable to be altered by Government at any time with reference to pending appeals on Common Gradation Lists or with reference to the recommendations of High powered 918 Committee, State Advisory Committee, Central Advisory Com mittee etc.
On November 5, 1974, the Chief Engineer of the Elec tricity Board (to which the petitioners and respondents had stood transferred permanently from October 1, 1973) after considering the representations against the seniority list received from the affected Junior Engineers, issued a re vised seniority list.
This seniority list was challenged by the respondents and others who belonged to backward classes by a Writ Petition No. 6084/74 filed in the High Court in May 1972.
The learned Single Judge who tried the said writ petition, by his order of March 29, 1978 struck down the said list on the ground that the Chief Engineer of the Electricity Board had no power to alter the seniority of the transferred employees whose seniority was fixed by the State Government.
However, he observed that if the Government had retained any power under the transfer order and if it was so advised, the Government would be at liberty to revise the seniority list.
Aggrieved by the said order the petitioners on August 25, 1978 preferred an appeal before the Division Bench of the High Court dismissed it.
In view of the observations made by the learned Single Judge, the Government on August 23, 1979 issued show cause notices once again to all the persons belonging to backward classes (the respondents) to show cause why their seniority should not be revised as per the assurance given by the Government to the High Court while disposing of Writ Petition No. 2 146/66.
Some of the respondents replied to the show cause notice on November 18, 1979 and some of them filed a Writ Petition in the High Court being Writ Petition No.2 15 of 1980 on December 7, 1979 for restraining the Government from revising the seniority pursuant to the show cause notice.
At the same time, in February 1986, some of the petitioners in Writ Petition No. 2 146/66 filed Writ petition No. 582/80 before the High Court for seeking a direction to the Government to implement the assurance given by it while disposing of the said Writ Petition.
The learned Single Judge by his decision of February 5, 198 1 dismissed the respondents ' petition upholding the power of the Govern ment to revise the seniority list, and in view of the said order passed in respondents ' writ petition, no orders were passed in the petitioners ' petition.
Aggrieved by the said decision, the respondents preferred an appeal on March 30, 198 1 to the Division Bench.
Since no stay was granted pending the appeal, the Government by its order dated May 919 26, 198 1 issued a final revised seniority list after con sidering the representations of the persons belonging to the backward classes including the respondents.
Thereafter on July 15, 1982, the Division Bench of the High Court allowed the appeal of the respondents holding that the Government had no power to revise the seniority list.
It is this deci sion which is under challenge.
On behalf of the respondents some further connected developments have been brought to out notice.
It appears that along with the appellants and respondents who were the Degree holders, some Diploma holders were transferred to the Board w.e.f. the same date, namely, October 1, 1973.
Some of them had preferred on April 16, 1980 a Writ Petition being Writ Petition No. 1657/80 before the High Court for a direc tion to the Government to prepare a seniority list of As sistant Engineers who were appointed from June 15, 1963 in accordance with the statutory Rules and to communicate the same to the Board.
On April 16, 1982, a learned Single Judge allowed the said petition upholding the plea that the said order No. 1166 dated November, 7, 1973 had given powers to the State Government to settle the seniority of the trans ferred employees as on October 1, 1973.
This decision was upheld in appeal by a Division Bench of the High Court by its decision of March 26, 1987.
The Special Leave Petitions Nos. 8044 and 10783 of 1987 preferred against the said decision were dismissed by this Court on October 30, 1987 and this Court directed the Board to implement the order of the High Court subject to any decision which may be rendered by this Court in the present appeals.
On August 4, 1989, the State Government communicated the seniority list of the Assistant Engineers to the State Electricity Board and the Board is acting on the same.
The result is that whereas the petitioners, namely, the Diploma holders in the said Writ Petition No. 1657/80 are the beneficiaries of the revised seniority list, the present appellants are not.
The High Court has quashed the revised seniority list on .three grounds.
The first ground is that the employ ees having exercised their option under the Government Orders Nos. 1651 and 1166 dated December 28, 1972 and Novem ber 7, 1973 respectively subject to the terms and conditions mentioned therein, they were estopped from contending that the seniority which they carried with them as it existed under the Government as on October 1, 1973 cannot be contin ued further and was liable to be disturbed because the rule of reservation contained in old Rule 22(ii)(c) was declared by this Court to be violative of Articles 14 and 16 of the Constitution of India.
The High Court 920 further opined that there was a declaration in G.O. No. 1166 of November 7, 1973 which was binding on all the concerned, viz., the Government, the Board as well as the employees, that the exercise of the option was final.
Since the Govern ment and the Board had acted upon the option exercised by the employees and transferred them from Government service to the service of the Board, they were estopped from revis ing the seniority.
So also the employees were estopped from claiming that their seniority should be revised on any grounds whatsoever.
The second ground given by the High Court was that the transfer itself being subject to the terms and conditioned mentioned in the aforesaid Government Orders which stated that the transfers were on "as is" basis which included seniority, the seniority cannot be disturbed on any ground whatsoever.
The High Court stated in this connection that the employees concerned were specifically notified that the names mentioned in the Annexure were not arranged in the order of seniority and they were further notified that the employees would carry with them the sen iority as it existed on October 1, 1973, the only exception being of those employees who were mentioned specifically in sub para (1) of paragraph 6 of G.O. No. 1166.
Those persons were non gazatted technical staff, ministerial and few others whose options were not received by the Government on account of the delay in transit or for other reasons.
The High Court negatived the contention that clause 4 of G.O. No. 1166 which stated that the employees will carry with them their seniority as it existed under the Government on October 1, 1973 "without prejudiced to the seniority of the persons referred to in sub para (1) above who may be trans ferred to the Board by subsequent order of the Government the seniority with reference to the position between Novem ber 1, 1956 and November 1, 1973 was liable to be altered by Government at any time with reference to pending appeals on common gradation list or with reference to the recommenda tions of High Powered Committee (HPC), State Advisory Com mittee (SAC), Central Advisory Committee (CAC) etc." includ ed the cases of employees who had made their representations such as the present appellants who had initiated the pro ceedings by Writ Petition No. 2 146 of 1966 and which pro ceedings were not finally disposed of even by October 1, 1973.
The High Court held that the word "etc." was confined only to those employees who were affected by the States Re organisation Act or by orders on appeal against the Common Gradation Lists or representations made against the recom mendations of the HPC or SAC or CAC which were all matters referfable to the integration of the services of the Andhra and Telengana regions consequent upon the re organisation of the States.
That clause also referred, according to the High Court, to the revision of inter se 921 seniority list as on October 1, 1973 of other non gazetted technical staff, ministerial and few others who may be subsequently transferred.
But it did not refer to any of those who had already been transferred.
According to the High Court, if that was the intention, the Government would have specifically stated so.
The last ground given by the High Court was that the Government had no power to alter the seniority of the employees after October 1, 1973 since they had ceased to be the Government employees.
According to the High Court, the power given to the Government under Rule 36 A of the Rules to review the seniority could not be exercised to rectify the mistake.
According to the High Court, the question was not whether the earlier seniority list was valid but whether it could be revised and if so, by which authority.
The Government 's power of revising the seniority list was only in respect of those who were Govern ment servants on the date of the revision.
The High Court also held that merely because the Board had no jurisdiction to disturb the seniority so fixed, it did not follow that the Government continued to have jurisdiction in respect of those employees who were no more its employees.
To appreciate the reasoning of the High Court, it is first necessary to reproduce the relevant portions of G.Os.
1651 and 1166 of December 29, 1972 and November 7, 1973 respectively: "G.O. Ms. No. 1651 . . . . . . . . . . 3.
After carefully examining the matter in the light of the above, the Government consider that in view of the transfer of the bulk of the electricity projects to the Board and in view of the fact that the Board is in charge of Electricity Supply and distribution, it will be appropriate that the Board should have direct control over the staff and all the activities of the Board should be managed by the Board staff.
The Government therefore direct that an opportunity be given to the Government employees working in electricity supply and maintenance etc.
, to opt for service under the Andhra Pradesh State Electricity Board subject to the fol lowing Board subject to the following terms and conditions.
The employees on transfer to the Boards: i. shall cease to be Government servants and shall hence forth be the employees of the Andhra Pradesh State Electric ity Board.
922 ii.
shall be governed by the rules and regulations framed by the Board in all matters including matters pertaining to promotions and disciplinary action subject however to (iii) below and the Andhra Pradesh Civil Service (CC&A) Rules shall cease to apply to them . " "G.O. Ms. No. 1166 . . . . . . . . . . 4.
With reference to the above orders, the Board and the Chief Engineer have obtained the options from the officers referred to in the Annexure to this order, and forwarded them to the Government.
The options exercised by the individuals were carefully considered by the Government.
All the officers mentioned in the Annexure to this order, have opted to the Board service in the form prescribed in Annexure I to the G.O. first read above.
In view of the options exercised by the officers, the Government have decided to and accordingly transfer the services of the officers, mentioned in the Annexure to this G.O. to the A.P. State Electricity Board with effect from 1.10.1973 forenoon on the terms and conditions specified in paragraph 3 above and also those mentioned hereunder: (1) Orders in respect of the non gazetted technical staff, ministerial and of few others whose option forms have not been received by the Government on account of delay in transit or for other reasons, will issue separately; (2) . . . . . . . . . (3) The transfer is on "as is" basis and the names in the Annexure are not arranged in the order of seniority and do not therefore confer any right for seniority on that basis; (4) On transfer to the Andhra Pradesh State Electricity Board, the individuals will carry with them the seniority as it existed under Government as on 1.10.1973 without preju dice of the seniority of the persons referred to in sub para (1) above, who may be transferred to the Board by a subse 923 quent order of the Government and the seniority with refer ence to the position between 1.11.1956 to (sic.) 1.10.1973 is liable to be altered by Government at anytime with refer ence to pending appeals on Common Gradation Lists or with reference to the recommendations of High Powered Committee, State Advisory Committee, Central Advisory Committee etc., . " 12.
We should have thought that a mere reading of these two Government Orders and particularly G.O. No. 1166, was enough to uphold the contention of the appellants herein that their seniority as on October 1, 1973 was liable to be revised by the Government at any time.
This was so because firstly, clause (3) of paragraph 6 makes it clear that the names in the Annexure sent along with the order were not arranged in the order of seniority, and did not, therefore, confer any right for seniority on the basis, This shows that the Government had not finalised the seniority list, and the list which was sent to the Board with the said order was a provisional one.
The Government had to say so because admit tedly on that day the seniority of the employees was in flux on account of various reasons.
In the first place, as stated in paragraph 1 of the order, the seniority of non gazetted technical staff, ministerial and few others whose options were not received on account of various reasons, could not have been arranged.
As regards the gazetted technical staff such as the appellants as well as the nontechnical staff, there were appeals pending against the Common Gradation Lists prepared as per the recommendations of the HPC, SAC, CAC etc.
with reference to the seniority position between November 1, 1956 and October 1, 1973.
This was a sequel to the re organisation of the States and the amalgamation of the different regions in the State.
Secondly, the Government could not have ignored the position that as on October 1, 1973 the dispute with regard to the seniority of the appel lants and the respondents herein was pending in the High Court right from November 1966 when, as stated earlier, 10 Junior Engineers including some of the present appellants had filed Writ Petition No. 2 146 of 1966 giving rise to further proceedings as narrated hereinabove.
In these cir cumstances, it will indeed be difficult to hold that whereas the Government reserved power and could reserve power to revise the seniority list on account of the disputes about seniority arising out of the States ' re organisation and/or on account of the non receipt of options of the non gazetted technical staff etc.
it did not or could not reserve such power to meet the situation arising out of the orders of the courts in the disputes pending between the appellants and the respondents herein.
According to us, even if no such powers 924 were specifically reserved in the said Government order, the Government would have been obliged to revise the seniority list to comply with such orders.
We are further afraid that the High Court, in this connection, placed too much emphasis on the expression "the transfer is on as is basis" and did not read into it what in the context of the whole order should have been quite obvi ous.
Clause 3 of the order itself states that the names mentioned in the Annexure were not arranged in the order of seniority and did not, therefore, confer any right for seniority on that basis.
Clause 4 of the order specifically stated that the seniority was liable to be altered by the Government at any time with reference to the pending appeals "etc." Even assuming that the Government by the word "etc.
" did not intend to refer to the matters pending in court and only intended to refer to the appeals arising out of the recommendations of the concerned committees, it should be clear to any one that whether the Government reserved such power or not with reference to the cases pending in courts, the Government would have been under an obligation to revise the seniority list to comply with such orders.
In the cir cumstances, the expression "the transfer is on as is basis" should have been confined to all service conditions except the seniority.
We are also unable to understand why the Government could revise the seniority list of some employees who were no longer its employees after October 1, 1973 merely because it had reserved its powers to do so while it had no power to do so in respect of the other employees merely because it had not reserved such power.
If the ground given by the High Court for such lack of power in respect of the latter class of employees is correct, viz., that they had ceased to be the Government servants, then for the same reason the Gov ernment could not have reserved and even if it had reserved, could not have had the power to change the seniority of the other employees since both had ceased to be the Government employees on and from October 1, 1973.
If the lack of power was on account of the severence of the relationship between the Government and the employees, then whether the Govern ment reserved the power or not, the Government could not have had such power.
On the other hand, if Government could exercise such power merely because it had reserved it, it could exercise it for any reason whatsoever and for any length of time even when the employees were not the Govern ment servants.
We are afraid that the Court failed to appre ciate that firstly, even if the Government so willed, it could not have reserved power to change the seniority of the employees after October 1, 1973.
Conversely, the Government had 925 always the power to revise the seniority list of the employ ees as on October 1, 1973 on account of reasons accruing prior to the said date.
To do it, it was not necessary for the Government to reserve any power, for it had inherent power to do so.
What is unfortunately lost sight of by the Court is that the Government had no reserved the power, as it could not, to change the seniority of the employees after October 1, 1973.
The Government had reserved the power, as it had every right to do so, to change the seniority of the employees as on October 1, 1973 or prior to that date when they were employees of the Government.
It is this initial wrong assumption which, we are afraid, had led the Court to the wrong conclusion.
We have pointed out above that the Government had not sent the list of the employees to the Board arranged accordingly to seniority and the expression "as is" in the circumstances referred to service conditions other than seniority.
We have further pointed out that even if the word "etc." at the end of clause (4) of paragraph 6 of the said Government Order was construed to exclude the dispute with regard to seniority pending in the court, that would not have exempted the Government from complying with the orders of the court.
To hold that the Government by its own order such as the present one could prevent operation of the order of any court is to invite conflict in the jurisdiction of the executive and the judiciary which, we are sure, the High Court did not intend.
But the reasoning of the Court unwit tingly and directly leads to such unconstitutional proposi tion.
For the same reasons, the Government could not have forced the employees to accept the term with regard to the seniority as an immutable one.
This is a part from the fact, as pointed out above, that in fact the said Government Order did not lay down any such term.
This being the case, it cannot be said that the appellants had accepted the seniori ty as was forwarded by the Government to the Board and they were estopped thereafter from agitating against it.
It is unnecessary to state that the decision of the court being the law, no plea of estoppel could be raised against it.
With respect, we are also unable to accept the reasoning of the High Court that since the Board had no power to change the seniority list, it could not be said that the Government had the said power.
As a first proposi tion, it is well settled that there cannot be a right with out a remedy.
Law abhors such vacuum.
But, as pointed out earlier, there are two periods with respect to which the power to alter seniority has to be examined.
The first period is upto October 1, 1973 926 and the second commences thereafter.
In the first period there was a relationship of employer employee between the Government and the transferred employees.
Hence, the Govern ment had ever? right to correct or amend the seniority of the employees upto that date.
therefore.
the Government had advertently or inadvertently committed any error in preparing the seniority list upto October 1, 1973, or be cause of the decisions of the courts it had to amend the said seniority list.
not only it had power to do so but it was the only authority which could do it.
The seniority list which was corrected by the Government was the seniority list as on or before October 1, 1973.
In the circumstances, we are of the view that the decision of the High Court suffers from legal infirmities and has to be set aside.
The result is that both the appeals are allowed.
The revised seniority list sent by the Govern ment to the Board with Government Order No. 233 of May 26, 198 1 is restored and the respondent Electricity Board is directed to act on the same.
In the circumstances of the case, there will be no order for costs in either of the appeals.
N.P.V. Appeals allowed.
|
The appellants and the respondents who were originally appointed as Junior Engineers in the Andhra Pradesh Elec tricity Subordinate Service, were subsequently transferred along with other Junior Engineers to the State Electricity Board with effect from October 1, 1973 on the basis of options exercised by them to join the Board.
in response to G.O.Ms.
No. 1651 dated 28.12.1972.
The terms and conditions of transfer were stipulated in G.O.Ms.
No. 1166 dated 7.11.1973.
On the date of transfer, the seniority list of the Junior Engineers had not been finalised.
However a seniority list prepared by the State Public Service Commission, taking into account the deletion of rule 22(ii)(c) of the Andhra Pradesh State and Subordinate Rules with retrospective effect from April 1, 1964, had been circulated among the concerned Junior Engineers for objections, if any, and most of them.
including the petitioners and respondents, had submitted their objections before October 1, 1973.
After the transfers were effected, the State Electricity Board prepared a revised seniority list but the High Court struck down the same on the ground that the Board had no power to alter the seniority of the transferred employees, whose seniority was fixed by the Government.
However, it observed that if the Government had retained any power under the transfer order it would be at liberty to revise the seniority list.
In view of the aforesaid observations, the Government issued show cause notices once again to all the persons belonging to backward classes (the respondents) for revising the seniority.
913 In a writ petition filed by the respondents for re straining the Government from revising the seniority, a Single judge of the High Court, upheld the power of the Government to revise the seniority list.
During the pendency of appeal before the Division Bench, the Government issued a final revised seniority list, vide G.O. No. 233 of May 23, 1981.
Thereafter, the Division Bench quashed the revised seniority list on the grounds that there was a declaration in G.O. of November 7, 1973 that the exercise of the option was final, and since the Government and the Board had acted upon the option exercised by the employees and transferred them from Government service to the service of the Board, they were estopped from revising the seniority and similar ly, the employees were estopped from claiming that their seniority should be revised on any grounds whatsoever, that since the transfers were on "as is" basis which included seniority, the seniority could not be disturbed on any ground whatsoever, that the Government had no power to alter the seniority of the employees after October 1, 1973 since they had ceased to be Government employees, and the power given under Rule 36A of the Rules to review the seniority could not be exercised to rectify the mistake, and that merely because the Board had no jurisdiction to disturb the seniority so fixed, it did not follow that the Government continued to have jurisdiction in respect of those employees who were no more its employees.
This decision was challenged in the appeals before this Court.
Allowing the appeals, this Court, HELD: 1.1 The Government had reserved the power, as it had every right to do so, to change the seniority of the employees as on October 1, 1973 or prior to that date when they were employees of the Government.
It had not reserved the power, as it could not, to change the seniority of the employees after October 1, 1973.
Even if it so willed, it could not have reserved power to change the seniority of the employees after October 1, 1973.
Conversely the Government had always the power to revise the seniority list of the employees as on October 1. 1973 on account of reasons accru ing prior to the said date.
To do it, it was not necessary for it to reserve any power, for it had inherent power to do so.
[925B; 924H; 925A] 1.2 By a mere reading of two Government Orders, and particularly, G.O. No. 1166 it is clear that seniority of the appellants as on October 1, 1973 was liable to be re vised by the Government at any time.
Clause (3) of paragraph 6 makes it clear that the names in the Annexure sent along with the order were not arranged in the order of seniority, 914 and did not.
therefore, confer any right for seniority on that basis.
This shows that the Government had not finalised the seniority list and the list which was sent to the Board with the said order was a provisional one.
The Government had to say so.
because, admittedly, as on that day the seniority of the employees was in a flux on account of various reasons.
viz., non receipt of options of non gazet ted technical staff and pendency of appeals of the gazetted technical staff, like the appellants and non technical staff against the Common Gradation Lists prepared as per the recommendations of various committees with reference to seniority position between November 1, 1956 and October 1, 1973, sequel to reorganisation of the States and amalgama tion of different regions in the State.
Besides.
the Govern ment could not have ignored the position that as on October 1, 1973 the dispute with regard to the seniority of the appellants and the respondents was pending in the High Court right from November 1966 when, 10 Junior Engineers including some of the present appellants had filed Writ Petition giving rise to further proceedings.
In these circumstances, it cannot be held that whereas the Government reserved power and could reserve power to revise the seniority list on account of the disputes about seniority arising out of the States re organisation and/or on account of the non receipt of options of the non gazetted technical staff etc.it did not or could not reserve such power to meet the situations arising out of the orders of the courts in the disputes pending between the appellants and the respondents.
There fore, even if no such powers were specifically reserved in the said Government order, the Government would have been obliged to revise the seniority list to comply with such orders.
[923B H; 924A] 1.3 Since the Government had not sent the list of the employees to the Board arranged according to seniority, the expression "as is" in clause (3) of paragraph 6 of the Government Order in the circumstances referred to service conditions other than seniority.
Even if the word "etc" at the end of clause (4) was construed to exclude the dispute with regard to seniority pending in the court, that would not have exempted the Government from complying with the orders of the Court.
To hold that the Government by its own order, such as the present one, could prevent operation of the order of any court is to invite conflict in the juris diction of the executive and the judiciary.
Similarly, the Government could not have forced the employees to accept the term with regard to the seniority as an immutable one.
In fact the said Government Order did not lay down any such term.
Hence, it cannot be said that the appellants had accepted the seniority as was forwarded by the Government to the Board and they were estopped thereafter from agitating against it.
The decision of the Court being the law, no plea of 915 estoppel could be raised against it.
[925C F] 1.4 It is well settled that there cannot be a right without a remedy.
Law abhors such vacuum.
But, there are two periods with respect to which the power to alter seniority has to be examined.
The first period is upto October 1, 1973 and the second commences thereafter.
In the first period, there was a relationship of employer employee between the Government and the transferred employees.
Hence, the Govern ment had every right to correct or amend the seniority of the employees upto that date.
If, therefore, the Government had advertently or inadvertently committed any error in preparing the seniority list upto October 1, 1973, or be cause of the decisions of the courts it had to amend the said seniority list, not only it had power to do so but it was the only authority which could do it.
The seniority list which was corrected by the Government was the seniority list as on or before October 1, 1973.
[925H; 926A B] In the circumstances, the decision of the High Court suffers from legal infirmities and has to be set aside.
The revised seniority list sent by the Government to the Board with Government Order No. 233 of May 23, 1981 is restored and the respondent Electricity Board is directed to act on the same.
[926C]
|
ivil Appeal No. 1451 of 1988.
From the Judgment and Order dated 14.3.88 of the Bombay High Court in W.P. No. 1033 of 1987.
M.S. Nesargi, R.C. Mishra and Dr. Meera Agarwal for the Appellants.
Vinod Bobde, Ms. J. Wad and A.M. Khanwilkar for the Respondents.
V.N. Ganpule for the State.
The Judgment of the Court was delivered by SAWANT, J.
The two questions raised in this appeal are: (i) Whether the employment notice issued by the respondent University on July 27, 1984 ought to have indicated reserva tions postwise, and (ii) Whether, assuming that the said notice was invalid the termination of services of the appellants on April 21, 1987 was valid? 2.
The University issued the employment notice in ques tion inviting applications for a total of 77 posts which included 13 posts of Professors, 29 posts of Readers and 35 posts of Lecturers in different subjects ranging from Eco nomics, Politics and Sociology to Physics, Pharmacy and Geology.
The notice mentioned total number of reservations categorywise but not subjectwise as follows: Professors Scheduled Castes 3, Scheduled Tribes 2 and VJ/NT 1 Readers Scheduled Castes 6, Scheduled Tribes 4 and VJ/NT 2 Lecturers Scheduled Castes 7, Scheduled Tribes 5 and VJ/ 'NT 4 A number of applications were received for the posts from candidates including the petitioners belonging to both reserved and nonreserved castes for all the three categories of posts, viz., Professors, Readers and Lecturers.
This advertisement was corrected by Corrigendum of February 1, 1985.
Thereafter, a further employment notice 888 for additional posts in all the three categories was issued on August 1, 1985 but we are not concerned with the same.
Different selection committees in all 53 in number were constituted and they recommended 47 candidates for 53 posts.
It appears that while recommending the selections, the committees also gave weightage to the candidates belonging to the reserved castes.
Thereafter, the Executive Council constituted a sub committee to decide which posts should be reserved for the reserved castes.
On the recommendation of the sub committee and after taking into consideration the backlog of reservations, the Executive Council decided to keep apart 17 posts and made permanent appointments only to 30 out of 47 candidates by its appointment orders issued on March 30, 1985 for the academic year 1985 86.
As regards 17 posts which were kept apart for reserved candidates, it decided to fill in the same by temporary appointments for those posts pending the availability of the suitable candi dates from reserved castes.
It appears that against these appointments some social workers and organisations made representations to the Chancellor making a grievance both against the employment notice as well as the procedure followed in making the said appointments.
By his order dated February 22, 1986, the Chancellor appointed a one man committee under Section 76 of the Nagpur University Act, 1974 (hereinafter referred to as the 'Act ') to inquire into the matter.
The committee submit ted its report on September 24, 1986 which was accepted by the Chancellor. 4.
In the meanwhile, a batch of writ petitions was filed in the High Court challenging the employment notice on the ground that the non obtaining of the recommendation from the Board of University Teaching and Research ( 'BUTR ' for short) before issuing the employment notice was bad in law in view of the provisions of Section 32(2) (iii) of the Act.
The High Court accepting this contention quashed the employment notice and set aside the appointments to the posts which were challenged in those petitions.
In all the petitions the Court also restrained the University from making any ap pointment without obtaining the recommendations from the BUTR.
Taking into consideration both the report of the one man committee and also the decision of the High Court, the Chancellor directed the Vice Chancellor to terminate the service of all the appointees including the appellants and accordingly the Vice Chancellor issued orders of termination of services of the appellants and others similarly appointed on April 21, 1987.
The termination orders mentioned four grounds as follows: 889 (a) the reservation policy adopted by the University was contrary to Section 57 of the Act; (b) the decision of the Executive Council allocating all reserved posts to VIth Plan posts were arbitrary and dis criminatory; (c) the University had failed to comply with the mandatory provisions of Section 32 of the Act since it had not con sulted the BUTR; and (d) that the employment notice was not in accordance with law.
It may be mentioned here that although the services were thus terminated by the said order the Vice Chancellor on the same day issued another order in exercise of his emergency powers under Section 11(4) of the Act and appointed all the appellants and others to the same posts protecting their pay and allowances at the same time making it clear that the appointments were temporary.
We are concerned in this appeal only with two grounds as stated at the outset.
The third ground, viz., whether the recommendations of BUTR were mandatory before the issuance of the employment notice was not pressed before the Full Bench from which the present appeal arises.
It appears that on the first ground, viz., whether the general reservation instead of the postwise reservation was illegal, there was a difference of opinion between two Division Benches of the High Court.
One Division Bench in Writ Petition No. 1876 of 1984 (hereinafter referred to as the 'Bhakre 's case ' (decid ed on December 7, 1984 took the view that the postwise reservation was not necessary whereas another Division Bench differed with the said view and sent the papers to the learned Chief Justice for referring the matter to a larger Bench and the issue referred to the larger Bench was as follows: "Is non reserving the posts of University teachers subject wise in the employment notice a breach of letter and spirit of reservation policy contained in Section 77C read with Section 57 of the Act?" That being the only issue, the Full Bench was really called upon to answer it alone.
However, thereafter by the the consent of parties one more issue was raised before the Full Bench which is the second of the two questions which we have to decide in this appeal, viz., whether, notwithstand ing the illegality of the general reservation, the services of the appellants were liable to be terminated.
On the first 890 issue, the Full Bench held that general reservations were in breach of the provisions of the Act and against the reserva tion policy and, therefore, illegal.
On the second issue, by majority the Full Bench held that since the appointments were not according to law from the beginning, 'the termina tion of the appellants ' services was legal.
As regards the first question, we have narrated earlier the method which was adopted by the University for reserving the posts.
It announced the posts categorywise as Professors, Readers and Lecturers in different subject and made a blanket declaration that 6 of the posts of Professor, 12 of the posts of Readers and 16 of the posts of Lecturers would be reserved for backward castes.
Neither the Universi ty nor the candidates knew at that time as to for which of the subjects and in what number the said posts were re served.
The result was that the candidates belonging to the reserved category in particular, who wanted to apply for the reserved posts did not know for which of the posts they could apply and whether they could apply at a11 for the posts in the subjects in which they were qualified.
That this could be the expected consequence of such an employment notice can legitimately be inferred and need not be and indeed cannot be, demonstrated by evidence of what actually happened, for there may be number of candidates who on account of the said uncertainty might have refrained from applying for the posts as against those who applied to take a chance.
What is further, the selection committees which were appointed to interview the candidates for the respec tive posts did not also know whether they were interviewing the candidates for reserved posts or not, and to assess merits of the candidates from the reserved category as such candidates.
The contention advanced on behalf of the appel lants that the selection committees even without know wheth er the posts concerned were reserved or not, had given weightage to the candidates from the reserved category and, therefore, it cannot be said that any injustice had resulted to them is without merit.
In the first instance, the conten tion proceeds on the footing that all those belonging to the reserved category who wanted to apply for a11 the said posts had done so even without knowing that the concerned posts were reserved.
Secondly, it also presumes that all eligible candidates from unreserved category had applied for the posts without knowing whether the posts were reserved or not.
The possibility that many eligible candidates belonging to both reserved and unreserved categories might not have taken the risk and chosen to gamble cannot be ruled out.
This argument further ignores the fact that the suitability of a candidate from a reserved category to the particular post has to be adjudged by taking into consideration various factors and the desired 891 result cannot be obtained by merely giving uniform weightage marks to the candidates concerned which was the only method followed by the selection committees while selecting the candidates.
Further, there is nothing on record to show that this method of giving weightage to the candidate was not followed in respect of reserved category candidates even if they had not applied for the post in the.reserved seats.
What is more, there is also nothing on record to show wheth er any candidates belonging to the reserved category has applied for a particular post in a reserved seat, without the prior knowledge that the post was reserved.
It is, therefore, difficult to understand as to how the selection committees proceeded to give weightage to the candidates without knowing whether they had applied for reserved or nonreserved seats.
What is more objectionable in the proce dure was that its Executive Council proceeded to classify the posts in different subjects between reserved and non reserved posts after the lists of selected candidates were received from different selection committees.
This method was open to an obvious objection since it gave a scope to eliminate unwanted selected candidates at ' that stage.
Whether it occurred in the present case or not is immaterial for testing the validity and the propriety of the method followed by the University.
As has been stated earlier, in fact, after the receipt of the list of selected candidates not only the Executive Council constituted yet another committee to decide which of the subjectwise posts should be reserved or not but the Executive Council also decided that although candidates for 47 posts were selected only 30 of them should be appointed permanently.
The latter included some backward class candidates for reserved posts so catego rised later.
But 17 of the posts were set apart although the candidates were selected for them, and they were so set apart for being filled in afresh by candidates belonging to the reserved category.
Interestingly, however, the employ ment notice issued subsequently for these 17 posts mentioned reservations postwise (subjectwise).
The argument based on Section 57(4)(a) of the Act to support the procedure adopted by the University is, accord ing to us, not well merited.
The contention is that since Section 57(4)(a) requires the University to state in the advertisement only the total number of posts and the number of reserved posts and not postwise, i.e., subjectwise, the employment notice in question was not bad in law.
According to us, the word "post" used in the context has a relation to the faculty, discipline, or the subject for which it is created.
When, therefore, reservations are required to be made "in posts", the reservations have to be postwise, i.e., subjectwise.
The mere announcement of the number of 892 reserved posts is no better than inviting applications for posts without mentioning the subjects for which the posts are advertised.
When, therefore, Section 57(4)(a) requires that the advertisement or the employment notice would indi cate the number of reserved posts, if any, it implies that the employment notice cannot be vague and has to indicate the specific post, i.e., the subject in which the post is vacant and for which the applications are invited from the candidates belonging to the reserved classes.
A non indica tion of the post in this manner itself defeats the purpose for which the applications are invited from the reserved category candidates and consequently negates the object of the reservation policy.
That this is also the intention of the legislature is made clear by Section 57(4)(d) which requires the selection committees to interview and adjudge the merits of each candidate and recommend him or her for appointment to "the general posts" and "the reserved posts", if any, advertised.
A support was also sought to be derived by the appel lants to their contention from the policy of reservation as enunciated in Government Resolution dated March 30, 1981 wherein instructions were issued in the matter in exercise of the power conferred on the Government under Section 77(c) of the Act.
The contention was that since in para 3(b) of the said Resolution it is stated that "similarly, at any given time of recruitment to the teaching posts, only the total number of reserved vacancies and the sections from which they are to be filled in should be determined.
It would be enough if the required percentage is fulfilled as a whole and not with reference to any particular post.
If the reserved vacancies cannot be filled, then so many posts as cannot be filled in, may be kept vacant for six months and should be again advertised thrice.
If, even after readver tising the posts three times, suitable candidates belonging to the reserved category do not become available, they may be filled in by candidates belonging to the "open category".
We are afraid that this interpretation placed on the afore said contents of the Government Resolution stems from their misreading.
Read in the context in which the said contents appear, it is clear that what is sought to be conveyed by them is that although at any given time the total percentage of reservation, viz. 34 is not made up vis a vis particular post or posts, it would be an enough compliance with the Resolution if the total number of vacancies filled in all the posts together conform to the said percentage.
It is common knowledge that the vacancies in posts in different subjects occur from time to time according to the exigencies of the circumstances and they arise unequally in different posts.
There may not be vacancies in one or some posts whereas there may be a large number of vacancies in other 893 posts.
In such circumstances, it is not possible to comply with the minimum reservation percentage of 34 vis a vis each post.
It is for this reason that the Resolution states that although minimum percentage of reserved posts may not be filled in one or some posts, it will be enough if in that year it is filled in taking into consideration the total number of appointments in all the posts.
This, however, does not absolve the appointing authority from advertising in advance the vacancies in each post and the number of posts in such vacancies meant for the reserved category, and inviting applications from the candidates belonging to the reserved and unreserved categories with a clear statement in that behalf.
In fact, the overall minimum percentage has to be kept in mind, as stated in the Resolution, at the time of issuing the employment notice or the advertisement as the case may be.
On behalf of the appellants reliance was also sought to be placed on a Full Bench decision of the Karnataka High Court in Dr. Raj Kumar vs Gulbarga University, AIR 125.
We do not see how the decision in question helps the appellants, for the Full Bench has observed there that general reservation has to be cadrewise and subjectwise.
But an exception could possibly be made in cases like the one of professors in which post available in each of the subjects is only one while grouping all of them together for purposes of reservation so that at least in the subjects in which the candidates belonging to the reserved category are available, they could be accommodated.
It is not necessary for us in this case to express our opinion on the correct course to be adopted when only one post is available in a particular subject at a given time.
The course to be adopted would depend upon the unit of reservations, the period over which the backlog is to be carried, the number of appointments already made in the said posts, the availability of candi dates from the reserved category etc.
What is material from our point of view in this case is to point out that even the Karnataka Full Bench has taken the view that generally reservation had to be cadrewise and subjectwise.
It was also a case of the filling in of the vacancies in teaching posts in a University.
We are, therefore, in complete agreement with the view taken by the Full Bench that the employment notice dated July 27, 1984 was bad in law since it had failed to notify the reservations of the posts subjectwise and had mentioned only the total number of reserved posts without indicating the particular posts so reserved subjectwise.
The second contention need not detain us long.
It is based primarily on the provisions of Section 57(5) of the Act.
The contention 894 is that since the provisions of that section give power to the Chancellor to terminate the services of a teacher only if he is satisfied that the appointment "was not in accord ance with the law at that time in force" and since the law at that time in force, viz., on March 30, 1985 when the appellants were appointed, was the law as laid down in Bhakre 's case (supra) which was decided on December 7, 1984, the termination of the appellants is beyond the power of the Chancellor.
The argument can only be described as naive.
It is unnecessary to point out that when the court decides that the interpretation of a particular provision as given earli er was not legal, it in effect declares that the law as it stood from the beginning was as per its decision, and that it was never the law otherwise.
This being the case, since the Full Bench and now this Court has taken the view that the interpretation placed on the provisions of law by the Division Bench in Bhakre 's case (supra) was erroneous, it will have to be held that the appointments made by the University on March 30, 1985 pursuant to the law laid down in Bhakre 's case (supra) were not according to law.
Hence, the termination of the services of the appellants were in compliance with the provisions of Section 57(5) of the Act.
When, therefore, the services of the appellants are to be terminated in view of the change in the position of law and not on account of the demerits or misdemeanour of indi vidual candidates, it is not necessary to hear the individu als before their services are terminated.
The rule of audi altrem partem does not apply in such cases and, therefore, there is no breach of the principles of natural justice.
In the result.
we are of the view that there is no merit in this case.
The appeal, therefore, stands dismissed.
In the circumstances of the case, however, there will be no order as to costs.
However, it is pointed out to us that some of the appellants had resigned from their earlier jobs and joined the University, some of them have become overaged for making any fresh application while others will have no chance either because the posts as per the new advertisement of 1987 are either reserved or non reserved and they belong to the other category.
We can, therefore, only recommend that the University may take into consideration the relevant facts pertaining to each of the appellants, and if it is possible, accommodate them without transgressing the law and the claims of other eligible candidates.
We make it clear that this recommendation is not a direction and is made purely on compassionate grounds.
It is to be followed only if it is possible for the University to do so without giving rise to further litigation by candidates who may be ag grieved on that account.
G.N. Appeal dismissed.
|
The respondent University issued an employment notice inviting applications for the posts of Professors, Readers and Lecturers in different subjects.
The notice mentioned the number of reservations category wise, but not subject wise.
Including the petitioners, a number of candidates belonging to both reserved and non reserved categories applied.
Selection Committees were constituted which recom mended 47 candidates for 53 posts; weightage was given to candidates belonging to the reserved category.
Thereafter the Executive Council constituted a sub Committee to decide which posts should be reserved.
On its recommendations and on consideration of the backlog of reservations, the Execu tive Council decided to set apart 17 posts and gave perma nent appointments only to 30 candidates.
It also decided that in respect of the 17 posts reserved, temporary appoint ments would be made pending the availability of suitable candidates from the reserved category.
On receipt of some representations expressing grievances against the employment notice as also the procedure followed in making the appointments, the Chancellor appointed a one man Committee to in 884 quire into the matter.
The Committee submitted its report which was accepted by the Chancellor.
Meanwhile, a batch of writ petitions was filed in the High Court challenging the employment notice on the ground that the non obtaining of the recommendation from the Board of University Teaching and Research before issuing the employment notice was bad in law in view of the provisions of Section 32(2)(iii) of the Act.
The High Court quashed the employment notice and set aside the appointments made to the posts.
It also restrained the University from making any appointment without obtaining the recommendations as afore said.
Taking into consideration the report of the one man committee and the decision of the High Court, the Chancellor directed the Vice Chancellor to terminate the services of all the appointees including the appellants.
Accordingly, the Vice Chancellor issued orders of termination of the services of the appellants and other similarly appointed.
Although the services were thus terminated, the Vice Chancellor on the same day issued another order in exercise of his emergency powers under Section 11(4) of the Act and appointed all the appellants and others to the same posts protecting their pay and allowances and making it clear to the appointments were temporary.
However the matter went before a Full Bench since one Division Bench took the view that post wise reservation was not necessary, and another Division Bench differed from it.
The Full Bench held that general reservations were in breach of the provisions of the Act and against reservation policy and hence illegal.
It also held that since the appointments were not in accordance with law from the beginning, the termination of the appellants ' services was legal.
Aggrieved, the appellants have preferred the present appeal against the decision of the Full Bench.
Dismissing the appeal, this Court, HELD: 1.
The employment notice dated July 27, 1984 was bad in law since it had failed to notify the reservations of the posts subject wise and had mentioned only the total number of reserved posts without indicating the particular posts so reserved subject wise.
[893G] 2.
The word "post" used in section 57(4)(a) of the Nagpur University Act, 1974 has a relation to the faculty, disci pline, or the subject for 885 which it is created.
When therefore, reservations are re quired to be made "in posts", the reservations have to be postwise, i.e., subjectwise.
The mere announcement of the number of reserved posts is no better than inviting applica tions for posts without mentioning the subjects for which the posts are advertised.
When, therefore, Section 57(4)(a) requires that the advertisement or the employment notice would indicate the number of reserved posts, if any, it implies that the employment notice cannot be vague and has to indicate the specific post, i.e. the subject in which the post is vacant and for which the applications are invited from the candidates belonging to the reserved classes.
A nonindication of the post in this manner itself defeats the purpose for which the applications are invited from the reserved category candidates and consequently negates the object of the reservation policy.
That this is also the intention of the legislature is made clear by Section 57(4)(d) which requires the selection committee to interview and adjudge the merits of each candidate and recommend him or her for appointment to "the general posts" and "the reserved posts", if any, advertised.
[891H; 892A C] 3.1 It is common knowledge that the vacancies in posts in different subjects occur from time to time according to the exigencies of the circumstances and they arise unequally in different posts.
There may not be vacancies in one or some posts whereas there may be a large number of vacancies in other posts.
In such circumstances, it is not possible to comply with the minimum reservation percentage of 34 visa vis each post.
It is for this reason that the Government Resolution dated 30.3.81 states that although minimum per centage of reserved posts may not be i"filed in one or some posts, it will be enough if in that year it is filled in, taking into consideration that total number of appointments in all the posts.
This, however, does not absolve the ap pointing authority from advertising in advance the vacancies in each post and the number of posts in such vacancies meant for the reserved category, and inviting applications from candidates belonging to the reserved and unreserved catego ries with a clear statement in that behalf.
In fact, the overall minimum percentage has to be kept in mind, as stated in the Resolution, at the time of issuing the employment notice or the advertisement as the case may be.
[892H; 893A C] 3.2 However, the course to be adopted would depend upon the unit of reservations, the period over which the backlog is to be carried, the number of appointments already made in the relevant posts, the availability of candidates from the reserved category etc.
[893F] Dr. Raj Kumar vs Gulbarga University, I.L.R. , referred to.
886 4.
In the instant case, there is nothing on record to show that the method of giving weightage to the candidates was not followed in respect of reserved category candidates even if they had not applied for the post in the reserved seats.
There is also nothing on record to show whether any candidate belonging to the reserved category had applied for a particular post in a reserved seat, without the prior knowledge that the post was reserved.
It is, therefore, difficult to understand as to how the selection committees proceeded to give weightage to the candidates without know ing whether they had applied for reserved or nonreserved seats.
What is more objectionable in the procedure was that its Executive Council proceeded to classify the posts in different subjects between reserved and non reserved posts after the lists of selected candidates were received from different selection committee.
This method was open to an obvious objection since it gave a scope to eliminate unwant ed selected candidates at that stage.
[891A D] 5.
When the court decides that the interpretation of a particular provision as given earlier was not legal it in effect declares that the law as it stood from the beginning was as per its decision, and that it was never the law otherwise.
This being the case, since the Full Bench and now this Court has taken the view that the interpretation placed on the provisions of law by the Division Bench in Bhakre 's case was erroneous, it will have to be held that the ap pointments made by the University on March 30, 1985 pursuant to that decision were not according to law.
Hence, the termination of the services of the appellants was in compli ance with the provisions of section 57(5) of the Act.
[894B D] 6.
Since the services of the appellants are to be termi nated in view of the change in the position of law and not on account of the demerits or misdemeanour of individual candidates, it is not necessary to hear the individuals before their services are terminated.
The rule of audi alterem partem does not apply in such cass, and therefore, there is no breach of the principles of natural justice.
[894D E] 7.
It seems, some of the appellants had resigned from their earlier jobs and joined the University.
Some of them have become overaged for making any fresh application, while others will have no chance either because the posts as per the new advertisements of 1987 are reserved or non reserved and they belong to the other category.
It is recommended on compassionate grounds that the University may take into consideration the relevant facts pertaining to each of the appellants, and if it is possible, accommodate them without transgressing the law and the claim of other eligible candi dates.
[894F G] 887
|
ivil Appeal No. 4521 of 1986.
From the Judgment and Order dated 20.12.1985 of the Patna High Court in C.W.J.C. No 1133 of 1984(R).
Ashok Desai, Solicitor General, Kuldip Singh, Kapil Sibal, Additional Solicitor Generals, K.K. Venugopal, R.K. Jain, Gobind Das, R.N Sachthey, Shanti Bhushan, Dr. L.M. Singhvi, L.N. Sinha, M.L. Verma, Ranjit Kumar, K.K. Lahiri, R.F. Nariman, section Sukumaran, P.K. Jain, P. Saswidia, P. Parmeshwaran, C.V. Subba Rao, P.P. Singh, D Goburdan, S.B. Upadhyay, P.C. Kapoor, M.M Kashyap, A. Sharan, R.D. Upadh yay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. Badri Nath Babu, B.B. Singh, A.K. Mitra, O.C. Mathur, A.N. Dittia, Arun Madan, Ms. A Subhashini, C.V. Subba Rao, Mrs. Sushma Suri and A.M. Ditta for the Appearing Parties.
The Judgment of the Court was delivered by SINGH, J.
In these appeals a common question of law is involved whether the State of Bihar had legal authority to execute leases in favour of the respondents for collection of slurry on payment of royalty to it.
Since the question involved in these appeals are common the same are being disposed of by a common judgment.
Civil Appeal No. 4521 of 1986 and Civil Appeal Nos.
61 62 of 1987 are directed against the judgment of the Patna High Court while Civil Appeal Nos. 230 231 of 1987 are directed against the judg ment of the Division Bench of the Calcutta High Court.
In order to appreciate the controversy in question it is necessary to recapitulate the facts.
M/s. Bharat Coking Coal Ltd. appellant in of 1986 is a Government Company which carries coal mining operations in village Sudamdih in the State of Bihar.
There is a coal washery adjacent to the appellant 's coal mine in village Sudamdih.
After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading.
Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers.
In the process of wash ing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company.
But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar.
After the water is soaked by the soil the small particles of coal get deposited in the river bed.
These coal particles are col lected and formed into briquettes which are sold in market for energy and fuel purposes.
The slurry coal has acquired high commercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations.
The State of Bihar granted lease in favour of Ram Nath Singh respondent No. 4 for collecting the coal parti cles settled in the Damodar fiber bed and other land includ ing plot No. 370 of Mauza Sudamdih.
The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired under the Coal Bearing Areas (Acquisition & Development) Act, 1957 for the purpose of mining of coal.
Pursuant to the lease, respondent No. 4 has been collecting the coal particles from plot No. 370.
The appellant company raised objection before the Revenue Authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were over ruled and re spondent No. 4 was permitted to collect the coal particles from the aforesaid plot.
The appellant thereupon filed a writ petition in the High Court of Patna challenging the State Government 's action in granting lease to respondent No. 4 for lifting slurry from the fiber bed, on the ground that the property belonged to the appellant company and the State Government had no authority in law to grant a mining lease without the prior approval of the Central Government under Section 5 of the Mines and Mineral (Regulation and Development) Act 1957.
Tata Iron & Steel Company Ltd. the appellant in Civil Appeal Nos.
61 62 of 1987, is a company incorporated under the Companies Act.
It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad.
These coal mines are commonly known as West Bokaro Collieties.
There is no dispute 753 that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and sub soil.
It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under Section 10 of the Bihar Land Reforms Act the appellant 's existing mining leases became statutory leases in the State of Bihar.
The appellant has established washery plant in the District of Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District Dhanbad for purposes of washing the coal after extraction from the coal mines and crushed into different sizes.
In the process of washing the coal small particles of coal escape from the washery.
and over flow from the plant and the same are deposited in the storage pond constructed by the appellant.
But sometime they overflow from the storage pond and settle down in the Raiyati land and in the Bokaro river bed.
The appellant has been claiming right that the slurry which escaped from the washery belonged to it and no other person had right to collect the same.
The State Government did not accept the appellant 's claim instead it settled the fights of collec tion of slurry with the respondents under the indentures granted in their favour.
Under the settlement the respond ents have been authorised by the State Government to collect sludge and slurry which settles down in the Bokaro river bed or in the Raiyati land on payment of royalty to the State.
The appellant filed two writ petitions before the Patna High Court challenging the authority of the State Government 's action on the ground that slurry was a mineral being coal and as such its collection or mining was regulated by the provisions of the Mines and Mineral (Regulation and Develop ment) Act, 1957 (hereinafter referred to as 'the Act ') and the State Government had no authority to grant any lease for collection of sludge/slurry without the previous sanction of the Central Government.
The aforesaid petitions were heard and disposed of by a Full Bench of the Patna High Court (AIR 1986 Patna 242).
The Full Bench dismissed the writ petitions on the findings that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine which was not regulated by the provisions of the Act.
The collection of slurry did not involve any mining operations and the settlement made by the State Government in favour of the respondents for collecting the same was not a mining lease, therefore, the State Gov ernment was not under any legal obligation to obtain previ ous sanction of the Central Government under the Act.
The High Court further held that after the slurry escaped into the river bed or to some other land, the same 754 ceased to belong to the appellants and the State Government was entitlement to execute lease for collection of the same.
Civil Appeal Nos.
230 231 of 1987 are directed against the judgment of a Division Bench of the Calcutta High Court (AIR 1985 Calcutta 143).
The Central Coal fields Ltd. and the Coal India Ltd. the appellants are Government Companies which own coal mines in the District of Giridih in the State of Bihar.
The appellants have set up coal washeries at Kathara, Kargali and Sawang in the District of Giridih for washing the coal extracted from its mines.
In the process of washing, particles of coal escape from the washery along with water which ultimately flows into the river Damodar.
The Mining Department of the State of Bihar granted lease to Industrial Fuel Marketing Company and Ors. respondents for removing the slurry from the river bed on payment of royalty but the appellants resisted the collection of slurry from their land and they instituted criminal proceedings against the contractors.
Thereupon, the respondents contractors filed writ petitions before the Calcutta High Court for quashing the criminal case registered against them, and also for the issue of a direction permitting them to collect slurry under the lease granted to them by the State of Bihar.
Before the High Court the appellants herein contended that the slurry belonged to them and the State of Bihar had no authority in law to grant any lease in respect of the same.
A learned single Judge of the High Court dismissed the writ petitions on the findings that the appellants herein are the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractors for removal of the same.
On appeal by the contractors a Division Bench of the Calcutta High Court vide its judgment (AIR 1985 Calcutta 143) held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Act were not applicable to the grant of lease.
On the question of appellants ' claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellant 's land, belonged to them and the respondents had no right to collect the same but if the slurry settled down on other 's land the respond ents have right to remove the same from the river bed.
Aggrieved, the Central Coal fields Ltd. and Coal India Ltd. have challenged the correctness of the High Court 's view by these appeals.
The main question which falls for consideration is whether the State of Bihar has authority to grant lease/settlement to the respondents for collection/lifting of coal slurry deposited in the river bed or on any other land after its escape from the appellants ' washeries.
755 Before the High Court the appellants contended that in view of the provisions of the Act the State of Bihar had no authority to grant any lease regarding collection of slurry without the prior approval of the Central Government.
The State of Bihar and other respondents contended before the High Court that the slurry was not a mineral, and its col lection or lifting from the river bed involved no mining operations, therefore, the Act did not apply and the State Government was free to grant leases for collection of the same.
The appellants further pleaded before the High Court that since slurry after its escape from their washeries settled down in their own land, it continued to be their property and the State of Bihar had no authority to grant lease for collection of the same from their land.
The Full Bench of the Patna High Court held that the slurry was neither coal nor a mineral instead it was a reject residue or waste of an industrial process consisting of mud, ash and oily substances having carbonaceous ingredients.
Since collection of slurry did not involve any mining operations the provisions of the Act did not apply and the State Gov ernment had authority to settle the removal of slurry with private parties.
With regard to the appellants ' claim of ownership of the slurry deposited on the appellants ' land, the Full Bench did not decide the question, on the ground that these issues involved disputed questions of fact which could properly be adjudicated in a civil suit.
The Division Bench of the Calcutta High Court held that the lease granted by the State of Bihar was not a mining lease as the river bed or the land from where the slurry was collected was not a mine as no winning or mining operations were involved in collecting the same.
The Bench further held that the lease granted by the State Government in favour of the respondents for collecting the slurry did not confer any right in them for carrying out coal mining operation nor such right relates to winning or mining of coal.
However the Bench held that the slurry deposited on the appellants ' land belonged to them and the respondents lessee had no right to collect slurry from the appellants ' land.
But if the slurry was deposited on the land not owned by the appellants, the lessee was entitled to remove the same under the settlement made by the State of Bihar.
Thus, both the High Courts held that the slurry which escaped from the washeries and depos ited in the river bed or on other land did not constitute a mineral and it was not regulated by the Central Act, conse quently, the State of Bihar had authority to settle the collection of slurry.
Learned counsel for the parties made elaborate submis sions, before us in support of their case.
On behalf of the appellants it was ' 756 urged that slurry/sludge the subject matter of dispute in the instant cases, in substance is coal, a mineral specified in the First Schedule to the Act.
The State Government had no authority in law to grant any lease to the respondents for the collection or removal or lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Government under Section 5 of the Act.
The counsel for the appellants further emphasised that slurry which escaped from washery of the coal mines, contains small particles of coal having carbona ceous character, and it is used for energy and fuel pur poses.
Assailing the findings of the Full Bench of the Patna High Court and the Division Bench of the Calcutta High Court, the appellants ' counsel submitted that slurry coal was not deposited in the river bed or other land by any artificial mode instead the same were deposited in the river bed and the land by natural process of flow of water dis charged from the washeries.
The process of collection or removal of the same from the river bed or Raiyati land by the respondent/lessees involved winning operations.
Winning or mining operation according to the learned counsel did not always require excavation or extraction of a mineral from the bowels of the earth instead a mineral like sand or gravel may be deposited on the earth and removal of the same would also involve winning or mining operation.
The appel lants further urged that if the slurry which is the subject matter of the lease or settlement, is not a mineral, the State Government had no authority in law to authorise any other person to remove the same from the appellants ' land.
There is no law made by the State Legislature authorising the State Government to interfere with the appellants ' property rights.
In the absence of any law the State of Bihar had no authority to interfere with the appellants ' property rights by executive orders.
In the alternative learned counsel for the appellants urged that on the admit ted pleadings of the parties slurry discharged from the washeries of the appellants ' coal mines constituted waste and effluent of coal mines, its disposal was exclusively within the legislative competence of the Parliament.
In view of the Parliament 's declaration under Section 2 read with Sections 13 and 18 of the Act, the State Government was denuded of all its powers in the matter relating to the disposal of slurry which would include its removal or col lection.
Since the State Legislature is denuded of its legislative competence to make any law with regard to dis posal of waste or effluent discharge of coal mines, the State Government has no executive power to deal with the same.
Learned counsel for the State of Bihar and other respondents reiterated their stand as taken by them before the High Court that the slurry was not a mineral and its removal did not involve any mining operations, consequently the settlement deed was not a mining 757 lease under the Act.
On behalf of the State Government it was further contended that once the slurry escaped from the washcry plants of the appellants it ceased to belong to them and as it polluted the river water and affected the fertili ty of Raiyati land the State Government was justified in providing for its collection and removal to prevent pollu tion.
The appellants could not have any right in the goods which they abandoned.
It was further urged that the washer ies do not form integral part of the mining operations, therefore the slurry could not be treated as a waste of coal mine.
In the alternative learned counsel contended that even if slurry was a waste of a coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating disposal of the slurry.
Before, we consider the contentions of the parties, we think it necessary to briefly discuss the nature and charac teristic of the slurry.
There is no dispute that coal is found in seams mixed with mud and other impurities.
After its extraction from the mines, it is crushed into different sizes, thereafter it is washed in the washeries of the coal mines for removing its impurities for purposes of making it fit for use for metallurgical purposes.
In the washery plants, coal is washed with the medium of water mixed with pine oil and sand through mechanical process.
In the process of washing, large quantity of water is discharged through pipes which carry the discharged water to storage ponds constructed for the purpose of retaining the slurry.
Along with the discharged water, small particles of coal are carried away to the pond where the coal particles settle down on the surface of the pond, and the same is collected after the pond is de watered.
The coal particles so collect ed are of fine quality, ash free and the same is used as fuel.
The slurry is a descriptive expression, it may be cement sluny or coal slurry, depending upon the character or quality of the mixture of mineral in the liquid form.
In Websters New 20th Century Dictionary, 'slurry ' is defined as follows: "A thin mixture of water and any of several fine, insoluble materials as clay, cement, soil etc.
" In common parlance slurry is a liquid form mixed with some other material.
In Encyclopedia Britannica 'slurry ' is defined as under: "Slurry watery mixture or suspension of insoluble matter.
In the manufacture of portland cement, a mixture of the raw materials with water is called a slurry.
Cement may be 758 piped as a slurry in building construction.
Coal may be transported over long distances as a slurry via pipeline; this method of transmission is economical between large producing areas and markets where large tonnages are used at a fairly uniform rate.
The shipment of iron ore as slurry, either by pipeline or by tanker, also has increased.
When slurry reaches its destination, the material is separated from the water before use or further processing." Viewed in the light of the above meaning of slurry, there is no doubt that in the instant cases slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water.
After it overflows the storage pond the slurry flows into the river and is deposit ed on the river bed, which is later on collected and used as fuel after it is formed into briquettes.
The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal.
Thus, the slurry is coal in liquid form.
A Division Bench of the Patna High Court in Kesari Mal Jain vs State of Bihar, AIR 1985 Patna 114 placing reliance on Nelson 's Dictionary of Mining which defined 'slurry ' as 'slurry inter alia means fine carbonaceous discharge from a colliery washery" held that the carbonaceous particles so discharged from the coal washery is used for producing energy or heat therefore it was coal.
The Bench further held that coal particles which flow out with the water from the coal washeries are formed into balls or briquettes for sale in the market for purposes of producing energy or heat, therefore, slurry was coal.
The Division Bench 's view was not accepted by the Full Bench of the Patna High Court as it held that the slurry deposit did not constitute a mineral.
We agree with the view taken by the Division Bench in Kesari Mal 's case (supra) as in our opinion the slurry coal deposited in the river bed or land, in substance as well as in its character continues to be coal.
If slurry is coal, the question is whether the leases in dispute granted by the State of Bihar constitute mine leases as contemplated by Section 5(2)(a) of the Act.
"Mining lease" as defined by Section 3(c) means "a lease granted for the purpose of undertaking mining operations and include a sub lease granted for such purpose.
"Mining operations" as defined by Section 3(d) means "any operations for the pur pose of winning any mineral.
" Section 5(1) places restric tion on the grant of mining leases by a State Government.
Section 5 (2)(a) lays down that except with the previous approval of the Central Government no prospecting licence or mining lease shall be granted in respect of any material specified in the First Schedule.
The First Schedule to 759 the Act specifies minerals as contemplated by Section 5(2)(a) and "coal" is specified therein at Item No. 4.
The Patna and Calcutta High Courts have held that the collection of slurry did not involve any mining operations, therefore, the lease in question was not a mining lease.
Consequently, the State Government was not under any legal obligation to obtain approval of the Central Government before granting leasses for collection of slurry.
These findings are assailed and the appellants contend that mining operations need not always involve extraction of mineral from the bowels of the earth, a mineral like sand, gravel may be deposited on the surface of the earth, and still its collection involves mining operations.
It was strenuously urged that it is wrong to assume that mines and minerals must always be embedded under the sub soil and There can be no mineral on the surface of the earth.
See: Bhagwan Das State of U.P. & Ors.
, ; The definition of "mining operation" and "mine" are very wide.
The expression "mining of mineral" in the definition of "mining operation" under section 3(d) of the Act is spacious enough to comprehend every activity by which a minerals extracted or obtained from the earth irrespective of whether such activity is carried out on the surface or in the bowels of the earth.
It is not a requirement of the definition of "mining operation", that the activity for winning the miner al must necessarily be an underground activity.
The essence of 'mining operation ' is that it must be an activity for winning a mineral whether under the surface or winning the surface of earth, vide: Tarkeshwar Sio Thakur Jiu vs B.D. Dey & Co. & Ors.
, ; The slurry which is deposited on the river bed is not dumped there artificially by any human agency instead coal particles are carried to the river bed by the flow of water through natural process.
Therefore the view taken by the High Court that the slurry which is deposited in the river bed is dumped by the appel lants by artificial process is incorrect.
Once the coal particles are carried away by the water which is discharged from the washery and the same are settled in the river bed, any operation for the extraction or lifting of the coal particles from the river bed would involve winning opera tions within the meaning of Section 3(d) of the Act.
We do not think it necessary to express any final opinion on this question as the appeals bound to succeed on the ground of absence of legislative competence of the State Legislature.
Shri K.K. Venugopal learned counsel for the appellant urged that the recovery of coal from slurry irrespective of whether slurry is a mineral, or its collection involved mining operations or not, the State 760 of Bihar has no authority in law to regulate disposal of slurry.
Under the Constitution 'conservation and development of mines and minerals ' is exclusively assigned to the Cen tral Government, and the State Legislature has no power to make any lease with regard to the disposal of coal slurry which is waste of coal mining.
He referred to the provisions of the Act and particularly to Sections 2 and 18 in support of his contention that in view of Parliamentary Legislation, the State Legislature has no legislative competence to enact any law on the subject, consequently the State Government has no executive authority to deal with the disposal of slurry.
In order to appreciate this submission it is neces sary to consider the Constitutional provisions and the Act.
Articles 245 and 246 of the Constitution read with Seventh Schedule and the legislative lists therein prescribe the extent of legislative competence of Parliament and,State Legislature.
Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule.
Similarly, State Legislature has exclusive power to make laws with respect to any of the matters enumerated in List II.
Parliament and the State Legislature both have legislative power to make laws with respect to any matter enumerated in List III, the Concurrent List.
This is the legislative scheme under the Constitution, but certain matters of legislation are overlapping which present difficulty.
The subject matter of legislation with respect of regulation of Mines and Mineral development is enumerated under Entry 23 of List II and Entry 54 of List I.
These Entries are as under: "23.
Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union." "54.
Regulation of mines and mineral development to the extent to which such regulation and development under the control of Union is declared by Parliament by law to be expedient in the public interest.
" The State Legislature is competent to enact law for the regulation of mines and mineral development under Entry 23 of State List but this power is subject to the declaration which may be made by Parliament by law as envisaged by Entry 54 of Union List.
Thus the legislative competence of the State Legislature to make law on the topic of mines and mineral is subject to Parliamentary Legislation.
The Parlia ment has enacted the Mines and Minerals (Regulation and 761 Development) Act, 1957.
By section 2 of the Act the Parliament has declared that it is expedient in public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act.
In view of Parliamentary declaration as made in section 2 of the Act, the State Legislature is denuded of its legislative power to make any law with respect to the regu lation of mines and mineral development to the extent as provided by the Act.
In order to ascertain the extent of Parliamentary declaration, it is necessary to have a glance at the provision of the Act.
Section 3 of the Act defines various expressions occurring in the Act.
Sections 4 to 9 prescribe restrictions on undertaking, prospecting and mining operations under licence or lease.
Section 10 to 12 prescribe procedure for obtaining prospecting licences or mining lease in respect of the land in which minerals vest in Government.
Sections 13 to 16 provide for framing of rules for regulating the grant of prospecting licences or mining leases.
In particular section 13 empowers the Central Government to make rules for regulating the grant of pros pecting licences and mining leases in respect of minerals and for the purposes connected therewith.
Section 13(2) lays down that rules may provide for all or any of the matters as enumerated under various clauses therein.
Clause (0) of section 13(2) before its amendment by the Amending Act 37 of 1986 conferred power on the Central Government to frame rules for the disposal or discharge of any tailings, slime or other waste products arising from any mining or metallurgical operations carried out in a mine.
This provision empowered the Central Government to frame rules for the disposal of waste products or effluent discharge from mines including a coal mine.
Section 14 makes the provisions of sections 4 to 13 inapplicable to minor minerals.
Section 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and purposes connected there with.
Since in the instant cases, we are not concerned with the minor minerals, it is not necessary to deal with the question in detail.
Section 17 confers special powers on Central Government to undertake prospecting or mining opera tions in certain lands.
Section 18 and 18A relate to the development of minerals.
Sections 19 to 33 deal with miscel laneous matters.
Section 18(1) provides for mineral development, this Section prior to its amendment by the Amending Act 37 of 1986 read as under: "Sec.
18(1): It shall be the duty of the Central Government to take such steps as may be necessary for the conservation and development of minerals in India and for that 762 purpose the Central Government, by notification in the Official Gazette, make such rules as it thinks fit.
" Section 18(1) as amended by the Amending Act 37 of 1986 reads as under: "Sec.
18(1): It shall be the duty of the Central Government to take such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mine opera tions and for such purpose the Central Government may, by notification in the Official Gazette, make such rules as it thinks fit.
" The amended and unamended sections both lay down that it shall be the duty of the Central Government to take all such steps as may be necessary "for the conservation and develop ment of minerals" in India and for that purpose it may make such rules as it thinks fit.
The expression "for the conser vation of minerals" occurring under section 18(1) confers wide power on the Central Government to frame any rule which may be necessary for protecting the mineral from loss, and for its preservation.
The expression 'conservation ' means "the act of keeping or protecting from loss or injury." With reference to the natural resources, the expression in the context means preservation of mineral; the wide scope of the expression "conservation of minerals" comprehends any rule reasonably connected with the purpose of protecting the loss of coal through the waste of coal mine, such a rule may also regulate the discharge of slurry or collection of coal particles after the water content of slurry is soaked by soil.
In addition to the general power to frame rules for the conservation of mineral, Sec.
18(2) confers specific power for framing rules regulating disposal of waste of a mine.
The Amending Act 37 of 1986 deleted clause (0) of section 13(2) and added the same as clause (k) to section 18(2) of the Act.
After the amendment Sec.
18(2)(k) reads as under: "18(2): In particular, and without prejudice to the general ity of the foregoing power, such rules may provide for all or any of the following matters, namely: (k): "the disposal or discharge of waste slime or tailing 763 arising from any mining or metallurgical operations carried out in a mine." Section 18(2)(k) confers express power on the Central Gov ernment for framing rules for the conservation and the development of mineral including the disposal or discharge of waste arising from any mining operations of a mine.
Such a rule may regulate disposal of slurry discharged from a washery which is an integral part of mining operations.
The aforesaid analysis of the provisions of the Act makes the extent of Parliamentary declaration clear that the disposal and discharge of sludge or slurry emanating or coming from the washery of a coal mine is exclusively within the legislative power of Parliament.
The Act further pro vides that the Central Government has exclusive power to frame any rule either u/s 13(2)(0) or under the amended section 18(2)(k) of the Act regulating disposal of slurry.
The effect of the Parliamentary declaration as contained in the Act is that the matters referred to in the declaration, stand abstracted from List II and those become matters of legislation in List I of the Seventh Schedule.
As a result of the declaration made by Parliament, under section 2 of the Act, the State Legislature is denuded of its legislative power with respect to the regulation of mines and mineral development and the entire legislative field has been taken over by Parliament.
In Baijnath Kedia vs State of Bihar & Ors., ; this Court dealing with the extent of Parliament 's declaration made under section 2 of the Act, ob served as follows: "To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest.
Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament.
Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is ab stracted from the legislative competence of the State Legis lature.
" This Court has consistently taken this view in The Hingir Rampur Coal Co. Ltd. & Ors.
vs The State of Orissa & Ors., [1961] 2 SCR537; State of Orissa vs M.A. Tulloch & Co., ; and State of Tamil Nadu vs Hind Stone, ; 764 The Central Government has not framed any rule either under Section 13 or under Section 18 of the Act.
Does it affect the legal position as discussed earlier? The answer must be in the negative.
Prior to the Amending Act 37 of 1986 Section 13(2)(o) conferred power on the Central Govern ment to frame rules for the purpose of granting prospecting licences and mining leases including the disposal or dis charge of any tailings, slime or other waste products.
Sub clause (0) of section 13(2) was transposed into section 18(2) as sub clause (k) by the Amending Act 37 of 1986.
As noted earlier, section 18(1) confers general power on the Central Government to frame rules and to take all such steps as may be necessary for the conservation and development of minerals in India.
Section 18(2) does not affect or restrict the generality or width of legislative power under Section 18(1) as the mat ters specified in various sub clauses of section 18(2) are illus trative in nature.
Even in the absence of sub section
(2) or its various sub clauses, the Central Government was invested with the power of subordinate legislation in respect of any matter which could reasonably be connected with the purpose of "conservation and development of minerals" by section 18(1) of the Act.
Thus, power to frame rules, regulating the dis charge or disposal of slime or slurry emanating from a coal mine including its collection from the river bed or from Raiyati land after its escape from the washery of the coal mines, would clearly fail within the expression "conserva tion of mineral".
Slurry admittedly contain coal particles.
its collection from land or river is reasonably connected with the 'conservation of mineral '.
Section 18(2)(k) which expressly confers power on the Central Government to regu late disposal or discharge of waste of a mine makes the Parliamentary declaration apparent that the State Legisla ture is not competent to regulate waste discharge of a coal mine.
Mere absence of any rule framed by the Central Govern ment under sections 13 or 18 of the Act with regard to the dis posal of slime or waste of a coal mine does not confer legislative competence on the State Legislature to make any law or rule.
Once a particular topic of legislation is covered by the Parliamentary declaration, the State Legisla ture is denuded of its power to make any law or rule in respect of that topic or subject matter and the absence of Rules would not confer legislative competence on the State.
In Hingir Rampur Coal Co. Ltd. & Ors.
vs The State of Orissa & Ors., this Court held: "In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that required is a declaration by Parliament that it was expedi ent in the public interest to take the regulation of devel opment of mines under the control of the Union.
In 765 such a case the test must be whether the legislative decla ration covers the field or not." Since Section 18 of the Act covers the field with respect to disposal of waste of a mine, there is no scope for the contention that until rules are framed the State Legislature has power to make law or rules on the subject.
Once the competent legislature with a superior efficacy expressly or impliedly evinces its legislative intent to cover the entire field on a topic, the enactments of the other legislature whether passed before or after would be overborne.
Mere absence of rules framed by the Central Government, does not confer power on the State Legislature to make law on the subject.
Since the legislative field with regard to the framing of rules relating to the disposal of slime and waste of ' coal mine is fully covered by section 18, the State Legisla ture is denuded of its power of making any law with regard to those matters.
It was then urged that in the absence of a law being made by the State Legislature, the State Government 's action in executing lease/ settlement in respondent 's favour for collection of slurry is relatable to exercise of its execu tive powers.
Learned counsel for the appellants contended that since Entry 23 of List II of the Seventh Schedule confers legislative power on the State Legislature for making laws regulating mines and minerals, the State Govern ment in the absence of any rule made by the Central Govern ment has power to regulate disposal and collection of slur ry.
The State Government was justified in exercising its executive power making arrangements for the collection or removal of slurry which has been polluting the river water and affecting the Raiyati land 's fertility.
Article 162 prescribes the extent of executive power of the State, it lays down that the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws.
Thus, the executive power of the State Government is co extensive with the legislative power of the State Legislature.
If the State Legislature has power to enact laws on a matter enumerated in the State List or in the Concurrent List the State has executive power to deal with those matters subject to other provisions of the Constitution.
If a subject matter falls within the legisla tive competence of State Legislature, the exercise of execu tive power by the State Government is not confined, as even in the absence of a law being made, the State Government is competent to deal with the subject matter in exercise of its executive power.
See: Rai Sahib Ram Jawaya Kapur & Ors.
vs The State of Punjab, In the absence of any law, the State Government or its officers in exercise of executive authority cannot infringe citizens fights merely because the 766 State Legislature has power to make laws with regard to subject, in respect of which the executive power is exer cised.
See: State of Madhya Pradesh & Anr.
vs Thakur Bharat Singh, ; , No doubt under Entry 23 of List II, the State Legislature has power to make law but that power is subject to Entry 54 of List I with respect to the regula tion and development of mines and minerals.
As discussed earlier the State Legislature is denuded of its power to make laws on the subject in view of Entry 54 of List I and the Parliamentary declaration made under Section 2 of the Act.
Since State Legislature 's power to make law with re spect to the matter enumerated in Entry 23 of List has been taken away by the Parliamentary declaration, the State Government ceased to have any executive power in the matter relating to regulation of mines and mineral development.
Moreover, the proviso to Article 162 itself contains limita tion on the exercise of the executive power of the State.
It lays down that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of State shall be subject to limitation of the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authority thereof.
The limitation as contained in the proviso to Article 162 was necessary to avoid conflict in the exercise of executive power of State and the Union Government in respect of matters enumerated in List III of the Seventh Schedule.
If Parliament and the State Legisla ture both have power to make law in a matter, the executive power of the State shall be subject to the law made by the Parliament or restricted by the executive power of the Union expressly conferred on it by the Constitution or any law made by Parliament.
Parliament has made the law as contem plated by Entry 54 of List I and the law so made confers exclusive power on the Central Government to frame rules regulating the disposal of waste or industrial effluent of a mine, the State Legislature has, therefore no power either to make law under Entry 23 of List II or to exercise execu tive power to regulate the disposal of slurry, a waste effluent discharge of a coal mine.
Learned counsel for the State of Bihar as well as for the respondent contractors contended that the lease executed by the State Government in their favour was not a mining lease within the provisions of the Act, therefore, the provisions of the Act are not applicable to it.
This submis sion is rounded on the assumption that the slurry is not coal.
We have already discussed the characteristic of slurry which shows that the coal can be transported in liquid form of slurry.
The slurry which gets deposited on the river bed and on Raiyati land contains fine particles of coal, on its resumption it is used for energy and 767 fuel purposes.
It is, therefore, difficult to accept the contention that the coal particles which escape from the washery and get deposited in the river bed or in Raiyati land do not have the character of mineral.
It is not, howev er, open to the State to raise this contention as while making settlement and granting lease in favour of the re spondents for lifting or collecting slurry deposits the State itself proceeded on the assumption that the coal particles as deposited in the river bed and in the Raiyati land on its escape from the coal washeries constituted 'mineral '.
Since under the Bihar Land Reforms Act the miner als vest in the State, it claimed right to grant lease in favour of the respondents for collecting the same.
In the indenture of settlement dated 9.4.1975 granted in favour of the M/s. Industrial Fuel Marketing Company and Ors.
in Civil Appeal No. 230 231 of 1987 the State Government itself stated: "and whereas these rejects/sludge being a mineral (emphasis supplied) the State Government is the owner of the same by virtue of the entire State including the minerals having vested in the State Government under the provisions of Bihar Land Reforms Act." The indenture purported to confer right on the lessee for lifting rejects also known as sludge comprising fine particles of coal which are ejected in the process of coal being washed in the coal washeries and which flow into the nearby river or to the lands held by the Raiyats.
The lease was granted by the Mining Department of the State Government dealing with minerals.
Similarly, the indenture of settlement dated 9.4.1981 granted in favour of respondent No. 4 in Civil Appeal Nos.
61 62 of 1987 permitting him to collect slurry after it is deposited in the river bed or in the land as specified in the lease, was also executed by the State of Bihar on the premise that the slurry as deposited in the river bed was a mineral, namely, coal.
Thus, it is apparent that the State of Bihar itself has been treating the 'slurry deposits ' as mineral and on that assumption it has been executing leases conferring rights on the respondents to collect the same on payment of royalty.
In this view, it is not open to the State of Bihar and the lessees to contend that slurry is not coal or miner al within the meaning of the Act.
Learned counsel for the respondents attempted to justify State 's action on the ground that the slurry as settled down in river bed or in Raiyati land was not waste or industrial effluent of coal mines as the washeries are not part of coal mines.
We find no merit in the submission.
Section 3 of the Act defines 'mining operations ' which means any operation undertaken for the purpose of winning any mineral.
The expression 'mine ' is not defined by the Act instead Section 3(1) says that the expression 'mine ' has the same meaning as assigned to it in the .
"Mine" as defined by Section 2(1)(j) of 768 1952 means any excavation where any operation for the pur pose of searching for or obtaining minerals has been or is being carried on and it includes: (xii) "any premises in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried on.
" The inclusive definition of mine is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale.
There is no dispute between the parties that the coal as extracted from the coal mine is crushed into pieces and thereafter it is washed to remove its impurities and ash contents to make the coal fit for sale.
After the coal is washed, it assumes the form of coke which is sold to consum ers.
The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine as it involves ancillary process.
Washery is included within the definition of mine under the .
Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine.
Moreover, it is not open to the respondents to contend that slurry is not a waste discharged from the washeries of coal mines.
The respondents have all along pleaded before the High Court as well as before this Court that slurry is a waste discharged from the washery of the appellants ' coal mines.
In Civil Appeal No. 4521 of 1986 Ram Nath Singh respondent No. 4 has stated in paragraph 2 of his affidavit before this Court that slurry/sludge is a waste substance of Sudamdih coal washery and in order to keep the river water clean and pollution free and to earn revenue the State Government settled the collection of slurry from the river bed in his favour.
The State of Bihar also in its affidavit filed before the High Court expressly stated that the sludge/ slurry was rejected property from the coal washery and the State of Bihar made settlement in favour of the respondents for collection of the waste deposits from the river bed and other land.
The full Bench of the Patna High Court also observed: "the sludge/slurry could not be raised to the status of being coal, as it was the consequen tial wastes of coal mining process, therefore the true nature of slurry was that it was a mere residue reject or waste of an industrial process consisting of mud, ash, oily substances water and carbonaceous ingredients.
" The respond ents have all along proceeded on the assumption that sludge/ 769 slurry was an industrial waste arising out of the mining operations of coal.
The State of Bihar as well as the re spondents in whose favour the right of collection of sludge/slurry has been settled have all along taken the stand that the discharge of slurry/sludge by the appellant 's washcry into the river has been polluting the river and affecting the fertility of land, therefore the State Govern ment, permitted the removal of the slurry/sludge with a view to prevent pollution of the fiber and the land.
On the admitted facts the entire activity relating to disposal of the industrial waste, slime or tailing in the shape of sludge/slurry escaping from the washeries of the appellant 's coal mines including the prevention of pollution of river water or land is covered by Sec. 18 of the Act.
The High Courts confined themselves to the question whether sludge/ slurry was a mineral under the Act and failed to consider the scope and effect of Section 18 of the Act.
We are there fore of the opinion that in view of the admitted case of the parties disposal of sludge/slurry coming out from the wash eries of appellants ' coal mines is covered by the Act and the State Government had, no authority in law to grant any lease or settlement authorising collection of the same from the five bed or from any other land.
Consequently, the respondents in whose favour settlements have been made by the State Government have no right to authority to collect sludge/slurry either from the five bed or from any other land.
In Civil Appeal No. 4521 of 1986 the appellants ' claim that plot No. 370 situated in village Sudamdih belonged to them and the sludge/ slurry discharged from their washery as settled down on that land also belonged to them therefore the State Government had no authority in law to permit respondents to collect slurry coal from their land.
The High Court held that since the appellant 's ownership fights in respect of Plot No. 370 of village Sudamdih was seriously disputed the question should be decided by the civil court.
Mr. Kapil Sibal learned counsel for the appellant urged that the High Court committed serious error as there was no scope for any dispute regarding the question of ownership of Plot No. 370.
We find force in his submission.
There is suffi cient material on record to show that Bharat Coking Coal Ltd. is the owner of the plot No. 370 situated at village Sudamdih and the respondents have failed to place any mate rial before the court that the appellant is not owner of Plot No. 370.
A Notification was issued by the Central Government on 6.8.1960 under sub section (1) of Section 4 of the Coal Beating Areas (Acquisition and Development) Act, 1957, for purpose of prospecting coal in the land specified in the Schedule to the Notification included the entire land of village Sudamdih District Dhanbad.
By another Notifica tion dated August 30, 1961 issued under 770 Section 7 of the Coal Bearing Areas (Acquisition and Devel opment) Act, 1957 the Central Government declared its inten tion to acquire the lands measuring 778.45 acres specified in Schedule A to the Notification Sudamdih village was mentioned in the Schedule.
Plot No. 370 of Sudamdih was expressly specified therein.
By another Notification dated December 16, 1961 the Central Government declared under Section 9 of the Coal Beating Areas (Acquisition and Devel opment) Act 1957 that the land measuring 778.45 acres de scribed in Schedule A and the rights to mine, quarry, bore, dig and search for win work and carry away minerals in the lands measuring 625.73 acres described in Schedule B are acquired.
The Schedule to the Notification clearly stated that all rights in village Sudamdih were acquired and plot No. 370 was expressly specified in the Schedule to the Notification.
On the issue of the aforesaid Notifications the lands specified therein vested in the Central Govern ment.
The Central Government by its order dated 27th January 1962 transferred the aforesaid lands including plot No. 370 situated in village Sudamdih to the National Coal Develop ment Corporation, a Government Undertaking.
In 1975 the Central Government reorganised the management structure of the coal industry in the public sector and a central compa ny, i.e. Coal India Limited, was constituted having Bharat Coking Coal Limited as one of its subsidiary.
The Bharat Coking Coal Ltd. was incorporated for running and managing the Sudamdih and Monidih coal mines of National Development Corporation.
Since then the Sudamdih coal mines and the land in dispute have been under the control and management of the Bharat Coking Coal Ltd. During the pendency of the appeal before this Court proceedings were initiated against re spondent No. 4 for the violation of interim orders of this Court.
In the contempt proceedings Respondent No. 4 contend ed that plot No. 370 of village Sudamdih belonged to the State of Bihar and the appellants had no ownership rights therein.
This Court held that since plot No. 370 of Sudamdih has been acquired under Section 9(1) of the Coal Bearing Areas (Acquisition and Development) Act 1957 the appellant company was its owner, and it was idle to contend the con trary.
We therefore hold that the appellant is the owner of plot No. 370 of village Sudamdih and the State Government had no authority in law to make any arrangement or to settle any right with respondents for collecting slurry deposits from that Plot No. 370 of Sudamdih.
In view of the above discussion, we hold that the slurry which escapes from the appellants ' washeries is mineral and its regulation is within the exclusive jurisdiction of the Central Government.
We further hold that in view of the Parliamentary declaration made by 771 Section 2 of the Act and having regard to Section 18 of the Act the State Government has no authority in law to make any settlement or grant any lease to any person for the collec tion of slurry deposits either from the river bed or other land.
The impugned settlements made in favour of the re spondents by the State Government are illegal and the re spondent lessees have no right or title to collect the slurry deposits, therefore, they are restrained from lifting or collecting the same from the land in dispute.
We, accord ingly, allow Civil Appeal No. 4521 of 1986 and Civil Appeal Nos.
61 62 of 1987 and set aside the order of the High Court of Patna and allow the writ petitions filed by the appel lants before the Patna High Court.
We further allow Civil Appeal Nos.
230 231 of 1987 and set aside the order of the High Court of Calcutta and dismiss the writ petitions filed by Industrial Fuel Marketing Company & Ors.
We further direct that the money deposited pursuant to the interim orders passed by the High Court and this Court will be paid to the successful party.
There will be no order as to costs.
G.N. Appeal al lowed.
|
The three appellant companies claimed their respective right to the slurry that escaped from their washery plant/pond and got deposited in the Bokaro and Damodar River beds, as also in certain Raiyati land.
The State Government did not accept their plea and leased out the right to remove the said slurry to the respondent on payment of royalty.
The first two appellants filed Writ Petitions before the Patna High Court challenging the State Government 's action in leasing out the right to the Respondent 's for removing the slurry.
The third company instituted criminal proceedings against the contractors, who in turn filed Writ Petitions before the Calcutta High Court for quashing the criminal proceedings and for a direction permitting them to collect slurry under the lease granted by the State Government.
745 The Full Bench of the Patna High Court dismissed the Writ Petitions and held that slurry was neither coal nor mineral; it was an industrial waste of coal mine which was not regulated by the provisions of the Act.
It also held that collection of slurry did not involve any mining opera tions and the settlement made by the State Government in favour of the respondents was not a mining lease and so the State Government was not under any legal obligation to obtain previous sanction of the Central Government under the .
It further held that after the slurry escaped into the river bed or to some other land, it ceased to belong to the appel lants and the State Government was entitled to execute the lease for collection of the slurry.
The Writ Petitions filed by the Contractors before the Calcutta High Court were dismissed by a Single Judge who held that the third appellnat company was the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractorS for removal of the same.
On appeal by the contractors the Division ' Bench held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Mines and ' Minerals (Regulation and Development) Act, were not applicable to the grant of lease.
On the question of appellants ' claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellants ' land, belonged to them and the respondents had nO right.
to collect the same but if the slurry settled down on other 's land the respondents have right to remove the same.
Against the above decisions of the two High Courts, the appellant companies have preferred the present appeals.
On behalf of the appellants, it was inter alia contended that the slurry/sludge was in substance coal, a mineral specified in the First schedule to the Act; that the State Government had no authority in law to grant any lease to the respondents for the collection, removal Or ' lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Govern ment under Section 5 of the Act; that the deposit of the slurry in the river bed and the land was by natural process of flow of water discharged from the washeries; that there was no law made by the State Legislature authorising the State Government to interfere with the appellants ' property right by way of executive orders; that slurry discharged from the washeries of the appellants ' coal mines constituted waste and effluent of coal mines, its disposal was exclu sively within the legislative compe 746 tence of the Parliament; and that in view of the Parlia ment 's declaration under Section 2 read with Sections 13 and 18 of the Act, the State Government was denuded of all its legislative competence to make any law with regard to dis posal of waste or effluent discharge of coal mines.
and hence the State Government had no executive power to deal with the same.
The main contentions on behalf of the respondents were that once the slurry escaped from the washery plants of the appellant it ceased to belong to them and as it polluted the river water and affected the fertility of Raiyati land the State Government was justified in providing for its collec tion and removal to prevent pollution; that the appellants could not have any right in the goods which they abandoned; that the washeries do not form integral part of the mining operations, and therefore the slurry could not be treated as a waste of coal mine.
Alternatively it was contended that even if slurry was a waste of coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating the disposal of the slurry.
Allowing the appeal, this Court, HELD: 1.
Slurry is a descriptive expression, it may be cement slurry or coal slurry, depending upon the character or quality of the mixture of mineral in the liquid form.
There is no doubt that in the instant cases, slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water.
After it overflows the storage pond the slurry flows into the river and is deposit ed on the river bed, which is later on collected and used as fuel after it is formed into briquettes.
The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal.
Thus, the slurry is coal in liquid form, and slurry coal deposited in the river bed or lands in substance as well as in its char acter continues to be coal.
[757F; 758C D] Kesari MaI Jain vs State of Bihar, AIR 1985 Patna 114, ap proved.
Websters New 20th Century Dictionary; Encyclopaedia Britannica, referred to.
The definition of "mining operation" and "mine" are very wide.
The expression "mining of mineral" in the defini tion of "mining operation" under Section 3(d) of the Mines and Minerals (Regulation & 747 Development) Act, 1957 is spacious enough to comprehend every activity by which a mineral is extracted or obtained from the earth irrespective of whether such activity is carried out on the surface or in the bowels of the earth.
It is not a requirement of the definition of "mining operation", that the activity for winning the mineral must necessarily be an underground activity.
The essence of 'mining operation ' is that it must be an activity for win ning a mineral whether under the surface or winning the surface of earth.
The slurry which is deposited on the river bed is not dumped there artificially by any human agency instead coal particles are carried to the river bed by the flow of water through natural process.
Therefore the view taken by the High Court that the slurry which is deposited in the river bed is dumped by the appellants by artificial process is incorrect.
Once the coal particles are carried away by the water which is discharged from the washery and the same are settled in the river bed, any operation for the extraction of lifting of the coal particles from the river bed would involve winning operations within the meaning of Section 3(d) of the Act.
However.
in the instant cases, it is not necessary to express any final opinion on this ques tion.
[759D G] Tarkeshwar Sio Thakur Jiu vs B.D. Dey & Co. & Ors., ; relied on.
Bhagwan Das vs State of U. P. & Ors.
, ; , referred 3.
The State Legislature is competent to enact law for the regulation of mines and mineral development under Entry 23 of State List but this power is subject to the declara tion which may be made by Parliament by law as envisaged by Entry 54 of Union List.
Thus the legislative competence of the State Legislature to make law on the topic of mines and minerals is subject to Parliamentary Legislation.
The Par liament has enacted the .
By Section 2 of the Act the Parlia ment has declared that it is expedient in public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act.
In view of Parliamentary declaration as made in section 2 of the Act, the State Legislature is denuded of its legislative power to make any law with re spect to the regulation of mines and mineral development to the extent as provided by the Act.
[760G H; 761A] 4.1 An analysis of the provisions of the Act makes the extent of 748 Parliamentary declaration clear that the disposal and dis charge of sludge or slurry emanating or coming from the washery of a coal mine is exclusively within the legislative power of Parliament.
The Act further provides that the Central Government has exclusive power to frame any rule either under Section 13(2)(0) or under the amended Section 18(2)(k) of the Act regulating disposal of slurry.
The effect of the Parliamentary declaration as contained in the Act is that the matters referred to in the declaration, stand abstracted from List II and these become matters of legislation in List I of the Seventh Schedule.
As a result of the declaration made by the Parliament, under Section 2 of the Act.
the State Legislature is denuded of its legisla tive power with respect to the regulation of mines and minerals development and the entire legislative field has been taken over by Parliament.
[763C E] 4.2 The Central Government has not framed any rule either under Section 13 or under Section 18 of the Act.
Prior to the Amending Act 37 of 1986 Section 13(2)(0) con ferred power on the Central Government to frame rules for the purpose of granting prospecting licences and mining leases including the disposal of discharge of any tailings, slime or other waste products.
Sub clause (0) of Section 13(2) was transposed into Section 18(2) as sub clause (k) by the Amending Act 37 of 1986.
Section 18 (1) confers general power on the Central Government to frame rules and to take all such steps as may be necessary for the conservation and development of minerals in India.
Section 18(2) does not affect or restrict the generality or width of legislative power under Section 18(I) as the matters specified in var ious sub clauses of Section 18(2) are illustrative in na ture.
Even in the absence of sub section (2) or its various sub clauses, the Central Government was invested with the power of subordinate legislation in respect of any matter which could reasonably be connected with the purpose of "conservation and development of minerals" by Section 18(1) of the Act.
Power to frame rules, regulating the discharge or disposal of slime or slurry emanating from a coal mine including its collection from the river bed or from Raiyati land after its escape from the washery of the coal mines.
would clearly fall within the expression "conservation of mineral".
Slurry admittedly contain coal particles, its collection from land or river is reasonably connected with the 'conservation of mineral '.
Section 18(2)(k) which ex pressly confers power on the Central Government to regulate disposal or discharge of waste of a mine makes the Parlia mentary declaration apparent that the State Legislature is not competent to regulate waste discharge of a coal mine.
Mere absence of any rule framed by the Central Government under Sections 13 or 18 of the Act with regard to the dis posal of slime or waste of a coal mine does not 749 confer legislative competence on the State Legislature to make any law or rule.
Once a particular topic of legislation is covered by the Parliamentary declaration, the State Legislature is denuded of its power to make any law or rule in respect of that topic or subject matter and the absence of Rules would not confer legislative competence on the State.
[764A G] 4.3 Since Section 18 of the Act covers the field with respect to disposal of waste of a mine.
there is no scope for the contention that until rules are framed the State Legislature has power to make law or rules on the subject.
Once the competent legislature with a superior efficacy expressly or impliedly evinces its legislative intent to cover the entire field on a topic.
the enactments of the other legislature whether passed before or after would be overborne.
Mere absence of rules framed by the Central Government.
does not confer power on the State Legislature to make law on the subject.
Since the legislative field with regard to the framing of rules relating to the disposal of slime and waste of coal mine is fully covered by Section 18.
the State Legislature is denuded of its power of making any law with regard to those mailers.
[765B C] Baijnath Kedia vs State of Bihar & Ors. ; Hingir Rampur Coal Co. Ltd. & Ors.
vs State of Orissa & Ors.
, ; ; State of Orissa vs M.A. Tulloch & Co., ; and State of Tamil Nadu vs Hind Stone, ; relied on.
The executive power of the State Government is co extensive with the legislative power of the State Legisla ture.
If the State Legislature has power to enact laws on a matter enumerated in the State List or in the concurrent list the State has executive power to deal with those mat ters subject to other provisions of the Constitution.
If a subject matter fails within the legislative competence of State Legislature.
the exercise of executive power by the State Government is not confined, as even in the absence of a law being made, the State Government is competent to deal with the subject matter in exercise of its executive power.
In the absence of any law, the State Government or its officers in exercise of executive authority cannot infringe citizens rights merely because the State Legislature has power to make laws with regard to subject, in respect of which the executive power is exercised.
No doubt under Entry 23 of List 1I, the State Legislature has power to make law but that power is subject to Entry 54 of List 1 with respect to the regulation and development of mines and minerals.
Since State Legislature 's power to make law with respect to the matter enumerated in Entry 23 of List II has been taken away by the Parliamentary declaration, the State Government ceased to have any executive power in the matter relating 750 to regulation of mines and mineral development.
Moreover, the proviso to Article 162 itself contains limitation on the exercise of the executive power of the State.
If Parliament and the State Legislature both have power to make law in a matter, the executive power of the State shall be subject to the law made by the Parliament or restricted by the execu tive power of the Union expressly conferred on it by the Constitution or any law made by Parliament.
Since Parliament has made the law as contemplated by Entry 54 of List I and the law so made confers exclusive power on the Central Government to frame rules regulating the disposal of waste or industrial effluent of a mine, the State Legislature has, therefore no power either to make law under Entry 23 of List II or to exercise executive power to regulate the disposal of slurry, a waste effluent discharge of a coal mine.
[765F H; 766A F] Rai Sahib Ram Jawaya Kapur & Ors.
vs State of Punjab, and State of M.P. & Anr.
vs Thakur Bharat Singh, ; , referred to.
It is apparent that the State of Bihar itself has been treating the 'slurry deposits ' as mineral and on that assumption it has been executing leases conferring rights on the respondents to collect the same on payment of royalty.
Hence it is not open to the State of Bihar and the lessees to contend that slurry is not coal or mineral within the meaning of the Act.
[767F] 7.
The inclusive definition of 'mine ' as contained in Section 2 of the Act is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale.
The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for.
sale is an integral part of a mine as it involves ancillary process.
Washery is included within the definition of mine under the .
Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine.
Moreover, it is not open to the respondents to contend that slurry is not a waste discharged from the washeries of coal mines, since they have all along pleaded that slurry is a waste dis charged from the washery of the appellants ' coal mines.
[768C; D E] 8.
The slurry which escapes from the appellants ' wash eries is mineral and its regulation is within the exclusive jurisdiction of the Central Government.
In view of the Parliamentary declaration made by Section 2 of the Act and having regard to Section 18 of the Act, the State 751 Government has no authority in law to make any settlement or grant any lease to any person for the collection of slurry deposits either from the river bed or other land.
The im pugned settlements made in favour of the respondents by the State Government are illegal and the respondent lessees have no right nor title to collect the slurry deposits and they are restrained from lifting or collecting the same from the land in dispute.
[771H; 772A] [This Court directed that the money deposited pursuant to the interim orders passed by the High Court and this Court will be paid to the successful party.
[771C]
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vil Appeal No. 432938 of 1990.
From the Judgment and Order dated 30.5.
1990 of the Allahabad High Court in C.M.W.P. Nos.
18102, 18036, 22161, 22836 and 22877 of 1989.
Kapil Sibal, Additional Solicitor General, Satish Chan dra, Ms. Shobha Dixit, Pradeep Mishra, R.K. Virmani, Gopal Subramaniam, Harish N. Salve and D.K. Garg for the appearing parties.
The Judgment of the Court was delivered by 898 RANGANATHAN, J.
We have come to the conclusion that the .
High Court 's decision under appeal has to be upheld.
But, as the question raised is one of importance and difficulty, we have heard the counsel at length.
We grant leave in all the petitions and proceed to give the reasons for our conclusion in detail.
Both sets of appeals are the off shoots of a "Residency Scheme" for junior doctors introduced in the State of U.P. and they can be conveniently disposed of by a common order.
In the State of U.P., post graduate courses in medicine were of two types: degree and diploma.
The duration of the degree course was two years and that of the diploma course, one year.
The minimum requirement for admission to a post graduate course (whether degree or diploma) was that the candidate should have passed the M.B.B.S. degree examina tion, then done one year 's internship and then done a house job for one year.
The "Residency Scheme" was notified on 22.8.89.
This was the culmination of a long period of agitation by junior doctors in the State for better emoluments and conditions of service.
This scheme was given retrospective effect from 1.8.1987, for para 8 of the scheme says: "The above residen cy scheme shall be deemed to have been enforced from 1st August, 1987".
Under the scheme, every candidate selected for a post graduate degree course would have a tenure of three years which would also be the tenure of the course itself.
All such candidates were to be called Junior Resi dents 1st year, 2nd year and 3rd year respectively during their tenure.
Each candidate selected for postgraduate diploma course would have a tenure of two years which would also be the tenure of the course and all such candidates were to be called Junior Residents 1st year and 2nd year respectively.
In other words, the duration of the degree course was raised to three years and that of the diploma course to two years.
However, simultaneously, the eligibili ty requirement of one year 's experience in a house job was dispensed with, the net result being that the total period needed, after taking a M.B.B.S. degree, to acquire a post graduate degree/diploma remained the same as before.
The modifications introduced by the new scheme needed certain transitory provisions being made for two purposes.
The first was to devise a formula of equation between the old and the new systems.
This was done by redesignating all students, junior doctors, house officers and others in position in the manner set out in para 5 of the 899 scheme.
The original notification is in Hindi but a free translation of the first part of the above para, as set out in the judgment of the High Court, reads thus: "Upon enforcement of the above Residency Scheme, all the House Officers, Junior Residents 1st year working since 1st August, 1987 and similarly working all Juniors Doctors ("all junior doctors similarly working" is perhaps a better translation) shall stand converted to the following new designation propose in the residency: section No. President designation Designation upon enforcement of residency scheme.
House Officer/Demonstrator, Junior Resident 1st year.
1st year.
Junior Resident/RMO 1st year/ Junior Resident RSO 1st year/RGO 1st year/ 2nd year.
Demonstrator 2nd year/P. G. degree student 1st year/ P.G. Diploma student 1st year.
Senior Resident/RMO 2nd year/ Junior Resident RSO 2nd year/RGO 2nd year/ 3rd year.
Demonstrator 3rd year/ Registrar/P.G. Degree students 2nd year.
The second provision necessary was in regard to their admis sion to the post graduate courses.
This was done by the second sub para or para 5 which ran thus: "At the same time ("Iske sath hi sath") the admis sion and registration of the House Officers, working at the time ("us sumay") to post graduate courses (degree/diploma course) shall be done after completion of their tenure and on the basis of their merit at M.B .B .S. and house job".
[Words in brackets give the original Hindi expressions used; emphasis added by us. ] 900 The provisions of the scheme do not explicitly say that the category of persons dealt with under the second sub para above will be admitted to the second year of the degree course (junior resident 2nd year) of the residency scheme on the basis of inter se merit.
A somewhat different line of thinking seems to have been adopted by the High Court in Dr. Sandeepa Srivastava 's case (to which we will be referring later).
But, so far as the present appeals are concerned, all parties have proceeded on the footing that the scheme is a valid one and that it envisaged that a person who had completed house job for one year could get admission into the second year of the course (whether degree or diploma).
The only controversy is whether this admission is open only to those persons who were in a house job as on 22.8.89 and completed it before 30.10.1989 (hereinafter referred to as 'the appellants ') or to all persons who had been in a house job on or after 1.8.87.
The question arose when a number of doctors (hereinafter referred to as 'the writ petitioners) who had done their M.B.B.S., internship and house job by April, 1988 and who (save for one) had even obtained admis sion, in March 1989, into a diploma course sought admission in the Motilal Nehru Medical College at Allahabad ( 'M.L.N. College ', for short) into the second year of a degree course in the same or a different speciality by taking advantage of clause 5 of the residency scheme.
Their applications were rejected on the ground that the relevant clause of the scheme was a transitory provision intended to benefit only persons who were on a house job as on 22.8.1989.
They alone could take advantage of the scheme as soon as they completed the house job; not persons who had completed their house job much earlier to that date.
The writ petitioners went to Court and this time they were successful.
A Division Bench of the Allahabad High Court held, interpreting rule 5, that rule 5 extended the privilege of admission to the second year of the degree course to all persons who were working as house officers on or after 1st August, 1987.
The State, as well as certain doctors who were in house jobs as on 22.8.89 and who had been admitted to post graduate degree courses on the basis of the State 's interpretation of the scheme but lost their seats as a result of the High Court 's decision, have preferred these appeals.
Four questions arose for the consideration of the High Court (1) Is the concession contemplated by rule 5 of the scheme limited only to doctors in house jobs as on 22.8.89 or available to all those who were in house jobs as on 1.8.87 and later? (2) Is a candidate who has already been admitted to, and is 901 undergoing a diploma course eligible to seek admission to a degree course under rule 57 (3) Is it open to a candidate who is a student in a post graduate diploma course in one speciality to seek admission to the postgraduate degree course in any particular special ity? (4) Is it permissible for a candidate who is undergoing a diploma course to abandon it in the middle and join a degree course? The High Court expressed no opinion on the latter two ques tions leaving it to the Principal of the College to decide the same in due course but answered the first two questions in favour of the writ petitioners.
We are concerned here only with these two questions.
We may take the second of these questions first.
The writ petitioners say that a direct answer to this question is provided by a notification issued on 13.8.87 by the Governor of the State in pursuance of the provisions of Article 348 of the Constitution read with section 28(5) of the Uttar Pradesh State Universities Act (Act X of 1973), as amended Act 29 of 1974.
This notification effects an amend ment to an earlier notification dated 15.12.1982 (as subse quently amended) by adding a new para thereto.
The new para provides: "(7A) If any candidate has been admitted in post graduate Diploma or Degree Course in one speciality he shall not be eligible for admission in Post Graduate Diploma or Degree Course in any other speciality.
For removal of doubts it is clarified that if a candidate has been admitted in Post Graduate Diploma Course in one speciality he may be allowed admission in Post Graduate Degree Course in that very spe ciality.
" If this is correct, there can be no doubt that none of the writ petitioners can be denied registration and considera tion for admission to the degree course merely on the ground that he has earlier been admitted to a diploma course in some speciality.
It is urged on behalf of the appellants that this rule has lost its force on the promulgation of the new scheme.
It is difficult to see why this should be so because its principle could be applied, mutatis mutandis, to the residency scheme as well.
But even if this is correct and this para is kept out of consideration altogether, there is no rule which prohibits a person (even though he may already be a student in a post graduate course) from seeking 902 admission to the second year of junior residency, the eligi bility clauses for admission to which he fulfills.
The High Court was, therefore right, while expressing no view on the question whether any of the writ petitioners are eligible to be admitted to any particular speciality, in holding that they could not be excluded from consideration for admission to the second year of the degree course merely because they are already students in a diploma course.
The first question, however, is a more difficult one.
We have considered the contentions of both sides carefully and we have come to the conclusion that there is no reason to disturb the High Court 's conclusion.
Prior to the enforce ment of the scheme, all candidates who had completed their M.B.B.S. together with one year of internship and one year of house job were eligible for admission to a postgraduate degree or diploma course and a particular candidate could make repeated attempts for being considered for admission to a particular post graduate speciality, irrespective of the batch to which he belonged or the particular year in which he was admitted to the M.B.B.S. course or the particular year in which he passed the final M.B.B.S. examination.
That liberty is available after the introduction of the new scheme also to all M.B.B.S. graduates who have completed one year of internship.
Irrespective of the year in which they qualified in the M.B.B.S. degree examination, it is open to all such candidates to seek admission to the first year of the new three year degree/two year diploma course.
That is not in dispute.
The question only is whether any of them are entitled to claim admission in the second year of that course on the ground that they had also completed their house job earlier.
The answer to this question must depend on the interpretation of the none too clear para 5 of the Residency Scheme.
In interpreting the scheme, it is first necessary to point out that the preamble to the notification sets out a two fold objective of prescribing a policy/procedure (a) for the conversion of the existing designations in the depart ments to equivalent designations and (b) for specification of the number of seats for various degree/diploma courses and for "eligibility examination for selection thereon".
[sic: apparently, this should read: "eligibility, examina tion or selection thereto". ] One further important factor to be borne in mind is that the scheme was given effect to from 1.8.87.
To ask persons, who had already completed a one year house job, to undergo the three year degree/two year diploma course would be a severe handicap to them as, earlier, they could have got their post graduate degree/diploma after two years/one year.
In order to adjust them into the new scheme 903 the State designated holders of house jobs as "junior resi dents (first year)" under the new scheme.
This enabled the holders of house jobs to get into the second year course under the residency scheme.
It has been stated, in the appellants ' rejoinder, that a large number of candidates who had completed their M.B.B.S. even ten years earlier and some candidates who were even on the verge of completing a post graduate degree course had applied for registration as junior residents (2nd year) along with the appellants and the writ petitioners.
This kind of situation would be im practical.
Obviously, the scheme could not be stretched and converted into a limitless provision making it possible for all persons who had completed their house jobs at some distant past to compete for admission to the second year of the degree course.
That is why para 5 limited the scope of the redesignation and admission.
The first part of it limit ed the equation above referred to only to persons who were working on house jobs since 1.8. 1987.
The High Court was clearly right in saying that the words "1st year" used in column of the table in para 5 against serial No. 1 govern only "demonstrator".
It is clear that the words "House Officer", "Junior Resident" and "Senior Resident" used against serial Nos. 1, 2 and 3 redesignate all such officers working since 1.8.87 as "junior residents 1st , 2nd and 3rd year" respectively.
That being so, both the writ petitioners as well as the appellants before us are all "junior resi dents (1st year)" and should be eligible for admission to the second year of the residency scheme course.
But, it is said, this cannot be, for two reasons.
One is that the second sub para of para 5 is restricted only to those who were House Officers on 22.8.89.
We think that this contention has been rightly repelled by the High Court.
To accept this construction would mean a segregation of the two parts of para 5 and the substitution of the words "on 22nd August 1989" for the words "since 1st August 1987" used in the first para of para 5.
The words "us sumay" clearly establish a nexus between the two parts of para 5 and can only refer to the period referred to in the first part viz. "since 1st August 1987".
It is difficult to see how a refer ence to two different periods could have been intended by the two parts of para 5.
That this could not be so is also clear for the scheme, though announced on 22.8.89, was to be effective from 1.8. 1987.
That is why a line is drawn as on that date and all persons who are working as house officers, junior resident doctors or senior resident doctors since that date are all assimilated into the new scheme.
There is no justification to read such assimilation as partial, as contended for by the State.
It was contended that the scheme was the outcome of negotiations with junior doctors in the State who were 904 agitating for better conditions of service and higher emolu ments and that the settlement with them was only that higher emoluments will be paid w.e.f. 1.8.87.
Necessary material to substantiate this plea was not placed before the High Court or before us.
But even assuming that the negotiations and agreement had a limited scope, we have to interpret the scope of para 5 on its language.
The reference to the period since 1.8. 1987 in para 5 fits in with the declaration in para 8 that the scheme should be deemed to have come into force on 1.8.87.
In this context, it is of significance that the scheme notified on 22.8.89 states that the scheme has been introduced in pursuance of proposals submitted to the State Government "for the desired improvement in under graduate/post graduate training" in all colleges and hospi tals but makes no reference to the revision of the scales of pay of the junior doctors.
It is, therefore, difficult to accept the plea that the date 1.8.87 has significance only in the matter of pay scales and nothing else.
This objection is not, therefore, sustainable.
The second point made by the State and the appellants is that the writ petitioners, under the scheme, are already "junior residents 2nd year" as they are already in the first year of a post graduate diploma course and they can not, therefore, be eligible for admission to the second year of the degree course where also they will be designated as "junior residents 2nd year".
In our view, the objection is untenable.
In the first place, it is only a variation of the argument that a person already undergoing a diploma course cannot be admitted to a degree course, which we have reject ed already.
But that apart, there is ' nothing wrong in the writ petitioners being admitted to the second year degree course and being called "junior residents 2nd year" there instead of in the diploma course.
In this context, it is necessary to point out that they have been admitted into the diploma course only in March 1989 and that they are not seeking any credit for the period of education they have undergone in the diploma course.
It is then argued that the words "ussamay" occurring in the second part of para 5 of the scheme is really a mistake for "at this time" or "is sumay" or "vartman mein".
In support of this contention, it is pointed out that the Director of Medical Education had written to the secretary to the Government on 2.11.1989 requesting that the word "vartman" be substituted in place of "us samay" in the notification of 22.8.89 "so that the meaning of the above lines shall be clear".
It is also submitted that the refer ence to such persons being eligible for admission "after the completion of the tenure" in the house job also makes it clear that persons who had already completed 905 their house jobs in 1987 or 1988 are not within contempla tion.
We are unable to agree.
When the notification talks of "us samay", we cannot read it differently.
The letter of Director of Medical Education dated 2.11.
1989 finds a reference only in the appellants ' rejoinder affidavit and the writ petitioners have had no opportunity to meet it.
The State has not referred to this letter, or the action taken on it, anywhere.
These difficulties apart, the letter pat ently seeks to bring about a change in the contents of the notification and is not a simple request for clarification as it purports to be.
At best, it only reflects the Direc tor 's understanding of the notification and cannot bind the writ petitioners or the Court.
Also, no information has been furnished by the appellants or the State as to whether the request of the Director has been accepted and an amendment published by the Government for the amendment suggested can become effective only on such publication.
It may be pointed out a propose this contention that the notification of 22.8.89 itself had been published in the Gazette only on 25.11.89, much subsequent to the Director 's letter.
Even assuming that her suggestion has since been accepted and the words "at that time" stand replaced by the words "at the present time" by a proper notification later, that amendment cannot affect the parties before us.
The date material for the purposes of their admission was 30.9.89, the last date by which the applications had to be sent in.
That being so, the words "us samay" used in the second sub para of para 5 are the operative words.
They clearly embody a reference to an anterior point of time and this can only be a reference to the period since 1.8.87 which finds specific mention in the first sub para and which is the period subsequent to the scheme coming into operation.
Thus, all persons doing house jobs after 1.8.87 are covered by the second sub para of para 5.
The words "after completion of the tenure" had to be used here because the class of persons referred to also included those who were in house jobs as on 22.8.89.
Indeed this was how the scheme was understood by the Principal of the M.L.N. College and, perhaps, by the other principals too.
We find that the terms of the advertisement issued by the Principal, M.L.N. College, to which the writ petitioners had responded said this: "Candidates must have passed M.B.B.S. Degree from a University recognised by M.C.I., should have completed one year compulsory rotatory internship training and should have completed/will be completing one year house manship in the subject concerned by 30th October, 1989 . " 906 This was the understanding of the scheme by the College Principal and, admittedly, the writ petitioners fulfilled these requirements.
There is, therefore, no substance in the second contention either.
Ms. Sobha Dixit, appearing for the State, submitted that the interpretation placed by the High Court creates two types of major difficulties.
The first is that though the High Court 's decision related only to M.L.N. College at Allahabad, similar claims have also been made for admissions into post graduate courses all over the State and, in some cases, the High Court, following the present case, has issued directions to a like effect with the result that a large number of candidates who have secured admissions are now facing the loss of their seats and of the benefit of almost one year of study which they have already undergone by now.
This argument, in our opinion, has no force.
It does not appear to be correct to say that the High Court 's deci sion in the present case will affect admissions all over the State.
The respondents have stated thus in para 13 of their counter affidavit: The admission in other Medical Colleges of U.P. have been done on the basis of old rules i.e. on the basis of Govt.
Notification dated 15.12.
1982 and 13.8.1987 and the students who have completed their house job much earlier prior to 22.8.89 were given admission in 2 year degree and 1 year diploma course according to their respective merits after the introduction of residency scheme dated 22.8.89." (underlining ours) This remains uncontroverted.
Further, the validity of the admissions made to the other colleges would depend on those who had applied for admission there.
If earlier batches of house officers had also applied for admission to those colleges and been refused admission, as in the M.L.N. Col lege, the position may be similar to that in the present case.
If, however, such persons had not at all applied or had been duly considered, no question can arise now for their consideration.
No unjustified revision of completed admissions is, therefore, likely to result.
The plea that the appellants have already completed about a year in the course and should not lose the benefit thereof cannot also be given much weight because, by interim orders passed in the writ petitions, the High Court had made it clear that they were being allowed to continue in the course only on the specific understanding 907 that their admissions will be subject to the result of the writ petitions.
The second point made by the State counsel is that it compels the batch of students working in a house job as on 22.8.89 to face competition from earlier batches and this according to her, is contrary to law.
In support of this contention, she referred to certain observations made by this Court that it would not be correct to compare the merits of candidates in different examinations and different States.
We see no force in this contention.
As pointed out earlier, before and after the introduction of the scheme, admission to the first year of the scheme was and will by open competition between medical graduates who had completed house jobs or internships irrespective of the batch to which they belong.
It is stated in an affidavit filed on behalf of the appellants that, though the writ petitioners, while getting admission to the postgraduate diploma course earlier had to compete with earlier batches of students, they were given some preference.
We do not know on what basis such preference was given and it is too late now to examine that aspect.
But the fact remains that they were considered along with candidates of earlier batches.
We, therefore, see no justification for contending that great injustice will be caused to the appellants because it has become necessary for them to face competition from two earlier batches of stu dents.
On the contrary, as pointed out by the High Court, it is the interpretation pleaded for by the State that may offend article 14 of the Constitution.
We have held earlier that the scheme, though introduced in 1989 is effective from 1.8.87.
If that be so, to place house officers working on 22.8.89 alone in a better position than those who had com pleted house jobs in 1987, 1988 or earlier in 1989 would result in a discrimination in their favour and against the writ petitioners unrelated to indeed, contrary to the very object and purpose of giving the scheme retrospective effect from 1.8.87.
One further contention raised on behalf of the state and the appellants is based on a decision of the High Court in the case of one Dr. Sandeepa Srivastava (Civil Miscellaneous Writ Petition No. 13419/89), a petition for special leave against which was dismissed by this Court (SLP 1380/89 dismissed on 6.4.90).
Dr. Srivastava had completed M.B.B.S. in 1987 and one year internship in June 1988 and had applied for admission to a house job but before the admission could be decided upon, the Residency Scheme had been introduced.
She challenged the admission to the first year of the degree course granted by the M.L.N. College, in preference to her, to one Dr. Surabhi Rai who 908 had completed her M.B.B.S. in 1987, completed her internship in 1988 and was in a house job as on 22.8.89.
A very pecul iar situation seems to have arisen in that case.
Dr. Surabhi Rai had applied for admission to the first year and not the second year of the new residency course though she was on a house job as on 22.8.89.
It appears she could not apply for the 2nd year like the writ petitioners here as her house job could not be completed by 30.10.89, the date mentioned in the advertisement with which we are concerned.
Dr. Srivasta va contended before the High Court (a) that only the 1983 batch of students who had passed M.B.B.S. in 1988 were eligible for admission to the degree course and not those who had passed out earlier; and (b) that Dr. Surabhi Rai should have sought admission to the second, and not the first, year of the Junior Residency course.
The court re jected the first contention which was patently untenable and this was sufficient to dispose of the writ petition.
The court, however, also proceeded to consider the second con tention and dealt with it as follows: "The second contention of the petitioner has also no force.
For this proposition, the petitioner has relied on the last part of para 5 of the Government order dated 22.8.89.
Para 5 of the Government Order has laid down that house officers and Junior doctors working since August 1, 1987 will be converted into Junior Residents of First Year.
Second year etc.
in accordance with the chart given in this para.
Last part of this para lays down about these house officers, who were working since 1.8.87.
This para does not provide for the criteria or deal with the admission of those candidates, who have joined the First Year House Job and have not yet completed even first year.
The cases of those, who have joined the course of house job but could not complete till the introduction of the new scheme of the residency, has been considered in the meeting of the Principals of all the Medical Colleges of U.P. and Director of Medical Education and Training on 16.9.1989.
Para 6 of this resolution laid down that as the course of house job has been abolished after the enforcement of the residency scheme and the candi dates, who are undergoing training of house job cannot pursue their studies and training any more and as such.
all those candidates, who are undergoing training of house job should be admitted in the first year course of Junior Resi dency on the basis of merit.
This resolution of the Princi pals of all the Medical Colleges appears to be fair and 909 most reasonable. ' As the course of house job has been abol ished and the candidates undergoing this course cannot possibly pursue their studies and if they are not admitted in the first year of the Junior Residency, they will suffer great hardship and irreparable loss, because they have been deprived of their right to persue their course of house job in the middle of the session.
When the course of house job has been abolished, it is impossible for the persons undergoing the course of house job to persue their studies any more.
In fact respondent No. 3 would have been happy, if she was permitted to continue and conclude the one year course of house job, because in that case after few months she would have got admission in the second year of Junior Residency and would have become senior to the petitioner and all others, who will be joining the first year of Junior Residency course now, but on ac count of the abolition of the system of house job it became impossible for the Respondent No. 3 to continue with the course and as such, she had to be contended with the admis sion in the first year of Junior Residency course.
" We do not wish to say anything about this part of the judgment as we are not aware whether any appeal has been sought therefrom.
It is sufficient to point out that all the appellants before us are persons who were in a house job on 22.8.89 and are claiming admission to the second year of the degree course.
We shall, therefore, simply content ourselves by saying that, since all the parties before us have pro ceeded on the footing that persons in the position of the appellants are eligible for admission as Junior Residents 2nd year, we are not called upon to consider the correctness of the judgment in Dr. Sandeep Srivastava 's case on this point.
That was a case which dealt with an admission to the first year of the degree course and, since there is nothing in the scheme which prohibits any person in the position of the appellants or Dr. Surabhi Rai from applying for admission as junior resident 1st year, the decision of the High Court was clearly correct.
The dismissal of the SLP in that case does not, therefore, affect our present discus sion.
The Judgment of the High Court in appeal before us, the judgment in Dr. Sandeepa Srivastava 's case and the other judgments to which Ms. Sobha Dixit made a reference, howev er, make it clear that the interpretation of the clauses of the scheme is, by no means, an easy 910 task.
In practice also, the basis on which the principals at least the principal of the M.L.N. College proceeded does not appear consistent with the letter of the Director of Medical Education dated 2.11.89.
In this state of affairs, we think that it is upto the State to find out a practical solution to ensure that the student community is not prejudiced by the ambiguities in the scheme.
In this context, our attention was drawn to the directions of this Court in the case of Mridula Avasthi and Others vs University of Delhi and Others, ; "In this background we are of the view that the impasse created on account of the rival claims advanced by the freshers and the seniors has to have a rough and ready solution yet not arbitrary and as acceptable and satisfying as possible.
We find that the two year degree course spe ciality wise has 149 seats while the three year degree course has 139 seats.
For convenience we extract the partic ulars made available at page 4 of the Bulletin of Informa tion.
It may be pointed out that there are 1003 candidates as against total 270 vacancies (degree and diploma courses together) for the seniors; and there are 33 1 candidates as against 205 vacancies for the two courses for the freshers.
With a view to providing some more seats for seniors we suggested to Mr. Rao appearing for the University that the number of seats may be increased and he has on instructions agreed, provided the Union of India provides funds and the Medical Council agrees to accommodate.
There are 21 special ities as indicated above.
We direct that the University shall create one seat in every speciality and thus 21 addi tional seats will be available over and above the 149 seats fixed by the University representing the 75% quota.
To this enhanced number of seats the 25% reservation of All India Selection shall not apply.
From the reserved seats made for the freshers, 21 seats being one from every speciality shall be taken away and made available to the seniors.
Thus 42 seats in all will be available for the seniors in the Post Graduate course to be filled up on the basis of inter se merit keeping the senior group apart.
The creation of the 21 seats will involve addi tional funds to be provided by the Union of India.
It will also require approval of the Medical Council of India and there 911 will perhaps also be necessity for permitting the variation of guide student ratio.
Since it is for one year and there would be no scope for recurrence and this has arisen in peculiar circumstances explained above, we direct the Gov ernment of India to take our order made without hearing it with a sense of understanding and make the necessary provi sions.
We also suggest to the Indian Medical Council to provide the necessary accommodation by relaxing the require ments.
These may be done quickly so that the time schedule may not be affected.
" Based on the above observations, an application has been filed before us praying that directions may be issued to the State of create, with the approval of the Medical Council of India, an adequate number of additional seats to accommodate all the applicants in the second year of the degree course in some speciality subject to the other rules in force in the State in this behalf.
We do not know how far this will be feasible having regard to the position prevalent not only in the M.L.N. Medical College but also elsewhere in the State.
We do not know how many additional seats will have to be created on this footing and whether it is at all possible to do so.
We, therefore, give no specific directions but leave it to the State Government to review the situation in the entire State and see if any solution that will accommo date all the contestants, who qualify on merit, can be found out.
However, any such review should not stand in the way of the immediate consideration subject to other rules in force of the writ petitioners for admission as "junior residents 2nd year".
They have already lost almost one year of the degree course though, presumably, (except perhaps for one) they have been continuing their studies in the post graduate courses where they had been earlier admitted.
This should be set right and such of those as are admitted should be enabled to make up for lost time and to complete their post graduate course, if possible, by the end of 1991.
With the above observations, these appeals are dis missed.
We, however, make no order as to costs.
R.S.S. Appeals dismissed.
|
The appellants are junior doctors who were in a house job on 22.8.1989.
They had been admitted to post graduate degree course (second year) in the M.L.N. Medical COllege under the "Residency Scheme" for junior doctors, which was notified on 22.8.1989 but was given retrospective effect from 1.8.1987.
They, however, lost their seats as a result of the High Court 's decision allowing the writ petitions flied by the respondent doctors whose applications for admission to the same course had been rejected.
The modifications introduced by the Residency Scheme needed certain transitory provisions being made for two purposes.
The first was to devise a formula of equating between the old and the new systems.
This was done by redes ignating all students, junior doctors, house officers and others in position in the manner set out in para 5 of the scheme.
The second provision necessary was in regard to their admission to the post graduate courses.
This was done by the second sub para of para 5.
The respondent doctors who had done their M.B.B.S., internship and house job by April 1988 and who had even obtained admission, in March 1989, into a diploma course, sought admission in the M.L.N. College into the second year of a degree course by taking advantage of clause 5 of the Residency Scheme.
Their applications were rejected on the ground that the clause 5 of the scheme was a transitory provision intended to benefit only persons who were on a house job as on 22.8.1989; they alone could take advantage of the scheme as soon as they completed the house job; and not persons who had completed their house job much earlier to that date.
Thereupon, these doctors filed writ petitions in the High Court.
A Division Bench of the High Court al lowed the petitions and held that clause 5 extended the privilege of admission to 896 the second year of the degree course to all persons who were working as house officers on or after 1st August, 1987.
The State as well as certain doctors who were in house jobs as on 22.8.1989 and who had been admitted to post graduate degree courses on the basis of the State 's inter pretation of the scheme but lost their seats as a result of the High Court 's decision, have preferred these appeals.
So far as the present appeals are concerned, all parties have proceeded on the footing that the residency scheme is a valid one and that it envisaged that a person who had com pleted house job for one year could get admission into the second year of the course (whether degree or diploma).
The only controversy is whether this admission was open only to those persons who were in a house job as on 22.8.1989 and had completed it before 30.10.1989.
Dismissing the appeals, this Court, HELD: (1) There is no rule which prohibits a person (even though he may already be a student in a post graduate course) from seeking admission to the second year of junior residency, the eligibility clauses for admission to which he fulfills.
The High Court was, therefore, right in holding that they could not be excluded from consideration for admission to the second year of the degree course merely because they were already students in a diploma course.
[901H; 902A B] (2) To ask persons, who had already completed a one year house job, to undergo the three year degree/two year diploma course would be a severe handicap to them as, earlier, they could have got their postgraduate degree/diploma course after two years/one year.
In order to adjust them into the new scheme the State designated holders of house jobs as "junior residents (first year)" under the new scheme.
This enabled the holders of house jobs to get into the second year course under the residency scheme.
[902H; 903A] (3) The scheme, however, could not be stretched and converted into a limitless provision making it possible for all persons who had completed their house jobs at some distant past to compete for admission to the second year of the degree course.
That is why para 5 limited the scope of the redesignation and admission.
The first part of it limit ed the equation only to persons who were working on house jobs since 1.8.1987.
[903B C] 897 (4) The date material for the purpose of their admission was 30.9.1989, the last date by which the applications had to be sent in.
That being so, the words "ussamay" used in the second sub para of para 5 are the operative words.
They clearly embody a reference to an anterior point of time and this can only be a reference to the period since 1.8.1987 which finds specific mention in the first sub para and which is the period subsequent to the scheme coming into opera tion.
[905D E] (5) All persons doing house jobs after 1.8.1987 are covered by the second sub para of para 5.
The words "after completion of the tenure" had to be used here because the class of persons referred to also included those who were in house jobs as on 22.8.1989.
[905F] (6) It is clear that the words "House Officer", "Junior Residents" and "Senior Residents" used against serial Nos. 1, 2 and 3 in para 5 of the scheme redesignate all such officers working since 1.8.1987 as "junior residents 1st, 2nd and 3rd year" respectively.
That being so, both the writ petitioners as well as the appellants are all "junior resi dents (1st year)" and should be eligible for admission to the second year of the residency scheme course.
[903D E] (7) It is clear from the judgments of the High Court on the subject that the interpretation of the clauses on the scheme is by no means an easy task.
In this state of af fairs, it is upto the State to find out a practical solution to ensure that the student community is not prejudiced by the ambiguities in the scheme.
[909H; 910A] Mridula Avasthi and Others vs University of Delhi and Others, ; , referred to.
|
ivil Appeal No. 4380 of 1990.
From the Judgment and Order dated 4th October, 1985 of the Patna High Court in C.W.J.C. No. 4065 of 1985.
R.K. Garg and A. Sharan for the Appellant.
K.K. Venugopal, P. Chidambaram, section Sukumaran, K.K. Lahiri, D. Partha Sarthy and S.N. Jha (N.P.) for the Re spondents.
The following Order of the Court was delivered: Special leave granted.
We have heard Mr. Garg for the appellant, Mr. Chidamba ram for the Principal Employer and Mr. Venugopal for the respondent Union.
A reference was made by the State Government of Bihar under section 10 of the to the Industrial Tribunal, Ranchi, on 9.7.81 referring to the following disputes for adjudication: (1) Whether the contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the following permanent and regular nature of work before 11.2.
198 1 are entitled for permanent employment? (2) Transportation of materials within the plant which is not dependent on outside supply; (3) All processes connected with the manufacturing process; 979 (4) Removal and handling of waste product; and (5) Sweeping and cleaning the machines, conveyors, shops and offices.
The Tribunal by its Award dated 18.12.1984 , came to hold that the workmen constituted the contract labour and, there fore, the reference was not maintainable.
If further held that action, if any, had to be taken only under section 10 of the and the power to take steps under that statutory provision vested in the State Government and not in the Tribunal.
It may be pointed out that prior to the reference being made to the Tribunal, the matter had been taken before the Patna High Court and by judgment dated 4.9.1981 the writ petition was disposed of holding that a reference had al ready been made to the Industrial Tribunal and the Award was awaited and it was open to the State Government to take steps under section 10(1) of the .
The High Court in its ultimate conclusion indicated: "When the Award was finally made by the Industrial Tribunal, to the State Government, as the learned Advocate General assures us, shall determine the matter in accordance with law.
If after such an Award is made and no decision is taken by the State Government within a reasonable time, the peti tioners shall be at liberty to move this Court again . " The subsequent events have exposed the fallacy of the con clusion of the High Court.
In fact if the provisions of the had been properly kept in view; no reliance could have been placed on the fact that the Award was awaited.
When the Award was made challenge was raised before the High Court but it refused to entertain the writ petition.
The appeal by special leave is against the in limine dis missal of the writ petition.
We have heard learned counsel for the parties at some length and it has been brought to our notice by Mr. Chidam baram that in regard to Items 1, 2 and 4 of the heads of dispute as indicated in the reference, the contract labour system is no more vogue and contract labour is now 980 confined to Item 3 only.
In view of the changed situation and taking into consideration the background of the dispute as also the fact that the litigation has been pending for almost a decade now, we do not think it would be appropriate to take a technical view of the situation and endorse the decision of the Tribunal.
We are, therefore, inclined to substitute the terms of the reference to the Tribunal by indicating that the reference shall now read thus: "Whether the contract workers engaged by the Management of the Tata Iron and Steel Company Ltd., Jamshedpur in the permanent and regular nature of work before 11.2.
198 1 are entitled to permanent employment in regard to Items 1, 2 and 4 under the Principal Employer.
" In regard to Item No. 3 it shall be for the State Gov ernment to take its own decision under the provisions of the as to whether the contract labour employment should be terminated, and since the State Government had already been considering this matter for some time, we direct the State Government to take its decision in terms of the assurances held out by its learned Advocate General to the Patna High Court several years back within three months from now.
To regulate the matter in a more effective way before the Tribunal and keeping in view the submissions made by Mr. Venugopal we direct that 'the Tribunal shall initially devote attention to identify the workmen who are desirous of being permanently absorbed under the Principal Employer and after such identification is made, the matter should be proceeded with in accordance with law.
All parties should be given full opportunity to raise their contentions and sub stantiate the same with such evidence as they like to lead but the Tribunal shall ensure that the dispute is disposed of within six months from today.
If necessary, full atten tion should be given to this case so as to comply with the direction regarding disposal within the time limit set by us.
There would be no order for costs.
P.S.S. Appeal disposed of.
|
The contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before February 11, 1981 in (1) transportation of materials within the plant which was not dependent on outside supply, (2) processes connected with manufacturing process, (3) removal and handling of waste products, and (4) sweeping and cleaning of machines etc., sought permanent employment under the principal em ployer.
The dispute was referred by the State Government under section 10 of the to the Industrial Tribunal.
The Tribunal held that the workmen constituted the contract labour and, therefore, the reference was not main tainable.
It further held that action, if any, had to be taken under section 10 of the , power to take steps for which vested in the State Government and not in the Tribunal.
The writ petition challenging the award was dismissed by the High Court in limine.
In the appeal by special leave it was brought to the notice of the Court on behalf of the management that con tract labour was now confined to item 3 only.
Disposing of the appeal, the Court ordered: 1.
The reference to the Tribunal shall now read: "Wheth er the contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before 11.2.1981 are enti tled to permanent employment in 978 regard to items 1, 2 and 4 under the principal employer".
[980B C] 2.
The State Government to take its own decision within three months under the provisions of the in regard to item No. 3 as to whether the contract labour employment should be terminated.
[980D] 3.
The Tribunal to dispose of the dispute within six months.
[980F]
|
ivil Appeal No. 3951 of 1990.
From the Judgment and Order dated 10.4.1990 of the Himachal Pradesh High Court in C.W.P. No. 12 of 1990.
V.A. Bobde, A.K.Sanghi and section Mudaliar for the Appellants.
Dr. Y.S. Chitale, Mrs. Sadhna Ramachandran and Jagan Mohan Rao for the Respondent.
Respondent, Raj Kumar Thakur, was a student in the Postgraduate Doctoral Programme as a Ph.D. scholar with his subject for doctoral study "Breeding of Honey Bees A Mellif era for Honey production through Artificial Insemination" which is a subject under the Department of Agriculture of Dr. Y.S. Parmar University of Horticulture & Forestry and is a course of study available in several other institutions in the country.
The respondent was registered for this course in 1985 and was required to complete the same in six semes ters with entitlement for extension by two more semesters by the Dean on the recommendation of the Adviser and for a further extension of two more semesters by the Vice Chancel lor of the Dr. Y.S. Parmar University of Horticulture and Forestry on the recommendation of the Dean.
The respondent completed seven semesters as a student and registered for the eighth semester on 24.7.1989 as a student of the Univer sity.
However, during this period respondent was appointed as Assistant Scientist in the pay scale of Rs.2200 4000 vide letter of appointment dated 26.7.1989.
The Dean by order dated 774 27.7.1989 permitted the respondent to register for the eighth semester.
This permission of the Dean was granted without the knowledge of the respondent having become an employee of the University as a result of the appointment letter dated 26.7.1989.
The respondent joined the post of Assistant Scientist pursuant to this appointment on 29.7.1989.
The respondent thereafter applied for a further extension of his registration for the course for the ninth semester.
The Vice Chancellor vide his order dated 22.11.1989 refused the permission on the ground that the respondent having become an employee of the University, was not entitled to that benefit in accordance with the provi sions applicable.
The restrictions in regard to an employee/teacher of the University for the purpose are as under: "(a) An employee/teacher of the University is permitted to undertake doctoral programme only in subjects for which facilities in other Universities in the country are not available.
Forestry being one such subject in the petitioner University.
The course of study of the respondent viz. Agriculture, is however, available in numerous other insti tutions and Universities in the country.
(b) An employee/teacher is required to take study leave and the same is admissible for pursuing approved courses outside the University only.
It is only in cases where facilities for the course of study which is not available elsewhere in the country, an in service teacher is permitted to undertake the same in the petitioner University.
(c) Study leave is not granted as a matter of fight and can be granted only after the employee/teacher has completed five years of continuous service in the University.
(d) Considering the number of employees aspiring to do doctoral programme the permission to do the same is given according to seniority.
" An employee of the University would be required to complete the Ph.D. within eight years of recruitment failing which increments are not admissible till completion of the course.
An employee who is Assistant Professor or holds an equivalent post, the respondent being in that category, normally becomes entitled to the senior scale of Rs.3000 5000 after completion of eight years of service.
However, in case of an employee obtaining the Ph.D. degree the senior scale be 775 comes applicable after five years instead of eight years.
On completion of eight years in the senior scale an employee/teacher is promoted to the next higher rank of reader.
Thus, a person getting a Ph.D. degree gets the senior scale ,earlier and consequently he is also promoted earlier to the post of reader.
There are 24 other employees who are senior to the respondent and are awaiting completion of their five years service for doing the doctoral programme and there are eight other employees who joined initially with the Ph.D. degree and are awaiting completion of five years for getting the senior scale.
The consequence of granting permission to the respondent for registration to the ninth semester would be to confer on the respondent the benefit which is not available to an employee of the Univer sity because of the aforesaid restrictions and this would result in giving a benefit to the respondent contrary to the provisions applicable while denying the same to others who are senior to the respondent in employment.
According to the appellants this was the reason for refusal by the Vice Chancellor of the permission sought by the respondent.
The respondent challenged this refusal of the permission to him by the Vice Chancellor by order dated 22.11.89 in the High Court of Himachal Pradesh in C.W.P. No. 12 of 1990.
By the impugned judgment dated 10.4.1990, the Full Bench of the High Court by majority allowed the writ petition and direct ed the Vice Chancellor to register the respondent for the remaining two semesters, namely, the ninth and the tenth semesters.
Hence, this appeal by special leave.
The grievance of the appellants is that the result of the impugned majority judgment of the High Court Would be that though the respondent is an employee/teacher of the University he would be doing research in a subject in which otherwise employees of the University are not permitted; the respondent would get the senior scale earlier and also be promoted to the post of Reader much before 24 persons senior to him who are awaiting their turn in the order of seniority to undertake the doctoral programme after completion of the requisite five years service which is contrary to the statu tory provisions; and the 24 other employees senior to the respondent would be adversely affected even without being parties in the writ petition.
The statutory provisions applicable to the case and their meaning is not in controversy.
The only controversy is whether the respondent can be treated as an employee or in service candidate for the Ph.D. course on these facts so as to attract the restrictions which are relied on by the University for refusing the permission for registration to the 776 ninth and tenth semesters sought by the respondent.
The majority opinion in the impugned judgment takes the view that the respondent is not an in service candidate for this purpose as he has already completed eight semesters and requires only two or three months to complete the Ph.D. course.
The majority has also been influenced by the fact that refusal of permission for completing the course at this stage would be hard on the respondent.
The minority view of Bhawani Singh, J., is that on appointment to a teaching post in the University, the respondent incurred the disability and attracted the restrictions which are applicable to all employees of the University irrespective of the consequence flowing from it.
In our opinion, the minority judgment of Bhawani Singh, J., on this point and the conclusion reached by him that the respondent attracted the restrictions at taching to all employees of the University on his appoint ment as a teacher of the University is the correct view and the respondent cannot escape from the statutory restrictions which became applicable to him as soon as he became an in service candidate for the remaining part of the Ph.D. course on his taking up of the appointment in the University.
The further fact that the benefit claimed by the respondent, if granted, would result in the respondent getting consequen tial benefits much before his several seniors as a result of this permission alone cannot also be overlooked.
It is not a case of merely giving some benefit to the respondent even by relaxation of some statutory provisions without causing any prejudice to anyone else but a case where such a benefit granted to the respondent alone from amongst a large number of employees of the University would also seriously preju dice their claim and amount to an act of discrimination.
Obviously, such a course is impermissible.
This is the consequence of the High Court judgment and, therefore, it must be set aside.
Consequently, the appeal is allowed and the impugned judgment dated 10.4.1990 of the High Court of Himachal Pradesh in C.W.P. No. 12 of 1990 is set aside.
No costs.
R.S.S. Appeal allowed.
|
The grant of permission to an in service teacher of the appellant University to undertake doctoral programme is subject to the statutory restrictions; (a), that the course of study is not available in other institutions and univer sities, (b) that the study leave would be admissible for pursuing approved courses outside the University only, (c) that the study leave would be granted after the teacher has completed five years of continuous service in the Universi ty, and (d) that the permission to do the same would be given according to seniority.
An Assistant Professor becomes entitled to the senior scale after completion of eight years of service.
However, the senior scale becomes applicable to a person getting Ph.D. degree after five years instead of eight years.
The respondent was a Ph.D. student under the Department of Agriculture of the appellant University for a course of study available in several other institutions, which he was required to complete in six semesters, with entitlement for extension by two semesters each on the recommendation of the Adviser and the Dean respectively.
Subsequently, he was appointed Assistant Professor in the said University.
He had by then completed seven semesters.
He was permitted by the Dean to register for the eighth semester without the knowl edge that he had become an employee of the University.
However, thereafter he was refused permission by the Vice Chancellor to register for the ninth semester on the ground that having become an employee of the University he was not entitled to that benefit.
In the writ petition challenging the said refusal the High Court by majority found that the respondent was not an in service candidate as he had already completed eight semesters and directed the Vice Chancellor to register him for the ninth and the tenth semesters.
773 Allowing the appeal by special leave, the Court, HELD: The respondent could not escape from the statutory restrictions which became applicable to him as soon as he became an in service candidate for the remaining part of the Ph.D. course on his taking up of the appointment in the University The benefit claimed if granted to him alone would result in his getting consequential benefits much before his several seniors and would seriously prejudice their claim and amount to an act of discrimination.
Such a course is impermissible.
[776D E]
|
ivil Appeal No. 2483 of 1982.
From the Judgment and Order dated 5.2.
1982 of the Allahabad High Court in Civil Misc.
Writ Petition No. 1744 of 1982.
Gobind Mukhoty and U.S. Prasad for the Appellants.
Ms. Rachna Gupta, Ms. Rani Chhabra and M.C. Dhingra for the Respondents.
The following Judgment of the Court was delivered by Appellant is a Society registered under the , 21 of 1860.
Five persons of whom some are respondents before us instituted a suit in the Court of Civil Judge, Varanasi challenging the election of the Manag ing Committee and other elected officers of the appellant and asked for rendition of accounts.
This suit of 1981 is still pending.
We are now concerned with the correctness of the finding on the preliminary issue as to whether such a suit is maintainable in the Civil Court.
The defendants ' objection to the maintainability is grounded upon the provi sions contained in Sections 23 and 25 of the Registration Act.
The Courts below have taken the view that the suit is not barred.
That is why the defendants are here by special leave.
973 A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in the civil court unless its cognizance is either expressly or impliedly barred.
The position is well settled that exclu sion of jurisdiction of the civil court is not to be readily inferred and such exclusion must be either expressly or implied.
Reliance has been placed by Mr. Mukhoty before us on the ratio of the Constitution Bench decision of this Court in K.S. Venkataraman & Company vs State of Madras, ; where reference has been made to the Privy Coun cil case in Raleigh Investment Company Limited vs The Gover nor General in Council.
It has been laid down that the Civil Court 's jurisdiction would be presumed unless the contrary is indicated.
Mr. Mukhoty has also relied upon two other decisions being Ganga Bai vs Vijay Kumar and Others, ; and Dhula bhai and Others, vs The State of Madhya Pradesh and Another, [ ; The legal position thus seems to be clear and it is not necessary to quote further authorities.
What is really in dispute is the application of the rule to the facts of the case.
To ascertain whether the suit would be barred, the effect of the provisions of Sections 23 and 25 of the Registration Act with the U .P. amendments has to be considered.
These sections provide: "23.
Audit: (1) Without prejudice to the provisions of sub section (2) of Section 4 or of Section 22, where the Regis trar is of opinion that it is necessary or expedient so to do, he may, by written order, require any society to furnish its accounts or a copy of a statement of receipts and ex penditure for any particular year duly audited by a Char tered Accountant: Provided that the Registrar may, at the request of society permit it to have such accounts and statement audit ed by any other person by him.
(2) If the society fails to furnish the documents referred to in sub section (1) within the period specified in the order or with such extended period as the Registrar may from time to time allow, the Registrar may cause the accounts of such society audited for the said year and may recover the cost of such audit from that society.
(3) If the society neglects or refuses to make its account or 974 other documents available for audit under sub section (2) or, in the opinion of the Registrar, otherwise fails to provide requisite facilities to have the audit made with due expedition, the Registrar may proceed to take action under Section 24.
Disputes regarding election of office bearers: (1) The prescribed authority may, on a reference made to it by the Registrar or by at least one fourth of the members of a society registered in Uttar Pradesh, hear and decide in a summary manner any doubt or dispute in respect of the elec tion or continuance in office of an office bearer of such society, and may pass such orders in respect thereof as it deems fit: Provided that the election of an office bearer shall be set aside where the prescribed authority is satis fied: (a) that any corrupt practice has been committed by such office bearer; or (b) that the nomination of any candidate has been improperly rejected; or (c) that the result of the election in so far as it concerns such office bearer has been materially affected by the improper acceptance of any nomination or by the improper reception, refusal or rejection of any vote or the reception of any vote which is void or by any non compliance with the provisions of any rules of the society.
Explanation I. A person shall be deemed to have commit ted a corrupt practice who directly or indirectly, by him self or by any other person (i) induces, or attempts to induce, by fraud, intentional misrepresentation, coercion or threat of injury, any elector to give or to refrain from giving a vote in favour of any candidate, or any person to stand or not to stand as, or to withdraw or not to withdraw from being a candidate at the election; (ii) with a view to inducing any elector to give or to refrain from giving a vote in favour of any candidate, or to inducing any 975 person to stand or not to stand as, or to withdraw or not to withdraw from being, a candidate at the election, offers or gives any money, or valuable consideration, or any place of employment, or holds out any promise of individual advantage or profit to any person; (iii) abets (within the meaning of the Indian Penal Code) the doing of any of the acts specified in clause (i) and (ii); (iv) induces or attempts to induce a candidate or elector to believe that he, or any person in whom he is interested, will become or will be rendered an object of divine dis pleasure or spiritual censure; (v) canvasses on grounds of caste, community, sect or reli gion; (vi) commits such other practice as the Government may prescribe to be a corrupt practice.
Explanation II A 'promise of individual advantage or profit to a person ' includes a promise for the benefit of the person himself, or of any one in which he is interested.
Explanation III The State Government may prescribe the procedure for hearing and decision of doubts or disputes in respect of such elections and make provision in respect of any other matter relating to such elections for which insuf ficient provisions exists in this Act or in the rules of the society.
(2) Where by an order made under sub section (1), an election is set aside or an office bearer is held no longer entitled to continue in office or where the Registrar is satisfied that any election of office bearers of a society has not been held within the time specified in the rules of that society, he may call meeting of the general body of such society for electing such office bearer or office bearers, and such meeting shall be presided over and be conducted by the Registrar or by any officer authorised by him in this behalf, and the provisions in the rules of the society relating to meetings and elections shall apply to such meeting and election with necessary modifications.
(3) Where a meeting is called by the Registrar under sub section no other meeting shall be called for the purpose of election by any other authority or any person claiming to be an office bearer of the society.
976 Explanation For the purposes of this section, the expres sion 'prescribed authority ' means an officer or court autho rised in this behalf by the State Government by notification published in the Official Gazette.
We are of the view that provisions of Section 23 are con fined to audit and have nothing to do with the relief of rendition of accounts.
No more is necessary to be said about that relief.
Section 25 deals with disputes regarding chal lenge to the eviction of office bearers.
The maintainability of dispute within the purview of that Section is hedged with conditions and unless such requirement is fulfilled, a statutory dispute would not be maintainable.
The present action in the Civil Court is by some of the members who perhaps would not satisfy the requirements laid down in Section 25.
It cannot be contended that Section 25 having provided the pre conditions on the satisfaction of which a dispute within the purview of that Section would be main tainable before the Registrar takes away the right of Mem bers of the Society to claim relief otherwise outside the purview of Section 25 on the basis of their right to seek remedy for their grievance.
It is not the contention of Mr. Mukhoty that the relief claimed is not one which would come within the ambit of Section 9 of the Code of Civil Proce dure.
That being so, we are of the view that the bar of Section 25 is not applicable to the facts of the case.
Therefore, the conclusion reached in the Courts below is correct and the suit is maintainable.
We pointed out to Mr. Mukhoty that the relief against election of office bearers must have become infructuous with the passage of time as the election is annual.
It is for the trial Court now to dispose of the suit taking into consider ation the changes in the situations that may be brought before it.
We dismiss the appeal and direct the trial court to expedite the disposal of the suit.
No costs.
T.N.A. Appeal dismissed.
|
The respondents instituted a civil suit challenging the election of the office bearers ' of the appellant Society and asked for rendition of accounts.
The appellant Society contested the suit on the ground that in view of Sections 23 and 25 of the the suit was barred.
The courts below having held that the suit was not barred, the defendant Society filed appeal in this Court.
Dismissing the appeal, this Court, HELD: 1.
A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in the civil court unless its cognizance is either expressly or impliedly barred.
The exclusion of jurisdiction of the civil court is not to be readily inferred and such exclusion must be either express or implied.
[973A B] K.S. Venkataraman & Company vs State of Madras, ; ; Ganga Bai vs Vijay Kumar and Ors., ; ; Dhula Bhai and Ors.
vs The State of Madhya Pradesh and Ors., ; ; referred.
Raleigh Investment Company Limited vs The Governor General in Council, [1947] L.R. 74 I.A. 50; cited.
The provisions of Section 23 of the Societies Regis tration Act, 1860 are confined to audit and have nothing to do with the relief of rendition of accounts.
[976B] 972 3.
Section 25 deals with disputes regarding challenge to the eviction of office bearers.
The maintainability of dispute within the purview of that Section is hedged with conditions and unless such requirement is fulfilled, a statutory dispute would not be maintainable.
[976B] 3.1 In the instant case the action in the Civil Court is by some of the members who perhaps would not satisfy the requirement laid down in Section 25.
It cannot be said that Section 25 having provided the pre conditions on the satis faction of which a dispute within the purview of that Sec tion would be maintainable before the Registrar takes away the right of Members of the Society to claim relief other wise outside the purview of Section 25 on the basis of their right to seek remedy for their grievance.
It is not the appellant 's contention that the relief claimed is not one which would come within the ambit of Section 9 of the Code of Civil Procedure.
Therefore, the bar of Section 25 is not applicable to the facts of the case, and the conclusion reached in the Courts below is correct and the suit is maintainable.
[976C E]
|
: Criminal Appeal Nos.
452 53 of 1990.
From the Judgment and Order dated 23.3.1989 of the Rajasthan High Court in S.B. Cr. R. No. 426 and 325 of 1982.
Badridas Sharma, Manoj Jain, H. Shekhar, Anil Kumar Gupta, Indra Makwana, Prem Sunder Jha, Lahoty and Ms. Meeta Sharma for the Appearing Parties.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leave granted.
These two criminal appeals are from the common Judgment of 812 the High Court of Rajasthan dated 23.3.1989 in S.B. Criminal Revision No. 426 of 1982 filed by the appellants Nos. 1, 2 and 3 and S.B. Criminal Revision No. 325 of 1982 filed by the appellants Nos. 4 and 5 herein.
On 21.4.1980 one Shanti Lal lodged a report at Bikaner Police Station stating therein that the appellants and two others namely Uttam Chand and Hanuman Chand at about 2 P.M that day were pelting stones at the informant 's house caus ing damage to it and that Durgabai, Tara and Sunita who at the relevant time were sitting at the chowk of the house were injured.
After recording F.I.R. No. 22 dated 21.4.
1980 and on completion of investigation police framed charges under section 147, 323, 325, 336 and 427 I.P.C. and the charge sheet was forwarded to the Judicial Magistrate No. 2 Bikaner under section 173 Cr.
After taking cognizance and after hearing the arguments, the Judicial Magistrate, Bikaner by his order dated 3.10.1980 in Criminal Case No. 165 of 1980 had been pleased to discharge the appellants Nos. 4 and 5, namely, Bijya Bai and Jiya Bai of all the charges levelled against them.
Appellants Nos. 1, 2 and 3, namely, Sohan Lal, Padam Chand and Vishnu were ordered to be charged only under section 427 I.P.C. on the basis of site inspection and injury report: On 25.2.82 the Assistant Public Prosecutor submitted an application to the Magistrate under section 216 Cr.
P.C. signed by Durga Bai stating: "The accused have been charged under section 427 I.P.C., whereas from the entire evidence and the medical evidence prima facie case under various sections i.e. 147, 325 and 336 I.P.C. is made out.
Hence it is prayed that accused be charged in accordance with the evidence and the charge be amended in the light of the evidence.
" After recording the plea of the accused persons, prose cution led evidence and examined P.W. 1 Shanti Lal, P.W. 2 Sampat Lal, P.W. 3 Chagan Lal on 12.5.82 and P.W. 4 Durga Bai on 8.7.82.
The learned Magistrate on 8.9.82 after referring to the aforesaid application submitted by A.P.P. dated 25.2.82 and heating the A.P.P. and the learned advocate for the accused and discussing the evidence and observing that if any ac cused was discharged of any charge under any section then there would be no bar for taking fresh cognizance and recon sideration against him according to section 2 16 Cr.
P.C. and that 813 the provision of section 319 Cr.
P.C. was also clear in that connection, recorded the following order: "Hence cognizance for offences under sections 147, 427, 336, 323,325 I.P.C. is taken against accused Sohan Lal, Padam Chand, Smt.
Vijya Bai, Jiya Bai, Vishnu, Hanuman Chand and Uttam Chand.
Orders for framing the charges against accused Sohan Lal, Padam Chand, Vishnu under the aforesaid sections are passed and accused Smt.
Jiya Bai, Vijya Bai, Uttam Chand and Hanuman Chand be summoned through bailable warrants in the sum of Rs.500 each.
File to come on 20.10.82 for framing the amended charge against the accused present.
Exemption from appearance of accused Vishnu Chand and Padam Chand is canceled until further order.
The advocate for the accused shall present the said accused in the Court in future.
" The above order was challenged in the aforesaid two criminal revision petitions in the High Court of Rajasthan and the same were dismissed by the order under appeal.
According to the learned Single Judge the question that arose for consideration in those revision petitions was whether a Magistrate was competent to take cognizance of the offence after recording some evidence against the accused persons who had been earlier discharged of those offences.
It was urged by the revision petitioners that having once discharged them it was not open to the Magistrate to proceed against them and the only remedy was to go in revision and the Magistrate could not review his own order.
The learned Judge dismissed the petitions taking the view that it was not a case of reviewing the order of discharge passed by the Magistrate but was a case of taking cognizance of the of fence on the basis of the evidence recorded by the Magis trate himself which was not in any way prohibited in law, and that under the provisions of section 3 19 Cr.
P.C. the Magis trate was fully competent to take cognizance of the offences on the basis of evidence recorded by him though for the same offences order of discharge was passed by him earlier.
Mr. B.D. Sharma, the learned counsel for the appellants, firstly, submits that the learned Magistrate while deciding the application dated 25.2.82 submitted by the A.P.P. under section 216 Cr.
P.C. committed error of jurisdiction in passing an order far beyond what was prayed in the application and could not have revised his own order of discharging the appellants.
Secondly, section 319 Cr.
P.C. was applicable only to a person not being the accused and the appellants having been 814 accused but discharged could not have been charged as was done in this case.
Counsel submits that the High Court having failed to notice this fact if this order is allowed to stand it will cause grave miscarriage of justice to the appellants.
The learned counsel for the State supports the impugned order submitting that the learned Magistrate found enough materials for taking cognizance and framing charges against the appellants after examining P. Ws. 1 to 4 and accordingly framed charges under sections 147, 323, 325 and 336 against them and summoned the appellants through bailable warrants and he had the jurisdiction to do so under section 3 19 Cr.
P.C. irrespective of the application under section 216 Cr.
P.C. filed by the A.P.P. We may now proceed to examine the contentions.
From the application submitted by the A.P.P. dated 25.5.82 there could be no doubt that what he prayed for was the charging the accused in addition to section 427 I.P.C. whereunder they were already charged, under sections 147, 323, 325 and 336 I.P.C. of which they were already discharged.
This application ex facie did not envisage the appellants Vijya Bai and Jiya Bai who were wholly discharged.under all the above sections.
Under section 219 Cr.
P.C. the court may alter charge.
It says: "2 16.
Court may alter charge.
(1) Any court may alter or add to any charge at any time before judgment is pronounced.
(2) Every such alteration or addition shall be read and explained to t. he accused.
(3) If the alteration or addition to a charge is such that proceeding immediately with the trial is not likely, in the opinion of the Court, to prejudice the accused in his de fence or the prosecutor in the conduct of the case, the Court may, in its discretion, after such alteration or addition has been made, proceed with the trial as if the altered or added charge had been the original charge.
(4) If the alteration or addition is such that proceeding immediately with the trial is likely, in the opinion of the court, to prejudice the accused or the prosecutor as 815 aforesaid, the Court may either direct a new trial or ad journ the trial for such period as may be necessary.
(5) xxxxx Add to any charge means the addition of a new charge.
An alteration of a charge means changing or variation of an existing charge or making of a different charge.
Under this section addition to and alteration of a charge or charges implies one or more existing charge or charges.
When the appellants Vijya Bai and Jiya Bai were discharged of all the charges and no charge existed against them, naturally an application under section 216 Cr.
P.C. was not maintainable in their case.
In cases of appellants Sohan Lal, Padam Chand and Vishnu against whom the charge under section 427 I.P.C. was already in existence there of course could arise the ques tion of addition to or alteration of the charge.
The learned Magistrate therefore while disposing of the application under section 216 Cr.
P.C. only had no jurisdiction to frame charges against the appellants Vijya Bai and Jiya Bai.
In his order the learned Magistrate did not say that he has proceeding suo motu against Vijya Bai and Jiya Bai though he said that section 319 Cr.
P.C. was also clear in this connection.
As regards the other three appellants, namely, Sohan Lal, Padam Chand and Vishnu they were already accused in the case.
Section 2 16 Cr.
P.C. envisages the accused and the additions to and alterations of charge may be done at any time before Judgment is pronounced.
The learned Magistrate on the basis of the evidence on record was satisfied that charges ought also to be framed under the other sections with which they were charged in the charge sheet.
That was also the prayer in the A.P.P. 's application.
However the learned Magistrate invoked his jurisdiction under section 3 19 Cr.
P.C. which says: "3 19.
Power to proceed against other persons appearing to be guilty of offence (1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.
(2) Where such person is not attending the Court, he may 816 be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid.
(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the inquiry into, or trial of, the offence which he appears to have committed.
(4) Where the Court proceeds against any person under sub section (1) then (a) the proceedings in respect of such person shall be commenced afresh, and the witnesses reheard; (b) subject to the provisions of clause (a), the case may proceed at if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced.
" The crucial words in the section are, 'any person not being the accused. ' This section empowers the Court to proceed against persons not being the accused appearing to be guilty of offence.
Sub sections 1 and 2 of this section pro vide for a situation when a Court heating a case against certain accused person finds from the evidence that some person or persons, other than the accused before it is or are also connected in this very offence or any connected offence; and it empowers the court to proceed against such person or persons for the offence which he or they appears or appear to have committed and issue process for the pur pose.
It provides that the cognizance against newly added accused is deemed to have been taken in the same manner in which cognizance was first taken of the offence against the earlier accused.
It naturally deals with a matter arising from the course of the proceeding already initiated.
The scope of the section is wide enough to include cases insti tuted on private complaint.
There could be no doubt that the appellants 1, 2 and 3 were the accused in the case at the time of passing the impugned order by the Magistrate and as such section 319 Cr.
P.C. would not cover them.
Could appellants 4 and 5 be brought under that section.? Were they accused in the case? Precise ly when a person can be called the accused? Generally speaking, to accuse means to allege whether the person is really guilty of the crime or not.
Accusation according to 817 Black 's Law Dictionary means a formal charge against a person, to the effect that he is guilty of a punishable offence laid before a Court or Magistrate having jurisdic tion to inquire into the alleged crime.
In this sense accu sation may be said to be equivalent of information at common law which is mere allegation of prosecuting officer by whom it is preferred.
In the Code of Criminal Procedure 1973, hereinafter called the Code, the expression 'the accused ' has been used in a narrower sense.
Chapter XII of the Code deals with information to the police and their power to investigate.
Section 154 deals with information in cognizable cases and section 155 with information as to non cognizable cases and investigation of such cases.
Section 167, dealing with procedure when investigation cannot be completed in 24 hours, says: "(1) Whenever any person is arrested and detained in custody and it appears that the investigation cannot be completed within the period of 24 hours fixed by section 57, and there are grounds for believing that the accusation or information is well rounded, the officer in charge of the police station or the police officer making the investigation, if he is not below the rank of sub inspector, shall forthwith transmit to the nearest Judicial Magistrate a copy of the entries in the diary hereinafter prescribed relating to case, and shall at the same time forward the accused to such Magistrate.
(2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdic tion to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding 'fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnec essary, he may order the accused to be forwarded to a Magis trate having such jurisdiction." (Emphasis ours) Thus the words 'the accused ' have been used only in respect of a case where there are grounds for believing that the accusation or information is well founded. 'Information ' and 'accusation ' are synonymously used.
818 Chapter XV deals with complaints to Magistrate.
SectiOn 200 provides for examination of complainant.
Section 202 deals with postponement of issue of process and says in sub section (1) that any Magistrate, on receipt of a com plaint of an offence which he is authorised to take cogni zance or which has been made over to him under section 192, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there sufficient ground for proceed ing.
Thus we find that the expression "the accused" has been used in relation to a complaint case under this section even before issue of process.
It also appears that in the Code the expression "the accused" is used after cognizance is taken by the Magistrate.
Chapter XVI of the Code deals with commencement of proceedings before Magistrates.
Section 204 dealing with issue of process uses the expression "the accused".
Under sub section (1) thereof if in the opinion of a Magistrate taking cognizance of an offence there is sufficient ground for proceeding and the case appears to be (a) a summon scase, he shall issue his summons for the attendance of the accused, or (b) a warrant case, he may issue a warrant, or, if he thinks fit, a summons, for causing the accused to be brought or to appear at a certain time before such Magis trate or (if he has no jurisdiction himself) some other Magistrate having jurisdiction.
Under sub section (2), no summons or warrant shall be issued against the accused under sub section (1) until a list of the prosecution witnesses has been filed.
Thereafter the expression 'the accused ' has been used in subsequent sections.
Thus one is referred to as 'the accused ' even before issue of process.
Section 273 provides for evidence to be taken in presence of the accused in the course of trial or other proceedings.
The explanation to the section says that "accused" includes a person in relation to whom any proceed ing under Chapter VIII (Security for keeping the peace and Good Behavior) has been commenced under this Code.
In Chandra Deo Singh vs Prokash Chandra Bose & Anr., ; , during the pendency of the first complaint on which the Magistrate directed an inquiry, the nephew of the deceased filed a complaint alleging that the respondent No. 1 had committed the murder.
The Sub Divisional Magis trate directed the First Class Magistrate to inquire into that complaint and also to report.
During the 819 inquiry, apart from the witness produced by the complainant respondent No. 1 was allowed to be represented by a counsel and two persons who had been named in the First Information Report alongwith respondent No. 1 were examined with court witnesses.
The First Class Magistrate after conducting the inquiry under section made a report stating that a prima facie case had been made out against the persons mentioned in the first complaint.
He made anoth er report on the second complaint stating that no prima facie case has been made against respondent No. 1.
The Sub Divisional Magistrate directed the initiation of committal proceedings against the persons mentioned in the first complaint.
On a revision application filed by the complain ant of the second complaint the Sessions Judge directed the Sub Divisional Magistrate to conduct further inquiry against respondent No. 1 who took the matter in revision to the High Court.
The Revision Applications by respondent No. 1 and three others were allowed wherefrom there was an appeal to this Court by certificate.
The main contentions of the appellant before this Court were that the respondent No. 1 had no locus standi to appear and contest a criminal case before the issue of process.
This Court held: "It seems to us clear from the entire scheme of Chapter XVI of the Code of Criminal Procedure (1898) that an accused person does not come into the picture at all till process is issued.
This does not mean that he is precluded from being present when an enquiry is held by a Magistrate.
He may remain present either in person or through a counsel or agent with a view to be informed of what is going on.
But since the very question for consideration being whether he should be called upon to face an accusation, he has no right to take part in the proceedings nor had the Magistrate any jurisdiction to permit him to do so." Joginder Singh & Anr.
vs State of Punjab and Anr., reported in ; is an authority for the propo sition that the expression "any person not being the ac cused" clearly covers any person who is not being tried already by the Court.
A criminal complaint was registered against 5 persons including the 2 appellants.
The police having found that the two appellants were innocent charge sheeted the remaining 3 persons and they were committed to trial.
At the trial evidence having shown the appellants ' involvement in the crime the prosecution moved an applica tion that they be tried along with the three accused and the Sessions Judge directed the appellants to stand trial to gether with other accused.
Their revision application in the 820 High Court was dismissed.
In their appeal in this Court it was inter alia submitted that Section 3 19 Cr.
P.C. was inapplicable to the facts of this case because the phrase "any person not being the accused" occurring in the section excluded from its operation an accused who had been released by the police.
This Court rejected the contention holding that the said expression clearly covered by person who has not been tried already by the Court and the very purpose of enacting such a provision like section 3 19 clearly showed that even a person who had been dropped by the police during investigation but against him evidence showing his involve ment in the offence came before the criminal court were included in the said expression.
In Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors., [ ; , under the Food Adulteration Act, the respondent No. 1 was Manager of the company and the respondent No. 2 to 5 were the directors of the company including the company.
The High Court quashed the proceed ings against the directors as also against the manager.
This court set aside a part of the Judgment of the High Court which quashed the proceedings against the manager respondent No. 1.
It was held that where the allegations set out in the complaint did not constitute any offence and the High Court quashed the order passed by the Magistrate taking cognizance of the offence there would be no bar to the Court 's discre tion under section 3 19 Cr.
P.C. if it was made out on the additional evidence laid before it.
Section 3 19 gives ample powers to any Court to take cognizance against any person not being an accused before it and try him along with the other accused.
This Court clearly observed: "In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the Court can take cognizance against them and try them along with the other accused.
But we would hasten to add that this is really an extraordinary power which is conferred on the Court and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken.
More than this we would not like to say anything further at this stage.
We leave the entire matter to the discretion of the Court concerned so that it may act according to law.
We would, however, make it plain that the mere fact that the proceedings have been 821 quashed against respondent Nos.
2 to 5 will not present the court from exercising its discretion if it is fully satis fied that a case for taking cognizance against them has been made out on the additional evidence led before it.
" It was pointed out that under the Cr.
P.C. 1973 the Court can take cognizance against persons who have not been made accused and try them in the same manner along with other accused.
In the old Code, Section 35 1 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused.
The Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and section 3 19 of the present Code gave full effect to the recommenda tion of the Law Commission by removing the lacuna which was found to exist in section 35 1 of the old Code.
In Dr. S.S. Khanna vs Chief Secretary, Patna & Ors., reported in ; this Court had to consider wheth er a person against whom a complaint was filed along with some other persons and who after an enquiry under section 202 of the Code was not proceeded against by the Court, could be summoned at a later stage under section 3 19 of the latter Code to stand trial for the same or a connected offence or of fences along with the other persons against whom process had been issued earlier by the Court.
It was held that having regard to the nature of the proceedings under section 202 of the Cr.
P.C. it may be difficult to hold that there is a legal bar based on the principle of issue estoppel to proceed under section 3 19 against a person complained against on the same material, if the Court has dismissed a complaint under section 203.
But the Court did not express any final opinion on the question.
In that case, however, the Magistrate decided to take action under section 3 19 of the Code on the basis of fresh evidence which was brought on record in the course of proceedings that took place after the enquiry contemplated under section 202 of the Code was over.
It was further held that even when an order of the Magistrate declining to issue process under section 202 was confirmed by a higher Court the jurisdiction of the Magistrate under section 3 19 remained unaf fected, if other conditions were satisfied and the autre low principle adumbrated in section 300 of the Code could not, howev er, apply to such a case.
In the instant case, Vijya Bai and Jiya Bai were dis charged by the Magistrate of all the charges and the three other appellants were discharged of the sections other than section 427 I.P.C. After the police submitted charge sheet against them the order of discharge, according to Mr. B.D. Sharma, could not be taken to be one under 822 section 203 but under section 245 which is included in Chapter XIX and deals with trial of warrant cases by the Magistrates.
This submission has not been refuted.
That section says: "245.
When accused shall be discharged. (1) If, upon taking all the evidence referred to in section 244, the Magistrate considers, for reasons to be recorded, that no case against the accused has been made out which, if unrebutted, would warrant his conviction, the Magistrate shall discharge him.
(2) Nothing in this section shall be deemed to prevent a Magistrate from discharging the accused at any previous stage of the case if, for reasons to be recorded by such Magistrate, he considers the charge to be groundless.
" If that was so, the question is what would be the effect of the order of discharge? Should the protection resulting from such an order of discharge be allowed to be taken away by allowing the same Magistrate to take cognizance of the offence or offences against them at a later stage of the trial, without further enquiry where the order of discharge was not challenged or even if the order of discharge was taken in revision and the same was affirmed by the revision al court? Section 397 empowers the High Court or any Ses sions Judge to call for examining the records or any pro ceedings before any inferior criminal court within its jurisdiction for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order, recorded or passed etc.
Section 398 empowers the High Court or the Sessions Judge to order inquiry.
It says: "On examining any record under section 397 or otherwise, the High Court or the Sessions Judge may direct the Chief Judicial Magistrate by himself or by any of the Magistrates subordi nate to him to make, and the Chief Judicial Magistrate may himself make or direct any subordinate Magistrate to make, further inquiry into any complaint which has been dismissed under section 203 or sub section (4) of section 204, or into the case of any person accused of an offence who has been discharged.
Provided that no Court shall make any direction under this section for inquiry into the case of any person who has been discharged unless such person has had an oppor tunity of showing cause why such direction should not be made." 823 Thus this provision empowers, the Courts to direct further inquiry into any complaint which has been dismissed under section 203 or sub section (4) of section 204 or in the case of any person accused of the offence who has been discharged and no such order shall be made unless such person has had an opportunity of showing cause why such direction should not be made.
The question therefore is whether the necessity of making a further inquiry as envisaged in section 398 could be obviated or circumvented by taking resort to section 319.
As has already been held by this Court, there is need for caution in resorting to section 3 19.
Once a person was an accused in the case he would be out of reach of this section.
The word "discharge" in section 398 means discharge of an offence relating to the charge within the meaning of sections 227,239,245 and 249.
Refusing to proceed further after issue of process is dis charge.
The discharge has to be in substance and effect though there is no formal order.
The language of the section does not indicate that the word "discharge" should be given a restricted meaning in the sense of absolute discharge where the accused is set at liberty after examination of the whole case.
The cases of appellants 4 and 5 would be one of total discharge.
But it could not be said that they were not some of the accused in the case, or that cognizance was not taken of the offences against them.
A personmay be accused of several offences and he may be discharged of some of fences and proceeded against for trial in respect of other offences.
This was the position regarding appellants 1, 2 & 3, who were partially discharged.
The High Court did not subscribe to the view taken in State vs Gangaram Kalite reported in AIR 1965 Assam and Nagaland 9.
Therein a chargesheet having been filed against 9 accused persons in his Court the Sub Divisional Magistrate called for report from the police and on receipt of the final report ordered the discharge of the accused persons on 26.6.1961.
Subsequently on 22.8.1961, without any fresh chargesheet or a complaint, Sub Divisional Magistrate decid ed to proceed afresh against the accused persons and ordered summons to be issued to them, fixing a later date for evi dence.
On a reference by the Additional District Magistrate, calling into question the procedure followed by the Sub Divisional Magistrate a single bench of the High Court of Assam and Nagaland on the basis of Section 241 A of the old Code of the Criminal Procedure held that assuming that the discharge order had been validly passed, the Magistrate became functus officio so far as the case was concerned and unless there was a fresh complaint or a fresh chargesheet no action in the matter could have been taken by the Sub Divi sional Magistrate.
It was observed that as the order 824 passed was an order of discharge and not one of acquittal, a fresh complaint could under law have been entertained by the Magistrate and in the absence of any such complaint, any attempt to go back on the order of discharge passed by him and to revive the case, as if the case had not been dis charged, would amount in law to a review of the Judgment of the Magistrate which was not permissible having regard to section 369 of the Code of Criminal Procedure.
Section 369 provided that no Court when it had signed its Judgment, shall alter or review the same, except to correct clerical errors.
The High Court in the instant case followed the decision in Saraswatiben vs Thakurlal Hitnatlal & Anr., reported in AIR 1967 Gujarat 263, holding that if at one stage on the evidence before him the Magistrate found that there was no prima facie case against the accused, subsequently on en quiry as a result of further evidence if he felt that there was prima facie case against the accused whom he had dis charged under section 251 A (2) Cr.
P.C., it was open to him to frame a charge against the accused and that it was not necessary to take cognizance again and the Magistrate did not become functus officio.
The same view was taken in Amarjit Singh @ Amba vs The State of Punjab, reported in Punjab Law Reporter Vol. 85 (1983) p. 324.
The above views have to yield to what is laid down by this Court in the decisions above referred to.
The provi sions of section 319 had to be read in consonance with the provi sions of section 398 of the Code.
Once a person is found to have been the accused in the case he goes out of the reach of section 3 19.
Whether he can be dealt with under any other provi sions of the Code is a different question.
In the case of the accused who has been discharged under the relevant provisions of the Code, the nature of finality to such order and the resultant protection of the persons discharged subject to revision under section 398 of the Code may not be lost sight of.
This should be so because the complainant 's desire for vengeance has to be tempered with though it may be, as Sir James Stephen says; "The Criminal law stands to the passion of revenge in much the same relation as marriage to the sexual appetite." (General view of the Criminal Law of England, p. 99).
The A.P.P. 's application under section 2 16, in so far as the appellants 1 to 3 were concerned could be dealt with under section 2 16.
Appellants 4 & 5 could be dealt with neither under section 2 16 nor under section 3 19.
In that view of the matter the impugned order of the Magistrate as well as that of the High Court in so far as the appellants 4 & 5, namely, Vijya Bai and Jiya Bai are concerned, have to be set aside which we hereby do.
The appeals are allowed to that extent.
G.N. Appeals allowed.
|
One 'S ' lodged a First Information Report alleging that the appellants and two others were pelting stones at the house of informant, thereby causing damage to it and injur ing three women who were sitting at the chowk of the house.
After completing investigation the police framed charges under sections 147, 323, 325, 335 and 427 IPC and forwarded the charge sheet to the Judicial Magistrate under section 173 Cr.
P.C. Taking cognizance and after hearing the argu ments, the Judicial Magistrate discharged appellants 4 and 5 of all the charges and ordered that appellants 1, 2 and 3 be charged only under section 427 IPC.
Later, the Assistant Public Prosecutor submitted an application to the Magistrate under Section 2 16 Cr.
P.C. signed by one of the Prosecution Witnesses, for amending the charge claiming that a prima facie case under sections 147, 325 and 336 IPC was made out.
After hearing the parties, the Magistrate allowed the said application.
This order was challenged before the High Court by way of Revision Peti tions.
The Petitions were dismissed by the High Court, holding that it was not a case of reviewing the order of discharge passed by the Magistrate, but was a case of taking cognizance of the offence on the basis of evidence recorded by the Magistrate himself, which was not prohibited in law.
It was also held that under section 319 Cr.
P.C. the Magis trate was fully competent to take cognizance of the offences on the basis of evidence recorded by him though for the same offences order of discharge was passed by him earlier.
Aggrieved at the aforesaid order of the High Court, the appellants have preferred these appeals, by special leave.
On behalf of the appellants it was contended that the Magis trate 810 committed error of jurisdiction in passing the subsequent order and that he could not have revised his own order discharging the appellants.
It was also contended that section 319 Cr.
P.C. was applicable only to a person not being the accused, and so the accused could not have been discharged.
The Respondent State contended that the Magistrate found enough materials for taking cognizance and framing charges under sections 147, 323, 325 and 336 IPC and he had juris diction to do so under section 319 Cr.
P.C. irrespective of the application under section 216 Cr.
P.C. filed by the Assistant Public Prosecutor.
Allowing the appeals, HELD: 1.1.
Under Section 216 Cr. P.C., 'and to any charge ' means the addition of a new charge.
An alteration of a charge means changing or variation of an existing charge or making of a different charge.
Addition to and alteration of a charge or charges implies one or more existing charge or charges.
When the appellants 4 and 5 were discharged of all the charges and no charge existed against them, natural ly an application under section 216 Cr.
P.C. was not maintainable in their case.
The Magistrate therefore while disposing of the application under section 216 Cr.
P.C. only had no jurisdic tion to frame charges against the appellants 4 and 5.
In his order the Magistrate did not say that he was proceeding suo motu against them though he said that section 319 Cr.
P.C. was also clear in this connection.
[815B D] 1.2.
As regards appellants 1, 2 and 3, they were already accused in the case.
Section 216 Cr.
P.C. envisages the accused and the additions to and alterations of charge may be done at any time before record was satisfied that charges ought also to be framed under the other sections with which they were charged in the charge sheet.
That was also the prayer in the Assistant Public Prosecutor 's application.
However, the Magistrate invoked his jurisdiction under section 319 Cr.
P.C. [815E F] 2.
The provisions of section 319 had to be read in consonance with the provisions of section 398 of the Code.
Once a person is found to have been the accused in the case he goes out of the reach of section 319.
Whether he can be dealt with under any other provisions of the Code is a different question.
In the case of the accused who has been discharged under the rele vant provisions of the Code, the nature of finality to such order 811 and the resultant protection ' of the persons discharged subject to revision under s, 398 of the Code may not be lost sight of.
This should be so because the complainant 's desire for vengeance has to be tempered with.
[824E F] Chandra Deo Singh vs Prokash Chandra Bose & Anr., ; ; Joginder Singh & Anr.
vs State of Punjab and Anr.
, ; ; Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors., ; ; Dr. S.S. Khanna vs Chief Secretary, Patna & Ors., ; ; relied on.
State vs Gangaram Kalite, AIR 1965 Assam and Nagaland 91 approved.
Saraswatiben vs Thakurlal Himmatlal & Anr., AIR 1967 Gujarat 263: Amarjit Singh @ Amba vs The State of Punjab, Punjab Law Reporter Vols.
85 (1983) p. 324, disapproved.
General view of the Criminal Law of England by James Stephen, p. 99 referred to. 3.
The Assistant Public Prosecutor 's application under section 216, in so far as the appellants 1 to 3 were concerned, could be dealt with under section 216.
Appellants 3 & 5 could be dealt with neither under section 216 nor under section 319.
The order of the Magistrate as well as that of the High Court in so far as the appellants 4 and 5 are concerned, are set aside.
[824G H]
|
Civil Appeal No. 5933 1983.
From the Judgment and Order dated 19.2.
1980 of the Allahabad High Court in Civil Misc.
Petition No. 5860 of 1978.
R.K. Jain, Ms. Abha R. Sharma and R.P. Singh, for the Appellant.
M .C. Dhingra for the Respondents.
This appeal by special leave involves the question as to the interpretation of the provisions of Section 29 A of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as 'the Act ').
967 The Act was enacted by the U .P.
State legislature to provide, in the interest of the general public, for the regulation of letting and rent of, and the eviction of tenants from certain classes of buildings situated in urban areas, and for matters connected therewith.
The Act, as originally enacted, was confined in its application to buildings only.
It was amended by U.P. Act XXVIII of 1976 whereby Section 29 A was inserted with a view to give pro tection against eviction to certain classes of tenants of land on which building exists.
The relevant provisions of Section 29 A read as under: "(2) This Section applies only to land let out, either before or after the commencement of this Section, where the tenant, with the landlord 's consent has erected any perma nent structure and incurred expenses in execution thereof.
XXX XXX XXX (4) The tenant of any land to which this Section applies shall be liable to pay to the landlord such rent as may be mutually agreed upon between the parties, and in the absence of agreement, the rent determined in accordance with sub section (5).
(5) The District Magistrate shall on the application of the landlord or the tenant determine the annual rent payable in respect of such land at the rate of ten per cent per annum of the prevailing market value of the land, and such rent shall be payable, except as provided in sub section (6) from the date of expiration of the term for which the land was let or from the commencement of this Section, whichever is later.
XXX XXX XXX (7) The provisions of this section shall have effect, not withstanding anything to the contrary contained in any contract or instrument or in any other law for the time being in force.
" The appellant is the owner of a plot of land measuring 30 x 65 sq.
situated at Garhmukteshwar Road (Azad Road) Meerut.
The said plot of land was let out by the appellant to the respondent No. 1 on March 20, 1957 at an annual rent of Rs. 170.
After the said plot of 968 land had been let out to him, respondent No. 1 with the consent of the appellant constructed a building over the said plot in 1965.
After the enactment of Section 29 A the appellant submitted an application on September 29, 1976, before the District Supply Officer/Delegated Authority, Meerut, for fixation of appropriate rent for the plot of land under sub section (5) of Section 29 A.
The said appli cation of the appellant was dismissed by the District Supply Officer Delegated Authority by order dated April 14, 1978 on the view that the provisions of sub section (5) of Section 29 A for fixation of rent are applicable to those cases only in which there is no agreed rent and that in this case both the parties have accepted that the rent of land is Rs. 170 per year has been fixed on the basis of mutual agreement and, therefore, the question of re fixation of rent does not arise.
Feeling aggrieved by the said order of the District Supply Officer the appellant filed a writ petition in the High Court of Judicature at Allahabad under Article 226 of the Constitution of India.
The said writ petition was dis missed by a Division Bench of the said High Court by order dated February 19, 1980.
The learned Judges have held that under Section 29 A the District Magistrate has jurisdiction to determine the rent only in those cases where there is no agreement relating to rent and if there is an agreement between the landlord and the tenant then the District Magis trate has no jurisdiction to determine the rent.
The learned Judges have further found that in the instant case admitted ly an agreement existed between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum to the appellant and as such there could be no en hancement of the rent under sub section (5) of Section 29 A. Feeling aggrieved by the said decision of the High Court the appellant has filed this appeal after obtaining special leave to appeal.
Shri R.K. Jain, the learned counsel for the appellant has urged that sub section (4) of Section 29 A postulates determination of rent in accordance with sub section (5) in cases where the rent has not been mutually agreed upon between the parties.
The submission of Shri Jain is that the expression "such rent as may be mutually agreed upon between the parties" in sub section (4) of Section 29 A means rent which has been mutually agreed upon after the enactment of Section 29 A and any agreement prior to the said enactment would not preclude determination of rent under Section 29 A of the Act.
In support of this submission Shri Jain has invited our attention to the decision of the Full Bench of the Allahabad High Court in Trilok Chand vs Rent Control and Eviction Officer and Another, [ 969 In Trilok Chand vs Rent Control and Eviction Officer case (supra) a Full Bench of the High Court has considered the correctness of the decision of the Division Bench in the present case and has construed the provisions of Section 29 A of the Act.
In that case it has been held that sub section (4) of Section 29 A precludes determination of rent only in those cases where the agreement fixing the rent was entered into subsequent to the coming into force of Section 29 A.
It has been observed: "The reason is this, sub section (4) applies to the land to which Section 29 A applies.
It provides that the tenant shall be liable to pay to the landlord such rent as may be agreed between the parties.
In the absence of such agreed rent, the sub section further provides that the tenant is liable to pay the rent determined in accordance with subsec tion (5).
These terms are clear enough and indicate that the agreement envisaged thereunder is not the agreement, existed prior to coming into force of Section 29 A.
It refers to subsequent agreement only.
The words "such rent as may be mutually agreed upon between the parties" refers to future agreement and not the past agreement.
Subsection (4) again emphasises "such rent".
Such rent, in the context means the rent to be mutually agreed upon by parties.
Sub section (4) further states that in the absence of agreement, the rent has to be determined in accordance with sub section (5)." (p. 636) "Yet another reason to support our view could be found from sub section (7).
It provides that notwithstanding anything to the contrary contained in any contract or instrument or in any other law for the time being in force, the provisions of Section 29 A shall have effect.
It means clearly that the agreement if any existing on the date of coming into force of Section 29 A is no bar for enforcing the rights under sub section (5).
Sub sections (4) and (5) shall prevail and not the antecedent agreement, if any." (p. 636) The learned Judges of the Full Bench have overruled the decision of the Division Bench in the present case.
We are in agreement with the view propounded by the Full 970 Bench in Trilok Chand 's case (supra).
In our opinion, the words "such rent as may be mutually agreed upon between the parties" in subsection (4) of Section 29 A envisage an agreement with regard to rent entered by the landlord and tenant after the coming into force of Section 29 A. An agreement prior to the commencement of Section 29 A would not preclude determination of rent under sub section (5) of Section 29 A.
In this context it may be mentioned that the words "may be" used in sub section (4) of Section 29 A are much oftener used with reference to the future than the past or the present (Pollock C.B. in Brown vs Batchelor, 25 L .J. exhibit 299, Stroud 's Judicial Dictionary, 5th Edn. P. 1575).
In sub section (4) of Section 29 A the words "may be" are preceded by the word "as" and are followed by the words "mutually agreed upon" which indicate that the words are used with reference to the future.
The provisions of sub section (7) which give overriding effect to the provisions of Section 29 A over an existing contract also lend support to this construction.
We are, therefore, unable to uphold the view of the learned Judges of the Division Bench of the High Court in this case that there could be no enhancement of the rent under sub section (5) of Section 29 A in view of the agreement between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum.
The appeal is, therefore, allowed.
The judgment and order of the High Court dated February 19, 1980 as well as the order dated April 14, 1978, passed by the District Supply Officer/Delegated Authority, Meerut, are set aside and the matter is remanded to the District Supply Officer/Delegated Authority, Meerut for consideration of the application submitted by the appellant for fixation of rent under Section 29 A of the Act in accordance with law.
No order as to costs.
G.N. Appeal allowed.
|
In 1957, the appellant let out a plot of land to Re spondent No. 1 at an annual rent of Rs. 170.
Respondent No. 1 constructed a building on the plot of land in 1968, with the consent of the appellant.
After the insertion in 1976 of Section 29 A in the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, appellant filed an application before the delegated authority under the Act for fixation of appropriate rent for the said land under Section 29 A(5) of the Act.
The application was dismissed by the authority on the ground that Section 29 A(5) was applicable only to those cases in which there was no agreed rent and since the parties, by mutual agreement, have accepted the annual rent at Rs. 170 there was no question of refixation of the rent.
Aggrieved, the appellant filed a Writ Petition in the High Court, which was dismissed.
The appellant has preferred this appeal, by special leave, against the said order of the High Court.
Allowing the appeal, HELD: 1.
The words "such rent as may be mutually agreed upon between the parties" in sub section (4) of Section 29 A of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 envisage an agreement with regard to rent entered by the landlord and tenant after the coming into force of Section 29 A. An agreement prior to the com mencement of Section 29 A would not preclude determination of rent under sub section (5) of Section 29 A.
Generally, the words 'may be ' are much oftener used with reference to the future than the 966 past or present.
In sub section (4) of Section 29 A the words 'may be ' are preceded by the word 'as ' and are allowed by the words 'mutually agreed upon ' which indicate that the words are used with reference to the future.
The provisions of sub section (7) which give overriding effect to the provisions of section 29 A over an existing contract also lend support to this construction.
The High Court was not correct in holding the view that there could be no enhance ment of the rent under subsection (5) of Section 29 A in view of the agreement between the appellant and the tenant that the tenant shall pay rent at the rate of Rs. 170 per annum.
[970A D] Trilok Chand vs Rent Control and Eviction Officer & Anr., ; approved.
Brown vs Batchelor, ; referred to.
Stroud 's Judicial Dictionary,, 5th Edn.
p. 1575; re|erred to.
The Judgment and order of the High Court dated Febru ary 19, 1990 as well as the order dated April 14, 1978 passed by the Delegated Authority are set aside and the matter is remanded to the Delegated Authority for considera tion of the application submitted by the appellant |or fixation of rent under Section 29 A of the Act in accordance with law.
[970E F]
|
ivil Appeal No. 1465 of 1990.
From the Judgment and Order dated 13.3.
1987 & 27.2.1989 of the Allahabad High Court in S.T.R. Nos.
522/86, 202/89 & 203 of 1989.
S.C. Manchanda and A.K. Srivastava for the Appellant.
The Judgment of the Court was delivered by RANGANATHAN, J.
These three Special Leave Petitions can be disposed of together as they involve a common point.
Notices of these petitions have been duly sent but there is no appearance on behalf of the respondents.
After hearing the counsel for the petitioner we grant leave and also proceed to dispose of the appeals.
The respondents in each of these cases was subjected to assessment under the U.P. Sales Tax Act.
The assessment years are different for the three cases being assessment years 1981 82, 1983 84 and 198283 respectively but this does not make any material difference.
In each of the cases, the assessee preferred an appeal to the first appellate authori ty and, along with the appeal, moved an application praying for the waiver of any deposit of tax which was necessary before the appeal could be entertained.
But the first appel late authority, in two of the cases, dismissed the applica tion.
In the third he directed the assessee to deposit 10% of the disputed tax within ten days from the, date of the order.
Dis satisfied with the orders of the first appellate authority, 1033 each of the assessees preferred an appeal to the Tribunal.
The Tribunal, in all the three cases, directed the assessee to pay 10% of the assessed tax before the appeal could be entertained.
Each of the assessees preferred a revision petition before the High Court.
The learned Single Judge who heard the revision petition in the main appeal preferred by Atma Ram Misra distinguished the earlier judgment of the Court in Vishamber Nath vs Commissioner of 'Sales Tax, U.P., [1979] U.P.T.C. 1276 and held that the condition requiring deposit of tax was not applicable in the instant case as no returns at all had been filed by the assessee for the relevant assessment year and no turnover stood admitted by the asses sees at any stage of the assessment proceedings.
This was followed in the other two cases with the result that the first appellate authority was held bound to entertain the appeals of the assessee without calling upon it for deposit of any portion of the tax.
It is this conclusion of the learned Single Judge that is the subject matter of the present appeals.
The question at issue turns upon the language of section 9 of the U.P. Sales Tax Act.
Since this section has been amended from time to time, it is necessary to extract the provisions of this section, in so far as it is relevant for the present purposes, as it stood from time to time: The section, when originally enacted read as follows: "Sec. 9 Appeals.
(1) Any assessee objecting to an assessment made on him may, within thirty days from the date on which he was served with notice of the assessment, appeal to such authority as may be prescribed: Provided that no appeal shall be entertained under this sub section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as might have become payable as the case may be." This provision made it obligatory on an assessee to pay up the admitted tax before his appeal against the assessment could be entertained.
1034 There were amendments to the above sub section by Amend ment Act No. 8 of 1954, Amendment Act No. 7 of 1959 and Amendment Act No. 11 of 1968.
These are not material for the present purposes.
Next came an amendment by Amendment Act No. 3 of 1971 which took effect from 1.10.1970.
This substi tuted the following provision in place of the original sub section (1): "(1) Any dealer objecting to any order made by the assessing authority other than an order mentioned in section 10 A, may within thirty days from the date of service of the copy of order, appeal to such authority as may be prescribed: Provided that no appeal against an assessment order under this Act shall be entertained unless the appel lant has furnished satisfactory proof of the payment of not less than: (a) When return is filed the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the return filed by him or at a later stage in proceeding before the assessing authority, whichever is greater.
(b) Where no return is filed the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be admitted at any stage in proceedings before the assessing authority, or 20 per cent, of the amount of tax of fee assessed whichever is greater.
Provided further that the appellate authority may, for special and adequate reasons to be recorded in writing, waive or relax the requirements of clause (b) of the pro ceeding proviso.
" This provision, it will be observed, effected two important changes: (a) The assessee had to deposit the highest amount of tax due on his admitted turnover.
However, if he had filed no return and had been assessed to tax, he had to deposit 20% of the assessed tax, if that was higher than the admitted tax; and 1035 (b) A discretion was conferred on the appellate authority to waive or relax the above requirement in appropriate cases.
The next amendment was by U.P. Act No. 12 of 1979 with effect from 1 11 1978.
The provision, as now amended, stood as follows: "(1) Any dealer or other person aggrieved by an order made by the assessing authority, other than an order mentioned in section 10 A may, within thirty days from the date of serv ice of the copy of the order, appeal to such authority as may be prescribed: Provided that no appeal against an assessment order under this Act shall be entertained unless the appel lant has furnished satisfactory proof of the payment of not less than (a) Where all the returns for the assessment year have been filed, the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the returns filed by him or at any stage in any proceeding under this Act, whichever is greater; or (b) Where some the returns for the assessment year have not been filed or no return has been filed for such year, the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the returns, if any, filed by him or at any stage in any proceedings under this Act or 20 per cent of the amount of tax or fee assessed whichever is greater; and Provided further that the appellate authority may, for special and the adequate reasons to be recorded in writing,.
waive or relax the requirements of clause (b) of the preceding proviso.
XXX XXX XXX This provision was in substance the same as the earlier one, but a change in language was necessitated by the fact that the Act contemplated not one but several returns from an assessee in the course of an assessment year and the earlier provision, which proceeded on the 1036 basis of a single return due from an assessee for the year having been filed or not filed, needed to be clarified.
Finally came Amendment Act No. 22 of 1984 on the heels of earlier ordinances which effected an amendment in Section 9 with effect from 12.2.1983.
The new sub section reads as follows: "(1) Any dealer or other person aggrieved by an order made by the Assessing Authority, other than an order mentioned in Section 10 A, may, within thirty days from the date of service of the copy of the order, appeal to such authority as may be prescribed: Provided that where the disputed amount of tax, fee or penalty does not exceed one thousand rupees, the appel lant may, at his option, request the Appellate Authority in writing for summary disposal of his appeal, whereupon the Appellate Authority may decide the appeal accordingly.
(I A) The manner and procedure of summary disposal of appeal shall be such as may be prescribed.
(I B) No appeal against an assessment order under this Act shall be entertained unless the appellant has furnished satisfactory proof of the payment of not less than (a) the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the returns filed by him or at any stage in any proceedings under this Act, whichever is greater, where all the returns for the assessment year have been filed, or (b) the amount of tax or fee due under this Act on the turnover of sales or purchases, as the case may be, admitted by the appellant in the returns, if any, filed by him or at any stage in any proceedings under this Act, or twenty per cent, of the amount of tax or fee assessed, whichever is greater, where some of the returns for the assessment year have not been filed or no return has been filed for such year: 1037 Provided that the Appellate Authority may, for special and adequate reason to be recorded in writing, waive or relax the requirement of the Clause (b) of this sub section in so far as it relates to deposit of twenty per cent of the amount of tax or fee assessed.
" Except for shifting the contents of the relevant provision to new subsection (1 B) and for a recasting of the section, the new provision has brought about no material change in the position so far as the issue before us is concerned.
It may be mentioned here that the assessment years before us being 1981 82 to 1983 84 appear to be governed by the provisions of the Act as they stood before the amendment in 1983.
However this does not make much of a difference since, as already pointed out, the effect of the provisions before and after amendment is the same.
The section, as it stands since 1 11 78, provides for two sets of situations.
Clause (a) deals with a case where all the returns for the assessment year have been filed by the assessee.
This means that there is a figure of turnover admitted by the assessee.
Again, in the course of the as sessment proceedings, it is possible that he may have admit ted a different figure of turnover from that disclosed in his returns.
In such a situation the provision requires the assessee to deposit the amount of the tax admitted by him (either in the returns or at any subsequent stage of the proceedings before the officer, whichever is greater).
Clause (b) deals with the situation where (a) some, though not all, the returns due from the assessee have been filed and (b) no return at a11 has been filed.
In this eventuali ty, the requirement of deposit turns not merely on the admitted amount of tax (as there may be no such admitted tax where no return at all has been filed) but is also made to turn on the assessed tax.
The provision requires the asses see to deposit the amount of tax admitted in the returns or at any stage of the proceedings under the Act or 20% of the amount of tax assessed whichever was greater.
In other words, the provision contemplates a comparison of (i) the admitted tax and (ii) 20% of the assessed tax.
Whichever of these two figures is higher has to be deposited by the assessee before his appeal against the assessment can be entertained.
There are perhaps two ways of reading clause (b).
One is that, in a case where no return at all has been filed and no admission had at all has been made by the assessee of any figure of turnover, then the first figure to be computed under clause (b) will be zero.
If, however, there is an assessment made on the assessee of any tax higher than nil, that 1038 will be the greater of the two figures to be computed under the clause and the assessee will have to deposit 20% of the assessed tax.
The other way of interpreting the sub section, which appears to have commended itself to the High Court, is to say that clause (b) will be attracted only if two figures are available for comparison: (1) a figure of turnover admitted in a return or in subsequent proceedings; and (2) a figure of assessed tax.
If the assessee has filed no return at all and if he has made no admission regarding his turn over at any stage of the proceedings, then figure (1) above cannot be computed.
Hence it is not possible to make a comparison between the two figures indicated above and therefore the provisions of deposit contained in clause (b) will not at all apply.
We think it is manifest that the first of the two con structions referred to above is the correct one.
The inter pretation accepted by the High Court, is, in our view, erroneous for two reasons.
In the first place, it does not give full effect to the last few words of clause (b) which clearly cover a case where no return at all has been filed for the assessment year in question.
True, even on this interpretation, the provision will govern a case where no return has been filed but the assessee has, in the course of the assessment proceedings, made some admission regarding his turnover but such cases are likely to be very few.
When the provision clearly contemplates a deposit of tax in cases where no return has been filed or where only some returns have been filed, it would be running in the teeth of the provision to interpret it in such a manner as to exclude the majority of such cases.
Secondly, the High Court 's interpre tation leads to a clear anomaly.
For, it would indeed be odd to suggest that a deposit is necessary where an assessee has filed his returns or admitted his turnover in the course of assessment proceedings but that an assessee who has not filed any return at all or made any admission at all can be allowed the privilege of an appeal even without making any deposit at all.
Such an interpretation will only result in putting a premium upon recalcitrant and dishonest assessees.
We do not think that this is the correct and proper way of interpreting the statutory provision.
The clear intent of the clause is that an assessee should be asked to pay up the admitted tax or 20% of the assessed tax, whichever is great er, before an appeal could 'be entertained and the provision should be interpreted in such a way as to give effect to this intent.
In this context, it is significant that the provision does not call upon the assessee to pay up the entire amount of assessed tax.
The Legislature fully appreciates that an assessment made, in the absence 1039 of any return or admission, may not always reflect the correct figure of tax leviable on the assessee.
It could be that the assessed figure involves an estimate which takes it beyond the figure which may be ultimately determined in the case.
But, at the same time, it cannot be said, merely because an assessee has not filed any return or made any admission expressly, that he necessarily disputes the en tirety of the assessed tax.
It could well be that he has not done either of these things just to postpone the payment of even the tax which he may not be in a position to contest.
Realising this situation, the provision in question makes two relaxations.
It does not make it obligatory on the assessee to deposit the entire amount of assessed tax.
It restricts the deposit of 20% of the assessed tax (a figure which can be treated as an ad hoc statutory quantification, on an average, of the tax demand in such cases on which there could be no quarrel).
Added to this, it empowers the appellate authority to waive or relax the requirements of clause (b).
This is because the appellate authority will be in a position to, prima facie, judge the extent to which, in the circumstances of a particular case, there is a real dispute in the appeal and to insist upon the deposit of such percentage of the assessed tax (not exceeding 20%) as it may consider appropriate.
If the intention of the legislature were only that the deposit should be confined only to the admitted tax in all cases, the second part of clause (b) referring to deposit of 20% of the assessed tax and, indeed, even the bifurcation made in clauses (a) and (b) would be redundant.
We are, therefore, of opinion that the deposit contemplated under clause (b) also covers cases where no returns have been filed and no admission of any turnover has come from the assessee.
We would like to make it clear that we modify the judg ment of the High Court only in so far as it directs that an assessee who has not made any return at all and has not admitted any figure of turn over in the course of the as sessment proceeding is relieved of the requirement to depos it 20% of the assessed tax under section 9(1) or 9(1 B), as the case may be.
What we have held, however, does not in any way affect the power of the appellate authority to waive or reduce the amount to be deposited, depending on the circum stances of the each case, under the proviso to the above sub section.
We should also like to make it clear that, despite our above conclusion, we do not propose to interfere in any of the three appeals, with the ultimate result of the High Court 's decision.
This is because 1040 the High Court has already permitted the appeals to be disposed of without requiring any deposits.
The learned counsel for the appellants is not in a position to state whether the appeals are still pending or whether they have since been disposed of pursuant to the directions of the High Court.
It would not be proper, in this situation, to modify the decretal position of the High Court 's order.
We, therefore, dismiss these appeals but make it clear that we do not agree with the High Court 's interpretation of the statutory provisions for the reasons set out above.
We make no order as to costs in the circumstances of the case.
R.N .J.
Appeals dis missed.
|
The respondents in each of these three cases was sub jected to assessment under the U.P. Sales Tax Act.
In each of these cases the assessee preferred an appeal to the first appellate authority and moved an application for the waiver of any deposit of the tax which was necessary before the appeal could be entertained.
The first appellate authority in two of the cases dismissed the application and in the third directed the assessee to deposit 10% of the disputed tax within ten days from the date of the order.
Dis satis fied with the orders of the first appellate authority each of the assessees preferred an appeal to the Tribunal.
The Tribunal in all the three cases directed the assessee to pay 10% of the assessed tax before the appeal could be enter tained.
Each of the assessees preferred a revision petition before the High Court.
The High Court held that the condition requiring deposit of tax was not applicable in the instant case of M/s Atma Ram Misra as no returns at all had been filed by the asses see for the relevant assessment year and no turnover stood admitted by the assessee at any stage of the assessment proceedings which was followed in the other two cases with the result that the first appellate authority was held bound to entertain the appeals of the assessee without calling upon it for deposit of any portion of tax.
The department has preferred these appeals by special leave against the decision of the single judge of the High Court in all the three cases.
This Court while dismissing the appeals made it clear that it did not agree with the High Court 's interpretation of the statutory provisions and, HELD: The provision in question makes two relaxations.
It does not make it obligatory on the assessee to deposit the entire amount of assessed tax.
It restricts the deposit to 20% of the assessed tax.
[1039C] 1032 It empowers the appellate authority to waive or relax the requirements of clause (b).
[1039C] The deposit contemplated under clause (b) also covers cases where no returns have been filed and no admission of any turnover has come from the assessee.
[1039E] This, however, does not in any way affect the power of the appellate authority to waive or reduce the amount to be deposited, depending on the circumstances of each case, under the proviso to the above subsection.
[1039G] Vishamber Nath vs Commissioner of Sales Tax, U.P., [1979] U.P.T.C. 1276.
|
ivil Appeal No. 1348 of 1990.
From the Judgment and Order dated 23.7.
1985 of the Bombay High Court in W.P. No. 3144 of 1981.
Tunara, J.A. Karia and M.N. Shroff for the Appellant.
Ashok H. Desai, Solicitor General, U.J. Makhija, B.S. Bisaria.
Mrs. A.K. Verma and Vivek Dholakia for the Respond ents.
V.N. Ganpule, V.N. Patil and A.S. Bhasime for the State of Maharashtra.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
The respondent is a statutory body corporate initially constituted under the Bombay Port Trust Act, 1879 (Bombay Act 6 of 1879), for short 'State Act '.
Under Sec.
26 thereof, the Board has power to acquire and hold movable and immovable property and also has power to lease, to sell or otherwise convey movable and immovable property which may have become vested in or acquired by them.
The respondent has appointed A.J. Mescarnas, 832 Assistant Estate Manager as their power of attorney holder to lease out its properties from time to time or terminate the leases and to lay action for ejectment, etc.
The re spondent owns the Building bearing Old R.R. No. 941 known as 'Frere Land Estate" in which room No. 2 admeasuring 28.27 sq.
meters was leased out to Vasantkumar Radhakisan Vora, for short 'Vasantkumar '.
The appellants are his legal repre sentatives.
He was served with a notice under Sec. 106 read with section 111(h) of the terminating the tenancy in terms of the covenants of lease and was asked to deliver possession of the demised property giving one month 's time from 22nd January, 1975.
It was served on Vasantkumar on January 28, 1975.
The notice of termination thereby became effective from 28th February, 1975.
In the meanwhile Major Port Trust Act, 1963 (Act No. 38 of 1963), for short the "Central Act", was made applicable to the Bombay Port Trust by operation of section 133 (2A) with effect from February 1, 1975.
After the expiry of one month, ejectment application was filed under section 41 of the Bombay (Act 15 of 1882) as amended under 1963 Maharashtra Amendment Act, against Vasantkumar and another for delivery of possession.
After 1976 Amendment Act 19 of 1976 came into force suits were laid against three other tenants.
It was pleaded by the respondent that it is a successor in interest of the Board under the State Act and were entitled to eject the tenants and to the possession of the demised portions.
The plea of Vasantkumar in his written statement elaborated by the learned counsel, is that the suit is not maintainable.
Since the State Act ceased to be operative with effect from Febru ary 1, 1975, the quit notice issued under Section 106 read with Section 111(h) of became ineffective and without determining the tenancy afresh, the suit was not validly laid.
It was also pleaded that the respondent had promised that in deposit of certain amount which the tenant did, Vasantkumar would be given on lease of a portion in the reconstructed building.
Thereby the re spondent is estopped by promissory estoppel to have the tenant ejected.
It may be mentioned at this juncture that one suit was dismissed on the ground that the tenancy was not duly determined as per law.
Other suits were decreed.
No appellate forum has been prescribed under Amendment Act of 1963 but a substantive suit on original side provided was available.
By Maharashtra Amendment Act 19 of 1976 to the principal Act such a right to appeal was incorporated.
Vasantkumar filed writ petition in the High Court under Articles 226 and 227 and others filed regular appeals to a Bench of two Judges of the Small Cause Court and are stated to be pending.
833 2.
In the writ petition the petitioner challenged the vires of 1963 Amendment Provisions and also 1976 Amendment Provisions to the .
When it came up for heating before Masodkar, J., he referred it to a Division Bench.
The Division Bench by its judgment dated January 17/18, 1982 up held the constitutional validity of those sections and remitted to the learned Single Judge to dispose of the writ petition on merits.
The learned single Judge considered and negatived two points namely, validity of the notice terminating the tenancy; promissory estoppel and dismissed the writ petition.
Vasantkumar had leave of this Court under article 136.
The primary contention of Mr. Turana, learned counsel for the appellant, is that quit notice issued under Sec. 106 read with Sec.
III(h) of the T.P. Act is invalid.
By issue of quit notice no right had accrued to the respondent.
Termination of tenancy became operative only on expiry of one month given thereunder, i.e. February 28, 1975, by which date the State Act became inoperative as from February 1, 1975 the Central Act came into force.
The respondent under the Central Act acquired, by statutory operation, the immov able property including the demised one in Frere Land Estate and thereby became a new landlord.
Termination of tenancy is an act inter vivos by operation of Sec. 106 read with Sec.
III(h) of T.P. Act.
Under Sec.
109 thereof, the respondent, not being a living person, is not entitled to the benefit of the quit notice as its operation is not saved by Sec. 2(d) and Sec.
5 thereof.
The suit, thereby, is not maintainable admittedly no quit notice determining the tenancy was issued after February 1, 1975.
The edifice of the argument was built up on shifting sand and when it was subjected to close scrutiny it crumbled down traceless.
Let us first deal with the arguments on the foot of the provisions of T.P. Act.
Section 2(d) of the provides saving of the previous operation of law.
It states that: " . nothing herein contained shall be deemed to affect save as provided by Sec.
57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a court of competent jurisdiction.
Section 106 empowers the landlord to terminate the contract of lease of immovable property, if it is for agricultural or manufacturing purpose by giving six months notice and ter minable on the part of either lessor or lessee, by giving fifteen days ' notice expiring with the end of the month of the tenancy.
Section ill(h) provides that, "on the expira tion of a notice to determine the lease, or to quit, or of intention 834 to quit, the property leased, duly given by one party to the other".
Section 109 is Rights of lessor 's transferee: "If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transfer ee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, sub ject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer cease to be subject to any of the liabilities imposed upon him by the lease unless the lessee elects to treat the transferee as the person liable to Provisos are not necessary, hence omitted.
Reading of these fascicule of provisions clearly demonstrates that a lessee of immovable property from month to month is terminable by giving fifteen days ' notice or as per the terms of the contract of the lessee.
(In this case the contract provides to give one month 's notice).
On expiry of one month from the date of receipt of the notice the lease shall stand terminated.
The lessor 's right on transfer of the immovable property including the lease hold rights created on the property sold, the transferee, in the absence of contract to the contrary, shall possess all the rights and if the lessee so elects, be subject to all the liabili ties of the lessor as to the property or part thereof so long as he is owner of it.
But by mere transfer the lessor shall not cease to be subject to any liabilities imposed upon him by contract of lease unless the lessee elects to treat the transferee as the person liable to him.
Undoubtedly, by issuance of notice to quit automati cally the right created thereunder, namely, cessation of the lease, does not become effective till the period prescribed in the notice or in the statute i.e. Sec.
106 expires.
On expiry thereof the lease becomes inoperative and the lessor acquires right to have the tenant ejected.
When he fails to deliver vacant possession, the lessor would be entitled to have the tenant ejected and taken possession in due process of law.
The successor in interest whether acquires these rights and the rights acquired by lessor would enure for his benefit is the crucial question.
In Halsbury 's Laws of England, 4th Edition, Vol. 27, paragraph 193 discussed the right accrued to the transferee of the benefit of 835 the notice to quit issued by the predecessor in title thus: "The notice when once given enures for the benefit of the successors in title of the landlord or tenant giving it.
" Hill and Redman in "Law of Landlord and Tenant", 17th Edition, Vol.
I, at page 488, paragraph 405 have stated to the similar fact thus: "The notice when once given enures for the benefit of the successor in title of the landlord or tenant giving it.
" In Mulla 's commentary on the , 6th Edition, at page 676 it is also stated thus: "Notice enures for the benefit of the successor in title of the lessor or lessee giving it." In Chitaley 's Transfer Property Act, 4th Edn., 1969:, Vol.
III, Note 35, it is stated thus: "Where the lessor gives notice to quit and then assigns his interest to another the assignee can take advantage of the notice." In N.P.K. Raman Menon vs Collector of Malabar, AIR ,1924 Madras 908 a Division Bench of the Madras High Court held that:, "English cases recognise that the person who is the landlord and entitled to possession, on the date of the notice to quit, is the proper person to give the notice and :that an assignee within the currency of that notice can take advan tage of the notice sent by his assignor and rely upon it, when he brings a suit for recovering possession.
No doubt Mr, Tunara placed strong reliance on the decision of Trimbak Damodhar Raipurkar vs Assaram Hiraman Patil &Ors., [1962] Suppl.
1 SCR 700.
The facts therein are that in 1943 a lease on agricultural land for five years was created Before the expiry thereof Bombay Tenancy Act, 1939 was made applicable to the area where the land was situated and under Sec.
23(1)(b) of that Act the period of lease was statutorily extended to ten years During the subsistence of the contractual tenancy it was statutorily extended and the Bombay of 1948 came into force.
In March 1952 notice was given to the tenant that the tenancy expired on March 31, 1953 and called upon the tenant to deliver possession.
In the meanwhile the Bombay Act 33 of 1952 came into force.
Its effect was that the lease automatically stood extended for ten years from time to time, unless terminated by giving one year 's notice averting that the land was required bona fide by the landlord for personal cultivation and that income would be the main source of income of the landlord.
It was contended that since 1952 Amending Act was not retrospec tive, the technical requirement of notice to quit do not apply.
The question was whether the landlord was entitled to eject the tenant without complying with the statutory re quirement.
In that context it was held by the Constitution Bench that by operation of the statutory provisions the period of lease of 10 years from time to time was automati cally extended unless the tenancy was validly terminated by giving a notice of one year or surrender was made by the tenant as specified in the statute.
The ratio therein has little application to the facts of this case.
In Hitkarini Sabha vs The Corporation of City of Jabalpur & Anr., the lease was granted by the Administrator without authority under the Statute.
Therefore, the lease was held to be void.
The notice as required under T.P. Act was held to be mandatory, but was not done.
Therefore the lease was subsisting and thereby as his land was acquired the tenant was entitled to compensation pro rata under Section 11 of the Land Acquisition Act.
We are at a loss to understand, how the ratio thereunder will be of any assistance to the appellant.
In Lower vs Sorreli, [ 1963] 1 Queen 's Bench Division 959 the question therein was whether the notice to quit was a valid notice.
Admittedly, second notice was given before the expiry of the first notice.
It was held that when such notice were issued withdrawing the first notice by issuance of the second notice, a new tenancy has been creat ed for the tenant to remain in possession until the expiry of the later notice on September 29, 1961, to which the tenancy sections 2(1) and 23(1) of the Agricultural Holdings Act, 1948 would apply.
Accordingly it was held by the Court of Appeal that there was no valid notice to quit.
The ratio therein also is of no avail to the appellant.
No doubt in Gurumurthappa vs Chickmunisamappa, AIR a Division Bench of Mysore High Court held that the successor in interest is not entitled to avail the notice to quit given by the original landlord.
In the light of the above discussion this view is not good law.
It is no doubt true that per se sec.
109 of T.P. Act does not apply to the facts of this case.
It contemplates transfer of lessor 's right inter vivos.
But when right, title and interest in immovable property 837 stand transferred by operation of law, the spirit behind Sec.
109 per force would apply and successor in interest would be entitled to the rights of the predecessor.
This is what the learned single Judge of the High Court in the impugned judgment has held and we approve of the view as correct.
We, accordingly, hold that the notice terminating the tenancy of Vasantkumar would enure to the benefit of the respondent and it could be availed of by the respondent to lay the suit for ' ejectment.
The matter could also be gleaned through the statuto ry operation as well.
By operation of Sec. 26 of the State Act, the Board of Trustees acquired and held the demised property which includes lease hold interest therein.
Section 29(1) of the Central Act interposed and from February 1, 1975 the appointed date, in relation to Bombay Port all the movable and immovable property, assets and funds of the predecessor Board shall vest in the Board, i.e. the respond ent.
By operation of Clause (b) thereof all debts, obliga tions and liabilities incurred, all contracts entered into and all matters and things engaged to be done, by with or for the Central Govt., or as the case may be, the other authority (i.e. predecessor Board under State Act) immedi ately before such day, for or in connection with the pur poses of the port, "shah be deemed to have been incurred, entered into and engaged to be done by, with or for the Board.
" It further postulates that all rates, fees, rents and other sums of money due to the Central Govt., or as the case may be, the other authority (i.e. the predecessor Board) in relation to the port immediately before such day shall be deemed to be due to the Board, i.e. the respondent.
Other clauses are not necessary.
Hence omitted.
Thereby by operation of Sec.
29(1)(b) the immovable properties, i.e. demised rooms and all contracts in relation thereto includ ing the lease and the right to ejectment pursuant to quit notice stood transferred to the respondent.
Sub section 2(A) of Sec.
133 'Repeal ' of the states that on the application of the Central Act to the Port of Bombay, except the provisions thereof relating to municipal assessment of the properties of the port of Bombay and matters connected therewith, shall cease to have force in relation to that port.
But subclause (c) of sub section (2D) of Sec. 133 provides that notwith standing anything contained in sub section (2A) (2B) and (2C) anything done or any action taken or purported to have been done or taken including . . notice . . issued . shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken on the corresponding provisions of this Act.
By 838 operation of Sec.
29(1)(a) & (b)read with Sec.
133(2A) the quit notice concerning the vested immovable property i.e. the demised rooms vested in the respondent shall be deemed to have been done or taken under Sec.
29(1) and Sec.
133(2A)(C) of the Central Act.
There is no inconsistency between the Central and the State Acts in this regard.
Section 6 of the postulates the effect of repeal thus: 'Where this Act or any (Central Act) or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a dif ferent intention appears, the repeal shall not (b) affect the previous operation of any enactment so re pealed or anything duly done or suffered thereunder ' or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so re pealed; or . . any such investigation, legal proceedings or remedy may be instituted, continued or enforced . . as if the repealing Act or Regulation had not been passed." Section 17(1) provides under: "In any (Central Act) or Regulation made after the commence ment of this Act, it shall be sufficient for the purpose of indicating the application of a law to every person or number of persons for the time being executing the functions of an office, to mention the official title of the officer at present executing the functions of an office, or that of the officer by whom the functions are commonly executed.
" Section 17 of the substitutes the func tionaries under the Central Act to those of the function aries under the State Act.
Section 6 gives effect to the previous operation of anything done or subsists the right acquired or privilege accrued under the Repealed Act and the legal proceedings of remedy may be instituted, continued or enforced as if the repealing Act had not been passed.
There fore, the operation, efficacy and effectiveness of the quit notice issued by the power of attorney Agent of the respond ent i.e. the Asstt.
Estate Manager has been acquired by the respondent Board.
The rights and 839 remedy accrued to the respondent under the State Act namely termination of tenancy by issue of quit notice under Sec. 106 and 111(h) of T.P. Act and on expiry of thirty days i.e. on February 28, 1975 the respondent Board became entitled to institute the proceedings in the suits to have the tenants ejected under Sec.
41 of the Provincial Small Cause Courts Act.
The contention of Mr. Tunara that the Central Act and the would apply only to the acts done under the Central Act or State Act, by exercise of the statutory power which alone have been validated and they have no application to bilateral acts under Central Act and the notice under Sec. 106 of T.P. Act is not the one either under the Central or the State Act and that the notice issued is not saved, is devoid of force.
The Board of Trus tees under the State Act have merely changed their hats and stand transposed to be functionaries under the Central Act.
The functionaries under both the Acts are the same.
The notice was issued by the Asstt.
Estate Manager by virtue of his official function as power of attorney agent on behalf of the respondent.
The Board of Trustees have the right to terminate the lease under Sec.
26 of the State Act and those rights stood transferred and vested under Sec.
29(1) of the Central Act.
Therefore, the termination of tenancy and laying the action for ejectment are integrally connected with their official capacity.
There is a reasonable connec tion between the impugned acts and official duty.
Thereby, they are the acts done under the Central Act.
In Commission er for the Court of Calcutta vs Abdul Rahim Osman & Co., Sec.
142 of the Calcutta Port Act came up for interpreta tion.
Thereunder it was contended that short delivery of the goods was an omission and not an act done under the Act and though the suit was laid beyond three months, it was not barred by limitation.
Section 142 enjoins that no suit shall be brought in for anything done or purported to have been done beyond three months.
It was held that after the expiry of three months from the day on which the cause of action had arisen for short delivery, which was done or purported to have been done under the Act, the suit was barred by limitation.
It was further held that in order to apply any bar under Sec.
142 it was first to determine whether the act which is complained of in the suit can be said to have been within the scope of the official duty of the person or persons who are sought to be made liable.
This question can be answered in the affirmative where there is a reasonable connection between the act and the discharge of the official duty.
Once the scope of official duty is determined, Sec.
142 will protect the defendant not only from a claim based on breach of the ' duty but also from a claim based upon an omission to perform such 840 duty.
The protection cannot be held to be confined to acts done in the exercise of a statutory power but also extends to acts done within the scope of an official duty.
This view was upheld in Trustees of Port of Bombay vs The Premier Automobiles Ltd. & Anr., ; where there was short delivery of one bundle out of 153 bundles consigned from Japan and omitted to be delivered and it was held to constitute an act done within the ambit of Sec. 87 of the Bombay Port Trust Act, 1879 and the bar of limitation pre scribed thereunder would apply.
Thus we have no hesitation to hold that the notice under Sec. 106 and Sec.
111(h) of the is an act done or purported to have been done in the official capacity as Power of Attorney holder/Asstt.
Estate Manager on behalf of the respondent, Board of Trustees; the right to lay the suit on expiry of one month 's period prescribed in the notice, namely, on or after February 28, 1975 had accrued to the respondent.
It is an act done or purported to have been done under the Central Act in exercise of the official function.
The right to lay the suit on determination of the tenancy by notice dated January 20, 1975 under the State Act is a transfer of inter est by operation of Sec.
29(1) of the Central Act, to the respondent under Sec.
109 of the .
Thereby the quit notice is valid.
The suit laid, pursuant thereto, is valid and legal.
Accordingly order of ejectment passed by the Small Cause Court is perfectly legal and unassailable.
The next contention of Mr. Tunara is that the re spondents are estopped from ejecting the appellant and other tenants who are similarly situated on the principle of promissory estoppel.
His contention is rounded upon the fact that the Estate Manager of the respondent in his letter dated April 3, 1972 directed the tenant to deposit Rs. 11,000 and odd for grant of tenancy after reconstruction of the flats therein.
The tenants placing reliance thereon have deposited the amount demanded from them and acted upon the promise to their detriment.
The respondent now shall be declared to be estopped from ejecting them from the demised respective portions leased out to them.
The learned Solici tor General contended that the Estate Manager has no author ity to give a promise.
Even assuming that he has such a power, it is conditional one, namely, approval by the Board.
The Board in its meeting resolved to reject the claim and on reconstruction decided to allot to its own employees out of administrative necessity.
Therefore, the promissory estoppel cannot be applied.
The principle of promissory estoppel is that where one party has by his word or conduct made to the other a clear and unequivocal promise or representation which is intended to create legal relations or affect a 841 legal relationship to arise in the future, knowing or.
intending that it would be acted upon by the other party to whom the promise or representation is made and it is in fact so acted upon the other party, the promise or representation would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings which have taken place between the parties.
The doctrine of promissory estoppel is now well established one in the field of admin istrative law.
This principle has been evolved by equity to avoid injustice.
It is neither in the realm of contract nor in the realm of estoppel.
Its object is to interpose equity shorn of its form to mitigate the rigour of strict law.
In Union of India vs Indo Afgan Agencies, Shah J., as he then was, speaking for the Division Bench of this Court while upholding the application of promissory estoppel to execu tive acts of the ,State negated the plea of executive neces sity thus: "We are unable to accede to the contention that the execu tive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to theft detriment.
Under our constitutional set up no person may be deprived of his right or liberty except in due course of and by if a member of the Executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute the Courts will be competent to and indeed would be bound to protect the rights of the aggrieved citizens.
" It was further held in its summing up thus: "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, not claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." In Century Spinning and Manufacturing Co. Ltd. vs Ulhasnagar Municipal Council, [1970] 3 SCR 854 Shah, J. again extended this doctrine of promissory estoppel against public authori ties thus: "This court refused to make distinction between a private 842 individual and a public body so far as the doctrine of promissory estoppel is concerned." In Motilal Padampat Sugar Mills vs State of Uttar Pra desh; , Bhagwati, J., as he then was, applied the doctrine of promissory estoppel to the executive action of the State Government and also denied to the State of the doctrine of executive necessity as a valid defence.
It was held that in are public governed by rule of law, no one high or low is above the law.
Everyone is subject to the law as fully and completely as any other and the Government is no exception.
The Govt.
cannot claim immunity from the doctrine of promissory estopped.
Equity will, in a given case where justice and fairness demands, present a person from exercis ing on strict legal rights even where they arise not in contract, but on his own title deed or in statute.
It ' is not necesary that there should be some pre existing contrac tual relationship between the parties.
The parties need not be in any count of legal relationship before the transaction from which the promissory estoppel takes its origin.
The doctrine would apply even where there is no pre existing legal relation ship ' between the parties, but the promise is intended to create legal relations or effect a legal rela tionship which will arise in nature.
It was further held that it is indeed pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned .
The former is equally bound as the latter There fore, the Government cannot claim any immunity from the doctrine of promissory estoppel and it cannot say that it is under no obligation to act in a manner i.e. fair and just or that it is not bound by the consi derations of honesty and good faith.
In fact, the Government should be held to have a high standard of rectitude while dealing with its citizens.
Since the doctrine Of promissory estoppel is an equitable doctrine, it must yield where the equity so re quires.
If it can be shown by the Govt.
that having regard to the facts as they have transpired, it would be inequita ble to hold the Govt.
or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the promise and enforce the promise against the Government.
The doctrine of promissory estoppel would be displaced in such a case.
because on the facts, equity would ' not require that the Government should be held bound by the promise made by it.
But the Govt. must be able to show that in view of the fact as have been tran spired, public interest.
would not be prejudiced.
Where the Govt.is required to carry out the promise the Court would have to balance, the public interest in the Government 's carrying out the promise made to the citizens, which helps citizens to act upon and alter his position 843 and the public interest likely to suffer if the promises were required to be carried out by the Government and deter mine which way the equity lies.
It would not be enough just to say that the public interest ' require that the Govt.
should not be compelled to carry out the promise or that the public interest would suffer if the Govt.
were required to honour it.
In order to resist its liability the Govt. would disclose to the Court the various events insisting its claim to be exempt from liability and it would be for the Court to decide whether those events are such as to render it equita ble and to enforce the liability against the Govt.
There fore, we are holding that the doctrine of promissory estop pel would equally apply to a private individual as well as a public body like a Municipal Council.
It was held that it cannot be applied in the teeth of an obligation or liability imposed by law.
It cannot be invoked to compell the Govt.
to do an act prohibited by law.
There may be no promissory estoppel against exercise of legislative functions.
Legisla ture can never be precluded from exercise of its legislative functions by resorting to doctrine of promissory estoppel.
The plea of executive necessity, though was rejected, its rigour was mellowed down to the above extent indicated above.
The doctrine of promissory estoppel, though doubted in Jeer Ram vs State of Haryana, ; was af firmed and reiterated by a Bench of three Judges in Union of India vs Godfrey Philips India Ltd., [1985] Supp. 3 SCR 123 at 144 Bhagwati, the Chief Justice, while; reiterating the law laid down in Motilal 'P ' Sugar Mills ' case (supra) made it clear thus: "there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the Govt.
or public authority be debarred by promissory estoppel from enforcing a statutory prohibition.
It is equally true that promissory estoppel Cannot be used to compel the Gov ernment or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make.
We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires; if it can be shown by the Government or public authority that having regard to the facts: as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority.
" 844 Doctrine of Promissory Estoppel was reiterated by another Bench of three Judges in State of Bihar vs Usha Martin Industries Ltd., [1987] (65) STC 430 and Asstt.
Commissioner of Commercial Taxes, Dharwar Dharmendra Trading Co., etc.
; , 12.
It is equally settled law that the promissory estop pel cannot be used to compel the Government or a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public author ity to make.
We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield place to the equity, if larger public interest so requires, and if it can be shown by the Government or public authority, for having regard to the facts as they have transpired that it would be inequitable to hold the Govern ment or public authority to .the promise or representation made by it.
The Court on satisfaction would not, in those circumstances raise the equity in favour of the persons to whom a promise or representation is made and enforce the promise or representation against Government or the public authority.
Equally Promissory estoppel should not be extend ed, though it may be rounded on an express or implied prom ise stammed from the conduct or representation by an officer of the State or public authority when it was obtained play fraud on the constitution and the enforcement would defeat or tend to defeat the constitutional goals.
For instance a fight to reservation either under article 15(4) or 16(4) in favour of the Scheduled Castes, Scheduled Tribes or backward classes was made with a view to ameliorate their status socially, economically and educationally so as to assimilate those sections into the main stream of the society.
The persons who do not belong to those classes, but produce a certificate to mask their social status and secure an ap pointment to an office or post under the State or public employment or admission into an educational institution maintained by the State or receiving aid from the State, on later investigation, though belated, was found that the certificate produced was false and the candidate was dis missed from the post or office or debarred or sent out from the institution or from the balance course of the study, the plea of promissory estoppel would always be found favour with the courts and being easily extended in favour of the candidate or party that played fraud on the Constitution.
It would amount not only putting a premium on the fraud on the Constitution, but also a denial to a reserved candidate and the general candidate as well.
Therefore, the plea of prom issory estoppel should not be extended to such areas.
845 Though Executive necessity is not always a good defence, this doctrine cannot be extended to legislative acts or to acts prohibited by the statute.
When it seeks to relieve itself from its application the Government or the public authority are bound to place before the Court the material, the circumstances or grounds on which it seeks to resile from the promise made or obliga tion undertaken by insistence of enforcing the promise, how the public interest would be jeopardised as against the private interest.
It is well settled legal proposition that the private interest would always yield place to the public interest.
The question, therefore, is whether promise, in fact, was made by the Estate Manager on behalf of the re spondent and whether the Estate Manager is competent to make such a promise and whether it binds the respondent.
The letter dated April 3, 1972 written by the Estate Manager is a conditional one, namely, that on fulfilling certain condi tions indicated in that letter he would make recommendation to the Board for grant of lease, condition precedent being that the tenant would deposit the required sum of about Rs. 11,000 and odd with the respondent.
Undoubtedly, the tenants completed that part of the obligation.
Thereafter admittedly it was placed before the Board, who by resolution dated September 10, 1974 which is at page 228 to 237 of the paper book, considered it, but was rejected on the ground that after reconstruction the building would be required to its staff.
Therefore, the decision has stemmed from its execu tive necessity, but that ground by itself would not be sufficient unless it is shown to the satisfaction of the Court that as against the interest of the private tenants the interest of its employees is of such as absolute impor tance that without allotment of the quarters to the staff the work of the Port Trust cannot be carried out.
No such material has been placed before us.
But the crucial circum stance would be whether an unequivocal promise in fact was made and the Estate Manager was competent to make promise.
In Howell vs Falmouth Boat Construction Co. Ltd. the facts are that ship repairers in a naval vessel carried out certain work in contravention of para 1 of the Restriction of Repairs of Ships Order, 1940, the Admiralty acting under regulation 55 of the Defence (Gener al) Regulations, 1939 directed that repairs or alteration of ships would not be carried out except under the authority of a licence granted by the Admiralty.
The defence was that work was carried out with the oral permission of the licenc ing authority officer of the Admiralty.
In the Court of Appeal Lord Denning, laid the rule of promissory estoppel that whenever Government Officers in the deal 846 ings with the subject, take on themselves to assume authori ty in a matter with which he is concerned the subject is under entitlement to rely on their having the authority which they assume.
He does not know and cannot be expected to know the limits of their authority and he ought not to suffer if they exceed it.
On further appeal the House of Lords while reversing the view, Lord Simonds stated thus: "I know of no such principle in our law nor was any authori ty for it cited.
The illegality of an act is the same wheth er or not the actor has been misled by an assumption of authority on the part of a Government officer however high or law in the hierarchy.
I do not doubt that in criminal proceedings it would be a material factor that the actor had been thus misled if knowledge was a necessary element of the offence, and in any case it would have a bearing on the sentence to be imposed.
But that is not the question.
The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority.
In my opinion the answer is clearly No. Such an answer may make more difficult the task of the citizen who is anxious to walk in the narrow way, but that does not justify a differ ent answer being given." Lord Normand stated at page 849 thus: "But it is certain that neither a minister nor any subordi nate officer of the Crown can by any conduct or representa tion bar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it." In Attorney General for Ceylon vs A.D. Silva, the Privy Council was called upon to consider whether the Collector of Custom was authorised to create a promise as against the crown.
Considering that question at page 479 it was held that: "All "ostensible" authority involves a representation by the principal as to the extent of the agent 's authority.
No representation by the agent as to the extent of his authori ty can amount to a "holding out" by the principal.
No public officer, unless he possesses some special power, can hold out on behalf of the Crown that he or some other public 847 officer has the right to enter into a contract in respect of the property of the Crown when in fact no such right exists.
Their Lordships think, therefore that nothing done by the Principal Collector or the Chief Secretary amounted to a holding out by the Crown that the Principal Collector had the right to enter into a contract to sell the goods which are subject matter of this action." In Administrative Law by Wade, 6th Edition at page 385 it is stated thus: "If the force of law is given to a ruling from an official merely because it is wrong, the official who has not legal power is in effect substituted for the proper authority , which is forced to accept what it considers a bad decision.
To legitimate ultra vires acts in this way cannot be sound policy, being a negation of the fundamental cannons of administrative law.
" Thus we have no hesitation to hold that before making the public authority responsible for acts of its subordi nate, it must be established that the subordinate officer did in fact make the representation and as a fact.
is compe tent to make a binding promise on behalf of the public authority or the Government, ultra vires acts do not bind the authority and insistence to abide by the said ultra vires promise would amount to putting premium and legitimacy to ultra vires acts of subordinate, officers.
It is seen from the record that the Estate Manager is merely an inter mediary to collect the material between the respondent Port Trust and its tenants and to place the material for consid eration .to the Board.
Thereby the Estate Manager is not clothed with any authority much less even ostensible author ity to create a promise so as to bind the respondent, that the respondent would allot the rooms on reconstruction to the tenants.
The promise by him is an ultra vires act, though conditional and, therefore, it does not bind the respondent.
Though the executive necessity has not been satisfactorily established, we hold that the doctrine of promissory estoppel in the light of the above facts cannot be extended in favour of the appellant and other tenants.
Sri Tunara further submitted that the tenant did not derive title, namely, lease hold right from the respondent Port Trust under the Central Act.
That the tenant disputed the title and it is a sufficient defence under the explana tion to section 43 to non suit the respondent 848 in the summary proceeding.
It was open to the respondent to file a regular suit.
The Small Cause Court ought to have rejected the application on that ground and the High Court would have gone into the question.
It being a pure question of law, this court may permit the appellant to argue on the point for the first time in this Court.
It is undoubtedly true as held by catena of decisions of this Court that a pure question of law, untraveled by questions of fact, which goes to the roots of the jurisdiction.
could be permitted to be raised for the first time in an appeal under article 136 of the Constitution.
We are afraid.
we cannot permit the appel lant to raise this point for the following reasons: Firstly, except making a bald averment in the written statement that the "suit is not maintainable" nothing has been pleaded in detail in the written statement.
Admittedly this point was neither taken in the writ petition nor argued in the High Court.
It is not even raised in the grounds of appeal in this Court nor even in points raised in the synop sis of the case, It is stated that remotely it was raised in the rejoinder.
Since it is a mixed question of facts and law and not being a pure question of law, we cannot permit to raise the point for the first time, that too, when it would prejudice the respondent of their case at this stage.
We accordingly decline to go into the question.
We would also straighten the record and state that the appellants raised in the writ petition the vires of Sections 2, 3 and 4 of the Maharashtra Amending Act, 1963 introducing Sec.
42(A) in Chapter VII of the and deleting Sections 45 to 47 from the Principal Act and of an amended Sec.
49 thereof as well as Sec.
46(2) of the Presi dency Small Cause Courts Act as amended by Maharashtra Amendment Act of 1976 as offending article 14 of the Constitu tion, and unsuccessfully argued before the Division Bench of the High Court same point was raised in the grounds of appeal in this court.
Though the appeal was argued for three days, Mr. Tunara did not argue this point across the Bar, nor we had the advantage of hearing the learned Solicitor General.
Even in a written brief running into 44 pages submitted by the counsel, he did not deal with this point.
The counsel, after arguing the two points dealt with earli er, has devoted his time on the question of jurisdiction of the trial court under Sec.
41, despite our repeatedly re minding him that this point was neither raised, nor argued in the High Court, At the end he stated that he had elabo rately argued the point of vires before the Single Judge and the Division Bench and except repetition of the same once over, he could do no better by further arguing here.
There fore, this Court could go through the judgment and deal with the point.
We deprecate 849 this practice.
When a constitutional question has been raised and does arise for consideration, unless there is a full dressed argument addressed by either side before this court no satisfactory resolution could be made.
Mere para phrasing the judgment of the High Court in particular when it relates to the local laws is no proper decision making.
Therefore, after giving our anxious consideration, we, with great anguish.
decline to go into the point.
Except these.
no other points have been argued.
Accordingly we do not find any merit in the appeal.
The appeal is dismissed.
but in the circumstances with out costs.
N.V.K. Appeal dismissed.
|
The respondent a statutory body corporate constituted under the Bombay Port Trust Act, 1879 a 'State Act ' who had appointed an Assistant Estate Manager as their power of attorney holder to lease out its property from time to time, terminate the leases and to lay action for ejectment, etc.; leased out the suit property to the appellant.
826 The appellant was served with a notice under Section 106 read with Section 111(h) of the terminating the tenancy in terms of the covenants of lease and directing delivery of possession of the demised property giving one month 's time from 22nd January 1975.
The notice was served on the tenants on January 28, 1975 and became effective from 28th February, 1975.
In the meanwhile, the Major Port Trust Act, 1963, a 'Central Act ' was made applicable to the Bombay Port Trust by operation of Section 133(2A) thereof with effect from February 1, 1975.
After the expiry of one month from the suit notice an ejectment application was filed under Section 41 of the Bombay as amended under the Maharashtra 1963 Amendment Act, and a direction was sought for delivery of possession.
After the Maharashtra Amendment Act 19 of 1976 came into force suits were laid against the three other tenants of the demised property.
The respondent pleaded in the said suit that it was a successor ininterest of the Port Trust Board under the State Act, and was entitled to eject the tenants and to take possession of the demised portions.
The appellant contended in his written statement that the suit was not maintainable since the State Act ceased to be operative with effect from February 1, 1975, the quit notice issued under Section 106 read with Section 111(h) of the became ineffective and without determining the tenancy afresh the suit was not validly laid.
It was further submit ted that the respondent had promised that on deposit of a certain amount which the appellant tenant did, he would be given to lease a portion in the reconstructed building, and consequently the respondent was estopped by promissory estoppel to have the tenant ejected.
One suit was dismissed on the ground that the tenancy was not duly determined as per law, while the other suits were decreed.
No appellate forum had been prescribed under the Maha rashtra Amendment Act of 1963 but a substantive suit on the original side provided was available, but such a right to appeal was incorporated by the Maharashtra Amendment Act, 19 of 1976.
The appellant filed a writ petition in the High Court under Articles 226 and 227 of the Constitution and the other tenants filed regular appeals to a Bench of two Judges of the Small Causes Court, which were pending.
827 In the writ petition of the appellant petitioner challenged the vires of sections 2,3 and 4 of the Maharashtra Amending Act, 1963 introducing Section 42(A) in Chapter VII of the and deleting Sections 45 to 47 from the Principal Act and of amendment of SectiOn 49 thereof; as well as Section 46(2) of the as amended by the Maharashtra Amendment Act of 1976 as offending Article 14 of tile Constitution.
When the matter came up before the Single Judge of the High Court it was referred to the Division Bench, which upheld the constitutional validity of the said sections and remitted the matter to the Single Judge for disposal on merits.
The Single Judge considered the matter and negatived the two points raised by the appellant petitioner regarding validity of the notice terminating tile tenancy, and also the plea of promissory estoppel, and dismissed the writ petition.
The appellant appealed to this Court by special leave under Article 136.
It was contended on behalf of the appel lant that the quit notice issued under Section 106 read with Section III(h) of the was invalid and that by issue of the said notice no right accrued to the respondents and that the termination of tenancy became operative only on expiry of one month given thereunder i.e. February 28, 1975, by which date the State Act became inop erative, as from February 1, 1975 the Central Act had come into force; that termination of tenancy was an act inter vivos by operation of Section 106 read with Section III(h) of the , and that under Section 109, the respondent not being a living person, was not entitled to the benefit of the quit notice as its operation was not saved by Section 2(d) and Section 5 of the said Act.
It was also contended that the respondents were estopped from ejecting the appellant and other tenants who were similarly situated on the principle of promissory estoppel, as the Estate Manager of the respondent in his letter dated April 3, 1972 directed the tenant to deposit Rs. 11,000 for grant of tenancy after reconstruction of the flats therein and placing reliance thereon the tenants having deposited the amount demanded from them and acted upon the promise to their detriment, the respondents shall be declared to be estopped from ejecting the tenants from the demised respec tive portions leased out to them.
The appeal was contested on behalf of the respondents by contending that when right, title, and interest in immovable property stood transferred by operation of law, the spirit behind Section 109 of the 828 will apply; and the successor in interest would be entitled to the rights of the predecessor and that as the Estate Manager had no authority to give a promise, and that even assuming that he had such a power, it was a conditional one, namely, approval by the Board, and that the Board having resolved to reject the claim, and on reconstruction decided to allot to its own employees out of administrative necessity, the principle of promissory estop pel cannot be applied.
Dismissing the appeal, this Court, HELD: 1.
When right, title and interest in immovable property stand transferred by operation of law, the spirit behind Section 109 of the per force would apply and successor ininterest would be entitled to the rights of the predecessor.
This is what the Single Judge of the High Court has held and the view is approved as correct.
The notice terminating the tenancy of Vasantkumar would enure to the benefit of the respondent and it could be availed of by the respondent to lay the suit for ejectment.
[836H; 837A B] N.P.K. Raman Menon vs Collector of Malabar, AIR 1924 Madras 908; Trimbak Damodhar Raipurkar vs Assaram Hiraman Patil & Ors., [1962] Suppl.
1 SCR 700; Hitkarini Sabha vs The Corporation of City of Jabalpur & Anr., and Lower vs Sorrell, [ 1963] 1 Queen 's Bench Division 959, referred to.
Gurumurthappa vs Chickmunisamappa, AIR , over ruled.
Halsbury 's Laws of England, 4th Edition, Vol.
27, p. 193; Hill and Redman in Law of Landlord and Tenant, 17th Edition Vol.
I, p. 488, p. 405; Mulla Transfer of Property Act, 6th Edition, p. 676 and Chitaley 's , 4th Edn.
1969, Vol.
III, Note 35, referred to.
2(i) The functionaries under both the State Act and the Central Act are the same.
The notice was issued by the Assistant Estate Manager by virtue of his official function as power of attorney agent on behalf of the respondent The Board of Trustees have the right to terminate the lease under Section 26 of the State Act and these rights stood transferred and vested under Section 29(1) of the Central Act.
Therefore the termination of tenancy and laying the action for ejectment are integrally connected with their official capacity.
There is a reasonable connection between the impugned acts and officials duty.
Thereby, they are the acts done under the Central Act.
[839C E] 829 2(ii) The notice under Section 106 and Section III(h) of the is an act done or purported to have been done in the official capacity as Power of Attorney holder/Assistant Estate Manager on behalf of the respondent, Board of Trustees; the right to lay the suit on expiry of one month 's period prescribed in the notice, namely, on or after February 28, 1975 had accrued to the respondent.
It is an act done or purported to have been done under the Central Act in exercise of the official function.
The right to lay the suit on determination of the tenancy by notice dated January 20, 1975 under the State Act is a transfer of inter est by operation of Section 29(1) of the Central Act, to the respondent under Section 109 of the .
Thereby the quit notice is valid.
The suit laid, pursu ant thereto, is valid and legal.
Accordingly order of eject ment passed by the Small Cause Court is perfectly legal and unassailable.
[840B E] Commissioner for the Court of Calcutta vs Abdul Rahim Osman & Co.; Trustees of Port of Bombay vs The Premier Automobiles Ltd. & Anr., ; , referred to.
3(i) The doctrine of promissory estoppel is now well established one in the field of administrative law.
This principle has been evolved by equity to avoid injustice.
It is neither in the realm of contract nor in the realm of estoppel.
Its object is to interpose equity shorn of its form to mitigate the rigour of strict law.
This doctrine would be displaced in a case where equity would not require that the Government should be held bound by the promise made by it.
But the Government must be able to show that in view of the facts as have been transpired, public interest would not be prejudiced.
Where the Government is required to carry out the promise the Court would have to balance, the public interest in the Government 's carrying out the promise made to the citizens, which helps citizens to act upon and alter ' his position and the public interest likely to suffer if the promises were required to be carried out by the Government and determine which way the equity lies.
[841B; 842G H; 843A] 3(ii) The doctrine of promissory estoppel would equally apply to a private individual as well as a public body like a Municipal Council.
It cannot be applied in the teeth of an obligation or liability imposed by law.
It cannot be invoked to compel the Government to do an act prohibited by law.
There may be no promissory estoppel against exercise of legislative functions.
[843B C] 3(iii) Promissory estoppel cannot be used for compelling the 830 Government or a public authority to carry out a representa tion or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make.
It being an equitable doctrine it must yield place to the equity, if larger public interest so requires and if it can be shown by the Government or public authority, for having regard to the facts as they have transpired that it would be inequitable to hold the Government or public authority to the promise or representation made by it.
[844B D] 3(iv) Promissory estoppel should not be extended, though it may be rounded on an express or implied promise stemmed from the conduct or representation by an officer of the State or public authority when it was obtained to play fraud on the Constitution and the enforcement would defeat or tend to defeat the Constitutional goals.
[844D] Union of India vs Indo Afgan Agencies, ; ; Century Spinning and Manufacturing Co. Ltd. vs Ulhasnagar Municipal Council, [1970] 3 SCR 854; Motilal Padampat Sugar Mills vs State of Uttar Pradesh, ; ; Jeet Ram vs State of Haryana, ; ; Union of India vs Godfrey Philips India Ltd., [1985] Supp.
3 SCR 123 at 144; State of Bihar vs Usha Martin Industries Ltd., [1987] 65 STC 430 and Asstt.
Commissioner of Commercial Taxes, Dharwar vs Dharmendra Trading Co. etc.
; , , referred to.
Before making the public authority responsible for act of its subordinate, it must be established that the subordinate officer did in fact make the representation and as a fact, is competent to make a binding promise on behalf of the public authority or the Government, ultra vires acts do not bind the authority and insistence to abide by the said ultra vires promise would amount to putting premium and legitimacy to ultra vires acts of subordinate officers.
[847D E] Howell vs Falmouth Boat Construction Co. Ltd, and Attorney General for Ceylon vs
A.D. Silva, , referred to.
The letter dated April 3, 1972 written by the Estate Manager is a conditional one, namely, that on fulfilling certain conditions indicated in that letter he would make recommendation to the Board for grant of lease, condition precedent being that the tenant would deposit the required sum of about Rs. 11,000 and odd with the respondent.
Un doubtedly, the tenants completed that part of the obliga tion.
Thereafter it was placed before the Board, who by resolution dated 831 September 10, 1974, considered.
,it, but was rejected on the ground that after reconstruction the building would be required by its staff.
[845C E] 6.
The Estate Manager is merely an intermediary to collect the material between the respondent Port Trust and its tenants and to place the material for consideration to the Board.
Thereby the Estate Manager is not clothed with any authority much less even ostensible authority to create a promise so as to bind the respondent, that the respondent would allot the rooms on reconstruction to the tenants.
The promise of him is an ultra vires act, though conditional and, therefore.
it does not bind the respondent.
Though the executive necessity has not been satisfactorily established, the doctrine of promissory estoppel cannot be extended in favour of the appellant and other tenants.
[847E G] 7.
When a constitutional question has been raised and does arise for consideration, unless there is a fulldressed argument addressed by either side before this Court no satisfactory resolution could be made.
Mere paraphrasing the judgment of the High Court in particular when it relates to the local laws is no proper decision making.
[849A B]
|
vil Appeals Nos.
1002 & 1003 of 1976.
From the Judgment and Order dated 3.10.1972 and 18.9.
1975 of the Allahabad High Court in Civil Misc.
Writ No. 2726 of 1970 and Civil Misc Writ Petition No. 9943 of 1975.
Satish Chander, S.N. Singh, T.N. Singh and H.L. Srivas tava for the Appellants.
J.P. Goyal, M.R. Bidsar and S.K. Jain for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
These appeals by special leave are directed against the judgments of the High Court of Allaha bad.
The land in plots Nos.
6385 and 6386 measuring 5 bighas and 4 biswas had been in the possession of Ram Dayal as mortgagee under Baijnath who was the original tenant.
Re spondents 1 to 3 are the descendants of Ram 960 Dayal.
They made an application under section 9 of the U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer.
They claimed tenancy fights on the basis of the deed dated 30.7.1945 and they stated that their names had been recorded in the Khatauni of 1359 Fasli; they are in cultivatory possession and have become adhivasis and subse quently sirdars.
They alleged that the names of the appel lants herein have been wrongly entered in the Khatauni of 1353 Fasli and that the appellants have no right or posses sion over the land.
The respondents prayed for entering their names as sirdars and scoring off the names of the appellants.
This application was allowed by the Consolidation Offi cer by order dated 23.7.1967.
The order was reversed by the Settlement Officer (Consolidation).
The Deputy Director of Consolidation dismissed the revision filed by the respond ents.
However, the writ petition filed by the respondents as C.M.W.P. No. 2726 of 1970 was allowed by the High Court by its judgment dated 3.10.1972 and the orders of the appellate and the revisional authorities were quashed thereby main taining the order of consolidation Officer.
Civil Appeal No. 1002 of 1976 is directed against the judgment dated 3.10.1972 of the High Court.
The appellants had filed a Special Appeal on 30th Novem ber, 1972 against the judgment dated 3.10.1972 of Single Judge of the High Court in C.M.W.P. No. 2726 of 1970.
Howev er, the said Letters Patent Appeal was not maintainable and ultimately dismissed in view of the U.P. High Courts (Aboli tion of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972.
This completes the narration of the fate of the writ petition No. 2726 of 1970 which finally culminated in favour of the respondents by order dated 3.10.72.
The appellants did not challenge the order of the High Court dated 3.10.72 by taking any further steps of filing any special leave petition before this Court.
On the con trary, on some mistaken and totally wrong advice of some counsel the appellants again initiated fresh proceedings by moving an application on 6.7.73 before the Settlement Offi cer Consolidation.
That application was rejected on 30.10.74.
A revision was filed against that order before the Deputy Director of Consolidation which was also rejected by order dated 21.7.75.
Thereafter the appellants filed C.M.W.P. No. 9943 of 1975 before the High Court on 7.8.75 against the order of the Deputy Director Consolidation.
This writ petition came to be dismissed by 961 order dated 18.9.
This judgment of the High Court is challenged in Civil Appeal No. 1003 of 1976.
When the High Court in the earlier Writ Petition No. 2726 of 1970 on the same subject matter had finally decided the matter in favour of the respondents by order dated 3.10.
1972, there was no question of giving any advice by any counsel in good faith to start proceedings afresh by moving a fresh application before the Consolidation authorities.
No counsel could have given such advice in good faith to start proceedings afresh before the Consolidation authorities and then to claim benefit of such period under section 14 of the .
It was elementary for any counsel of whatever standing to have known that none of the authorities of the Settlement or Consolidation department could have any right or juris diction to set aside the order of the High Court dated 3.10.1972.
The Settlement Officer (Consolidation) as such was justified in dismissing the application by his order dated 30.10.
1974, and thereafter the revision by the Deputy Director (Consolidation) by order dated 21.7.
The appellants then under the same mistaken advice not in good faith filed C.M.W.P. No. 9943 of 1975 which came to be dismissed by the High Court on 18.9.
The second judg ment of the High Court is now challenged in Civil Appeal No. 1003 of 1976.
Both the appeals had been filed after the expiry of the period of limitation.
The appellants had applied for condo nation of delay on the ground that the appellants had been prosecuting the prior proceedings in good faith on legal advice and the period of more than three years taken in prosecuting the proceedings is liable to be excluded in computing the period of limitation under the provision of section 14 of the .
The respondents had filed counter to the application and opposed the same.
This Court granted special leave vide order dated 2.9.
1976 in both matters subject to the right of the respondents to argue the question of limitation and the applicability of section 14 of the at the hearing of the appeals.
The first question that we have to decide is that of limitation.
The delay of 1198 days according to the appel lants had occurred unwillingly and the appellants had been prosecuting with due diligence the earlier proceedings before the appellate and the revisional authorities and on the basis of the advice given by their counsel.
There is no proper affidavit of either the appellants or the counsel in support of the application for condonation of delay.
There is also no other material to indicate that the appellants had exercised due diligence in work 962 ing out their remedies and sought proper advice in the matter.
When the party had no right of appeal, the proceed ings instituted before the High Court challenging the judg ment in the writ petition cannot be considered to be one in good faith.
The subsequent proceedings are also not legal or valid.
When the decision of the High Court in the writ petition was one quashing the orders of the appellate and the revisional authorities, the party could not proceed on the basis that the matter was restored to the lower authori ties for fresh decision.
We are therefore not satisfied that there is any merit in the ground urged by the appellants for getting over the bar of limitation.
The appeals are liable to be dismissed as time barred.
We find that even on the merits, the appellants cannot succeed.
The respondents based their claim on the patta in their favour under the deed of 30.7.1945.
The Consolidation Officer accepted the genuineness of the deed and found title with the respondents.
The appellants had claimed right under the subsequent document of 2.8.
1945 in continuation of an earlier deed of 23.11.
The land was admittedly in the possession of Baijnath, the original tenant and he was dispossessed in execution of the decree obtained by the landlord in 1944.
The tenancy in favour of Baijnath was subsisting when the deed of 23.11.
1943 was executed.
The creation of a tenancy during the subsistence of the earlier one could not confer any right.
Before the deed of 2.8.
1945 patta was already granted in favour of the respondents.
The circumstances under which the same was granted also weighed in finding title in favour of the respondents.
The landlord had obtained a decree against Baijnath when the land was mortgaged in favour of Ram Dayal.
The mortgagee later on obtained the decree against the landlord for an amount of Rs.214 being the value of the crops in the land.
An agree ment was subsequently entered into between the landlord and the respondents settling the claim under the decree and granting patta in favour of the respondents.
These facts have been found in favour of the respondents by the Consoli dation Officer.
The High Court in quashing the orders of the appellate and the revisional authorities was of opinion that there was apparent error on the face of the record.
The appellate authority was found to be wrong in its conclusion that the respondents lost their right by the continued possession of the appellants.
The High Court noticed that even before the Consolidation Officer, the appellants did not press their claim on the basis of the patta of 1943 and has also found that the deed of 23.11.1943 was not a valid settlement inasmuch as the land was in the possession of the sitting tenant.
It was also noticed that soon after the deed of 2.8.1945, dispute arose regarding possession, that the 963 appellants had been dispossessed on the basis of the decree obtained by the respondents setting aside the order of a criminal court.
Before the decree became final pending litigation, the U.P. Zamindari Abolition Act came into force.
In view of the subsequent legislation, the respond ents have proceeded under the U.P. Consolidation Act and the proceedings culminated in the present appeals.
In the light of the definite findings of the competent authority that the respondents have derived valid title as tenants under the deed of 30.7. 1945 and the apparent mis take in the proceedings of the appellate and the revisional authorities as found by the High Court, it is not now open to the appellants to contend that they are rightful tenants entitled to possession of the land.
Though the claim based on deed of 23.11.1943 had not been pressed before the lower authorities, it has been contended before us that the appel lants have a case on the principle contained in section 43 of the Transfer of Property Act.
The learned counsel for the appellants maintained that even if the deed of 23.11.
1943 was inoperative or was not valid for the reason that the landlord had no possession since they obtained possession on 30.6.1944, the appellants acquired tenancy right and that has been confirmed by the deed of 2.8.
The argument, though attractive, is not acceptable.
Section 43 of the Transfer of Property Act embodies the rule of estoppel by deed.
The section enables the transferee to whom a transfer is made on fraudulent or erroneous repre sentation to lay hold at his option of any interest which the transferor may subsequently acquire in the property provided by doing so he does not adversely affect the right of any subsequent purchaser for value without notice.
Thus when a lessor erroneously represents that he is authorised to lease a property and creates a lease of it and afterwards acquires that property, the lessee is entitled to have the property from the lessor.
This principle has no application if the transfer is invalid.
The transfer under the deed of 23.11.
1943 became inoperative not on account of any fraudu lent or erroneous representation.
The settlement was invalid and inoperative on account of the subsisting lease in re spect of the land and as the landlord could not super impose a second lease in respect of the tenanted property, no interest could be created in favour of the appellants under that document and, therefore, there is no question of feed ing the estoppel.
The execution of the deed dated 30.7.
1945 in favour of the respondents negatives the claim of the appellants having acquired any right after the property was taken delivery of in 1944.
We therefore reject the conten tion.
964 We accordingly hold that there is no valid ground to interfere with the decision of the High Court.
We therefore dismiss the appeals.
In the facts and circumstances of the case, we direct the parties to bear their respective costs.
S.B. Appeals dismissed.
|
The land in plots Nos.
6385 and 6386 had been in posses sion of Ram Dayal as mortgagee under Baijnath who was the original tenant.
Respondents No. 1 3 are the descendants of Ram Dayal.
They made an application under section 9 of U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer claiming tenancy rights on the basis of the deed dated July 30, 1945, stating that their names had been recorded in Khatauni of 1359 Fasli.
They are in cultivatory possession and have become adhivasis and subsequently sir dars.
They further contended that the appellants have no right of possession over the land and their names have been wrongly entered in the Khatauni No. 1353 Fasli.
The respond ents prayed for entering their names as sirdars.
This application was allowed by the Consolidation Offi cer vide order dated July 23, 1967.
The Settlement Officer (Consolidation) reversed the order and the Deputy Director of Consolidation dismissed the revision filed by the re spondents.
Subsequently the respondents filed a writ petition in the High Court.
The High Court allowed the same and quashed the orders of the appellate and the revisional authorities, and maintained the order of the Consolidation Officer in its judgment dated 3rd October, 1972.
The appellants filed a special leave on 30th November, 1972 against the judgment of the High Court dated 3rd Octo ber, 1972 under letters patent.
It was not maintainable in view of the U.P. Courts (Abolition of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972.
Thus Writ Petition finally culminated in favour of the respondents by High Court order dated 3rd October, 1972.
958 The appellants instead of challenging the order of the High Court by way of filing any Special Leave Petition before this Court, initiated fresh proceedings by moving an application on 6th July, 1973 before the Settlement Officer (Consolidation) which was rejected on 30th October, 1974.
A revision was filed against the said order before the Deputy Director of Consolidation which was also rejected on 21st July, 1975.
Thereafter the appellants moved the High Court again, and the Writ Petition filed by them was dismissed by its order dated 18th September, 1975.
Since the subject matter had been finally decided by the High Court judgment of 3rd October, 1972 so to start pro ceedings afresh was not in good faith as none of the author ities of the Settlement or Consolidation could have any right or jurisdiction to set aside the order of the High Court.
The second judgment of the High Court dated 18th September, 1975 was challenged in C.A. No. 1003 of 1976 in this Court.
Dismissing the appeal, the Court, HELD: Both the appeals had been filed after the expiry of the period of limitation.
The appellants had applied for condonation of delay on the ground that they had been prose cuting the prior proceedings in good faith and on legal advice so the period of more than three years be excluded in computing the period of limitation under section 14 ' of the .
The Respondents filed counter to the application and opposed the same.
[961D E] Special leave was granted by this Court on 2nd Septem ber, 1976 subject to the rights of the respondents to argue the question of limitation and applicability of section 14 of the at the hearing of the appeals.
[961F] The appellants as to the question of limitation submit ted that the delay of 1198 days had occurred unwillingly though they had been prosecuting with due diligence before the appellate authorities but there is no proper affidavit either of the appellants or the Counsel in support of the application for condonation of delay.
There is also no other material to indicate that the appellants had exercised due diligence in working out their remedies and sought proper advice in the matter.
There was no right of appeal against the judgment of the High Court as it quashed the orders of the appellant and the revisional authorities so the proceed ings instituted by the party by restoring to the lower authorities for fresh decision are not legal or valid.
Hence the appeals are liable to be dismissed as time barred.
[961G H; 962A B] 959 Even on merits, the appellants cannot succeed.
Admitted ly the original tenant was Baijnath but was dispossessed in execution decree obtained by the landlord in 1944.
Thereaf ter the land was mortgaged in favour of Ram Dayal and the mortgagee obtained the decree against the landlord.
The respondents subsequently entered into an agreement setting the claims under the decree and granting patta in favour of the Respondents in deed dated 30th July, 1945.
These facts have been accepted by the Consolidation Officer and the deed and title were found to be in favour of the,respondents.
The tenancy in favour of Baijnath was subsisting when the deed of 23rd November, 1943 was executed.
The creation of a tenancy during the subsistence of the earlier one could not confer any right and even before the deed of 2nd August, 1945 patta was already granted in favour of the respondents.
[962D G] Even the contention of the appellants that they have a case under section 43 of the Transfer of Property Act, which embodies the rule of estoppel by deed, is not applicable because the transfer under the deed of 23rd November, 1943 became inoperative because the settlement was invalid on account of the subsisting lease in respect of the Land and the landlord could not super impose a second lease in re spect of the tenanted property, so no interest could be created in favour of the appellants under that document of 2nd August, 1945 and therefore, there is no question of feeding the estoppel.
[963E G]
|
(Civil) No. 960 of 1987.
(Under Article 32 of the Constitution of India).
G.L. Sanghi, B.A. Masodkar, Sunil Dogra and P.H. Parekh for the Petitioner.
V.C. Mahajan, K. Swami and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
This writ petition under Article 32 of the Constitution by a Judicial Member of the Central Administra tive Tribunal purports to be a sequal of this Court 's deci sion in S.P. Sampath Kumar vs Union of India, and Ors., ; The petitioner contends that the decision in Sampath Kumar 's case (supra) equates the Central Adminis trative Tribunal with the High Court and therefore, its Chairman has to be equated with the Chief Justice of a High Court and the Vice Chairman and Members must be equated with the sitting Judges of the High Court in all respects.
It is contended that while the Vice Chairman have been equated with sitting Judges of the High Court, the Members have not been so equated in their pay and other conditions of serv ice.
It is further contended that a distinction has been made in the conditions of service, particularly the pay and age of superannuation between the Vice Chairmen and the Members, which is arbitrary and therefore, the Members also should be given the same pay as the Vice Chairmen and their age of superannuation should also be the same i.e. 65 years as that of the Vice Chairmen.
It is urged that the judicial functions discharged by the Vice Chairmen and the 949 Members of the Central Administrative Tribunal are the same and therefore, the principle of "equal pay for equal work" applies.
Violation of Article 14 of the Constitution is alleged on this basis.
Part XIV A containing Articles 323 A and 323 B were inserted in the Constitution of India by the Constitution (Forty second Amendment) Act, 1976 enabling the setting up of Administrative Tribunals and Tribunals for other matters by legislative enactments.
The Central Administrative Tribunal has been constituted under Section 4 of the (hereinafter referred to as 'the Act ') with a Chairman, Vice Chairmen and Members judicial and administrative.
The qualifications for appointment of Chairman, Vice Chairmen or other Members are prescribed by Section 6 of the Act.
Sec tion 7 provides that the Vice Chairman or, as the case may be such one of the Vice Chairman as the appropriate Govern ment may, by notification, authorise in this behalf, shall act as the Chairman in the event of any vacancy in the office of the Chairman for any reason whatsoever, or when the Chairman is unable to discharge his functions for any reason.
Section 8 prescribes the term of office of the Chairman, Vice Chairman or other Members as five years from the date on which he enters upon his office with eligibility for re appointment for another term of five years provided that no Chairman or Vice Chairman shall hold the office after he has attained the age of 65 years and any other Member, the age of 62 years.
Section 10 of the Act provides for the salaries and allowances and other terms and condi tions of service of Chairman, Vice Chairman and other Mem bers to be such as may be prescribed by the Central Govern ment.
Section 17 confers on the Tribunal the same jurisdic tion, powers and authority in respect of contempt of itself as a High Court has under the .
But for this specific provision, the Tribunal would not have the power of the High Court in this behalf.
Section 18 provides for distribution of business amongst the Benches of the Tribunal.
Section 28 excludes the jurisdiction of courts except the Supreme Court or any Industrial Tribunal, Labour Court or other authority, constituted under the or any other corresponding law for the time being in force in relation to matters over which the Tribunal has been conferred jurisdiction.
Section 35 con tains the rule making power of the Central Government while Section 36 gives power to the appropriate Government to make rules to carry out the provisions of the Act and particular ly, for the matters specified therein.
The specified pur poses for which the Central Government can make rules speci fied in Section 35(2)(c) include 950 the salaries and allowances payable to, and the other terms and conditions of the Chairman, Vice Chairmen and other Members.
The rules framed under the Act are to be laid before the Parliament.
It is not necessary to give further details of the , the provisions of which were considered at length in Sampath Kumar 's case (supra) and now stand amended in accordance with the observations of this Court in that decision.
The Central Administrative Tribunal (Salaries and Allow ances and Conditions of Service of Chairman, Vice Chairmen and Members) Rules, 1985 (hereinafter referred to as 'the rules ') were framed in exercise of the powers conferred by Section 35(2)(c) of the .
Rule 3 therein, as it now exists, specifies Rs.9,000 p.m. as the pay of the Chairman; Rs.8,000 p.m. as the pay of the Vice Chairman; and the pay scale of Rs.7300 100 7600 per mensem for a Member.
As earlier indicated, the age of super annuation prescribed in Section 8 of the Act for the Chair man and Vice Chairman is 65 years and for any other Member, 62 years.
The petitioner 's grievance is that the pay of any other Member of the Tribunal and his age of superannuation should be Rs. 8,000 p.m. and 65 years respectively as in the case of Vice Chairmen, since the Members and Vice Chairmen discharge identical judicial functions.
The question is: Whether the principle of "equal pay for equal work", relied on by the petitioner, is applicable to this situation or there is any hostile discrimination against the Members of the Central Administrative Tribunal, as alleged by the petitioner.
If the petitioner 's contention be correct, then would arise the question of relief which can be granted.
The prayer made in this petition is to direct an amendment in the and the rules framed thereunder, to prescribe the same pay and age of superannua tion for the Members as in the case of the Vice Chairman.
The argument of Shri B.A. Masodkar and Shri G.L. Sanghi in support of the petition is that the Members and the Vice Chairman of the Central Administrative Tribunal belong to the same class since they discharge identical judicial functions and there is no rational nexus of the classifica tion made between them with the object sought to be achieved.
It is urged that the Tribunal is one entity com prising of the Chairman, Vice Chairmen and Members which has been substituted for the High Court in respect of the juris diction conferred on the Tribunal and therefore, there is no justification for discriminating between them in the matter of pay and other conditions of service.
951 In the counter affidavit of the respondent, it has been stated that all the functions of the Vice Chairman and the Members are not the same inasmuch as the Vice Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharges certain administrative functions entrusted to him by the Chairman while no such administra tive function is discharged by any Member.
It is stated that the office of the Vice Chairman and any other Member cannot, therefore, be treated as the same or in one class.
Shri V.C. Mahajan, learned counsel for the respondent contended that Sampath Kumar 's case (supra) does not lend any support to the petitioner 's contention and in this context the observa tions made therein actually negative the petitioner 's stand.
It was also urged that the relief claimed for a direction to amend the aforesaid Act and the rules framed thereunder cannot be granted, which alone is the relief claimed in the writ petition.
was rightly not disputed by learned counsel for the petitioner that the relief specifically claimed in the petition of a direction to amend the Administrative Tribu nals Act, 1985 and the rules flamed thereunder to equate the Members of the Tribunal with the Vice Chairman in the matter of pay and age of superannuation cannot be granted For this reason, it was urged on behalf of the petitioner that the relief may be suitably moulded to grant the same benefit for the Members of the Tribunal if the allegation of hostile discrimination is accepted.
it is not necessary for us to deal further with this aspect since we have no doubt that the plea of violation of Article 14 of the Constitution, raised by the petitioner, is untenable and must fail.
The sheet anchor of petitioner 's case is the decision of this Court in Sampath Kumar 's case (supra).
We will present ly show that the decision in Sampath Kumar 's case (supra) does not support the petitioner 's claim in this petition.
It is significant to note that the age of superannuation of High Court Judges is 62 years while that of the Chairman and Vice Chairman of the Tribunal is 65 years and of any other Member is 62 years.
No attempt has been made on behalf of the petitioner to justify the fixation of age of superannua tion of the Chairman and the Vice Chairman as 65 years if they are to be equated with the Chief Justice and sitting judges of the High Court who retire at the age of 62 years only.
In respect of the age of superannuation, the Members of the Tribunal are at par with the Chief Justice and the Judges of the High Court.
Obviously, it is for this reason that an attempt was made to claim the equality with the Vice Chairman of the Tribunal who gets Rs.8,000 p.m. as pay like a High Court Judge but retires at the higher age of 65 years.
This disparity itself indicates that 952 the Chairman, Vice Chairmen and Members of the Tribunal are not equated with the Chief Justice and Judges of the High Court for all purposes which, in substance, is the founda tion of the petition.
The contention of Shri D .A. Masodkar, learned counsel for the petitioner, is that the Administrative Tribunal being a substitute for the High Court for adjudicating disputes relating to service matters the Members of the Tribunal should be equated with the High Court Judges for all purposes including their pay and age of superannuation.
He contends that the lower pay and age of superannuation of the Members of the Tribunal is discriminatory and violates Article 14 of the Constitution.
His argument is that the Members should be equated in this behalf with the Vice Chairman whose pay is equal to that of a puisne Judge of the High Court.
However, no attempt was made to justify on this reasoning the higher age of superannuation of the ViceChair man being 65 years against 62 years of a High Court Judge.
Shri G.L. Sanghi supported the petition and contended that the Tribunal being one body, the persons constituting it cannot be bifurcated into separate categories and the pay and age of superannuation of all of them should be the same.
He adds that the Members and the ViceChairman should have the same pay and age of superannuation while the slightly higher pay of the Chairman was justified as in the case of the Chief Justce vis a vis the puisne Judges of the High Courts.
In substance, the contention of Shri Masodkar is for equating the Members of the Tribunal with puisne Judges of the High Courts in the matter of pay on the assumption that the Tribunal is equated with the High Court and with the Vice Chairman of the Tribunal in the matter of age of super annuation on the basis of equal work.
The contention of Shri G.L. Sanghi is slightly different.
He argues that the Tribu nal being one entity there is no reason to treat its Members differently when all of them perform the same judicial function, the only difference being that the Chairman has additional administrative functions to discharge.
Part XIV A of the Constitution of India containing Articles 323 A and 323 B provides for the constitution of administrative and other tribunals for the purpose of adju dication or trial by these tribunals of disputes relating to matters specified therein.
Article 323 A deals with adminis trative tribunals to be constituted for adjudication of disputes with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other specified 953 authority.
The law enacted by.
the Parliament for this purpose may provide for all matters relating to the consti tution and functions of the Administrative Tribunals as well as for exclusion of jurisdiction of all courts, except the jurisdiction of the Supreme Court of India, with respect to the matters required to be adjudicated by the Administrative Tribunal.
It is for this purpose that the has been enacted and Section 28 therein excludes the jurisdiction of all courts except the Supreme Court or any Industrial Tribunal, Labour Court or other authority constituted under the or any other corresponding law for the time being in force in relation to matters which the Administrative Tribu nal is empowered to adjudicate.
The Act also provides for transfer of all pending cases as provided in Section 29 of the Act.
In the first place, the assumption in the argument on behalf of the petitioner that the Tribunal is equated with the High Court is fallacious.
It is not only the service matters required earlier to the adjudicated by the High Court but also those by the subordinate courts which are now to be adjudicated by the Administrative Tribunals.
That apart, Article 323 A itself clearly contemplates that the Administrative Tribunals constituted thereunder are distinct from the High Courts and it is the law enacted by the Par liament providing for establishment of an Administrative Tribunal which is to provide for all matters relating to the jurisdiction, powers, procedure and all supplemental, inci dental and consequential matters relating to the Administra tive Tribunal.
It is, therefore, the law enacted by the Parliament constituting the Administrative Tribunal which has to be first seen for the purpose of ascertaining the real nature and status of the Tribunal and the persons constituting it.
There is no ambiguity in the provisions of the and the exact status and service conditions of the Chairman, Vice Chairman and Members of the Administrative Tribunal together with the qualifications for appointment to these offices have been clearly spelt out in the Act.
This Act provides expressly for the term of office of the Chairman, Vice Chairman and Members in Section 8 and for the salaries and allowances and other terms and conditions of service by Section 10 read with Section 35(2)(c) and the rules framed thereunder.
The Central Administrative Tribunal (Salaries and allowances and Conditions of Service of Chairman, Vice Chairmen and Mem bers) Rules, 1985 have been framed in exercise of the powers conferred by Section 35(2)(c) to provide for the salaries and allowances etc.
The scheme of the Act and the rules framed thereunder is quite clear and their enactment is in the manner laid down in Article 324 A of the Constitution.
954 The term of office and the age of superannuation, pay and allowances and other service conditions of the Chairman, Vice Chairman and Members are specifically provided in this manner and from the scheme it is evident that the Chairman, Vice Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the Tribunals.
Such elaborate provisions were unnecessary if the Tribunal was equated with the High Courts and its Members with High Court Judges.
Similarly, a higher age of superannuation could not have been prescribed for the Chairman and Vice Chairman of the Tribunal.
Article 323 A of the Constitution itself envisages different provi sions in this behalf and not the same as.
that of the High Courts which is the assumption made in the petitioner 's contention.
In fact, the provisions of the Act indicate that there is no intention of equating the Chairman, Vice Chair man and Members of the Tribunal with the Chief Justice and Judges of the High Courts for purposes other than those expressly provided in respect of jurisdiction, power etc.
Section 17 of the Act is a significant indication.
By Sec tion 17, the Tribunal has been given the power to punish for contempt of itself and it is provided that for this purpose the Tribunal shall have, and exercise, the same jurisdic tion, powers and authority as the High Court and the refer ences in the , tO a High Court shall be construed as including a reference to such Tribu nal.
It is obvious that the need for enacting such a provi sion arose only because in the absence of such a provision conferring on the Tribunal the jurisdiction and power of a High Court for the purpose of the provisions of the , 197 1, the Tribunal would not have the same jurisdiction or power while adjudicating those very matters which earlier were to be adjudicated by the High Court.
Similarly, Section 30 of the Act provides that all proceed ings before a Tribunal shall be deemed to be judicial pro ceedings within the meaning of Sections 193, 219 and 228 of the Indian Penal Code, 1860.
This provision also is unneces sary if the petitioner is right in contending that the Tribunal is equated with the High Court for all purposes and must be treated as a deemed High Court with all the, logical consequences.
It is, therefore, not possible for the Administrative Tribunal to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage.
In our opinion, this alone is sufficient to indicate that the petitioner 's assumption is fallacious and his attempt to be treated as a deemed High Court Judge cannot be accepted.
Apart from the obvious fallacy already indicated, the peti tioner 's claim, if accepted, would result in appointment of some 955 deemed High Court Judges contrary to the express provision made in the Constitution for appointment of High Court Judges.
During the course of heating, it was pointed out that mere substitution of a different forum for adjudication of a dispute does not result in conferring on the new forum the status of the substituted forum for purposes other than the jurisdiction and power to adjudicate that dispute unless their status be otherwise equal.
To illustrate, Section 115 CPC by amendment in some states empowers the District Courts instead of the High Court to decide revisions thereunder, but that does not equate the District Court with the High Court.
No attempt was made on behalf of the petitioner to answer this.
The slightly modified argument of Shri G .L.
Sanghi for achieving the same purpose also does not bear close scruti ny.
The , itself makes a distinction between the Chairman, Vice Chairman and Members.
The age of superannuation of the Chairman and Vice Chairman is 65 years while that of the Members is 62 years.
Similar ly, there is difference in their salaries.
They are not treated to be in one class for this purpose by the Act itself.
It cannot, therefore, be said that all of them constitute one class since the Tribunal is one.
The case of the Chairman was distinguished by learned counsel on the basis that his position was akin to that of the Chief Jus tice of the High Court.
However, the age of superannuation of the Chief Justice and the puisne Judges of the High Court is the same which pattern is not maintained in the Act.
A provision is made in the Act for discharge of certain admin istrative functions of the Chairman by the Vice Chairman and not by the Members and similarly, there is provision only for the Vice Chairman to fill a casual vacancy.
The founda tion of initial equality on which the argument of discrimi nation is based, is non existent.
The parent statute itself shows that they were not born equals.
There is also no merit in the casual argument that there is a proposal for higher pay and age of superannuation for Members of Tribunals for other matters constituted in ac cordance with Article 323 B of the Constitution.
The basic fact to be remembered is that Articles 323 A and 323 B themselves require the law constituting these Tribunals to provide for the pay and other conditions of service of its Members and, therefore, the same would be governed in the case of each Tribunal by the provisions of the statute giving birth to the Tribunal.
These statutes being differ ent, the provisions therein in this behalf can also be different which has been left to the legislative wisdom to decide.
956 Considerable emphasis was laid on behalf of the peti tioner on S.P. Sam path Kumar 's case (supra) to contend that the Tribunals constituted under Article 323 A have been equated with the High Courts.
It is sufficient to say that in Sam path Kumar (supra), the question before us in the present petition did not arise for consideration and the observation therin cannot be torn out of context.
On the contrary, certain observations in para 22 of that judgment indicate that the retiring age of 62 years or 65 years, for the Members, Chairman and Vice Chairman was treated to be in accord with the pattern of the enactment on the basis that the Members and Chairman or Vice Chairman were in different categories.
Equation of the Tribunal with the High Court therein was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case.
We are unable to accept that the decision of this Court in S.P. Sampath Kumar (supra) supports the contention before us in this petition.
As a result of the aforesaid discussion, we have no hesitation in holding that the equality claimed by the Members of the Administrative Tribunal with the Judges of the High Courts or even the Vice Chairman of the Tribunal in the matter of pay and age of superannuation does not exist being contrary to the pattern and scheme of the parent statute establishing the Tribunal and, therefore, the very foundation for the argument of discrimination being non existent, the petition must fail.
Consequently, the petition is dismissed.
In the circum stances of the case, the parties will bear their own costs.
R.S.S. Petition dismissed.
|
The petitioner is a Judicial Member of the Central Administrative Tribunal.
In this writ petition he claims equality of the Members of the Administrative Tribunal with the Judges of the High Court, or even the Vice Chairman of the Tribunal, in the matter of pay, and age of superannua tion.
The Central Administrative Tribunal (Salaries and Allow ances and Conditions of Service of Chairman, Vice Chairman and Members) Rules, 1985 were framed in exercise of the powers conferred by section 35(2)(c) of the .
Rule 3 of the Rules specifies Rs.8,000 p.m. as the pay of the Vice Chairman and the pay scale of Rs.7300 100 7600 p.m. for a Member.
Rule 8 prescribes the age of superannuation for the Chairman and Vice Chairman at 65, and for any other Member 62 years.
It was contended on behalf of the petitioner that an arbitrary distinction had been made in the conditions of service, particularly in regard to pay and age of superannu ation, between the Vice Chairman and the Members; that the judicial functions discharged by the Vice Chairman and the Members of the Central Administrative Tribunal were the same and, therefore, the principle of "equal pay for equal work" applied, and on that basis Article 14 had been violated; and that the Administrative Tribunal being a substitute for the High Court for adjudicating disputes relating to service matters, the Members of the Tribunal should be equated with the High Court Judges for all purposes 947 including their pay and age of Superannuation.
S.P. Sampath Kumar vs Union of India, ; , relied upon.
On behalf of the respondent it was contended that all the functions of the Vice Chairman and the Members were not the same in as much as the Vice Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharged certain administrative functions entrusted to him by the Chairman.
Dismissing the writ petition, this Court, HELD: (1) It is the law enacted by Parliament constitut ing the Administrative Tribunal which has to be first seen for the purpose of ascertaining the real nature and status of the Tribunal and the persons constituting it.
[1953 E] (2) It is not possible for the Administrative Tribunal to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage.
[956G] (3) There is no ambiguity in the provisions of the , and the exact status and service conditions of the Chairman, Vice Chairman and Mem bers of the Administrative Tribunal together with the quali fications for appointment to these offices have been clearly spelt out in the Act.
[953F] (4) From the scheme of the Act and the rules flamed thereunder it is quite clear that their enactment is in the manner laid down in Article 323 A of the Constitution.
From the scheme it is evident that the Chairman, Vice Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the Tribunals.
Such elaborate provisions were unnecessary if the Tribunal was to be equated with the High Courts and its members with High Court Judges.
1953D; 954C] (5) Article 323 A and 323 B themselves require the law constituting these Tribunals to provide for the pay and other conditions of service of its Members and, therefore, the same would he governed in the case of each Tribunal by the provisions of the statute giving birth to the Tribunal.
These statutes being different, the provisions therein in this behalf can also be different, which has been left to the legislative wisdom to decide.
[955G H] 948 (6) Equation of the Tribunal with the High Court was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case.
[956C] S.P. Sampath Kumar vs Union of India, ; , distinguished & explained.
(7) The foundation of initial equality on which the argument of discrimination is based, is non existent.
The parent statute itself shows that they were not born equals.
[956E]
|
vil Appeal No. 2080 (L) of 1977.
Appeal by Certificate from the Judgment and Order dated 20.12.74 of the Calcutta High Court in Appeal No. 104 of 1972.
R.N. Nath and Rathin Das for the Appellant S.P. Khera, M. Quamaruddin and Mrs. M. Quamaruddin for the Respondents.
G.S. Chatterjee for the State.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal, by certificate granted under Article 133(1)(a) of the Constitution, is directed against judgment and order of the High Court of Judicature at Calcutta dated December 20, 1974, in Appeal No. 104 of 1972.
Karnani Properties Ltd., appellant herein, is a company incorporated under the Companies Act, 1913.
It owns several mansion houses known as Karnani Mansions at Park Street, Calcutta.
There are about 300 flats in these mansions which have been let out to tenants.
The appellant provides various facilities to its tenants in these flats, e.g. free supply of electricity, washing and cleaning of floors and lavato ries, lift service, electric repairs and replacing, sanitary repairs and replacing, etc., and for that purpose the appel lant employ over 50 persons, namely sweepers, plumbers, malis, lift man, durwans, pumpmen, electric and other mis tries, bill collectors and bearers, etc., in connection with these properties.
A dispute arose between the employees of the appellant represented by Barabazar Zamandar Sangh (hereinafter referred to as 'the union ') and the appellant with regard to wages, scales of pay, dearness allowance and gratuity.
The Government of West Bengal, by order dated July 29, 1967, referred for adjudication to the 6th Industrial Tribunal, West Bengal, the industrial dispute relating to: (a) Fixation of Grades and Scales of pay of the different categories of workmen; (b) Dearness Allowance; and (c) Gratuity.
937 The appellant raised preliminary objections with regard to the validity of the reference before the Industrial Tribunal on the ground that the alleged dispute is not an industrial dispute and that the reference is barred by Section 19 of the (hereinafter referred to as 'the Act ') for the reason that in 1960 there was an Award on the basis of settlement made with the union, and the said Award has not been terminated by either of the parties and is still binding on the parties.
The Industrial Tribunal, by its order dated August 24, 1968, overruled the said preliminary objections raised by the appellant and thereafter the Tribunal gave the Award dated March 3, 1969.
The Industrial Tribunal expressed its inability to fix any grades and scales of pay of the workmen for the reason that the evidence adduced by the Union on this issue was scrappy, none too convincing and not very much acceptable.
As regards dearness allowance the Industrial Tribunal held that since November, 1964 the price index of working class in Calcutta has considerably gone up from 460 to 750 points (as was in October, 1968), i.e. roughly by 300 points.
The Industrial Tribunal awarded enhanced DA at the rate of Rs.60 per month (Rs.20 per 100 points) to the sweeper, bearer, helper, mali, mazdoor, lift man, head sweeper, durwan, pumpman, and as sistant electric mistry.
DA at the , 'ate of Rs.54 per month (Rs. 18 per 100 points) was awarded to the plumber, raj mistry, head durwan, electric mistry and driver and bill collector.
It was also directed that the said rates of DA would remain in force as long as the price index will remain between 600 to 800 points and if the price index goes up beyond 800 points the rate of DA will be revised according to the rates mentioned and if it goes below 600 points it also may be revised accordingly.
With regard to gratuity the Industrial Tribunal pointed out that under the existing scheme gratuity is payable to every workmen after completion of three years continued, faithful and satisfactory service at the rate of 10 days consolidated salary for every com pleted year of service since the date of appointment.
The Industrial Tribunal held that three years ' period was too short to make a workman entitled to gratuity and that "satisfactory" and "faithful" are vague terms.
The Industri al Tribunal framed a scheme of gratuity whereunder after completion of six years of continuous service with the appellant every workmen on retirement or on death will get an amount of gratuity at the rate of 10 days ' consolidated salary for every completed year of service since the date of appointment and a workman who resigns voluntarily would also be entitled to get the gratuity at the same rate provided he completed 10 years of continuous service.
The Industrial Tribunal also directed that if the termination of service is the result of misconduct which caused financial loss to the employer 938 that loss would first be compensated from the gratuity payable to employee and the balance, if any, should be paid to him.
It was also directed that the services of the work men prior to 1950 would not be taken into consideration for the purpose of payment of gratuity.
The appellant filed a writ petition in the High Court under Article 226 of the Constitution wherein the. order dated August 24, 1968 and the Award dated March 7, 1969 given by the Industrial Tribunal were challenged.
The said writ petition was heard by a learned single Judge, who by his judgment dated March 17 & 20, 1972, dismissed the said writ petition.
Before the learned single Judge it was urged that the Award made by the Industrial Tribunal was without jurisdiction for the reason that the appellant does not carry on an "industry" as defined in the Act and that the dispute between the appellant and the workmen cannot come within the ambit of industrial dispute, and also.
for the reason that there was a previous Award dated March 3, 1960 which has not been terminated and was still subsisting and in view of the said Award the present reference was invalid and further that no dispute was raised between the workmen and the appellant prior to the reference before the Indus trial Tribunal and as such the Tribunal has no jurisdiction to deal with the matter.
The learned single Judge rejected all these objections.
He held that in view of the nature of the activity carried on the appellant does carry on an industry within the meaning of the Act and the dispute between the appellant and its workmen come within the ambit of the Act.
As regards the Award dated March 3, 1960 the learned single Judge found that the workmen concerned had given notice to terminate the previous Award and as such the existence of previous Award and as such the existence of previous Award would not preclude a fresh reference.
The learned single Judge observed that no specific plea was raised by the appellant before the Industrial Tribunal challenging the order and the reference on the ground that there was no such dispute prior to the reference between the workmen and the appellant about the questions referred to in the order of reference and that whether there was any demand or not is a question of fact.
the learned single Judge, however, held that from the evidence it is clear that the workmen concerned had demanded before the order of reference in their charter of demands dearness allowance and provident fund and gratuity and as such there was a dispute between the workmen concerned and the employers before the order of reference was made.
The Award was challenged on merits before the learned single Judge on the ground that the Industrial Tribunal did not consider the appellant 's capaci ty to pay in granting dearness allowance to the workmen concerned.
The learned single Judge 939 rejected the said contention on the view that reading the Award as a whole it could not be contended that the Tribunal did not take into consideration either the capacity to pay or the leval of the cost of living.
The appellant filed an appeal against the judgment of the learned single Judge which was dismissed by a Division Bench of the High Court by its judgment and order dated December 20, 1974.
The learned Judges agreed with the deci sion of the learned single Judge that the appellant is carrying on an industry under Section 2(j) of the Act.
Before the Division Bench it was contended on behalf of the appellant that the earlier Award was made on the basis of a settlement between the two parties and that since the said Award was in a nature of settlement it could only be termi nated in accordance with the provisions of Section 19(2) of the Act relating to termination of a settlement.
The learned Judges of the Division Bench held that the said contention was not raised by the appellant before the Tribunal and also before the learned single Judge and it could not be raised for the first time at the stage of the appeal and that it cannot be considered to be a pure question of law because for a settlement under Section 2(p) of the Act the necessary requirements of settlement as laid down in the statute and the rules have to be satisfied and whether the necessary recruitments have been satisfied or not will involve inves tigation into facts.
The learned Judges were, however, of the view that even if the said plea was allowed to be raised it could not be accepted inasmuch as the materials on record do not establish that the requirement of "settlement" as defined in Section 2(p) of the Act are satisfied in respect of the earlier Award.
It was held that an Award does not necessarily cease to be an Award merely because the same was made on the basis of a settlement arrived at between the parties and that the earlier Award was an "Award" within the meaning of Section 2(b) of the Act and was not a settlement as contemplated by Section 2(p) of the Act.
With regard to the termination of the earlier Award, the learned Judges have held that in the facts and circumstances of the case it had been validly terminated in accordance with Section 19(6) as well as Section 19(2) of the Act.
Before the Division Bench it was urged on behalf of the appellant that the Tribunal has not considered the financial capacity of the appellant while making the Award with regard to dearness allowance and reliance was placed on certain documents which were filed before the Division Bench.
The learned Judges held that in considering the findings arrived at by the Tribunal the Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the 940 Tribunal should not be allowed to be placed before the Court in a writ petition for determining whether the findings of the Tribunal are justified or not and that in the instant case no proper grounds have been made out for not producing the materials which were then available at the time of the hearing before the Tribunal and why the said documents could not be produced even before the learned single Judge.
The learned Judges further held that even if the said documents are taken into consideration the same would be of no partic ular assistance to the appellant inasmuch as the said docu ments consist mainly of balance sheets and assessment or ders, and that the legal position is settled that while computing gross profits for the purpose of revising wage structure and dearness allowance the provision made for taxation, depreciation and development rebate cannot be deducted and the provisions of the Companies Act contained in Sections 205 and 211 and the principles of accountancy involved in preparation of profit and loss accounts have no relevance or bearing while considering the revision of wages and dearness allowance.
The learned Judges have held that on the materials on record the Tribunal was justified in making the Award and that the materials on record before the Tribu nal establish that the amount ordered by the Tribunal was not beyond the financial capacity of the appellant.
Aggrieved by the decision of the Division Bench of the High Court the appellant has flied this appeal after obtain ing leave to appeal from the High Court under Article 133(1)(a) of the Constitution.
Shri R.N. Nath, the learned counsel for the appellant, has submitted that the High Court was in error in holding that the appellant is an industry under Section 2(j) of the Act.
Shri Nath has submitted that in arriving at the said conclusion the learned Judges of the Division Bench of the High Court have relied upon the decision of this Court in Management of Safder Jung Hospital vs Kuldip Singh Sethi, [ ; which decision was overruled by this Court in Bangalore Water Supply & Sewerage Board vs R. Rajappa and Others, ; The submission of Shri Nath is that in accordance with the principles laid down in Bangalore Water Supply & Sewerage Board Case, (supra) the appellant cannot be taken to be carrying on an "industry" under Section 2(j) of the Act.
In our opinion there is no substance in this contention.
It is no doubt true that the learned Judges of the Division Bench of the High Court have placed reliance on the decision of this Court in the Safdar Jung Hospital Case, (Supra) for holding that the appellant is carrying on an industry under Section 2(j) of the Act and the decision in Safdar Jung Hospital case, (supra) has 941 been overruled by a larger Bench of this Court in Bangalore Water Supply & Sewerage case, (supra).
But this does not mean that the view of the High Court that the appellant is carrying on an industry under Section 2(j) of the Act is erroneous.
In Safdar Jung Hospital case, (supra), a six member Bench of this Court had overruled the earlier deci sion in State of Bombay vs Hospital Mazdoor Sabha, ; and gave a restricted interpretation to the definition of "industry" contained in Section 2(j) of the Act.
Bangalore Water Supply & Sewerage Board, case (decided by a seven member Bench of this Court) by overruling the decision in Safdar Jung Hospital case, has restored the Hospital Mazdoor Sabha case.
In other words, the effect of decision on Bangalore Water Supply & Sewerage Board case, is that the expression "industry" as defined in Section 2(j) has to be given the meaning assigned to it by this Court in the earlier decisions in D.N. Banerjee vs P.R. Mukherjee, ; , Corporation of the of Nagpur vs Its employees, [ ; and the Hospital Mazdoor Sabha case Krishna Iyer, J., who delivered the main judgment in Bangalore Water Supply & Sewerage Board case, has summed up the principles which are decisive, positively and nega tively, of the identity of "industry" under the Act.
The first principle formulated by the learned Judge is as under: "I, Industry, as defined in Section 2(j) and explained in Banerjee has a wide import: (a) Where (i) systematic activity (ii) organised by cooper ation between employer and employee, (the direct) and sub stantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrele vant, be the venture in the public joint or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the under taking.
" 942 If the said principles are applied to the facts of the present case and there can be no doubt that the activity carried on by the appellant satisfies the requirements of the definition of "industry" contained in Section 2(j) of the Act.
In this regard, it may be mentioned that the learned Judges of the Division Bench of the High Court have found as under: "(i) The Memorandum of Association of the appellant company indicate that the principal object for which the appellant company was incorporated is to acquire by purchase, trans fer, assignment or otherwise lands, buildings and landed properties of all description and in particular to acquire from the Karnani Industrial Bank Ltd., the immovable proper ties now belonging to the said Bank and to improve, manage and develop the properties and to let out the same on lease or otherwise dispose of the same.
(ii) The principal business of the company is to deal with the real property and it is a real estate company.
(iii) The income which the appellant derives is not from mere letting out the properties to the tenants and that the tenants pay not only for mere occupation of the property but also for enjoyment of the various services which are ren dered by the appellant to the tenants and to which services the tenants are entitled as a matter of right for the occu pation of the premises.
(iv) The services which are rendered to the tenants and about which there does not appear to be any dispute are: (a) elaborate arrangements for supply of water; (b) free supply of electricity; (c) washing and cleaning of floors and lavatories; (d) lift services; (e) electric repairs and replacing; and (f) sanitary repairs and replacing etc.
943 (v) For offering these services to the tenants, the appel lant has employed a number of workmen and these services which undoubtedly confer material benefits on the tenants and constitute material services, are rendered by the em ployees.
(vi) The employees of the appellant company are engaged in their respective calling or employment to do their work in rendering the services.
(vii) Activity carried on by the appellant company is un doubtedly not casual and is distinctly systematic.
(viii) The work for which labour of workmen is required is clearly productive of the services to which the tenants are entitled and which also form a part of the consideration for the payments made by the tenants.
(ix) The appellant carries on its business with a view to profits and it makes profits and declares dividends out of the profits earned.
From the aforesaid findings recorded by the High Court, with which we find no reason to disagree, it is evident that the activity carried on by the appellant falls within the ambit of the expression "industry" defined in Section 2(j) of the Act as construed by this Court in Bangalore Water Supply & Sewerage Board case (supra).
The Award of the Industrial Tribunal cannot, therefore, be assailed on the basis that the appellant is not carrying on an industry under the Act.
Shri Nath has next contended that the Industrial Tribu nal was not competent to make the Award as the earlier Award dated March 3, 1960, had not been validly terminated.
He has urged that the earlier Award was in the nature of a settle ment under Section 2(p) of the Act and it could be terminat ed only in accordance with Section 19(2) of the Act.
Shri Nath has pointed out that for terminating a settlement under Section 19(2) a written notice is necessary whereas for termination of an Award under Section 19(6) of the Act a written notice is not required and a notice is sufficient.
In our opinion this contention does not require consid eration in view of the finding recorded by the learned Judges of Division Bench of the High Court that the letter dated November 24, 1966 was a notice 944 under Section 19(6) as well as under Section 19(2) of the Act.
It has been found that the said letter of the union which was addressed to the Labour Commissioner was sent to the appellant company and that in the said letter there is a clear intimation of the intention of the employees to termi nate the Award and from the letter of the appellant dated February 13, 1967 it appears that the appellant had become aware of the intention of the union to terminate the Award and that the order of reference was made on July 29, 1967, long after the expiry of the period of two months.
It is not the requirement of Section 19(2) of the Act that there should be a formal notice terminating a settlement and notice can be inferred from the correspondence between the parties (See: Indian Link Chain Manufacturers Ltd. vs Their Workmen, ; In the aforesaid facts and circumstances the High Court was justified in holding that the Award dated March 3, 1960 had been validly terminated before the passing of the order of reference.
Shri Nath has urged that there has been non compliance of the provisions of Section 19(7) of the Act which lays down that no notice given under sub section (2) or sub sec tion (6) shall have effect unless it is given by a party representing the majority of the persons bound by the set tlement or Award as the case may be.
This question has been raised by the appellant for the first in this Court.
It involves an inquiry into questions of fact which cannot be made at this stage.
The same, therefore, cannot be allowed to be agitated.
Shri Nath has lastly urged that the Industrial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity of the appellant to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submit ted by the appellant before the High Court.
We find no substance in this contention.
The High Court has rightly held that in considering the finding arrived at by the Tribunal the High Court while exercising its jurisdiction under Article 226 of the Constitution should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribunal should not normally be allowed to be placed before the Court.
The appellant has not been able to show why the said documents were not produced before the Tribunal.
It is not the case of the appellant that the Tribunal had precluded the appellant from producing these documents.
In these circumstances we find no justification for accepting the plea of the learned counsel for the appel lant for 945 reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before the High Court.
The appeal is, therefore, dismissed with costs.
During the pendency of this appeal, the appellant has made a deposit before the Tribunal.
The respondent .union will be entitled to withdraw the said amount along with the interest that has accrued on it.
T.N.A. Appeal dismissed.
|
The appellant, a real estate company, was engaged in the business of letting out its property on lease, Besides it was also rendering various services to its tenants such as electricity and water supply, washing and cleaning, lift services, electrical and sanitary repairs on payment basis.
For rendering these services the appellant company employed a number of workmen.
A dispute arose between the employees and the appellant company with regard to wages, scales of pay, dearness allowance and gratuity.
The State Government re ferred the disputes to Industrial Tribunal for adjudication.
The appellant company contested the reference before the Tribunal by raising a preliminary objection that the alleged dispute was not an industrial dispute and that the reference was barred by Section 19 of the since there was an earlier binding award, based on settlement with the Union, which was not terminated by either parties.
934 By an order dated August 24, 1968 the Tribunal overruled the preliminary objection and gave the award dated March 3. 1969 enhancing the dearness allowance of the employees.
The Tribunal also framed a revised gratuity scheme but did not fix any grades and pay scales of workmen for want of con vincing evidence.
The appellant company filed a writ petition in the High Court challenging the Tribunal 's order dated August 24, 1968 as well as the Award dated March 7, 1969 contending: (i) that the Award was without jurisdiction because the appel lant company was not carrying on 'industry ' and the alleged dispute was not an 'Industrial Dispute ' and that the previ ous Award was not terminated and was still subsisting; (ii) that no dispute was raised between the workmen and the appellant prior to the reference before the Tribunal; and (iii) that the Tribunal did not consider the appellant 's capacity to pay dearness allowance to the workmen.
A single judge of the High Court dismissed the writ petition by rejecting all the contentions.
The appellant filed an appeal against the judgment of the single judge before a Division Bench of the High Court which was also dismissed.
Against the decision of the Division Bench of the High Court the appellant company filed an appeal to this Court, contending: (i) that the High Court was in error in holding that the appellant was an 'industry ' under Section 2(j) of the Act; (ii) that the Tribunal was not competent to make the Award since the earlier Award, which was in the nature of a settlement under Section 2(p), was not terminated in accordance with section 19(2) by giving a formal written notice; (iii) that there was non compliance with the provi sions of Section 19(7) of the Act; and (iv) that the Indus trial Tribunal was in error in making the Award in relation to Dearness Allowance without examining the capacity to pay the additional amount and that the High Court should have remanded the matter to the Tribunal for considering this issue in the light of the documents which were submitted by the appellant before the High Court.
Dismissing appeal, this Court, HELD: 1.
The activity carried on by the appellant compa ny falls within the ambit of the expression "industry" defined in Section 2(j) of the .
The Award of the Industrial Tribunal cannot, there fore, be assailed on the basis that the appellant is 935 not carrying on an 'industry ' under the Act.
[943E] Bangalore Water Supply & Swerage Board v .R. Rajappa and Ors., ; , applied.
Management of Safdar jung Hospital vs Kuldip Singh Sethi, ; ; State of Bombay vs Hospital Mazdoor Sabha, ; ; D.N. Banerjee vs P.R. Mukherjee, ; and Corporation of the City of Nagpur vs Its employees; , , referred to. 2.
It is not the requirement of Section 19(2) of the that there should be a formal notice terminating a settlement, and notice can be inferred from the correspondence between the parties.
[944B] Indian Link Chain Manufacturers Ltd. vs Their Workmen, [1972] I SCR 790, applied.
2.1 In view of the finding of the Division bench that the letter of employees Union dated November 24, 1966 was a notice under section 19(6) as well as section 19(2) of the and that the said letter contained a clear intimation of the intention of the employ ees to terminate the Award, the High Court was justified in holding that the earlier award had been validly terminated before the passing of the order of reference.
[943H; 944A B ] 3.
The High Court was right in taking the view that while exercising its jurisdiction under Article 226 of the Constitution the High Court should generally consider the materials which were made available to the Tribunal and fresh or further materials which were not before the Tribu nal should not normally be allowed to be placed before the Court.
[944F G] 3.1 In the instant case the appellant has not been able to show why the documents relied on by it were not produced before the Tribunal.
Therefore there is no justification for accepting the plea of the appellant for reconsideration of the Award of the Tribunal in the light of the documents submitted by the appellant during the pendency of the appeal before High Court.
[944G H] 4.
A question raised for the first time in the Supreme Court involving an inquiry into questions of fact cannot be allowed to be agitated.
[944E] 936
|
ition (Civil) Nos.
888 892 of 1987, 757 of 1988 and 316 of 1989.
(Under Article 32 of the Constitution of India).
7 H.S. Gururaja Rao, Mrs. C. Markandeya and section Markandeya for the Petitioners.
Krishnamurthy Iyer, P. Parthasarthi and T.V.S.N. Chari for the Respondent.
The Judgment of the Court was delivered by KASLIWAL, J.
The above mentioned bunch of writ petitions under Article 32 of the Constitution of India have been filed by the retired Government servants of the Government of Andhra Pradesh having retired in between 1st April, 1978 and 28th October, 1979.
The case of the petitioners is that in pursuance to persistent demands made by the State Govern ment Employees to revise their pay scales the Andhra Pradesh Government by Government Order dated November 3, 1977 ap pointed Shri A. Krishnaswamy, I.A.S. (Retd.) as the Pay Revision Commissioner.
By another Government Order dated January 28, 1978 the Pay Revision Commissioner was also directed to review the existing retirement benefits inter alia to all employees of the State Government and to examine the question of extension of retirement benefits and make suitable recommendations in that regard.
The Pay Revision Commissioner submitted a report comprised of five volumes.
The Commission recommended that the date from which the revised scales of pay would be given effect to should be April 1, 1978.
In Paragraphs 9.42 to 9.45 of its report the Pay Revision Commissioner specifically recommended that the age of retirement should be increased from 55 years to 58 years.
It has been alleged that so far as the recommenda tions of the Commission in regard to the increased pay scales are concerned, the same were accepted and implemented by the State Government w.e.f.
April 1, 1978.
But so far as the recommendation in regard to increase in the age of superannuation from 55 years to 58 years, the same was implemented only w.e.f. October 29, 1979 through G.O.M.S. No. 283 Finance and Planning.
It has also been alleged by the petitioners that the State Government issued G.O. (P) No. 88 Finance and Planning dated March 26, 1980 whereby the Revised Pension Rules, 1980 were promulgated.
The above rules divided the Government servants for the purpose of pension into two parts, Part I applying to all Government servants who were in service on 29th October, 1979 and Part II applying to such of the Government servants who retired/died in between 1st April, 1978 and 28th October, 1979 (both dates inclusive).
The contention of the petitioners is that by the above Rules two categories of pensioners 8 were created with different rates of pension which is com pletely arbitrary and in violation of the law declared by this Hon 'ble Court in D.S. Nakara & Others vs Union of India, ; The petitioners have, therefore, prayed that pension rules Part II which has been made ap plicable to Government servants having retired between 1st April, 1978 and 28th October, 1979 be quashed and it may be directed that they would also be governed by Part I of the Rules which is applicable to those Government servants who were in service on 29th October, 1979.
The counter affidavit has been filed on behalf of the State of Andhra Pradesh.
In the counter affidavit it has been stated that Pay Revision Commissioner was appointed to review the structure of different scales of Pay, dearness allowance and other compensatory allowance of all categories of employees of the State Government, Local Bodies and Aided Institutions as well as work charge establishments.
An additional term of reference was added for reviewing the existing retirement benefit of all categories.
After care fully considering all the relevant factors the Government implemented the recommendations relating to revision of scales of pay w.e.f.
1st April, 1978.
As regards the age of superannuation, the Government of Andhra Pradesh increased the age of superannuation to 58 years w.e.f. October 29, 1979.
This increase in the age of superannuation could not be implemented retrospectively as it would have led to a lot of difficulties, but to compensate those who retired after April 1, 1978 and before October 29, 1979 the Government gave them benefits as under: (1) The pension formula was increased from 33/80 to 30/60 for all those who retired between 1.4.1978 and 28.10.1979.
This increase was specifically given as they would not have otherwise been entitled to the revised pension formula of 33/66 which had been applied only to such Government serv ants who retired after 29.10.1979.
(2) Formula for calculation of gratuity was increased to 1/3rd of emoluments for each completed six months period of qualifying service subject to a maximum of 20 months emolu ments and limited to Rs.30,000.
Earlier the formula was 1/4th of pay for every six months service subject to a maximum of 16 1/2 times and emoluments limited to Rs.30,000.
(3) The Family pension was increased to 30% of the last drawn pay without any maximum limit.
Earlier the rates of Family 9 pension were different for different ranges of pay and the minimum was Rs.60 and maximum Rs.250.
It was further submitted in the counter affidavit that the distinction between the pensioners in Part I and II is based on the date of retirement and is clearly connected with the age of superannuation which was raised from 55 years to 58 years.
It is not correct to say that the Govern ment had arbitrarily divided the pensioners into two groups.
As the date of superannuation was enhanced to 58 years on 29.10.1979 it was necessary to draw a line between those who retired earlier to that date and those who retired subse quent to 29.10.1979.
It was pointed out that the pension formula would be 30/60 for those who retired between 1.4.1978 and 28.10.1979 and their pension worked out on the basis of 30/60 of the average emoluments and in respect of those who retired on or after 29.10.1979, it would be worked out as 33/66.
Thus both the rules guarantee 50% of pension irrespective of date of retirement.
It was also pointed out in the counter affidavit that a writ petition (civil) No. 12605/85 was filed by the Andhra Pradesh State Government Retired Officers Association and Others vs The State of Andhra Pradesh and Others on identical grounds and the same was dismissed by this Hon 'ble Court by an order dated 2.3.1987.
In the above case it was held that "In view of the averments contained in paragraph 2(d) and 3 of the counter affidavit, it is quite clear that the State Government was fully alive to improve the pensionary benefit of those who had already retired prior to October 29, 1979 and accordingly enhanced the rates of pension.
We are satisfied that there is a discernible basis for differential rates of pension and it cannot be said that such differential rates have no reasonable nexus to the object sought to be achieved or that they offend Article 14 of the Constitution.
The Writ Petition is accord ingly dismissed".
We have heard the arguments advanced by Learned Counsel for both the parties and have thoroughly perused the records and the Andhra Pradesh Revised Pension Rules, 1980.
We are fully convinced that the claim of the petitioners is based on a complete misconception of the Rules.
A perusal of the Rules clearly goes to show that Part I of the Rules was no doubt made applicable to all Government servants who would retire on or after 29.10.1979 while Part II was made ap plicable to such Government servants who were holding pen sionable posts on 31st March, 1978 and who retired between 1st April, 1978 and 28th October, 1979 and this distinction was necessary in view of the fact 10 that the age of superannuation for retirement was increased from 55 years to 58 years w.e.f.
29th October, 1979.
Howev er, all the benefits have been granted to the pensioners like the petitioners who had retired between 1.4.1978 and 29.10.1979 in the amount of pension, retirement gratuity and family pension as granted to the Government servants falling under Part I. So far as the amount of pension is concerned, the formula of completed six monthly periods of qualifying service was worked out as 30/60 of average emoluments which was equal to 50% of the pay.
On account of the fact that the Government servants falling in Part I and retiring at the superannuation age of 58 years the above formula was calcu lated at 33/66 which was also 50% of the average emoluments.
Similarly in the case of retirement gratuity and family pension no distinction has been made in the case of the two categories of pensioners.
This clearly goes to show that neither there is any discrimination nor any disadvantage to the pensioners falling in the category of petitioners and the formula working out the amount of pension is based on a rational principle and it cannot be said that such differen tial rates have no reasonable nexus to the object sought to be achieved or the same are in any manner violative of article 14 of the Constitution.
In view of the circumstances mentioned above the case of D.S. Nakara & Ors.
vs Union of India, (supra) is not at all applicable in the facts and circumstances of this case and renders no assistance to the petitioners.
In the result we find no force in these writ petitions and the same are dismissed with no order as to costs.
G.N. Petitions dismissed.
|
The Andhra Pradesh State Government appointed a Pay Revision Commissioner in 1977, for revision of pay scales in respect of its employees.
The Commissioner was also directed to review the then existing retirement benefits and to make suitable recommendations regarding extension of retirement benefits.
He submitted his report and recommended that the revised scales be made effective from 1.4.78.
He also recom mended that the retirement age should be increased from 55 years to 58 years.
Accepting the report, the State Government implemented the recommendations regarding pay scales effective from 1.4.78.
The recommendation regarding increase in retirement age was implemented with effect from 29.10.1979.
The State Government promulgated the Revised Pension Rules, 1980, which made a distinction between Government servants who were in service as on 29th October, 1979 (Part I) and those Government servants who retired/died in between 1.4.78 and 28.10.79.
(Part II).
By these Writ Petitions, the petitioners challenged the Revised Pension Rules, 1980 on the ground that the said Rules created two different categories of pensioners with different rates of pension which was completely arbitrary and in violation of this Court 's decision in D.S. Nakara & Ors.
vs Union of India, ; The Respondent State contended that the increase In the age of superannuation could not be implemented retrospec tively as it would have led to a lot of difficulties, but to compensate those who retired after April 1, 1978 and before October 29, 1979 the Government gave them certain benefits.
It was further contended that since the date of superannua tion was enhanced to 58 years on 29.10.1979 it was neces 6 sary to draw a line between those who retired earlier to that date and those who retired subsequent to 29.10.1979, which was not arbitrary and the rules guarantee 50% of pension to both categories irrespective of the date of retirement.
Dismissing the writ petitions, HELD: 1.
The claim of the petitioners is based on a complete misconception of the Rules.
A perusal of the Rules clearly goes to show that Part I of the Rules was no doubt made applicable to all Government servants who would retire on or after 29.10.1979 while Part II was made applicable to such Government servants who were holding pensionable posts on 31st March, 1978 and who retired between 1st April, 1978 and 28th October, 1979 and this distinction was necessary in view of the fact that the age of superannuation for retire ment was increased from 55 years to 58 years w.e.f.
29th October, 1979.
[9G H; 10A] 2.
All the benefits have been granted to the pensioners like the petitioners who had retired between 1.4.1978 and 29.10.1979 in the amount of pension, retirement gratuity and family pension as granted to the Government servants falling under Part I So far as the amount of pension is concerned, the formula of completed six monthly periods of qualifying service was worked out as 30/60 of average emoluments which was equal to 50% of the pay.
On account of the fact that the Government servants falling in Part I are retiring at the superannuation age of 58 years the above formula was calcu lated as 33/66 which was also 50% of the average emoluments.
Similarly in the case of retirement gratuity and family pension no distinction has been made in the case of the two categories of pensioners.
This clearly goes to show that neither there is any discrimination nor any disadvantage to the pensioners falling in the category of petitioners and the formula working out the amount of pension is based on a rational principle and it cannot be said that such differen tial rates have no reasonable nexus to the object sought to be achieved or the same are in any manner violative of Article 14 of the Constitution.
[10A D] D.S. Nakara & Ors.
vs Union of India, ; ; distinguished.
|
vil Appeal Nos.
2 192/93 of 1972.
From the Judgment and Decree dated 23.4.1971 of the Madras High Court in Writ Appeal Nos. 155 and 157 of 1970.
G.L. Sanghi, K. Parasaran, section Krishnamurthy Iyer, K.K. Venugopal, D.N. Mishra and Ms. Lira Goswami for the Appel lants.
V.C. Mahajan, Gobind Das, N.L. Kakar, C.V. Subba Rao, B.R. Aggarwala, T.C. Sharma, Mrs. Sushma Suri and Ms. Sushma Manchanda for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
Both these appeals are against the common judgment of the Madras High Court (hereinafter referred to as 'the High Court ') by a certificate under Article 133(1) of the Constitution prior to its amendment.
The appellants ' writ petitions were dismissed by a common judgment dated 18.12.1969 by a learned Single Judge of the High Court and thereafter, the writ appeals were dismissed by a Division Bench of the High Court on 23.4.1971.
The grievance of the appellants before us is, as it was in the High Court, against the fixation of a uniform retention price in 1969 to be paid to all producers for the cement produced by them and acquired by the State Trading Corporation.
In short, the appellants ' grievance is that the fixation of a uniform retention price for all producers in 1969 instead of three different retention prices for different categories of producers, as was done earlier, amounted to discrimination contravening Article 14 of the Constitution.
The background in which the argument of discrimination has to be tested may now be stated.
Cement has been a con trolled com 853 modity for a long time and its production, distribution and price were regulated by Cement Control Orders issued by the Central Government from time to time in exercise of the powers conferred under the Industries (Development & Regula tion) Act, 1951.
The arrangement made in 1856 was that the entire quantity of cement produced by all producers was acquired by the State Trading Corporation which distributed it throughout the country at a uniform price on f.o.r.
basis.
The price payable by the State Trading Corporation to the producer was, however, the 'retention price ' or 'ex works ' or 'ex factory price ' fixed by the Government.
In accordance with the recommendations of the First Tariff Commission in 1958, the Central Government fixed f.o.r.
and ex factory prices for a period of three years from July 1958, under the Cement Control Order, 1958.
Even though the consumer price was one uniform f.o.r.
destination price, there were different retention prices for cement relating to the producers.
In case of a new unit commencing production, the Government fixed suitable retention price for it on the basis of cost of production.
Pursuant to representation by the cement industry for revision in the prices, the Second Tariff Commission was set up by the Government to examine the question.
The Tariff Commission, after a comprehensive study, submitted its report on 26.8.1961.
In the report, it was noticed that fixation of ex works price for individual cement producers had brought stagnation in the cement industry due to lack of competition and incentive amongst producers to reduce the cost of production, improve the operational efficiency and increase the output.
It was observed that instead of reward ing efficiency, it had promoted a tendency to inflate costs which facilitated increase in the margin of profit to the producer.
The Tariff Commission ultimately grouped the various units under three broad categories on the basis of return on the capital employed.
These were: the lowest cost group, the high cost group, and those whose cost of produc tion was in between the other two groups.
Accordingly, the Tariff Commission recommended different retention prices for the manufacturers of cement.
The Government generally ac cepted the recommendations and passed the Cement Control Order, 1961, fixing three different retention prices for three different groups of manufacturers.
The Central Govern ment from time to time permitted increase in the retention prices so fixed.
The Central Government decided on discontrol of cement w.e.f.
1.1.1966, but the cement industry imposed a system of self regulation and set up an unofficial body known as "Cement Allocation and 854 Coordinating Organisation".
The cement was to be distributed to consumers at uniform f.o.r.
destination price all over India.
This price included a freight component.
A cement regulation account was also established to which a manufac turer would either contribute or draw from depending on the actual freight incurred.
This system was not found workable and the Central Government decided to re impose control.
The Cement Control Order, 1967 was passed under Section 18G and Section 25 of the Industries (Development & Regulation) Act, 1951, to be effective from 1.1.1968.
Under this Order, the threetier retention price system was continued and the retention prices fixed for the three groups were specified in the Schedule as Rs.90.50, Rs.93.50 and Rs.96.
Both the appellants fell under the category for which the retention price specified in the Schedule was Rs.96.
Under this Cement Control Order, the system of uniform consumer price was preserved and freight equalisation was maintained by requir ing the manufacturer to either contribute or draw from the cement regulation account set up under clause 9 of the Order.
The Cement Controller replaced the Cement Allocation and Co ordinating Organisation.
Pursuant to the representation made by various manufac turers, the Central Government enquired into the increase in the cost of production since 1.1.1966.
In consultation with the concerned authorities, it was estimated that the weight ed average increase in the cost of production since 1.1.1966 was Rs7 per tonne.
The Central Government then issued the Cement Control (Amendment) Order, 1969 on 14.4.1969 effec tive from 16.4.1969 by which the Cement Control Order, 1967 was amended and in respect of all cement manufacturers, except M/s. Travancore Cement Limited, Kottayam, a uniform retention price of Rs. 100 per tonne was fixed.
The appellants filed writ petitions in the Madras High Court challenging the fixation of a uniform retention price of Rs. 100 per tonne in this manner on the ground that it violated Articles 14 and 19(1)(g) of the Constitution.
As earlier stated, the challenge was rejected by a Single Judge and thereafter, a Division Bench of the High Court, Hence, these appeals by a certificate granted by the High Court under the unamended Article 133(1) of the Constitution of India, The challenge before us in these appeals is based only on Article 14 of the Constitution.
Shri K. Parasaran, learned counsel for the appellant in the Civil Appeal No. 2193 of 1972 (Chettinad Cement 855 Corporation Ltd. vs Union of India, contended that the impugned Order made in 1969 fixing a uniform retention price for all three categories of cement producers treats unequals as equals.
He argued that the fixation of three different retention prices earlier was based on the Tariff Commis sion 's Report on the postulate that different .producers were differently situated with different cost of production and therefore, the fixation of different retention prices for them was reasonable.
He next contended that increase in the cost of production being the real cause for re fixation of a higher price, the exercise purports to be under Clause 12 of the Cement Control Order, 1967, which does not permit fixation of the same price for all producers in spite of the difference in their cost of production, particularly when the Schedule to the order initially specified different prices for them.
He also contended that on the finding of the High Court that the Chettinad Cement Corporation Ltd. (appellant in Civil Appeal No. 2193 of 1972) a newly born unit in infancy has suffered by this common treatment because there are several features which distinguish the Chettinad Cement Corporation Ltd. from the other units, fixation of the same price for this appellant is discrimina tory, particularly when a distinction was made in the case of M/s. Travancore Cement Ltd., Kottayam, for which a higher retention price was fixed.
Shri Parasaran, therefore, con tended that atleast in the case of this appellant, discrimi nation is proved on the basis of the High Court 's finding of fact and a direction for re fixation of a reasonable price 'for this appellant would be justified.
Shri G.L. Sanghi, learned counsel for the appellant in Civil Appeal No. 2192 of 1972, advanced a slightly modified argument.
He too referred to Clause 12 of the Cement Control Order, 1967 to contend that fixation of one uniform retention price for all producers is not permissible thereunder.
He argued that the increase of Rs.7 per tonne was to be made to the existing three tier retention prices, but an irrational basis was adopted in fixing the uniform price of Rs. 100 per tonne which results in an unequal increase to the three different retention prices then existing.
Both the learned counsel contended that the result, therefore, is that whereas pro ducers for whom the retention price fixed earlier was Rs.90.50 per tonne have got an increase of more than Rs.7, the producers for whom the retention price was fixed at Rs.96 per tonne have been given an increase of less than Rs.7.
It was, therefore, contended that fixation of the uniform retention price of Rs. 100 per tonne in case of all cement producers except M/s. Travancore Cement Ltd., Kotta yam, is discriminatory resulting in contravention of Article 14 of the Constitution.
To recapitulate, the arrangement in vogue from 1956 was that 856 the cement produced by all the producers was acquired by the State Trading Corporation which distributed the commodity throughout the country at a uniform price on f.o.r. destina tion basis.
The price payable by the S.T.C. to the producers was known as the 'retention price ' or 'ex works ' or 'ex factory price ' at a uniform rate.
On a representation by the industry for revision of prices, the Government appointed the Second Tariff Commission to go into the question.
The Tariff Commission, after a comprehensive review, submitted its report on 26.8.1961, and recommended the fixation of different retention prices for different groups of cement producers.
The Government generally accepted the recommenda tions of the Tariff Commission and fixed three different retention prices which remained in vogue till fixation of a uniform retention price by the impugned Order in 1969.
It may be mentioned that the fixation of three different prices instead of one uniform retention price in the inter vening period was challenged before the Rajasthan High Court on the ground that it was discriminatory, but that challenge was rejected in Jaipur Udyog Ltd. vs Union of India, AIR 1.
Thereafter, the cement industry sought a further revi sion of the prices and the industry accepted in principle that there should be one uniform retention price or ex factory price in place of the three tier system, though the claim of the industry was that the uniform price be fixed at Rs.96 instead of Rs.93.
The real controversy, therefore, between the cement industry and the Central Government was, whether the addition of Rs.7 per tonne for fixation of a uniform retention price should be made to the sum of Rs.96 or to Rs.93.
In other words, if the uniform retention price were fixed at Rs. 104 per tonne instead of Rs. 100 per tonne, there was no grievance to anyone in the cement indus try against fixation of the uniform retention price.
Even at the hearing before us, in reply to this specific query by us, learned counsel for the appellants did not dispute that no grievance would survive to the appellants if the uniform retention price was fixed at Rs. 104 per tonne instead of Rs. 100 per tonne.
In substance, the grievance of both the appellants, therefore, is only to this extent and the argu ment of discrimination has been advanced for this purpose.
In the counter affidavit filed on behalf of the Central Government, the manner in which the uniform retention price for the industry was fixed at Rs. 100 per tonne has been elaborately explained.
A portion of the counter affidavit, relied on by the High Court also, is as under: 857 "The question of introduction of a uniform price for the entire industry had been under consideration from time to time since 1961.
The opportunity of the request of the industry for an upward revision of their retention price due to increase in cost of production as a result of Governmen tal actions since 1.1.1966, was availed of to consider whether it was not opportune to introduce finally a uniform price for the entire industry as a Whole.
In view of the observations of the Tariff Commission in 1961 that econo mies were possible with better management control and that the industry should make every effort to reduce its cost of production in future and the time elapsed since 196 1 it was felt that the additional price granted to the industry in 196 1, need not any longer be continued.
The weighted aver age increase in the cost of production as a result of Gov ernmental actions since 1.1.1966, was determined in consul tation with the Chief Cost Accounts Officer as Rs.7 per tonne.
The uniform price thus works out to Rs.90.50 per tome, i.e. Rs.69.50 per tonne prescribed in '1961 together with subsequent increases amounting in all to Rs.21.
The weighted average retention price on the basis of three different retention prices amounted to Rs.93 per tonne.
The uniform price for the industry was thus fixed at Rs. 100 i.e. Rs.93 per tonne, the weighted average of the three retention prices on the basis of actual production plus Rs.7 per tonne, as a result of the increase in the cost of pro duction due to Governmental actions since 1.1.1966.
The fixation of a uniform retention price does not therefore involve any inequality or arbitrariness.
It is denied that the Cement Control (Amendment) Order, 1969, has introduced any unfair and arbitrary inequality among the various pro ducers and would cause considerable loss to the petitioner or would amount to an unjust and arbitrary discrimination violative of Article 14 or 19(1)(g) of the Constitution of India.
" The assertion in the counter affidavit of the Government is that the industry was itself in favour of a single uni form retention price which was taken into account by the Government in fixing the uniform price.
This was not rebut ted by the appellants.
The High Court has rightly relied on this fact.
It is, therefore, clear that the fixation of Rs. 100 per tonne as the uniform retention price for the entire industry with the solitary exception of M/s. Travancore Cement Ltd., Kotta 858 yam, for which justification has been shown, was on a ra tional basis taking into account all relevant data and factors including the cement industry 's acceptance of the principle of a uniform retention price for the entire indus try, the only difference being in the price, actually fixed at Rs. 100 per tonne instead of Rs. 104 per tonne claimed by the cement industry.
It is obvious that the fixation at Rs. 100 per tonne being shows to be made on a principle which has not been faulted, the actual fixation at Rs. 100 instead of Rs. 104 to be received by the industry is not within the domain of permissible judicial review if the principle of a uniform retention price for the entire industry cannot be faulted, The principles of price fixation permitting the fixation of a uniform price for the entire industry are no longer debatable after the recent decision of a Constitution Bench in M/s, Shri Sitaram Sugar Company Limited & Anr.
vs Union of India & Ors.
, and U.P. Stale Sugar Corporation Ltd. & Anr.
vs Union of India & Ors.
, JT even if the same were debatable when the controversy arose in the present case.
In this decision, the Constitution Bench while affirming the earlier decisions of this Court in Anakapalle Co operative Agricultural & Industrial Society Ltd. etc.
vs Union of India & Ors.
, ; and The Panipat Cooperative Sugar Mills vs Union of India, [1973] 2 SCR 860 reiterated the settled principles.
It was pointed out that what is best for the industry and in what manner the policy should be formulated and implemented, bearing in mind the object of supply and equitable distribution of the commodity at a fair price in the best interest of the gener al public, is a matter for decision exclusively within the province of the Central Government and such matters do not ordinarily attract the power of judicial review.
It was also held that even if some persons are at a disadvantage and have suffered losses on account of the formulation and implementation of the Government policy, that is not by itself sufficient ground for interference with the Govern mental action.
Rejection of the principle of fixation of price unitwise on actual cost basis of each unit was reiter ated and it was pointed out that such a policy promotes efficiency and provides an incentive to cut down the cost introducing an element of healthy competition among the units.
Similarly, the criticism against the principle of weighted average adopted in fixation of price was rejected as baseless.
It is obvious that even if there be no price control, the uneconomic units would be at a great disadvan tage and, therefore, the position should not be different for the purpose of price fixation.
The "cost plus" price fixation perpetuates inefficiency in the industry and is against the long term interest of the country.
It was held "that 859 price, . . , is to be arrived at by a process of cost ing with reference to a reasonably efficient and economic representative cross section of manufacturing units.
" It is, therefore, clear that the principle of fixation of a uniform price for the industry is an accepted principle and this has to be done by fixing a uniform price on the basis of the cost of a reasonably efficient and economic representative cross section of manufacturing units and not with reference to the cost in relation to each unit.
Obviously, such a practice is in larger public interest and also promotes efficiency in the industry providing an incentive to the uneconomic units to achieve efficiency and to reduce their cost.
In the same decision, the permitted scope of judicial review was summarised as under: "The true position, therefore, is that any act of the repos itory of power, whether legislative or administrative or quasi judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it.
" In the present case, we find that the fixation of the uniform retention price at Rs. 100 per tonne is based on the weighted average increase of Rs.7 in the cost of production and the weighted average retention price on the basis of three different retention prices determined at Rs.93 per tonne on the basis of expert opinion.
Fixation of a uniform retention price being clearly permissible and the same having been determined at Rs. 100 per tonne on the basis of expert opinion, rounded on relevant factors, there is no scope for interference within the limits of permissible judicial review in the present case.
A brief reference to Clause 12 of the Cement Control Order, 1967 may also be made.
Clause 12 reads as under: "12.
POWER TO VARY THE PRICES AND TO ALTER THE SCHEDULE .
The Central Government may, having regard to any change in any of the factors relevant for the price of cement, such as an increase or decrease in the cost of production or distribution, by notification in the Official Gazette, vary the price fixed in this Order or alter the Schedule to this Order as appear to it to be necessary.
" 860 We are unable to appreciate how Clause 12 in any manner restricts the Central Government 's power to fix a uniform retention price for all the units specified in the Schedule to the Order, even though different prices were specified in the Schedule as initially enacted.
The Central Government 's power to refix the price can be exercised 'having regard to any change in any of the factors relevant for determination of price of cement '.
The meaning of the expression 'having regard to ' is wellsettled.
It indicates that in exercising the power, regard must be had also to the factors enumerated together with all factors relevant for exercise of that power.
Once such factor specified in Clause 12 is "such as an increase or decrease in the cost of production or distri bution".
Admittedly, the fixation of the uniform retention price at Rs. I00 per tonne was made on the industry 's demand for revision of the price as a result of increase in the cost of production, the only dispute between the industry and the Central Government being with regard to the extent of increase and not to the effect of increase or the mode of increase by fixation of a uniform price.
It is, therefore, difficult to appreciate the support that the learned counsel for the appellants seek from Clause 12.
The only surviving question for consideration is the argument in Civil Appeal No. 2 193 of 1972 for a differen tial treatment to the appellant, M/s. Chettinad Cement Corporation Limited, on the analogy of M/s. Travancore Cement Limited, Kottayam.
In the counter affidavit of Shri G. Ramanathan, Under Secretary to the Government of India, the reason for treating Travancore Cement Limited different ly has been clearly stated.
It has been stated that it is a sub standard unit with a capacity of 50000 tonnes per annum only without any scope for expansion while the standard capacity for a unit is two lakh tonnes per annum; so that this unit is not capable of expanding the capacity and it is on the whole an uneconomic unit deserving a special consid eration.
No material has been produced by the appellant, M/s. Chettinad Cement Corporation Limited, to show that it is a similar sub standard unit without any capacity for expansion, so that it too must continue to be an uneconomic unit like M/s. Travancore Cement Limited, Kottayam deserving a similar treatment.
The counter affidavit, therefore, shows a rational basis for classifying M/s. Travancore Cement Limited, Kottayam, differently as a sub standard and an uneconomic unit without any scope for improvement in com parison to other units.
This argument also is untenable.
As a result of the aforesaid discussion, we do not find merit in 861 any of the contentions advanced in support of these appeals to support the challenge on the basis of Article 14 of the Constitution to the fixation of a uniform retention price of Rs. 100 per tonne in 1969 by the impugned Order or to the practice of a uniform retention price being followed upto 1979.
These appeals are accordingly dismissed.
In the circum stances of the case, the parties shall bear their own costs.
R.S.S. Appeals dismissed.
|
The appellants filed writ petitions in the Madras High Court challenging the fixation in 1969 of a uniform reten tion price of Rs. 100 per tonne of cement instead of the existing three different retention prices for different categories of producers fixed earlier on the basis of the recommendations made by the Second Tariff Commission in 1961.
The grievance of the appellants was that the fixation of a uniform retention price to be paid to all producers for the cement produced by them and acquired by the State Trad ing Corporation amounted to discrimination contravening Article 14 of the Constitution.
The challenge was rejected by a Single Judge and, thereafter, a Division Bench of the High Court.
Cement has been a controlled commodity for a long time and its production, distribution and price were regulated by Cement Control Orders issued by the Central Government from time to time in exercise of the powers conferred under sections 18G and 25 of the Industrial (Development & Regula tion) Act, 1951.
On behalf of the appellants it was contended that the impugned Order made in 1969 fixing a uniform retention price for all three categories of cement producers treated un equals as equals; that the increase of Rs.7 per tonne was to be made to the existing three tier retention prices, but an irrational basis was adopted in fixing the uniform price of Rs. 100 per tonne which resulted in an unequal increase to the three different retention prices then existing; that clause 12 of the Cement Control Order, 1967 did not permit one uniform retention price; and that atleast in the case of Chettinad Cement Corporation Ltd. discrimination was proved on the basis of the distinction made by the High Court in the case of M/s Travancore Cement Ltd. The appellants howev er did not dispute before this court that no grievance would survive if the uniform retention price was fixed at Rs. 104 per tonne instead of Rs. 100.
851 On behalf of the respondents it was asserted that the industry itself had sought a revision of the prices and had accepted in principle that there should be one uniform retention price.
Dismissing the appeals, this Court, HELD: {1) The fixation of Rs. 100 per tonne as the uniform retention price for the entire industry with the solitary exception of M/S Travancore Cement Ltd. for which justification had been shown, was on a rational basis taking into account all relevant data and factors including the cement industry 's acceptance of the principle of a uniform retention price for the entire industry, the only difference being in the price actually fixed at Rs. 100 per tonne instead of Rs. 104 per tonne claimed by the cement industry.
It is obvious, therefore, that the principle of a uniform retention price for the entire industry had not been fault ed.
[857H; 858A B] (2) The principle of fixation of a uniform price for the industry was an accepted principle and this had to be done by fixing the uniform price on the basis of the cost of a reasonably efficient and economic representative cross section of manufacturing units and not with reference to the cost in relation to each unit.
[859A B] M/s. Shri Sitaram Sugar Company Limited & Anr.
vs Union of India & Ors.
and U.P. State Sugar Corporation Ltd. & Anr.
vs Union of India & Ors., J.T. , referred to.
(3) Fixation of a uniform retention price being clearly permissible and the same having been determined at Rs. 100 per tonne on the basis of expert opinion, rounded on rele vant factors, there was no scope for interference within the limits of permissible judicial review in the present case.
[859E] Anakapalle Co operative Agricultural & Industrial Socie ty Ltd. vs Union of India, and The Panipat Cooperative Sugar Mills vs Union of India, [1973] 2 SCR 860, referred to.
(4) The Central Government 's power under Clause 12 of the Cement Control Order, 1967 to refix the price can be exercised 'having regard to any change in any of the factors relevant for determination of price of cement '.
The meaning of the expression 'having regard to ' is well settled.
It indicates that in exercising the power, regard must be had also to the factors enumerated together with all factors relevant for 852 exercise of that power.
One such factor specified in Clause 12 is "such (5) No material has been produced by the appellant to show that M/s Chettinad Cement Corporation is a similar substandard unit without any capacity for expansion, so that it too must continue to be an uneconomic unit like M/s Travancore Cement Ltd. deserving a similar treatment.
[860F G]
|
vil Appeal Nos.
2403 05 of 1989 From Orders Nos.
568 to 570/88 A dated 31.10.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. C/A. No. 808 to 810 of 1987 A and C/Misc.
No. 390 of 1987 A. S.K. Dholakia and S.K. Kulkarni for the Appellant.
Kapil Sibal, Additional Solicitor General, P. Parmeswa ran and Mrs. R. Rangaswamy for the Respondent.
The Judgment of the Court was delivered by KASLIWAL, J.
All these appeals under Sec.
130(e) of the (hereinafter referred to as the Act) are directed against the common order made by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi dated 31.10.88 in C.A. Nos.
808 to 8 10/87 A. Brief facts of the case are that M/s. Sharp Business Machines (Pvt.) Ltd., Bangalore (hereinafter referred to as the company) is a small scale manufacturing unit duly regis tered as such since 1984.
The company had started the phased manufacture of plain paper copiers and obtained a licence in this regard dated 25.11.86 for Rs.4,94,500 from the licens ing authority.
The company imported components and consuma bles in SKD/CKD for plain paper copiers.
Three consignments were imported from M/s. Paralax Industrial Corp., Hongkong under airways bill numbers 098, 4960, 3120; 098, 4960, 3116; and 098, 4960, 3105 all dated 21.1.87.
The goods were re ceived at the air cargo complex, Bangalore.
The company sought the clearance of the imported goods under bills of entry Nos.
2044, 2045 and 2046 all dated 3.2.87.
Similarly, the goods were also imported from M/s. Alpha Papyrus Trading Co. Pvt. Ltd., Singapore under airway bill No. 098 4925 4914 dated 19.2.87.
the clearance for this consignment was sought under bill of entry No. 4993 dated 11.3.87.
The company had declared the value of each of the consignments at Rs.32,182 Rs.43.359), Rs.5,412 and Rs.18,659 respectively in respect of the above mentioned bills of entry Nos. 2044, 2045.
2046 and 4993.
The total value declared was Rs.99,612 under all the four bills.
32 Proceedings were held before the Appraiser of Customs air cargo complex Bangalore for verification of the goods and their valuation etc.
and the statements of the company 's Managing Director Sh.
Sadanand were also recorded on 11.2.87.10.3.87 and 18.3.87 under Sec.
108 of the Act.
The Collector of Customs issued a notice to the company under Sec.
124 of the Act on 4.3.87 relating to the first consign ment.
In the said notice it was stated that 4 items were not covered by the licence and the same were liable for confis cation.
However.
on 30.3.87 the Collector issued another notice in supersession of the earlier notice dated 4.3.87.
Notice was also issued on the same date in respect of bill of entry dated 11.3.87.
By the said notices the Collector proposed to enhance the value of the goods imported and further proposed to confiscate the entire goods imported and also to levy a fine and other penalties.
The company was accused of misdescription of the goods, misdeclaration of value, suppression of the relationship with the suppliers, suppression of the place of origin of goods etc.
The Collector by his order dated 13.4.87 decided all the points against the company.
The Collector held that the quotations given by M/s. Shun Hing Technology Ltd. along with the application for approval of their PMP during July 1986 should be taken as the correct value of the goods imported.
and the plea of the company that it had received a special discount in view of the bulk purchases and promise of future purchases was not accepted.
The Collector in these circumstances determined the price of the goods at Rs.7,15,485 for the purposes of Sec.
14(1) of the Act.
The Collector thus held that there was a misdeclaration of the value to the tune of Rs.6,15,873 and the duty payable there on would be Rs.10.96,228.20p.
The Collector further held that the entire goods imported were liable to confiscation under Sec.
111(m) of the Act.
The Collector also held that the goods imported were fully finished copiers in SKD/CKD form and as such there was a misdeclaration that the import ed goods were only parts of the copiers.
The Collector also held that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence.
The goods covered by three bills 2044, 2045 and 2046 were held to be one consignment and one AWB and thus viewed as one consignment, it amounted to the import of ten copiers.
The goods imported under the 4th bill No. 4993 were four fully finished copiers in SKD/CKD form.
The Collector further held that in terms of note (i) to Imports Control Order.
1955 and Customs Tarrif Act, 1975, these goods will be deemed to be filly assembled copiers for the purpose of valuation and licence.
Thus the goods imported as 33 fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence.
It was also held in the alternative that even if all the parts imported were viewed individually, none of the items tally with the licence.
The Collector in this regard gave detailed reasons for arriving at this conclu sion.
The Collector also held that the value of the parts imported for the purposes of Sec.
14(1) of the Act would be Rs.5,63,332 whereas the importers were permitted to import goods worth Rs.4,94,500.
There was thus an excess of Rs.68,832 and as such the goods were liable to confiscation under Sec.
III(d) of the Act.
The Collector in these circum stances passed an order for confiscation of the entire goods with an option to the company to redeem them on payment of a fine of Rs.3 lacs.
The Collector also imposed a fine of Rs.1 lac on the company and Rs. 1 lac on Sh.
Sadanand the Manag ing Director of the Company.
The company filed two appeals aggrieved against the common order of the Collector relating to both the notices and a separate third appeal was preferred by the Managing Director before the Customs, Excise and Gold (Control) Appellate Tribunal.
The Tribunal dismissed all the three appeals by a common order dated 31.10.88.
The company and the Managing Director aggrieved against the order of the Tribunal have filed the above mentioned three appeals before this Court.
One of the arguments raised before the Tribunal was that the Collector erred in treating SKD/CKD parts of the copiers imported, as assembled copiers, for the purpose of Schedule I to the Imports (Control) Order.
1955 and the case Union of India vs Tarachand Gupta & Bros., ; applied on all force to the instant case.
The Tribunal in this regard set aside the finding recorded by the Collector and placing reliance on a decision of the Calcutta High Court in Collector of Customs, Calcutta vs Misuny Electronic Works, held that one has to look into the re spective licence and not to the fact that if all the con signments covered by all the bills of entry are assembled together, there will be complete machines.
The Tribunal, however, upheld the other findings recorded by the Collector to the effect that even if all the imported parts contained in SKD/CKD packs of copiers were viewed individually the licence produced was not valid for any of the items import ed.
Tribunal thus held that the Collector was right in holding that the imported goods were not covered by the valid licence.
The Tribunal also held that the Collector was right in rejecting the price shown by the company in the invoices.
The Tribunal also rejected the contention made by the counsel for the 34 company that the valuation made by the Collector was exorbitant.
As regards the question of imposing fine and penalty also the Tribunal found the order of the Collector as correct.
and did not find any cogent reason to interfere in the order of the Collector.
We have heard Mr. Dholakia for the appellants and Mr. Kapil Sibley learned Addl.
Solicitor General for the re spondents.
It was argued by Mr. Dholakia that the Tribunal commit ted a serious error in holding that the invoices submitted by the company were undervalued and could not be relied upon for determining the correct value of the goods imported.
It was contended that the Collector Customs was not correct in determining the value of the imported goods on the basis of the quotations of M/s. Shun Hing Technology Ltd., Hongkong.
The quotation of Shun Hing indicated prices at Hongkong and not the place of importation.
There was no other material on record to determine the value of the imported goods.
It was thus contended that in the absence of any other relevant material, the invoice price has to be taken as the basis for valuation.
It was also submitted that there was no justifi cation in discarding the price shown in the invoices which contained the correct value of the goods imported and in case of Customs authorities were not placing reliance on such prices mentioned in the invoices.
then the burden lay on the Customs department to find out the correct value of the goods by collecting material and other adequate evidence before enhancing the value of the imported goods.
The onus to prove the charge of undervaluation against the company was on the Customs department and the evidence relied upon by them, as contained in the adjudication order.
is not at all sufficient to discharge that onus.
It was further argued that any reliance placed on the quotations furnished at the time of submitting the application for grant of licence was wholly erroneous.
At the time of submitting the application for grant of licence the prices are quoted for fixing the upper limit of the value of the licence.
When the actual purchase transactions were entered into, the company negoti ated for the price and having regard to the quantum of purchase and the prospects of future sales, the company was given 25% , ' count by the suppliers.
It was also submitted that the prices quoted by M/s. Shun Hing Technology Ltd., Hongkong were not the value of the components imported by the company in SKD/CKD form of plain paper copiers.
Thus any price quoted by M/s. Shun Hing can never form any basis for arriving at a proper and correct valuation of the goods imported by the company in the present case.
35 On the other hand it was submitted by the learned Addl.
Solicitor General that it has been admitted by Sh.
P.N. Sadanand, Managing Director of the company in his statement dated 10.3.87 that the goods imported in the present case by the company were of Japanese origin and manufactured by M/s. Matushita Electric Company Ltd., Japan.
M/s. Shun Hing Technology Ltd., Hongkong were the authorised agents of M/s.
Matushita Electric Co. Ltd., Japan, who are the manufactur ers of Panasonic copies.
He further admitted that normally the Panasonic copies were supplied to Hongkong in fully assembled form and then they were dismantled in Hongkong by the agents and thus supplied in India in SKD/CKD form.
Sadanand admitted to have visited Hongkong during January, 1987 alongwith his Engineer Sh.
K.S. Radhakrishan for pur chase of 10 copiers 6 Nos.
Model EP 1300 and 4 Nos.
Model EP 2625 and that he alongwith the Engineer dismantled the fully assembled copiers.
It was submitted that the goods contained in the cartons comprised of all the parts required for full and complete assembly of copiers.
At the time of examination of the goods covered by Bill of Entry No. 4993 dated 11.3.87, it was found that out of the six cartons, four cartons were the original cartons used for packing fully finished/assembled copiers Model EP 2625.
The descrip tion, model number, brand, manufacturer and country of origin/manufacture of the copier (viz.
Plain Paper Copier EP 2625 Panasoni, Matushita Electric Co. Ltd. and Japan respec tively) were clearly marked on these four cartons, one set of cassettes, trays, covers, one drum, one developer unit and a bottle of developer.
It was thus argued that the original packing cartons used for packing fully finished copiers are normally supplied only if fully finished copiers are purchased.
It was submitted that the adjudicating au thority has given detailed reasons for showing that the goods imported were not components of plain paper copiers as declared.
In fact, the company had purchased 14 fully fin ished copiers 10 in Hongkong and 4 in Singapore and had then dismantled for importing the same in the guise of components of copiers.
The company had submitted application for ap proval of their phased manufacturing programme to the Devel opment Commissioner, Small Scale Industries Govt.
of India, New Delhi in July, 1986 and alongwith this application they had also submitted the quotations received by them from M/s. Shun Hing Technology Ltd., Hongkong which covered all the items imported except a few items like toner, drum and table for model FP 2625.
The company in the present case not only violated the terms and conditions of licence but also com mitted a complete fraud in importing fully finished copiers which was a totally prohibited item, in the guise of sepa rate components and accessories by dismantling the fully finished copiers.
In the above 36 circumstances the adjudicating authority was fully justified in not believing the value mentioned in the invoices and in placing reliance on the prices mentioned in the quotations given by M/s. Shun Hing Technology Ltd., Hongkong.
It was further argued by Mr. Sibbal that the prices quoted by M/s. Shun Hing were based on the prices given by the manufactur ers i.e. M/s.
Matushita Electric Co. Ltd., Japan and there was no question of supplying the components of the copiers on a lesser price than given by the manufacturers them selves.
The company had a special relationship with M/s. Shun Hing Technology Ltd., Hongkong as a sort of collabora tor with no formal agreement and that M/s. Paralax Industri al Corp., Hongkong were in turn agents of M/s. Shun Hing Technology Ltd., Hongkong.
We have considered the submissions made by learned counsel for the parties.
Section 14 of the Act provides for valuation of goods for the purpose of assessment.
Section 14(1) which is relevant for our purposes reads as under: 14.
"Valuation of goods for purposes of assessment: (1) For the purposes of the (51 of 1975), or any other law for the time being in force whereun der a duty of customs is chargeable on any goods by refer ence to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50." According to the above provision the value of the goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation, in the course of interna tional trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale.
In the present case the 37 company itself had produced a copy of the quotations re ceived by them from M/s. Shun Hing Technology Ltd., Hongkong in respect of the copiers and other items imported alongwith their application for approval of their phased manufacturing programme.
The company itself having produced these quota tions, they cannot dispute the correctness of the prices mentioned therein.
The company has not only not disputed the correctness of these quotations but has not produced any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time.
The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determin ing the correct value of the imported goods.
Mr. Dholakia next contended that the Tribunal itself had set aside the finding of the adjudicating authority on the question of treating SKD/CKD packs of the copiers imported comprised of all the 100% components of copiers.
The company had tried to practice a fraud in defeating the import policy itself.
The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62% of the components of the copiers and the balance of 38% was to be manufactured by them indigenously.
According to the import policy this percentage of 62% was to be reduced in the subsequent years.
The import policy was not meant for such entrepreneurs who instead of importing 62% of the components, imported 100% of the components of a fully finished and complete goods manufactured by a foreign country.
It is an admitted position that fully finished plain paper copiers were a prohibited item for import and thus the device adopted by the company in the present case was a complete fraud on the import policy itself.
Apart from the above circumstances in our view the Tribunal was not right in setting aside the finding of the adjudicating authority and in taking the view that one has to look into the respective licence and not to the fact that if all the consignments covered by all the bills of entry assembled together, there will be a full and complete machinery.
It is an admitted position that goods covered by the three bills of entry Nos. 2044, 2045 and 2046 were all dated 3.2.87 and had been shipped from Hongkong on the same day i.e. on 21.1.87.
The entire goods had arrived on the same day and by the same flight on 30th January, 1987.
The goods covered under the three bills of entry have been supplied by the same supplier viz. M/s. Paralax Industrial Corp., Hong kong.
The goods covered by these bills of entry are ten numbers 38 copiers in SKD/CKD condition, accessories, spares, consuma bles and excess items.
The goods covered by the 4th bill of entry are four numbers copiers in SKD/CKD condition and consumables.
the licence produced is valid for certain components and is not valid for fully assembled copiers.
The fully assembled copiers are the end products of the import ers and hence cannot be imported by them.
Plain Paper Copi ers are electronic equipments.
The case Union of India vs Tara Chand Gupta & Bros. (supra) lends no assistance to the appellants in the facts and circumstances of the present case.
In the above case Tara Chand & Bros. held an import licence dated July 10, 1956 permitting them to import parts and accessories of motorcycles and scooters as per Appendix XXVI of the Import Policy Book for July December, 1956.
Under the said licence, the respondents in that case imported certain goods which arrived in two consignments, each containing 17 cases by two different ships.
According to the respondents, the goods so imported by them were motorcycle parts which their licence authorised them to import.
The Customs authorities, on the contrary held, on the examination of the goods, that they constituted 51 sets of "Rixe Mopeds complete in a knocked down condition".
After holding an inquiry the Deputy Collec tor directed confiscation of the said goods with an option to the respondents to pay certain sums in lieu of confisca tion and also personal penalties.
That order was passed on the basis that the goods imported were not parts and acces sories of motorcycles and scooters presumably under entry 295 of the Schedule to the Import (Control) Order but were motorcycles/scooters in completely knocked down conditions, prohibited under remark II against entry 294, a licence in respect of goods covered by it would authorise import of motorcycles and scooters.
The Deputy Collector held that though the goods were not in completely knocked down condi tion it made no difference as the tyres, tubes and saddles were easily obtainable in India and their absence did not prevent the machines being otherwise complete.
He also found that there was a trade practice under which traders were supplying motorcycles without tyres, tubes and saddles unless the purchaser specially asked for these parts.
Ac cording to him the goods could not be regarded as spare parts but were "Moped in disassembled condition.
" The re spondents in the above case filed a civil suit and the matter went in appeal to the High Court.
The Letters Patent Bench of the High Court held that the Collector 's jurisdic tion was limited to ascertain whether or not the goods imported by the respondents were spare parts and accessories covered by entry 295 in respect of which they undoubtedly held the licence, and therefore, he could not have 39 lumped together the two consignments which.
though imported under one licence, arrived separately and were received on different dates and could not have come to the conclusion that the plaintiffs had imported 51 "Rixe" Mopeds in com pletely knocked down condition.
The respondents were enti tled to import the said goods and therefore.
Section 167(8) of the Sea did not apply and the respondents consequently could not have been held guilty of breach either of that Section or Section 3 of the Imports & Exports (Control) Act.
It was further held that the decision of this Court in Girdhari Lal Bansi Dhar vs Union of India, ; did not over rule but only distinguished judgment in D.P. Anand vs Mls.
T.M, Thakore & Co., C.A. No. 4/1959 decided on August 17, 1960 (H.C.) and therefore, the binding force of that decision remained unshaken.
The Union of India came in appeal to this Court by grant of certificate.
This Court held as under: "Under entry 295, except for rubber tyres and tubes for whose import a separate licence could be obtained under entry 41 of Part V, there are no limitations as to the number or kind of parts or accessories which can be imported under a licence obtained in respect of the goods covered thereunder.
Prime facie, an importer could import all the parts and accessories of motor cycles and scooters and it would not be a ground to say that he has committed breach of entry 295 or the licence in respect of the goods described therein, that the parts and accessories imported.
if assem bled, would make motor cycles and scooters in CKD condition.
3There are no remarks against entry 295.
as there are against entry 294, that a licence in respect of goods cov ered by entry 295 would not be valid for import of spares and accessories which, if assembled, would make motor cycles and scooters in CKD condition.
Apart from that, the goods in question did not admittedly contain tyres.
tubes and sad dles, so that it was impossible to say that they constituted motor cycles and scooters in CKD condition.
The first two could not be imported and were in fact not imported because that could not be done under the licence in respect of goods covered by entry 295 which expressly prohibited their import and a separate licence under entry 41 of Part V would be necessary.
The third, namely.
saddles were not amongst the goods imported.
No doubt, there was, firstly, a finding by the Collector that a trade practice prevailed under which motor cycles and scooters 40 without tyres, tubes and saddles could be sold.
Secondly.
the tyres and tubes could be had in the market here and so also saddles, so that if an importer desired, he could have sold these goods as motor cycles and scooters in CKD condi tion.
The argument was that since there was a restriction in entry 294 against imports of motor cycles and scooters in CKD condition, the importer could not be allowed to do indirectly what he could not do directly.
The argument apparently looks attractive.
But the question is what have the respondents done indirectly what they could not have done directly.
In the absence of any restrictions in entry 295, namely, that a licence in respect of goods covered by entry 295 would not be valid for import of parts and accessories which.
when taken together.
would make them motor cycles and scooters in C.K.D. condition.
the respond ents could import under their licence all kinds and types of parts and accessories.
Therefore, the mere fact.
that the goods imported by them were so complete that when put to gether would make them motor cycles and scooters in C.K.D. condition.
would not amount to a breach of the licence or of entry 295.
Were that to be so, the position would be anoma lous as aptly described by the High Court.
Suppose that an importer were to import equal number of various parts from different countries under different indents and at different times, and the goods were to reach here in different con signments and on different dates instead of two consignments from the same country as in the present case.
If the conten tion urged before us were to be correct, the Collector can treat them together and say that they would constitute motor cycles and scooters in C.K.D. condition.
Such an approach would mean that there is in entry 295 a limitation against importation of all parts and accessories of motor cycles and scooters.
Under that contention, even if the importer had sold away the first consignment or part of it, it would still be possible for the Collector to say that had the importer desired it was possible for him to assemble all the parts and make motor cycles and scooters in C.K.D. condi tion.
Surely, such a meaning has not to be given to entry 295 unless there is in it or in the licenee a condition that a licensee is not to import parts in such a fashion that his consignments, different though they may be, when put togeth er would make motor cycles and 41 Scooters in C.K.D. condition.
Such a condition was advisedly not placed in entry 295 but was put in entry 294 only.
The reason was that import of both motor cycles and scooters as also parts and accessories thereof was permitted, of the first under entry 294 and of the other under entry 295.
A trader having a licence in respect of goods covered by entry 294 could import assembled motor cycles and scooters, but not those vehicles in C.K.D. condition, unless he was a manufacturer and had obtained a separate licence therefore from the Controller of Imports who, as aforesaid.
was autho rised to issue such a licence on an ad hoc basis.
Thus the restriction not to import motor cycles and scooters in C.K.D. condition was against an importer holding a licence in respect of goods covered by entry 294 under which he could import complete motor cycles and scooters and not against an importer had a licence to import parts and acces sories under entry 295.
If Dr. Syed Mohammad 's contention were to be right we would have to import remark (ii) against entry 294 into entry 295, a thing which obviously is not permissible while construing these entries.
further, such a condition, if one were to be implied in entry 295, would not fit in, as it is a restric tion against import of motor cycles and scooters in C.K.D. condition and not their parts and accessories.
There is, therefore, no question of a licensee under entry 295 doing indirectly what he was not allowed to do directly.
What he was not allowed to do directly was importing motor cycles and scooters in C.K.D. condition under a licence under which he could import complete motor cycles and scooters only.
That restriction, as already observed, ' applied to a licen see in respect of goods described in entry 294 and not a licensee in respect of goods covered by entry 295.
The result is that when the Collector examines goods import ed under a licence in respect of goods covered by entry 295 what he has to ascertain is whether the goods are parts and accessories, and not whether the goods, though parts and accessories, are so comprehensive that if put together would constitute motor cycles and scooters in C.K.D. condition.
Were he to adopt such an approach, he would be acting con trary to and beyond entry 295 under 42 which he had to find out whether the goods imported were of the description in that entry.
Such an approach would, in other words, be in non compliance of entry 295." This Court distinguished the case of Girdhari Lal Bansi Dhar (supra) by making the following observation: "It will be noticed that the Bombay decision in D.P. Anand 's case was not dissented from but only distinguished, and therefore, the High Court in the present case was justified in following it.
It is true, however, that counsel for the appellant there relied on that decision in support of his proposition that a ban on completed article cannot be read as a ban on the importation of its constituents, which, when assembled, would result in the prohibited article, and this Court pointed out in answer that in D.P. Anand 's case, the imported components could not have when assembled, made up the completed article because of the lack of certain essen tial parts which admittedly were not available in India and could not be imported.
The real distinction, however, be tween the two cases was that the decision of the Collector in D.P. Anand 's case was not, as was the decision in Gird bari Lal 's case under which of the two competing entries the imported goods fell but that the imported goods in question, if assembled together, would not be the goods covered by the entry, and therefore, not the goods in respect of which the licence was granted.
Further, the articles in question, even when assembled together, were not prohibited articles as in Girdhari Lal 's case.
Girdhari Lal case is clearly distin guishable because it is not as if motor cycles and scooters are prohibited articles as was the case there.
The restric tion is not against licensees importing motor cycles and scooters under entry 294 and parts and accessories under entry 295 but against the licensees under entry 294 import ing motor cycles and scooters in CKD condition.
The question in the instant case was not under which of the two entries, 294 or 295, the goods fell, but whether the goods were parts and accessories covered by entry 295.
" In our view the Tribunal was not correct in placing reliance on the case Union of India vs Tara Chand Gupta & Bros. (supra) in the facts and circumstances of the present case.
In the case before us the 43 import of fully assembled copiers was prohibited.
The appel lant was only entitled to import 62% of the components.
As already mentioned above, the device adopted by the appellant in the present case was a complete fraud on the Import Policy and the appellant was doing indirectly what he was not permitted to do directly.
We are further of the view that the facts in the present case are more akin and similar to the facts of the case Girdhari Lal Bansi Dhar vs Union of India, (supra) which was distinguished in the case of Union of India vs Tara Chand Gupta & Bros. (supra).
Mr. Dholakia also tried to assail the finding recorded by the Collector and upheld by the Tribunal and argued that the components imported by the appellant tallied with the parts which were permitted under the licence.
We do not find any force in this submission.
The Collector has given de tailed reasons for holding that the imported goods were not covered by the valid licence and the Tribunal having upheld such finding, the same cannot be challenged by the appellant before this Court.
Mr. Dholakia also submitted that in the facts and cir cumstances of the case the order confiscating the goods and imposing fine and penalty both on the company and Sh.
Sada nand, the Managing Director was too high and ought to be reduced.
We find no force in this submission as well.
This is a case where the appellant had not only violated the terms and conditions of the licence but also committed a fraud on the Import Policy itself.
Thus we find no ground or justifica tion to reduce the penalty or fine.
In the result we find no force in these appeals and the same are dismissed with one set of costs.
P.S.S. Appeals dismissed.
|
Section 14(1) of the provides that where a duty of customs is chargeable on any goods by refer ence to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale.
for delivery at the time and place of importation.
in the course of international trade.
The appellant company, a small scale manufacturer of plain paper copiers.
had submitted.
alongwith their applica tion for approval of the phased manufacturing programme, the quotations received by them from their foreign collaborators based in Hongkong in respect of the various components and obtained a licenee in this regard for Rs.4,94,500.
Subse quently, they imported three consignments of components and consumables in SKD/CKD form from suppliers at Hongkong and another consignment from Singapore.
The total value declared under the four bills of entry was Rs.99,612.
The Collector of Customs found that the invoices submit ted by the company were undervalued and determined the price of goods at Rs.7,15,485 with reference to the quotations, for the purposes of section 14(1) of the Act.
He thus held that there was a misdeclaration of value to the tune of Rs.6,15,873, that the duty payable thereon would be Rs.10,96,228.20 and that the entire goods were liable to confiscation under section 111(m) of the Act.
He also held that the goods imported were fully finished copiers in SKD/CKI) form and as such there was a misdeclaration that the import ed goods were only parts of the copiers, that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence, that fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence.
In the alternative he held that even if all the parts contained in SKD/CKD packs were 29 viewed individually, none of the items was covered by the licence.
He further held that the value of the parts import ed for the purposes of section 14(1) of the Act would be Rs.5,63,332, whereas the importers were permitted to import goods worth Rs.4,94,500, that there was thus an excess of Rs.68,832 and as such the goods were liable to confiscation under section 111(d) of the Act.
Consequently, he directed con fiscation of the entire goods with an option to the company to pay Rs.3 lakhs in lieu thereof and also Rs.2 lakhs in personal penalties.
The Customs, Excise and Gold (Control) Appellate Tribunal dismissed their appeals.
In these appeals under section 130(e) of the Act, it was contended for the appellants that the quotations had indi cated prices at Hongkong and not the place of importation, that at the time of submitting the application for grant of licence the prices were quoted for fixing the upper limit of the value of the licence, that when the actual purchase transactions were entered into the company negotiated for the price and having regard to the quantum of purchase and the prospects of future sales the company was given 25 per cent discount by the suppliers, and that in the absence of any other material on record the invoice price alone could form the basis of valuation of the imported goods.
For the respondents, it was contended that the prices quoted by the collaborators were based on the prices given by the manufac turers.
and there was no question of supplying the compo nents on a lesser price than given by the manufacturers themselves, that the goods imported were not components of plain paper copiers as declared, that the cartons in fact comprised of all the parts required for full and complete assembly of 14 copiers, that the company in importing them in the guise of separate components and accessories had not only violated the terms and conditions of the licence but also committed a complete fraud, that in the circumstances the adjudicating authority was fully justified in placing reliance on the prices mentioned in the quotations.
Dismissing the appeals under section 130(e) of the Act, the Court, HELD: 1.1 According to section 14(1) of the for purposes of assessment the value of the imported goods is to be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation, in the course of interna tional trade, where the seller and the buyer have no inter est in the business of each other and the price is the sole consideration for the sale or offer for sale.
[36G H] 1.2 In the instant case the appellant company itself had produced 30 a copy of the quotations received by them from their collab orators at Hongkong in respect of the copiers and other items imported, alongwith their application for approval of their phased manufacturing programme.
They, therefore.
could not dispute the correctness of the prices mentioned in the said quotations.
Not only that, they have also failed to produce any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time.
The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determining the correct value of the imported goods.
[37A C] 2.1 The goods covered by the three bills of entry dated 3rd February, 1987 had been shipped from Hongkong on the same day i.e. on 21st January, 1987.
The entire goods had arrived on the same day and by the same flight on 30th January, 1987.
These goods had been supplied by the same supplier.
They comprised of ten numbers copiers in SKD/CKD condition, accessories, spares, consumables and excess items.
The goods covered by the 4th bill of entry were four numbers copiers in SKD/CKD condition and consumables.
If assembled together these would constitute full and complete copiers.
The licenee produced was valid for certain compo nents and was not valid for fully assembled copiers.
The appellant company was thus doing indirectly what they were not permitted to do directly under the licence.
[37H; 38A B] Girdbari Lal Bansi Dhar vs Union of India, ; referred to.
Union of India vs Tarachand Gupta & Bros., ; distinguished.
2.2 The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62% of the components of the copiers and the balance of 38% was to be manufactured by them indigenously.
This percentage of 62% was to be reduced in the subsequent years.
The import policy was not meant for such entrepre neurs who instead of importing 62% of the components, im ported 100% of the components of a fully finished and com plete goods manufactured by a foreign country.
Fully fin ished plain paper copiers were the end product of the im porters and hence could not be imported by them.
The device a, looted by the company in the instant case was thus a complete fraud on the import policy itself.
[37D F] 31 2.3 The order confiscating the goods and imposing fine was, therefore, rightly made.
|
ivil Appeal No. 1422 of 1973 From the Judgment and Order dated 5.7.1971 of the Calcutta High Court in Civil Order No. 1826 of 1971.
T.C. Ray, G.S. Chatterjee and D.P. Mukherjee for the Appel lant.
P.K. Chatterjee, Ranjan Mukherjee, N.R. Choudhary, Somnath Mukherjee and P.K. Moitra for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave under article 136 of the Constitution arises against the order dated July 5, 1971 made by the Calcutta High Court in Civil Order No. 1826 of 1971 dismissing the writ petition in limine.
The material facts are that the lands of Hal Plot Nos. 2202, 2204, 2206, 2209, 2210, 2212, 2214, 2219, 2220, 2225.
2226, 2228, 2229, 2232, 2233, 2234, 2236 and 2239 of Mouza Kisho rimohanpore, J.L. No. 168, P.S. Jaynagar were recorded in the final Khaitan Nos. 143 and 144 of J.L. No. 168 as "Tank Fishery" (being used for pisciculture) and by operation of section 6(1)(e) of West Bengal Estates Acquisition Act 1 of 1954, for short 'the Act ' stand excluded from its purview.
The Asstt.
Settlement Officer initiated suo moto proceedings on May 14, 1968 that they have not been properly classified and prima facie require correction of classifications of those lands.
Accordingly, he drew up the proceedings under s.44(2A) of the Act, issued notice to the respondents who are brothers, intermediaries.
They filed their written objections and 95 appeared through counsel.
They also filed the documents, examined three witnesses apart from themselves.
On behalf of the State one Mr. Ranjit Kumar Dutta, Revenue Officer.
Yadavpur Settlement was examined.
The objections raised by the respondents are that the lands originally belong to Smt.
Banodamayee Dasi, Superior Landlady, who granted to them dakhilas Nos. 9 and 10 in the year 1359 B.S. i.e. 1952 A.D.
Thereafter they have been cultivating pisciculture in the said lands.
They got embankment raised around the land.
They have been conducting fishery business.
In the fields survey the property was recorded in their name as the occupiers.
On account of the injunction issued 'by the High Court the attestation in the original settlement was not effected.
When they approached the Junior Land Revenue Officer for receipt of the rents, after due enquiry by endorsement dated April 30, 1958 A.D., the Tehsildar made an endorsement on the body of the receipt "for Pisciculture".
They were con ducting fishery in a large scale.
They had applied to the Chief Minister Dr. B.C. Roy for a loan of Rs.25,000.
An endorsement on the application was made by the concerned Secretary.
When the miscreants sought to disturb the embark ments, they made a complaint to the police, who initiated action in this regard.
Agricultural Income tax Department levied on them income tax relying on pisciculture being done by the respondents.
The Asstt.
Settlement Officer considered the entire evidence on record in great detail like Civil Court and held that the three witnesses examined in proof of the respond ents conducting pisciculture in the disputed plots of lands are interested and brought up witnesses for the detailed reasons given in support thereof; the respondents did not produce the report of the Junior Revenue Officer who direct ed to accept the rents from the respondents.
Admittedly, all the lands stood vested in the year 1955 56 in the State by operation of the notification issued under section 4(1) of the Act.
Though the settlement was stated to have been obtained from the Principal Landlady in the year 1952 (1359 B.S.), they did not produce any pre or post settlement records for the period upto 2955 56, the year of vesting, to establish that the disputed lands are recorded as tank fishery.
Mr. R.K. Dutta examined on behalf of the State stated that he made local inspection on April 11.
1968 A.D. and found recorded the class of land in 18 days (plots).
Serial Nos.
2202, 2204, 2206.
2209, 2210, 2212, 2214, 2219, 2220.2225.
2228, 2229, 2232, 2233, 2236 and 2239 within that Mouza.
The present Days (Plots) Nos. 2206, 2239, 2229, 2225, 2212, 2219, 2220 are small Dobas i.e. "ponds" and he did not find any sign of pisciculture in those plots.
Plot Nos.
22 10, 2209, 2233 and 2234 are blind canals.
There was no connection whatsoever of those plots with river or big canals.
96 He stated that there was water within those days (plots), but he did not find any sign of pisciculture therein.
He did not find any water in plot Nos. 2202, 2232, 2204, 2214, 2236, 2239, 2228 and 2226 either existing or drained in those plots.
Danga (elevated land) "Layek Jangal Bheter" (like jungle inside).
"Layek Jangal" (jungle outside) and there was no water at all.
He also made local enquiries from other persons in the neighbourhood and they testified to the same fact.
He admitted that adjacent to these plots there were two plots, namely, plot Nos. 2201 and 2235, but outside the disputed lands wherein pisciculture was being carried out in those plots at the time of inspection.
He also stated that the people examined by him have stated that till date the lands remained in the same condition.
In the settlement plan (map) the plots were not classified as pisciculture.
Only two plots i.e. 2201 and 2235 were classified as pisci culture.
It may be stated at this juncture that though Mr. Dutta was subjected to gruelling cross examination at great length on the nature of pisciculture and characterstics etc.
as regards the existence of the condition of the lands at the time of his inspection and that he did not find any trace of carrying pisciculture, no cross examination was directed nor was suggested to the contrary.
The Asstt.
Settlement Officer after consideration of the entire evidence found that the respondents claimed to have started fishery after obtaining settlement from landlady in the year 1952, they admitted that Khasra enquiry was conducted in the year 1954 (1361 B.S. ) in their presence and examined witnesses.
The Enquiry Officer did not enter in the Khasra record that any pisci culture was being carried on in any disputed plots except plot Nos. 2201 and 2235.
On the other hand he noted that there is no fishery in any of those plots except those two specified plots.
The vesting of plots under the Act took place in the year 1955 56.
Except the receipt issued by the Tehsildar, no documentary evidence of payment of rent has been produced.
The Tehsildar had no business to write on the receipt "for pisciculture", nor record of enquiry made by Junior Land Revenue Officer in this regard was produced.
It is, therefore, clear that in the Khasra enquiry it was not recorded that the suit plots are fishery and in none of the plots it was recorded that any pisciculture was being con ducted.
The attestation took place in July 1959, i.e. after seven years from 1359 B.S. (1952) the year so settlement and three years from the date of starting the so called fishery.
No documentary evidence except the solitary receipt which was rejected by the Asstt.
Settlement Officer was produced to show that any pisciculture was being conducted.
The receipt given by the Tehsildar is obviously to accommodate the respondents.
There is no sufficient 97 proof of laying any road to carry the fish from the said plots.
Sri Atul Kumar Sahoo, one of the respondents, when was examined as a witness admitted it.
Admittedly, fishery was carried out in plot Nos. 2201 and 2235 which are linked up with river Alian Khal with tide but they are not part of lands in dispute.
None of the plots which are subject matter of the suit is linked up with river or any big canal with tide.
With regard to making an application to the Chief Minis ter the copy has not been produced.
There is no evidence whether these plots of lands having been mentioned in that application.
Since, admittedly, the respondents are having fishery in plot Nos. 2201 and 2235, it was likely that the loan application would relate to those plots.
The total extent of the disputed land is about 550 Bighas.
Even ac count books showing income and expenditure of fishery were not produced, though time was allowed to produce the docu ments more than once.
Some lands are dry lands and some lands are with the shrubs inside river embankment and out side.
So the question of fishery over those plots does not arise.
Only to refute this factual situation the respondents tried to patch it up by saying that these plots were dried up for some months in every year.
But they have failed to prove the existence of any fishery over those plots by adducing sufficient and reliable evidence.
When there is no evidence to show the existence of fishery in any of the disputed plots, it is obvious that plots were wrongly re corded as fishery.
Primary authority considered the oral evidence and rejected it for valid reasons and ordered that the classification of plot Nos. 2202, 2239, 2225, 2232, 2204, 22 10, 2234, 22 14. 2236, 2228 and 2226 in.
Hal Kha tian Nos. 134 and 144 within Mouza Kishorimohanpore, J.L. No. 168, P.S. Jaynagar as recorded as "Ghert" and piscicul ture in column No. 23 should be deleted and instead the classification of plots Nos. 2202 and 2209 should be record ed as 'Layek Jungle Outside ' plot Nos.
2202, 2204, 2236 and 2228 should be recorded as 'Layek Jungle Outside '.
Plot Nos.
2201, 2234 should be recorded as 'pond ', 22 14 and 2226 should be recorded as 'Danga '.
Recording in column No. 23 to the effect 'pisciculture ' in plot Nos.
2209, 2229, 2206, 22 12, 22 19, 2233 and 2220 should be deleted.
Against this order an appeal was filed before the Tribu nal (IXth Addl.
District Judge, Alipore) under section 44(3) of the Act which by Judgment dated March 4, 1971 in E.A. No. 49 of 1968 in one paragraph with cryptic order assuming the role of an administrator reversed the order of the A.S.O. The conclusions, without discussing the evidence recorded by the Appellate Judge are that in the C.S. Khatain he found that these lands were recorded as Layek Jungle Vitar and 98 Bahir, doba pukur and Khal.
He had gone through the R.S. Map and from the map he found no sign of jungle as against the disputed lands.
One salt manufacturing company was in occu pation of the disputed land before the respondents took settlement from the original landlady.
The existence of salt manufacturing company shows that there was salt water on the disputed lands.
With a view to develop the land they applied for the loan to the Chief Minister on May 25, 1955.
That shows that there exists fishery in the disputed land.
The Junior Land Revenue Officer found on May 11, 1958 after inspection the existence of fishery.
Therefore, it shows that on the date of vesting there exists fishery in the lands.
Local witnesses who were examined support the exist ence of fishery for a pretty long time.
Against this there is no rebutting evidence adduced by the State.
Accordingly he set aside the order of the Asstt.
Settlement Officer and confirmed the original classification.
The State filed the writ petition and the High Court, as stated earlier, dis missed the writ petition in limine.
Shri Roy, the learned St. Counsel appearing for the State contended that the Asstt.
Settlement Officer has carefully assessed the evidence and recorded the findings.
The Appellate Tribunal has reversed the findings without considering the validity of the reasons recorded by the Asstt.
Settlement Officer.
It has taken irrelevant factors or non existing factors into account and thereby the find ings recorded by the Appellate District Judge is based on no evidence.
On the other hand it is beset with conjecture and surmises.
Shri Chatterji, the learned Sr. Counsel appearing for the respondent 's contended that the appellate authority has recorded the findings of fact that pisciculture was in existence as on the date of vesting.
This Court cannot interfere with the findings of fact recorded by the appel late court, in particular, when the High Court did not choose to interfere with the finding.
The record in the settlement refers that the lands are used for pisciculture.
It is open to the State to establish that the lands are not being used as pisciculture.
In its absence the findings recorded by the appellate court is one of fact and this Court cannot interfere with that finding.
Admittedly the High Court did not go into any of the questions raised by the appellant in the writ petition.
It summarily dismissed the writ petition.
Therefore, what we have to read is only the orders of the Appellate Tribunal and the Asstt.
Settlement Officer the primary authority together with the record of evidence.
Counsel took us through the evidence to show that the findings recorded by the appellate Judge are based on either no evidence or surmises and con 99 jectures.
We have given our anxious consideration to the respective contentions and considered the evidence on record once again.
It is indisputably true that it is a quasi judicial proceeding.
If the appellate authority had appreci ated the evidence on record and recorded the findings of fact, those findings are binding on this Court or the High Court.
By process of judicial review we cannot appreciate the evidence and record our own findings of fact.
If the findings are based on no evidence or based on conjectures or surmises and no reasonable man would on given facts and circumstances, come to the conclusion reached by the appel late authority on the basis of the evidence on record.
certainly this Court would oversee whether the findings recorded by the appellate authority is based on no evidence or beset with surmises or conjectures.
Giving of reasons is an essential element of administration of justice.
A right to reason is, therefore, an indispensable part of sound system of judicial review.
Reasoned decision is not only for the purpose of showing that the citizen is receiving jus tice, but also a valid discipline for the Tribunal itself.
Therefore, statement of reasons is one of the essentials of justice.
The appellate authority in particular a trained and experienced District Judge is bound to consider the entire material evidence adduced and relied on by the parties and to consider whether the reasons assigned by the primary authority is cogent, relevant to the point in issue and based on material evidence on record.
The District Judge has forsaken this salutary duty which the legislature obviously entrusted to him.
The question, therefore, is whether the reasons assigned by the appellate tribunal are based on no evidence on record or vitiated by conjectures or surmises.
For appreciating this point it is necessary to look into the purpose of the Act and relevant provisions therein.
The Act has been made to acquire the estates, all rights.
of inter mediaries therein and of certain rights of raiyats and trader raiyats of non agricultural tenants in occupation of the lands comprised in the State.
Section 4(1) empowers the State Government to issue notification under the Act from time to time declaring that with effect from the date men tioned in the notification all estates and all rights of every intermediary in each such estate situated in the district or a part of the district specified in the notifi cation "shall vest in the State" free from all incumbrances.
The procedure has been provided in this behalf in sub sec tion (2) to (6) of section 4 of the Act, the details of which are not relevant for the purpose of this case.
The effect of the notification as adumbrated in section 5 thereof is that all grants of, and confirmation of titles to, estates and rights therein, to which the declaration applies and which were made in favour of the intermediaries shall determine.
100 Thereby, by statutory operation the pre existing rights and all grants of and confirmation of the titles to the estate and the rights therein statutorily have been determined by issuance and publication of the notification under section 4(1) read with section 5 of the Act.
Section 6 of the Act employing non obstante clause carved out exceptions to the operation of sections 4 and 5 and preserve the right of intermediary to retain possession and title of certain land in certain circumstances.
Sub section (1) postulates thus: "Notwithstanding anything contained in Sections 4 and 5, an intermediary shall, except in the cases mentioned in the proviso to sub section (2) but subject to the other provi sions of that sub section be entitled to retain with effect from the date of vesting (e) tank fisheries; Explanation "tank fishery" means a reservoir or place for the storage of water, whether formed naturally or by excava tion or by construction of embankments, which is being used for pisciculture or for fishing, together with the subsoil and the banks of such reservoir or place, except such por tion of the banks as are included in a homestead or in a garden or orchard and includes any right of pisciculture or fishing in such reservoir or place.
" A reading of these provisions clearly indicates that notwithstanding the determination of pre existing rights, titles and interest of the holders of the estate in the notified estate, subject to proviso to subsection (2) and other provisions of sub section, sub section 1(c) retains the rights and possession of intermediary in respect of tank fisheries.
Tank fishery means the lands being used for pisciculture or any fishing in a reservoir or storage place whether formed naturally or by artificial contrivance as a permanent measure except such portion of embankment as are included in a homestead or in a garden or orchard to be tank fishery.
Such lands occupied by pisciculture or fishing stood preserved to the intermediary.
In Chamber 's 20th Century Dictionary at page 829.
the word 'pisciculture ' defined to mean "the rearing of fish by artificial methods".
In Webster Comprehensive Dictionary, Vol.
II 'pisciculture ' means hatching and rearing of fish.
In Stroud 's Judicial Dictionary, Vol.
II, 4th Edition at page 1051 the term 'several fishery ' 101 is sometimes said to be a right of fishing in public waters, which may be exercisable by many people.
Therefore, when by means of reservoir a place for storage of water whether formed naturally or by excavation or by construction of embankment, is being used for pisciculture or for fishing is obviously a continuous process as a source of livelihood.
would be 'tank fisheries ' within the meaning of section 6(1)(e).
Such tanks stand excluded from the operation of sections 4 and 5.
The question, therefore, emerges whether the disputed plots are tank fisheries.
Undoubtedly, as rightly contended by Shri Chatterji that if the findings recorded by the appellate tribunal that the disputed plots of land are tank fisheries, are based on evidence on record, after its due consideration in proper perspective certainly that finding is binding on this Court, as being a finding of fact.
The finding recorded by the appellate tribunal is based on five grounds, namely nonexistence of the forestry in the map; making application for loan ' revenue receipts produced by the respondent; previous salt cultivation and the oral evidence adduced on behalf of the respondents.
Yet another ground is absence of rebuttal evidence by the State.
We have already noted the findings recorded by the Asstt.
Settlement Officer.
They need no reiteration.
Mr. Dutta examined on behalf of the State made personal inspection.
The contention of Shri Chatterjee is that he inspected the land in the year 1968, but the relevant date is of the year 1952 and there is no evidence contrary to the existence of land in 1952 being used for pisciculture.
It is true that the crucial date for establishing, as a fact that the pisciculture was being carried on in the disputed land is the period of vesting, namely, 1955 56.
The existence of fishery subsequent to that period is not of any relevance.
Admittedly.
the respondents did not produce before the Asstt.
Settlement Officer either post or pre record till date of vesting to establish that from 1952 to 1955 56 i.e. from the date of obtaining settle ment till date of vesting, the lands were recorded in set tlement records as pisciculture or fishery.
Admittedly, in 1954 the Khasra enquiry was conducted in the presence of the respondents.
The findings recorded in the relevent columns are that no pisciculture or fishery was being carried on except in two plots i.e. 2201 and 2235 which are not subject matter of enquiry but are situated adjacent to these lands.
Those findings were not challenged at any time.
The report of the Tehsildar directing payment of the land revenue was not produced.
What was produced is only receipt on the body of which an endorsement "for pisciculture" was made by the Tehsildar.
The reason given by the Asstt.
Settlement Officer in rejecting the receipts was that there was no need for the Tehsildar to write "for pisciculture" and that was not the practice.
This finding was 102 not disputed by the appellate Judge.
Therefore, there is no documentary evidence to establish that the lands were being used, on the date of settlement or also on the date of vesting, as pisciculture or fishery.
The finding recorded by the Asstt.
Settlement Officer is based on the evidence given by Mr. Dutta, who on personal inspection, found that the lands remained in the same condition from the date of vest ing till date of his inspection in the year 1968.
This finding was also not contradicted in the cross examination of Mr. Dutta, though he was subjected to gruelling cross examination.
Therefore, the finding that the State has not produced any rebuttal evidence is palpably wrong on the face of the record.
The further findings that the map does not indicate that there exists any forestry, is also a conclu sion reached by the appellate authority without discussing the evidence of Mr. Dutta who had stated in his evidence that there are shrubs outside and inside the lands in dis pute.
It is the specific case of the respondents that they made embankment, but Mr. Dutta finds that there was no embankment to any of the plots.
That was also a finding recorded by the Asstt.
Settlement Officer.
There is no discussion by the appellate authority of the evidence given on that count.
Though written objections were filed and evidence was adduced by the respondents, neither in the objections nor in the oral evidence tendered by the two respondents or their witnesses it was shown that the lands were used earlier for salt cultivation by erstwhile land holder.
Therefore, this is an extraneous factor which the District Judge picked from his hat without any foundation.
The solitary revenue receipt produced by the respondents was rejected by the Asstt.
Settlement Officer for cogent rea sons.
The appellate authority being final authority on facts, is enjoined and incumbent upon it to appreciate the evidence; consider the reasoning of the primary authority and assign its own reasons as to why he disagrees with the reasons and findings of the primary authority.
Unless ade quate reasons are given merely because it is an appellate authority, it cannot brush aside the reasoning or findings recorded by the primary authority.
By mere recording that Dakhilas (rent receipts) show that lands are used as pisci culture is a finding without consideration of the relevant material on record.
The other finding that respondent ap plied to the Chief Minister for loan and that it would establish that the loan amount was utilised for developing fishery is also a surmise drawn by the appellate authority.
It is already seen that admittedly the respondents have plot Nos. 2201 and 2235 in which they have been carrying on fishery operations.
The application said to have been filed before the Chief Minister has not been produced.
The account books of the respondents have not been produced.
When the documentary evidence, which being the lust evidence, is 103 available but not produced an adverse inference has to be drawn by the Tribunal concerned against the respondents for non production and had it been produced, it would have gone against the respondents.
A police complaint was said to have been made concerning disturbance in the enjoyment of the lands in question.
No documentary evidence was produced or summoned.
Even if it is done it might be self serving one unless there is a record of finding of possession and enjoy ment by the respondents for fishery.
Even then also it is not binding on the State nor relevant in civil proceedings.
The contention of Shri Chatterjee that it is the duty of the appellant to produce the record to repudiate the find ings recorded by the appellate authority is without sub stance.
In a quasi judicial enquiry is for the parties who relied upon certain state of facts in their favour have to adduce evidence in proof thereof.
The proceedings under the Act is not like a trial in a Civil Court and the question of burden proof does not arise.
In the absence of abduction of the available documentary evidence, the necessary conclusion drawn by the Asstt.
Settlement Officer that the loan appli cation made might pertain to plot Nos. 2201 and 2235 is well justified.
The appellate authority is not justified in law to brush aside that finding.
The other finding that the witnesses examined on behalf of the respondents support the existence of the fishery for a pretty long time is also without discussing the evidence and assigning reasons in that regard.
The Asstt.
Settlement Officer extensively considered the evidence and has given cogent reasons which were neither discussed nor found to be untenable by the appellate authority.
Thus, we have no hesitation in coming to the conclusion that the Appellate Tribunal disregarded the material evidence on record, kept it aside, indulged in fishing expedition and crashed under the weight of conjec tures and surmises.
The appellate order is, therefore, vitiated by manifest and patent error of law apparent on the face of the record.
When so much is to be said and judicial review done, the High Court in our considered view, commit ted error of law in dismissing the writ petition in limine.
In the facts and circumstances of this case, in particular, when the litigation has taken well over 28 years till now, we find it not a fit case to remit to the High Court or Tribunal for fresh consideration.
It is contended that the respondents are entitled to the computation of holding under the Act, since they are pos sessed of some other lands.
We direct that if any determina tion of total holding of the lands including plot Nos. 2201 and 2235 and any other lands are to be made under the Act or any other Land Reform Law singly or conjointly it is 104 open to the appropriate authorities to determine the hold ing of the respondents in accordance with law after giving reasonable opportunity to the respondents and the State after excluding the plots of lands in dispute Shri Roy, learned counsel for the State repeatedly asserted that the lands no longer remain to be fishery land and became part of urban area around the Calcutta City and building operations are going on.
On the other hand the counsel for the respondents asserted to the contrary.
We have no definite evidence on record.
Therefore, if the lands are still found to be capable of using for fishery purpose and in case the State intends to lease it out for fishing operations, to any third party, as per rules in vogue, first preference may be given to the respondents.
subject to the usual terms.
as per the procedure prevalent in the State of West Bengal in this regard.
Accordingly, we quash the order of Appellate Tribunal dated March 4. 1971 and restore the order of the Asstt.
Settlement Officer elated July 12.
The appeal is allowed accordingly and the parties are directed to bear their respective costs.
T.N.A. Appeal allowed.
|
The land belonging to the respondent intermediaries comprising of certain plots stood vested in the State of West Bengal by operation of a Notification issued under Section 4(1) of the West Bengal Estates Acquisition Act, 1953.
Since the plots were recorded as 'tank fisheries ' (used as pisciculture), they stood excluded from the purview of the vesting Notification under Section 6(1)(e) of the Act and preserved to the respondent intermediaries.
Subsequently the primary authority the Assistant Set tlement Officer initiated suo moto proceedings by issuing notice to the respon 92 dents under Section 44(2a) of the Act for correction of classification of lands on the ground that the plots were wrongly recorded as fishery plots.
The respondents objected to reclassification of the lands by contending that in 1952 they were granted Dakhilas to the said land by one `B ', the Principal landlady, and thereafter they have been cultivat ing pisciculture on the said plots of the land and conduct ing fishery business.
The Assistant Settlement Officer rejected the claim of the respondents and ordered reclassi fication of the plots.
The respondents filed an appeal before the Tribunal (District Judge) under section 44(3) of the Act.
The Appellate Tribunal reversed the order of the Assistant Settlement Officer and confirmed the original classification of the plots.
Against the decision of the Appellate Tribunal, the State filed a writ petition in the Calcutta High Court which dismissed the petition in limine.
In appeal to this Court it was contended on behalf of the State: (i) that the Appellate Tribunal had reversed the findings without considering the validity of the reasons recorded by the Assistant Settlement Officer; (ii) that the Appellate Tribunal had taken irrelevant factor or non exist ing factors into account and thereby its findings were based on no evidence and hence vitiated in law.
On behalf of the respondents it was contended that since the Appellate Authority has recorded the findings of fact that pisciculture was in existence as on the date of vesting the Supreme Court cannot interfere with the findings of fact recorded by the Appellate Court, particularly, when the High Court did not choose to interfere with the finding.
Allowing the Appeal, this Court, HELD: 1.
Giving of reasons is an essential element of administration of justice.
A right to reason is, therefore, an indispensable part of sound system of judicial review.
Reasoned decision is not only for the purpose of showing that the citizen is receiving justice, but also a valid discipline for the Tribunal itself.
Therefore, statement of reasons is one of the essentials of justice.
[99C D] 1.1 The appellate authority in particular a trained and experienced District Judge is bound to consider the entire material evidence adduced and relied on by the parties and to consider whether the reasons assigned by the primary authority is cogent, relevant to the 93 point in issue and based on material evidence on record.
The appellate authority being final authority on facts, is enjoined and incumbent upon it to appreciate the evidence; consider the reasoning of the primary authority and assign its own reasons as to why it disagrees with the reasons and findings of the primary authority.
Unless adequate reasons are given, merely because it is an appellate authority, it cannot brush aside the reasoning or findings recorded by the primary authority.
[99D; 102E F] 2.
If the appellate authority had appreciated the evi dence on record and recorded the findings of fact, those findings are binding on this Court or the High Court.
By process of judicial review this Court cannot appreciate the evidence and record its own findings of fact.
If the find ings are based on no evidence or based on conjectures or surmises and no reasonable man would, on given facts and circumstances, come to the conclusion reached by the appel late authority on the basis of the evidence on record, certainly this Court would oversee whether the findings recorded by the appellate authority is based on no evidence or beset with surmises or conjectures.
[99A C] 2.1 In the instant case the Appellate Tribunal disre garded the material evidence on record, kept it aside, indulged in fishing expedition and crashed under the weight of conjectures and surmises.
The appellate order is, there fore, vitiated by manifest and patent error of law apparent on the face of record.
The order of Appellate Tribunal is quashed and the order of Assistant Settlement Officer is restored.
[103F G; 104D] 3.
Tank fishery means the lands being used for piscicul ture or any fishing in a reservoir or storage place whether formed naturally or by artificial contrivance as a permanent measure except such portion of embankment as are included in a homestead or in a garden or orchard to be tank fishery.
Such lands occupied by pisciculture or fishing stand pre served to the intermediaries and thus stands excluded from the operation of sections 4 and 5 of the West Bengal Estates Acquisition Act, 1953.
But the crucial date for establish ing, as a fact that the pisciculture was being carried on in the disputed land is the period of vesting.
The existence of fishery subsequent to that period is not of any relevance.
[100G H; 101E] Chamber 's 20th Century Dictionary, page 829; Webster comprehensive Dictionary, Vol.
II and Stroud 's Judicial Dictionary, Vol.
II 4th Edn., page 1051, referred to.
94 3.1 In the instant case the respondents did not produce before the Assistant Settlement Officer either post or pre record till date of vesting to establish that from 1952 to 1955 56 i.e. from the date of obtaining settlement till date of vesting, the lands were recorded in settlement records as pisciculture of fishery.
Therefore, there is no documentary evidence to establish that the lands were being used, on the date of settlement or also on the date of vesting, as pisci culture or fishery.
[101F; 102A] 4.
Admittedly the High Court did not go into any of the questions raised by the appellant in the writ petition.
It summarily dismissed the writ petition.
The High Court com mitted error of law in dismissing the writ petition in limine.
[98G; 103F]
|
IN Writ Petition Civil Nos. 348 352 of 1985.
(Under Article 32 of the Constitution of India).
Kapil Sibbal, Additional Solicitor General, Madan Lokur, Ms. Shobha Dikshit, Gopal Subramaniam and Ms. A. Subhashini (NP) for the appearing parties.
Pramod Swarup for the Intervener and R.K. Mehta (NP) for the State of Orissa.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This is an interlocutory application at the instant of the respondents in the writ petitions where the following directions of this Court have been asked for: (i) grant time to State of Uttar Pradesh for implementing judgment and order dated 25th September, 1987 and commence the session for post graduate education from 2nd May, 1990 in all the seven medical colleges; (ii) further permit the State of Uttar Pradesh to hold the competitive examination for admitting the post graduate students for the year 1990 through the University of Luc know; and (iii) pass such other and further orders as it may deem fit and proper in the interest of justice.
138 The main judgment of this Court was delivered on 22nd June, 1984, in Dr. Pradeep Jain etc.
vs Union of India & Ors.
, ; By a subsequent order made on 21st July, 1986, this Court directed that the total number of seats for admission to post graduate courses in each medical college or institution on the basis of All India Entrance Examination shall be limited to 25% and such examination would be held by the All India Institute of Medical Sciences at New Delhi.
By order dated September 25, 1987, this Court made clear directions for the sake of bringing about uniformity in post graduate medical teaching by requiring post graduate courses to be structured on a uniform basis; directing that diploma prevailing in Tamil Nadu may not be available for admission to a post graduate degree course; and ordering that provision in regard to super specialities like MD and other higher degrees need not be court controlled.
For doing so this Court allowed a five year period upto 1992 inclu sive.
With a view to bringing all the medical colleges and institutions subject to the scheme to one common discipline and for admissions beginning from 1993, the Court indicated that there should be only one pattern, namely, the three year degree course without any housemanship.
After having done so the Court proceeded to fix uniform schedule for inviting applications for having the selection examination, declaration of the result, admission of students to the post graduate courses and commencement of the sessional teaching.
The Court then desired that the discipline regarding holding of the selection examination, admission and commencement of courses should be effective from 1988.
In the penultimate paragraph of that order.
it was said: "All necessary directions for post graduate course are now complete.
We direct the Union of India, the Medical Council of India, the State Governments, Universities, Medical Institutions and all other authorities that may be involved in implementation of the scheme to give full effect to the orders and directions made by this Court in the proper spirit so that the scheme may become operative as directed.
We make it clear that no application for any modification of matters already covered by our order henceforth shall ordi narily be entertained.
A copy of this order shall be communicated forth with to the Chief Secretary of every State and Union Terri tory for compliance.
A copy of it be also sent to the Direc tor 139 Generals, All India ' Radio and Doordarshan for appropriate publicity of the order in general interest.
" We have ascertained from the Registry that there was due compliance of the direction contained in the last paragraph of the order.
A matter from Bihar forming subject of Civil Appeal No. 3589 of 1989 relating to admission in post graduate medical courses came before this Court.
This Civil Appeal was dis posed of by this Court on 15.11.89 (AIR 1990 SC 749).
Deal ing with the lapses on the part of the State of Bihar in the matter of compliance with the directions of 1987 which we have already referred to, this Court said: "Obviously the relevant directions have not been followed by the examining body for the current year.
Similarly, the State of Bihar did not follow the directions of this Court while drawing up its prospectus.
If the courses of study are to commence from May 2, the last qualifying date could not have been fixed as May 31, 1989.
It has been reiterated before us that several States have not been following.the directions.
Instead of issuing notice to the States and Union Territories for examining the correctness of the allegations of delay and non compliance of the directions, we have thought it appropriate to indicate that every one including the States, Union Territories and other authori ties running Medical Colleges with Post Graduate Courses are bound by our order and must strictly follow the time sched ule indicated in paragraph 6 of the order.
We have not proceeded against the defaulting authorities for violation of this Court 's order, hoping that there would be no recur rence of it but we would like to administer a warning to everyone that if it is brought to our notice at any time in future that there has been violation, a serious view of such default shall be taken.
We hope and trust that everyone concerned shall comply with the time frame strictly and there would be no lapse in this regard in future.
" This application is grounded upon the default which this Court has been anxious to eliminate and apprehensive of non compliance of directions wherein a serious threat of punishment had been held out.
Both the State of Uttar Pra desh and the seven medical colleges run by it are bound to implement the scheme in the main judgment as modified from time to time and were covered by the orders of 1987 and 140 1989.
We have read our order of 1987 again and find no scope for the stand of the respondents in the present petition for the position that there was scope for confusion relating to the directions in regard to uniform pattern of the courses and the time scheduled for the various aspects concerned with the selection examination, admission of students into the Post Graduate and commencement of sessional teaching.
These were two different matters and while in regard to items referred to in the order of 1987 a clear five year period was allowed to evolve the system of uniformity, time frame for every purpose like admission and teaching was intended to be brought into force from the year 1988.
Two distinct sets of directions were made one in regard to the requirement of change of the regulations and rules and the procedural aspects in operating the scheme, and the other for regulating admission and commencement of teaching.
We reject the plea of the Uttar Pradesh Government and the other respondents that there was scope for confusion and non compliance with the directions was relatable to a bona fide mistake.
This is a clear instance of either wilful default or total callous indifference to binding and lawful orders made by this Court.
Where the direction is clear and arising out of default of compliance, a further direction is made clarifying the position and warning defaulting parties of serious consequences we find no scope for any justifica tion for continued default.
More so when the State Govern ment and its officers obliged to give effect to our direc tions fail to take notice of the same and exhibit a conduct of noncooperation and callousness.
It was the obligation of the State of Uttar Pradesh in terms of the two orders referred to above to initiate action for admission in appropriate time so as to allow the com mencement of the course for the year 1990 with effect from May 2, 1990.
It is the respondents ' stand that for the year 1990 the Entrance Examination for the remaining seats (besides 25% controlled by the AllMS) was to be conducted by the University of Lucknow on 27th May, 1990.
This itself was contrary to the scheme and exhibited the same pattern of conduct as appeared in the Bihar case referred to above.
In fact on looking at the matter from every possible angle we have not been able to appreciate the submissions of Mrs. Dixit and are of the view that the performance of the State of U.P. and its public authorities is anything short of contumacy.
At one stage we were thinking of initiating contempt action against the State and the Principals of the seven medical colleges.
Such steps for disciplining the State and the public authorities concerned would result in multiplicity of proceedings; therefore, instead of undertak ing such an exercise we have thought it appropriate to impose 141 exemplary costs against the State of Uttar Pradesh as also the principal of each of the seven medical colleges.
We direct that the State of U.P. shall pay costs of Rs.20,000 (twenty thousand) while each of the Principals shall pay Rs.500 (five hundred) by way of costs.
So far as the State of Uttar Pradesh is concerned it has of course to come from the public fund of the State.
In regard to the principals of each of the seven medical colleges located at Lucknow, Agra, Kanpur, Jhansi, Meerut, Gorkhpur and Allahabad, the amount of costs shall be recovered personally from their salary and they would not be entitled to reimbursement of the same from the State exchequer.
These payments be made with the Regis try of this Court by 30th of September, 1990.
A copy of this order shall be made available to each of the principals of the seven medical colleges for compliance.
The State of U.P. is directed to hold the Selection Examination stipulated by it for May 27, 1990, by 30th of September, 1990 and the University of Lucknow is authorised to conduct it.
The result of the examination should be published within one week, that is, by 8th of October, 1990 and admissions should be completed on or before 26th of October, 1990, and classes shall commence on 1st of Novem ber, 1990.
The classes shall be deemed to have commenced from 2nd May, 1990, and each of the medical colleges shall undertake to provide additional teaching in course of the session so as to compensate the students for the days lost on the basis that the course begun on 2nd May, 1990.
Each of the principals of the medical colleges shall certify to the Registry of this Court by 15th November 1990, that this part of order has been implemented.
Before we part with the case we would like to again administer a warning to everyone associated with the scheme for implementing the directions contained in the main judg ment and the subsequent orders that a future default by anyone in any part of the country shall indeed be seriously viewed and drastically dealt with.
This Court has stated in the past and we would like now to reiterate that the direc tions of this Court are not intended to be brushed aside and overlooked or ignored.
Meticulous compliance is the only way to respond to directions of this Court.
P.S.S. Application disposed of.
|
In Dr. Pradeep Jain vs Union of India, ; the Court had laid down a scheme of admission to medical colleges in graduate and post graduate courses.
By its order dated September 1987 in a miscellaneous petition the Court made certain specific directions for the sake of bringing about uniformity in post graduate medical teaching and allowed a five year period upto 1992 for doing so.
In 6 of the said order it also fixed a uniform schedule for inviting applications for holding the selection examination, declara tion of the result, and admission of students to the post graduate courses.
11 was laid down therein that the courses of study shall commence in every institution throughout the country from May 2 every year.
The said time frame was intended to be brought into force from the year 1988, The Union of India, the Medical Council of India, the State Governments, Universities, medical institutions and all other authorities involved were required to give full effect to the orders and directions.
copy of the order was communi cated forthwith to the Chief Secretary every State and Union Territory for compliance.
In State of Bihar vs San jay Kumar, AIR 1990 SC 749 dealing with the lapse on the part of the State of Bihar in the matter of compliance with the directions of 1987 the Court had expressed the hope and trust that everyone con cerned would comply with the time frame strictly in future and held out a serious threat of punishment against the defaulting authorities.
In the instant interlocutory application the respondents sought grant of time to the State of Uttar Pradesh for implementing the reader dated September 25, 1987 and com mence the session for post graduate education from 2nd May, 1990 in all the seven medical colleges run by 136 it, and to hold the competitive examination for admitting the postgraduate students for the year 1990 through the University of Lucknow.
Their stand was that there was scope for confusion relating to the directions and non compliance was relatable to a bona fide mistake.
Disposing of the application, the Court, HELD: 1.
The directions of the Court are not intended to be brushed aside and overlooked or ignored.
Meticulous compliance is the only way to respond to them.
[141G] 2.1 In the instant case, two distinct sets of directions were made by the Court one in regard to requirement of change of the regulations and rules and the procedural aspects of the scheme, and the other for regulating admis sion and commencement of teaching.
There was no scope for confusion relating to them.
[140C D] 2.2 It was the obligation of the State of Uttar Pradesh in terms of the orders of 1987 and 1989 to initiate action for admission in appropriate time so as to allow the com mencement of the course for the year 1990 with effect from May 2, 1990.
The respondents ' stand that the entrance exami nation for the remaining seats (besides 25% controlled by the AllMS) was to be conducted by the University of Lucknow on 27th May, 1990 itself was contrary to the scheme.
[140E F] 2.3 Where the direction is clear and arising out of default of compliance, a further direction is made clarify ing the position and warning defaulting parties of serious consequences, there was no scope for any justification for continued default.
In failing to take notice of the Court 's directions the State Government and its officers have exhib ited a conduct of non cooperation and callousness.
In fact, their performance was nothing short of contumacy.
It is but appropriate, therefore, to impose exemplary costs against the State of Uttar Pradesh as also the Principal of each of the seven medical colleges.
[140D; G H] The State of U.P. shall pay costs of Rs.20,000 while each of the Principals of the seven medical colleges shall pay Rs.500 by way of the costs which shall be recovered personally from their salary, and they would not be entitled to reimbursement of the same from the State exchequer.
[141A] 3.
The State of U.P. to hold the selection examination stipulated by it for May 27, 1990, by 30th of September, 1990 and the University 137 of Lucknow is authorised to conduct it.
The result of the examination should be published within one week, that is, by 8th of October, 1990 and admissions should be completed on or before 26th of October 1990 and classes shall commence on 1st of November, 1990.
The classes shall be deemed to have commenced from 2nd May, 1990, and each of the medical col leges shall undertake to provide additional teaching to compensate the students for the days lost.
[141D E] 4.
A warning is administered to everyone associated with the scheme for implementing the directions contained in the main judgment and the subsequent orders that a future de fault by anyone in any part of the country shall be serious ly viewed and drastically dealt with.
[141F]
|
tition No. 226 of 1986.
(Under Article 32 of the Constitution of India).
WITH Civil Appeal No. 1263 of 1990.
From the Judgment and Order dated 28.4.1989 of the Central Administrative Tribunal, Hyderabad in T.A. No. 1146 of 1986.
Dr. L.M. Singhvi, Dr. Gauri Shankar, C. Mukopadhya, P.N. Misra and H.S. Parihar, for the Petitioners.
Madhava Reddy, Vivek Gambhir, S.K. Gambhir, R.D. Upadhyaya and Surender Karnail for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Petitioners are employees under the State Insurance Corporation, respondent No. 1.
According to the notification dated 22nd of April, 1977, issued in exer cise of powers 121 conferred by section 97(1), ( 1, 2)(xxx), section 2A and section 17(2) of the , (hereinafter re ferred to as 'the Act ') which came by way of supersession of the Employees State Insurance Corporation (Recruitment) Regulations, 1965, the post of Insurance Inspector/Manager Grade II was treated partly as selection and partly as nonselection.
There was no age limit for departmental candi dates and two thirds of the vacancies were to be filled up promotion and onethird by competitive examination under the Rules.
By advertisement dated 6th August, 1983, applications were invited for filling up the one third vacancies by direct recruitment to the category of post of Insurance Inspector/Manager Grade II.
The petitioners in this applica tion under article 32 of the Constitution responded to the said advertisement and were in due course declared as successful in the test.
In consideration of the fact that a good number of vacancies were then existing and in anticipation of the position that more vacancies were about to occur, a select list was drawn up for the existing and future vacancies.
In the said select list petitioners featured at Sr.
114, 116, 121, 159, 171, 172 and 188 respectively.
The panel was notified and in accordance with the practice petitioners along with other successful candidates were individually intimated by respondent No. 2 on 1.9.1984.
As already, indicated, the direct recruitment was on the basis of examination and interview.
The advertisement did not prescribe any pass marks in the interview though for the written examination 40% was prescribed.
Selection was, however, made on the basis of 40% in the interview test and those who did not secure 40% in the interview were not selected.
Challenge was made by the unsuccessful candidates questioning their rejection by contending that in the ab sence of any prescription of pass marks for the interview test, there was no justification to apply the 40% basis.
Writ Petitions were also filed when the respondents instead of appointing people from the panel of successful candidates went on filling up existing vacancies out of the category of promotees.
Such petitions were pending before the Calcutta, Madras and Andhra Pradesh High Courts when the Central Administrative Tribunals came to be set up.
These were transferred to the respective Benches of the Central Admin istrative Tribunals and on being clubbed were disposed of by a common judgment dated 28th of April, 1989, by the Hydera bad Bench of the Central Administrative Tribunal.
The Tribu nal held: "We would direct in these cases that the respondents shall work out and estimate the vacancies available upto 20th 122 June, 1986 accurately (we have used the word 'accurately ' as an apprehension has been expressed that direct recruits are not getting their due since over 320 posts were filled up between May, 1986 and December, 1988 by promotees on ad hoc basis or otherwise).
After such estimation, the respondents shall deduct therefrom 116 vacancies which have already been filled and make available the remaining vacancies to the applicants and others who took the examination on the basis of aggregate marks, i.e. total marks obtained in the written test and the oral interview.
Such of the applicants in all the three cases before us and heard by us at Hyderabad, Madras and Calcutta, who come within the zone of selection in accordance with this procedure as directed by us would be entitled to appointment.
" The writ petition is by the successful candidates whose names appear in the panel but who have not been given ap pointments.
They have contended that the respondents were entitled to the issue of appointment orders to them inasmuch as vacancies exist and there was no indication that the life of the select list would expire either at the end of one year or on the expiry of the further extended period of six months and when there has been no fresh select list as yet.
The decision of the Central Administrative Tribunal referred to above has been assailed by special leave chal lenging the direction of the Tribunal that the fresh select list filling up the remaining vacancies as on 20th June, 1986, should be prepared on the basis of total marks ob tained in the written examination and interview in disregard of the qualifying marks for the latter.
We granted special leave and have heard the writ petition and the civil appeal together.
As already indicated, the last list on the basis of recruitment examination was drawn up in 1984.
There have been a good number of vacancies then existing and subse quently a number of them have arisen as against which only 116 appointments have been made, including 16 out of the reserved categories.
At one stage of the hearing we had indicated to Shri Madhav Reddy, appearing for the respond entCorporation that the existing vacancies should be filled up out of the panel of 1984 and in answer to this sugges tion, an affidavit has been filed to say that candidates have been waiting for the holding of fresh recruitment examination and if out of the panel of 1984 all the existing vacancies are directed to be filled up, they would be frus trated.
There is force in the submission.
The Tribunal in its decision has indicated 123 that even upto 20th June, 1984, there were some vacancies which were available to be filled up out of the panel.
On account of respondents ' inaction in holding of annual re cruitment examinations, vacancies have accumulated.
Keeping all these aspects in view, we direct that 50% of the vacan cies existing upto 31st of December, 1989, relatable to the one third quota should be filled up out of the panel after giving credit to 116 appointments noticed by the Tribunal.
The remaining vacancies should be filled up by holding of a fresh recruitment examination latest before 30th of Septem ber, 1990.
So far as the remaining question that was debated before the Tribunal is concerned, we are of the view that the scheme intended for recruitment should be on the basis of an examination comprising of written test and interview.
We agree with the submission of Shri Madhav Reddy that inter view has its own place in the matter of the selection proc ess and the choice of the candidate.
Once this is recog nised, it would be appropriate to require every candidate to pass the interview test and for that purpose there should be a basic limit provided.
In the absence of any prescription of qualifying marks for the interview test the same pre scription of 40% as applicable for the written examination seems to be reasonable.
That has been the view expressed by one of us (Punchhi, J.) in a decision (Rajesh Sood & Ors.
vs Director General, Employees State Insurance Corporation & Anr., decided on August 7, 1985) to which our attention has been drawn.
We approve of the view.
Accordingly, we modify the direction of the Administrative Tribunal and hold that in the oral examination the pass mark shall be 40% and 40% pass marks shall be insisted separately for the written as also the oral test for qualifying in th selection.
The appeal is partly allowed and both the matters are disposed of by this common judgment.
There shall be no order as to costs.
T.N.A. Appeal allowed in part.
|
The respondent Corporation prepared a panel for the post of Insurance Inspector, for filling up the direct recruit quota, on the basis of written test and interview.
In the absence of prescribed marks for the interview 40% was made as basic limit for selection.
The unsuccessful candidates challenged their rejection before the Central Administrative Tribunal contending that the selection based on 40% marks in the interview was unjus tified.
Petitions were also filed by the successful candi dates seeking directions to the respondent Corporation to issue appointments pursuant to the panel prepared.
The tribunal directed that a fresh select list be pre pared for filling up the remaining vacancies on the basis of the total marks obtained in the written examination and interview, in disregard of the qualifying marks of the interview.
Hence this appeal.
The successful candidates also filed a Writ Petition contending that they were entitled to appointment order since there was no indication of the expiry of the panel.
Allowing the appeal in part and disposing of the matter, this Court, 120 HELD: 1.
Interview has its own place in the matter of the selection process and the choice of the candidate.
Once this is recognised, it would be appropriate to require every candidate to pass the interview test and for that purpose there should be a basic limit provided.
In the absence of any prescription of qualifying marks for the interview test the prescription of 40% as applicable for the written exami nation seems to be reasonable.
[123C D] Rajesh Sood & Or3 '.
vs Director General, Employees State Insurance Corporation & Anr., decided on August 7, 1985, approved.
50% of the vacancies existing upto 31st December, 1989, relatable to the one third quota should be filled up out of the penal after giving credit to appointments already made.
The remaining vacancies should be filled up by holding of a fresh recruitment examination.
The scheme intended for recruitment should be on the basis of an examination com prising of written test and interview.
In the oral examina tion the pass mark shall be 40% and 40% pass marks shall be insisted separately for the written as also the oral test for qualifying in the selection.
[123B; D E]
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Special Leave Petition (Civil) No. 11493 of 1989 From the Judgment and Order dated 7.9.1989 of the Bombay High Court in W.P. No. 3762 of 1989.
Mrs. Indira Jaisingh, Tripurari Ray and M.N. Shroff for the Petitioner.
V.N. Ganpule and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
This Special Leave is directed against the judgment of a Division Bench of the Bombay High Court dis missing summarily Writ Petition No. 3762 of 1989 filed by the petitioner.
The petitioner passed the Higher Secondary Certificate (hereinafter referred to as "the H.S.C.") examination held in March 1989, and sought admission to a medical college in Bombay conducted by the Government or one of the Municipal Medical Colleges in the city of 3 Bombay on the footing that she belonged to the Scheduled Tribe of Mahadeo Koli.
In support of her claim she tendered certain caste certificates.
Her application was referred, in accordance with the relevant rules to the Scrutiny Commit tee.
which is an expert body for determination of caste claims, for verifying her claim to belong to the aforesaid Scheduled Tribe.
In support of her claim, the petitioner submitted several caste certificates obtained by her.
At the hearing before the Scrutiny Committee the petitioner also furnished the Secondary School Leaving Certificate of her father.
Her father was requested to furnish his Primary School Leaving Certificate or birth certificate in order to ascertain the correct caste of the petitioner but he failed to produce the same.
The Committee, therefore, conducted the necessary inquiries at the Municipal Primary School, Worli, Koliwada, Bombay where the petitioner 's father had taken his primary education.
That school by its letter dated April 29, 1989, disclosed entries made in register of the said school showing inter alia, that the caste of the petitioner 's father was recorded as "Son Koli".
These entries were made in 1945 when there was no special advantage which the Sched uled Tribe of Mahadeo Koli enjoyed over the members of the caste of Son Koli.
It was pointed out by the Committee that these entries are entitled to a very great probative value as they have been made at a time when no question of making any manipulation arose.
The certificates relied upon by the petitioner have been rejected by the Scrutiny Committee primarily because these certificates were inconsistent with the entries in the said Register of the Primary School relating to the petitioner 's father to which the Committee attached great probative value.
The reasons given by the Scrutiny Committee for the rejection cannot be said to be irrelevant or perverse.
There is no complaint that the rules of fairplay have not been observed by the scrutiny Commit tee.
It rejected the claim of the petitioner that she be longed to the Scheduled Tribe of Mahadeo Koli.
This decision was upheld by the Additional Commissioner for Tribal Devel opment, State of Maharashtra in an appeal preferred by the petitioner.
Against the decision the petitioner filed a writ petition in the Bombay High Court challenging the aforesaid decision and that writ petition was summarily dismissed by a Division Bench of that High Court.
We have heard learned counsel for the petitioner who has strongly urged that the High Court was in error in rejecting the writ petition summarily as it is done.
We find, however, that it has not been shown how the decision of the Scrutiny Committee or the Appellate decision of the Commissioner for Tribal Welfare discloses any error calling for any interfer ence in a writ petition.
The entire controversy 4 has to be appreciated in the light of the admitted fact that Mahadeo Koli is a Scheduled Tribe whereas Son Koli is a caste.
We cannot find fault with the Scrutiny Committee for placing great reliance on the entries in the register of the primary school where the petitioner 's father took his pri mary education, as at the time when these entries were made there was no reason why he should have made a wrong state ment about the caste or tribe to which he belonged.
It was sought to be contended by learned counsel for the petitioner that Scrutiny Committee has proceeded on an entirely erroneous basis as the real claim of the petitioner is that Son Kolis are a section of the Scheduled Tribe of Mahadeo Koli.
We find, however, that this contention has nowhere been raised before the Scrutiny Committee or before the Commissioner of Tribal Welfare although it does appear to have been raised in the writ petition.
It was not open to the petitioner to raise this contention for the first time in the writ petition.
Learned counsel drew our attention to the list of the Scheduled Tribes in the State of Maharashtra appearing in Para 9 of the .
Entry 29 shows that "Koli Mahadeo" is a Scheduled Tribe recognised in Maharash tra.
In the list of Backward Classes issued by the State of Maharashtra we find that Kolis are recognised as belonging to "other backward classes".
Son Kolis are shown as belong ing to other backward classes in the list of other backward classes issued by the State of Maharashtra.
These documents, however, nowhere support the claim that Son Kolis are a section of Scheduled Tribe of Mahadeo Koli.
Learned counsel for the petitioner drew our attention to a publication entitled "Transactions of the Bombay Geograph ical Society from 1836 to 1838" which has been printed in 1844.
In this publication, Kolis are described as a tribe but a perusal of the relevant observations show that no distinction has been drawn in this publication between castes and tribes, and hence, the statements made in the said publication do not lend any support to the claim of the petitioner.
In the result, there is no merit in the special leave petition and it is dismissed.
No orders as to costs.
N.P.V. Petition dismissed.
|
The petitioner sought admission to a medical college in the State of Maharashtra on the footing that she belonged to the Scheduled Tribe of Mahadeo Koli and submitted several caste certificates, including her father 's Secondary School Leaving Certificate.
The Scrutiny Committee, the expert body for determining such claims, rejected her claim on the basis of entries made in 1945 in the register of the Municipal Primary School, where her father had his primary education, which showed that the caste of the petitioner 's father was recorded as 'Son Koli '.
This decision was upheld by the Additional Commissioner for Tribal Development.
The High Court summarily dismissed the petitioner 's writ petition.
In the Special Leave Petition before this Court, on behalf of the petitioner it was contended that the High Court was in error in rejecting the Writ Petition summarily and that the Scrutiny Committee had proceeded on an entirely erroneous basis as the real basis of the petitioner 's claim was that Son Kolis were a section of the Schedule Tribe of Mahadeo Koli.
Dismissing the Special Leave Petition, this Court, HELD: Entry 29 of the list of Scheduled Tribes in the State of Maharashtra, appearing in Para 9 of the shows that 'Koli Mahadeo ' is a Scheduled Tribe recognised in Maharashtra.
In the list of Backward Classes issued by the State, Kolis are recognised as belonging to "other backward classes".
Son Kolis are shown as belonging to other backward classes in the list of other backward classes.
These docu ments nowhere support the claim that Son Kolis are a section of Scheduled Tribe of Mahadeo Koli.
Though Kolis are de scribed as a tribe in the publication entitled "Transactions of the Bombay Geog 2 raphical Society from 1836 to 1838", a perusal of the rele vant observations shows that no distinction has been drawn in the said publication between castes and tribes.
[2D F] Admittedly, Mahadeo Koli is a Scheduled Tribe whereas Son Koli is a caste.
The Scrutiny Committee cannot be fault ed for placing great reliance on the entries in the register of the primary school where the petitioner 's father took his primary education, as at the time when these entries were made there was no reason why he should have made a wrong statement about the caste or tribe to which he belonged.
These entries were made in 1945, when there was no special advantage which the Scheduled Tribe of Mahadeo Koli enjoyed over the members of the caste of Son Koli.
The certificates relied upon by the petitioner have been rejected by the Scrutiny Committee primarily because these certificates were inconsistent with the entries in the said register of the Primary School relating to the petitioner 's father to which the Committee attached great probative value, as it was of the view that they were made at a time when no question of making any manipulation arose.
The reasons given by the Scrutiny Committee for the rejection cannot be said to be irrelevant or perverse.
There is no complaint that the rules of fair play have not been observed by the Scrutiny Commit tee.
[4A E]
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Criminal Appeal No. 386 of 1978.
From the Judgment and Order dated 19/20th July, 1977 of the Himachal Pradesh High Court in Crl.
A. No. 46 of 1976.
Rakesh Luthra, N.N. Bhatt, L.R. Singh (N.P.) and lrshad Ahmad for the Appellant.
K.G. Bhagat, N.K. Sharma and Ms. A. Subhashini (N.P.) for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
The appellant, K.C. Sharma, alongwith two others was charged for the offence punishable under sections 302 and 201 read with section 34 of the Indian Penal Code for causing the death and concealing the dead body of Joginder Singh.
The Additional Sessions Judge, Kangra Division at Dharamsala convicted all the accused under section 302/34 and directed them to undergo imprisonment for life and to pay a fine of Rs.500 and also to the sentence of two years rigor ous imprisonment and fine of Rs.500 for the offence of section 201/34, in default of payment of fine for a further period of three months rigorous imprisonment.
All the sentences were directed to run concurrently.
On appeal the Division Bench of the High Court of Himachal Pradesh by judgment dated July 20, 1977 acquitted accused 2 and 3 of the offence under section 302 IPC and confirmed the conviction and sentence of the appellant and set aside the sentence of fine.
The leave having been granted by this Court, this appeal has been filed.
The narrative of prosecution case runs thus: The de ceased Joginder Singh, resident of Jogipura.
Kangra on November, 10, 1974.
while going to Pathankot with some currency notes in his possession went on his way to Jassur Village to meet his friend one Bala Pahalwan.
On enquiry the latter was said to be absent in the village.
The deceased came in contact with the appellant and both went to the Dhaba of PW. 7, Joginder Singh Paul to have some drink, but PW. 7 did not allow them to take liquor inside the Dhaba.
Both of them sat in the back side of the Dhaba to have drink.
PW. 8 Tamil Singh and one Jai Onkar were also invited to have drink with them.
All of them together consumed the liquor and ate meat.
The deceased paid the price of the liquor and meat and when he had become tipsy, PW. 8 suggest ed to take the deceased to Pathankot or to keep him at Dhaba 110 Beli where at he could make necessary arrangements for their stay but the appellant insisted upon taking the deceased to Kangra.
Thereafter the appellant and the deceased boarded the Truck No. HPK 4179 driven by A. 2, Madho Ram, Driver and A. 3, Bihari Lal, Cleaner.
PW. 8 and the other left the place.
The truck was loaded with the bricks and the appel lant and the deceased sat on the bricks in the body of the truck and went towards Kangra side.
PW. 12, the Octroi Clerk at Nagpur states that the truck driven by A. 2 went towards Baijnath.
PW. 13.
Burfiram, Chowkidar at Ichhi Marketing Co op.
Society spoke that he saw the truck driven by A. 2 and A. 3 and got unloaded the bricks at the godown of the said Society at about mid night but the deceased was not seen there.
It is further the case of the prosecution that while the deceased or accused were going in the truck, there ensued a quarrel between them over some money matter and the appellant took iron screw driver and gave blows on the head and face of the deceased.
Consequently the deceased was half dead.
He was thrown out of the truck but finding him not dead put him in the truck and all the accused severed the head with an iron saw and burried the trunk under stones in the outskirts of the village Dhadhu and carried the head with them in the truck.
The head was hidden at a place between Guggal and Chaitru on the Kachcha road branching off the main road to the village Ichhi.
On November 13, 1974, PW. 6 Karrudi Ram, the Chowkidar of Mauza Bandi, during twilight, had gone to answer nature 's call at the outskirts of the village Dhadhu and noticed the blood stains and a torn pant near the stones.
On further probe the hand of the deceased was seen projecting from the stones and he noticed the dead body.
He went and reported to Bidhu Ram, PW. 10.
the Pradhan of the village and two others.
All of them went to the spot, noticed the dead body.
10 kept a watch during the night.
On November 14, 1974 at about 7.00 or 8.00 a.m. PW. 6 went to the Police Station and lodged the com plaint.
PW. 26, the A,S.I. recorded and issued the First Information Report and proceeded to the spot.
He recovered the articles on and near the dead body under PW. 11, Panch nama and conducted inquest and sent the dead body for post mortem.
The Doctor conducted autopsy.
On November 15.
1974 the parents of the deceased came to the Police Station and identified the clothes of the deceased.
On November 16, 1974, PW. 27, the Sub Inspector of the Police took over the investigation.
He contacted one Kuldip Singh, a Conductor in Kapila Transport Company from whom he came to know that on November 10, 1974, the deceased and the appellant were seen consuming liquor at Jassur.
Thereafter PW. 27 and PW. 10, Bidhu Ram, Pradhan of Guggal Panchayat went to the appel lant 's village Sahaura and was sent for the appellant.
The appel 111 lant on coming to him was found to have shaved off his moustaches.
PW. 27 had enquired as to why he had removed his moustoches upon which the appellant was claimed to have replied that he had removed his moustaches due to demise of his maternal uncle.
PW. 10 and PW. 27 took the appellant to Jassur for identification purposes.
The appellant pointed out PW. 7, the owner of the Dhaba and the latter identified the appellant as one seen in the company of the deceased and having consumed liquor.
Equally of PW. 8.
Thereafter the appellant was taken back to PW.
10 's village and PW.
27 left the village for further investigation.
On enquiry made by PW. 10, in the shop of one Mangath Ram and in the company of one Raghunath, to reveal the truth to him, the appellant was stated to have requested PW. 10 whether he could save him if he would tell the truth.
Thereupon PW. 10 stated that he could not save him but if he would speak the truth he would help himself.
Thereupon the appellant was stated to have made extra judicial confession giving out the details of consuming liquor with the deceased; their going together on the truck, the quarrel that ensued between them; his hitting the deceased with the screw driver, throwing the. dead body, thinking that he died, on the road realising that he was not dead, lifting him and putting him in the body of the truck and all the accused cutting the head of the deceased with the saw blade and burrying the trunk under the stones and hiding the head at different place and thereby they had committed the crime.
10 gave this information to PW. 27 on the next day, namely, November 25, 1974.
Thereon all the accused were arrested.
On November 27, 1974, the Driver A. 2 was stated to have made a statement under section 27 of the Evidence Act.
exhibit PW. 9/A leading to discovery of the hidden head at a place between Guggal and Chaitru.
This statement had been made in the presence of PW. 9 and another and the severed head was recovered under Memo exhibit PW. 9/B. This was in the presence of PW. 10 and another.
The head was sent to the Doctor for post mortem examination.
The Doctor verified and found it to be correct and the doctor corelated the trunk of the dead body and the head belonging to the de ceased.
On November 30., 1974, pursuant to statement made by the appellant and A. 3 under exhibit PW.
16/B leading to recover one iron saw without handle and a piece of cloth wrapped to one of its sides was recovered from a bush near Kathman Mor and PW. 10 and another are Panch witnesses and found the saw blade contained with blood stains and a piece of cloth of torn pant.
They were recovered under exhibit PW. 16/C.
The clothes of the appellant were also claimed to have been recovered from his house under exhibit PW.
16/H which was stained with blood and the same were recovered in the presence of PW. 16 The Serologist found the blood stains disintegrated on all the 112 items.
On the basis of this evidence the prosecution laid the chargesheet against all the accused.
As stated earlier the appellant now stands convicted and sentenced for the offences under sections 302 and 201, I.P.C. The two others did not file appeal against their convict under section 201 I.P.C.
The entire prosecution case rested on circumstantial evidence.
As regards the appellant, the circumstances relied on the prosecution are three, namely,(i) the appellant and the deceased were last seen together by PW. 7, the owner of the liquor shop Dhaba and PW. 8, the companion who had liquor with the deceased and the appellant; (ii) the extra judicial confession made to PW. 10, the Pradhan of Guggal Gram Panchayat; and (iii) the discovery of saw blade pursu ant to the statement made by the appellant and A. 3 under section 27 of the Evidence Act.
The question, therefore, is whether the prosecution proved guilt of the appellant beyond all reasonable doubt.
In a case of circumstantial evidence.
all the circumstances from which the conclusion of the guilt is to be drawn should be fully and cogently established.
All the facts so estab lished should be consistent only with the hypothesis of the guilt of the accused.
The proved circumstances should be of a conclusive nature and definite tendency, unerringly point ing towards the guilt of the accused.
They should be such as to exclude every hypothesis but the one proposed to be proved.
The circumstances must be satisfactorily established and the proved circumstances must bring home the offences to the accused beyond all reasonable doubt.
It is not necessary that each circumstances by itself be conclusive but cumula tively must form unbroken chain of events leading to the proof of the guilt of the accused.
If those circumstances or some of them can be explained by any of the reasonable hypothesis then the accused must have the benefit of that hypothesis.
In assessing the evidence imaginary possibilities have no role to play.
What is to be considered are ordinary human probabilities.
In other words when there is no direct wit ness to the commission of murder and the case rests entirely on circumstantial evidence, the circumstances relied on must be fully established.
The chain of events furnished by the circumstances should be so far complete as not to leave any reasonable ground for conclusion consistent with the inno cence of the accused.
If any of the circumstances proved in a case are consistent with the innocence of the accused or the chain of the continuity of the circumstances is broken, the accused is entitled to the benefit of the doubt.
113 In assessing the evidence to find these principles.
it is necessary to distinguish between facts which may be called primary or basic facts on one hand and inference of facts to be drawn from them.
on the other.
In regard to the proof of basic or primary facts.
the court has to judge the evidence in the ordinary way and in appreciation of the evidence in proof of those basic facts or primary facts, there is no scope for the application of the doctrine of benefit of doubt.
The court has to consider the evidence and decide whether the evidence proves a particular fact or not.
Whether that fact leads to the inference of the guilt of the accused or not is another aspect and in dealing with this aspect of the problem the doctrine of benefit would apply and an inference of guilt can be drawn only if the proved facts are inconsistent with the innocence of the accused and are consistent only with his guilt.
There is a long distance between may be true and must be true.
The prosecution has to travel all the way to establish fully the chain of events which should be consistent only with hypothesis of the guilt of the accused and those circumstances should be of conclu sive nature and tendency and they should be such as to exclude all hypothesis but the one proposed to be proved by the prosecution.
In other words.
there must be a chain of evidence so far consistent and complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all probability the act must have been done by the accused and the accused alone.
The question emerges, therefore is whether the prosecu tion has established the three circumstantial evidence heavily banked upon by the prosecution in proof of the guilt of the appellant.
The first circumstance is that the de ceased and the appellant were last seen together by PW. 7 and PW. 8.
From the evidence it is clear that there is no prior intimacy of the appellant and the deceased.
They happened to meet per chance.
Equally from the evidence it is clear that PW. 7, the liquor shop owner and PW. 8 who had liquor with the appellant and the deceased are also absolute strangers to the deceased and the appellant.
Admittedly there is no identification parade conducted by the prosecu tion tO identify the appellant by PW. 7 or PW. 8.
The appel lant was stated to have pointed out to PW. 7 as the one that sold the liquor and PW 8 consumed it with him and the de ceased.
Therefore it is not reasonably possible to accept the testimony of PW. 7 and PW. 8 when they professed that they have seen the appellant and the deceased together consuming the liquor.
It is highly artificial and appears on its face a make believe story.
114 The next piece of evidence is the alleged extra judicial confession made by the appellant to PW. 10.
An unambiguous extra judicial confession possesses high probative value force as it emanates from the person who committed the crime and is admissible in evidence provided it is free from suspicion and suggestion of its falsity.
But in the process of the proof of the alleged confession the court has to be satisfied that it is a voluntary one and does not appear to be the result of inducement, threat or promise envisaged under section 24 of the Evidence Act or was brought about in suspicious circumstances to circumvent Section 25 and 26 of the Evidence Act.
Therefore, the court has to look into the surrounding circumstances and to find whether the extra judicial confession is not inspired by any improper or colateral consideration or circumvention of the law suggest ing that it may not be true one.
For this purpose the court must scrutinise all the relevant facts such as the person to whom the confession is made, the time and place of making it, the circumstances in which it was made and finally the actual words used by the accused.
Extra judicial confession if found to be voluntary, can be relied upon by the court alongwith other evidence on record.
Therefore, even the extra judicial confession will also have to be proved like any other fact.
The value of the evidence as to the confes sion depends upon the verocity of the witness to whom it is made and the circumstances in which it came to be made and the actual words used by the accused.
Some times it may not be possible to the witness to reproduce the actual words in which the confession was made.
For that reason the law insists on recording the statement by a Judicial Magistrate after administering all necessary warnings to the accused that it would be used as evidence against him.
Admittedly PW.
10 and the appellant do not belong to the same village.
From the narrative of the prosecution story it is clear that PW. 27, and PW. 10 came together and appre hended the appellant from his village and was taken to Jassur for identification.
After he was identified by PW. 7 and PW. 8 it was stated that he was brought back to Gaggal village of PW. 10 and was kept in his company and PW. 27 left for further investigation.
Section 25 of the Evidence Act provides that no confession made to a police officer shall be proved as against a person accused of any offence.
Section 26 provides that no confession made by any person while he is under custody of the police officer, unless it be made in the immediate presence of a magistrate, shall be proved as against such person.
Therefore, the confession made by an accused person to a police officer is irrelevant by operation of Section 25 and it shall be proved against the appellant.
Likewise the confession made by the appellant while he is in the custody of the police shall not 115 be proved against the appellant unless it is made in the immediate presence of the magistrate, by operation of Sec tion 26 thereof.
Admittedly the appellant did not make any confession in the presence of the magistrate.
The question, therefore, is whether the appellant made the extra judicial confession while he was in the police custody.
It is incred ible to believe that the police officer, PW. 27, after having got identified the appellant by PW. 7 and PW. 8 as the one last seen the deceased in his company would have left the appellant without taking him into custody.
It is obvious, that with a view to avoid the rigour of Section 25 and 26, PW. 27 created an artificial scenerio of his leaving for further investigation and kept the appellant in the custody of PW. 10, the Pradhan to make an extra judicial confession.
Nothing prevented PW. 27 to take the appellant to a Judicial Magistrate and had his confession recorded as provided under section 164 of the Crl.
P.C. which possesses great probative value and affords an unerring assurance to the court.
It is too incredulous to believe that for mere asking to tell the truth the appellant made voluntarily confession to PW. 10 and that too sitting in a hotel.
The other person in whose presence it was stated to have been made was not examined to provide any corroboration to the testimony of PW. 10.
Therefore, it would be legitimate to conclude that the appellant was taken into the police custo dy and while the accused was in the custody, the extra judicial confession was obtained through PW. 10 who accommo dated the prosecution.
Thereby we can safely reach an irre sistible conclusion that the alleged extra judicial confes sion statement was made while the appellant was in the police custody.
It is well settled law that Sections 25 and 26 shall be construed strictly.
Therefore, by operation of Section 26 of the Evidence Act, the confession made by the appellant to PW. 10 while he was in the custody of the police officer (PW. 27) shall not be proved against the appellant.
In this view it is unnecessary to go into the voluntary nature of the confession etc.
The third circumstance relied on is the statement said to have been made by the appellant under section 27 of the Evidence Act leading to discovery of the consequential information, namely, saw blade, is not of a conclusive nature connecting the appellant with the crime.
The recover ies were long after the arrest of the appellant.
The blood stains on all the articles were disintegrated.
So it was not possible to find whether it is human blood or not.
Moreover, from the prosecution evidence it is clear that the deceased himself was an accused in an earlier murder case and it is obvious that he had enemies at his back.
Absolutely no motive to commit crime was attributed to the appellant.
116 No doubt the appellant and two others have been charged for an offence under section 302 and 201 read with Section 34, namely, common intention to commit the offences and A. 2 and A. 3 were acquitted of the charge under section 302/34, I.P.C. and that there is no independent charge under section 302, I.P.C.
If, from the evidence, it is established that any one of the accused have committed the crime individual ly, though the other accused were acquitted, even without any independent charge under section 302, the individual accused would be convicted under section 302, I.P.C. sim plicitor.
The omission to frame an independent charge under section 302, I.P.C. does not vitiate the conviction and sentence under section 302, I.P.C. Thus considered we find that the prosecution has utterly failed to prove any one of the three circumstances against the appellant and the chain of circumstances was broken at every stage without connecting the accused to the commission of the alleged crime as the prosecution failed to prove as a primary fact all the three circumstances, much less beyond all reasonable doubt bringing home the guilt to the accused, and to prove that the accused alone had committed the crime.
Therefore, the appellant is entitled to the benefit of doubt.
The conviction and sentence of the appellant for the offences under section 302 or Section 201 of I.P.C. are set aside.
The appellant is on bail granted by this Court after nine years ' incarceration.
The bail bond shall stand can celled.
He shall remain at liberty unless he is required in any other case.
Before parting with the case, it is necessary to state that from the facts and circumstances of this case it would appear that the investigating officer has taken the appel lant, a peon, the driver and the cleaner for ride and tram pled upon their fundamental personal liberty and lugged them in the capital offence punishable under section 302.
I.P.C. by freely fabricating evidence against the innocent.
Un doubtedly.
heinous crimes are committed under great secrecy and that investigation of a crime is a difficult and tedious task.
At the same time the liberty of a citizen is a pre cious one guaranteed by article 3 of Universal Declaration of Human Rights and also article 21 of the Constitution of India and its deprivation shall be only in accordance with law.
The accused has the fundamental right to defend himself under article 10 of Universal Declaration of Human Rights.
The right to defence includes right to effective and meaningful defence at the trial.
The poor accused cannot defend effec tively and adequately.
Assigning an experienced defence counsel to an indigent accused is a facet of fair procedure and an inbuilt right to liberty and life envisaged under articles 117 19 and 21 of the Constitution.
Weaker the person accused of an offence, greater the caution and higher the responsi bility of the law enforcement agencies.
Before accusing an innocent person of the commission of a grave crime like the one punishable under section 302, I.P.C., an honest, sincere and dispassionate investigation has to be made and to feel sure that the person suspected of the crime alone was re sponsible to commit the offence.
Indulging in free fabrica tion of the record is a deplorable conduct on the part of an investigating officer which under mines the public confi dence reposed in the investigating agency.
Therefore, great er care and circumspection are needed by the investigating agency in this regard.
It is time that the investigating agencies, evolve new and scientific investigating methods, taking aid of rapid scientific development in the field of investigation.
It is also the duty of the State, i.e. Cen tral or State Government to organise periodical refresher courses for the investigating officers to keep them abreast of the latest scientific development in the art of investi gation and the march of law so that the real offender would be brought to book and the innocent would not be exposed to prosecution.
Though article 39A of the Constitution provides fundamental rights to equal justice and free legal aid and though the State provides amicus curiae to defend the indigent accused, he would be meted out with unequal defence if, as is common knowledge the youngster from the Bar who has either a little experience or no experience is assigned to defend him.
It is high time that senior counsel practicing in the court con cerned, volunteer to defend such indigent accused as a part of their professional duty.
If these remedial steps are taken and an honest and objective investigation is done, it will enhance a sense of confidence of the public in the investigating agency.
We fervently hope and trust that concerned authorities and Senior Advocates would take appropriate steps in this regard.
The appeal is accordingly allowed.
P.S.S. Appeal allowed.
|
The appellant was convicted under sections 302 and 201 read with section 34 IPC.
The prosecution case was that he and the deceased were last seen together in village J on November 10, 1974 by PW. 7, owner of a dhaba cum liquor shop, and PW. 8, and all of them had consumed liquor.
The deceased had by then become tipsy.
Thereafter the appellant and the deceased had boarded a truck driven by A 2 and A 3, the cleaner.
While they were going in the truck there ensued a quarrel between them over some money matters and the appellant attacked the deceased with an iron screw driver, and when the latter was half dead all the accused severed his head with an iron saw and burried the trunk under stones.
The head was hidden at a different place.
Three days later, PW 6, chowkidar of a neighboring village noticed the dead body and reported the matter to PW 10, the village pradhan, who accompanied him to the spot.
PW 6 lodged the FIR the next morning.
On receiving information that the deceased and the appellant were seen consuming liquor on November 10 the Sub Inspector, PW 27, and PW 10 went to appellant 's village and took him for identification to village J, where PWs 7 and 8 identified him as one seen in the company of the deceased and having consumed liquor.
The appellant was thereafter taken to PW 10 's village and PW 27 proceeded for further investigation.
The appellant then made an extra judicial confession to PW 10 of having committed the crime with the help of A 2 and A 3.
PW 10 passed on that informa tion to PW 27 the next day following which the accused were arrested.
Thereafter A 2 made a statement under section 27 of 106 the Evidence Act leading to the ' discovery of the severed head.
The weapon of offence was also recovered.
The High Court confirmed the conviction and sentence of the appellant but acquitted the other two of the charge under section 302 IPC.
Allowing the appeal by special leave, the Court, HELD: 1.
The prosecution has failed to bring home the guilt to the appellant beyond all reasonable doubt and to prove that he alone had committed the crime.
He is, there fore, entitled to the benefit of doubt.
[116D] 2.1 When there is no direct witness to the commission of murder and the case rests entirely on circumstantial evi dence, all the circumstances from which the conclusion of the guilt is to be drawn should be fully and cogently estab lished.
The proved circumstances should be of a conclusive nature and definite tendency unerringly pointing towards the guilt of the accused.
Imaginary possibilities have no role to play.
What is to be considered are ordinary human proba bilities.
It is not necessary that each circumstance by itself be conclusive but cumulatively must form unbroken chain of events leading to the proof of the guilt of the accused.
If any of the said circumstances are consistent with the innocence of the accused or the chain of the conti nuity of the circumstances is broken, the accused is enti tled to the benefit of the doubt.
[112D H] 2.2 In assessing the evidence to find these principles it is necessary to distinguish between facts which may be called primary or basic facts on one hand and inference of facts to be drawn from them, on the other.
In regard to the proof of basic or primary facts, the court has to judge the evidence in the ordinary way and in appreciation of the evidence in proof of those basic facts or primary facts, there is no scope for the application of the doctrine of benefit of doubt.
The court has to consider the evidence and decide whether the evidence proves a particular fact or not.
Whether that fact leads to the inference of the guilt of the accused or not is another aspect and in dealing with this aspect of the problem, the doctrine of benefit would apply and an inference of guilt can be drawn only if the proved facts are inconsistent with the innocence of the accused and are consistent only with his guilt.
[113A C] 3.1 In the instant case, from the evidence it is clear that there was no prior intimacy of the appellant and the deceased.
They happened to meet per chance.
PW 7, the liquor shop owner, and PW 8, who had 107 liquor with the appellant and the deceased were also abso lute strangers to the deceased and the appellant.
Admittedly there was no identification parade conducted by the prosecu tion to identify the appellant by PW 7 or PW 8.
The appel lant was stated to have pointed out to PW 7 as the one that sold the liquor and PW 8 consumed it with him and the de ceased.
Therefore, it is not reasonably possible to accept the testimony of the PW 7 and PW 8 when they professed that they had seen the appellant and the deceased together con suming the liquor.
It is highly artificial and appear on its face a make believe story.
[113F H] 3.2.1 An unambiguous extra judicial confession possesses high probative value force as it emanates from the person who committed the crime and is admissible in evidence pro vided it is free from suspicion and suggestion of its falsi ty.
But in the process of the proof of the alleged confes sion the court has to be satisfied that it is a voluntary one and does not appear to be the result of inducement, threat or promise envisaged under section 24 of the Evidence Act or was brought about in suspicious circumstances to circum vent ss, 25 and 26 of the Evidence Act.
For this purpose the court must scrutinise all the relevant facts such as the person to whom the confession is made, the time and place of making it, the circumstances in which it was made and final ly the actual words used by the accused.
[114A D] 3.2.2 Section 25 of the Evidence Act provides that no confession made to a police officer shall be proved as against a person accused of any offence.
Section 26 provides that no confession made by any person while he is under custody of the police officer, unless it be made in the immediate presence of a magistrate, shall be proved as against such person.
[114G] 3.2.3 In the instant case, the appellant did not make any confession in the presence of the magistrate.
From the narrative of the prosecution story it is clear that PW 10 and the appellant did not belong to the same village and that PW 27 and PW 10 came together and apprehended the appellant from his village and took him to village J for identification.
After he was identified by PW 7 and PW 8 it was stated that he was brought back to the village of PW 10 and was kept in his company and PW 27 left for further investigation.
It is incredible to believe that the police officer, PW 27 after having got an accused identified would have left without taking him into custody.
He seems to have created an artificial scenario of his leaving for further investigation and keeping the appellant in the custody of PW 10 to make an extra judicial confession, with a view to avoid the rigour of sections 25 and 108 26.
Nothing prevented him from taking the appellant to a Judicial Magistrate and having his confession recorded as provided under section 164 of the Crl.
P.C. which possesses great probative value and affords an unerring assurance to the court.
It is too incredulous to believe that for mere asking to tell the truth the appellant made voluntary confession to PW 10 and that too sitting in a hotel.
The other person in whose presence it was stated to have been made was not examined to provide any corroboration to the testimony of PW 10.
It would be legitimate, therefore, to conclude that the appellant was taken into police custody and the extra judicial confession was obtained there through PW 10 who accommodated the prosecution.
[115A E] 3.2.4 It is well settled law that sections 25 and 26 of the Evidence Act shall be construed strictly.
Therefore, by operation of section 26 the confession made by the appellant to PW 10 while he was in the custody of the police officer shall not be proved against him.
[115E] 3.3 The statement said to have been made by the appel lant under s 27 of the Evidence Act leading to discovery of the consequential information, namely.
saw blade, is not of a conclusive nature connecting the appellant with the crime.
The recoveries were made long after the arrest of the appel lant.
The blood stains on all the articles had disintegrat ed.
So it was not possible to find whether it was human blood or not.
Moreover, from the prosecution evidence it is clear that the deceased himself was an accused in an earlier murder case and it is obvious that he had enemies at his back.
Absolutely no motive to commit the crime was attribut ed to the appellant.
[115G H] 4.
The conviction and sentence of the appellant for the offences under sections 302 and 201 IPC are set aside.
The bail bond shall stand cancelled.
He shall remain at liberty unless he is required in any other case.
[116D] 5.
Indulging in free fabrication of evidence against an innocent and implicating him in the capital offence punisha ble under section 302 IPC, as in the instant case, is a deplora ble conduct on the part of an investigating officer.
The liberty of a citizen is a precious one guaranteed by consti tutional provisions and its deprivation shall be only in accordance with law.
Before accusing the appellant of the commission of such a grave crime an honest, sincere and dispassionate investigation should have been made to feel sure that he alone was responsible to commit the offence.
[117B; A] 109
|
ivil Appeal No. 4381 of 1990.
From the Judgment and Order dated 23.8.1989 of the Bombay High Court in W.P. No. 494 of 1982.
Ashok H. Desai, Solicitor General, Shishir Sharma and P.H. Parekh for the Appellant.
Vinod Bobde, S.V. Deshpande and P.S. Sadavartey for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Special leave granted.
The appeal is set down for hearing by consent of both the parties.
This appeal involves a question of interpretation of paragraphs 521(5)(e) and 521(10)(c) of the Award of the All India Industrial Tribunal (Bank Disputes) which is popularly known as the Shastri Award, (hereinafter referred to as the Award) and is important for the entire banking industry in the country covered by the Award.
In order to appreciate the significance of the ques tion, it is necessary to narrate the facts leading to this appeal.
The employee concerned was working as a clerk in the Gadchiroli branch of the appellant State Bank of India at the relevant time.
A departmental inquiry was held against him for four acts of misconduct and the 16 inquiry officer came to the conclusion that two of the charges were fully proved while one charge was proved to a limited extent and the fourth charge was not established.
On the basis of the report of the inquiry officer, the compe tent authority tentatively decided to dismiss the employee from service, and issued a notice to him under paragraph 52 1(10)(a) of the Award, to show cause as to why the said punishment should not be imposed on him.
The competent authority also gave him a hearing as required by the said provision, and thereafter passed an order, the operative and relevant part of which is as follows: "Looking at the entire case I find that the established charges, viz., uttering indecent word, threatening the Agent and failure to do the work allotted are quite serious charges and would warrant dismissal.
However, the employee has had the benefit of a very tenacious defence from the date of the issue of the show cause notice for dismissal and various arguments have been raised with a view to evade the punishment which would normally follow out of the serious ness of the offences.
Taking note of them, even though I do not quite find them tenable, as indicated in my detailed observations thereon, and of the extenuating circumstances (most important of which is the comparatively young age of the employee) I have decided not to impose the punishment of dismissal.
At the same time I am of the opinion that it would not be desirable to retain Shri Sadavarte in the Bank 's service and accordingly I order that he be discharged on payment of one month 's pay and allowances in lieu of notice.
In terms of para 521(10)(c) of the Sastry Award, this would not amount to disciplinary action.
An industrial dispute was raised by the first respondent Union, and in due course it was referred to the Central Govt.
Labour Court, Bombay for adjudication.
By its award of March 2, 1981, the Labour Court held that the order of dismissal of the petitioner was proper.
Against the said decision, the respondent Union preferred a writ petition before the High Court raising several contentions.
The High Court confined its decision only to one point, viz., whether the termination of the service was retrenchment, and if so, whether it was made in accordance with the provisions of Section 25F of the (hereinaf ter referred to as the Act).
The Court held that the termi nation of the services was retrenchment and was made in breach of the said provisions in as much as no retrenchment 17 compensation was paid to the employee.
The termination of the services was, therefore, set aside.
It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpreta tion of the provisions of paragraphs 521(5)(e) and 52 1(10)(c) of the Award and ignoring their context.
We may first refer to the provisions with regard to retrenchment under the Act.
Section 2(00) of the Act defines retrenchment as follows: "Retrenchment" means the termination by the em ployer of the service of a workman for any reason whatsoev er, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or "Compensation in cases of retrenchment".
As pointed out above, paragraph 521 is in Section 111 which contains the only other paragraph, namely, paragraph 520.
That paragraph is a prologue to Section III and to paragraph 521, which both deal with procedure for taking disciplinary action.
Para 520 reads as follows: "Under the subject of disciplinary action we deal with dismissal, suspension, warning or censure, fine, the making of adverse remarks and the stoppage of an increment.
" It is, therefore, clear both from the heading of Section 111 as well as from the contents of para 520 that the provisions of para 521 deal with nothing but disciplinary action and tile procedure for taking such action.
Paragraph 521 which is a self contained code of disciplinary action and of the procedure for taking it, begins with the following statement: "A person against whom disciplinary action is proposed or likely to be taken should, in the first in stance, be informed of the particulars of the charge against him; he should have a proper opportunity to give his expla nation as to such particulars.
Final orders should be passed after due 18 consideration of all the relevant facts and circumstances.
With this object in view we give the following directions: . .
It classifies delinquencies into three categories, namely, (i) offences (ii) gross misconduct and (iii) minor miscon duct and prescribes procedure to deal with each of them.
Sub paragraph (1) to (3) deal with the cases of of fences.
Sub para (1) defines offence to mean any act involv ing moral turpitude and for which an employee is liable to conviction and sentence under the provisions of law.
Sub para 2(a) states that when in the opinion of the management, the employee has committed an offence and he is not prose cuted by the prosecuting agency, the bank may take steps to prosecute him or get him prosecuted.
The bank is also empow ered to suspend the employee in such circumstances.
Sub paragraph 2(b) states that if the employee is convicted in such prosecution, he may either be dismissed or "be given any lesser form of punishment as mentioned in sub para 5 below".
However, if he is acquitted with or without the benefit of doubt, sub para 2(c) lays down two different procedures to meet the two situations.
It states that even if an employee is given a clean acquittal, it is open to the management to proceed against him under the provisions set out in sub paras (9) and (10) "relating to discharges".
It may be mentioned here that the provisions with regard to the discharges in sub paras (9) and (10) referred to here, are contained only in sub para 10(c) and they come into play only when the management decides under sub para (9) to take a disciplinary action and the action is taken after the procedure for the same as laid down in sub para (10) is followed.
But with that, we may deal with a little later.
In cases of clean acquittal and a departmental inquiry held thereafter, the management is given yet another option.
Instead of the discharge as provided under sub para 10(c), the management may only terminate the services of the em ployee with three months ' pay and allowances in lieu of notice, if it comes to the decision not to continue the employee in service.
In such cases, he shall be deemed to have been on duty during the entire period of suspension, if any, and therefore shall be entitled to the full pay and allowances minus the subsistence allowances he had drawn and also to all other privileges for the period of suspension.
Such simple termination of service is not provided for either in sub para (5) or in sub para (10).
Thus it is obvious from sub paragraph 2(c) that when a departmental inquiry is held or 19 when disciplinary action is taken in case of a clean acquit tal.
two options are given to the management, namely.
(i) to discharge the employee under sub paragraph 10(c) with or without notice or on payment of only a month 's pay and allowances, in lieu of notice but without the benefit of the suspension being converted into a period of duty or (ii) to terminate the services with three months ' pay and allow ances, in lieu of notice and also with the further benefit of converting the period of suspension into a period of duty.
However, when the acquittal is with the benefit of doubt and the management does not proceed to discharge the employee under sub para 10(c) but wants to resort to the second option of the termination of service with three months ' pay and allowances in lieu of notice, it is left to the discretion of the management to pay the employee such portion of the pay and allowances for the period of suspen sion as the management may deem proper, and unless the management so directs, the period of suspension is not to be treated as the period spent on duty.
It should, however.
be remembered that the course of action open to the management under sub paragraph 2(c) is in the alternative to and not in negation of the other modes of punishment, namely, to dis miss etc.
the employee.
What is, however, necessary to note is the distinction between an action of discharge following the disciplinary proceedings under sub paras (9) and (10) and that of simple termination of service under sub para 2(c).
The same distinction is also maintained in sub para 2(d).
Sub para (3) throws yet more light on the subject.
It states that where an employee is guilty of an offence but he is not put on trial within a year of the commission of the offence, the management may deal with him as if he had committed an act of "gross misconduct", or "minor miscon duct" as the case may be.
The employee may not be put on trial within an year, either because the prosecuting author ity refuses to do so, or because it comes to the conclusion that there is no case for prosecution.
Hence although the management is empowered to proceed against the employee under the provisions set out in sub paras (9) and (lO) relating to discharge, he has to be given the benefit of being treated on duty for the period he was under suspension, if any, and he is entitled to all the further benefits accruing on that account.
In the departmental inquiry following such non prosecution, the management may also come to the decision not to continue the employee in service.
In that case instead of proceeding against him.
under the provisions relating to discharge in sub paras (9) and (10), the management is empowered to terminate his services with three months ' pay and allowances in lieu of notice as provided in sub para 20 (2).
Thus sub paragraph (3) like sub para (2) also makes a distinction between discharge under sub paragraph (10)(c) and a mere termination of service with three months ' pay and allowances, in lieu of notice.
It is the latter action which amounts to the simple discharge and for it, a separate provision is made in paragraph 522 in Section IV.
We will refer to that provision at a later stage.
What is necessary, to bear in mind at this stage is the distinction made be tween the discharge under sub paragraph (10) and simple termination of service in sub paras 2(c), 2(d) and (3).
Sub para (4) of paragraph 52 1 defines "gross miscon duct" and sub para (5) prescribes punishment for "gross misconduct".
Sub para (6) defines "Minor misconduct" and sub para (7) prescribes punishment for such misconduct.
Sub para (8) then states the manner in which the record is to be kept when action is taken under sub paras (3), (5) or (7) which deal with the punishment for "gross misconduct" or "minor misconduct" as the case may be.
Sub para (5) as stated above, follows on the heels of the enumeration of gross misconducts in sub para (4), and reads as follows: "(5) An employee found guilty of gross misconduct may: (a) be dismissed without notice, or (b) be warned or censured, or have an adverse remark entered against him, or (c) be fined, or (d) have his increment stopped, or (e) have his misconduct condoned and be merely discharged".
It should be clear from the context in which sub clause (e) of subparagraph (5) occurs that the entire expression, namely, "have his misconduct condoned and be merely dis charged" has nothing but penal implications, and the measure mentioned therein is a sequel to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4).
It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole.
The discharge spoken of there is nothing but a punishment for a gross miscon 21 duct.
This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in para graph 522 of the Award, as pointed earlier, and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3).
If it was intended to provide for a discharge simpliciter there, which was not meant to be penal, there was no need to enumerate it in sub para (5) which specifically enumerates punishments for acts of gross misconduct.
Secondly, nothing prevented the authors of the Award in stating in the said sub clause (e) that the discharge simpliciter was in terms of paragraph 522.
We have pointed out earlier the distinction made by the Award in sub paragraphs (2)(c), (2)(d) and (3) between the discharge following proceedings under paras (9) and (10) and the simple termination of service or discharge simpliciter as contemplated by paragraph 522.
Sub paragraphs (9) and (10) of paragraphs 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action.
Sub para (9) says that when it is decided to take a disciplinary action against an employee, such decision shall be communicated to him within three days thereof.
Sub Para (10)(a) then lays down the procedure to be followed while conducting the disciplinary proceedings.
It also enjoins upon the manage ment to give the employee a hearing with regard to the nature of the proposed punishment.
The latter provision has also bearing on the construction of sub clause (c) thereof.
We will advert to it instantly.
Sub clause (b) of sub para (10) gives power to the management to suspend the employee pending inquiry.
Its other provisions also throw light on the construction of sub clause (c) thereof.
These provisions state that although the employee is suspended during the inquiry, if on the conclusion of the inquiry it is decided to take no action whatsoever against him, he shall be deemed to have been on duty throughout the period of suspension and would accord ingly, be entitled to the full wages and allowances and all other privileges for the said period.
On the other hand "if some punishment other than dismissal" is inflicted, it is left to the discretion of the management to treat either the whole or a part of the period of suspension as on duty with the right to corresponding portion of the wages, allowances, etc.
These provisions would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provi sions after inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the in quiry, as on duty.
22 Then follows the provision of sub clause (c) which is crucial for our purpose.
The said sub clause reads as fol lows: "In awarding punishment by way of disciplinary action the authority concerned shall take into account the gravity of the misconduct, the previous record, if any, of the employee and any other aggravating or extenuating cir cumstances that may exist.
Where sufficiently extenuating circumstances exist the misconduct may be condoned and in case such misconduct is of the "gross" type he may be merely discharged, with or without notice or on payment of a month 's pay and allowances, in lieu of notice.
Such dis charge may also be given where the evidence is found to be insufficient to sustain the charge and where the bank does not, for some reason or other, think it expedient to retain the employee in question any longer in service.
Discharge in such cases shall not be deemed to amount to disciplinary action.
" In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the proposed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action".
The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice.
The punishment of discharge is to be awarded in two circumstances.
The first circumstance is when there are sufficiently extenuating circumstances but the misconduct is of a "gross" type.
In other words, where the misconduct is not of a "gross" type and there are exten uating circumstances, the misconduct may merely be condoned without the authority proceeding to inflict the punishment of discharge.
That is made clear by stating thus "and in case such misconduct is of the gross type he may be merely discharged" etc.
The second circumstance in which the au thority is given power to inflict such discharge is when the charge is such that the Bank does not for some reason or other think it expedient to retain the employee any longer in service but the evidence is insufficient to prove the charge.
Read in the context, therefore, the discharge given under sub clause (c) can hardly be doubted as being a pun ishment.
However, as was sought to be contended on behalf of the respondent Union and certainly with some force, the last sentence of the said clause is couched in 23 a language which is calculated to create considerable doubt and confusion with regard to the true nature of the action of discharge spoken of there.
The said sentence states in so many words that the discharge effected under both the cir cumstances shall not be "deemed" to amount to "disciplinary action".
Read in isolation, the said sentence does purport to convey that the discharge is not by way of a punishment and on that score we may not find any fault with the reason ing of the High Court.
But as stated at the very outset, we have to read this sentence also in its proper context and in the light of the other provisions of the Award.
As pointed out earlier, one of the two circumstances in which such discharge is to be effected is when the miscon duct is of a "gross" type and even if there are extenuating circumstances.
It is to provide a punishment precisely for misconducts of gross type that a provision for such dis charge is made in sub clause (e) of sub para (5) to which we have already made a reference.
Read with the said sub para (5)(e), the provision of the present sub clause (c) of sub para (10) becomes more clear.
If a misconduct is not of a "gross" type, it may be merely condoned without any further action.
But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the em ployee.
The expressions used both in sub para 5(e) and sub para 10(c) in that respect are identical.
Similar is the action contemplated for the second circumstances referred to in sub para 10(c), namely, when the charge though unsustain able for want of evidence is such that it is considered inexpedient to retain the employee in service.
If our reading of the provisions is correct, then it needs no elaborate explanation as to why the punishment of discharge both in sub para 5(e) and 10(c) has been worded as it is and why further it became necessary to add the last sentence to sub para 10(c).
Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge.
This is for the benefit of the employee.
It protects him from the baneful consequences of dismissal.
At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so.
Thus the provision of such discharge works to the advantage of both.
At the same time, it cannot be gainsaid that the said dis charge is as a result of the disciplinary proceeding.
Al though in form it may not, and for the reasons stated above in the peculiar circumstances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceed 24 ings.
To make clear.
however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence in question has been added by way of an abundant precaution.
That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of paragraph 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself.
Paragraph 522 as stated earlier is in section IV and is entitled "procedure for termination of employment" as dis tinct from the title of section III, namely, "procedure for taking disciplinary action" in which paragraph 521 occurs.
Paragraph 522 begins by saying "We now proceed to the sub ject of termination of employment.
We give the following directions: . . "Thereafter in sub paragraph (1) thereof, it speaks of a simple termination of service of a permanent employee and in sub paragraph (4), talks of simi lar discharge simpliciter of employees other than permanent employees.
But what is important to note is that the dis charge simpliciter or simple termination of service which is provided for here, has two distinguishing features.
Firstly, it is effected in cases not involving disciplinary action for mis conduct and secondly, it is to be effected by giving three months ' notice or of payment of three months ' pay and allowances in lieu of notice, in the case of permanent employees and by giving one month 's notice or on payment of one month 's pay and allowances, in lieu of notice in case of probationers.
There is some apparent conflict in the provi sions of sub clause (1) and sub clause (4) with regard to the period of notice in case of an employee other than a permanent employee.
It is, however, immaterial for our purpose.
There are yet other conditions imposed by sub para (6) of paragraph 522 when the termination of the service of the employees is on account of the closing down of the establishment or when retrenchment of more than 5 employees is to be effected.
But those conditions again do not oblit erate the distinction between discharge simpliciter or simple termination of service other than as a result of a disciplinary proceeding, and discharge effected under sub paras 5(e) and 10(c) as a result of such proceedings.
As stated earlier, the termination of employment other than discharge provided for in sub paras 2(c), 2(d) and 3 of paragraph 521 also requires three months ' pay and allow ances, in lieu of notice as do the provisions of paragraph 522(1).
But unlike the provisions of paragraph 522(1) which require three months ' notice or payment of three months ' pay and allowances only in case of permanent employees and one month 's notice or one month 's pay and allowances, in lieu of notice in case of employees other than per 25 manent employees, the relevant provisions of paragraphs 521(2)(c) and 521(3) require, a notice of three months ' or pay and allowances for three months ' in lieu of notice, in respect of all employees.
Further, what is equally important to note is that whereas para 522(1) and 521(2)(c) and (3) relating to simple termination of service, require the requisite notice to be given or the payment of salary allow ances in lieu thereof.
the provisions of discharge contained in the sub paras (2)(c) and (3) and (10)(c) of para 521 do not in all cases require notice or pay and allowances, in lieu of notice.
The discharge may also be affected under the said provisions without any notice or pay and allowances in lieu of it.
Thus the distinction between the discharge contemplated under paragraph 521(10)(c) and discharge sim pliciter or simple termination of employment under the other provisions is clear enough.
This will also show that the two belong to different categories and are not the same.
While the former is intended to be punitive.
the latter is not.
As is further clear from the provisions of paragraphs 521(2)(c).
(2)(d) and (3).
the discharge contemplated there.
as against simple termination.
is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge".
In other words.
it is as a result of a disciplinary proceed ing. 12.
Apart from it, we find that to construe the dis charge under 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disciplinary proceedings will deprive an employee of a valuable advantage.
viz. that of challenging the legality and propriety of the disciplinary action taken against him.
whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc.
It is not.
therefore.
in the inter ests of the employees to construe the provisions as the High Court has done.
The predominant object of the Award is to protect the interests of the employees.
It is for all these reasons that we are unable to accept the very able arguments advanced by Mr. Bobde on behalf of the respondent Union to support the reasoning of the High Court.
The result to our aforesaid discussion is that the termination of service of the employee in the present case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings and is punitive.
It is, there fore.
not "retrenchment" within the meaning of Section 2(00) of the Act.
Hence, there was no question of complying with the provisions of Section 25F of the Act.
The decision 26 of the High Court has.
therefore to be set aside.
In view of the interpretation placed by us on the provisions of paragraph 521(5)(e) and 521(10)(c), there is a queer situation in which both the appellant Bank and the respondent Union would find themselves.
The Bank has been supporting the interpretation which we have placed and the respondent Union has been opposing it.
but both not looking beyond their immediate interest involved in the present case, which is qua an individual employee.
We are happy that the Bank has canvassed the view that it has done in this case.
For that view is calculated to benefit the employees at large and in the long run though, it may be to its advan tage and to the disadvantage of the individual employee in this case.
The respondent Union, however, by pressing the proposition to the contrary, was supporting a view which was not in the interests of the employee at all.
Though, there fore, it may be a loser in the present case, it should thank itself that the interpretation is not in accordance with the submissions made on its behalf.
This leaves us with the question of the relief to be granted in the present case.
Shri Bobde.
submitted that if we are not to accept the interpretation placed by the High Court on the provisions in question, we should remand the matter to the High Court for deciding the other contentions raised in the writ petition, since the court had not gone into the same and had allowed the petition only on the basis of its interpretation of the said provisions.
We find that this course is not advisable in the present case for various reasons.
The mis conducts complained of against the employee are of 1966.
He was chargesheeted in January 1968 and re moved from service on April 9, 1970.
The Court proceedings have been pending since then till today, i.e., for more than about 23 years now.
In the meanwhile, we are informed that the appellant who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such.
We, further, find that the mis conducts which are held proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award.
The Labour Court is the final fact finding forum.
Further.
while setting aside the order of the Labour Court, the High Court has granted re instatement in service and back wages as follows: (i) 50 per cent of the back wages from 9.4.70 to 24.11.75, (which is the date of the reference for adjudication to the Labour Court) on the ground that the damages for the delay in making should be shared by both the parties equally, and (ii) full back wages 27 from 25.11.75 till 31.5.79 on the ground that though the employee started his practice as a lawyer in June 1978, he was not well settled in practice for the first year, and (iii) no back wages for the period from 1.6.79 till the date of his re instatement which is the date of the High Court 's judgment.
i.e., August 23, 1989.
Shri Desai.
the learned Solicitor General appearing for the Bank wanted to produce before us a letter from the Maharashtra State Electricity Board to show that in fact the employee was in gainful employment with the said Board for about six years.
Although we have not taken the said letter on record, there is no denial of such employment from the side of the employee.
We are further informed that pursuant to the order of the High Court, the employee has already received an amount of Rs.93,000.
The effect of our decision would be to set aside not only the order of re instatement but also of the back wages which would require the employee to refund the said amount of Rs.93,000.
Of course, Shri Bobde stated that the employee was prepared to refund the said amount and to contest the petition on other grounds.
At present.
the employee is in his fifties.
Taking into consid eration all the facts, we are of the view that it would serve the interests of justice if we set aside the order of the High Court and restore that of the Labour Court without requiring the employee to refund the amount which he has already received.
The appeal is allowed.
accordingly.
There will be no order as to costs.
N. V. K. Appeal allowed.
|
The appellant Bank instituted a departmental inquiry against one of its employees, a clerk in one of its branch es.
The departmental inquiry was held for four acts of misconduct and the inquiry officer came to the conclusion that two of the charges were fully proved, while one charge was proved to a limited extent, and the fourth charge was not established.
On the basis of the report of the inquiry officer, the competent authority decided to dismiss the employee from service, and issued a notice to him under paragraph 521(10)(a) of the Award of the All India Industri al Tribunal popularly known as the Shastri Award, requiring him to show cause as to why the said punishment should not be imposed on him.
He was also given a hearing as required by the said provision, and thereafter an order was passed to the effect: that the established charges viz. uttering indecent words, threatening the agent, and failure to do the work allotted are quite serious and would warrant dismissal, though he may not be dismissed, in view of the extenuating circumstances, but that at the same time it would not be desirable to retain him in the Bank 's service, and that as such, "he be discharged on payment of one month 's pay and allowances in lieu of notice.
In terms of para 521(10)(c) of the Shastri Award this would not amount to disciplinary action." An industrial dispute was raised by the first respond ent Uuion, and it was referred to the Central Government Labour Court, for adjudication and by its award the Labour Court upheld the order of dismissal.
12 The first respondent Union preferred a writ petition to the High Court and raised several contentions, but the High Court confined its decision only to one point, viz. whether the termination of the service was retrenchment, and whether it was made in accordance with the provisions of Section 25F of the ; held that the termina tion of the service of the second respondent was retrench ment within the meaning of section 2(00), and was made in breach of the statutory provision contained in Section 25F in as much as no retrenchment compensation was paid to the employee, and set aside, the order of termination of serv ice.
In the appeal by the Bank to this Court, the question for consideration was: whether the order of termination of service served on the employee, amounts to punishment or not.
Allowing the appeal, this Court, HELD: 1.
It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpre tation of the provisions of paragraphs 521(5)(e) and 521(10)(c) of the Award and ignoring their context.
[17B] 2.
The termination of service of the employee in the instant case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings, and is punitive.
It is, therefore, not "retrenchment" within the meaning of Section 2(00) of the .
Hence, there was no question of complying with the provisions of Section 25F of the Act.
The decision of the High Court has, therefore, to be set aside.
[25G H; 26A] 3.
It is clear from the context in which sub clause (e) of sub para (5) occurs that the entire expression, namely, "have his misconduct condoned and he merely discharged" has nothing but penal implications, and the measure mentioned therein is a sequal to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4).
It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole.
The discharge spoken of there is nothing but a punishment for a gross misconduct.
This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in paragraph 522 of the Award.
and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3).
[20G H; 21A B] 13 4.
Sub paras (9) and (10) of paragraph 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action.
Sub paras (9), 10(a), 10(b) would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provisions after the inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the inquiry, as on duty.
[21D & G H] 5.
In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the pro posed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action".
The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice.
The punishment of discharge is to be awarded in two circumstances.
The first circumstance is when there are sufficiently extenuating circumstances but the mis conduct is of a "gross" type.
The second circum stance is when the charge is such that the Bank does not for some reason or other think it expedient to retain the em ployee any longer in service but the evidence is insuffi cient to prove the charge.
[22D E] 6.
Read with sub para (5)(e), the provisions of sub clause (c) of sub para (10) become more clear that if a mis conduct is not of a "gross" type, it may be merely condoned without any further action.
But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the employee.
The expressions used both in sub para (5)(e) and sub para 10(c) in that respect are identical.
Similar is the action contemplated for the second circumstance referred to in sub para 10(c), namely when the charge though unsustainable for want of evidence is such that it is considered inexpedient to retain the employ ee in service.
[23D E] 7.
Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge.
This is for the benefit of the employee.
It protects him from the banefull consequences of dismissal.
At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so.
Thus the provision of such discharge works to the advantage of both.
At the same time, it cannot be gainsaid that the said 14 discharge is as a result of the disciplinary proceeding.
Although in form it may not, and in the peculiar circum stances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceedings.
To make clear, however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence viz: "Discharge in such cases shall not be deemed to amount to disciplinary action", has been added by way of abundant precaution.
[23F H; 24A] 8.
That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of para 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself.
The distinction between discharge contemplated under para graph 521(10)(c) and discharge simpliciter or simple termi nation of employment under the other provisions is clear enough.
This will also show that the two belong to different categories and are not the same.
While the former is intend ed to be punitive, the latter is not.
As is further clear from the provisions of paragraphs 521(2)(c), (2)(d) and (3), the discharge contemplated there, as against simple termina tion, is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge".
In other words, it is as a result of a disciplinary proceeding.
[24B; 25C D] 9.
To construe the discharge under paragraphs 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disci plinary proceedings will deprive an employee of a valuable advantage, viz. that of challenging the legality and propri ety of the disciplinary action taken against him, whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc.
It is not, therefore, in the interests of the employees to construe the provisions as the High Court has done.
The predominant object of the Award is to protect the interests of the employees.
[25E F] 10.
Remanding the matter to the High Court for deciding the other contentions raised in the writ petition, is not advisable for various reasons.
The misconducts complained of against the employee are of 1966.
He was charge sheeted in January 1968 and removed from service on April 9, 1970.
The Court proceedings have been pending for more than about 23 years.
In the meanwhile, the respondent No. 2 who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such.
Further, the mis conducts, which are held 15 proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award.
The Labour Court is the final fact finding forum.
The High Court while setting aside the order of the Labour Court has granted reinstatement in service and back wages and pursuant to the said order, the employee has already received an amount of Rs.93,000.
The effect of decision would be to set aside not only the order of reinstatement but also of the back wages which would require the employee to refund the said amount.
Even though the employee was prepared to refund the amount and to contest the petition on other grounds, at present, the employee is in his fifties.
Taking into consideration all these facts the interests of justice would be served if the order of the High Court is set aside and the order of the Labour Court is restored without requiring the employee to refund the amount he has already received.
[26E G; 27C E]
|
Civil Appeal No. 5653 1983.
From the Judgment and Order dated 31.8.1979 of the Allahabad High Court in Misc.
Writ Petition No. 4994 of 1975 E.C. Agarwal for the Appellant.
Manoj Swarup and Ashok K. Srivastava for the Respondent.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal by special leave is direct ed against the judgment of the High Court of Judicature at Allahabad dated August 31, 1979 in Civil Misc.
Writ Petition No. 4994 of 1975 filed by the appellant.
The said writ petition related to proceedings for determination of surplus land under the U.P. Imposition of Ceiling on Land Holdings Act.
1960 (hereinafter referred to as 'the Act ').
The Act has been enacted by the U.P. State legislature to provide for the imposition of ceiling on land holdings in Uttar pradesh and certain other matters connected therewith.
In Section 4 of the Act provision is made for calculation of ceiling area.
Section 5 provides for imposition of ceiling on existing holdings.
Sections 6 to 8 provide for exemption of certain lands from the imposition of ceiling.
Section 9 provides for issue of a general notice by the Prescribed Authority calling upon every tenure holder holding land in excess of the ceiling area to submit to him a statement in respect of all his holdings.
Section 10 days down that in every case where a tenure holder fails to submit a statement or submits an incorrect statement the Prescribed Authority shall.
after making such enquiry as he may consider neces sary cause to be prepared a statement indicating the plot or plots proposed to be declared as surplus land and thereupon cause to be served on every such tenure holder a notice together with a copy of the statement thus prepared calling upon him to show cause.
within a period specified in the notice.
why the statement be not taken as correct.
Section 11 provides for determination of surplus land by the Pre scribed Authority in cases where no objection is filed within the period specified in the notice.
issued under Section 10.
Section 12 provides for determination of surplus land by the Prescribed Authority in cases where an objection has been filed.
Section 13 makes provision for appeal against the order passed by the Prescribed Authority under Section 11 or Section 12. 121 In 1972 it was decided to lower the ceiling limit and to make further provisions with regard to transfers in antici pation of the imposition of ceiling.
The U.P. State legisla ture enacted the U.P. Imposition of Ceiling on Land Holdings (Amendment) Act, 1972.
U.P. Act 18 of 1973 (hereinafter referred to as 'the 1973 Act ') which came into force on June 8, 1973.
By the 1973 Act Sections 3 to 8 were substituted and other amendments were made in the Act.
Certain further amendments were made in the Act by the U.P. Act 2 of 1975.
Among the amendments introduced by the Amendment Act of 1975 was insertion of Explanation I and Explanation II after sub section (1) of Section 5 as substituted by the 1973 Act.
U.P. Act 2 of 1975 was brought into force with effect from June 8, 1973.
A notice under Section 10(2) of the Act was issued to the appellant and he filed objections wherein it was submit ted that Chhiddu Singh.
the father of the appellant, had executed a registered gift deed dated October 13, 1971 in respect of Plot No. 111 measuring 63 Bighas, 12 Biswas and 17 Dhur in favour of his wife, Smt.
Roshan Kumari, Smt.
Premwati, wife of the appellant, and Virendera Bahadur Singh and Tej Vir Singh, sons of the appellant.
It was also stated that Chhiddu Singh died on April 28, 1973.
The submission of the appellant was that the said land which was gifted by his father Chhiddu Singh was not inherited by the appellant and it could not be treated as part of the holding of the appel lant for the purpose of imposition of ceiling.
The Pre scribed Authority overruled the said objection of the appel lant and ignoring the gift made by Chhiddu Singh, included the said land as part of the holding of the appellant and declared the surplus land of the appellant to the extent of 49 Bighas and 17 Biswas.
The appellant filed an appeal which was partly allowed by the First Additional Civil Judge.
Aligarh, by his judgment dated January 31.
1975, whereby the area of surplus land was reduced to 42 Bighas, 13 Biswas and 6 Dhur.
The appellant filed a writ petition in the High Court which was dismissed by the High Court by judgment dated August 31, 1979.
Feeling aggrieved by the said judg ment of the High Court the appellant has filed this appeal after obtaining special leave to appeal.
The expression 'holding ' is defined in clause (9) of Section 3 as under: "(9) 'holding ' means the land or lands held by a person as a bhumidhar, sirdar, asami of Gaon Sabha or an asami mentioned in Section 11 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, or as a tenant 122 under the UP.
Tenancy Act, 1939, other than a sub tenant, or as a Government lessee or as a sub lessee of a Government lessee, where the period of sub lease is co extensive with the period of the lease;" The expression 'tenure holder ' is defined in clause (17) of Section 3 as under: "(17) 'tenure holder ' means a person who is the holder of a holding, but does not include (a) a woman whose husband is a tenure holder; (b) a minor child whose father or mother is a tenure holder.
" The relevant provisions of Section 5 are: "5 Imposition of ceiling (1) On and from the commencement of the Uttar Pradesh Imposition of Ceiling of Land Holdings (Amendment) Act, 1972, no tenure holder shall be entitled to hold in the aggregate throughout Uttar Pradesh, any land in excess of the ceiling area applicable to him.
Explanation I In determining the ceiling area applicable to a tenure holder, all land held by him in his own right, whether in his own name, or ostensible in the name of any other person, shall be taken into account.
Explanation II (If on or before January 24, 1971, any land was held by a person who continues to be in its actual cultivatory possession and the name of any other person is entered in the annual register after the said date) either in addition to or to the exclusion of the former and whether on the basis of a deed of transfer or licence or on the basis of a decree, it shall be presumed, unless the contrary is proved to the satisfaction of the prescribed authority, that the first mentioned person continues to held the land and that it is so held by him ostensibly in the name of the second mentioned person.
" "(6) In determining the ceiling area applicable to a tenure 123 holder, any transfer of land made after the twenty fourth day of January, 1971, which but for the transfer would have been declared surplus land under this Act, shall be ignored and not taken into account; Provided that nothing in this sub section shall apply (a) a transfer in favour of any person (including Govern ment) referred to in sub section (2); (b) a transfer proved to the satisfaction of the prescribed authority to be in good faith and for adequate consideration and under an irrevocable instrument not being a benami transaction or for the immediate or deferred benefit of the tenure holder or other members of his family.
Explanation The burden of proving that a case falls within clause (b) of the proviso shall rest with the part.x, ' claiming its benefit.
" Shri Agarwal has urged that the amendments that were introduced in the Act by U.P. Act 18 of 1973 are not retro spective in nature and that the said amendments are opera tive with effect from June 1973, and that surplus land has to be determined with reference to June 8, 1973, the date of coming into force of the 1973 Act.
The submission of Shri Agarwal is that on June 8.
1973 the land covered by Plot No. 111 measuring 63 Bighas, 12 Biswas and 17 Dhur could not be included in the holding of the appellant and the appellant was not the tenure holder in respect of the said land.
Shri Agarwal has contended that in view of the gift deed dated October 13, 1971, executed by Chhiddu Singh, the father of the appellant, the land covered by the gift deed had vested in the donees and the appellant did not inherit the said land on the death of Chhiddu Singh on 28th April, 1973.
Laying stress on the definition of expression holding ' contained in clause (9) of Section 3 and the expression 'tenure holder ' contained in clause 117) of Section 3, Shri Agarwal has submitted that on June 8, 1973 the land that was gifted by Chhiddu Singh was not held by the appellant and it was not part of appellant 's holding and the appellant was not the tenure holder in respect of the same.
find no merit in this contention.
The Act postulates that the ceiling area of a tenure holder has to be deter mined in accordance with the provisions contained in Section 5.
Alongwith such determina 124 tion of ceiling area there has to Be determination of the surplus land held in excess of the ceiling area which is to be acquired by the Stale.
For the purpose of determination of the ceiling area provision has been made in sub section (6) of Section 5 that any transfer of land, which but for the transfer would have been declared surplus land under the Act.
if made after January 24, 1971, shall be ignored and not taken into account.
Transfers falling within the ambit of clauses (a) and (b) of the proviso to sub section (6) are.
however, excluded and such transfers even though made after January 24, 1971 have to be taken into account.
The gift made under the gift deed dated October 13, 1971 executed by Chhiddu Singh was a transfer of land.
It was made after January 24, 1971.
It was in respect of land which but for the transfer would have been declared surplus land under the Act.
The said transfer did not fall within the ambit of clauses (a) and (b) of the proviso to sub section (6) of Section 5.
In view of sub section (6) of Section 5 the said gift was, therefore, liable to be ignored for the purpose of determining the ceiling area applicable to the appellant.
Shri Agarwal has urged that sub section (6) of Section 5 cannot be applied to the present case inasmuch as it postu lates a transfer by the tenure holder whose ceiling area is to be determined under the Act and that in the present case the gift was not made by the appellant but by his father and.
therefore.
the said gift cannot be ignored on the basis of the provisions of Sub section (6) of Section 5.
We are unable to agree.
Sub section (6) of Section 5 does not speak of a transfer by the tenure holder.
It speaks of any trans fer of land made after January 24, 1971 which but for the transfer would have been declared surplus land under the Act.
It is not the requirement of sub section (6) of Section 5 that the transfer should be by the tenure holder whose ceiling area is to be determined.
We cannot read this re quirement in it.
While construing sub section (6) of Section 5 it has to be borne in mind that this provision has been made with the object of preventing evasion of the ceiling law by owners of large holdings making transfers in antici pation of the imposition of the lower limit on the ceiling area, Such a provision must be so interpreted as to curb the mischief find advance the remedy.
A construction which will cut down the scope of this provision cannot be adopted.
In our opinion, therefore, sub section (6) of Section 5 is applicable to a transfer made by the predecssor ininterest of the tenure holder whose ceiling area is to be determined in cases where such predecessor died before June 8, 1973 and the tenure holder whose ceiling area is to be determined inherited the lands of 125 such predecessor prior to June 8, 1973.
In the instant case the land which was transferred by Chhiddu Singh under gift deed dated October 13, 1971 was land which but for the said transfer would have been declared surplus under the Act.
Once the gift made by Chhiddu Singh is ignored the land so gifted should be treated to have continued to vest in Chhiddu Singh at the time of his death on April 28, 1973 and on the death of Chhiddu Singh the appellant inherited the same.
The said land has to be treated as part of the holding of the appellant on June 8, 1973 and he was the tenure holder in respect of the same on that date.
The said land was required to be taken into consideration for determining the surplus land held by him.
Shri Agarwal has relied upon the decision of this Court in Arjan Singh and Another vs The State of Punjab and Oth ers; , This case turns on the interpreta tion of the expression 'this Act ' in Section 7 of the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act, 1962 whereby Section 32KK was introduced in the Pepsu Tenancy and Agricultural Lands Act, 1955 with effect from October 30, 1956.
By Section 32KK it was provided that land owned by a Hindu undivided family would be deemed to be land of one land owner and partition of land owned by such a family shall be deemed to be a disposition of land for the purposes of Section 32FF and the question was whether a partition effected by a registered partition deed dated September 6, 1956 was covered by the said provision.
It would have been so covered if the expression 'this Act ' was construed to mean the principal Act of 1955.
This Court, however, held that in view of the various provisions con tained in the Amendment Act of 1962 the expression 'this Act ' meant the Amendment Act of 1962 and not the principal Act.
This decision, therefore, turns on the interpretation of the particular provision of the Amendment Act of 1962 and it has no bearing on the present case.
therefore, find no merit in the appeal and it is accordingly dismissed.
No order as to costs.
S.Bali Appeal dismissed.
|
The 1960 Act makes provision for imposition of Ceiling on Land holdings and for determination of surplus land.
It was amended by U.P. Act 18 of 1973 to lower the ceiling limit and to make provisions with regard to transfers of land in anticipation of the imposition of ceiling.
This Act came into force on June 8, 1973.
Further amendments were made in the Act by U.P. Act 2 of 1975 inserting Explanation I & Explanation II after sub section (1) of section 5 as substituted by 1973 Act and given effect retrospectively i.e. from June 8, 1973.
A notice under section10(2) of Act was issued to the appellant and he filed objections submitting that Chhiddu Singh, his father, had executed a registered gift deed dated October 13, 1971 in respect of plot No. 111 measuring 63 Bighas, 12 Biswas and 17 Dhur in favour of appellant 's mother.
appellant 's wife and two sons of the appellant.
Chhiddu Singh died on April 28, 1973.
Accordingly the said gifted land was not inherited by the appellant and it could not be treated as part of his holding for the purpose of imposition of ceiling.
The prescribed authority overruled the objections, included the said land as part of the hold ing of the appellant and declared the surplus land of the appellant to the extent of 49 Bighas and 17 Biswas.
The appellant filed an appeal to the First Additional Civil Judge.
It was allowed partly and the surplus land was reduced to 42 Bighas 13 Biswas and 6 Dhur.
The appellant thereafter filed a writ petition in the High Court which was dismissed.
Feeling aggrieved the appellant filed this appeal after obtaining special leave to appeal.
The appellant urged before this Court that amendments introduced by the 1973 Act are not retrospective in nature and are operative only from June 8, 1973, that the surplus land has to be determined as on June 8, 1973, the date of coming into force of 1973 Act, and that the 119 land gifted by the appellant 's father on October 13, 1971 could not be included in the holding of the appellant as he was not the tenure holder of the said land on the death of his father on April 28, 1973.
Dismissing the appeal, the Court, HELD: The 1973 Act postulates that ceiling area of a tenure holder has to be determined in accordance with the provisions contained in sec.
5 of the Act.
While determining the ceiling area, the surplus land held in excess of ceiling area, which is to be acquired by the State, has also to be determined.
[123H; 124A] For determining ceiling area sub section (6) of section 5 provides that any transfer of land, which but for the transfer would have been declared surplus land under the Act if made after January 24, 1971 shall be ignored and not taken into account but transfers falling within the ambit of clauses (a) and (b) of the proviso to sub sec.
(6) are, excluded, and such transfers even though made after January 24, 1971, have to be taken into account.
[124B] In the instant case, the gift was made and executed on October 13, 1971 and it was a transfer of land and as it was made after January 24, 1971 the transfer of land was in respect of land which would have been declared surplus land under the Act.
This transfer did not fall within the ambit of clauses (a) and (b) of the proviso to sub section (6) of section 5.
Thus such gift was liable to be ignored for the purpose of determining the ceiling area applicable to the appellant.
Sub section (6) of section 5 does not speak of a transfer by the tenure holder but it speaks of any transfer of land made after January 24, 1971.
So the contention of the appellant that gift was made by his father and not by him as tenure holder and he did not inherit the same on the death of his father is untenable, since sub section (6) of section 5 is applicable to a transfer even made by the predecessors in interest of the tenure holder whose ceiling area is to be determined and who inherited the land prior to June 8, 1973.
The land which was transferred vide gift deed dated October 13, 1971 was land which but for the said transfer would have been declared surplus land under the Act.
[124C H; 125A] Thus, once the gift is ignored it is to be treated to have continued to vest in the appellant 's father and after his death the appellant inherited the same and as such was part of the holdings of the appellant on June 8, 1973 and has to be taken into consideration for determining the surplus land held by the appellant.
[125B] 120
|
terlocutory Application No. 1 of 1990.
IN Civil Appeal No. 4444 of 1991).
From the Judgment and Order dated 25.5.1991 of the Allahabad High Court in C.W.P. No. 5267 of 1990.
D.K. Garg and Pradip Misra for the Appellants.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Leave is granted to the petitioners who were not parties before the High Court in Writ Petition No. 5267 of 1990 to file the special leave petition.
The Registry shall.
therefore.
consequently register this spe cial leave petition.
Special leave is granted.
On 25.5.1990.
a learned Single Judge of the Allahabad High Court is said to have made an order in Writ Petition No. 5267 of 1990.
That brief order for convenience is ex tracted below: has been brought to the notice of the Court that the opp.
parties have violated the time schedule framed by Hon 'ble Supreme Court in the case of Dr. Dinesh Kumar vs 132 M.L.N. Medical College, Allahabad; , in organising the competition to be held on 27.5.90 by Lucknow University for admissions in Post Graduate Medical Courses in the State Medical Colleges.
The Hon 'ble Supreme Court has recently warned in the case of State of Bihar vs Dr. Sanjay Kumar Sinha, AIR 1990) SC 749 that "Everyone including the States.
the Union territories and other authorities running Medical colleges with Post Graduate Courses are bound by our order and must strictly follow the same schedule".
For violating its orders, the Hon 'ble Supreme Court hoped that "there would be no recurrence of it but we would like to administer a warning to everyone that if it is brought to our notice at any time in future that there has been viola tion, a serious view of such default shall be taken.
Keeping in view the above observations the opposite parties are strictly directed not to hold the competitive examina tion scheduled on 27th May, 1990 and admit the petitioners in Post Graduate Medical Courses in the present session on the basis of marks obtained in MBBS Course as has been done for MDS Courses.
The Writ Petition is allowed with no order as to costs" On the basis of that order and relying upon the terms thereof, a learned Single Judge of the Lucknow Bench of the High Court made an order on 4.6.90) directing that steps be taken on the basis of the direction direction made in the order dated 25.5.90 for giving admission to candidates in P.G. Courses.
The net result of these two orders is that the Selection Examination for filling up of the seats in the Post Graduate Medical Courses of the seven medical colleges in U.P. has been cancelled and a direction has been issued to the State Government to grant admission on the basis of M.B.B.S. results.
This Court by order dated 21st August, 1990 directed the Registrar of the Allahabad High Court to transmit the record wherein order dated 25.5.90 is said to have been made.
The Registrar in his letter dated 22nd August, 1990, to this Court in response to the direction has stated that: "there is no such case as writ No. 5267 of 1990 Dr. B. Sheetal Nandwani vs State and Others, and no judgment 133 was delivered by Hon 'ble Mr. Justice Anshuman Singh on 25.5.90 in the said case.
The file is sent to you through special messenger and you are requested to kindly return the file after the Hon 'ble Court 's perusal.
It is further submitted that fake judgment was said to have been produced before different Medical Colleges purporting to have been delivered by Hon 'ble Mr. justice Anshuman Singh, J. on 25.5.1990 in Writ Petition No. 5267 of 1990 directing the opposite parties not to hold competitive examinations scheduled on 27.5.90 and admit the petitioners in Post Graduate Medical Course in the present session on the basis of the marks obtained in M.B.B.S. Course.
In 'Northern India Patrika ' (Allahabad Edition) dated 11.8.90 this matter was published with the heading 'Bogus Judgment aborts entrance Exam ' and only then it came to the notice of the Hon 'ble Court and the Hon 'ble the Chief Justice took up the matter and directed that a CID enquiry be instituted.
On the direction of Hon 'ble the Chief Justice the Government has been moved to get the matter investigated by CID.
" From the report it is manifest that a fake order in a non existent writ petition was produced before the Lucknow Bench of the Allahabad High Court for securing the order dated 4.6.90.
It also transpires that on the basis of al leged order dated 25.5.90 and the subsequent order of 4.6.90 some admissions have been secured in some of the medical colleges.
Those who have taken admission on the basis of such orders.
that is on the basis of the M.B.B.S. result without going through a selection examination cannot be allowed to continue in the Post Graduate Courses.
We are satisfied that there is a deep seated conspiracy which brought about the fake order from Allahabad.
the principal seat of the High Court and on the basis thereof a subsequent direction has been obtained from the Lucknow Bench of the same High Court.
The first order being non existent has to be declared to be a bogus one.
The second order made on the basis of the first order has to be set aside as having been made on the basis of misrepresentation.
We are alive to the situation that the persons who have taken admission on the basis of the M.B.B.S. results are not before us.
The circum stances in which such benefit has been taken by the candi dates concerned do not justify attraction of the application of rules of natural justice of being provided an opportunity to be heard.
At and rate now that we have at the instance of the U.P. Government ordered 134 the selection examination to be held, admission on the basis of M.B.B.S. results cannot stand.
We accordingly direct that admissions, if any on the basis of M.B.B.S. results granted after the impugned orders of the High Court shall stand vacated and the Principals of the medical colleges of U.P. are directed to implement the direction forthwith.
A copy of this order shall be communicated to each of the Principals of the seven medical colleges in the State of U.P. for compliance.
The report of the Registrar of the High Court of Allaha bad indicates that the Criminal Investigation Department of the State has been asked to investigate into the matter.
We are of the view that appropriate investigation should be done by the Central Bureau of Investigation and persons behind this deep seated fraud should be brought to book without any delay.
Purity of the judicial stream should not be allowed to be polluted by such a clandestine move and citizens should not be misled by actions of the conspira tors.
We, therefore, direct that the Central Bureau of Investigation shall step in forthwith and complete the investigation within two months and provide a copy of the report containing the result of the investigation to this Court.
A copy of the report shall simultaneously be submit ted to the learned Chief Justice of the Allahabad High Court.
The appeal is allowed with costs.
As and when the respondents who are said to be petitioners in writ petition No. 5267 of 1990 are identified shall be made to pay the costs of this appeal which we assess at Rs.10,000.
Out of the costs as and when recovered, the appellants shall be entitled to a sum of Rs.3,000 and the remaining sum of Rs.7,000 shall be paid to the Supreme Court Legal Aid Com mittee.
T.N.A. Appeal allowed.
|
On the basis of a fake order, in a non existent writ petition, said to have been passed by a Single Judge of the Allahabad High Court on 25.5.1990, some persons obtained an order dated 4.6.1990 from the Lucknow Bench of the High Court which directed cancellation of the scheduled competi tive admission examination to the Post Graduate Medical Courses in the Medical Colleges of the State of Uttar Pra desh and.
granted admission on the basis of the marks ob tained in the M.B.B.S. Exams.
Some admissions were secured in the medical colleges of the State on the basis of the High Court 's orders.
Against the High Court 's orders, the U.P. Junior Doctors ' Action Committee has preferred this appeal by special leave.
Allowing the appeal, this Court, HELD: 1.1 Purity of the judicial stream should not be allowed to be polluted by a clandestine move and citizens should not be misled by actions of the conspirators.
1.2 There is a deep seated conspiracy which brought about the fake order from Allahabad High Court and on the basis thereof a subsequent direction has been obtained from the Lucknow Bench of the same High Court.
The first order being non existent is declared to be a bogus one.
The second order made on the basis of the first order is set aside as having been made on the basis of misrepresentation.
Conse quently, those who have taken admission on the basis of such orders, that is on the basis of the M.B.B.S. result without going through a selection examination, cannot be allowed to continue in the Post Graduate 131 Courses.
Accordingly, admissions, if any, made on the basis of orders of the High Court shall stand vacated.
[133F G; 134A] 2.
Though the persons who have taken admission on the basis of the High Court 's order are not before this Court yet the circumstances in which such benefit has been taken by them do not justify attraction of the application of rules of natural justice of being provided an opportunity to be heard.
[133G H] 3.
Appropriate investigation should be done by the Central Bureau of Investigation and the persons behind the deep seated fraud should be brought to book without any delay.
[134C] Dr. Dinesh Kumar vs M.L.N. Medical College, Allahabad, ; ; and State of Bihar vs Dr. Sanjay Kumar Sinha, A.I.R. 1990 SC 749, cited.
|
ivil Appeal No. 417 of 1984.
From the Judgment and Order dated 12.8.1981 of the Delhi High Court in C.W.P. No. 1835 of 1981.
A.K. Ganguli, A. Sharan for the Appellant.
Kapil Sibal, Additional Solicitor General, Raju Rama chandran, Rajiv Dhawan, C.V. Subba Rao and Mrs. Sushma Suri for the Respondents.
T. Prasad for the Secretary, Ministry of Defence.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal, by special leave, is directed against the order dated August 12, 1981, passed by the High Court of Delhi dismissing the writ petition filed by the appellant.
In the writ petition the appellant had challenged the validity of the finding and the sentence recorded by the General Court Martial on November 29, 1978, the order dated May 11, 1979, passed by the Chief of Army Staff confirming the findings and the sentence recorded by the General Court Martial and the order dated May 6, 1980, passed by the Central Government dismissing the petition filed by the appellant under Section 164(2) of the (hereinafter referred to as 'the Act ').
48 The appellant held a permanent commission, as an offi cer, in the regular army and was holding the substantive rank of Captain.
He was officiating as a Major.
On December 27, 1974, the appellant took over as the Officer Commanding of 38 Coy.
ASC (Sup) Type 'A ' attached to the Military Hospital, Jhansi.
In August 1975, the appellant had gone to attend a training course and he returned in the first week of November 1975.
In his absence Captain G.C. Chhabra was the officer commanding the unit of the appellant.
During this period Captain Chhabra submitted a Contingent Bill dated September 25, 1975 for Rs.16,280 for winter liveries of the depot civilian chowkidars and sweepers.
The said Contingent Bill was returned by the Controller of Defence Accounts (CDA) Meerut with certain objections.
Thereupon the appellant submitted a fresh Contingent Bill dated December 25, 1975 for a sum of Rs.7,029.57.
In view of the difference in the amounts mentioned in the two Contingent Bills, the CDA reported the matter to the headquarters for investiga tion and a Court of Enquiry blamed the appellant for certain lapses.
The said report of the Court of Enquiry was considered by the General Officer Commanding, M.P., Bihar and Orissa Area, who, on January 7, 1977 recommended that 'severe displeasure ' (to be recorded) of the General Officer Com manding in Chief of the Central Command be awarded to the appellant.
The General Officer Commanding in Chief.
Central Command did not agree with the said opinion and by order dated August 26, 1977, directed that disciplinary action be taken against the appellant for the lapses.
In view of the aforesaid order passed by the General Officer Commanding in Chief, Central Command, a charge sheet dated July 20. 1978, containing three charges was served on the appellant and it was directed that he be tried by Gener al Court Martial.
The first charge was in respect of the offence under Section 52(f) of the Act, i.e. doing a thing with intent to defraud.
the second charge was alternative to the first charge and was in respect of offence under Section 63 of the Act, i.e. committing an act prejudicial to good order and military discipline and the third charge was also in respect of offence under Section 63 of the Act.
The appellant pleaded not guilty to the charges.
The prosecution examined 22 witnesses to prove the charges.
The General Court Martial.
on November 29, 1978, found the appellant not guilty of the second charge but found him guilty of the first and the third charge and awarded the sentence of dismissal from service.
The appellant submit 49 ted a petition dated December 18, 1978, to the Chief of Army Staff wherein he prayed that the findings and the sentence of the General Court Martial be not confirmed.
The findings and sentence of the General Court Martial were confirmed by the Chief of the Army Staff by his order dated May 11, 1979.
The appellant, thereafter, submitted a post confirmation petition under Section 164(2) of the Act.
The said petition of the appellant was rejected by the Central Government by order dated May 6, 1980.
The appellant thereupon filed the writ petition in the High Court of Delhi.
The said writ petition was dismissed, in limine, by the High Court by order dated August 12, 1981.
The appellant approached this Court for grant of special leave to appeal against the said order of the Delhi High Court.
By order dated January 24, 1984, special leave to appeal was granted by this Court.
By the said order it was directed that the appeal be listed for final hearing before the Constitution Bench.
The said order does not indicate the reason why the appeal was directed to be heard by the Constitution Bench.
The learned counsel for the appellant has stated that this direction has been given by this Court for the reason that the appeal involves the question as to whether it was incumbent for the Chief of the Army Staff, while confirming the findings and the sentence of the General Court Martial, and for the Central Govern ment, while rejecting the post confirmation petition of the appellant, to record their reasons for the orders passed by them.
We propose to deal with this question first.
It may be mentioned that this question has been consid ered by this Court in Som Datt Datta vs Union of India and Others, ; In that case it was contended before this Court that the order of the Chief of Army Staff confirming the proceedings of the Court Martial under Sec tion 164 of the Act was illegal since no reason had been given in support of the order by the Chief of the Army Staff and that the Central Government had also not given any reason while dismissing the appeal of the petitioner in that case under Section 165 of the Act and that the order of the Central Government was also illegal.
This contention was negatived.
After referring to the provisions contained in Sections 164, 165 and 162 of the Act this Court pointed that while Section 162 of the Act expressly provides that the Chief of the Army Staff may "for reasons based on the merits of the case" set aside the proceedings or reduce the sentence to any other sentence which the Court might have passed, there is no express obligation imposed by Sections 164 and 165 of the Act on the confirming authority or upon the Central Government to give reasons in support of its decision to confirm the proceedings of the Court Martial.
This Court observed that no other section of the Act or any of the rules made 50 therein had been brought to its notice from which necessary implication can be drawn that such a duty is cast upon the Central Government or upon the confirming authority.
This Court did not accept the contention that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, there is a general principle or a rule of natural justice that a statutory tribunal should always and in every case give reasons m support of its decision.
Shri A.K. Ganguli has urged that the decision of this Court in Som Datt Datta 's case (supra) to the extent it holds that there is no general principle or rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision needs reconsid eration inasmuch as it is not in consonance with the other decisions of this Court.
In support of this submission Shri Ganguli has placed reliance on the decisions of this Court in Bhagat Raja vs The Union of India and Others, ; ; Mahabir Prasad Santosh Kumar vs State of U.P. and Others, ; ; Woolcombers of India Ltd. vs Woolcombers Workers Union and Another, and Siemens Engineering & Manufacturing Co. of India Limited vs Union of India and Another, The learned Additional Solicitor General has refuted the said submission of Shri Ganguli and has submitted that there is no requirement in law that reasons be given by the con firming authority while confirming the finding or sentence of the Court Martial or by the Central Government while dealing with the post confirmation petition submitted under Section 164 of the Act and that the decision of this Court in Som Datt Datta 's case (supra) in this regard does not call for reconsideration.
The question under consideration can be divided into two parts: (i) Is there any general principle of law which requires an administrative authority to record the reasons for its decision; and (ii) If so, does the said principle apply to an order con firming the findings and sentence of a Court Martial and post confirmation proceedings under the Act? On the first part of the question there is divergence of opinion in the common law countries.
The legal position in the United States is different from that in other common law countries.
51 In the United States the courts have insisted upon recording of reasons for its decision by an administrative authority on the premise that the authority should give clear indication that it has exercised the discretion with which it has been empowered because "administrative process will best be vindicated by clarity in its exercise" Phelps Dodge Corporation vs National Labour Relations Board, [1940] 85 Law Edn. 1271 at P. 1284.
The said requirement of record ing of reasons has also been justified on the basis that such a decision is subject to judicial review and "the Courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review" and that "the orderly functioning of the process of review requires that the grounds upon which the administra tive agency acted be clearly disclosed and adequately sustained." Securities and Exchange Commission vs Chenery Corporation, ; at P. 636.
In John T. Dunlop vs Waiter Bachowski, ; 377) it has been observed that a statement of reasons serves purposes other than judicial review inasmuch as the reasons promotes thought by the authority and compels it to cover the rele vant points and eschew irrelevancies and assures careful administrative consideration.
The Federal Administrative Procedure Act, 1946 which prescribed the basic procedural principles which are to govern formal administrative proce dures contained an express provision (Section g(b) ) to the effect that all decisions shall indicate a statement of findings and conclusions as well as reasons or basis the, for upon all the material issues of fact, law or discretion presented on the record.
The said provision is now contained in Section 557(c) of Title 5 of the United States Code (1982 edition).
Similar provision is contained in the state stat utes.
In England the position at Common law is that there is no requirement that reasons should be given for its decision by the administrative authority (See: Regina vs Gaming Board for Great Britain Ex Party Benaim and Khaida, [1970] 2 Q.B. 417 at p. 431 and McInnes vs Onslow Fane and Another, at p. 1531).
There are, however, observa tions in some judgments wherein the importance of reasons has been emphasised.
In his dissenting judgment in Breen vs Amalgamated Engineering Union and Others, Lord Denning M.R., has observed that: "the giving of reasons is one of the fundamental of good administration." (P. 191) In Alexander Machinery (Dudley) Ltd. vs Crabtree, Sir John Donaldson, as President of the National Industrial Relations Court, has observed that: 52 "failure to give reasons amounts to a denial of justice.
" In Regina vs Immigration Appeal Tribunal Ex parte Khan (Mahmud), Lord Lane, CJ., while expressing his reservation on the proposition that any failure to give reasons means a denial of justice, has observed: "A party appearing before a tribunal is entitled to know either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind." (P. 794) The Committee on Ministers ' Powers (Donoughmore Commit tee) in its report submitted in 1932, recommended that "any party affected by a decision should be informed of the reasons on which the decision is based" and that "such a decision should be in the form of a reasoned document avail able to the parties affected." (P. 100) The Committee on Administrative Tribunals and Enquiries (Franks Committee) in its report submitted in 1957, recommended that "decisions of tribunals should be reasoned and as full as possible." The said Committee has observed: "Almost all witnesses have advocated the giving of reasoned decisions by tribunals.
We are convinced that if tribunal proceedings are to be fair to the citizen reasons should be given to the fullest practicable extent.
A decision is apt to be better if the reasons for it have to be set out in writing because the reasons are then more likely to have been properly thought out.
Further, a reasoned decision is essential in order that, where there is a right of appeal, the applicant can assess whether he has good grounds of appeal and know the case he will have to meet if he decides to appeal." (Para 98) The recommendations of the Donoughmore Committee and the Franks Committee led to the enactment of the Tribunals and Enquiries Act, 1958 in United Kingdom.
Section 12 of that Act prescribed that it shall be the duty of the Tribunal or Minister to furnish a statement, either written or oral, of the reasons for the decision if requested, on or before the giving of notification of the decision to support the deci sion.
The said Act has been replaced by the Tribunals and Enquiries Act, 1971 which contains a similar provision in Section 12.
This requirement is.
however, confined.
in its applications to tribunals and statu 53 tory authorities specified in Schedule I to the said enact ment.
In respect of the tribunals and authorities which are not covered by the aforesaid enactment, the position, as prevails at common law, applies.
The Committee of JUSTICE in its Report, Administration Under Law, submitted in 1971, has expressed the view: "No single factor has inhibited the development of English administrative law as seriously as the absence of any gener al obligation upon public authorities to give reasons for their decisions.
" The law in Canada appears to be the same as in England.
In Pure Spring Co. Ltd. vs Minister of National Revenue, at P. 539 it was held that when a Minister makes a determination in his discretion he is not required by law to give any reasons for such a determination.
In some recent decisions, however, the Courts have recognised that in certain situations there would be an implied duty to state the reasons or grounds for a decision (See: Re R D.R. Construction Ltd. And Rent Review Commission, and Re Yarmouth Housing Ltd. And Rent Review Commission, In the Province of Ontario the Statutory Powers Procedure Act, 1971 was enacted which provided that "a tribunal shall give its final deci sion, if any, in any proceedings in writing and shall give reasons in writing therefore if requested by a party." (Section 17).
The said Act has now been replaced by the Statutory Powers and Procedure Act, 1980, which contains a similar provision.
The position at common law is no different in Australia.
The Court of Appeal of the Supreme Court of New South Wales in Osmond vs Public service Board of New South Wales, had held that the common law requires those entrusted by Statute with the discretionary power to make decisions which will affect other persons to act fairly in the performance of their statutory functions and normally this will require an obligation to state the reasons for their decisions.
The said decision was overruled by the High Court of Australia in Public Service Board of New South Wales vs Osmond, and it has been held that there is no general rule of the common law, or principle of natural justice, that requires reasons to be given for administrative decisions, even decisions which have been made in the exercise of a statutory discretion and which may adversely affect the interests or defeat the legitimate or reasonable expectations, of other persons.
Gibbs CJ., in his leading judgment, has expressed the view that "the 'rules of natural justice are 54 designed to ensure fairness in the making of a decision and it is difficult to see how the fairness of an administrative decision can be affected by what is done after the decision has been made.
" The learned Chief Justice has.
however.
observed that "even assuming that in special circumstances natural justice may require reasons to be given, the present case is not such a case." (P. 568).
Deane J., gave a concur ring judgment, wherein after stating that "the exercise of a decision making power in a way which adversely affects others is less likely to be.
or appear to be, arbitrary if the decision maker formulates and provides reasons for his decision", the learned Judge has proceeded to hold that "the stage has not been reached in this country where it is a general prima facie requirement of the common law rules of natural justice or procedural fair play that the administra tive decision maker.
having extended to persons who might be adversely affected by a decision an adequate opportunity of being heard.
is bound to furnish reasons for the exercise of a statutory decision making power." (P. 572).
The learned Judge has further observed that the common law rules of natural justice or procedural fair play are neither stand ardized nor immutable and that their content may vary with changes in contemporary practice and standards.
In view of the statutory developments that have taken place in other countries to which reference was made by the Court of Ap peal, Deane, J. has observed that the said developments "are conducive to an environment within which the courts should be less reluctant than they would have been in times past to discern in statutory provisions a legislative intent that the particular decision maker should be under a duty to give reasons." (P. 573).
This position at common law has been altered by the Commonwealth Administrative Decisions (Judicial Review) Act.
Section 13 of the said Act enables a person who is entitled to apply for review the decision before the Federal Court to request the decision maker to furnish him with a statement in writing setting out the findings on material questions of fact, referring to the evidence or other mate rial on which those findings were based and giving the reasons for the decision and on such a request being made the decision maker has to prepare the statement and furnish it to the persons who made the request as soon as practica ble and in any event within 28 days.
The provisions of this Act are not applicable to the classes of decisions mentioned in Schedule I to the Act.
A similar duty to give reasons has also been imposed by Sections 28 and 37 of the commonwealth Administrative Appeals Tribunal Act.
In India the matter was considered by the Law Commission in 55 the 14th Report relating to reform in Judicial Administra tion.
The Law Commission recommended: "In the case of administrative decisions provision should be made that they should be accompanied by reasons.
The reasons will make it possible to test the validity of these deci sions by the machinery of appropriate writs." (Vol.
II P. 694).
No laws has, however, been enacted in pursuance of these recommendations, imposing a general duty to record the reasons for its decision by an administrative authority though the requirement to give reasons is found in some statutes.
The question as to whether an administrative authority should record the reasons for its decision has come up for consideration before this Court in a number of cases.
In M/s. Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala and Others, ; , a Constitution Bench of this Court.
while dealing with an order passed by the Central Government in exercise of its appellate powers under Section 111(3) of the in the matter of refusal by a company to register the transfer of shares, has held that there was no proper trial of the appeals before the Central Government since no reasons had been given in support of the order passed by the Deputy Secretary who heard the appeals.
In that case it has been observed: "If the Central Government acts as a tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this Court under Article 136 of the Constitution we fail to see how the power of this Court can be effectively exercised if reasons are not given by the Central Government in support of its order." (P. 357) In Madhya Pradesh Industries Ltd. vs Union of India and Others, ; the order passed by the Central Government dismissing the revision petition under Rule 55 of the Mineral Concession Roles, 1960, was challenged before this Court on the ground that it did not contain reasons.
Bachawat, J., speaking for himself and Mudholkar, J., re jected this contention on the view that the reason for rejecting the revision application appeared on the face of the order because the Central Government had agreed with the reasons given by 56 the State Government in its order.
The learned Judges did not agree with the submission that omission to give reasons for the decision is of itself a sufficient ground for quash ing it and held that for the purpose of an appeal under Article 136 orders of courts and tribunals stand on the same footing.
The learned Judges pointed out that an order of court dismissing a revision application often gives no reasons but this is not a sufficient ground for quashing it and likewise an order of an administrative tribunal reject ing a revision application cannot be pronounced to be in valid on the sole ground that it does not give reasons for the rejection.
The decision in Hari Nagar Sugar Mills case (supra) was distinguished on the ground that in that case the Central Government had reversed the decision appealed against without giving any reasons and the record did not disclose any apparent ground for the reversal.
According to the learned Judges there is a vital difference between an order of reversal and an order of affirmance.
Subba Rao, J., as he then was, did to concur with this view and found that the order of the Central Government was vitiated as it did not disclose any reasons for rejecting the revision applica tion.
The learned Judge has observed: "In the context of a welfare State, administrative tribunals have come to stay.
Indeed, they are the necessary concomi tants of a Welfare State.
But arbitrariness in their func tioning destroys the concept of a welfare State itself.
Self discipline and supervision exclude or at any rate minimize arbitrariness.
The least a tribunal can do is to disclose its mind.
The compulsion of disclosure guarantees consideration.
The condition to give reasons introduces clarity and excludes or at any rate minimizes arbitrariness; it gives satisfaction to the party against whom the order is made; and it also enables an appellate or supervisory court to keep the tribunals within bounds, A reasoned order is a desirable condition of judicial disposal." (P. 472).
"If tribunals can make orders without giving reasons, the said power in the hands of unscrupulous or dishonest officer may turn out to be a potent weapon for abuse of power.
But, if reasons for an order are given, it will be an effective restraint on such abuse, as the order, if its discloses extraneous or irrelevant considerations, will be subject to judicial scrutiny and correction.
A speaking order will at its best be a reasonable and at its worst be at least a plausible one.
The public should not be deprived of this only safeguard." (P. 472).
57 "There is an essential distinction between a court and an administrative tribunal.
A Judge is trained to look at things objectively, uninfluenced by considerations of policy or expediency; but an executive officer generally looks at things from the standpoint of policy and expediency.
The habit of mind of an executive officer so formed cannot be expected to change from function to function or from act to act.
So it is essential that some restrictions shall be imposed on tribunals in the matter of passing orders affect ing the rights of parties; and the least they should do is to give reasons for their orders.
Even in the case of appel late courts invariably reasons are given, except when they dismiss an appeal or revision in limine and that is because the appellate or revisional court agrees with the reasoned judgment of the subordinate court or there are no legally permissible grounds to interfere with it.
But the same reasoning cannot apply to an appellate tribunal, for as often as not the order of the first tribunal is laconic and does not give any reasons." (P. 472 73).
With reference to an order of affirmance the learned Judge observed that where the original tribunal gives rea sons, the appellate tribunal may dismiss the appeal or the revision, as the case may be, agreeing with those reasons and that what is essential is that reasons shall be given by an appellate or revisional tribunal expressly or by refer ence to those given by the original tribunal.
This matter was considered by a Constitution Bench of this Court in Bhagat Raja case (supra) where also the order under challenge had been passed by the Central Government in exercise of its revisional powers under Section 30 of the read with rules 54 and 55 of the Mineral Concession Rules, 1960.
Dealing with the question as to whether it was incum bent on the Central Government to give any reasons for its decision on review this Court has observed: "The decisions of tribunals in India are subject to the supervisory powers of the High Courts under article 227 of the Constitution and of appellate powers of this Court under article 136.
It goes without saying that both the High Court and this Court are placed under a great disadvantage if no reasons are given and the revision is dismissed curtly by the use of the single word "rejected", or "dismissed".
In 58 such a case, this Court can probably only exercise its appeallate jurisdiction satisfactorily by examining the entire records of the case and after giving a hearing come to its conclusion on the merits of the appeal.
This will certainly be a very unsatisfactory method of dealing with the appeal." (P. 309).
This Court has referred to the decision in Madhya pra desh Industries case (supra) and the observations of Subba Rao, J., referred to above, in that decision have been quoted with approval.
After taking note of the observations of Bachawat, J., in that case, the learned Judges have held: "After all a tribunal which exercises judicial or quasijudi cial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of par ties of far reaching consequences to them are adjudicated upon in a summary fashion, without giving a personal hearing when proposals and counter proposals are made and examined, the least that can be expected is that the tribunals shall tell the party why the decision is going against him in all cases where the law gives a further right of appeal." (P.315).
Reference has already been made to Som Datt Datta 's case (supra) wherein a Constitution Bench of this Court has held that the confirming authority, while confirming the findings and sentence of a Court Martial, and the Central Government, while dealing with an appeal under Section 165 of the Act, are not required to record the reasons for their decision and it has been observed that apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, it could not be said that there is any general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision.
In that case the Court was primarily concerned with the interpretation of the provisions of Act and the Army Rules, 1954.
There is no reference to the earlier decisions in Harinagar Sugar Mills case (supra) and Bhagat Raja case (supra) wherein the duty to record reasons was imposed in view of the appellate jurisdiction of this Court and the supervisory jurisdiction of the High Court under Articles 136 and 227 of the Consti tution of India respectively.
In Travancore Rayon Ltd. vs Union of India, 59 "The Court insists upon disclosure of reasons in support of the order on two grounds; one, that the party aggrieved in a proceedings before the High Court or this Court has the opportunity to demonstrate that the reasons which persuaded the authority to reject his case were erroneous; the other, that the obligation to record reasons operates as a deter rent against possible arbitrary action by the executive authority invested with the judicial power." (P. 46) In Mahabir Prasad Santosh Kumar vs State of U.P. and Others (supra) the District Magistrate had cancelled the licence granted under the ' U.P Sugar Dealers ' Licensing Order, 1962 without giving any reason and the State Govern ment had dismissed the appeal against the said order of the District Magistrate without recording the reasons.
This Court has held: "The practice of the executive authority dismissing statuto ry appeal against orders which prima facie seriously preju dice the rights of the aggrieved party without giving rea sons is a negation of the rule of law." (P. 204) "Recording of reasons in support of a decision on a disputed claim by a quasi judicial authority ensures that the deci sion is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency.
A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim.
If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may deter mine whether the facts were properly ascertained, the rele vant law was correctly applied and the decision was just." (P. 205) In Woolcombers of India Ltd. case (supra) this Court was dealing with an award of an Industrial Tribunal.
It was found that the award stated only the conclusions and it did not give the supporting reasons.
This Court has observed: "The giving of reasons in support of their conclusions by judicial and quasi judicial authorities when exercising initial jurisdiction is essential for various reasons.
First, it is calculated to prevent unconscious unfairness or arbitrari 60 ness in reaching the conclusions.
The very search for rea sons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion.
The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations.
Second, it is a well known principle that justice should not only be done but should also appear to be done.
Unreasoned conclusions may be just but they may not appear to be just to those who read them.
Reasoned conclu sions, on the other hand, will have also the appearance of justice.
Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi judicial authorities to this Court by special leave granted under Article 136.
A judgment which does not disclose the reasons, will be of little assistance to the Court." (P. 507) In Siemens Engineering & Manufacturing Co. of India Limited case (supra) this Court was dealing with an appeal against the order of the Central Government on a revision applica tion under the .
This Court has laid down: "It is now settled law that where an authority makes an order in exercise of a quasi judicial function it must record its reasons in support of the order it makes.
Every quasijudicial order must be supported by reasons." (P 495) "If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them.
Then along administrative au thorities and tribunals, exercising quasi judicial function will be able to justify their existence and carry credibili ty with the people by inspiring confidence in the adjudica tory process.
The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partera, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its 61 proper spirit and mere pretence of compliance with it would not satisfy the requirement of law." (496) Tarachand Khatri vs Municipal Corporation of Delhi & Others, [1977] 2 SCR 198 was a case where an inquiry was conducted into charges of misconduct and the disciplinary authority, agreeing with the findings of the Inquiry Offi cer, had imposed the penalty of dismissal.
The said order of dismissal was challenged on the ground that the disciplinary authority had not given its reasons for passing the order.
The said contention was negatived by this Court and distinc tion was drawn between an order of affirmance and an order of reversal.
It was observed: " . . while it may be necessary for a disciplinary or administrative authority exercising quasi judicial functions to state the reasons in support of its order if it differs from the conclusions arrived at and the recommendations made by the Inquiry Officer in view of the scheme of a particular enactment or the rules made thereunder, it would be laying down the proposition too broadly to say that even an ordi nary concurrence must be supported by reasons." (P. 208) In Raipur Development Authority and Others vs Mls.
Chokhamal Contractors and Others, [1989] 2 S.C.C. 721 a Constitution Bench of this Court was considering the ques tion whether it is obligatory for an arbitrator under the Arbitration Act, 194(1 to give reasons for the award.
It was argued that the requirement of giving reasons for the deci sion is a part of the rules of natural justice which are also applicable to the award of an arbitrator and reliance was placed on the decisions in Bhagat Raja case (Supra) and Siemens Engineering Co. case (Supra).
The said contention was rejected by this Court.
After referring to the decisions in Bhagat Raja case (Supra); Som Datt Datta case (Supra) and Siemens Engineering Co. case (Supra) this Court has ob served: "It is no doubt true that in the decisions pertaining to Administrative Law, this court in some cases has observed that the giving of reasons in an administrative decision is a rule of natural justice by an extension of the prevailing rules.
It would be in the interest of the world of commerce that the said rule is confined to the area of Administrative Law . .
But at the same time it has to be borne in mind that what applies generally to settlement of disputes by 62 authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settle ment of private disputes." (P. 751 52) The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts.
An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power.
But this is not the sole consideration.
The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consid eration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decisionmaking.
In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by con siderations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency.
Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi judicial func tions, would no doubt facilitate the exercise of its juris diction by the appellate or supervisory authority.
But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance.
These considerations show that the re cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrari ness and ensures a degree of fairness in the process of decision making.
The said purpose would apply equally to all decisions and its application cannot be confined to deci sions which are subject to appeal, revision or judicial review.
In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an admin istrative authority exercising quasijudicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review.
It may, however, be added 63 that it is not required that the reasons should be as elabo rate as in the decision of a Court of law.
The extent and nature of the reasons would depend on particular facts and circumstances.
What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy.
The need for recording of reasons is greater in a case where the order is passed at the original stage.
The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional author ity agrees with the reasons contained in the order under challenge.
Having considered the rationale for the requirement to record the reasons for the decision of an administrative authority exercising quasi judicial functions we may now examine the legal basis for imposing this obligation.
While considering this aspect the Donough more Committee observed that it may well be argued that there is a third principle of natural justice, namely, that a party is entitled to know the reason for the decision, be it judicial or quasi judi cial.
The committee expressed the opinion that "there are some cases where the refusal to give grounds for a decision may be plainly unfair; and this may be so, even when the decision is final and no further proceedings are open to the disappointed party by way of appeal or otherwise" and that "where further proceedings are open to a disappointed party, it is contrary to natural justice that the silence of the Minister or the Ministerial Tribunal should deprive them of the opportunity." (P 80) Prof.
H.W.R. Wade has also ex pressed the view that "natural justice may provide the best rubric for it, since the giving of reasons is required by the ordinary man 's sense of justice." (See Wade, Administra tive Law, 6th Edn.
P. 548).
In Siemens Engineering Co. case (Supra) this Court has taken the same view when it observed that "the rule requiring reasons to be given in support of an order is, like the principles of audi alteram parlem, a basic principle of natural justice which must inform every quasi judicial process." This decision proceeds on the basis that the two well known principles of natural justice, namely (i) that no man should be a Judge in his own cause and (ii) that no person should be judged without a hearing, are not exhaustive and that in addition to these two princi ples there may be rules which seek to ensure fairness in the process of decision making and can be regarded as part of the principles of natural justice.
This view is in conso nance with the law laid down by this Court in A.K. Kraipak and Others vs Union of India and Others, , wherein it has been held: 64 "The concept of natural justice has undergone a great deal of change in recent years.
In the past it was thought that it included just two rules namely (i) no one shall be a Judge in his own cause (nemo dabet esse judex propria causa) and (ii) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem).
Very soon thereafter a third rule was envisaged and that is that quasi judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably.
But in the course of years many more subsidiary rules came to be added to the rules of natural justice." (P. 468 69) A similar trend is discernible m the decisions of Eng lish Courts wherein it has been held that natural justice demands that the decision should be based on some evidence of probative value.
(See: R. vs Deputy Industrial Injuries Commissioner ex P. Moore, ; Mahon vs Air New Zealand Ltd., The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fairplay in action." As pointed out earlier the requirement about re cording of reasons for its decision by an administrative authority exercising quasi judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision making.
Keep ing in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by adminis trative authorities.
The rules of natural justice are not embodied rules.
The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority.
With regard to the exercise of a particular power by an adminis trative authority including exercise of judicial or quasi judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement.
It may do so by making an express provi sion to that affect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Deci sions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment.
Such an exclusion can also arise by necessary implication from the nature of the sub ject matter, the scheme and the provisions of the 65 enactment.
The public interest underlying such a provision would outweight the salutary purpose served by the require ment to record the reasons.
The said requirement cannot, therefore, be insisted upon in such a case.
For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administra tive authority exercising judicial or quasi judicial func tions is required to record the reasons for its decision.
We may now come to the second part of the question, namely, whether the confirming authority is required to record its reasons for confirming the finding and sentence of the court martial and the Central Government or the competent authority entitled to deal with the post confirma tion petition is required to record its reasons for the order passed by it on such petition.
For that purpose it will be necessary to determine whether the Act or the Army Rules, 1954 (hereinafter referred to as 'the Rules ') ex pressly or by necessary implication dispense with the re quirement of recording reasons.
We propose to consider this aspect in a broader perspective to include the findings and sentence of the court martial and examine whether reasons are required to be recorded at the stage of (i) recording of findings and sentence by the court martial; (ii) confirma tion of the findings and sentence of the court martial; and (iii) consideration of post confirmation petition.
Before referring to the relevant provisions of the Act and the Rules it may be mentioned that the Constitution contains certain special provisions in regard to members of the Armed Forces.
Article 33 empowers Parliament to make law determining the extent to which any of the rights conferred by Part Ill shall, in their application to the members of the Armed Forces be restricted or abrogated so as to ensure the proper discharge of their duties and the maintenance of discipline amongst them.
By clause (2) of Article 136 the appellate jurisdiction of this Court under Article 136 of the Constitution has been excluded in relation to any judg ment, determination, sentence or order passed or made by any Court or tribunal constituted by or under any law relating to the Armed Forces.
Similarly clause (4) of Article 227 denies to the High Courts the power of superintendence over any Court or tribunal constituted by or under any law relat ing to the Armed Forces.
This Court under Article 32 and the High Courts under Article 226 have, however, the power of judicial review in respect of 66 proceedings of courts martial and the proceedings subsequent thereto and can grant appropriate relief if the said pro ceedings have resulted in denial of the fundamental rights guaranteed under Part III of the Constitution or if the said proceedings suffer from a jurisdictional error or any error of law apparent on the face of the record.
Reference may now be made to the provisions of the Act and the Rules which have a bearing on the requirement to record reasons for the findings and sentence of the court martial.
Section 108 of the Act makes provision for four kinds of courts martial, namely, (a) general courts martial; (b) district courts martial; (c) summary general courtsmar tial and (d) summary courts martial.
The procedure of court martial is prescribed in Chapter XI (Sections 128 to 152) of the Act.
Section 129 prescribes that every general court martial shall, and every district or summary general court martial, may be attended by a judge advocate, who shall be either an officer belonging to the department of the Judge Advocate General, or if no such officer is available, an officer approved of by the Judge Advocate General or any of his deputies.
In sub section (1) of Section 131 it is pro vided that subject to the provisions of sub sections (2) and (3) every decision of a courtmartial shall be passed by an absolute majority of votes, and where there is an equality of votes on either the finding or the sentence, the decision shall be in favour of the accused.
In sub section (2) it is laid down that no sentence of death shall be passed by a general courtmartial without the concurrence of at least two thirds of the members of the court and sub section (3) provides that no sentence of death shall be passed by a summary general court martial without the concurrence of all the members.
With regard to the procedure at trial before the General and District courts martial further provisions are made in Rules 37 to 105 of the Rules.
In Rule 60 it is provided that the judge advocate (if any) shall sum up in open court the evidence and advise the court upon the law relating to the case and that after the summing up of the judge advocate no other address shall be allowed.
Rule 61 prescribes that the Court shall deliberate on its findings in closed court in the presence of the judge advocate and the opinion of each member of the court as to the finding shall be given by word of mouth on each charge separately.
Rule 62 prescribes the form, record and announcement of finding and in sub rule (1) it is provided that the finding on every charge upon which the accused is arraigned shall be recorded and, except as provided in these rules, shall be recorded simply as a finding of "Guilty" or of "Not guilty".
Sub rule (10) of Rule 62 lays down that the finding on charge shall be announced forthwith in open court as subject to confirmation.
Rule 64 lays down 67 that in cases where the finding on any charge is guilty, the court, before deliberating on its sentence, shall, whenever possible take evidence in the matters specified in sub rule (1) and thereafter the accused has a right to address the court thereon and in mitigation of punishment.
Rule 65 makes provision for sentence and provides that the court shall award a single sentence in respect of all the offences of which the accused is found guilty, and such sentence shall be deemed to be awarded in respect of the offence in each charge and in respect of which it can be legally given, and not to be awarded in respect of any offence in a charge in respect of which it cannot be legally given.
Rule 66 makes provisions for recommendation to mercy and sub rule (1) prescribes that if the court makes a recommendation to mercy, it shall give its reasons for its recommendation.
Sub rule (1) of Rule 67 lays down that the sentence together with any recommendation to mercy and the reasons for any such recommendation will be announced forthwith in open court.
The powers and duties of judge advocate are pre scribed in Rule 105 which, among other things, lays down that at the conclusion of the case he shall sum up the evidence and give his opinion upon the legal bearing of the case before the court proceeds to deliberate upon its find ing and the court, in following the opinion of the judge advocate on a legal point may record that it has decided in consequences of that opinion.
The said rule also prescribes that the judge advocate has, equally with the presiding officer, the duty of taking care that the accused does not suffer any disadvantage in consequences of his position as such, or of his ignorance or incapacity to examine or cross examine witnesses or otherwise, and may, for that purpose, with the permission of the court, call witnesses and put questions to witnesses, which appear to him neces sary or desirable to elicit the truth.
It is further laid down that in fulfilling his duties, the judgeadvocate must be careful to maintain an entirely impartial position.
From the provisions referred to above it is evident that the judge advocate plays an important role during the courts of trial at a general court martial and he is enjoined to maintain an impartial position.
The court martial records its findings after the judge advocate has summed up the evidence and has given his opinion upon the legal bearing of the case.
The members of the court have to express their opinion as to the finding by word of mouth on each charge separately and the finding on each charge is to be recorded simply as a finding of "guilty" or of "not guilty".
It is also required that the sentence should be announced forth with in open court.
Moreover Rule 66(1) requires reasons to be recorded for its recommendation in cases where the court makes a recommendation to mercy.
There is no such require 68 ment in other provisions relating to recording of findings and sentence.
Rule 66(1) proceeds on the basis that there is no such requirement because if such a requirement was there it would not have been necessary to have a specific provi sion for recording of reasons for the recommendation to mercy.
The said provisions thus negative a requirement to give reasons for its finding and sentence by the court martial and reasons are required to be recorded only in cases where the courtmartial makes a recommendation to mercy.
In our opinion, therefore, at the stage of recording of findings and sentence the court martial is not required to record its reasons and at that stage reasons are only required for the recommendation to mercy if the court mar tial makes such a recommendation.
As regards confirmation of the findings and sentence of the court martial it may be mentioned that Section 153 of the Act lays down that no finding or sentence of a General, District or summary General, Court Martial shall be valid except so far as it may be confirmed as provided by the Act.
Section 158 lays down that the confirming authority may while confirming the sentence of a court martial mitigate or remit the punishment thereby awarded, or commute that pun ishment to any punishment lower in the scale laid down in Section 71.
Section 160 empowers the confirming authority to revise the finding or sentence of the court martial and in sub section (1) of Section 160 it is provided that on such revision, the court, if so directed by the confirming au thority, may take additional evidence.
The confirmation of the finding and sentence is not required in respect of summary court martial and in Section 162 it is provided that the proceedings of every summary court martial shall Without delay be forwarded to the officer commanding the division or brigade within which the trial was held or to the prescribed officer; and such officer or the Chief of the Army Staff or any officer empowered in this behalf may, for reasons based on the merits of the case, but not any merely technical grounds, set aside the proceedings or reduce the sentence to any other sentence which the court might have passed.
In Rule 69 it is provided that the proceedings of a general court martial shall be submitted by the judge advocate at the trial for review to the deputy or assistant judge advocate general of the command who shall then forward it to the confirming officer and in case of district court martial it is provided that the proceedings should be sent by the presiding officer, who must, in all cases.
where the sentence is dismissal or above, seek advice of the deputy or assistant judge advocate general of the command before confirmation.
Rule 70 lays down that upon receiving the proceedings of a general or district Court Martial, the confirming authority may 69 confirm or refuse confirmation or reserve confirmation for superior authority, and the confirmation, non confirmation, or reservation shall be entered in and form part of the proceedings.
Rule 71 lays down that the charge, finding and sentence, and any recommendation to mercy shall, together with the confirmation or non confirmation of the proceed ings, be promulgated in such manner as the confirming au thority may direct, and if no direction is given, according to custom of the service and until promulgation has been effected, confirmation is not complete and the finding and sentence shall not be held to have been confirmed until they have been promulgated.
The provisions mentioned above show that confirmation of the findings and sentence of the court martial is necessary before the said finding or sentence become operative.
In other words the confirmation of the findings and sentence is an integral part of the proceedings of a court martial and before the findings and sentence of a court martial are confirmed the same are examined by the deputy or assistant judge advocate general of the command which is intended as a check on the legality and propriety of the proceedings as well as the findings and sentence of the court martial.
Moreover we find that in Section 162 an express provision has been made for recording of reasons based on merits of the case in relation to the proceedings of the summary courtmartial in cases where the said proceedings are set aside or the sentence is reduced and no other requirement for recording of reasons is laid down either in the Act or in the Rules in respect of proceedings for confirmation.
The only inference that can be drawn from Section 162 is that reasons have to be recorded only in cases where the proceed ings of a summary court martial are set aside or the sen tence is reduced and not when the findings and sentence are confirmed.
Section 162 thus negatives a requirement to give reasons on the part of the confirming authority while con firming the findings and sentence of a court martial and it must be held that the confirming authority is not required to record reasons while confirming the findings and sentence of the courtmartial.
With regard to post confirmation proceedings we find that subsection (2) of Section 164 of the Act provides that any person subject to the Act who considers himself ag grieved by a finding or sentence of any court martial which has been confirmed, may present a petition to the Central Government, the Chief of the Army Staff or any prescribed officer superior in command to the one who confirmed such finding or sentence and the Central Government, the Chief of the Army Staff or other officer, as the case may be, may pass such orders 70 thereon as it or he thinks fit.
In so far as the findings and sentence of a court martial and the proceedings for confirmation of such findings and sentence are concerned it has been found that the scheme of the Act and the Rules is such that reasons are not required to be recorded for the same.
Has the legislature made a departure from the said scheme in respect of post confirmation proceedings? There is nothing in the language of sub section (2) of Section 164 which may lend support to such an intention.
Nor is there anything in the nature of post confirmation proceedings which may require recording of reasons for an order passed on the post confirmation petition even though reasons are not required to be recorded at the stage of recording of findings and sentence by a court martial and at the stage of confirmation of the findings and sentence of the court martial by the confirming authority.
With regard to record ing of reasons the considerations which apply at the stage of recording of findings and sentence by the court martial and at the stage of confirmation of findings and sentence of the courtmartial by the confirming authority are equally applicable at the stage of consideration of the post confir mation petition.
Since reasons are not required to be re corded at the first two stages referred to above, the said requirement cannot, in our opinion, be insisted upon at the stage of consideration of post confirmation petition under Section 164(2) of the Act.
For the reasons aforesaid it must be held that reasons are not required to be recorded for an order passed by the confirming authority confirming the findings and sentence recorded by the court martial as well as for the order passed by the Central Government dismissing the post confir mation petition.
Since we have arrived at the same conclu sion as in Sorn Datt Datta case (Supra) the submission of Shri Ganguli that the said decision needs reconsideration cannot be accepted and is.
therefore, rejected.
But that is not the end of the matter because even though there is no requirement to record reasons by the confirming authority while passing the order confirming the findings and sentence of the CourtMartial or by the Central Government while passing its order on the post confirmation petition, it is open to the person aggrieved by such an order to challenge the validity of the same before this Court under Article 32 of the Constitution or before the High Court under Article 226 of the Constitution and he can obtain appropriate relief in those proceedings.
We will, therefore, examine the other contentions that have 71 been urged by Shri Ganguli in support of the appeal.
The first contention that has been urged by Shri Ganguli in this regard is that under sub section (1) of Section 164 of the Act the appellant had a right to make a representa tion to the confirming authority before the confirmation of the findings and sentence recorded by the court martial and that the said right was denied inasmuch as the appellant was not supplied with the copies of the relevant record of the court martial to enable him to make a complete representa tion and further that the representation submitted by the appellant under sub section (1) of Section 164 was not considered by the confirming authority before it passed the order dated May 11, 1979 confirming the findings and sen tence of the court martial.
The learned Additional Solicitor General, on the other hand, has urged that under sub section (1) of Section 164 no right has been conferred on a person aggrieved by the findings or sentence of a court martial to make a representation to the confirming authority before the confirmation of the said findings or sentence.
The submis sion of learned Additional Solicitor General is that while sub section (1) of Section 164 refers to an order passed by a court martial, sub section (2) of Section 164 deals with the findings or sentence of a court martial and that the only right that has been conferred on a person aggrieved by the finding or sentence of a court martial is that under sub section (2) of Section 164 and the said right is avail able after the finding and sentence has been confirmed by the confirming authority.
We find considerable force in the aforesaid submission of learned Additional Solicitor Gener al.
Section 164 of the Act provides as under: "(1) Any person subject to this Act who considers himself aggrieved by any order passed by any court martial may present a petition to the officer or authority empowered to confirm any tinging or sentence of such court martial and the confirming authority may take such steps as may be considered necessary to satisfy itself as to the correct ness.
legality or propriety of the order passed or as to the regularity of any proceeding to which the order relates.
(2) Any person subject to this Act who considers himself aggrieved by a finding or sentence of any court martial which has been confirmed, may present a petition to the Central Government, the Chief of the Army Staff or any prescribed officer superior in command to the one who 72 confirmed such finding or sentence and the Central Govern ment, the Chief of the Army Staff or other officer, as the case may be, may pass such orders thereon as it or he thinks fit.
" In sub section (1) reference is made to orders passed by a courtmartial and enables a person aggrieved by an order to present a petition against the same.
The said petition has to be presented to the officer or the authority empowered to confirm any finding or sentence of such court martial and the said authority may take such steps as may be considered necessary to satisfy itself as to the correctness, legality or propriety of the order or as to the regularity of any proceedings to which the order relates.
Sub section (2), on the other hand, makes specific reference to finding or sentence of a court martial.
and confers a right on any person feeling aggrieved by a finding or sentence of any court martial which has been confirmed, to present a peti tion to the Central Government, Chief of the Army Staff or any prescribed officer.
The use of the expression "order" in sub section (1) and the expression "finding or sentence" in sub section (2) indicates that the scope of sub section (1) and sub section (2) is not the same and the expression "order" in sub section (1) cannot be construed to include a "finding or sentence".
In other words in so far as the finding and sentence of the court martial is concerned the only remedy that is available to a person aggrieved by the same is under sub section (2) and the said remedy can be invoked only after the finding or sentence has been con firmed by the confirming authority and not before the con firmation of the same.
Rule 147 of the Rules also lends support to this view.
In the said Rule it is laid down that every person tried by a court martial shall be entitled on demand, at any time after the confirmation of the finding and sentence, when such confirmation is required, and before the proceedings are destroyed, to obtain from the officer or person having the custody of the proceeding a copy thereof including the proceedings upon revision, if any.
This Rule envisages that the copies of proceedings of a court martial are to be supplied only after confirmation of the finding and sentence and that there is no right to obtain the copies of the proceedings till the finding and sentence have been confirmed.
This means that the appellant cannot make a grievance about non supply of the copies of the proceedings of the court martial and consequent denial of his right to make a representation to the confirming authority against the findings and sentence of the court martial before the confirmation of the said finding and sentence.
Though a person aggrieved by the finding or sentence of a courtmar tial has no right to make a representation before the confi ramtion 73 Of the same by the confirming authority, but in case such a representation is made by a person aggrieved by the finding or sentence of a court martial it is expected that the confirming authority shall give due consideration to the same while confirming the finding and sentence of the court martial.
In the present case the representation dated December 18, 1978 submitted by the appellant to the confirming au thority was not considered by the confirming authority when it passed the order of confirmation dated May 11, 1979.
According to the counter affidavit filed on behalf of Union of India this was due to the reason that the said represen tation had not been received by the confirming authority till the passing of the order of confirmation.
It appears that due to some communication gap within the department the representation submitted by the appellant did not reach the confirming authority till the passing of the order of con firmation.
Since we have held that the appellant had no legal right to make a representation at that stage the non consideration of the same by the confirming authority before the passing of the order of confirmation would not vitiate the said order.
Shri Ganguli next contended that the first and the second charge levelled against the appellant are identical in nature and since the appellant was acquitted of the second charge by the court martial his conviction for the first charge can not be sustained.
It is no doubt true that the allegations contained in the first and the second charge are practically the same.
But as mentioned earlier, the second charge was by way of alternative to the first charge.
The appellant could be held guilty of either of these charges and he could not be held guilty of both the charges at the same time.
Since the appellant had been found guilty of the first charge he was acquitted of the second charge.
There is, therefore, no infirmity in the court martial having found the appellant guilty of the first charge while holding him not guilty of the second charge.
Shri Ganguli has also urged that the findings recorded by the court martial on the first and third charges are perverse inasmuch as there is no evidence to establish these charges.
We find no substance in this contention.
The first charge was that the appellant on or about December 1975, having received 60.61 meters woollen serge from M/s Ram Chandra & Brothers, Sadar Bazar, Jhansi for stitching 19 coats and pants for Class IV civilian employees of his unit with intent to defraud 74 got 19 altered ordnance pattern woollen pants issued to the said civilian employees instead of pants stitched out of the cloth received.
To prove this charge the prosecution exam ined Ram Chander P.W. 1 and Triloki Nath P.W. 2 of M/s Ram Chandra & Brothers, Sadar Bazar, Jhansi who have deposed that 60.61 meters of woollen serge cloth was delivered by them to the appellant in his office in December, 1975.
The evidence of these witnesses is corroborated by B.D. Joshi, Chowkidar, P.W. 3, who has deposed that in the last week of December, 1975, the appellant had told him in his office that cloth for their liveries had been received and they should give their measurements.
As regards the alteration of 19 ordnance pattern woollen pants which were issued to the civilian employees instead of the pants stitched out of the cloth that was received, there is the evidence of N/sub.
P. Vishwambharam P.W. 19 who has deposed that he was called by the appellant to his office in the last week of December, 1975 or the first week of January, 1976 and that on reaching there he found ordnance pattern woolien pants lying by the side of the room wall next to the appellant 's table and that the appellant had called Mohd. Sharif P.W. 15 to his office and had asked him to take out 19 woolien trousers out of the lot kept there in the office.
After Mohd. Sharif had select ed 19 woollen trousers the appellant told Mohd. Sharif to take away these pants for alteration and refitting.
The judge advocate, in his summing up, before the court martial, has referred to this evidence on the first charge and the court martial, in holding the appellant guilty of the first charge, has acted upon it.
It cannot, therefore, be said that there is no evidence to establish the first charge levelled against the appellant and the findings recorded by the court martial in respect of the said charge is based on no evidence or is perverse.
The third charge, is that the appellant having come to know that Capt.
Gian Chand Chhabra while officiating OC of his unit, improperly submitted wrong Contingent Bill No. 341/Q dated September 25, 1975 for Rs.16,280 omitted to initiate action against Capt.
Chhabra.
In his summing up before the court martial the judge advocate referred to the CDA letter M/IV/191 dated November 20, 1975 (Exh. 'CC ') raising cert in objection with regard to Contingent Bill No. 341/Q dated September 25, 1975 for Rs.16,280 and pointed out that the said letter was received in the unit on or about November 28, 1975 and bears the initials of the appellant with the aforesaid date and remark "Q Spk with details".
This would show that the appellant had knowledge of the Contingent Bill on November 28, 1975.
It is not the case of the appellant that he made any complaint against Captain 75 Chhabra thereafter.
It cannot, therefore, be said that the finding recorded by the court martial on the third charge is based on no evidence and is perverse.
In the result we find no merit in this appeal and the same is accordingly dismissed.
But in the circumstances there will be no order as to costs.
R.N.J. Appeal dismissed.
|
The Appellant was officiating as a Major though he held a substantive rank of Captain as a permanent Commissioned Officer of the army when on December 27, 1974 he took over as the Officer Commanding 38 Coy.
A.S.C. (Sup) Type 'A ' attached to the Military Hospital, Jhansi.
In August, 1975 the Appellant went to attend a training course and returned in the first week of November.
In his absence Captain G.C. Chhabra was commanding the unit of the appellant and he submitted a Contingent Bill dated September 25, 1975 for Rs.16,280 for winter liveries of the depot civilian chowki dars and sweepers.
The said Bill was returned by the Con troller of Defence Accounts (CDA) with certain objections.
Thereupon the appellant submitted a fresh contingent Bill dated December 25, 1975 for a sum of Rs.7,029.57.
In view of the wide difference in the two Contingent Bills, the CDA reported the matter to the Headquarters for investigation and a Court Enquiry blamed the appellant for certain lapses.
After considering the said report of the Court of En quiry the General Officer Commanding, M.P., Bihar and Orissa recommended that 'severe displeasure ' (to be recorded) of the General Officer Commanding in Chief of the Central Command be awarded to the appellant.
The General Officer Commanding in Chief Central Command, however.
did not agree with the said opinion and by order dated August 26, 1977 directed that disciplinary action be taken against the appellant for the lapses.
Pursuant to the said order a charge sheet dated July 20, 1978 containing three charges was served on the appellant and it was directed that he be tried by General Court Mar tial.
The first charge was, doing of a thing with intent to defraud under section 52(f) of the Act.
The second charge was alternative to the first charge i.e. commit 45 ting an act prejudicial to good order and military disci pline under section 63 of the Act and the third charge was also in respect of offence under section 63 of the Act. 'the appellant pleaded not guilty to the charges.
The General Court Martial on November 29, 1978 found him guilty of first and third charge and awarded the sentence of dis missal from service.
Thereupon the appellant submitted petition dated December 18, 1978 to the Chief of Army Staff praying that the findings of the General Court Martial be not confirmed.
The Chief of the Army Staff by his order dated May 11, 1979 confirmed the findings and sentence of the General Court Martial.
The appellant thereafter submit ted a post confirmation petition under section 164(2) of the Act.
This was rejected by the Central Government by order dated May 6, 1980.
Thereupon the appellant filed a writ petition in the High Court of Delhi which was dismissed in limine.
Hence this appeal by special leave directed to be heard by the Constitution Bench for the reason that it involves the question as to whether it was incumbent for the Chief of the Army Staff, while confirming the findings and sentence of the General Court Martial and for the Central Government while rejecting the post confirmation petition of the appellant to record their reasons for the orders passed by them.
Dismissing the appeal, this Court, HELD: The requirement that reasons be recorded should govern the decisions of an administrative authority exercis ing quasi judicial functions irrespective of the fact wheth er the decision is subject to appeal, revision or judicial review.
It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law.
The extent and nature of the reasons would depend on particular facts and circumstances.
What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy.
[62H; 63A B] The need for recording of reasons is greater in a case where the order is passed at the original stage.
The appel late or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revision al authority agrees with the reasons contained in the order under challenge.
[63B] Except in cases where the requirement has been dispensed with expressly or by necessary implication, an administra tive authority exercising judicial or quasi judicial func tions is required to record ' the reasons for its decision.
[65B] 46 The provisions contained in the and the Army Rules, 1954 negative a requirement to give reasons for its findings and sentence by a Court Martial and reasons are not required to be recorded in cases where the Court Martial makes a recommendation to mercy.
Similarly, reasons are not required to be recorded for an order passed by the confirm ing authority confirming the findings and sentence recorded by the Court Martial as well as for the order passed by the Central Government dismissing the post confirmation peti tion.
[70E F] Sub section (1) of section 164 of the enables a person aggrieved by an order passed by a Court Martial to present a petition against the same.
The expression "order" under sub section (1) does not include a finding or sentence of the Court Martial and in so far as the finding and sen tence of the Court Martial is concerned the only remedy that is available to a person aggrieved by the same is under sub section (2) of section 164 of the and the said remedy can be invoked only after the finding or sentence has been confirmed by the confirming authority and not before the confirmation of the same.
[72B; D E] Though a person aggrieved by the finding or sentence of a Court Martial has no right to make a representation before the confirmation of the same by the confirming authority, but in case such a representation is made by a person ag grieved by the finding or sentence of a Court Martial it is expected that the confirming authority shall give due con sideration to the same while confirming the finding and sentence of the Court Martial.
[72H; 73A] Som Datt Datta vs Union of India & Ors., [1969] 2 S.C.R. 177; Bhagat Raja vs The Union of India & Ors., ; ; Mahabir Prasad Santosh Kumar vs State of U.P. & Ors., ; ; Woolcombers of India Ltd. vs Woolcombers Workers Union & Ant., [1974] I S.C.R. 503; Siemens Engineering & Manufacturing Co. of India Ltd. vs Union of India & Anr., ; Phelps Dodge Corporation vs National Labour Relations Board, [1940] 85 Law Edn. 1271 at p. 1284; Securities and Exchange Commis sion vs Chenery Corporation; , at p. 636; John T. Dunlop vs Waiter Bachewski, ; 377; Regina vs Gaming Board for Great Britain, Exparte Benaim & Khaida, ; at p. 431; Mc Innes vs Onslow Fane & Anr., at p. 1531; Breen vs Amalgamated Engineering Union & Ors., ; Alexander Machinery (Dudley) Ltd. vs Crabtree, [1974] I.C.R. 120; Regina vs Immigration Appeal Tribunal Ex Parte Khan (Mahmud), ; Pure Spring Co. Ltd. vs Minister of National Revenue, 47 at p. 539; Re R.D.R. Construction Ltd. & Rent Review Commission, 168; Re Yar mouth Housing Ltd. & Rent Review Commission, ; Osmond vs Public Service Board of New South Wales, ; Public Service Board of New South Wales vs Osmond, ; M/s. Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala & Ors., ; ; Madhya Pradesh Industries Ltd. vs Union of India & Ors., ; ; Tranvancore Rayon Ltd. vs Union of India; , ; Tarachand Khatri vs Municipal Corporation of Delhi & Ors., [1977] 2 S.C.R. 198; Raipur Development Authority & Ors.
vs M/s. Chokhamal Con tractors & Ors., [1989] 2 S.C.C. 721; A.K. Kraipak & Ors.
vs Union of India & Ors.
, ; R. vs Deputy Industrial Injuries Commissioner ex P. Moore, [1965] 1 Q.B. 456 and Mahon vs Air New Zealand Ltd., , referred to.
|
ivil Appeal No. 1935 of 1981.
From the Judgment and Order dated 8.4.
1980 of the Calcutta High Court in Matter No. 143 of 1980.
Sukumar Bhattacharya and G.S. Chaterjee for the Appellant.
J. Ramamurthy.
g. Rajappa and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by K.N. SINGH, J.
The appellant is a Government Corporation engaged in jute industry.
It was assessed to income tax for the assessment year 1974 75 by the Income Tax Officer.
The assessee preferred appeal before the Appellate Assistant Commissioner.
During the hearing of the appeal, the assessee raised an additional ground claiming deduction of Rs. 11,54,995 on the ground of liability of Purchase Tax.
The assessee claimed that in view of the decision of this Court in Kedarnath Jute Company Limited vs Commissioner of Income Tax, [19771 the aforesaid amount being tax liability should be deducted from its income for purposes of charging tax.
The Appellate Assistant Commissioner permitted the assessee to raise the additional ground and after hear ing the Income Tax Officer, he accepted the assessee 's claim and allowed deduction of Rs. 11,54,995 in computing the total income of the assessee for the assessment year 1974 75.
The Revenue preferred appeal before the Income Tax Appellate Tribunal.
The Tribunal held that the Appellate Assistant Commissioner had no jurisdiction to entertain an additional ground or to grant relief to the assessee on a ground which had not been raised before the Income Tax Officer.
The Tribunal set aside the order of the Appellate Assistant Commissioner placing reliance on the decision of this Court in Addl.
Commissioner of Income Tax, Gujarat vs Gurjargravures P. Ltd. [1978] 111 I.T.R.I.
The assessee made application before the Tribunal under Section 256(1) of the Income Tax Act, 1961 for making reference to the High Court.
The Tribunal refused to refer the question on 343 the findings that the question stood covered by this Court 's decision in Gurjargravures (supra).
The assessee thereupon approached the High Court under Section 256(2) of the Act for calling the statement of case and reference from the Appellate Tribunal.
A Division Bench of the Calcutta High Court held that the Tribunal was right in rejecting the assessee 's application, therefore it refused to call state ment of case.
The assessee thereupon approached this Court under Article 136 of the Constitution.
and obtained leave.
Hence this Appeal.
The question of law which the assessee sought to be referred to the High Court under Section 256(1) of the Act was: "Whether on the facts and in the circumstances of the case.
the Income Tax Appellate Tribunal was justified in holding that the Appellate Assistant Commissioner of Income Tax had exceeded his powers in entertaining the additional ground of appeal taken before him in respect of the claim for deduc tion of a sum of Rs. 11,54,995 representing liability for raw jute Purchase Tax.
" Section 251 of the Income Tax Act (hereinafter referred to as the 'Act ') prescribes power of the Appellate Authority hearing appeal against the order of.
Income Tax Officer.
Clause (a) of Section 25 1(1) confers power on the Appellate Authority namely the Appellate Assistant Commissioner [now after the Amendment of 1987 the Deputy Commissioner (Ap peals)] according to which Appellate AUthority while hearing appeal against an order of assessment.
has power to confirm.
reduce, enhance or annual the assessment; he is further empowered to set aside the assessment and remit the case back to the Assessing Officer for making a fresh assessment in accordance with its directions.
after making such further inquiry as may be necessary.
If a direction is issued by the Appellate Authority, the Assessing Officer is required to proceed to make such fresh assessment and determine the amount of tax, if any.
payable on the basis of fresh assess ment.
The Appellate Assistant Commissioner is thus invested with wide powers under section 251(1)(a) of the Act while hearing an appeal against the order of assessment made by the Income Tax Officer.
The amplitude of the power includes power to set aside the assessment order or modify the same.
The question is whether the Appellate Assistant Commissioner while hearing an appeal under section 251(1)(a) has jurisdiction to allow the assessee to raise an additional ground in assailing the order of the assessment before it.
The Act does not contain any express provision debarring an assessee from raising an addi 344 tional ground in appeal and there is no provision in the Act placing restriction on the power of the Appellate Authority in entertaining an additional ground in appeal.
In the absence of any statutory provision.
general principle relat ing to the amplitude of appellate authority 's power being co terminus with that of the initial authority should nor mally be applicable.
But this question for the purposes of the Income Tax Act has been an intricate and vexed one.
There is no uniformity in the judicial opinion on this question.
Section 31 of the Income Tax Act, 1922 also conferred power on the Appellate Assistant Commissioner to hear appeal against the assessment order made by the Income Tax Officer.
The Chagla, CJ of the Bombay High Court considered the question in detail in Narrondas Manordass vs Commissioner of Income Tax, and held that the Appellate Assistant Commissioner was empowered to correct the Income Tax Officer not only with regard to a matter which had been raised by the assessee but also with regard to a matter which may have been considered by the Income Tax Officer and determined in the course of the assessment.
The High Court observed that since the Appellate Assistant Commissioner had revising authority against the decisions of the Income Tax Officer; a revising authority not in the narrow sense of revising those matters, which the assessee makes a grievance but the subject matter of the appeal not only he had the same powers which could be exercised by the Income Tax Officer.
These observations were approved by this Court in Commissioner of Income Tax vs McMillan & Co., ; the Appellate Assistant Commissioner on an appeal preferred by the assessee had jurisdiction to invoke, for the first time provisions of Rule 33 of the Income Tax Rules, 1922, for the purpose of computing the income of a nonresident even if the Income Tax Officer had not done so in the assessment proceedings.
But in Commissioner of Income Tax, Bombay vs Shapporji Pallon Ji Mistry, [1962] 44 I.T.R. 891 this Court while considering the extent of the power of the Appellate Assistant Commissioner referred to a number of cases decided by various High Courts including Bombay High Court judgment in Narrondas case and also the decision of this Court in McMillan & Co. case and held that in an appeal filed by the assessee, the Appellate Assistant Commissioner has no power to enhance the assessment by discovering new sources of income, not considered by the Income Tax Officer in the order appealed against.
It was urged on behalf of the Revenue that the words "enhance the assessment" occurring in section 31 were not confined to the assessment reached through particular process but the amount which ought to have been computed if the true total income had been 345 found.
" The Court observed that there was no doubt that this view was also possible, but having regard to the provisions of Sections 34 and 33B, which made provisions for assessment of escaped income from new sources, the interpretation suggested on behalf of the Revenue would be against the view which had held the field for nearly 37 years.
In this view the Court held that the Appellate Assistant Commissioner had no power to enhance the assessment by discovering new sources of income.
This decision does not directly deal with the question which we are concerned.
Power to enhance Tax on discovery of new source of income is quite different than granting deduction on the admitted facts fully supported by the decision of this Court.
If the tax liability of the assessee is admitted and if the Income Tax Officer is af forded opportunity of hearing by the Appellate Authority is allowing the assessee 's claim for deduction on the settled view of law, these appears to be no good reason to curtail the powers of the appellate authority under Section 25 1(1)(a) of the Act.
In Commissioner of Income Tax, U.P.v.
Kanpur Coal Syndi cate, a three Judge Bench of this Court discussed the scope of Section 31(3)(a) of the Income Tax Act, 1922 which is almost identical to Section 251(1)(a).
The Court held as under: "If an appeal, lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal.
Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment.
The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal.
The scope of his power is conterminous with that of the Income Tax Officer.
He can do what the Income Tax Officer can do and also direct him to do what he has failed tO do. " (emphasis supplied) The above observations are squarely applicable to the interpretation of section 25 1(1)(a) of the Act.
The declaration of law is clear that the power of the Appellate Assistant Commissioner is co terminus with that of the Income Tax Officer, if that he so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer.
No 346 exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power.
Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provi sions.
In the absence of any statutory provision the Appel late Authority is vested with all the plenary powers which the subordinate authority may have in the matter.
There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assist ant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer.
In Additional Commissioner of Income Tax, Gujarat vs Gurjargravures P. Ltd. (supra) this Court has taken a dif ferent view, holding that in the absence of any claim made by the assessee before the Income Tax Officer regarding relief, he is not entitled to raise the question of exemp tion under Section 84 before the Appellate Assistant Commis sioner hearing appeal against the order of Income Tax Offi cer.
In that case the assessee had made no claim before the Income Tax Officer for exemption under Section 84 of the Act, no such claim was made in the return nor any material was placed on record supporting such a claim before the Income Tax Officer at the time of assessment.
The assessee for the first time made claim for exemption under Section 84 before the Appellate Assistant Commissioner who rejected the claim but on further appeal the Appellate Tribunal held that since the entire assessment was open before the Appellate Assistant Commissioner there was no reason for his not entertaining the claim, or directing the Income Tax Officer to allow appropriate relief.
On a reference the High Court upheld the view taken by the Tribunal.
On appeal this Court set aside the order of the High Court as it was of the view that the Appellate Assistant Commissioner had no power to interfere with the order of assessment made by Income Tax Officer on a new ground not raised before the Income Tax Officer, and therefore the Tribunal committed error in directing the Appellate Assistant Commissioner to allow the claim of the assessee under Section 84 of the Act.
Apparent ly this view taken by two Judge Bench of this Court appears to be in conflict with the view taken by the three Judge Bench of the Court in Kanpur Coal Syndicate 's case (supra).
It appears from the report of the decision in Gujarat case the three Judge Bench decision in Kanpur Coal Syndicate (supra) case was not brought to the notice of the Bench in the Gurjargravures P. Ltd. (supra).
In the 347 circumstances the view of the larger Bench in the Kanpur Coal Syndicate, (supra) holds the field.
However we do not consider it necessary to over rule the view taken in Gurjar gravures P. Ltd. (supra) case as in our opinion that deci sion is rounded on the special facts of the case, as would appear from the following observations made by the Court; "As we have pointed out earlier, the statement of case drawn up by the Tribunal does not mention that there was any material on record to sustain the claim for exemption which was made for the first time before the Appellate Assistant Commissioner.
We are not here called upon to consider a case where the assessee failed to make a claim though there was no evidence on record to support it, or a case where a claim was made but no evidence or insufficient evidence was ad duced in support.
In the present case neither any claim was made before the Income Tax Officer, nor was there any mate rial on record supporting such a claim.
" The above observa tions do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner if the ground so raised could not have been raised at that particu lar stage when the return was filed or when the assessment order was made, or that the ground became available on account of change of circumstances or law.
There may be several factors justifying raising of such new plea in appeal, and each case has to be considered on its own facts.
If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects.
Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discre tion in accordance with law and reason.
He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons.
The satisfac tion of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid prin ciples or any hard and fast rule can be laid down for this purpose.
In Rai Kumar Srimal vs Commissioner of Income Tax, West Bengal 111, a Division Bench of Cal cutta High Court presided over by Sabyasachi Mukharji, J., as he then was held that the Appellate Assistant Commission er was entitled to admit new ground or evidence either suo motu or at the invitation of the parties.
If he is acting on being invited by the assessee, then there must be some ground for admitting new evidence in the sense that there must be some explanation to show that the failure to adduce earlier the evidence sought to be adduced before the Appel late Assistant Commissioner was not wilful and not unreason able.
This view is reasonable and it finds favour with us.
348 In the instant case the assessee was carrying on manu facture and sale of jute.
In the assessment year of 1974 75 he did not claim any deduction on its liability to pay Purchase Tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as the appellant entertained a belief that it was not liable to pay Purchase Tax under the afore said Act.
But later on it was assessed to Purchase Tax and the order of assessment was received by it on 23.11.
The appellant disputed the demand and filed an appeal before the Appellate Authority and obtained stay order.
The asses see thereafter claimed deduction for the amount of Rs. 11,54,995 towards his liability to pay Purchase Tax as deduction for the assessment year 1974 75.
The assessee had not actually paid the Purchase Tax as he had obtained stay from the Appellate Authority nonetheless its liability to pay tax existed, and it was entitled to deduction of Rs. 11,54,995 as was held by this Court in Kedarnath Jute Mfg. Co. Ltd. vs Commissioner of Income Tax (Central), Calcutta, There was no dispute about these facts.
In these circumstances the Appellate Assistant Com missioner allowed the assessee to raise this question and after hearing the Income Tax Officer, he granted the deduc tion from the assessee 's income.
The Tribunal took a con trary view placing reliance on the decision of this Court in Gujargravures P. Ltd. (supra).
As already discussed the facts in the instant case are quite clear, unlike the facts involved in Gurjargravures case.
We are, therefore, of the view that the view taken by the Appellate Tribunal and the High Court is not sustainable in law.
In our opinion, the High Court and Tribunal both committed error in refusing to state the case, or making a reference.
The next question which arises for consideration is to know what order should be passed in the present circum stances.
In view of the findings recorded by us ordinarily we should direct the High Court to call for the statement of case from the Tribunal and thereupon decide the matter afresh, but this procedure would be time consuming.
Since we have already discussed the correct position of law we do not consider it necessary to follow the usual procedure.
Since the view taken by the Income Tax Appellate Tribunal is not sustainable in law we grant leave against the order of the Appellate Income Tax Tribunal under Article 136 and set aside the same and remit the matter to the Appellate Income Tax Tribunal to consider the merit of the deduction permit ted by the Appellate Assistant Commissioner.
If the Tribunal thinks it necessary it may remand the matter to the Appel late Assistant Commissioner (now Deputy Commissioner of Appeals) for reheating.
The appeal is accordingly disposed of.
There will be no order as to costs.
G.N. Appeal disposed of.
|
In respect of the assessment for the assessment year 1974 75, the appellant assessee preferred an appeal before the Appellate Assistant Commissioner.
During the hearing of the appeal, the assessee raised an additional ground as regards its liability to Purchase Tax and claimed a deduc tion of Rs.11,54,995.
After giving an opportunity of hearing to the Income Tax Officer, the Appellate Assistant Commis sioner allowed the said claim.
The Revenue preferred an appeal before the Income Tax Appellate Tribunal.
The Tribunal held that the Appellate Assistant Commissioner had no jurisdiction to entertain any additional ground not raised before the Income Tax Officer and set aside the order of the Appellate Assistant Commis sioner.
The assessee 's application for making reference to the High Court was refused by the Tribunal.
The High Court also rejected the assessee 's application for calling the state ment of the case and reference from the Tribunal.
Hence, this appeal by special leave.
Disposing of the appeal, the Court, HELD: 1.1 The declaration of law is clear that the power of the Appellate Assistant Commissioner is co terminus with that of the Income Tax Officer.
If that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer.
No exception could be taken to this view as the Act does not place any restric tion or limitation on the exercise of appellate power.
Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original 341 authority may have in deciding the question before it sub ject to the restrictions or limitation if any prescribed by the statutory provisions.
In the absence of any statutory provisions to the contrary the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter.
[155G H; 156A B] 1.2 If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects.
Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discre tion in accordance with law and reason.
He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons.
The satisfac tion of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid prin ciples or any hard and fast rules can be laid down for this purpose.
[157D F] Commissioner of Income Tax vs Mc Millan & Co., ; ; Commissioner of Income Tax, U.P. vs Kanpur Coal Syndicate,, ; Kedarnath Jute Mfg. Co. Ltd. vs Commissioner of Income Tax (Central), Calcutta, ; relied on.
Commissioner of Income Tax, Bombay vs Shapporji Patton Ji Mistry, ; Addl.
Commissioner of Income Tax Gujarat vs Gurjargravures ?.
Ltd., ; distinguished.
Rai Kumar Srimal vs Commissioner of Income Tax, West Bengal 111, , approved.
Narrondas Manordass vs Commissioner of Income Tax, [1957] 31 referred to. 2.
In the instant case, the assessee was assessed to Purchase Tax.
The appellant disputed the demand and filed an appeal before the Appellate Authority and obtained stay order.
The assessee thereafter claimed deduction for the amount of Rs.11,54,995 towards his liability to pay Purchase Tax as deduction for the assessment year 1974 75.
The asses see had not actually paid the Purchase Tax as it had ob tained stay from the Appellate Authority; nonetheless its liability to pay tax existed, and it was entitled to deduc tion of Rs. 11,54,995.
[158B C] 3.
Since the view taken by the Income Tax Appellate Tribunal is 342 not sustainable in law, the order of the Tribunal is set aside and the matter is remitted to the Tribunal to consider the merit of the deduction permitted by the Appellate As sistant Commissioner.
If the Tribunal thinks it necessary, it may remand the matter to the Appellate Assistant Commissioner (Deputy Commissioner of Appeals) for hearing [158F H]
|
ivil Appeals Nos.
322 & 323 of 1976.
From the Judgment and Order dated 27.3.1973 and 23.5.75 of the Delhi High Court in F.A.O. (O.S.) No. 35 of 1969 and C.M. No. 1300 of 1974 in F.A.O. (O.S.) 35 of 1969.
P.P. Juneja for the Appellant.
B.B. Barua, Ms. A. Subhashini (N.P.) and Ms. Indira Sawhney ( N.P. ) for the Respondent.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
Civil Appeal No. 322 of 1976 This appeal by special leave has been filed against the judgment dated March 27, 1973 of the High Court of Delhi in F.A.O. (O.S.) No. 35 of 1968.
The appellant, section Harcharan Singh, was awarded a contract for 80 constructing approaches to the Bridge Structure B 2 on the North Sikkim Road in 1959 60.
Under the agreement the appel lant was required to do hard rock cutting to the extent of 7.54,530 cft.
The rate fixed for the said work in the con tract was Rs.129 per thousand cft.
plus 2%.
The appellant was required to perform hard rock cutting to the extent of 18, 18,704 cft.
The appellant claimed payment at the rate of Rs.200 per thousand cft.
for the additional work of hard rock cutting.
He also claimed certain other sums under other heads.
The dispute in respect of four heads was referred to arbitration in accordance with the clause 25 of the agree ment.
The arbitrator gave his award dated February 5, 1965 wherein he disallowed the claim of the appellant in respect of two items but made an award in favour of the appellant in respect of two items of claim.
In this appeal we are only concerned with the claim of the appellant in respect of the additional work of hard rock cutting which the appellant was required to execute.
The arbitrator awarded a sum of Rs.52,800 against the said item.
The award was filed in the High Court by the arbitrator alongwith his letter dated June 6, 1968.
Objections were filed by the respondent under Sections 30 and 33 of the (hereinafter referred to as 'the Act ').
The said objections were consid ered by the learned single Judge of the Delhi High Court and by order dated April 23, 1969.
the said objections of the respondent were rejected and it was ordered that the award be made a rule of the Court.
The respondent filed an appeal against the said order and decree passed by the learned single Judge.
The appeal was partly allowed by the Division Bench of the High Court by judgment dated March 27, 1973, whereby the award as regards the claim for higher remunera tion at the rate of Rs.200 per thousand cft.
for the addi tional work of hard rock cutting was set aside.
The award in respect of other item of the claim relating to expenditure incurred by the appellant in reconstructing the retaining walls after damage, was maintained.
Aggrieved by the said decision of the Division Bench of the High Court the appel lant has filed this appeal after obtaining special leave.
As indicated earlier, this appeal is confined to the claim of the appellant for payment for the additional work of hard rock cutting which the appellant was required to execute.
The appellant has claimed a higher rate of Rs.200 per thousand cft.
for this additional work.
Under the agree ment the appellant was required to execute hard rock cutting to the extent of 7,54,530 cft.
but actually he was required to execute such cutting to the extent of 18.15 lacs cft.
The extent of the additional work was about 10.60 lacs cft.
, i.e. about 140%.
While undertaking the execution of the additional work of hard rock 81 cutting the appellant in his letter dates August 24, 1960 addressed to the Executive Engineer, Central Division No. II, Gangtok, had requested for revision of the rate for hard rock cutting and stated that the minimum working rates for this item are 52% above the tendered rates.
The ExecUtive Engineer by his letter dated September 2, 1960, requested the appellant to submit an analysis of rate for hard rock cutting.
The appellant submitted his analysis of rates on September 14, 1960 wherein after analysing the rates of materials and labour the workable rate worked out to Rs.200 per thousand cft.
The Executive Engineer also got an analy sis of rates done on the basis of the data collected on actual observation and he arrived at a figure of Rs.237 per thousand cft.
By his letter dated November 9, 1961 addressed to the Superintending Engineer, Calcutta Central Circle No. III, CPWD, Calcutta, the Executive Engineer recommended the extra rate of Rs.200 per thousand cft.
for work in excess of 20% of the stipulated quantity.
The Superintending Engineer, in his letter dated February 23, 1962 addressed to the Additional Chief Engineer III, Central P.W.D., New Delhi, made a similar recommendation and the Additional Chief Engineer made a similar recommendation in his letter dated July 16, 1962 addressed to the Secretary to the Government of India, Ministry of Works and Housing.
It appears that the Government did not agree to pay at a rate in excess of the rate of Rs.129 per thousand cft.
plus 2% stipulated under the agreement.
The dispute was, therefore, referred to arbitration.
The arbitrator in his award has considered this item of claim as under: Claim Dispute Award "The contractor claims The arbitrator The claim of the that for Item No 3 of is to deter contractor is the agreement he should mine whether partly justified.
be paid at the rate of under the He should be paid Rs.200 per 1000 cft.
terms and con an amount of for the quantities ditions of the Rs.52,800 (Rupees beyond what is stipu contract, the fifty two thousand lated in the agreement.
claim is jus and Eight hundred tified and if only) in addition so, to what ex to the payment to tent. be made to him at relevant agreement rate for the total quantity of work executed by him under this item.
" 82 Before the learned single Judge it was submitted on behalf of the respondent that the award is a speaking award and from the award it is apparent that the arbitrator has fixed rates for additional work done by the contractor which the arbitrator has no jurisdiction to do by reason of clause 12 of the agreement between the parties which provides that additions to the contract work shall be carried out by the contractor on the same conditions in all respects on which he agreed to do the main work and at the same rates as specified in the tender for the mainwork.
The learned single Judge rejected the said contention and held that the arbi trator was determining only the value of the additional work at the rate of Rs.200 which had been agreed by the Engineer in charge and the Superintending Engineer of the Circle as contemplated by clause 12 and the scope of the inquiry before the arbitrator was only the quantity of work which was additional to the quantities specified in the agreement.
The learned Judges of the Division Bench of the High Court have disagreed with the said view and have ob served that it is clear from the statement of claim as incorporated in the award, and the affidavit of the contrac tor that there was no dispute with regard to the quantity of work and the only dispute was with regard to the rate and that the arbitrator had allowed a sum of Rs.52,800 to the contractor in respect of the total quantity of work executed by him under item No. 3 in addition to the agreed rate and that there was no escape from the conclusion that the arbi trator had awarded the above 'amount by applying a rate higher than the agreed rate.
The learned Judges of the Division Bench were of the view that under clause 12 of the agreement the provision with regard to the fixing of the rate by the Engineer incharge and the Superintending Engi neer of the Circle comes into play only when the additional item of work does not form part of the main work and the rates for such work are not specified in the schedule of rates.
The learned Judges of the Division Bench have held that since the additional hard rock cutting job done by the appellant was part of the main work and the agreement pro vided the rate for the said item, there was no occasion for the Engineer in charge or the Suprer intending Engineer to fix the rate for the extra quantity of hard rock cutting and that the action of the arbitrator in allowing the rate to the contractor in excess of the agreed rate for the job of hard rock cutting was against clause 12 of the agreement and thereby the arbitrator had exceeded his jurisdiction.
As regards the award of an arbitrator under the Act.
the law is well settled that the arbitrator 's adjudication is generally considered binding between the parties for he is a tribunal selected by the parties and the power of the court to set aside the award is restricted to cases 83 set out in section 30 of the Act, viz. (a) if the arbitrator has misconducted himself or the proceedings; or (b) when the award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35; or (c) when the award has been improperly procured or is otherwise invalid.
Under clause (c) of Section 30 the Court can set aside an award which suffers from an error on the face of the award.
It is.
however.
not open to the Court to speculate, where no rea sons are given by the arbitrator.
as to what impelled the arbitrator to arrive at his conclusion.
But the jurisdiction of the arbitrator is limited by the reference and if the arbitrator has assumed jurisdiction not possessed by him, the award to the extent to which it is beyond the arbitra tor 's jurisdiction would be invalid and liable to be set aside (See: Jivarajbhai Ujarnshi Sheth and Others vs Chin tatnanrao Balaji and Others, ; This posi tion at law has been reiterated by the Constitution Bench of this Court in its recent decision in Raipur Development Authority and Others vs M/s Chokharnal Contractors and Others, [1989] 2 S.C.C. 721.
It has been held that an arbi trator or umpire is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agreement or the deed of submission he is re quired to give such reasons and if the arbitrator or umpire chooses to give reasons in support of his decision it is open to the Court to set aside the award if it finds that an error of law has been committed by the arbitrator or umpire on the face of the record on going through such reasons and that an award can neither be remitted nor set aside merely on the ground that it does not contain reasons in support of the conclusion or decisions reached in it except where the arbitration agreement or the deed of submission requires him to give reasons.
In the instant case the arbitration agreement or the deed of submissions did not require the arbitrator to give reasons and, therefore, the award cannot be questioned on the ground of an error on the face of the award.
The learned Judges of the Division Bench of the High Court have set aside the award in relation to claim No. 1 relating payment for additional work of hard rock cutting on the ground that in making the award the arbitrator exceeded his jurisdiction by allowing a rate to the contractor in excess of the agreed rate for the job of hard rock cutting against the terms and conditions contained in clause 12 of the agreement.
The question which needs to be considered here is as to whether in awarding the sum of Rs.52,800 to the appellant for the additional 84 work of hard rock cutting executed by him the arbitrator has disregarded clause 12 of the agreement.
The said clause reads as under: "The Engineer in charge shall have power to make any altera tions in, commissions from, additions to or substituting for, the original specifications, drawings, designs and instructions, that may appear to him to be necessary or advisable during the progress of the work, and the contrac tor shall be bound to carry out the work in accordance with any instructions which may be given to him in writing signed by the Engineer in charge, and such alterations, omissions, additions or substitutions shall not invalidate the con tract: and any altered, additional or substituted work which the contractor may be directed to do in the manner above specified as part of the work shall be carried out by the contractor on the same conditions in all respects on which he agreed to do the main work and at the same rates as are specified in the tender for the main work.
The time for the completion of the work shall be extended in the proportion that the additional or substituted work bears to the Origi nal work, and the certificate of the Engineer in charge shall be conclusive as to such proportion.
And if the al tered, additional or substituted work included any class of work for which no rate is specified in this contract, then such class of work shall be carried out at the rates entered in the schedule of rates of the C.P.W.D. Schedule of Rates 53 54 on which the estimated cost shown on page 1 of tender is based provided that when the tender for the original work is a percentage above the schedule rates the altered, addi tional or substituted work required as aforesaid shall be chargeable at the said schedule rate plus the same percent age deduction addition and if such class of work is not entered in the said schedule of rates, then the contractor shall within seven days of the date of the receipt of the order to carry out the work inform the Engineer incharge of the rat.
e which it is his intention to charge for such class of work, and if the Engineer in charge does not agree to this rate he shall by notice in writing be ' at liberty to cancel his order to carry out such class of work and arrange to carry it out in such manner as he may consider advisable provided always that if the contractor "shall commence work or incur any expenditure in regard thereto before the rates shall have been determined as lastly hereinbefore 85 mentioned, then and in such case he shall only be entitled to be paid in respect of the work carried out or expenditure incurred by him prior to the date of the determination of the rate as aforesaid according to such rate or rates as shall be fixed by the Engineer in charge.
In the event of a dispute the decision of the Superintending Engineer of the Circle shall be final.
" Under this clause the Engineer in charge was empowered to make any additions to the original specifications that may appear to him to be necessary or advisable during the progress of the work and the contractor was bound to carry out the work in accordance with any instructions given to him in writing signed by the Engineer in charge.
As regards payment for the additional work which the contractor was directed to do it was provided that: (i) The contractor shall be paid at the same rates as are specified in the tender for the main work; (ii) If the additional work included any class of work for which no rate was specified in the contract then the con tractor shall be paid at the rates entered into the schedule of rates of the C.P.W.D. Schedule of Rates 53 54 on which the estimated cost shown on page 1 of tender is based and if the tender for the original work is a percentage above the schedule rates the additional work shall be chargeable at the said schedule rates plus the same percentage deductions/addition; and (iii) If such class of work is not entered in the said Schedule of Rates then the contractor should inform the Engineer in charge within seven days of the receipt of the order the rate he wants to charge for such class of work and the Engineer in charge, if he does not agree to the said rate, may cancel the order for such additional work and if the contractor has commenced the work or incurred expendi ture in regard thereto before the determination of the rates the contractor shall be paid in respect of work carried out or expenditure incurred by him prior to the determination of the rates according to such rates or rates as shall be fixed by the Engineer in charge and in the event of a dispute the decision of the Superintending Engineer of the Circle would be final.
The case of the appellant is that clause 12 envisages alter ations or 86 additions within reasonable limits and an addition to the extent of 140% in respect of one particular item alone is not covered by this clause and that in awarding Rs.52,800 as extra payment for the additional work the arbitrator has not acted in disregard of clause 12 and he cannot be said to have exceeded his jurisdiction.
A clause making provision for additions and variations is generally found in building and construction contracts.
In Hudson 's Building and Engineering Contracts 8th Edn.
it has been observed: "It may be that it can be inferred from the terms of the contract that the power to order extras, although apparently unlimited, is in fact limited to ordering extras up to a certain value and, in such a case, extras ordered in excess of that amount, although work of a kind contemplated by the contract, may yet be quite outside the terms of the con tract." (p. 294) "If the extra work ordered is outside the contract the terms of the contract have no application." (p. 296) In this context it would be relevant to take note of the decision of the Court of Appeal in England in Parkinson (Sir Lindsay) & Co. Ltd. vs Commissioners of His Majesty 's Works and Public Buildings, In that case the contractors had agreed with His Majesty 's Commissioners of Works and Public Buildings to erect an ordnance factory according to the general conditions and specifications and bills of quantities and drawings annexed for the contract sum of Pound 3,500,000 and under the general conditions of contract the Commissioners had power, at their absolute discretion, to modify the extent and character of the work or to order alterations of or additions to the works and it was the duty of the contractor to comply with the archi tect 's instructions in this respect.
In the contract it was also provided that it is probable that further work to the value of approximately, Pound 500,000 would be ordered on a measured basis under the terms of the contract.
The contract was amended by a deed of variation and it was provided that exceptional methods should be used to hasten the work and that a system of uneconomic working should be introduced to bring about the completion of the factory by the date fixed by the contract.
The Commissioners ordered work to be exe cuted greatly in excess of the amount contemplated although not different in character from that covered by the varied contract, so that the works could not be completed until a year beyond the time anticipated and the actual cost of the 87 contracts was L6,683,056 which amount had been paid to them alongwith L300,000 the maximum profit under the deed of variation.
During the progress of the work the contractors had.
complained to the Commissioners that they were being called on to execute more work than was contemplated by the varied contract and claimed that they were entitled to extra remuneration for the work in excess of that contemplated but they proceeded with the work at the request of the Commis sioners leaving the issue to be subsequently decided by arbitration.
The arbitrator found that the estimated cost of the work under the varied contract was L500,000 and awarded L90,298 as proportionate or reasonable profit or remunera tion to the contractors for the additional work.
The said award was upheld by the Court of Appeal on the view that a term must be implied in the varied contract that the Commis sioners should not be entitled to require work materially in excess of the sum of L5,000,000 and that such excess work having been done by the contractors, the Commissioners were liable to pay the contractors reasonable remuneration there fore.
On behalf of the Commissioners reliance was placed on Condition 33 of the original contract which gave the Commis sioners an unlimited power of ordering extras even to the extent of altering the character of the work.
The contrac tors, on the other hand, placed reliance on the following observations of Mc Cardie, J. in Naylor, Benzon & Co. vs Krainische Industrie Gesellschart, [1918] 1 K.B.331: "It is essential to remember, however, that words, even though general, must be limited to circumstances within the contemplation of the parties.
" Accepting the contention urged on behalf of the contrac tors Asquith L. J. observed: "If the original contract plus the deed are read without any implied limitation on their literal meaning, the result, as indicated above, is that after L300,000 profit has been earned by the contractor, he can be compelled to labour like the Danaids without reward or limit, or any further "extras" which the commissioners may elect to exact from him, 'till the last syllable of recorded time. ' Only the most compel ling language would induce a court to construe the combined instruments as placing one party so completely at the mercy of the other.
Where the language of the contract is capable of a literal and a more restricted meaning, all relevant circumstances can be taken into account in decid 88 ing whether the literal or a more limited meaning should be ascribed to it".
(p. 662) Similarly Singleton L.J. has observed: "1 find myself unable to agree with the submission of Mr. Rewcastle that under the contract as varied by the deed of variation, the contractors would have been bound to continue making alterations and additions, if ordered, for years and years, without any extra payment by way of profit.
That would have led to manifest absurdity and injustice, as Mathew, J. said in Bush vs Whitehaven Trustees, (1).
There must be a limit." (p. 673) Here also the question has often arisen whether the contractor under the variation clause is liable to execute the extra or additional quantities of the tendered items at the tendered rates to an unlimited extent.
In some awards given by the arbitrators in the Central Public Works Depart ment of the Government of India the variation of the ten dered quantities under the variation clause in the contract has been restricted to 10% beyond which the contractor was entitled to claim as extras and these awards have been accepted and implemented by the Government.
It appears that the standard form of contract of the Central Public Works Department has been amended and now it specifically permits for a limit of variation called "deviation limit" upto a maximum of 20% and upto such limit the contractor has to carry out the work at the rates stipulated in the contract and for the work in excess of that limit at the rates to be determined in accordance with clause 12 A under which the Engineer in charge can revise the rates having regard to the prevailing market rates (See: Gajaria 's Law relating to Building and Engineering Contracts in India, 3rd Edn., pages 410 412).
In the instant case, it appears that the Executive Engineer, the Superintending Engineer and the Additional Chief Engineer in their letters dated November 9, 1961, February 23, 1962 and July 16, 1962 respectively have ex pressed the view that the additional work under the terms of the contract may be confined to 20% and the appellant may be paid at the rates prescribed in the contract for 20% of the additional work and for the extra quantity of additional work he may be paid remuneration at the increased rate taking into account the increased costs in execution of the said work on account of the peculiar nature of the work.
While considering the claim of the appellant the 89 arbitrator was required to consider the terms of the con tract and to construe the same.
It was, therefore, permissi ble for the arbitrator to consider whether clause 12 of the contract enables the Engineer incharge to require the appel lant to execute additional work without any limit or a reasonable limit should be placed on the quantity of the additional work, which the appellant may be required to execute at the rate stipulated for the main work under the contract.
For that purpose the arbitrator could take into consideration the practice prevalent in the Central Public Works Department in this regard as well as the correspond ence between the appellant and the authorities including the letters dated November 9, 1961, February 23, 1962 and July 16, 1962 of the Executive Engineer, the Superintending Engineer and the Additional Chief Engineer recommending payment of remuneration at the increased rate for the addi tional work in excess of 20% of the quantity stipulated in the contract.
The appellant was claiming increased rate of Rs.200 per 1000 cft.
for the entire quantity of additional work.
The arbitrator did not accept the said claim of the appellant in full and has partly allowed the said claim by awarding Rs.52,800 which means that the arbitrator has awarded the increased rate only for a part of the additional work of hard rock cutting which the appellant was required to execute.
The arbitrator was entitled to do so on the construction placed by him on clause 12 of the contract and, therefore, it cannot be said that in awarding the sum of Rs.52,800 for the additional work the arbitrator has exceed ed his jurisdiction and the award is vitiated by an error of jurisdiction.
In the circumstances, we are unable to agree with the judgment of the learned Judges of the Division Bench of the High Court on this part of the claim.
The appeal is, therefore, allowed and the judgment of the Division Bench of the High Court setting aside the award of the arbitrator with regard to item No. 1 of the claim relating to payment for additional work of hard rock cutting is set aside and the order passed by the learned Single Judge upholding the award of the arbitrator in this regard is restored.
The appellant will be entitled to his costs.
Civil Appeal No. 323 of 1976 This appeal is directed against the order dated May 23, 1975 of the High Court of Delhi whereby the High Court rejected C.M. No. 1300 of 1974 filed by the appellant under Order 41, rule 21 read with Section 151 C.P.C., praying that the ex parte judgment dated March 27, 1973 in F.A.O. (O.S.) No. 35 of 1969 may be set aside and the appeal be re admit ted to its original number and the appeal be heard 90 and decided on merits.
The appellant has filed C.A. No. 322 of 1976 against the said judgment of the High Court dated March 27, 1973 in F.A.O. (O.S.) No. 35 of 1968.
The said appeal has been allowed by the judgment given today.
Since the judgment of the High Court dated March 27, 1973 has been set aside by this Court in C.A. No. 322 of 1976 this appeal does not survive and it is disposed of accordingly.
No costs.
G.N. Appeal disposed of.
|
The appellant was awarded a contract for constructing approaches to certain Bridge structure.
As per the agree ment, he was required to do hard rock cutting to the extent of 7,54,530 cft.
and the rate fixed was Rs.129 per thousand cft.
plus 2%.
Actually the appellant was required to perform hard rock cutting to the extent of 18,18,704 cft.
For the additional work, the appellant claimed payment at the rate of Rs.200 per thousand cft.
He also claimed certain other sums under other heads.
Dispute in respect of 4 heads was referred to arbitration.
The arbitrator in his award disal lowed two claims and allowed the other two claims, one of which was in respect of the additional work of hard rock cutting, and awarded a sum of Rs.52,800 under this head.
The arbitrator filed the award in the High Court.
After consid ering the objections filed by the respondent a Single Judge of the High Court ordered that the award be made a rule of the Court.
The respondent filed an appeal against the said order and the Division Bench set aside, ex parte, the claim for higher remuneration at the rate of Rs.200 per thousand cft.
Aggrieved, the appellant has preferred an appeal, by ' special leave.
The other appeal, also by special leave, is against the High Court 's rejection of the prayer for setting aside the ex parte judgment.
Allowing the former appeal and disposing of the latter one, HELD: 1.
As regards the award of an arbitrator under the Act, the law is well settled that the arbitrator 's adjudica tion is generally considered binding between the parties for he is a tribunal selected by the parties and the power of the court to set aside the award is restricted to cases set out In section 30 of the Act.
It is, however, not open to the 77 Court to speculate, where no reasons are given by the arbi trator, as to what impelled the arbitrator to arrive at his conclusion.
But the jurisdiction of the arbitrator is limit ed by the reference and if the arbitrator has assumed juris diction not possessed by him, the award to the extent to which it is beyond the arbitrator 's jurisdiction would be invalid and liable to be set aside.
An arbitrator or umpire is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agree ment or the deed of submission he is required to give such reasons.
If the arbitrator or umpire chooses to give reasons in support of his decision it is open to the Court to set aside the award if it finds that an error of law has been committed by him on the face of the record.
An award can neither be permitted nor set aside merely on the ground that it does not contain reasons in support of the conclusion or decisions reached in it except where the arbitration agree ment or the deed of submission requires him to give reasons.
[82H; 83A E] Jivarajbhai Ujamshi Sheth and Others vs Chintamanrao Balaji and Others, ; ; Raipur Development Authority and Others vs M/s Chokhamal Contractor and Others, [1989] 2 SCC 721, relied on.
2.1 In the instant case the arbitration agreement or the deed of submission did not require the arbitrator to give reasons and, therefore, the award cannot be questioned on the ground of an error on the face of the award.
The Divi sion Bench of the High Court set aside the award in respect of the claim relating to payment for additional work of hard rock cutting on the ground that in making the award the arbitrator exceeded his jurisdiction by allowing a rate to the contractor in excess of the agreed rate for the job of hard rock cutting against the terms and conditions in clause 12 of the agreement.
[83F G] 2.2 Under clause 12 of the agreement, the Engineer in charge was empowered to make any additions to the original specifications that may appear to him to be necessary or advisable during the progress of the work and the contractor was bound to carry out the work in accordance with any instructions given to him in writing signed by the Engineer in charge.
[85B C] 2.3 It has to be inferred from the terms of the contract whether this power to order extras, although apparently unlimited, is in fact limited to ordering extras upto a certain value and in such a case, extras ordered in excess of that amount may be outside the terms of the contract.
78 Parkinson (Sir Lindsay) & Co. Ltd. vs Commissioners of His Majesty 's Works and Public Buildings, , referred to.
Hudson 's Building and Engineering Contracts, 8th Edn.
294, 296, referred to.
In some awards given by the arbitrators in the Cen tral Public Works Department of the Government of India the variation of the tendered quantities under the variation clause in the contract has been restricted to 10% beyond which the contractor was entitled to claim as extras and awards have been accepted and implemented by the Government.
It appears that the standard form of contract of the Central Public Works Department has been amended and now it specifi cally permits for a limit of variation called "deviation limit" upto a maximum of 20% and upto such limit the con tractor has to carry out the work stipulated in the contract and for the work in excess of that limit at the rates to be determined in accordance with clause 12 A under which the Engineer in Charge can revise the rates having regard to the prevailing market rates.
[88D F] Gajaria 's Law relating to Building and Engineering Contracts in India, 3rd Edn., pages 410 412, referred to.
In the instant case, the Executive Engineer, the Superintending Engineer and the Additional Chief Engineer have expressed the view that the additional work under the terms of the contract may be confined to 20% and the appel lant may be paid at the rates prescribed in the contract for 20% of the additional work and for the extra quantity of additional work he may be paid remuneration at the increased rate taking into account the increased costs in execution of the said work on account of the peculiar nature of the work while considering the claim of the appellant the arbitrator was required to consider the terms of the contract and to construe the same.
It was, therefore, permissible for the arbitrator to consider whether clause 12 of the contract enables the Engineer in charge to require the appellant to execute additional work without any limit, or a reasonable limit should be placed on the quantity of the additional work, which the appellant may be required to execute at the rate stipulated for the main work under the contract.
For that purpose the arbitrator could take into consideration the practice prevalent in the Central Public Works Depart ment in this regard as well as the correspondence between the appellant and the authorities recommending payment of remuneration at the increased rate for the additional work in excess of 20% of the quantity stipulated in the contract.
79 The appellant was claiming increased rate of Rs.200 per 1000 cft.
for the entire quantity of additional work.
The arbi trator did not accept the said claim of the appellant in full and has partly allowed the said claim by awarding Rs.52,800 which means that the arbitrator has awarded the increased rate only for a part of the additional work of hard rock cutting which the appellant was required to exe cute.
The arbitrator was entitled to do so on the construc tion placed by him on clause 12 of the contract and, there fore, it cannot be said that in awarding the sum of Rs.52,800 for the additional work the arbitrator has exceed ed his jurisdiction and the award is vitiated by an error of jurisdiction.
[88G H; 89A E] 5.
The judgment of the Division Bench of the High Court setting aside the award of the arbitrator with regard to the claim relating to payment for additional work of hard rock cutting is set aside and the order passed by the Single Judge upholding the award of the arbitrator in this regard is restored.
[89F] 6.
Since the judgment of the Division Bench of the High Court is set aside the appeal against the order rejecting the prayer for setting aside the ex parte judgment, does not survive.
|
Appeal No. 91 of 1976.
From the Judgment and Order dated 15.4.
1975 of the Punjab and Haryana High Court in I.T. Reference No. 14 of 1972.
Bishamber Lal and Ms. Geetanjali Madan for the Appellant.
Gauri Shanker, Manoj Arora, section Rajappa and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the Punjab and Haryana High Court dated 15.4.1975 answering the Income Tax Reference made to it by the Income Tax Appellate Tribunal.
Briefly, the facts giving rise to this appeal are that the appellant Saraswati Industrial Syndicate is a limited company carrying on business of manufacturing and sale of sugar and machinery for sugar mills and other industries.
Another company, namely, the Indian Sugar and General Engi neering Corporation (hereinafter referred to as 'the Indian Sugar Company ') was also manufacturing machinery parts for sugar mills.
On 28th September 1962 under the orders of the High Court the Indian Sugar Company was amalgamated with the appellant company.
After the amalgamation, the Indian Sugar Company lost its identity, as it did not carry on any busi ness.
Prior to the amalgamation, the Indian Sugar Company had been allowed expenditure to the extent of Rs.58,735 on accrual basis in its earlier assessment.
The company had shown the aforesaid amount as a trading liability and the said trading liability was taken over by the appellant company.
After amalgamation, the appellant company claimed exemption on the amount of Rs.58,735 from income tax for the assessment year 1965 66 on the ground that the amalgamated 335 company was not liable to pay tax under Section 41(1) of the Income Tax Act 1961 (hereinafter referred to as 'the Act ') as the expenditure had been allowed to the erstwhile Indian Sugar Company which was a different entity from the amalga mated company.
The Income Tax Officer disallowed the appel lant 's claim for exemption.
The assessee filed appeal before the Appellate Assistant Commissioner who confirmed the order of the Income Tax Officer.
The assessee, thereafter, pre ferred appeal before the Income Tax Appellate Tribunal.
The Tribunal allowed the appeal on the construction of Section 41(1) of the Act.
The Tribunal held that after the amalgama tion of the Indian Sugar Company with the assessee company the identity of the amalgamating company was lost and it was no longer in existence, therefore, the assessee company was a different entity not liable to tax on the aforesaid amount of Rs.58,735.
On the Department 's application the Tribunal referred the following question to the High Court: "Whether on the facts and circumstances of the case the Tribunal was justified in law in holding that the amount of Rs.58,735 was not chargeable to tax under sub section (1) of Section 41 of the Income Tax Act 1961 for the assessment year 1965 66?" The High Court answered the question in favour of the Reve nue holding that the exemption from tax liability claimed by the appellant assessee was chargeable to tax under Section 41(1) of the Act.
The High Court held that on the amalgama tion of the two companies, neither of them ceased to exist instead both the amalgamating companies continued their entities in a blended form.
It further held that the amalga mated company was a successor in interest of amalgamating company and since the assets of both the companies were merged and blended to constitute a new company the liabili ties attaching thereto must, therefore be, on the amalgamat ed company.
On these findings the High Court held that the amalgamated company, namely, the assessee was liable to pay tax on Rs.58,735 which came into its hands from the assets of the Indian Sugar Company.
The assessee made application before the High Court under Section 261 of the Act read with Section 109 of the Code of Civil Procedure for certificate to appeal to this Court but the High Court dismissed the same.
The appellant, thereupon, approached this Court by means of special leave petition under Article 136 of the Constitution.
This Court granted leave.
Hence this appeal.
Section 41(1) of the Act reads as under: 336 1(1).
Whether an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained.
whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him or the ' value of benefit accruing to him, shall be deemed to be profits and gains of business or profession and accord ingly chargeable to income tax as the income of that previ ous year, whether the business or profession in respect of which the allowance or deduction has been made is in exist ence in that year or not ." Section 41(1) has been enacted for charging tax on profits made by an assessee, but it applies to the assessee to whom the trading liability may have been allowed in the previous year.
If the assessee to whom the trading liability may have been allowed as a business expenditure in the previous year ceases to be in existence or if the assessee is changed on account of the death of the earlier assessees the income received in the year subsequent to the previous year or the accounting year cannot be treated as income received by the assessee.
In order to attract the provisions of Section 41(1) for enforcing the tax liability, the identity of the assessee in the previous year and the subsequent year must be the same.
If there is any change in the identity of the assessee there would be no tax liability under the provi sions of Section 41.
In Commissioner of Income Tax, Madhya Pradesh vs Hukumchand Mohanlal, this Court held that the Act did not contain any provision making a succes sor in a business or the legal representative of an assessee to whom the allowance may have been already granted liable to tax under Section 41(1) in respect of the amount remitted on receipt by the successor or by the legal representative.
ln that case the wife of the assessee on the death of her husband succeeded to the business carried on by him.
Another firm which had recovered certain amounts towards the sales tax from the assessee 's husband succeeded in an appeal against its sales tax assessment and thereupon the firm refunded that amount to the assessee which was received during the relevant accounting period.
The question arose whether the amount so received by the assessee could be assessed in her hands as a deemed profit under Section 41(1) of the Act.
This Court held that Section 41 did not apply because the assessee sought to be taxed was not the assessee as contemplated by Section 41(1) as the husband of the asses 337 see had died, therefore the Revenue could not take advantage of the provisions of Section 41(1) of the Act.
The question is whether on the amalgamation of the Indian Sugar Company with the appellant company, the Indian Sugar Company continued to have its entity and was alive for the purposes of Section 41(1) of the Act.
The amalgamation of the two companies was effected under the order of the High Court in proceedings under Section 391 read with Sec tion 394 of the .
The Saraswati Industrial Syndicate, the transferee company was a subsidiary of the Indian Sugar Company, namely, the transferor company.
Under the scheme of amalgamation the Indian Sugar Company stood dissolved on 29th October, 1962 and it ceased to be in existence thereafter.
Though the scheme provided that the transferee company the Saraswati Industrial Syndicate Ltd. undertook to meet any liability of the Indian Sugar Company which that company incurred or it could incur, any liabili ty, before the dissolution or not thereafter.
Generally, where only one company is involved in change and the rights of the share holders and creditors are varied, it amounts to reconstruction or reorganisation or scheme of arrangement.
In amalgamation two or more companies are fused into one by merger or by taking over by another.
Reconstruction or 'amalgamation ' has no precise legal mean ing.
The amalgamation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending company become substantially the share holders in the company which is to carry on the blended undertakings.
There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company.
Strictly 'amalgamation ' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition.
See: Halsbury 's Laws of Eng land, 4th Edition Vol.
7 Para 1539.
Two companies may join to form a new company, but there may be absorption or blend ing of one by the other, both amount to amalgamation.
When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.
In M/s. General Radio and Appliances Co. Ltd. & Ors.
M.A. Khader (dead) by Lrs., [1986] 2 S.C.C. 656, the effect of amalgamation of 338 two companies was considered.
M/s. General Radio and Appli ances Co. Ltd. was tenant of a premises under an agreement providing that the tenant shall not sub let the premises or any portion thereof to anyone without the consent of the landlord.
M/s. General Radio and Appliances Co. Ltd. was amalgamated with M/s. National Ekco Radio and Engineering Co. Ltd. under a scheme of amalgamation and order of the High Court under Sections 391 and 394 of .
Under the amalgamation scheme, the transferee company, namely, M/s. National Ekco Radio and Engineering Company had acquired all the interest, rights including leasehold and tenancy rights of the transferor company and the same vested in the transferee company.
Pursuant to the amalgamation scheme the transferee company continued to occupy the prem ises which had been let out to the transferor company.
The landlord initiated proceedings for the eviction on the ground of unauthorised sub letting of the premises by the transferor company.
The transferee company set up a defence that by amalgamation of the two companies under the order of the Bombay High Court all interest, rights including lease hold and tenancy rights held by the transferor company blended with the transferee company, therefore the transfer ee company was legal tenant and there was no question of any sub letting.
The Rent Controller and the High Court both decreed the landlord 's suit.
This Court in appeal held that under the order of amalgamation made on the basis of the High Court 's order, the transferor company ceased to be in existence in the eye of law and it effaced itself for all practical purposes.
This decision lays down that after the amalgamation of the two companies the transferor company ceased to have any entity and the amalgamated company ac quired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets.
In the instant case the Tribunal rightly held that the appellant company was a separate entity and a different assessee, therefore, the allowance made to Indian Sugar Company, which was a different asses see, could not be held to be the income of the amalgamated company for purposes of Section 41(1) of the Act.
The High Court was in error in holding that even after amalgamation of two companies, the transferor company did not become non existent instead it continued its entity in a blended form with the appellant company.
The High Court 's view that on amalgamation 'there is no complete destruction of corpo rate personality of the transferor company instead there is a blending of the corporate personality of one with another corporate body and it continues as such with the other is not sustainable in law.
The true effect and character of the amalgamation largely depends on the terms of the scheme of merger.
But there cannot be any doubt that when two compa nies 339 amalgamate and merge into one the transferor company loses its entity as it ceases to have its business.
However, their respective rights of liabilities are determined under scheme of amalgamation but the corporate entity of the transferor company ceases to exist with effect from the date the amal gamation is made effective.
In view of the above discussion, we agree with the Tribunal 's view that the amalgamating company ceased to exist in the eye of law, therefore the appellant was not liable to pay tax on the amount of Rs.58,735.
The appeal is accordingly allowed and we set aside the order of the High Court and answer the question in favour of the assessee against the Revenue.
There will be no order as to costs.
V.P.R Appeal allowed.
|
Under the scheme of amalgamation and order of the High Court under Sections 391 and 394 of the on 28.9.1962 one Indian Sugar Company was amalgamated with the appellant assessee company.
The transferor company had been allowed expenditure to the extent of Rs.58,734.
The appellant transferee company claimed exemption on the amount of Rs.58,735 from income tax for the assessment year of 1965 66 on the ground that the amalgamated transferee compa ny was not liable to pay tax under Section 41(1) of the Income tax Act, as the expenditure had been allowed to the erstwhile transferor company.
The claim was disallowed by the Income Tax Officer.
The transferee appellant company 's appeal was also rejected by the Appellate Assistant Commis sioner.
The appellant company preferred appeal before the Income Tax Tribunal which was allowed on the ground that after amalgamation, the transferor company 's identity was lost and it was no longer in existence and the transferee company was a different entity.
When the question was referred to the High Court, it answered the reference in favour of the Revenue, holding that on amalgamation of the two companies, neither of them ceased to exist, instead both the companies continued their entities in a blended form and the amalgamated company was a successor in interest of the amalgamating company.
333 The Appellant Company 's application under Section 291 of the Income Tax Act read with Section 109, Code of Civil Procedure was dismissed by the High Court.
Hence the present appeal.
Allowing the appeal of the assessee Appellant company, this Court, HELD: 1.
Section 41(1) has been enacted for charging tax on profits made by an assessee, but it applies to the asses see to whom the trading liability may have been allowed in the previous year.
If the assessee to whom the trading liability may have been allowed as a business expenditure in the previous year ceases to be in existence or if the asses see is changed on account of the death of the earlier asses sees the income received in the year subsequent to the previous year or the accounting year cannot be treated as income received by the assessee.
[146C E] 2.
In order to attract the provisions of Section 41(1) for enforcing the tax liability, the identity of the asses see in the previous year and the subsequent year must be the same.
If there is any change in the identity of the assessee there would be no tax liability under the provisions of Section 41.
[146E] 3.
Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation.
When two companies are merged and are so joined, as to form a third company or one is absorbed into the other or blended with another, the amalga mating company loses its entity.
[147G] 4.
After the amalgamation of two companies the transfer or company ceased to have any entity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets.
[148E] 5.
The true effect and character of the amalgamation largely depends on the terms of.the scheme of merger.
But there can be no doubt that when two companies amalgamate and merge into one, the transferor company loses its entity as it ceases to have its business.
However, their respective rights or liabilities are determined under the scheme of amalgamation but the corporate entity of the transferor company ceases to exist with effect from the date the amal gamation is made effective.
[148H; 149A B] 334 Commissioner of Income Tax, Madhya Pradesh vs Hukumchand Mohanlal, and M/s. General Radio and Appliances Co. Ltd. & Ors.
vs M.A. Khader (dead) by L.rs., [1986] 2 S.C.C. 656; followed.
Halsbury 's Laws of England, 4th Edition Vol.
7 Para 1539; referred to.
|
ivil Appeals Nos.
1334 and 1335 of 1982.
From the Judgment and Order dated 9.11.1979 and 8.5. 1979 of Delhi High Court in L.P.A. No. 192 of 1979 and R.F.A. No. 245 of 1969.
Sasidharan and P.K. Pillai for the Appellants.
Tapas Ray, A.K. Srivastava and Ms. A. Subhashini for the Respondents.
The following Order of the Court was delivered: KANIA, J. Lands comprising a few bighas belonging to the claimants (appellants) and situated in the area now known as 'Nehru Place ' in Delhi were notified for acquisition by the Government of India by a Notification dated November 13, 1959, issued under Section 4 of the Land Acquisition Act, 1894.
The said lands were duly acquired under the said Act.
In compensation proceedings the Land Acquisition Collector awarded to the claimants (appellants) compensation at the rate of Rs.2,000 per bigha and further awarded solatium and interest as provided by law.
In two references under section 18 of the Land Acquisition Act at the instance of the appel lants, the Additional District Judge enhanced the compensa tion from Rs.2,000 per bigha to Rs.4,000/5,000 per bigha.
From the orders of the Additional District Judge.
the appel lants filed appeals in Delhi High Court.
The Delhi High Court enhanced the compensation to Rs.7,000 per bigha and also awarded solatium and interest.
Compensation was deter mined at the aforesaid rate largely on the footing of a sale of comparable land by 128 one Puran to the Delhi Finance Company Private Limited (hereinafter referred to as the DLF Co. ').
That sale took place a few months prior to the date of the Notification and rate at which the land was sold was Rs.6,000 per bigha.
In view of the period of few months which had gone by and the rise in land values, the High Court determined the compensa tion at Rs.7,000 per bigha.
The claimants strongly relied on the instances of 'sales of small developed plots by the DLF Co. and pointed out that it was on the basis of the sales that the High Court had awarded compensation at the rate of Rs.11 per sq. yard to the DLF Co. in respect of similar lands of the said company acquired by the government.
This amount was arrived at by taking the price of developed plots sold by DLF Co. and deducting therefrom the cost of develop ment.
It was alleged by the claimants that this land was contiguous to the land of the claimants acquired as afore said and the acquisition was at almost the same time as in the case of the claimants.
It was submitted by them that the principal reason given by learned District Judge as well as the High Court for not accepting the instance of the compen sation awarded to DLF Co. was not tenable in law.
It was submitted by them that compensation should also have been awarded to them on the basis of the said instance.
The High Court has taken the view that the instance of compensation awarded to DLF Co. was not acceptable mainly because that company was in a position to develop the land and to realise its potentiality and had been able to sell certain developed plots at a very much higher rates.
The High Court took the view that the higher compensation was liable to be awarded to the DLF Co. because that organisation was in a better position to develop the land and hence.
the potentiality of the land in its hands was greater.
With respect to learned Judges of the High Court who delivered the impugned judgment, in our opinion, the view taken by them cannot be sustained.
In land acquisition proceedings compensation has to be fixed on the basis of a hypothetical sale at or about the time of the notification under section 4 of the Land Acquisition Act of similar land by a willing seller to a willing buyer.
there being no other factors like urgent need of money or urgent need of the land for a special purpose and so on which might depress or augment the price.
In determining this compensation the ability of a particular party or his lack of ability to develop the land and to realise its potential.
cannot be regarded as a relevant circumstances.
The High Court.
there fore, was in error in placing great reliance of the afore said circumstances in determining the value of the land for fixing the compensation.
129 We would have proceeded to determine the compensation ourselves but for the fact that the appellants have failed to furnish any material on record of this Court on which we can fix the proper compensation nor have any arguments been advanced before us in that regard.
In these circumstances, we set aside the impugned judgments and orders and remand the appeals to the Delhi High Court for determination of the proper compensation for the lands acquired in accordance with law.
The appeals are accordingly allowed.
There will be no order as to costs.
G.N. Appeals allowed.
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Notification under section 4 of the Land Acquisition Act, 1894 was issued in respect of the appellant 's lands in 1959 and the lands were acquired.
The Land Acquisition Collector awarded compensation at the rate of Rs.2,000 per bigha, as also solatium and interest.
The appellants approached the District Court which enhanced the compensation from Rs.2,000 per bigha to Rs.4,000/5,000 per bigha.
The appellants preferred appeals before the High Court.
Taking into account a comparable sale in the area few months before the Notification, the High Court enhanced the compensation to Rs.7,000 per bigha and also awarded solatium and interest.
The plea for higher compensation on the ground that some developed plots were sold by a real estate company at a higher rate was negatived since according to the High Court that company was in a better position to develop the land and that the potentiali ty of the land in its hands was greater.
These appeals, by special leave, are against the said orders of the High Court.
Allowing the appeals, HELD: 1.
In land acquisition proceedings compensation has to be fixed on the basis of a hypothetical sale at or about the time of the notification under section 4 of the Land Acquisition Act of similar land by a willing seller to a willing buyer, there being no other factors like urgent need of money or urgent need of the land for a special purpose and so on which might depress or augment the price.
In determining this compensation the ability of a particular party or his lack of ability to develop the land and to realise its potential, cannot be regarded as a relevant circumstance.
The High Court, therefore, was in error in 127 placing great reliance of the aforesaid circumstance in determining the value of the land for fixing the compensa tion.
[128F H] 2.
The appellants have failed to furnish any material on record of this Court on which this Court could fix the proper compensation nor have any arguments been advanced in that regard.
In these circumstances, the impugned judgments and orders are set aside and the appeals remanded to the High Court for determination of the proper compensation for the lands acquired in accordance with law.
and in the light of our judgment.
[129A B]
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ivil Appeal No. 4479 of 1990.
357 From the Judgment and Order dated 19.4.
1989 of the Madhya Pradesh High Court in M.P. No. 1378 of 1989.
S.K. Dholakia and D. Bhandari for the Appellant.
Kapil Sibal.
Additional Solicitor General, G.L. Sanghi, B.R. Agarwala.
Ms. Sushma Manchanda, S.K. Agnihotri, Mahen der Singh, Ms. Sushma Suri, Ujjwal A. Rana and Ashok Singh for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
Special leave is granted.
The appellant and the respondent No. 5 along with others were candidates for admission to the Post graduate Course in Obstetrics and Gynaecology in the G.R. Medical College, Gwalior.
They had duly passed the M.B.B.S. examina tion and satisfied the other essential conditions for admis sion.
The selection of the candidates was made on the basis of their relative merit and the respondent No. 5 was select ed as the last candidate in the list of the successful applicants.
The appellant was placed on the top of the waiting list and was admitted for the Diploma Course.
She challenged the admission of the respondent No. 5 on the ground that the latter was a foreign national, and was not entitled to be considered for admission in absence of prior clearance certificate by the Ministry of Health and Family Welfare, Central Government; which she could not file along with her application nor could she produce it before she was finally selected.
A writ application under Article 226 of the Constitution filed by the appellant was heard by a Full Bench of the Madhya Pradesh High Court and was dismissed by the judgment under appeal.
The learned counsel for the appellant has relied upon the Instruction dated the 6th August, 1983 issued by the Government of India, Ministry of Health and Family Welfare, to the Deans and the Principals of all Medical Colleges regarding procedure for admission of foreign students in medical institutions in the country.
By a subsequent order the Instruction which in terms had been issued for a partic ular year was kept alive.
The learned counsel for the re spondents have not disputed the binding nature of the In struction.
But there is a serious dispute about its inter pretation.
After the receipt of the applications for admission the matter was scrutinised by a committee described as the College and Hospital 358 Council and it prepared a merit 'list in which the respondent No. 5 ranked higher than the appellant.
Objections were invited latest by the 23.10.1989 and the appellant filed her application within time alleging that the respondent No. 5 was not eligible for admission at all as she had not pro duced the necessary certificate from the Ministry of Health and Family Welfare.
It appears that the respondent No. 5 had produced a letter from the Ministry of External Affairs stating that the said Ministry had no objection to the admission of the respondent.
The objection was considered by the College and Hospital Council of which besides others the Dean Dr. A.K. Govila as also the mother inlaw of the re spondent No. 5.
Dr. (Mrs.) P. Oliyai, a former Professor and Head of the Department of Obstetrics and Gynaecology of the College were members.
The objection raised by the appellant was rejected by the following decision: "(b) Dr. Roza Oliyai, since married to an Indian Doctor and obtained the permission of Ministry of External Affairs (Letter No. 1703/Dir.
(GMS)/89 dated 31.3.1989), the objec tions raised were rejected and her merit stands as status quo.
Accordingly the final list was published on 8.11.
The respondent No. 5 was, however, able to obtain the necessary certificate from the Ministry of Health and Family Welfare later and the same was filed in the College.
The respondent No. 5 was formally admitted in the first week of December, 1989.
The learned counsel for the appellant has pressed the following two points in support of the appeal: (a) The selection of the respondent No. 5 by the College and Hospital Council was vitiated on account of participation of the respondent 's mother in law as a member; and (b) Under the Government of India Instruction it was neces sary for the respondent No. 5 to have produced before the College and Hospital Council the necessary certificate from the Ministry of Health and Family Welfare before her final selection.
The crucial date was when the respondent No. 5 was finally selected and her formal admission later in December, 1989 was not material.
Also the certificate issued by the Ministry of External Affairs could not be a substi tute for the Ministry of Health and Family Welfare.
359 6.
The first argument of the learned counsel for the appellant is well founded.
Dr. (Mrs.) P. Oliyai was, without any doubt.
vitally interested in the admission of her daugh ter in law and her presence in the meeting of the Council must be held to have vitiated the selection of the respond ent No. 5 for admission.
As was observed in A.K. Kraipak and Other vs Union of India, and Others, there was a conflict between her interest and duty and taking into consideration human probabilities in the ordinary course of human conduct, there was reasonable ground for pleading that she was likely to have been biased.
In the Kraipak 's case the person concerned was the Acting Chief Conservator of Forests who did not participate in some of the deleberations of the selection Board, but the fact that he was a member of the Board and that he participated in the deleberations where the claims of his rivals were considered and in the preparation of list were held to have necessarily caused an impact on the selection, as the Board must have given weight to his opinion.
In that case the other members of the Board had filed affidavits stating that the Acting Chief Conserva tor had in no manner influenced their decision, but this was not considered sufficient to save the selection.
The princi ple has been followed in numerous cases including in Ashok Kumar Yadav and Others vs State of Haryana and Others, 17, where it was emphasised that it was not necessary to establish bias and that it was sufficient to invalidate the selection process if it could be shown that there was reasonable likelihood of bias.
It is regrettable that in spite of repeated reminders by the courts of law, the College and Hospital Council constituted by a number of highly educated persons and headed by the Dean himself did not pay any need.
It was expected of Dr. (Mrs.) Oliyai to dissociate from the Council instead of espousing the case of her daughter in law and in any event it was the bounden duty of the Dean to have seen that Dr. Oliyai did so before proceeding with the selection process.
We, accordingly hold that the selection of the respondent No. 5 for admission to the Post graduate Course was vitiated in law.
Ordinarily as a result of our above finding the matter would have been sent for reconsideration by a proper ly constituted selection committee, but having regard to the nature of the dispute between the rival doctors for the right of admission to the course of study for the present session which is fast progressing necessitating expeditious disposal of the issue, we asked the learned counsel for the parties to place the merits of their respective cases.
Accordingly, arguments were addressed, and we have consid ered the same at some length, and we proceed to decide the controversy finally here.
360 8.
Although during the hearing the learned advocates for the parties made submissions dealing with several other facets of the disputed issue, but ultimately they agreed, and in our view rightly, that the final outcome of the present litigation is dependent on the interpretation of the direction as contained in the Instruction issued by the Ministry of Health and Family Welfare, referred to above.
At one stage it was suggested on behalf of the respondent that since she has now acquired Indian nationality, she cannot be thrown out of the College.
There is no merit in this argu ment, as admittedly the respondent was not a citizen of this country when she was actually admitted in the College in the first week of December, 1989.
Mr. G.L. Sanghi also relied upon the letter dated 31.8.
1989 issued by the Ministry of External Affairs in favour of the respondent which was relied upon by the College and Hospital Council for reject ing the objection of the appellant.
This again cannot be of any help.
The role of the Ministry of External Affairs is distinctly different from that of the Ministry of Health and Family Welfare, and a certificate of no objection by one Department cannot be a substitute for the clearance by the other.
Scrutiny by the Ministry of External Affairs is made with a view to screen the person concerned to find out whether he is desirable person at all to enjoy the hospital ity of the country in the background of various relevant factors in this regard.
So far the Ministry of Health and Family Welfare is concerned, it has to take into account the question whether a seat for the medical course either upto the Degree standard or the Post graduate stage can be spared for a foreign national.
The State has to spend a large sum of money in running institutions of higher technical educa tion and the seats are limited.
In such a situation a seat can be allotted to a foreign national only at the cost of a citizen of this country.
The College and Hospital Council was, therefore, not right in deciding to admit the respond ent No. 5 on the strength of no objection certificate by the Ministry of External Affairs.
Now remains the question as to meaning of the afore said Instruction which contains two provisions as mentioned in clauses (a) and (b).
Undisputedly clause (a) is not attracted in the present case as the seat in question has not been made available by the Ministry of Health and Family Welfare and consequently there is no question of a foreign student to be sponsored by the said Ministry.
The second part of the Instruction as contained in clause (b) reads as follows: "(b) No foreign student, who is seeking admission directly for such course, shall be admitted unless Ministry of Health and Family Welfare gives its clearance.
361 According to the appellant the stage at which the condition mentioned above has to be satisfied is when the final selec tion for.admission is made.
Mr. Sanghi contends that the direction has to be construed in the light of the expression "admitted" used therein, which indicates that if the neces sary certificate is produced before the actual admission takes place, the same cannot be held to be illegal.
The learned counsel pointed out that the purpose of the Instruc tion is to ensure that no foreign national is allowed to occupy a seat ordinarily meant for the citizen of the coun try without the permission of the Ministry of Health and Family Welfare, Government of India, and once that hurdle is cleared, the purpose is fully satisfied.
After the produc tion of the necessary clearance, there does not remain any reason for rejecting the claim of a more meritorious candi date.
He emphasised the fact that the respondent No. 5 having secured higher percentage of marks than the appellant in the M.B.B.S. examination was adjudged a better candidate on merits.
We agree.
Accordingly, we find that the admission of the respondent No. 5 cannot be ignored or cancelled on the ground of any illegality.
The appeal is, therefore, dismissed but, in the circumstances, without costs.
R.S.S. Appeal dismissed.
|
The appellant and respondent No. 5 along with others were candidates for admission to the post graduate course in Obstetrics and Gynecology in the G.M. Medical College, Gwalior.
Respondent No. 5 was selected as the last candidate in the list of the successful applicants.
The appellant was placed on the top of the waiting list.
The appellant challenged the admission Of respondent No. 5 on the ground that the latter was a foreign national and was not entitled to be considered for admission in absence of prior clearance certificate by the Ministry of Health and Family Welfare, Central Government, which she could not file along with her application nor could she produce it before she was finally selected.
The respondent had however produced a no objection letter from the Ministry of External Affairs.
Later, she was also able to obtain the necessary certificate from the Ministry of Health and Family welfare.
The writ application under Article 226 of the Constitu tion filed by the appellant was dismissed by a Full Bench of the Madhya Pradesh High Court.
Before this Court it was contended on behalf of the appellant that (i) the selection of respondent No. 5 was vitiated on account of participation of the respondent 's mother in law (a former Professor and Head of Department) as a member of the College and Hospital Council; and (ii) under the Government of India Instructions it was necessary for respondent No. 5 to have produced before the College and Hospital 356 Council the necessary certificate from the Ministry of Health and Family Welfare before her final selection, and the certificate issued by the Ministry of External Affairs could not be a substitute.
Dismissing the appeal on merits, this Court, HELD: (1) The mother in law of respondent No. 5 was, without any doubt, vitally interested in the admission of her daughter in law and her presence in the meeting of the Council must be held to have vitiated the selection of respondent No. 5 for admission.
A.K. Kraipak vs Union of India, ; Ashok Kumar Yadav vs State of Haryana, ; , referred to.
(2) It is regrettable that in spite of repeated remind ers by the Courts of law, the College and Hospital Council constituted by a number of highly educated persons and headed by the Dean himself did not pay any heed to the principles of natural justice.
(3) The State has to spend a large sum of money in running institutions of higher technical education and the seats are limited.
In such a situation a seat can be allot ted to a foreign national only at the cost of a citizen of this Country.
The College and Hospital Council was, there fore, not right in deciding to admit the respondent No. 5 on the strength of no objection certificate by the Ministry of External Affairs.
(4) A certificate of no objection by one Department cannot be a substitute for the clearance by the other.
(5) The purpose of the Instructions is to ensure that no foreign national is allowed to occupy a seat ordinarily meant for the citizen of the country without the permission of the Ministry of Health and Family Welfare, Government of India, and once that hurdle is cleared, the purpose is fully satisfied.
After the production of the necessary clearance, there does not remain any reason for rejecting the claim of respondent No. 5 who was a more meritorious candidate, who had secured higher percentage of marks than the appellant in the M.B.B.S. examination.
|
ivil Appeal No. 2228 of 1982.
From the Judgment and Order dated the 25.7.1980 of the Madras High Court in C.R.P. No. 1150 of 1979.
Anant Palli and E.C. Agarwala for the Appellant.
396 V. Balachandran and K. Vijay Kumar for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
The appellant/tenant is in occupation of a double storeyed building bearing No. 100, Aiya Mudali Street, Chintadripet, Mount Road, Madras on a monthly rent of Rs. 170.
The respondent landlady filed an application under Sec. 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 18 of 1960 as amended by Act, 23 of 1973, for short 'the Act '.
The Rent Controller fixed the fair rent at Rs. 1,000 per month.
On appeal, the Court of Small Causes, Madras and on further Revision under Sec. 25, the Madras High Court confirmed the order.
This appeal by special leave has been at the behest 01 ' the tenant.
The admitted facts are that 1/3rd portion of the building is being used for residential and the rest for non residential purpose namely, for running a school.
It is of 50 years ' old.
Section 4 of the Act provides the procedure for fixation of the fair rent, which reads thus: "Fixation of Fair Rent (1) The Controller shall on applica tion made by the tenant or the landlord of a building and after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in the following sub sections.
(2) The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building.
(3) The fair rent for any non residential building shall be twelve per cent gross return per annum on the total cost of such building.
(4) The total cost referred to in sub section (2) and sub section (3) shall consist of the market value of the site in which the building is constructed, the cost of construction of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent; Provided further that the cost of provision of amenities specified in Schedule I shall not exceed 397 (i) in the case of any residential building, fifteen per cent; and (ii) in the case of non residential building, twentyfive per cent, of the cost of site in which the building is con structed and the cost of construction of the building as determined under this Section." "5.(a) The cost of construction of the building including cost of internal water supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned.
The Controller may, in appropriate cases, allow or disallow an amount not exceeding thirty per cent of construction having regard to the nature of the building.
(b) The Controller shall deduct from the cost of construc tion determined in the manner specified in clause (a) depre ciation, calculated at the rates specified in Schedule II.
" A bird 's eye view of Sec. 4 indicates that the Control ler shall hold an enquiry before fixing the fair rent pre ceded by an application made in that behalf either by the tenant or the landlord, in accordance with the principles set out in sub sections 2 to 5 of Sec. 4.
In case of a residential building the fair rent shall be 9 per cent and for nonresidential building 12 per cent gross return per annum on the total cost of the building in question.
The total cost shall consist of (a) market value of the site on which the building is constructed; (b) the cost of the construction of the building; and (c) the cost of provision of any one or more of the amenities specified in Schedule I which shall not exceed: (1) in the case of residential building 15 per cent; and (2) in case of any non residential building 25 per cent of the cost of the site in which the building was constructed as determined under Sec. 4 of the Act.
The cost of the construction of the building would also include internal water supply, sanitary and electrical installations.
The estimation of its ratio thereof shall be as is done by the Public Works Department of the Government for the area concerned.
In addition to the above, having regard to the nature of the building, the Controller may, in appropriate cases, allow or disallow an amount not exceeding 30% of construction.
The Controller shall also deduct from the cost of construction determined in the manner specified in clause (a) of sub 398 section 5 of Sec.
(4) the depreciation calculated at the rates specified in Schedule II.
The determination of the fair rent of the building shall be fixed as on the date of the application filed for fixation of the fair rent.
Section 5 of the Act provides the right for refixation of the fair rent under the Act for the reasons adumbrated therein with which we are presently not concerned.
An Engi neer was appointed as a Commissioner to evaluate the total cost of the building, who adopted the rates of the Public Works Department and submitted his report which is Exhibit P 2.
He was also examined as a witness.
The rates of the construction for terraced building were (a) for the ground floor at Rs.345 per sq.
metre and (b) for first floor at Rs.320 per sq.
metre.
As regards the tiled portion, the cost of construction is Rs.300 per sq.
metre.
The parties also adduced oral evidence.
The Rent Controller after considera tion thereof fixed the rates as afore stated and he worked out the fair rent on that basis.
The entire ground floor consists of 2927.25 sq.
the area of two shops wherein consists of 238.00 sq.
The built up area of the first floor is 3330.75 sq.
ft., the tiled portion consists of 237 sq.
The cost of construc tion was estimated at Rs. 1,99,300.
The depreciation @ 1 per cent, as is first class building, was given.
He added the market value of the open site at Rs.20,000 and also annuity on the vacant portion @ 1 per cent was added.
Accordingly the Rent Controller worked out the cost at Rs. 1,51,820.
The fair rent as non residential premises, at 12 per cent gross return, was fixed at Rs. 15 18 per month.
Since the respond ent, landlady confined to the enhancement of the fair rent at Rs. 1,000, it was accordingly fixed.
On appeal it was affirmed.
In the revision, the High Court while agreeing with the valuation adopted, determined fair rent on the basis that 1/3rd as being used for residential purpose and 2/3rd for non residential purpose.
On that basis the learned Judge worked out at the rate of 9 per cent and 12% as adum brated in Sec.
4(2) and (3) and fixed the fair rent.
While upholding the depreciation at 1 per cent it fixed the fair rent Rs.1391.67 per month, but affirmed the fair rent at Rs.1,O00 per month as was confined to, by the landlady.
From this material matrix the question at issue is whether the fixation of the fair rent by the Rent Controller, ultimately affirmed by the High Court, is illegal.
The contention of the learned counsel for the appellant/tenant that the cost of the building and its market value are illegal, is falla cious and untenable.
Section 4 not only provides the proce dure but also the principles and method on the basis of which the fair rent is to be determined.
The fixation of fair rent, therefore, is in consonance with Section 4.
We 399 accordingly affirm its legality.
Realising this stark reali ty the counsel laid emphasis that the valuation of the cost of construction should be as on the date of the construction of the building and placed strong reliance on K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors.
, Therein this Court held that the expres sion 'cost of construction ' means the cost of construction of the building as originally erected with such additions as may be required to be made for subsequent improvements.
Rule 12 which prescribes the rate at which the cost of construc tion is to be computed plainly goes beyond the terms of the section.
Accordingly this Court allowed the appeal and determined the fair rent as on the basis of the cost of construction.
On that premise the learned counsel for the appellant contended that calculation of the cost of con struction to the residential as well as non residential building should be with reference to the date of applica tion.
We find no substance in the contention.
It is already seen that sub section 4 of Sec. 4 of the Act, clearly indi cates that the total cost of construction referred to in sub section 2 and sub section 3 shall consist of the market value as on the date of application for fixation of the fair rent.
It is obvious that at the time when this court ren dered the decision in Nambiar 's case there was no provision in Sec. 4 as to the date on which the cost of construction was to be determined, and Rule 12 provided in the manner in which the fixation of the fair rent has to be made.
But subsequently it was amended by Amending Act 23 of 1973 incorporating in sub section (4) of Sec. 4 of the Act as the date of making an application.
This is also apparent when we see Sec. 5 of the Act.
Sub section (3) of Sec. 5 clearly mentions that: "Where the fair rent of any building has been fixed before the date of the commencement of the Tamil Nadu Building (Lease and Rent Control) Amendment Act, 1973 the Landlord or the tenant may apply to the Controller to refix the fair rent in accordance with the provisions of Section 4 and on such application, the Controller may refix the fair rent. ' ' Thus we are clearly of the view that the ratio in Nambi ar 's case no longer would apply.
The subsequent amendment brought on the statute in 1973, amplified the date of appli cation as the staring point to fix market value.
On the basis of the valuation of the building estimated by the commissioner as per P.W.D. rates prevailing in the area and evidence produced by the parties, the Rent controller as modified by the High Court rightly determined the fair rent.
400 It is next contended that the method adopted by the Controller and ultimately upheld by the High Court in fixing the fair rent is not correct.
It is contended that the value of the building has been changing from time to time as is reflected from the evidence on record and the courts below committed the gravest error in not considering the evidence in proper perspective.
It is already seen that Sec.
4 pre scribed the principles on the basis of which the fair rent is to be fixed.
In the light of those principles the evi dence adduced by the parties was considered by the Control ler, the appellate court and the High Court, found that the fixation of the fair rent is much in excess to the claim made by the landlady.
Since the landlady confined the claim for Rs. 1,000 per month, the courts below have fixed the fair rent at Rs. 1,000.
Therefore, on the findings of facts based on consideration of the evidence, this Court cannot interfere and come to its conclusion.
Thereby the finding is not vitiated nor illegal warranting interference.
The appeal is accordingly dismissed with costs, fixed at Rs .5,000.
G.N. Appeal dismissed.
|
The appellant tenant was in occupation of a double storeyed building on a monthly rent of Rs. 170.
The respond ent landlady filed an application under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent.
The Rent Controller took note of the fact that 1/3rd portion of the building was being used for residential purpose and the rest of the building for non residential purpose, namely, for running a school.
He also appointed an Engineer as Commissioner to evaluate the total cost of the building.
The Commissioner adopted the rates prevalent in the Public Works Department and submitted his report.
On the basis of the Commissioner 's report, the Rent Controller worked out the cost at Rs.1,51,820.
Accordingly, the fair rent for the said premises was arrived at Rs.1518 per month at 12 per cent gross return.
Since the respondent landlady had confined her claim for the enhance ment of fair rent to Rs.1,O00 only, the Rent Controller fixed the fair rent at Rs.1,O00.
On appeal, the order of Rent Controller was affirmed by the Court of Small Causes.
On a revision being preferred, the High Court agreed with the valuation adopted and determined the fair rent on the basis that 1/3rd of the premises was used for residen tial purpose and 2/3rd for nonresidential purpose, and, as per sub sections (2) and (3) of Section 4 of the Act, worked out the rent at 9 per cent and 12 per cent respectively on the cost of construction arrived at.
The High Court fixed the fair rent at Rs. 1391.67 per month.
It confirmed the fair rent of Rs. 1,000 as was fixed by the Rent Controller and as confined to by the Respondent landlady.
This appeal, by special leave, is against the High Court 's order.
It 395 was contended that the cost of the building and its market value as worked out was illegal, fallacious and untenable.
Dismissing the appeal, HELD: 1.
Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prescribes the principles on the basis of which the fair rent is to be fixed.
In the light of those principles, the evidence adduced by the parties was considered by the Rent Controller, the appellate court and the High Court and they found that the fixation of the fair rent was much in excess of the claim made by the Respondent landlady.
Since she confined her claim to Rs.1,O00 per month, the courts below have fixed the fair rent at Rs.1,O00.
Therefore, on the findings of facts based on consideration of the evidence, this court cannot interfere and come to its own conclusion.
The finding is neither vitiated nor illegal warranting interference.
[210B C] 2.1 Sub section 4 of Section 4 of the Act, clearly indicates that the total cost of construction referred to in sub sections (2) and (3) shall consist of the market value as on the date of application for fixation of the fair rent.
[209C] 2.2 It is obvious that at the time when this Court rendered its decision in Nambiar 's case there was no provi sion in Section 4 as to the date on which the cost of con struction was to be determined, and Rule 12 provided the manner in which the fixation of the fair rent has to be made.
The subsequent amendment brought on the statute in 1973, by the Amending Act 23 of 1973, has incorporated sub section (4) in Section 4 which amplified the date of appli cation as the starting point to fix market value.
As such the fair rent has been rightly determined by the courts below.
[209D E; HI K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors., , referred to.
|
Criminal Appeal No. 453 of 1986.
From the Judgment and Order dated 2.7.1986 of the Rajas than High Court in D .B.
Criminal Appeal No. 289 of 1983.
U .R. Lalit and S.K. Jain for the Appellant.
N.H. Hingorani, Ms. Hingorani, Ravi P. Wadhwani and B.D. Sharma for the Respondent.
Aruneshwar Gupta for the State.
The Judgment of the Court was delivered by R.M. SAHAI, J.
In this appeal, by grant of special leave under Article 136 of Constitution of India, the short ques tion that arises for consideration is if the High Court committed any error of law in exercise of its powers under section 378 read with section 3861(a) of the Criminal Proce dure Code in allowing the appeal against acquittal and convicting the appellant under section 302 of the Indian Penal Code and sentencing him to undergo life imprisonment.
Law is well settled.
While caution is the watchword, in appeal against acquittal as the Trial Judge has occasion to watch demeanour of witnesses and interference should not be made merely because a different conclusion could have been arrived, the provision does not 404 inhibit any restriction or limitation.
Prudence demands restraint on mere probability or possibility but in perver sity or misreading interference is imperative otherwise existence of power shall be rendered meaningless.
Time and place of unnatural death, of Asha Rani, by burning, at her in laws ' small house with at least six inmates, could not and was no disputed.
Both the Trial Judge and the High Court held that the prosecution succeeded in proving this.
It was further found by them that she did not die of accident nor she committed suicide.
Burning by kero sene stove or gas or even firewood may not be unusual due to synthetic wear which has become very common.
But when post mortem report indicates, as was in this case, that smell of kerosene was coming from body and even burnt hairs smelt kerosene then it not only belied the statement of her sis ter in law (Nand) that she was burnt while making tea but it ruled out remotest possibility of accident.
That is why the findings were not, seriously, challenged by the appellant.
Asha Rani was thus murdered.
Why? Sadly for Rs.5,000 or an auto rickshaw which her father, of seven daughters, could not afford even though he suffered the ignominy of her being beaten in his presence by her in laws at his own house.
Bride burning is a shame of our society.
Poor never resort to it.
Rich do not need it.
Obviously because it is basical ly an economic problem of a class which suffers both from ego and complex.
Unfortunately, the high price rise and ever increasing cost of living coupled with enormous growth of consumer goods effacing difference between luxury and essen tial goods appear to be luring even the new generation of youth, of the best service.
to be as much part of the dowry menace as their parents and the resultant evils flowing out of it.
How to curb and control this evil? Dowry killing is a crime of its own kind where elimination of daughter in law becomes immediate necessity if she or her parents are no more able to satiate the greed and avarice of her husband and their family members, to make the boy available, once again in the marriage market.
Eliminate it and much may stand resolved automatically.
Social reformist and legal jurists may evolve a machinery for debarring such a boy from remarriage irrespective of the member of family who commit ted the crime and in violation penalise the whole family including those who participate in it.
That is social os tracisation is needed to curtail increasing malady of bride burning.
Motive for a murder may or may not be.
But in dowry deaths it is inherent.
Both the courts have concurrently held on evidence of 405 parents of deceased, that her in laws were regularly and continuously pestering her for bringing cash or an auto rickshaw and on their failure to satisfy their demand she was subjected to torture and maltreatment.
But the Judge attempted to dilute it by holding that relations between the deceased and her in laws were strained.
And even if there was any motive it could not be of appellant.
There is thus little difference between the finding of the two courts on motive except for immediate cause.
But what was overlooked was that in dowry deaths motive is already there and what is required of courts to examine is as to who translated it into action as motive for it is not individual, but of family.
Motive of dowry, the first link was found proved.
Next and most important link was the evidence of doctor or the details of what happened in the hospital.
The victim was undisputedly brought in the ward at 10.00 a.m.
She was examined by Dr. Saxena PW 6, a student of first year of M.S. course.
He prepared the bed head ticket.
Since it was a serious case he sent for Dr. Temani and Dr. Patricia the medical jurist.
He stated that Dr. Temani examined her first and Dr. Patricia came later.
He stated that Asha Rani was conscious from 10.00.
a.m. to 11.00 a.m. He further admitted unequivocally that when she was admitted she could give clear cut answer of whatever was asked from her.
He thus stated three vital things, one preparation of bed head ticket and entries made on it, second about the sequence in which the doctors examined the patient and third that the victim was conscious who could understand and give answers of whatever questions were asked from her.
In the bed head ticket which was deposed to be written by him it was clearly mentioned that Asha Rani complained of misbehaviour of her brother in law.
He made an unsuccessful attempt to wash off its effect by stating that on his inquiry as to who burnt her she did not disclose name of anyone.
Nothing turns on this part of the statement as he could not deny the entry in the bed head ticket.
No further need be said firstly because he was a student only and secondly circumstances do not lie.
However if the entry in bed head ticket and the statement on three vital aspects are not contradicted by the other two doctors either by taking their depositions individually or with Dr. Saxena then minor contradictions here and there not relevant or material could not shake the prosecution case.
Dr. Temani examined the deceased and gave detailed description in the injury report.
It is also mentioned that she was burnt by her brother in law (Devar).
He stated that on his inquiry Asha Rani told him that she was burnt by her brother in law (Devar) Ashok.
He further stated that the statement was made in presence of Dr. Patricia 406 who on his asking made endorsement on the injury report.
In cross examination he admitted that Dr. Patricia came five minutes after him.
He stated that the deceased disclosed name of Ashok in her presence.
He further stated that she was conscious.
Dr Patricia deposed that Asha Rani stated in her presence stated on asking of Dr. Temani that she was burnt by Ashok Kumar.
She admitted that the endorsement on the injury report that Asha Rani was burnt by her Devar was made by her on request of Dr. Temani.
Thus on all material particulars the statements were consistent.
The Judge could not point out any contradiction on these important aspects but discarded the statement of Dr. Temani and Dr. Patricia because there were contradictions as to how many persons were present during examination by these doctors, and if even earlier such dying declaration was recorded in injury report and got endorsed by senior doctors and why the doc tors did not disclose it to anyone and why the report was written by compounder on dictation of Dr. Temani and why was not he examined.
It was held, 'Dr. Temani has said about the statement by Asha Rani prior to examination by him and has deposed about the presence of Dr. Patricia.
Dr. Patricia is stated to have recorded the statement of Asha Rani after examining.
Dr. Patricia and Dr. Rakesh, whom Dr. Patricia has stated to be with her as a House Surgeon, has falsified the statements of both the witness and it has been clearly said that before him Asha Rani said anything to Dr. Temani nor Dr. Patricia nor Dr. Patricia or Dr. Temani examined Asha Rani before him.
In this way there are vital contradic tions between the statements of Dr. Patricia and Dr. Temani and on account of refutal by the statement of Dr. Rakesh in my opinion, prima facie, it can be said that no reliance can be placed on the statements of Dr. Patricia and Dr. Temani. ' This approach of the Judge apart from being faulty was contrary to the rule and appreciation of evidence.
The High Court after going into detail and examining the evidence of each of these witnesses has found that there was no material contradiction either on the question of presence of the two doctors of the sequence in which she was examined by them or in respect of recording of bed head ticket and the injury report.
Dr. Patricia in her statement stated that in her presence when Dr. Temani asked Asha Rani as to who burnt her she told that her brother in law (Devar) Ashok had burnt her.
Dr. Temani stated the same.
But the two were disbe lieved because Dr. Temani in her cross examination stated that when he got the injury report recorded by compounder Dhirender Jain Dr. Patricia went away and he got the en dorsement of Dr. Patricia on the desk outside the chamber.
The High Court pointed out that there was no material con tradiction on the two aspects namely the disclosure of name by Asha Rani in her presence on asking of Dr. 407 Temani and the endorsement in the injury report.
Even the sequence of examination by Dr. Saxena then by Dr. Temani and thereafter reaching of Dr. Patricia and then disclosure of name of the appellant by Asha Rani have all been deposed without any contradiction.
The High Court was further of the opinion that merely because the injury report reached on 13th August 1982 at the police station it could not reflect adversely on the testimony of either of the doctors.
It was also held that the entry of misbehaviour of Ashok Kumar in the bed head ticket by Dr. Saxena and the name of Ashok in the injury report were consistent as Ashok was admittedly present in the hospital when Dr. Saxena had examined the victim.
May be that he was present even when Asha Rani was examined by Dr. Temani but that by itself could not render the entry of his name in the injury report suspicious or motivated.
The High Court further was right in concluding that the statement made by her was correct and honest as apart from the statement of a dying person which is normally trustworthy there was no reason for her to disclose the name of Ashok to Dr. Temani or of brother in law to Dr. Saxena when her relations were strained with her in laws and the husband.
Nor there could be any reason or motive for the doctors to implicate him.
Appreciation apart the order of the Judge is vitiated as apart from deciding the caste on irrelevant considerations, criticising the doctors without any basis, drawing an infer ence against Dr. Patricia only because she was a lady the most serious error of which he was guilty and which rendered the order infirm which could be set aside by the High Court was that he mis read the evidence and indulged in conjectur al inferences and surmises.
To quote his own words: "From the statement of Dr. Rakesh it is also clear that when Asha Rani was brought to the Ward, she was unconcious.
In this situation it seems very strange and unnatural that prior to the alleged statement Asha Rani was senseless and thereafter became unconscious.
Then how did she have re gained consciousness in between only to make a statement, particularly in the situation when every part of the body was cent per cent badly burnt and in this severe pain it cannot be expected that she could have been able to make a statement to the doctor, seeing her trouble, giving her some medicine, would not have tried to pacify her.
From exhibit PS, the bed head ticket, itself appears that simultaneously with the admission she was given injections of morphia etc.
so that she may be fully quiet and her speech 408 would not be possible and she might not have felt terrible pain.
This also appears to be surprising that if she was really able to speak, why did she only say that her brother in law Ashok burnt her and why also she not say as to why she was burnt and how did he burn her.
If for sometime she would not have told this, even then there should have been an anxiety to Dr. Patricia and Dr. Temani and they should have asked her as to how and why she was burnt but nothing like this happened and possibly in a corner of exhibit P 4, where endorsement A to B has been made, over there so much could be written.
Therefore it appears that the endorsement A to B has been got written later on when so needed.
" Needless to say that each and every word of this is based neither on appreciation of testimony of the witnesses nor on consideration of material on record but on imagination and assumption.
For instance the finding that from statement of Dr. Saxena it was clear that when Asha Rani was brought to ward she was unconscious is against testimony of Dr. Saxena and is not supported by any material whatsoever.
The other conclusions flowing out of it were equally fallacious.
From the bed head ticket it is clear that morphine was injected after eleven yet the judge observed to support his unsup portable finding that it was administered simultaneously on entry in the ward.
The High Court thus did not exceed its powers in setting aside the order of acquittal.
Investigation was criticised and it was submitted that no one from locality having been produced nor the nurse or compounder, who took down injury report on dictation of Dr. Temani, having been examined nor any incriminating material having been found at site it created a doubt if everything proceed fairly and in accordance with law.
Argument as a matter of law that defective investigation should go to discredit prosecution cannot be disputed but on facts it is not available.
The High Court was aware of it and, in our opinion rightly, did not discard prosecution evidence due to remissness of investigating officer on ratio laid down by this Court in Chander Kant vs State of Maharashtra, AIR 1974 SC 220.
We are further of the opinion that the finding of the High Court that the investigating officer due to remiss ness failed to preserve the site is correct but it does not in any manner weaken the prosecution case.
Nor any adverse inference could be drawn due to non production of nurse or compounder when the investigating report was written on dictation of Dr. Temani.
409 Delay in sending injury report to the Police Station on 13th instead of 9th despite request by Police Inspector was attempted to be highlighted as casting suspicion on its genuineness.
The High Court has gone into this aspect in detail and has found that in fact the negligence, if any, was on the part of the investigating officer as despite having received the information he neither took care to preserve the site nor did he record the statement of any of the doctors before 14th August.
Entries in the injury report which have been construed as dying declaration by the two courts below were severely criticised and it was submitted that although dying declara tion was admissible in evidence and conviction could be recorded on it without corroboration yet the circumstances in which it was recorded created doubt if it was genuine.
The High Court for very good reasons rejected similar argu ments advanced before it.
We also do not find any substance in it.
When the deceased was examined by Dr. Temani he having found her condition to be serious immediately sent message to the police station and also requested for arrang ing for recording of the dying declaration.
This is corrobo rated by the entry in the record of the police station.
But the inspector of police came after 11.00 when the injection of morphine had already been administered to lessen the agony of the patient who thereafter became unconscious.
She was, however, as indicated earlier conscious between 10.00 to 11.00 during which period the bed head ticket was written by Dr. Saxena and the entries were made on the injury re port.
The judge did not doubt the recording on the bed head ticket that the deceased complained of misbehaviour by her brother in law.
Even the learned counsel could not point out any infirmity or reason to discard it except that by mere word, brother in law it was not established that it was appellant, i.e., the effort was to make out a case of doubt.
That could have been possible if that entry could have stood alone.
But it stands not only corroborated but clarified by identifying the appellant by entry in injury report as the brother in law who was responsible for this crime.
We per sued the injury report and we could not find any reason to doubt its authenticity.
Before parting with this case we consider it necessary to record that the judge was uncharitable in discarding the testimony of Dr. Patricia and doubting her truthfulness principally because she was a woman forgetting that she was a doctor of 14 years standing and there was no reason for her to make the endorsement on the injury report other than stated that it was on request of Dr. Temani.
We do not wish to comment further but we express our deep dissatisfaction on the 410 manner in which the judge criticised the two doctors.
For the reasons stated above we are of the opinion that the High Court did not commit any error in allowing the appeal and recording the conviction under Section 378 read with Section 386( 1 )(a) of the Indian Penal Code.
In the result this appeal fails and is dismissed.
The appellant is already in jail.
He shall serve out his sen tence.
T.N.A. Appeal dismissed.
|
The appellant was accused of burning his sister in law to death.
Accordingly, he was prosecuted for the offence of murder.
The Trial Judge acquitted him by holding (i) that there was no motive for him to cause the murder; (ii) that there were vital contradictions between the statement of the doctors who examined the deceased and that the conviction could not be based on the testimony of doctor before whom the dying declaration was made by the deceased; and (iii) that the investigation was defective because (a) no one from the locality was produced; (b) the nurse and the compounder who took down the injury report on the dictation of the doctor was not examined; and (c) no incriminating material was found at the site.
The State preferred an appeal before the High Court against the acquittal order, which allowed the appeal, set aside the order of acquittal passed by the Trial Court, and convicted the accused under Section 302 of the Indian Penal Code and sentenced him to life imprisonment.
Hence this appeal by the accused.
Dismissing the appeal, this Court, HELD: 1.
While caution is the watchword, in appeal against 402 acquittal as the Trial Judge has occasion to watch the demeanour of witnesses, and interference should not be made merely because a different conclusion could have been ar rived, the provisions contained in Sections 378 and 386 of the Code of Criminal Procedure, 1973 do not Inhibit any restriction or limitation.
Prudence demands restraint on mere probability or possibility but in perversity or mis reading interference is imperative otherwise existence of power shall be rendered meaningless.
[213H; 214A] 2.
In the instant case, the approach of the Trial Judge apart from being faulty was contrary to the rule and appre ciation of evidence.
Appreciation apart the order of the Trial Judge is vitiated as apart from deciding the case on irrelevant considerations, criticising the doctors without any basis, drawing an inference against the doctor only because she was a lady the most serious error of which he was guilty and which rendered the order infirm which was rightly set aside by the High Court was that he mis read the evidence and indulged in conjectural inference and surmises.
Therefore, the High Court did not exceed its powers in setting aside the order of acquittal.
It did not commit any error in allowing the appeal and recording the conviction under Section 378 read with Section 386(a) of the Code of Criminal Procedure.
[216F; 217E; 220A] 3.
Motive for a murder may or may not be.
But in dowry deaths it is inherent.
In dowry deaths what is required of courts to examine is as to who translated it into action as motive for it is not individual, but of family.
[214H; 215A] 4.
Argument as a matter of law that defective investiga tion should go to discredit prosecution cannot be disputed but on facts of the instant case it is not available.
The High Court was right in not discarding the prosecution evidence due to remissness of investigating officers.
The finding of the High Court that the investigating officer due to remissness failed to preserve the site is correct but it does not in any manner weaken the prosecution case.
Nor any adverse inference could be drawn due to non production of nurse or compounder when the investigating report was writ ten on dictation of the doctor.
[218F H] Chander Kant vs State of Maharashtra, A.I.R. 1974 SC 220, referred to.
Bride burning is a shame of our society.
Poor never resort to it Rich do not need it.
Obviously because it is basically an economic problem of a class which suffers both from ego and complex.
Unfortu 403 nately, the high price rise and ever increasing cost of living coupled with enormous growth of consumer goods effac ing difference between luxury and essential goods appear to be luring even the new generation of youth, of the best service, to be as much part of the dowry menace as their parents and the resultant evils flowing out of it.
How to curb and control this evil? Dowry killing is a crime of its own kind where elimination of daughter in law becomes imme diate necessity if she or her parents are no more able to satiate the greed and avarice of her husband and their family members, to make the boy available, once again in the marriage market.
Eliminate it and much may stand resolved automatically.
Social reformist and legal jurists may evolve a machinery for debarring such a boy from remarriage irre spective of the member of family who committed the crime and in violation penalise the whole family including those who participate in it.
That is social ostracisation is needed to curtail increasing malady of bride burning.
[214E G]
|
Civil Appeal No. 105 of 1990.
From the Judgment and Order dated 10.3.
1988 of the Rajasthan High Court in S.B. Civil Second Appeal No. 327 of 1976.
C.M. Lodha, H.M. Singh and R.S. Yadav for the Appellant.
S.K. Ghose, M. Qamaruddin and Mrs. M. Qamaruddin for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Is Estoppel a good defence to 'archaic ', Atam Prakash vs State of Haryana, ; , right of Pre emption which is a 'weak right ', Bishen Singh vs Khazan Singh; , , and can be defeated by any 'legitimate ' method Radha Kishan vs Sridhar, ; Barring High Court of Rajasthan and erstwhile, Mewar State Jethmal vs Sajanumal, [1947] Mewar Law Reports, 36, most of the other high courts, namely, Allahabad, Naunihal Singh vs Ram Ratan, , Oudh, Ram Rathi vs Mr. Dhiraji, [1947] Oudh 81, Ajmer 352 Gopinath vs R.S. Nand Kishore, AIR 1952 Ajmer 26, Bhopal, Abdul Karim vs Babu Lal, AIR 1953 Bhopal, and Lahore Kanshi Ram Sharma & Anr.
vs Lahori Ram & Anr., have answered the issue in the affirmative.
The Privy Coun cil, [1929] PC AIR 259, too, applied this principle to non suit a pre emptor who knew that the property was in the market for long but offered to purchase, only.
one out of many blocs.
It had: "Assuming that the prior completed purchase by the appellant would under other circumstances, have given him the right of pre emption in respect of the blocks in suit, he must be taken by his conduct to have waived this right, and that it would be inequitable to allow him now to re assert it." Even in Muslim Law which is the genesis of this right, as it was unknown to Hindu Law and was brought in wake of Mohamme dan Rule, it is settled that the right of pre emption is lost by estoppel and acquiescence.
Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith.
It operates as a check on spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished.
It is invoked and applied to aid the law in administration of justice.
But for it great many injustice may have been perpetrated.
Present case is a glaring example of it.
True no notice was given by the seller but the trial court and appellate court concurred that the pre emptor not only came to know of the sale immediately but he assisted the purchaser appellant in raising construction which went on for five months.
Having thus persuaded, rather misled, the purchaser by his own conduct that he acquiesced in his ownership he somersaulted to grab the property with con structions by staking his own claim and attempting to unset tle the legal effect of his own conduct by taking recourse to law.
To curb and control such unwarranted conduct the courts have extended the broad and paramount considerations of equity, to transactions and assurances, express or im plied to avoid injustice.
Legal approach of the High Court, thus, that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre emption Act (In brevity 'the Act ') was given by the seller and pre emptor should have had occasion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a 353 weapon of defence.
In the Privy Council decision, referred earlier, the court was concerned with Oudh Laws Act (18 of 1876) which too had an identical provision for giving notice by seller.
No notice was given but since pre emptor knew that the property was for sale and he had even obtained details of lots he was precluded from basing his claim on pre emption.
Exception, to this universal rule or its non availabili ty, is not due to absence of any provision in the Act ex cluding its operation but welfare of society or social and general well being.
Protection was, consequently, sought not on the rationale adopted by the High Court that in absence of notice under Section 8 of the Act estoppel could not arise but under cover of public policy.
Reliance was placed on Shalimar Tar Products vs H.C. Sharma, ; , a decision on waiver, and Equitable Life Assurance Society of the United States vs Reed, 14 Appeal Cases 587, which laid down that there could be no estoppel against statute.
Equi ty, usually, follows law.
Therefore that which is statutori ly illegal and void cannot be enforced by resorting to the rule of estoppel.
Such extension of rule may be against public policy.
What then is the nature of right conferred by Section 9 of the Act? In Bishen Singh vs Khazan Singh, ; this Court while approving the classic judgment of Mahmood, J. in Gobind Dayal vs Inayatullah, ILR 7 All 775 (FB). 'that the right of pre emption was simply a right of substitution ' observed that, 'courts have not looked upon this right with great favour, presumably, for the reason that it operated as a clog on the right of the owner to alienate his property.
In Radha Kishan vs Shridhar, AIR 1960 SC 1369 this Court again while repelling the claim that the vendor and vendee by accepting price and transferring pos session without registration of sale deed adopted subterfuge to defeat the right of pre emption observed that, 'there were no equities in favour of a pre emptor, whose sole object is to disturb a valid transaction by virtue of the rights created in him by statute.
To defeat the law of pre emption by any legitimate means is not fraud on the part of either the vendor or the vendee and a person is entitled to steer clear of the law of pre emption by all lawful means '.
Such being the nature of right it is harsh to claim that its extinction by conduct would amount to statutory illegality or would be opposed to public policy.
The distinction be tween validity and illegality or the transaction being void is clear and well known.
The former can be waived by express or implied agreement or conduct.
But not the latter.
The provision in the Act requiring a vendor to serve the notice on persons having right of pre emption is condition of validity of transfer, and therefore a pre emptor could waive it.
Failure to serve notice as 354 required under the Act does not render the sale made by vendor in favour of vendee ultra vires.
The test to deter mine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved.
If the answer is latter then it may be difficult to put estoppel as a defence.
But if it is right of party alone then it is capable of being abnegated either in writing or by conduct.
The Act does not provide that in case no notice is given the transaction shall be void.
The objective is to intimate the pre emptor who may be interested in getting himself substituted.
The Act does not debar the pre emptor from giving up this right.
Rather in case of its non exercise within two months, may be for the financial reasons.
the right stands extinguished.
It does not pass on to anyone.
No social disturbance is caused.
It settles in purchaser.
Giving up such right.
expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy.
Even otherwise on facts found that the respondent knew of the sale deed.
assisted the appellant in raising the construction and after the construction was completed in the month of June he gave the notice in month of July for exer cise of the right and filed the suit in January would itself demonstrate that the conduct of the respondent was inequita ble and the courts in this country which are primarily the courts of equity, justice and good conscience cannot permit the respondent to defeat the right of appellant and invoke a right which has been called a weak and inequitable right.
In the result this appeal succeeds and is allowed.
The order of the High Court is set aside and that of the First Appellate Court is restored.
The appellant shall be entitled to his costs.
G.N. Appeal allowed.
|
The appellant purchased certain properties by way of registered sale deeds.
She constructed therein a godown and a two storeyed building with the knowledge and assistance of the respondent, who did not say anything about the common passage and had never expressed his intention to pre empt the sales.
Soon after the construction was over, the respondent sent a notice to the appellant claiming his right to pre empt the sale.
The appellant gave a reply to the notice.
However, respondent filed a suit for preemption in relation to the said properties.
The appellant pleaded that the respondent was estopped from claiming the pre emption.
Principle of waiver was also pleaded.
The Trial Court dis missed the suit of the respondent, and he preferred an appeal before the District Judge which was also dismissed.
Respondent preferred a regular second appeal before the High Court.
The High Court allowed the appeal holding that the principles of estoppel and waiver had no application against the pre emptor to preempt the suit, and set aside the orders of the Courts below.
Aggrieved against the High Court 's order the appellant has preferred this appeal, by special leave.
Allowing the appeal, this Court, HELD: 1.1 Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith.
It operates as a check on 350 spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished.
It is invoked and applied to aid the law in administration of justice.
But for it great many injustice may have been perpetrated.
[162D E] 1.2 Legal approach of the High Court, that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre emption Act was given by the seller and pre emptor should have had occassion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a weapon of defence.
[162G H] 2.
There can be no estoppel against statute.
Equity usually follows law.
Therefore, that which is illegal cannot be enforced by resorting to rule of estoppel.
Such an exten sion may be against public policy.
The distinction between validity and illegality or the transaction being void is clear and well known.
The former can be waived by express or implied agreement or conduct.
But not the latter.
[163D & F G] Shalimar Tar Products Ltd. vs H.C. Sharma, ; ; Equitable Life Assurance Society of the United States vs Reed, 14 AC 587; Bishan Singh vs Khazan Singh, ; and Radha Kishan vs Shridhar, AIR 1960 SC 1369, referred to.
The provision in the Pre emption Act requiring a vendor to serve notice on persons having right of pre emp tion is condition of validity of transfer, and therefore a pre emptor could waive it.
Failure to serve notice as re quired under the Act does not render the sale made by vendor in favour of vendee ultra vires.
The test to determine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved.
If the answer is latter then it may be difficult to put estoppel as a defence.
The Act does not provide that in case no notice is given the transaction shall be void.
The objective is to intimate the pre emptor who may be interested in getting himself substituted.
It does not debar the pre emptor from giving up this right.
Rather in case of its non exercise within two months, may be for financial reasons, the right stands extinguished.
It does not pass on to anyone.
No social disturbance is caused.
It settles in purchaser.
Giving up such right, expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy.
[163H; 164A C] Jethmal vs Sajanumal, [1947] Mewar Law Reports 36, over ruled.
351 Atam Prakash vs State of Haryana, ; ; Bishan Singh vs Khazan Singh, ; ; Radha Kishan vs Sridhar, ; ; Naunihal Singh vs Ram Ratan, ILR 39 All. 127; Ram Rathi vs Mt. Dhiraji, [1947] Oudh 81; Gopinath vs R.S. Nand Kishore, AIR 1952 Ajmer 26; Abdul Karim vs Babulal, AIR 1953 Bhopal 26 and Kanshi Ram Sharma vs Lahori Ram, , approved.
Pateshwari Partab Narain Singh vs Sitaram, AIR 1929 PC 259, referred to. 4.
In the instant case, the fact that the respondent knew of the sale deed, assisted the appellant in raising the construction and after the construction was completed in the month of June he gave notice in the month of July for exer cise of the right and filed the suit in January, would itself demonstrate that the conduct of the respondent was inequitable and the courts in this country which are pri marily the courts of equity, justice and good conscience cannot permit the respondent to defeat the right of appel lant and invoke a right which has been called a weak and inequitable right.
[164D E]
|
ON: Civil Appeal Nos.
543 to 570 of 1974.
From the Judgment and Order dated 22.1.1973 of the Kerala High Court in A.S. Nos. 487, 488, 489, 490, 491,492,493,495,497, 498, 499, 500, 501,502, 503,504, 505,506, 507, 509, 510, 511, 512, 5 13, 5 14, 5 15, 521 and 523 of 1969.
G.L. Sanghi and Ms. Lily Thomas for the Appellant.
A.S. Nambiar, K.R. Nambiar and T.T. Kunhikannan for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
This batch of 28 Appeals are against the common judgment and decrees of the Kerala High Court in A.S. No. 487 of 1969 etc.
dated January 22, 1973 and leave under article 136 was granted by this Court on March 14, 1974.
The High Court reversed the awards and decrees of land acquisition, Sub Court, Ernakulam and confirmed the separate awards of the Collector dated March 29, 1962.
The notifica tion under section 4(1) of the Kerala Land Acquisition 1089 for short "the Regulation" was published on October 31, 1961 and the declarations which are the relevant dates for deter mining the market value by operation of Section 22(1) was published on October 31, 1961 and February 22, 1962.
The land acquired was 190.37 acres 368 and 15.48 acres for Periyar Valley Irrigation Project and Phyto Chemicals Project both being public purposes.
The Collector determined the market value at Re.O.04 per cent for certain lands and Re.O. 12 per cent for certain other lands, Rs.30 per cent to the wet lands as against the claim of Rs.40 and 50 per cent and Compensation to the trees as timber value was given.
The total Compensation fixed was Rs.4.84 lakhs.
Dissatisfied therewith the appellant sought reference under section 18 thereof.
They also claimed sepa rate value as fruit bearing trees on potential value.
They also claimed charges for severence and injurious effects on the remaining land.
The Civil Court after adduction of evidence and on consideration thereof enhanced the market value to the lands @ Rs.40 50 as claimed in addition to a sum of Rs.30 to 38 per cent.
It awarded in all Rs.20.20 lakhs on all counts including severence and injurious ef fects and 15 per cent solatium and also 6 per cent interest on additional compensation from the date of taking posses sion till date of payment vide page 3 of short notes of the appellant.
On appeals by the State, by common judgment dated January 22, 1973, the High Court reversed the award of the Civil Court and confirmed that of the Land Acquisition Collector.
Mr Sanghi, learned Sr. counsel for the appellants with his usual vehemence contended that the High Court committed manifest error of law in reversing the awards and decrees of the Civil Court which had the advantage of seeing the de meanor of the witnesses and extensively considered the evi dence in particular the unimpeachable documents exhibit p.7, p.9 and p. 10.
The appellant, on account of the acquisition, had to incur huge expenditure to construct Kayallas, Pathways, culverts etc.
for protection of the rest of the Estate.
The amount expended was to prevent injurious effects to the Estate and is to be recompensated.
It is further contended that the potential value of the trees have to be taken into account in determining the market value.
The appellant also is entitled to compensation for severence due to submersion of the lands when the Periyar Canal passes through the rubber estate of the appellant.
Therefore, the appellant is entitled to the compensation in full measure with interest on solatium.
The High Court was unjustified in reversing the awards and the decrees of the Civil Court.
The first question, therefore, is whether the High Court is justified in reversing the awards and decrees of the Civil Court.
Admittedly 190.37 and 15.48 cents of land is part of the extensive Periyar Estate of 879.37 acres stretching over seven miles long on the banks of the Periyar River.
It had a road of 14 feet width by name 369 Alwaye Munnar Highway running through middle of the Estate.
The lands were acquired for submersion due to Periyar River Valley Irrigation Project and to establish Phyto Chemical Project.
Shri Sanghi, repeatedly reiterated that in deter mining the market value an element of some guesswork is involved.
But in determining the market value the Court has to eschew arbitrary fixation keeping in view the settled principles of law in evaluating market value in compulsory acquisition on the hypothesis of a willing vendor and a willing vendee.
Therefore, let us glance through the settled principles of law in this regard.
In Galapati Raju vs Revenue Divisional Officer, popularly known as Vijji 's case, the judicial committee of the Privy Council held that compensa tion for compulsory acquisition governed by Section 23(1) of the Land Acquisition Act, 1894 is the market value of the land at the date of the publication of the notification under sub sec.
(1) of the Section 4 of the Act "what a willing vendor might reasonably except to obtain from will ing purchaser".
The function of the Court in awarding com pensation under the Act is to ascertain the market value of the land at the date of notification under section 4(1) of the Act (in this case under section 6(1) of the Regulation) and the evaluation may be as pointed out by this Court in Special Land Acquisition Officer vs Adinarayana Setty, [1959] Suppl.
1 S.C.R. 404 at 412 (1) Opinion of experts; (2) The price paid within a reasonable time in bona fide transactions of purchase of the land acquired or the land adjacent to the acquired land and possessing similar advan tages; (3) Number of years of purchase of the actual or immediately perspective profits of the land acquired.
In that case while adopting the second method the High Court arrived at average price of four transactions excluding two sales and separate average was arrived fixed the market value of Rs. 13.80.
This Court calculating the average of six sale transactions fixed the market rate at Rs. 11.
In Tribeni Devi & Ors.
vs Collector of Ranchi, ; at 2 12 this Court held that for determining compensation payable to the owner of the land, the market value is to be determined by reference to the price which may reasonably to obtain from willing purchasers but since it may not be possible to ascertain this with any amount of precision the authority charged with the duty to award compensation is bound to make an estimate judged by an objective standard.
While reiterating the three tests laid down in S.L.A. Officer 's case, it was further emphasised that these methods, however, do not preclude the Court from taking any other special circumstances into consideration, the requirement being always to arrive at as nearly 370 as possible at an estimate of the market value.
In arriving at a reasonable correct market value it may be necessary to take even two or all these methods into account inasmuch as the exact evaluation is not always possible as no two lands may be the same either in respect of the situation or the extent or potentiality nor is it possible in all cases to have reliable material from which the valuation can be accurately determined.
This Court rejected the sale deeds of the lands situated farther away from the lands acquired and also disallowed 10 per cent additional compensation over market rate fixed.
In Dollor Co., Madras vs Collector of Madras, this Court held that "we may even say that the best evidence of the value of the property is the value of the sale in the very property to which the claimants are the party.
If the sale is of recent date and all that need normally be proved is that the sale was between a willing purchaser and willing seller, that there has not been any appreciable rise or falls since and that nothing has been done on the land during the interval to raise the value.
But if the sale was long ago, may be the court would examine more recent sales of comparable lands as throwing better light on current land value.
This Court further emphasised the fact that because the appellant therein himself pur chased the land which is 10 months prior to the date of notification under section 4, at a price of Rs.410 per ground, that would be the measure of prevailing market value.
The High Court enhanced the market value to Rs. 1800 per ground and on appeal was filed by the State.
Though the appellant still claimed higher value, this Court negatived further enhancement.
In Smt.
Kaushalya Devi Bogra & Ors.
vs The Land Acquisition Officer, Aurangabad & Anr., ; the transaction in respect of small properties do not offer proper guidelines and, therefore, the price fetched therein cannot be taken as real basis for determining compensation for large tracts of property.
This was also the view in Pridviraj vs State of Madhya Pradesh, ; and Padrna Uppal Etc.
vs State of Punjab & Ors.
, ; If they are relied upon reasonable reduction should be given.
Accordingly, this Court has fixed the market value in the light of the development of the land in the neighbour hood of the township etc.
In Chandra Bansi singh & Ors. etc.
vs State of Bihar & Ors. etc.
; , notification under section 4(1) was issued for acquiring 1034 acres of land for housing construction by the Housing Board.
This Court held that compensation should be paid as per the value of the land prevailing as on the date of the notification but not on the date of taking over possession.
371 5.
In Tahsildar, Land Acquisition, Visakhapatnam vs P. Narasingh Rao and Ors., a Division Bench of the Andhra Pradesh High Court to which one of us (K. Ramaswamy, J) was a member while reiterating the princi ples referred to above held that the object of determining the compensation with reference to comparable sales of the land adjacent to the land acquired is to find the fertility, quality, the probable price of the land under acquisition is ' likely to fetch and the actual price paid by the vendee to the vendor under those transactions as a prudent vendee and is not actuated with any other speculative features.
It is to ascertain these facts, the sale deeds are insisted to be produced.
The market value fixed must be reasonable and fair to the owner as well as to avoid undue burden to the exchequer.
Therefore, the transaction relating to the ac quired land of recent dates or in the neighbour hood lands that possessed of similar potentiality or fertility or other advantageous features are relevant pieces of evidence.
When the Courts are called upon to fix the market value of the land in compulsory acquisition.
the best evidence of the value of property is the sale of the acquired land to which the claimant himself is a party, in its absence the sales of the neighbouring lands.
In proof of the sale transaction, the relationship of the parties to the transaction, the market conditions, the terms of the sale and the date of the sale are to be looked into.
These features would be estab lished by examining either the vendor or vendee and if they are not available, the attesting witnesses who have personal knowledge of the transaction etc.
The original sale deed or certified copy thereof should be tendered as evidence.
The underlying principles to fix a fair market value with refer ence to comparable sales is to reduce the element of specu lation.
In a comparable sales the features are: (1) it must be within a reasonable time of the date of the notification; (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or land adjacent to the land acquired and (4) it should possess similar advantages.
These should be established by adduction of material evidence by examining as stated above the parties to the sale or persons having personal knowledge of the sale transactions.
The proof also would focus on the fact whether the transactions are genuine and bona fide transactions.
As held by this Court in Collector, Raigarh vs Hari Singh Thakur & Anr., ; that fictitious and unreal transactions of speculative nature brought into existence in quick succes sion should be rejected.
In that case it was found by major ity that these sale deeds are brought up sales.
In Adminis trator General of West Bengal vs Collector, Varanasi, ; that the price at which the property fetches would be by a willing seller to a willing purchaser but not too anxious a buyer, dealing at aim 's length.
The 372 prices fetched for similar lands with similar advantages and potentialities and the bona fide transactions of the sale at time of preliminary notification are the usual, and indeed the best, evidence of the market value.
Other methods of valuation are resorted to if the evidence of sale of similar land is not available.
The prices fetched for smaller plots cannot form basis for valuation of large tracts of land as the two are not comparable properties.
Smaller plots always would have special features like the urgent need of the buyer, the advantageous situation, the like of the buyer etc.
In Chimanlal Hargovinddas vs Special Land Acquisition Officer, Poona & Anr., ; this Court held that the land situated on the frontage have special advantage and the land situated in the interior undeveloped area will not have the value at par since the latter will have lower value than land situated near developed area.
Some guesswork is permissible in determining the value and on this basis this Court did not interfere with fixation of market value by the High Court.
In Mehta Ravindrarai Ajitrai vs State of Gujarat, ; this Court reiterated the ratio in West Bengal Administrator General 's case that the persons to prove the fair transaction are either the vendor and the vendee or the person conversant with the sale and they are to be examined.
The original sale deed or the certified copy of the sale deed are to be produced.
The same is the view in Dr. Hari Singh Thakur 's case.
This was also the view of the Andhra Pradesh High Court in Narasingh Rao 's case.
In Mantaben Manibhai vs Special Land Acquisition Officer, Baroda, AIR 1990 SC 103 to which one of us (L.M. Sharma, J) was a member, this Court held that when the quality of the lands are different (bagayat land and jiryat land).
Bagayat land is superior in quality and to what percentage of superiority was not established by the claim ants.
This Court held that addition of 25 per cent of the value of the Jiryat land was held to be proper valuation.
In Hindustan Oil Co. Ltd. vs Special Duty Collector (Land Acquisition), this Court held that cumulative effect of all the facts and circumstances should be taken into consideration in arriving at a reasonable and fair market value.
8. ' In the light of these principles, the further con tention that having rejected the documents produced by the State, the High Court 373 ought to have relied upon the documents produced by the appellant as comparable sale and would have confirmed the compensation awarded ' by the Civil Court does not impress us as well founded.
It is well settled law that the amount awarded by the Land Acquisition Collector form an offer and that it is for the claimants to adduce relevant and material evidence to establish that the acquired land are capable of fetching higher market value and the amount offered by the [,and AcqUisition Collector was inadequate and he proceeded on a wrong premise or principle.
In Ezra vs Secretary of State for India, I.L.R. it was held that the amount awarded by the Collector forms an offer.
It was reiterated by this Court in Raja Harish Chandra vs Dy.
Land Acquisition Officer, ; Khorshed Shapoor Chenai, etc.
vs Assistant Controller of Estate Duty, 15 and Dr. G.H. Grant vs State of Bihar, ; In Hari Singh 's case, A.P. Sen, J. held (and major ity did not disagree) at p. 191 C to E that: "In a reference under section 18 of the Act, the burden of prov ing that the amount of compensation awarded by the Collector is in adequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him .
It is equally well settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compen sation.
the award has to be confirmed.
" In that ease it was held that the evidence produced was untrustworthy.
Same is the view of Bombay High Court in Asstt.
Development Officer vs Tavaballi, at 361 D.B. and of A.P. High Court in Narsing Rao 's case and T.W. Higgins claimant vs Secretary of State, AIR 19 ; Naresh Chandra Bose vs State of West Bengal & Ors.
AIR 1955 Cal.
398 at 399; Smt.
Kusumgauri Ramray Munshi & Ors.
vs The Special Land Acquisition Officer, Ahmedabad, at 94, 95 and Maharao Shri Madansinhji vs State of Gujarat, AIR 1969 Gujarat 270.
It is also the duty of the State to adduce evidence in rebuttal.
This Court in Chaturbhuj Panda & Ors.
vs Collector, Raigarh, [1969] 1 SCR412 at 414 has rightly pointed out that: 374 "It is true that the witnesses examined on behalf of the appellants have not been effectively cross examined.
It is also true that the Collector had not adduced any evidence in rebuttal; but that does not mean that the court is bound to accept their evidence.
The Judges are not computers.
In assessing the value to be attached to oral evidence, they are bound to call into aid their experience of life.
As Judges of fact, it was open to the appellate Judges to test the evidence placed before them on the basis of probabili ties.
" In Narasingh Rao 's case. 1 have dealt with in paragraph 8 thus: "The object of the inquiry is to bring on record the price fetched or capable of fetching, the relative situation of the land acquired and the subject of the sale transac tion, their fertility, suitability, nature of the use to which they are put to.
income derive or other special dis tinctive features possessed of by the respective lands either single of some or all relevant to the facts in issue.
In this process the courts are not mere umpires but to take intelligent participation and to see whether the counsel on either side are directing towards this goal or the court itself to intervene in this regard." Therefore, it is the paramount duty of the courts of facts to subject the evi dence to close scrutiny, objectively assess the evidence tendered by the parties on proper consideration thereof in correct perspective to arrive at reasonable market value.
The attending facts and circumstances in each case would furnish guidance to arrive at the market value of the ac quired lands.
The neighbour hood lands possessed of similar potentialities or same advantageous features or any advanta geous special circumstances available in each case also are to be taken into account.
Thus, the object of the assessment of the evidence is to arrive at a fair and reasonable market value of the lands and in that process sometimes trench on the border of the guesswork but mechanical assessment has to be eschewed.
The Judges are to draw from their experience and the normal human conduct of parties in bonafide and genuine sale transactions is the guiding star in evaluating evidence.
Misplaced sympathies or undue emphasises solely on the claimants ' right to compensation would place heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes.
In V.R. Katarki vs State of Karnataka & Ors.
, C.A. No. 4392/86 dated March 22, 1990 decided by Bench of this Court to which one of us (K. Ramaswamy, J.) is a member, the appellant apart from other charges, was imputed with miscon duct of fixing, in his capacity as Civil Judge at Bagalkot, "higher valuation than was legitimate of the 375 lands." After conducting enquiry he was dismissed from service and when he challenged it, the High Court upheld it on the judicial side.
On further appeal, since the appeals against higher valuation were pending in the High Court, without going into that question, while confirming the dismissal laid the rule thus: "We would like to make a special mention of the position that even if the assessment of valuation is modified or affirmed in an appeal as a part of the judicial process, the conduct of the judicial officer drawable from an overall picture of the matter would yet be available to be looked into.
In appropriate cases it may be opened to draw inferences even from judicial acts" of the misconduct.
The rule of conduct spurned by this Court squarely put the nail on the official act as a refuge to fix arbitrary and unreasonable market value and the person concerned shall not camaflouge the official act to a hidden conduct in the function of fixing arbitrary or unreasonable compensation to the acquired land.
Equally it is salutory to note that the claimant has legal and legitimate right to a fair and reasonable compensation to the land he is deprived of by legal process.
The claimant has to be recompensated for rehabilitation or to purchase similar lands elsewhere.
In some cases for lack of comparable sales it may not be possible to adduce evidence of sale transactions of the neighbouring lands possessed of same or similar quality.
So insistence of adduction of precise or scientific evidence would cause disadvantage to the claimants in not getting the reasonable and proper market value prevailing on the date of notification under section 4( 1 ).
Therefore, it is the paramount duty of the Land Acquisition Judge authority to keep before him always the even scales to adopt pragmatic approach without indulging in "facts of imagination" and assess the market value which is reasonably capable to fetch reasonable market value.
What is fair and reasonable market value is always a question of fact depending on the nature of the evidence, circumstances and probabilities in each case.
The guiding star would be the conduct of a hypotheti cal willing vendor would offer the lands and a willing purchaser in normal human conduct would be willing to buy as a prudent man in normal market condition as on the date of the notification under section 4(1) but not an anxious buyer dealing at arm 's length nor facade of sale or fictitious sales brought about in quick succession of otherwise to inflate the market value.
Let us consider the evidence on record from the above perspective and evaluate the circumstances on record.
Shri Sanghi repeatedly stressed that an element of guesswork is inescapable and exhibit P. 7, 8, 9 & 10 furnish the best materi al.
Though he relied on exhibit P. 1 to P. 3, in fairness, he did not press for consideration in our view quite 376 rightly as they are very small extents of 2 1/2; 4 and 3 cents respectively.
They are situated in residential and commercial areas.
So they cannot be relied on.
But he strongly relied on exhibit P. 7 dated March 9, 195 1.
The extent is Ac.
3 4 cents for Rs. 19,000.
It worked out at Rs.52.50 per cent.
The High Court held that the lands covered by exhibit P. 7 are situated by the side of irrigation channel and paddy cultivation was carried on.
Under those circumstances, the evidence of P.W. 6, the vendor was not accepted and in our opinion quite rightly and exhibit P. 7 was rightly not relied as lands in question are not irrigated lands whereas the lands under exhibit P. 7 are paddy lands cultivated by irrigation sources and is situated four miles away from the acquired lands.
Similarly exhibit P. 9 is dated April 4. 1957.
The extent is Ac.
1.38 cents for Rs.6,000.
PW. 5 is the vendor.
It worked out at Rs.43.50 per cent.
It is also four miles away from the acquired lands.
It is also not of any assistance to the appellant as this land also is a paddy land irrigated by irrigation sources.
It is undoubted that in exhibit P. Ii).
the judgment of the Sub Court.
Ernakulam in Land Acquisition Case No. 298 of 1963 etc.
relate to the land in the vicinity of Phyto Chemical Project and the Land Acquisition Court awarded (C) Rs.80 per cent for the paddy lands and Rs.43 per cent for dry land.
The ' High Court has pointed out that on the basis of the evidence adduced in that case.
namely, comparable sales, the determination of the market value is correct.
It was held that it cannot form the basis for determining the market value of the lands in this case.
We have been taken through the entire judgment under exhibit P. 10 and after carefully scanning the evidence, we are not persuaded to take a different view from that of the High Court.
Which has correctly appreciated the evi dence.
Accordingly exhibit P. 10 also would not form a base to fix the market value.
It is undoubtedly true that the High Court did not accept the evidence adduced by the State.
It was rejected both by the Civil Court as well as by the High Court.
The Sub Judge appears to be too anxious to award whatever is asked for on mechanical appreciation without subjecting the evidence to legal and critical scrutiny and analysis.
The appellate Court after rejecting the evidence may have to find whether there are any circumstantial or other material evidence on record to fix reasonable market value.
We are relieved to undertake that exercise in view of fair stand taken by the Learned Advocate General.
Kerala, who appeared in the High Court.
It is clear from the judg ment that the Learned Advocate General while arguing the case had stated across the bar.
obviously on instructions or in fairness from record, that the market value can be fixed at Rs. 18 per cent.
This is.
therefore.
a concession made by the Learned Advocate General on behalf of the State.
The High Court, therefore, was not justified in not 377 taking into account this submission of the Advocate General.
It is undoubted that the High Court having rejected the evidence of the claimants has to confirm the offer made by the Collector in the award provided if there is no other evidence on record.
But in view of the concession made by the Learned Advocate General, we are of the definite view that the claimants are entitled to the market value Rs. 18 per cent to the lands other than those to which the Collec tor awarded @ Rs.30 per cent as the reference court shall not reduce the market value to less than awarded by the Collector as enjoined under the statute.
As a limb of the argument Shri Sanghi has placed reliance on the concession made by the government pleader in the Trial Court that exhibit P. 9 would form the basis for determination of the market value which worked out @ Rs.43.50 per cent.
We are unable to accept the submission of the learned counsel.
Any concession made by the government pleader in the Trial Court cannot bind the Government as it is obviously, always, unsafe to rely on the wrong or erroneous or wanton concession made by the counsel appearing for the State unless it is in writing on instructions from the responsible officer.
Otherwise it would place tindue and needless heavy burden on the public exchequer.
But the same yardstick cannot be applied when the Advocate General has made a statement across the bar since the Advocate General makes the statement with all responsi bility.
In those circumstances we have no hesitation to accept the statement of Learned Advocate General and hold that the market value of the lands would be fixed at Rs. 18 per cent.
From the very nature of compulsory acquisition 15 per cent solatium as additional compensation was statutorily fixed.
Therefore, determination of additional market value is unwarranted.
It is next contended that the claimants are entitled to the severence charges and injurious effects on the re maining lands of the claimant.
From the evidence it is clear that the Commissioner who collected the evidence in this regard has admitted in the crossexamination that the appel lant did not expend any money in erecting boundary walls, bridges, projects etc.
It is an admitted fact that though from the date of the acquisition till date of evidence more than six years have passed by, the appellant has not pro duced any material or account books of the Estate to estab lish that they have expended any money in this regard.
It is also admitted by both the engineers examined on behalf of the State and also appellant 's witnesses that the road passing through the lands is being used by the appellant to carry his goods i.e. his forest produce etc.
Though during rainy season that too for a short period at some places the water get stagnated on the 378 roads at lower levels but that stand no impediment for the carriage of the goods as admitted by the witnesses.
This phenomena was prevalent even before acquisition.
In these circumstances we entirely agree with the High Court in its finding that the appellant has not established that they have expended any money for erection of retaining walls.
culverts.
bridges etc.
There is no damage.
due to acquisi tion of the land of the appellant and.
therefore.
the award of severence charges is unwarranted.
Both the counsel have taken us through the material evidence of PW. 7, 8 & 9.
C.P.W. 1 and C.P.W. 2 examined on behalf of the State.
We have once again carefully scanned the evidence and we are satisfied that the High Court has thoroughly considered the evidence of all the witnesses and reports of the Commission ers.
The High Court is well justified in arriving at the finding that the appellant has not expended any money for either constructing any boundary walls.
culverts.
bridges or roads etc.
The value of the land of the appellant has not been injuriously effected due to acquisition.
No damage due to severence was caused.
Under these circumstances the appellant is not entitled to compensation in this regard.
When we have pointed out that the appellant is not entitled separately to the value of the land and the trees as poten tial value as fruit bearing one.
The counsel agreed.
on instructions, that they would confine to fix market value of the lands.
The only question then remains is whether the appel lant is entitled to payment of interest on solatium.
The High Court relied on Union of India vs Shri Ram Mehar & Anr., ; and rejected the claim for interest.
Section 25(3) of the Regulation reads thus: "If the sum in the opinion of the court, the Division Peishkar ought to have awarded as compensation is in excess of the sum which the Division Peishkar did not award as compensation, the award of the court may direct that the government shall pay interest on such excess @ Rs.6 per centum per annum from the date on which the Division Peish kar took possession of the land to the date of payment of such excess in Court " A reading thereof does postulate that in the opinion of the Court the Land Acquisition Officer ought to have awarded compensation in excess as found by the court.
then the court may direct that the government shall pay interest @ 6 per centum per annum on the excess amount so found as compensation.
The payment should be from the date, the land was taken possession by the Division Peishkar till the date of the payment of the excess amount into court.
379 The question, therefore, is whether "interest" is an inte gral part of the word "compensation" under sub section (3) of Section 25 of the Regulation.
In Shri Ram Mehar 's case, the question came up for consideration was whether the words "interest on market value" in Section 4(3) of the Land Acquisition (Amendment and Validation Act, 1967) would include payment of interest on solatium.
Additional 15 per cent solatium undersection (2) of Section 23 certainly forms part of compensation as under section 23 the market value of the land would include solatium.
But market value and compensation are distinct expressions and have been used as such in the Land Acquisi tion Act.
The key to the meaning of the word "compensation" is to be found in Section 23(1) which consists of market value and solatium on the market value which is stated to be compensation.
Therefore, this Court held that the term market value has acquired a definite connotation in judicial decision.
If the word market value and compensation were intended by the legislature to have the same meaning, it is difficult to comprehend why the word compensation in sections 28(a) and 34 and nor market value was used.
So market value cannot be equated to compensation.
The market value is, therefore, only one of the components in the determination of the amount of compensation, if the legislature has used the word "market value" in Section 4(3) of the Amending Act, it must be held that it was done deliberately and what was intended was that interest should be payable on the market value of the land and not on the amount of compensation.
Otherwise, there is no reason why the Parliament should not have employed the word compensation in the aforesaid provi sion of the amended Act.
Webster Comparative Dictionary at p. 267, the word compensation defined (I) the act of compen sating or (2) that which compensates payment.
In Stroud 's Judicial Dictionary, Fourth Edition, Volume I at p. 523 compensation defined (Defence Act 1842 (c. 94), section 19) includes not only the value of the land taken but also damage for severence or injuriously effecting other lands belonging to the owner of the land taken, al though the Act contained no such clause as Land Clauses Consolidation Act, 1845.
The word compensation is used to recompensate or reparation to the loss caused to the owner of the land.
Therefore, we have no hesitation to hold that Section 25(3) contemplates payment of interests on solatium to recompensate the owner of the land for loss of user of the land from the date of taking possession till date of payment into court.
The word compensation has been advisedly used by the legislature.
Accordingly we hold that the appel 380 lant is entitled to interest on solatium.
We allow the appeals to the extent indicated above.
The market value is fixed at Rs. 18 per cent and confirm the market value at Rs.30 per cent for wet lands awarded by the Collector.
Solatium at Rs. 15 per cent and interest at 6 per cent on the excess market value determined under the judg ment including solatium from the date of taking possession till the date of payment.
In other respects the judgment of the High Court is confirmed and in the circumstances, the parties are directed to bear their own costs throughout.
P.S.S. Appeals allowed.
|
The respondent State had acquired a large extent of land out of the appellant 's estate under the Kerala Land Acquisi tion Regulation, 1089 for river valley irrigation project and to establish an industrial project.
The notification under Section 4(1) of the Regulation was published on Octo ber 31, 1961.
This was followed by the declaration under Section 6(1) published on February 22, 1962.
The Collector by his awards dated March 29, 1962 deter mined the market value under Section 22(1) of the Regulation at Re.O.04 per cent for certain lands, Re.O.12 per cent for certain other lands, and Rs.30 per cent for the wet lands as against the claim of Rs.40 and 50 per cent.
Compensation for the trees at timber value was also given.
The total compen sation fixed was Rs.4.84 lakhs.
Dissatisfied therewith the appellant sought reference under Section 18 of the Regulation.
They also claimed sepa rate value for fruit bearing trees on potential value and charges for severence and injurious effects on the remaining lands.
In support of the claim they relied on exhibit P. 7 dated March 9, 1951 and exhibit P. 9 dated April 4, 1957 which worked out at Rs.52.50 and Rs.43.50 per cent respectively, and the acquisition forming subject matter of exhibit P. 10 pertaining to the land in the vicinity of the industrial project award ed at the rate of Rs.80 per cent for paddy lands and Rs.43 for dry land.
The Government pleader stated before the civil court that exhibit P. 9 could form the basis for determining the market value.
The court enhanced the market value @ Rs.40 50 per cent as claimed in addition to a sum of Rs.30 to 38 per cent.
It awarded in all Rs.20.20 lakhs on all counts includ ing severence and injurious effects, 15 per cent solatium and also 6 per cent interest on additional compensation from the date of taking possession till date of payment.
363 The High Court found that the lands covered by exhibit P. 7 and exhibit P. 9 were paddy lands cultivated by irrigation sources and situated about four miles away from the acquired lands which were not irrigated and therefore held that these could not form the basis for determining market value.
Similarly, it found exhibit P. 10 could not form a base to fix the market value.
The High Court did not accept the evidence adduced by the State, which was rejected by the civil court as well.
The statement made by the State Advocate General across the bar that the market value could be fixed at Rs. 18 per cent was also not taken into account.
Consequently, it reversed the awards and decrees of the civil court.
In these appeals by special leave it was contended for the appellant that having rejected the documents produced by the State the High Court ought to have relied upon the documents produced by the appellant as comparable sales and consumed the compensation awarded by the civil court, that exhibit P. 7, 9 and 10 furnished the best material, that the Government pleader had conceded before the trial court that exhibit P. 9 could form the basis for determining the market value, that they had incurred huge expenditure on civil works for protection of the rest of the estate from injuri ous effects for which they should be recompensated, that the potential value of the trees had to be taken into account in determining the market value, that they were entitled to compensation for severence due to submersion of the lands and that they were also entitled to payment of interest on solatium.
Allowing the appeals partly, the Court, HELD: 1.1 When the Courts are called upon to fix the market value of the land in compulsory acquisition, the best evidence of the value of property is the sale of the ac quired land to which the claimant himself is a party, in its absence the sales of the neighbouring lands possessed of similar potentiality or fertility or other advantageous features made within a reasonable time of the date of noti fication in bona fide transactions on the hypothesis of a willing seller and a willing purchaser but not too anxious a buyer, dealing at arms length nor facade of sale or ficti tious and unreal transactions of speculative nature brought into existence in quick succession or otherwise to inflate the market value.
This, however, does not preclude the Court from taking any other special circumstances into considera tion, the requirement being always to arrive at as nearly as possible an estimate of the market value judged by an objec tive standard.
[181C 182D] 364 Gajapati Raju vs Revenue Divisional Officer, ; Special Land Acquisition Officer vs Adinarayana Setty, [1959] Suppl.
1 S.C.R. 404; Tribeni Devi & Ors.
vs Collector of Ranchi; , ; Dollor Co. Madras vs Collector of Madras, ; Chandra Bansi Singh & Ors. etc vs State of Bihar & Ors. etc.; , ; Tahsildar, Land Acquisition Visakhapatnam vs P. Narasingh Rao & Ors., ; Collector, Raigarh vs Hari Singh Thakur & Anr., ; ; Administrator General of West Bengal vs Collector, Varanasi, ; ; Mehta Ravindrarai Ajitrai vs State of Gujarat, ; and Hindustan Oil Co. Ltd. vs Special Duty Collector (Land Acquisition), [1990] 1 S.C.R. 59, referred to. 1.2 The prices fetched for smaller plots cannot form basis for valuation of large tracts of land as the two are not comparable properties.
Smaller plots always would have special features like the urgent need of the buyer, the advantageous situation, the like of the buyer etc.
Similar ly, the land situated on the frontage have special advantage and the land situated in the interior undeveloped area will not have the value at par since the latter will have lower value then the former.
So is the case with orchard land and agricultural land, the former being superior in quality as compared to the latter.
If such sales are relied upon rea sonable reduction should be given.
[182B C] Smt.
Kaushalva Devi Bogra & Ors.
vs The Land Acqui sition Officer, Aurangabad & Anr., ; ; Pridviraj vs State of Madhya Pradesh, ; ; Padma Uppal etc.
vs State of Punjab & Ors., [1977] 1 S.C.R. 329; Chimanlal Hargovinddas vs Special Land Acquisition Officer, Poona & Anr., ; and Mantaben Manibhai vs Special Land Acquisition Officer, Baroda, A.I.R. , referred to.
1.3 In some cases for lack of comparable sales it may not be possible to adduce evidence of sale of the neighbour ing lands possessed of same or similar quality.
So, insist ence on abduction of precise or scientific evidence would cause disadvantage to claimants in not getting the reasona ble and proper market value.
The courts of facts should, therefore, keep before them always the even scales to adopt pragmatic approach without indulging in facts of imagination and assess the market value which is capable to fetch rea sonable compensation.
They may in that process sometimes trench on the border of the guess work but mechanical as sessment should be eschewed.
Misplaced sympathies or undue emphasis solely on the claimants ' right to compensation would 365 place heavy burden on the public exchequer to which everyone contributes by direct or indirect taxes.
[185D G; 184F G] 1.4 In the instant case, the High Court found that exhibit P. 7 and P. 9 relied on by the civil court were not applica ble as the lands covered by them were paddy fields cultivat ed by irrigation sources and situated four miles away from the acquired unirrigated lands.
Similarly, it also found that exhibit P. 10 could not be relied on.
The High Court, therefore, could not be said to be unjustified in reversing the awards and decrees of the civil court.
[186B D] 2.
The amount awarded by the Land Acquisition Collector forms an offer.
It is for the claimants to adduce relevant and material evidence to establish that the acquired lands were capable of fetching higher market value and the amount offered by the Land Acquisition Collector was inadequate and he proceeded on a wrong premise or principle.
It is also the duty of the State to adduce evidence in rebuttal.
[183B, G] Ezra vs Secretary of State for India, I.L.R. ; Raja Harish Chandra vs Dy.
Land Acquisition Officer, ; Khorshed Shapoor Chenai, etc.
vs As sistant Controller of Estate Duty; , ; Dr. G.H. Grant vs State of Bihar, ; ; Asstt.
Development Officer vs Tayaballi, AIR ; Tah sildar, Land Acquisition, Visakhapatnam vs P. Narasingh Rao Secretary of State, AIR 1919 Cal.
1008; Naresh Chandra Bose vs State of West Bengal & Ors., AIR 1955 Cal. 398; Smt.
Kusumgauri Ramray Munshi & Ors.
vs The Special Land Acquisi tion Officer, Ahmedabad, ; Maharao Shri Madansinhji vs State of Gujarat, AIR 1969 Gujarat 270 and Chaturbhuj Panda & Ors.
vs Collector, Raigarh, ; , referred to.
2.2 In the instant case the evidence produced by the appellant was found untrustworthy by the High Court.
It also did not accept the evidence adduced by the State.
[186E F] 3.1 The Appellate Court after rejecting the evidence may have to find whether there are any circumstantial or other material evidence on record to fix reasonable market value.
The State Advocate General having stated across the bar in the High Court that the market value can be fixed at Rs.18 per cent, a concession made by him with all responsibility on behalf of the State, the High Court was not justified in 366 not taking into account this submission.
[186G I87B] 3.2 Any concession made by the Government pleader in the trial court cannot bind the Government as it is always unsafe to rely on the wrong or erroneous or wanton conces sion made by the counsel appearing for the State unless it is in writing on instructions from the responsible officer.
Otherwise it would place undue and needless heavy burden on the public exchequer.
[187C] 3.3 The claimants are, therefore, entitled to the market value @ Rs.18 per cent to the lands other than those to which the Collector awarded @ Rs.30 per cent, as the refer ence court shall not reduce the market value to less than that awarded by the Collector as enjoined under the statute.
From the very nature of compulsory acquisition, 15 per cent solatium as additional compensation was statutorily fixed.
Therefore, determination of additional market value is unwarranted.
[187E] 3.4 Section 25(3) of the Regulation contemplates payment of interest on solatium to recompensate the owner of the land for loss of user of the land from the date of taking possession tilldate of payment into court.
The claimants are, therefore, entitled to interest on solatium.
It is fixed at 6 per cent on the excess market value determined under the judgment including solatium from the date of taking possession till the date of payment.
In other re spects judgment of the High Court is confirmed.
[189G 190B] Union of India vs Shri Ram Mehar & Anr., [1973] 2 S.C.R. 720, referred to. 4.
The Commissioner who collected the evidence in re spect of the injurious effects on the remaining lands of the claimants admitted in the cross examination that the appel lant did not expend any money on civil works.
Though from the date of the acquisition till the date of evidence more than six years had passed by the appellant had not produced any material or account books of the estate to establish that they have expended any money in this regard.
Both the engineers examined on behalf of the State and also appel lant 's witnesses admitted that the road passing through the lands was being used by the appellant to carry its forest produce etc.
Though during rainy season that too for a short period, at some places the water gets stagnated on the roads at lower levels but that stand no impediment for the car riage of the goods.
This phenomena was prevalent even before acquisition.
The value of the land of the appellant had not been injuriously effected due to acquisition.
No 367 damage due to severence was caused.
Under these circum stances, the appellant was not entitled to compensation in this regard.
[187F 188D] 5.
The Sub Judge appears to be too anxious to award whatever is asked for on mechanical appreciation without subjecting the evidence to legal and critical scrutiny and analysis.
In such a case, even if the assessment of valua tion is modified or affirmed in an appeal as apart of the judicial process, the conduct of the judicial officer, drawable from an overall picture of the matter would yet be available to be looked into.
In appropriate cases it may be opened to draw inferences even from judicial acts of the misconduct.
The person concerned shall not, therefore, camouflage the official act to a hidden conduct in the function of fixing arbitrary or unreasonable compensation to the acquired land.
V.R. Katarki vs State of Karnataka & Ors., Civil Appeal No. 4392 of 1986 decided on March 22, 1990, referred to.
|
vil Appeal No. 1934 of 1972.
From the Judgment and Order dated 9.12.
1971 of the Punjab and Haryana High Court in regular Second Appeal No. 1286 of 1969.
V.C. Mahajan, K.R. Nagaraja (NP) and R.S. Hegde for the Appellant.
419 Uma Dutta, E.C. Agarwala, Ms. Sheil Sethi and Susheel Kumar for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This first defendant 's appeal by special leave is from the Judgment and Decree of the High Court of Punjab and Haryana in R.S.A. No. 1286 of 1969 dated 9.12.
Respondents 4 to 6 Balwant Singh, Jagir Singh and Teja Singh, sons of Kehar Singh sold land measuring 38 Kanals 3 Marlas, being 3/5th share of 63 Kanals 11 Marlas of ances tral land situated at village Maherna Kalan, Tehsil and District Ludhiana, as per sale deed dated June 4, 1964 in favour of the appellant (first defendant) for Rs. 14,000 as the vendors left their village Maherna Kalan and had not been cultivating the same and it was not yielding any prof it.
The sale deed contained a recital that the vendors sold the land with a view to purchase land in another village.
On November 6, 1965 the vendors actually purchased 80 Kanals of Nehri land for Rs. 11,000.
The parties are admittedly Jat Sikhs governed by Punjab Customs.
Respondents 1 to 3 filed a declaratory suit on August 3, 1966 in the Court of Sub Judge, Ludhiana seeking a declara tion that the sale of the suit land would not affect their reversionary rights after the death of respondents 4 to 6 as they were governed by the custom in the matter of alienation inasmuch as the suit land was ancestral in the hands of the alienors qua the plaintiffs (respondents 1 to 3) and that the sale was effected without consideration and without legal necessity; and respondents 4 to 6 (defendants 2 to 4) were restrained from alienating under the custom.
The appellant averred, inter alia, that the sale was for consideration and legal necessity as it was an act of good management on the part of the alienors; that respondents 4 to 6 who were not sonless and were men of good character and sober habits; that migrating from their village they had settled elsewhere as they were neither cultivating the suit land nor were in a position to manage and cultivate the same; and that the alienors had actually purchased 80 Kanals of better quality Nehri land which showed that the sale was an act of good management on the part of the vendors.
It was also contended that the land in suit was not ancestral qua the plaintiffs nor was it governed by customs and that the plaintiffs had no locus standi.
420 The respondents 4 to 6 being defendants 2 to 4 admitted the claims of the plaintiffs.
The respondent No. 5 who was the brother of respondent No. 2, was impleaded as proforma defendant having the same interest as the plaintiffs.
The Trial Court, inter alia held that the parties in respect of the sale of the suit land were governed by custom whereunder ancestral land could not be alienated except for legal necessity or as an act of good management; that the suit land was ancestral qua the plaintiffs (respondents 1 to 3) and defendants 2 to 4 (respondents 4 to 6); that the sale was effected for consideration of Rs. 14,000 as stipulated in the sale deed; and that the sale was an act of prudent management on the part of the vendors and as such unimpeach able.
The suit having been dismissed and the first appeal therefrom having failed, the respondents 1 to 3 preferred R.S.A. No. 1286 of 1969 in the High Court of Punjab and Haryana wherein they sought to adduce additional and further evidence of a sale deed dated June 3, 1969 alleged to have been executed by respondents 4 to 6 in respect of the suit land.
The High Court allowed the R.S.A. and set aside the sale holding that it was neither for any legal necessity nor could it be justified as an act of good management.
The suit was accordingly decreed.
The certificate to file Letters Patent Appeal having been refused, the appellant obtained special leave.
Mr. V.C. Mahajan, the learned counsel for the appellant, submits that whether the sale was or was not an act of good management having been a question of fact, the Trial Court and the first appellate court having arrived at a concurrent finding that it was an act of good management and as such unimpeachable, this concurrent finding could not have been set aside by the High Court in second appeal; that the sale deed dated June 3, 1969 which was never accepted and proved according to law was irrelevant for impeaching the sale and the High Court erred in law in taking it into consideration while determining whether the sale was an act of good man agement.
Mr. Uma Dutta, learned counsel for the respondents, submits, inter alia, that the sale of the suit land measur ing 38 Kanals 3 Marlas being on June 4, 1964 and the subse quent purchase of 80 Kanals for Rs. 11,000 being on November 8, 1965 and that land also having subsequently been sold on June 3, 1969 for Rs.35,000 and there being no evidence to show that the suit land was less fertile or that the vendors 421 had settled at village Pather, the High Court was correct in holding that the impugned sale was not an act of good man agement.
The only question to be decided in this appeal, there fore, is whether the High Court was correct in setting aside the concurrent finding that the impugned sale was an act of good management and not restricted by custom.
It is common ground that the parties are governed by the local custom which restricts alienation.
About the custom W.H. Rattigan in his 'A Digest of Customary Law in the Punjab ' (14th Ed.) in Chapter IV at page 283 said: "Thus, while the unhampered exclusive use of property in a man 's possession, whether ancestral or acquired, for his lifetime, with a free disposal of the income, is not denied, freedom of alienation, whether by gift or bequest, is in regard to ancestral immovable property, subject in most cases to certain restrictions." A 'late Senior Judge of the Chief Court ' in a leading case (Nos.
107 P.R. 1887, page 247) expressed generally that: respect of ancestral immovable properly in the hands of any individual.
there exists some sort of residuary interest in all the descendants of the first owner.
or body of owners, however, remote and contingent may be the proba bility of some among such descendants ever having the enjoy ment of the property.
In short, the owner in possession is not regarded as having the whole and sole interest in the property, and power to dispose of it, so as to defeat the expectations of those who are deemed to have a residuary interest and who would take the property if the owner died without disposing of it.
The limitations within which per sons having or claiming to have such a residuary interest may prevent an owner in possession from defeating their expectations will be found to vary according to local cir cumstances, which may either weaken or rebut the presumption that the owner has not an unrestricted power of disposition.
" 422 Sir Meredyth Plowden in Gujar vs Sham Das, 107P.R. 1887 also said: "In respect of ancestral immovable property in the hands of any individual, there exists some sort of residuary interest in all the descendants of the first owner or body of owners, however remote and contingent may be the probability of some among such descendants ever having the enjoyment of the property.
The owner in possession is not regarded as having the whole and sole interest in the property, and power to dispose of it, so as to defeat the expectations of those who are deemed to have a residuary interest, and who would take the property if the owner died without disposing of it.
" In the critical words of Chief Justice Sir Shadi Lal in Gujar vs Sham Das (supra) the issues before the Court were whether in a case, where the power of a sonless Jat proprie tor to alienate ancestral land without necessity was in dispute, it was the duty of the alienee to prove a custom authorizing a transfer of the ancestral land in favour of stranger, and on whom lay the onus of proving that a sonless proprietor has powers to dispose of ancestral land without necessity; and the rest were mere deductions.
In para 59 at page 291 of the Digest Rattigan states the restrictions on alienation of ancestral immovable property thus: "Ancestral immovable property is ordinarily inalienable (especially amongst 'Jats ' residing in the central districts of the Punjab), except for necessity or with the consent of male descendants, or, in the case of a sonless proprietor, of his male collaterals.
"Provided" that a proprietor can alienate ancestral immovable property at pleasure if there is at the date of such alienation neither a male descendant nor a male collateral in existence (No. 36 P.R. 1895; No. 55 P.R. 1903, F.B.)" In other words, the custom is that the ancestral immova ble property is ordinarily inalienable especially amongst Jats residing in the Central Districts of Punjab, except for necessity and the other permis 423 sible reasons.
An alientation as a bona fide act of good management has been treated as one of necessity and hence, valid.
At page 388 of the Digest we find the gloss: "In the case of a male proprietor, in the management of agricultural affairs a very strict economy and a very excel lent management must not be insisted upon.
Ordinary bona fide management is all that can be demanded (No. 70 P.R. 1894; No. 20 P.W.R. 1911; No. 40 P.W.R. 1911, and No. 25 P.R. 1911); 1922, 69 Ind. Case 521 (exchange of land).
Where although no immediate necessity for a sale is established, if the sale has been held to be an act of good management, it is binding on the reversioners.
" The above statement has been commented upon as being a bit wide, and the suggested statement is that 'such a sale must be upheld '.
In Mohammad Chiragh and Ors.
vs Fatta & Ors.
, A.I.R. 1934 Lahore 452 where although no immediate necessity for sale was established, but there was a recital in the sale deed that the vendors intended to purchase other land with the proceeds of the sale, and a representation of that kind was made to the vendees which might have been believed by them in good faith, the High Court did not see any good grounds for interference with the findings of the learned District Judge that the sale was an act of good management which, it was observed; "was essentially a find ing of fact.
" In Abdul Rafi Khan vs P. Lakshmi Chand & Ors., A.I.R. 1934 Lahore 998 where the members of the family, finding their position in the village precarious due to deteriorating relations between it and the tenants in the village sold their Land one by one as they found it diffi cult to manage them or recover rent and the vendors moved to another place where they purchased certain land, it was held that the sale of the land was an act of good management and the vendee was not expected to see to the application of the money by the vendors to the purposes mentioned in the sale deed.
Similarly in Dial Singh vs Surain Singh, A.I.R. 1937 Lahore 493, the question was whether a sale of ancestral land was for necessity.
On April 3, 1934 Bhagwan Singh sold ancestral land for Rs. 1,500 the entire consideration being paid to him before the Sub Registrar.
The object of the sale was the purchase of land in Bikaner and Gwalior States and actually since the sale Bhagwan Singh spent 424 about Rs. 160 in buying about 100 bighas of land in Gwalior.
The lower courts concurrently found that the sale was for.
necessity.
Before the District Judge it was urged that the money had not been actually spent on the purpose for which it was raised.
But the learned District Judge held that this was admitted to be correct, that all that the alienee had to do was to see that the money was required for a legitimate purpose.
The sole question, therefore, was whether the sale in order to buy land in Gwalior and Bikaner was an act of good management, which would be regarded as one of necessi ty.
The Division Bench held that no sufficient reason had been shown for dissenting from the concurrent finding of the courts below that the sale of land by Bhagwan Singh in the presence of his elder son was for necessary.
In Gajjan Singh & Ors.
vs Anna Singh, [1968] P.L.R. Vol.
70 195 it was held that no person could be tied down to the village where he had ancestral land unless it was shown that he was leaving the village or disposing of the land in the village on some false pretext.
Where relations of a proprie tor with his brother were strained and he sold the land to purchase land in some other village, the alienation was held to be an act of good management and that once a true repre sentation was made by the vendor, the vendees were not to see the application of the money and they need not prove that the money in fact was utilised for a necessary purpose.
It was further held that the land purchased with the sale proceeds of the ancestral land did not cease to be ancestral and it remained ancestral land.
In the instant case the vendee proved the ingredients of good management and the concurrent finding of the Trial Court and the first Appellate Court was that the impugned sale was an act of good management, and it was essentially a finding of fact.
Applying the law as enunciated in the above decisions we do not find any infirmity therein.
The submis sions of the learned counsel for the respondents that in view of the subsequent sale of the land would go to show that it was speculative sale would be wholly irrelevant.
There was evidence to show that even prior to the sale the vendors were not cultivating and as such not deriving any profit from the land.
The distance of time between the impugned sale on June 4, 1964 and the purchase of 80 Kanals of land in the other village on November 6, 1965 was not such as to disprove that the sale was an act of good manage ment and as such was for necessity.
The Trial Court clearly found that the vendors left for and settled at the new village where they purchased 30 Kanals of land.
The averment that the purchased land was subsequently sold on June 425 3, 1969 at Rs.35,000 besides having not been proved in accordance with law, was wholly irrelevant for the purpose of discharging the onus of the appellant vendee.
The High Court was, therefore, in error in setting aside the concur rent finding of fact in the facts and circumstances of the case, in Second Appeal.
In the result, this appeal is allowed, the impugned Order of the High Court is set aside and Decree of the lower courts in the suit restored.
The parties being near rela tions, we leave them to bear their ' own costs.
Y. Lal Appeal allowed.
|
Respondent Nos. 4 to 6 sold their 3/5th share of the ancestral land to the appellant for Rs.14,000, as the ven dors left their village and wanted to settle elsewhere where they purchased 80 kanals of Nehri land.
Respondents Nos. 1 to 3 filed a declaratory suit in the court of Sub Judge, Ludhiana seeking a declaration that the sale of the suit land would not affect their reversionary rights after the death of respondents 4 to 6.
They pleaded that the land was ancestral and according to the custom governing the parties, it could not be alienated; they also asserted that the land was sold without any consideration and legal necessity.
The appellant defendant No. 1, contended that the sale was an act of good management on the part of the alienors, and that the same was not without consideration/the vendors having decided to settle elsewhere.
The trial court held that the sale was an act of prudent management and was not without consideration.
As regards the custom it held that the parties were governed by custom, whereunder ancestral land could not be alienated except for legal necessity or as an act of good management.
The suit was accordingly dismissed and the first appeal preferred against that decision failed.
Respondents 1 to 3 thereafter preferred Regular Second Appeal before the High Court.
The High Court allowed the appeal, set aside the sale holding that it was neither for any legal necessity nor could it be justified as an act of good management.
The suit was accordingly decreed.
Hence this appeal by the appellant defendant No. 1 by special leave.
418 Before this Court the appellant contended that the sale was or was not an act of good management having been a question of fact, the trial court as also the first appel late court having arrived at a concurrent finding that it was an act of good management, the High Court should not have interfered with that finding.
On the other hand the respondents contended that the sale was not an act of good management.
Allowing the appeal, this Court, HELD: The custom is that the ancestral immovable proper ty is ordinarily inalienable specially amongst Jats residing in the Central Districts of Punjab, except for necessity and the other permissible reasons.
All alienation as a bona fide act of good management has been treated as one of necessity and hence valid.
[233B] In the instant case, the vendee proved the ingredients of good management and the concurrent finding of the Trial Court and the first appellate court was that the impugned sale was an act of good management, and it was essentially a finding of fact.
[234F] The High Court was, therefore, in error in setting aside the concurrent finding of fact in the facts and circum stances of the case in Second Appeal.
Gujar vs Sham Das, 107 P.R. 1887; Mohammad Chiragh and Ors.
vs Fatta & Ors., AIR 1934 Lahore 452; Abdul Rafi Khan vs
P. Lakshmi Chand and Ors., AIR 1934 Lahore 998; Dial Singh vs Surain Singh, AIR 1937 Lahore 493; Gujjan Singh and Ors.
vs Atma Singh, 1968 PLR Vol.
70 195.
|
vil Appeal No. 453 (NL) of 1984.
From the Judgment and Order dated 19.5.
1983 of the Allahabad High Court in C.M .W.P.
No. 8798 of 1980.
K. Ramamurthi and R.D. Upadhyay for the Appellant.
Anil Kumar Gupta for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court dismissing the appellant 's writ petition challenging an award of the Industrial Tribunal.
The appellant was working as an Assistant Cashier in the Rampur Zila Sahkari Bank Ltd., when a reference of an industrial dispute was made under section 4 A of the U .P.
Indus trial Disputes Act, 1947 (hereinafter referred to as the U.P. Act).
The provisions of the U .P.
Act relevant to the present case are similar to those of the Central Act, that is, the .
Section 4 K of the U.P. Act, like the corresponding section 10 of the Central Act, empowers the State Government to refer industrial disputes to Labour Courts or Tribunals.
During the pendency of the reference the appellant was put under suspension and served with a charge sheet in February 1976, which was followed by a domestic inquiry leading to the dismissal of 413 the appellant from service on 16.8.
The U.P. Act in sections 6 E and 6 F incorporates provisions similar to those in ss 33 and 33 A of the Central Act.
The appellant filed a complaint under section 6 F of the U.P. Act before the Industrial Tribunal, and the same was treated as a dispute referred to it and was finally disposed of by the Award which was im pugned before the High Court.
The Tribunal, in the first instance, examined the case of the appellant on the question whether principles of natural justice had been followed in the domestic inquiry, and after hearing the parties.
decided the issue by its order dated 23.2.
1979 in favour of the workman.
Proceeding further the Tribunal asked the management to justify the order of punishment on merits.
Accordingly, the parties led their evidence and the Tribunal recorded a finding that the charges levelled were established by the materials on the record and the workman, therefore, was not entitled to any relief.
As stated earlier, the appellant challenged the award before the Allahabad High Court by filing a writ petition.
By a well discussed judgment, which is now under challenge before us, the High Court dismissed the writ application.
Mr. Ramamurthi, the learned counsel appearing in support of the appeal, has raised before us the following two points: (i) After recording its conclusion that the domestic inquiry was vitiated on account of violation of principles of natu ral justice, the Tribunal was under the duty of announcing its award in favour of the appellant; and since there was no application filed on behalf of the employer for permission to justify the punishment by leading evidence, the Tribunal exceeded its jurisdiction in asking the management to do so.
(ii) In any event, the appellant was entitled to his salary for the period 16.8.1976 (that is, the date of his dismiss al) to 20.7.
the date of the Award of the Tribunal.
Mr. Ramamurthi contended that after the conclusion reached by the Tribunal that the domestic inquiry held by the employer was illegal.
question of justification of the impugned punishment by fresh 414 materials could arise only if the management had applied to the court for permission to justify the punishment and, in the absence of such a prayer, the Tribunal did not have the power to call upon the employer to do so.
In order to pro ceed further with the Reference for the above purpose, it was essential to have a pleading in this regard, along with an express prayer by the employer, and the Tribunal was not entitled to adopt an advisory role by informing the employer of its rights, namely, the right to adduce additional evi dence to substantiate the charges.
The learned counsel heavily relied on the decision of this Court in Shankar Chakravarti vs Britannia Biscuit Co., ; , which was governed by the Central Act.
As rightly urged on behalf of the appellant, a relevant decision under the Central Act must be held to apply to a case under the U.P. Act since the provisions of the two Acts are in pari mate ria.
However, the case cited is not an authority for the point urged by the learned counsel and he, therefore, cannot take any aid therefrom.
In the aforementioned case the Tribunal came to the conclusion that the inquiry was conducted in violation of the principles of natural justice and was, therefore, viti ated, and the award was pronounced rejecting the application of the management under section 33(2)(b) for approval of the action terminating the service of the employee.
The employer challenged the award in a writ case before the Calcutta High Court on the ground that the Tribunal was under a duty to call upon the management to lead evidence in support of the correctness on merits of the order of punishment, which was not done.
It was not a case of a prayer having been made by the employer which was rejected.
This aspect has been spe cifically mentioned in the judgment and it was further observed that before the learned single Judge who heard the writ case no plea was raised about any denial of opportunity to the respondent Company "to lead evidence in proof of charges after the domestic inquiry was found to be defec tive".
The writ petition was dismissed by the learned single Judge and the employer Company preferred a Letters Patent Appeal which was allowed by a Division Bench observing that after holding that the domestic inquiry was defective, it was incumbent upon the Tribunal to give an opportunity to the employer to lead evidence to prove the charges and as this was not done, the award was vitiated in law.
This Court, in appeal, disagreed with the Division Bench of the High Court and reversed the judgment.
It was held that if an opportunity is sought by the employer to adduce additional evidence to substantiate the charges of misconduct, the Tribunal or the Labour Court, as the case may be, should grant the 415 opportunity.
"But if no such opportunity is sought nor there is any pleading to that effect no duty is cast on the Labour Court or the Industrial Tribunal suo motu to call upon the employer to adduce additional evidence to substantiate the charges.
" It was pointed out that there was neither a plead ing in which any claim for adducing additional evidence was made "nor any request was made before the Industrial Tribu nal till the proceedings were adjourned for making the Award and till the Award was made".
The judgment relied upon does not support the proposition formulated before us that in absence of a prayer the Tribunal is debarred from reminding the employer of his right to adduce additional evidence to substantiate the charges.
We do not find any valid ground for accepting the stand of the appellant taken before us.
The entire argument of the learned counsel is rounded on the decision of this Court in Chakravarti 's case which is clear ly distinguishable.
As has been stated earlier, in that case the Court was not called upon to consider the point as urged before us and the judgment repeatedly made it clear that what was under consideration was whether a duty has been cast in law on the Labour Court or the Tribunal to afford an opportunity to the employer in absence of a request and the question was answered in negative leading to the conclusion that: ". if there is no such obligatory duty in law failure to give any such opportunity cannot and would not vitiate the proceedings. " 8.
Analysing the situation, it appears that by asking the respondent to justify the punishment by adducing addi tional evidence.
the Tribunal merely reminded the employer of his rights and the employer promptly availed of the opportunity.
We do not find any illegality in the course adopted which could vitiate the Award.
The first point is.
therefore rejected.
The second ground urged in support of the appeal appears to be well founded.
The learned counsel is right in relying on the observations in Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha; , at p. 215, that if the order of punishment passed by the manage ment is declared illegal and the punishment is upheld subse quently by a labour tribunal, the date of dismissal cannot relate back to the date of the illegal order of the employ er.
The appellant is, therefore entitled to his salary from 16.8.
1976 to 20.7.
1980 and the entire amount should be paid by the respondent Bank within a 416 period of three months from today. ' If the amount is not paid or offered to the appellant as directed, the respondent Bank will be liable to pay interest thereon at the rate of 12% per annum for the future period commencing on the date of expiry of three months from today till the same is rea lised.
The appeal is allowed in part as indicated above.
The parties shall bear their own costs.
P.S.S. Appeal partly allowed.
|
The appellant, an employee of the respondent Sahkari Bank was put under suspension and served with a chargesheet during the pendency of the reference under section 4K of the U.P.
It was followed by a domestic inquiry leading to his dismissal.
Thereupon he filed a complaint under section 6 F of the Act before the Industrial Tribunal and the same was treated as a dispute referred to it.
The Tribunal found that principles of natural justice had not been followed in the domestic inquiry.
However, proceeding further it asked the management to justify the order of punishment on merits.
The parties led their evi dence and the Tribunal recorded a finding that charges levelled were established.
The High Court dismissed the writ petition challenging the award.
In the appeal by special leave, it was contended for the appellant that after the conclusion reached by the Tribunal that the domestic inquiry held by the employer was illegal, question of justification of the punishment by fresh materi als could arise only if the management had applied for permission to justify the punishment and, in the absence of such a prayer the Tribunal did not have the power to call upon the employer to do so, and that in any event the appel lant was entitled to his salary from the date of his dis missal to the date of the award.
Allowing the appeal in part, the Court, HELD: 1.
By asking the respondent to justify the punish ment by adducing additional evidence the Tribunal merely reminded the employer of his rights.
There was no illegality in the course adopted which could vitiate the award.
[225F] 412 Shankar Chakravarti vs Britannia Biscuit Co., [1979] 3SCR 1165, distinguished.
If the order of punishment passed by the management is declared illegal and the punishment is upheld subsequent ly by a labour tribunal, the date of dismissal cannot relate back to the date of the illegal order of the employer.
[225H] In the instant case, the Tribunal had initially found that the domestic inquiry was vitiated on account of viola tion of principles of natural justice.
The appellant was, therefore, entitled to his salary from the date of his dismissal, to the date of the award.
[225D & H] Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha, ; , applied.
|
ivil Appeal No. 229 of 1976.
From the Judgment and Order dated 6.9.1974 of the Kerala High Court in A.S. No. 76 of 1974.
section Padmanabhan, K. Prasonthi and N. Sudha Karan for the Appellant.
Ms. Shyamla Pappu, G. Vishwanathan lyer, V.B. Saharya and Mrs. Sarla Chandra for the Respondents.
The Judgment of the Court was delivered by PUNCHHI, J.
This appeal by special leave is against the judgment and decree dated 6.9.
1974 passed by the High Court of Kerala in A.S. No. 76 of 1974 whereby the High Court reduced the decree of the trial court to one fourth disal lowing the remaining three fourth on the ground that the same was barred by limitation.
The plaintiff appellant hereinbefore us ventures to have the decree of the trial court restored.
Since defendant respondent No. 2, Santu Mohammed Rawther is to meet the established liability, there is an effort on his behalf, though quite belated, to seek leave to cross object to the partial decree of the suit.
The facts giving rise thereto were indeed diverse and varied which got involved in four suits disposed by the trial court by a common judgment, in the first instance, in April, 1967.
Four appeals, were filed by the aggrieved parties before the High Court out of which three were dis posed of by a common judgment on 11 9 1972.
The fourth appeal arising from O.S. No. 141 of 1965 was allowed grant ing permission to the plaintiff appellant herein to amend the plaint so as to base his money suit on the basis of two promissory notes with the aid of acknowledgments contained in some documents.
The trial court in pursuance of the order of remand granted a decree against the defendants for a sum of Rs.56,769.80, with interest thereon at 6 1/4 per cent from 11 11 1964 till 31 7 1955 and thereafter at 6 per cent per annum till payment, with proportionate costs against the estate of 436 Vellappa Rawther in the hands of defendants 2 to 10; and another personal decree for a certain sum against the first defendant respondent which presently is not in dispute.
The High Court on appeal preferred by defendant respondents No. 2 and 4 10 in Original Suit No. 141 of 1965 (the only one surviving) modified the decree reducing it to the one fourth of the decreed sum and focussed the liability on defendant respondent No. 2 absolving others of the remaining liability on the bar of limitation.
Such view was taken on the facts established that the liability to discharge debts of Vellap pa Rawther deceased incurred by means of two promissory notes dated 23 11 1960 and 5 1 1961 for Rs.25,000 and Rs.50,000 respectively, after the death of Vellappa Rawther on 26 6 1962, was individually on his heirs proportionate to the extent of their share in the estate devolving on them and since the debt had become time barred, acknowledgment of the same by defendant respondent No. 2 as well as partial payment of the debt by him rendered him alone liable to meet liability to the extent of one fourth related to the share of the estate which as a Muslim heir he received from the deceased.
In this appeal it is claimed on behalf of the plaintiff appellant that the acknowledgment and partial payment afore referred to saved limitation against all and thus the entire debt could be recovered from defendant respondent No. 2, he being in possession of the estate lying joint, and thus the High Court was in error in upsetting the decree of the trial court.
It has been urged on behalf of the appellant that the integrity of the two debts of Rs.25,000 and Rs.50,000 creat ed by two promissory notes Exhibits B 14 and B 15 could not be broken on the footing that the liability to discharge those debts stood devolved on the heirs of the deceased debtor, proportionate to their shares known to Mahomedan Law.
It has also been urged on behalf of the appellant that the acknowledgment of liability made by defendant respondent No. 2 would under section 18 of the Limitation Act save limitation not only against him but as against other heirs as well, since he is supposed to have acted as a representa tive, agent or partner on their behalf.
Further, it has been urged on behalf of the appellant that part payment made by defendant respondent No. 2 would save limitation under section 19 of the Limitation Act against the other co heirs of the deceased Mahomedan debtor.
The view taken by a learned Single Judge of the Andhra Pradesh High Court in Mohd. Abdul Qadeer vs Azarnatullah Khan and 8 Others, [1974] 1 Andhra Weekly Reporter 98 has been pressed into service to contend that though under the Mahomedan Law each heir is liable for the debts of the deceased to the extent only of a share of the debts, proportionate to his share of the es tate, but so far as the cre 437 ditor is concerned, the identity and integrity of the debt remains unimpaired by the death of the original promisor, and no several debts emerge in place of one debt.
However, in all fairness it was in the next breath pointed out to us that another Single Judge of the same High Court in Vasantarn Sambasiva Rao vs Sri Krishna Cement and Concrete Works, Tenali, [1977] Andhra Law Times Reports at 528 doubted the view in Mohd. Abdul Qadeer 's case (supra) on the basis of a division bench case of that Court taking the view that section 19 of the Limitation Act emphasised not the identity or integrity of the debt, but the due authori sation by one of the debtors or the other to make part payment towards debt due from them, and further that the concept of identity and integrity of the debt due from several heirs was foreign to sections 19 and 20.
Before we proceed any further it would be apposite to clearly recapitulate and re state the principles of Mahome dan Law on the subject.
A five judge bench of this Court in N.K. Mohammad Sulaiman vs N.C. Mohammad Ismail and Others, at page 940 culled out certain well settled and well accepted principles.
Some of these are as under: "The estate of a muslim dying intestate devolves under the Islamic Law upon his heirs at the moment of his death i.e., the estates vests immediately in each heir in proportion to the share ordained by the personal law and the interest of each heir is separate and distinct.
Each heir is under the personal law liable to satisfy the debts of the deceased only to the extent of the share of the debt proportionate to his share in the estate.
" It is plain from the afore quotation that the debt of the deceased gets divided in shares by operation of Muslim Personnal Law amongst the heirs proportionate to their shares in the estate.
The theory of sanctity of the integri ty of the debt is apparently foreign in the case of a de ceased muslim leaving debt and some estate both being divis ible amongst his heirs.
A.A.A. Fyzee in his Outlines of Muhammadan Law (4th Edition) at page 385 quotes Mulla to say: "Proceeding logically, the first principle to be borne in 438 mind is that each heir is liable for the debts of the de ceased in proportion to the share he receives of the inheri tance.
For instance, a Muslim dies leaving three heirs, who divide the estate amongst themselves in accordance with their rights.
A creditor of the deceased sues two of the heirs and not the third; the two heirs sued will each be liable to pay a part of the debt proportionate to his own share of the inheritance, and they will not be made to pay the whole of the debt, either jointly or severally (h).
" In Principles of Mahomedan Law by Mulla, 17th Edition, sections 43 and 46 provide: "43.
Extent of liability of heirs for debts Each heir is liable for the debts of the deceased to the extent only of a share of the debts proportionate to his share of the estate (d).
Suit by creditor against heirs If there be no executor or administrator, the creditor may proceed against the heirs of the deceased, and where the estate of the deceased has not been distributed between the heirs, he is entitled to execute the decree against the property as a whole without regard to the extent of the liability of the heirs inter se (h).
" The question whether the ownership of a Muhammadan intestate devolves immediately on his heirs, and such devo lution is not contingent upon, and suspended till, payment of such debts was answered authoritatively almost a century ago by a Full Bench of the Allahabad High Court in Jafri Begam vs Amir Muhammad Khan, [1885] Vol.
7 ILR Allahabad Series in the negative.
Rather it was authoritatively set tled (see page 843 of the Report) that Muhammadan heirs are independent owners of their specific shares, and if they take their shares subject to the charge of the debts of the deceased, their liability is in proportion to the extent of their shares.
These observations in Jafri Begam 's case (supra) are prime roots of the theory as to the divisibility of the debt in the hands of heirs of a Muslim intestate.
So it would be right to treat it settled that muslim heirs are independent owners of their specific shares simultaneously in the estate and debts of the deceased, their liability fixed under the Personal Law proportionate to the extent of their shares.
In this state 439 of law it would be unnecessary to refer to other decisions of various High Courts touching the subject.
So we proceed on the footing that as many heirs, as are defending this cause, there are debts in that number.
Now it is time to advert to Exhibits B7 and B51.
Exhibit B7 is a letter by defendant respondent No. 2 to the plain tiff appellant stating that he will pay off all the amounts due to the plaintiff and to everyone else within two months.
The trial court construed this to be an acknowledgment of the debt.
The High Court agreed with that finding that the document contained an acknowledgment in writing.
Practically nothing was said against this finding before the High Court.
Then we have Exhibit B51 which is styled as a consent deed, executed by defendant respondent No. 2 authorising the first defendant respondent to dispose of two motor cars for a sum of Rs. 13,000 and discharge the liabilities of his deceased father arising out of the two promissory notes Exhibit B 14 and B 15 aforesaid.
The trial court found that Exhibit B51 created an agency in favour of defendant respondent No.1 within the meaning of section 19 of the Limitation Act.
The High Court agreed with the view of the trial court and came to the conclusion that the deed Exhibit B51 contained an acknowledgment and the two endorsements made on the respec tive promissory notes Exhibit B 14 and B 15 coupled by a payments of sums towards the debt by the duly authorised agent of defendant respondent No. 2 could well be regarded as payments attracting extension of limitation under section 19 of the Limitation Act.
Having recorded that finding the High Court directed itself to the question whether payments thus made would extend limitation as against the other heirs also and held in the negative.
The conclusion is that ac knowledgment Exhibit B7 and endorsements on Exhibits B 14 and B 15 on the authority of Exhibit B51 were held to have extended the period of limitation only against defendant re spondent No. 2.
Though we have been addressed to take a contrary view on reinterpretation of these documents but, having heard learned counsel in that behalf we are inclined to agree with the High Court and leave the matter undis turbed denying ourselves treading in the field of facts.
Sub section (1) of section 18 of the Limitation Act (corresponding section 19 of the repealed Act IX of 1908) provides as follows: "Where, before the expiration of the prescribed period of a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or 440 right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
" Sub section (2) of section 20 (corresponding to section 21 of the repealed Act IX of 1908) says that nothing in the said sections (being sections 18 and 19) renders one of several joint contractors, partners, executors or mortgagees chargeable by reason only of a written acknowledgment signed by, or of a payment made by, or by the agent of, any other or others of them.
The heirs of a muslim dying intestate on whom falls the liability to discharge the debt, proportionate to their respective shares in the estate devolved, can hardly be classified as joint contractors, partners, executors or mortgagees.
As held above they are by themselves independent debtors; the debt having been split by operation of law.
Inter se they have no jural relationship as co debtors or joint debtors so as to fail within the shadow of contrac tors, partners, executors or mortgagees or in a class akin to them.
They succeed to the estate as tenants in common in specific shares.
Even a signed written acknowledgment by the principal or through his agent would bind the principal and not anyone else standing in jural relationship with the principal in accordance with section 20(2).
The Muslim heirs inter se have no such relationship.
In this view of the matter, we take the view that the High Court was right in confining the acknowledgment of the debts only to respondent No. 2 and not extending the acknowledgment to the other co heirs for their independent position.
Section 19 of the Limitation Act, (corresponding to section 20 of the repealed Act IX of 1908).
so far as is relevant for our purpose, provides that where payment on account of debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made.
In the context, if the debt is one and indivisible, payment by one will interrupt limitation against all the debtors unless they come within the exception laid down in section 20(2) which has been taken note of earlier.
And if the debt is susceptible of division and though seemingly one consists really of several distinct debts each one of which is pay 441 able by one of the obligors separately and not by the rest, section 20 keeps alive his part of the debt which has got to be discharged by the person who has made payment of inter est.
It cannot affect separate shares of the other debtors unless on the principal of agency, express or implied, the payment can be said to be a payment on their behalf also.
See in this connection Abheswari Dasva and Another vs Babu rali Shaikh and Others, AIR 1937 Cal. 191.
The payment made on account of debt by defendant respondent No. 2 as an independent debtor, and not as an agent, express or implied, on behalf of other co heirs could hardly, in the facts established, here be said to be a payment on behalf of all so as to extend period of limitation as against all.
We are thus of the considered view that the High Court was right in confining the extension of limitation on payment of a part of debt only against defendant respondent No. 2, proportion ate to his share of the estate devolved on him which was one fourth.
We are further of the view that the High Court was right in holding the suit against other co heirs to be barred by limitation relating to their shares of the debt.
Lastly it was urged by learned counsel for the appellant that even though the debts of the deceased be taken to be divisible and devolving separately on the heirs in propor tion to their shares, the plaintiff still could proceed to recover the entire debt from defendant respondent No. 2 since he was still continuing in possession of the estate and had not parted with it by means of partition to the other co heirs.
This argument cannot sustain for a moment in view of the clear statement of law made by the Allahabad High Court in Jafri Begam 's case (supra) at pages 841 42.
Such a question has been driven therein to the realm of procedural law and held to be not part of substantive law constituting any rule of inheritance.
The property of the co heirs supposedly in possession of defendant respondent No. 2 cannot be touched directly in his hand unless the co heirs being parties to the suit are held liable to pay their share of the debt; the debt being recoverable.
But here it involves a factual aspect on which there is not enough material on the record or the matter having been examined by the court below.
We decline to take up this issue at this stage.
For the reasons aforesaid we find no merit in this appeal and dismiss it.
We equally find no merit in the belated cross objection of defendant respondent No. 2, leave of which was sought during the course of the hearing of the appeal.
We decline to entertain the request.
There shall be no order as to costs.
R.S.S. Appeal dismissed.
|
One Vellappa Rawther, deceased, had incurred debt by means of two promissory notes for Rs.25,000 and Rs.50,000.
In the suits filed on the basis of the promissory notes, the Trial Court granted a decree against the estate of Vellappa Rawther in the hands of defendants 2 to 10.
The High Court on appeal modified the decree reducing it to one fourth of the decreed sum and focussed the liability on defendant Respondent No. 2 absolving others of the re maining liability on the bar of limitation.
Such view was taken as the facts established that the liability to dis charge debts of Vellappa Rawther after his death was indi vidually on his heirs proportionate to the extent of their share in the estate devolving on them, and since the debt had become time barred, acknowledgment of the same by de fendant respondent No. 2 as well as partial payment of the debt by him rendered him alone liable to meet liability to the extent of one fourth related to the share of the estate which as a Muslim heir he received from the deceased.
Before this Court, it was claimed on behalf of the appellant that under sections 18 and 19 of the Limitation Act the acknowledgment and partial payment saved limitation against all and thus the entire debt could be recovered from defendant respondent No. 2, he being in possession of the estate lying joint.
Dismissing the appeal, this Court, HELD: (1) The debt of the deceased gets divided in shares by operation of Muslim Personal Law amongst the heirs proportionate to their shares in the estate.
The theory of sanctity of the integrity of the 434 debt is apparently foreign in the case of a deceased muslim leaving debt and some estate both being divisible amongst his heirs.
[247G] Mohd.
Abdul Qadeer vs Azamatullah Khan and 8 Others, [1974] 1 Andhra Weekly Reporter 98; Vasantam Sambasiva Rao vs Sri Krishna Cement and Concrete Works, Tenali 1977 Andhra Law Times Reports at 528; N.K. Mohammad Sulaiman vs
N.C. Mohammad Ismail and Others, at 940, re ferred to.
(2) It would be right to treat it settled that muslim heirs are independent owners of their specific shares simul taneously in the estate and debts of the deceased, their liability fixed under the personal law proportionate to the extent of their shares.
[248H] Jafri Begum vs Amir Muhammad Khan, [1885] Vol.
7 ILR Allahabad series, referred to.
(3) The heirs of a muslim are by themselves independent debtors; the debt having been split by operation of law.
Inter se, they have no jural relationship as co debtors or joint debtors so as to fall within the shadow of contrac tors, partners, executors or mortgagees or in a class akin to them.
They succeed to the estate as tenants in common in specific shares.
[250D] (4) Even a signed written acknowledgment by the princi pal or through his agent would bind the principal and not anyone else standing in jural relationship with the princi pal in accordance with section 20(2) of the Limitation Act.
The Muslim heirs inter se have no such relationship.
[250E] (5) If the debt is one and indivisible, payment by one will interrupt limitation against all the debtors unless they come within the exception laid down in section 20(2).
And if the debt is susceptible of division and though seem ingly one consists really of several distinct debts each one of which is payable by one of the obligors separately and not by the rest, section 20 keeps alive his part of the debt which has got to be discharged by the person who has made payment of interest.
It cannot affect separate shares of the other debtors unless on the principal of agency, express or implied, the payment can be said to be a payment on their behalf also.
[250H; 251A] Abheswari Dasya and Another vs Baburali Shaikh and Others, AIR 1937 Cal. 191, referred to.
435 (6) The property of the co heirs supposedly in posses sion of defendant respondent No. 2 cannot be touched direct ly in his hand unless the co heirs being parties to the suit are held liable to pay their share of the debt; the debt being recoverable.
[251F]
|
ivil Appeal No. 2494 of 1978.
From the Judgment and Order dated 9.12.
1977 of the Andhra Pradesh High Court in Writ Appeal No. 465 of 1976.
A. Subba Rao for the Appellant.
A.S. Nambiar, B. Parthasarthy, G. Prabhakar and K. Ram Kumar for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This appeal by special leave is from the common Judgment of the High Court of Andhra Pradesh dismiss ing two writ appeals and a writ petition.
The Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 (hereinafter referred to as the 'old Act ') was applicable to Vijayawada Municipality of Andhra Pradesh and property tax was levied under that Act.
The Andhra Pradesh Municipalities Act 1965 (hereinafter referred to as the new Act ') came into force on 2.4.1965.
Section 2(11) of the new Act defined "council" to mean "a municipal council constituted under this Act.
" Section 391(1) of the new Act repealed the old Act.
Section 389 of the new Act provided: "389.
Act to be read subject to Schedule IX in regard to first reconstitution of a council etc.
: In regard to the first constitution of a council for any local area under Section 3. or to the first reconstitution in accordance with the provisions of this Act, of a council in existence at the commencement thereof, and otherwise in first giving effect to the provisions of this Act, this Act shall be read subject to the rules in schedule IX.
" 384 The Schedule IX to the new Act contained the transitional provisions in the rules therein.
Rule 12 thereof dealt with levy of taxes etc.
and said: "12.
Levy of taxes etc.
Any tax, cess or fee which was being lawfully levied by or on behalf of any council at the com mencement of this Act and which may be lawfully levied under this Act, shall notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee be levied by or on behalf of the council at such rate as may be prevailing at such commencement or at such other rate as may be determined by the council from time to time, by a resolu tion for the year in which this Act is brought into force, and unless the Government by general or special order other wise direct, for subsequent years also.
" The result was that tax lawfully levied and continued to be levied under the old Act had to be continued unless the council by resolution determined such other rate from time to time, and unless the Government by general or special order otherwise directed under the transitional provisions.
On 18.9.
1969 the Government of Andhra Pradesh issued G.O. Ms. No. 749 M.A. in exercise of its powers under the afore said Rule 12 of Schedule IX directing that all Municipal Councils, shall with effect from 1.4.70 levy the Property tax as per the provisions of the new Act.
But due to certain administrative difficulties the revision could not be com pleted before 1.4.
1970 and the Government, therefore. issued G.O. Ms. No. 293 M.A. dated 18.4.
1970 directing the Municipal Council to levy the property tax as per the provi sions of the new Act from 1.10. 1970.
By another G.O. Ms. No. 81 M.A. dated 30.1.1971 the Government directed the Municipal Council of vijayawada to continue to levy the property tax under the provisions of the old Act as certain rate payers had filed writ petition in the High Court and obtained stay.
However, by G.O. Ms. No. 675 M.A. the G.O. Ms. No. 81 was rescinded and the Vijayawada Municipal Coun cil was directed to collect revised taxes under the provi sions of the new Act with effect from 1.10. 1970.
This latter G.O. Ms. No. 675 was in its turn rescinded by G.O. Ms. No. 255 M.A. dated 15.6.73 whereby the Government or dered that the Vijayawada Municipal Council shall continue to levy the property tax under the provisions of the old Act and that G.O. was to be deemed to have come into force from 1.10.1970.
As a result the Vijayawada Municipality continued to levy and enhance the property tax under the provisions of the old Act.
It 385 may be mentioned that under section 82 of the old Act property, tax was levied on the basis of gross annual rental value, whereas under section 87 of the new Act the basis of assessment in owner occupied building was the capital value thereof to be determined in the prescribed manner.
The G.O. Ms. No. 255 dated 15.6.73 was challenged by house property owners in the High Court in two writ peti tions under Article 226 of the Constitution of India seeking writ in the nature of mandamus or order or direction re straining the Vijayawada Municipal Council from enforcing it and declaring the same illegal and void.
It was inter alia contended before the learned Single Judge that by earlier G.Os.
the Government having directed that taxes should be levied under the new Act, the transitional power under rule 12 had been already exercised and the power to levy any tax under the old Act therefore ceased and it was not open to the Government to rescind the previous orders and re direct taxes to be levied under the old Act.
That contention was accepted observing: "The language of the Rule is clear that once the Government by a general or special order, otherwise directs, the power to levy tax under the old Act is exhausted.
" Even so, it was held that in view of the provisions in section 4(1) of the Andhra Pradesh Municipalities (Fourth Amendment) Act (23 of 1975) which validated the actions taken, those could not be challenged as invalid.
The submissions that the Amendment Act was not retrospective and that the enhancement of the tax was not made following the procedure prescribed by law, were also negatived holding that the procedure prescribed under the old Act was followed inasmuch as under the old Act the property tax was levied on the basis of only rental value whereas under the new Act it was on the basis either of the rental value or of the capital value, and that under the old Act when tax was being levied on the basis of rental value there was no need to ascertain the capital value of the land and for enhancing the assessment all that the authority had to know was whether there had been an increase in the rent and Rule 6 of Schedule II which dealt with the value of the building for the purposes of property tax was inapplicable as the levy under the old Act on the basis of rental value and enhancement could be done accord ing to the procedure contained in Schedule VII Rule 10 of the old Act.
It was not denied that special notice as re quired under the old Act was given.
The writ petitions were accordingly dismissed.
386 Two writ appeals were filed by the writ petitioners.
Another writ petition having raised identical questions was heard with the two appeals by the Division Bench.
The Divi sion Bench held that the finding of the Single Bench that having already given directions by the General Orders under the transitory provision of Schedule IX Rule 12 the Govern ment 's power under that provision ceased and it had no power to rescind that order and direct that the taxes which were under the old Act must be continued to be collected was not challenged before it.
The Division Bench held that the Fourth Amendment Act had entrusted to the Municipal Councils the power to tax under the old Act, though that Act had been repealed.
It held that though the actions of the Vijayawada Municipal Council pursuant to the General Order might have been invalid those were validated by section 4(1) of the Fourth Amendment Act.
It was also held that the appellant could pursue their remedies by way of revision under the new Act.
Thus, the Division Bench having dismissed the two writ appeals as well as the writ petition by the impugned judg ment and also having refused the certificate, the appellant has obtained special leave.
Mr. A. Subba Rao, the learned counsel for the appellant, submits that under the old Act the basis for assessment of property tax was the annual rental value while under the new Act it was capital value.
By the G.O. No. 749 the Government having directed that property tax would be levied under the new Act, the subsequent G.Os.passed after rescinding the said G.O. No. 749 and redirecting assessment to be made under the old Act were invalid as was held by the Single Bench and that finding was not challenged before the Divi sion Bench.
Consequently, it is submitted, during the period from 1969 to 1973 there was no valid law to enable the Municipal Council to levy taxes under the old Act and the actions under the G.Os.
are sought to be validated by the Fourth Amendment Act of 1975, but unless the substantive law relating to the method of assessment was also amended retro spectively, the invalid actions could not be validated, as that law could not be deemed to have been in existence by a legal fiction.
Council submits that section 87 of the new Act relating to levy of Property Tax was amended so as to bring it in conformity with the corresponding provision of section 20 of the old Act which prescribed rental value as the basis for assessment.
It is pointed out that section 3 of the Fourth Amendment Act did not contain any indication that the said amendment was retrospective so as to bring it on the statute book by a fiction prior to 1973 when the invalid assessment was made.
The Fourth Amendment Act came into force only from 10th June, 1975 which was the date of the Ordinance.
The amendment of section 87 of the new Act 387 being not retrospective in its operation prior to 1973, it is submitted that the invalid assessments could not have been validated.
Mr. A.S. Nambiar, the learned counsel for the respond ents, submits that the old Act entitled the Municipality to collect the taxes which had been collected in accordance with law and after coming into force of the new Act accord ing to the intermediate G.Os.; and that the impugned G.O. Ms. No. 255 dated 15.6.73 having directed the taxes to be levied and collected in accordance with the old Act, there was.
no infirmity in the Judgments of the High Court.
It appears that after the writ petitions were filed challenging G.O. Ms. No. 255 dated 15.6.73 the Government issued the Andhra Pradesh Municipalities (Amendment) Ordi nance 1975 (Ordinance 1 of 1975) which became the Andhra Pradesh Municipalities (Fourth Amendment) Act, 1975 which was deemed to have come into force on the 10th June, 1975.
By the said Amendment act not only sections 85 and 87 of the new Act were amended but also certain intervening actions of the Municipal Council were sought to be validated.
Section 85 dealt with levy of tax and sub section (1) thereof said: "Where the council by resolution determines that a property tax shall be levied, such tax shall be levied on a11 build ings and lands within the municipal limits save those ex empted by or under this Act or any other law." Sub section (2) provided: "Save as otherwise provided in this Act and subject to the provisions of sections 81 & 87 and in accordance with the rules made by the Government in this behalf, these taxes shall be levied . .
Section 2 of the Fourth Amendment Act amended section 85 of the new Act by substituting clauses (a) and (b) of sub section (2) excluding the proviso thereto, by the following words: "At such percentages of the annual rental value of lands or buildings or both as may be fixed by the council.
" Section 86 of the new Act provided as follows: "86.
Levy of property tax on a direction by Government: 388 (1) The Government may, after consultation with the council by order published in the Andhra Pradesh Gazette, direct any council to levy the property tax referred to in sub section (1) of Section 81 or any class of such tax, at such rate and with effect from such date, not being earlier than the first day of the half year immediately following that in which the order is published, as may be specified in the order.
(2) When an order under sub section (1) has been published, the provisions of this Act relating to property tax shall apply as if the council had.
on the date of publication of such order, by resolution, determined to levy the tax at the rate and with effect from the date specified in the order and as if no other resolution of the council under Section 81 determining the rate at which and the date from which property tax shall be levied, had taken effect.
(3) A council shall not alter the rate at which the property tax of any class or such tax is levied in pursuance of an order under sub section (1) or abolish such tax except with the previous sanction of the Government.
" Section 87(1) of the new Act provided: "87(1) Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto unless the owner of the building is a different person from the owner of such site or premises.
, ' By section 3 of the Fourth Amendment Act in sub section (2) of section 87 of the new Act the following words were substituted, namely: "(2) The annual rental value of lands and buildings Shall be deemed to be the gross annual rent at which they may reason ably be expected to let from month to month or from year to year less a deduction, in the case of buildings, of ten per cent of that portion of such annual rent which is attributa ble to the buildings alone, apart from their sites and the adjacent lands occupied as an appurtenance thereto; and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever.
389 Provided that in respect of any building and the land appur tenant thereto, the fair rent of which has been fixed under section 4 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the gross annual rent shall be the annual amount of the fair rent so fixed.
" Section 4 of the Fourth Amendment Act sought to validate the actions taken earlier by providing as under: "4(1) Notwithstanding anything in the provisions of the principal Act or any order of the Government made under the rule 12 in Schedule IX to the Principal Act, any,action taken till the commencement of this Act by any municipal council to continue to levy and collect the property tax in accordance with the method or manner or assessment or levy as provided in the Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 or the Andhra Pradesh (Telangana Area) District Municipalities Act, 1956, as the case may be, shall not be deemed to be invalid or ever to have been invalid by reason only of the fact that such action was taken by the said municipal council during the period when the power in this behalf had not been validly entrusted to it in accordance with the provisions of the principal Act or the rules made thereunder and accordingly: (a) The levy and collection of property tax made in pursu ance of such action shall for all purposes be deemed to be, and to have always been, made in accordance with law; and (b) no suit or other proceeding shall be instituted or continued in any court against the municipal council con cerned or any person or authority whatsoever on its behalf on the ground only that any such action or levy and collec tion was not taken or made in accordance with law.
(2) Notwithstanding anything in sections 85 and 87 of the Principal Act as amended by this Act, the property tax levied in accordance with the provisions of the Principal Act as it stood before the commencement of this Act by such of the municipalities as have come into existence after the commencement of the principal Act shall continue to.
be levied and collected by or on behalf of the Municipal 390 Council of any such municipality for the year commencing on the 1st April, 1975 .
" Admittedly the validity of the Fourth Amendment Act had not been challenged in the High Court.
In fact it was passed during the pendency of the writ petitions in the High Court.
Mr Suba Rao 's submission is that section 3 of the Fourth Amend ment Act having not been made retrospective, section 4 of the Act could not have said that the levy and collection of property tax made in pursuance of such action for all purposes be deemed to be and to have always been made in accordance with law.
It is true that only sub section (2) of Section 87 of the new Act was substituted as stated above by the Fourth Amendment Act.
However.
once the amendment substituted sub section (2) of section 87 it formed a part of that section.
This amendment only provided the basis of assessment and it itself did not provide for the commencement of such calcula tion which however might be taken from the other provisions of the new Act or from the General Orders issued by the Government.
Section 4(1) of the Fourth Amendment Act ex pressly validated any action taken till the commencement of that Act notwithstanding anything in the provisions of the new Act or in any Government Order made under rule 12 of Schedule IX of the new Act and the Municipal Council should continue to levy and collect the property tax in accordance with the method or manner of assessment or levy as provided in the old Act and those acts shall not be deemed to be invalid or ever to have been invalid by reason only of the fact that such action was taken by the said municipal coun cil during the period when the power in this behalf had not been validly entrusted to it in accordance with the provi sions of the new Act or the rules made thereunder and that the levy and collection of property tax may in pursuance of such action shall for all purposes be deemed to be, and to have always been, made in accordance with law.
From the above provisions of section 4( 1 ) of the Fourth Amendment Act there is no doubt that the legislature intended to validate the actions taken under the general orders and under the old as well as the new Act.
It may be interpreted that the impugned G.O. having been validated, the tenure covered by it must also be held to have been covered by it, so that there was really no interregnum in the process or procedure of assessment of property tax.
Mr. Subba Rao relies on Janapada Sabha, Chhindwara vs The Central Provinces Syndicate Ltd. and Anr., ; In that case in 1935, the Independent Mining Local Board, Chhindwara con 391 stituted under C.P. Local Self Government Act, 1920 resolved to levy a cess on coal extracted within the area at 3 pies per ton.
The sanction of the Local Government, as required by section 51(2) of the Act, was obtained for the levy.
In 1943, the levy was enhanced to 4 pies, in 1946 to 7 pies and in 1947 to 9 pies.
The validity of the enhanced levy was chal lenged and this Court, in appeal, held that the increased levy would also require the previous sanction of the Local Government and such sanction not having been obtained, the levy at a rate higher than 3 pies was illegal.
The State legislature thereafter enacted the Madhya Pradesh Koyala Upkar (Manyatakaran) Adhiniyam, 1964.
Section 2(a) of that act defined "Board" to mean the independent Mining Local Board, Chhindwara and its successor body the Janapada Sabha Chhindwara, the appellant, constituted under the C.P. and Berar Local Government Act, 1948.
Section 2(b) defined "cess" to mean "a cess imposed by the independent Mining Local Board Chhindwara or its successor" Section 3(1) of that Act provided that 'notwithstanding a judgment of any court, cesses imposed, assessed or collected by the Board in pursuance of the notifications specified in the Schedule shall.
for all purposes, be deemed to be, and to have been validly imposed.
assessed or collected as if the enactment under which they were issued stood amended at material times so as to empower the Board to issue the said notifications.
In the Schedule were specified three notifications enhancing the rate of cess.
On the question whether the enhanced levy was validated by the 1964 Act, this Court held that the Act did not give legal effect to the imposition of cess at the enhanced rates.
It was pointed out that the text or even the nature of the amendments was not disclosed though Section 51(2) of the 1920 Act could not be deemed to have been repealed by the 1964 Act, because the latter Act, in terms was limited in its application to the Independent Mining Local Board, Chhindwara, and its successor body and only in respect of the three notifications specified in the Sched ule.
An Act so limited in its application to one Local Board and to specified notification could not repeal the sub section which applied to all Boards.
Nor was there anything to indicate that notifications issued by the appellant Board without the sanction of the State Government must be deemed to have been issued validly.
It was held that such an in tendment could not be implied without express language, in a taxing statute.
It was further observed that it was open to the legislature within certain limits to amend the provi sions of an Act retrospectively and to declare what the law shall be deemed to have been.
But the Legislature, in that case attempted to overrule or set aside a decision of the Court.
It was not open to the Legislature to say that a judgment of a Court properly constituted and rendered in exercise of its powers in a matter brought 392 before it shall be deemed to be ineffective either as a precedent or between the parties.
That case is, therefore, clearly distinguishable from the instant case on facts.
Firstly, in the instant case there is no question of any judgment of any Court having been overruled or set aside.
The Single Bench Judgment was passed on 23.3.76, that is, after the Amendment Act which came into force on 10.6.75.
Secondly the language of Section 4(1) is very clear as to the intention of the legislature as to the contents of the amendment.
What the amendment in the instant case did was to amend the new Act and also validate actions taken under the G.O. impugned in the case.
What was prescribed by the im pugned G.O. was the same as was prescribed by the old Act which itself stood repealed by the new Act.
The procedure thus prescribed was one under the G.O. and not under the old Act, and Section 4(1) validated those actions without reviv ing the repealed old Act itself but by amending the new Act and validating the transitory measure taken by virtue of the Government 's orders issued under the transitional provision Schedule IX, of the new Act particularly Rule 12 thereunder.
The validity of Section 4(1) itself having not been chal lenged, it was not open for the Courts to give.
an interpre tation contrary to the clear and unequivocal language of the Section.
The rule is that an amendment Act must be read as if the words of amendment had been written into the Act except where that would lead to an inconsistency.
(Shamarao V. Parulekar vs The District Magistrate, Thana Bombay, at 689) Power of the legislature to pass a law includes the power to validate actions retrospectively, of course, within Constitutional limitations.
It is apt to remember that the State 's power to tax is derived from the Constitution and the municipality 's power to tax is derived from the State Legislature which could delegate that power in the manner the Constitution permits to the municipal council, an agent of the State Government, and the munici pality cannot refuse to raise taxes as directed.
The proper authority to determine what should and what should not constitute a public burden is the Legislature of the State.
This is not only true for the State itself but it is also true in respect of each municipality of the State; these inferior corporate bodies having only such authority in this regard as the legislature shall confer upon them.
A statute will not be declared unconstitutional unless it is specifi cally challenged and the principle is equally applicable to an enactment authorising levy of a tax for a public purpose.
The power to tax is a sovereign power and is legislative in character and it has to be exercised within the Constitu tional limitations.
The statutes relating to municipal taxes may be changed according to the existing legislative rules of State policy unless forbidden by the Constitution from doing so.
Irregular assessment may 393 also be regularised with retrospective effect within.
the same Constitutional limitations.
Where the Court has not already declared invalid a taxing measure which was of doubtful validity, it is permissible for appropriate legis lature to validate it by retrospective legislation.
No legal fiction is involved in such a case.
Mr. Subba Rao 's submis sion has, therefore, to be rejected.
We find force in the submission of Mr. Nambiar in this regard.
The G.O. impugned before the High Court has been covered and validated by the above provisions, the G.O. itself covered the period after the repeal of the old Act and till the date of commencement of the Fourth Amendment so that no interregnum was really there.
The assessment made according to the provisions of the old Act were validated as actions taken by the council pursuant to the impugned G.O. and not under the provisions of the old Act which was al ready repealed.
While referring to the old Act, the G.O. did not revive the Act but only prescribed the same procedure as was found in the repealed Act as a transitory measure.
The validity of section 4(1) of the Fourth Amendment Act having not been challenged before the High Court, we do not find any infirmity in the impugned judgments of the High Court.
In the result, this appeal fails and is dismissed but under the facts and circumstances of the case without any order as to costs.
Y. Lal Appeal dismissed.
|
Vijayawada Municipality of Andhra Pradesh earlier levied property tax under the Andhra Pradesh (Andhra Areas) Dis trict Municipalities Act, 1920.
That Act 'was repealed and the new Act known as the Andhra Pradesh Municipalities Act, 1965 came into force on 2.4.1965.
Under the old act property tax was levied on the basis of gross annual rental value, whereas under section 87 of the new Act the basis of assess ment in owner occupied building was the capital value there of to be determined in the prescribed manner.
Section 389 of the new Act provided that that Act was to be read subject to Schedule IX which contained transitional provisions in the rules.
Rule 12 thereof dealt with levy of taxes etc.
The Government under Rule 12 issued a G.O. Ms. No. 749 M.A. directing that all Municipal Councils shall with effect from 1.4.70 levy the property tax as per the provisions of the new Act, which date by a subsequent G.O. was changed to 1.10.1970.
By another G.O.Ms.
No. 81 M.A. dated 30.1.71, the Government directed the Vijayawada Municipal Council to continue to levy the property tax under the provisions of the old Act as rate payers had filed writ petitions in the High Court and obtained stay.
However, by G.O.Ms.
675 M.A., the G.O.No. 81 was rescinded and the Vijayawada Municipal Council was directed to collect revised taxes under the provisions of the new Act with effect from 1.10.70.
This G.O. was rescinded and by G.O. Ms. No. 255 M.A. dated 15.6.73 the Government directed the Vijayawada Council to levy the property tax under the old Act.
As a consequence, the Vijayawada Municipal continued to levy and enhance the property tax under the old Act.
The validity of G.O.Ms.
No. 255 dated 15.6.73 was chal lenged by house property owners in the High Court in two writ petitions seeking an order restraining the Vijayawada Municipal Council from enforcing it.
and declaring the same illegal and void.
The petitioners ' contention 382 amongst others was that the Government having directed that the taxes be levied under the new Act, the transitional power under rule 12 stood exercised, and the power to levy tax under the old Act had ceased and it was no longer open to the government to rescind the previous orders.
The High Court accepted the said contention, but held that in view of the provisions of section 4(1) of the Andhra Pradesh Munici palities (Fourth Amendment) Act (23 of 1975), which validat ed the actions taken, those could not be challenged as invalid.
The writ petitions were therefore dismissed.
Ap peals to 'the Division Bench, having failed, this appeal has been filed after obtaining special leave.
Dismissing the appeal, this Court, HELD: The State 's power to tax is derived from the Constitution, and the municipality 's power to tax is derived from the State Legislature, which could delegate that power in the manner the Constitution permits to the municipal council, an agent of the State Government and the municipal ity cannot refuse to raise taxes as directed.
The proper authority to determine what should and what should not constitute a public burden is the Legislature of the State.
This is not only true for the State itself, but it is also true in respect of each municipality of the State; these inferior corporate bodies having only such authority in this regard as the legislature shall confer upon them.
[202E F] A statute will not be declared unconstitutional unless it is specifically challenged and the principle is equally applicable to an enactment authorising levy of a tax for a public purpose.
The power to tax is a sovereign power and is legislative in character and it has to be exercised within the constitutional limitations.
The statutes relating to municipal taxes may be changed according to the existing legislative rules of State policy unless forbidden by the Constitution from doing so.
[202G H] Irregular assessment may also be regularised with retro spective effect within the Constitutional limitations.
Where the Court has not already declared invalid a taxing measure which was of doubtful validity, it is permissible for appro priate legislature to validate it by retrospective legisla tion.
No legal fiction is involved in such a case.
[203A C] The G.O. itself covered the period after the repeal of the old Act and till the date of commencement of the fourth amendment so that no interregnum was really there.
The assessment made according to the provisions of the old Act were validated as actions taken by the Council 383 pursuant to the impugned G.O. and not under the provisions of the old Act which was already repealed.
While referring to the old Act, the G.O. did not revive the Act but only prescribed the same procedure as was found in the repealed Act as a transitory measure.
[203B C] Janapada Sabha Chhindwara vs The Central Provim 'es Syndicate Ltd. and Anr., ; , referred to.
|
ivil Appeal No 2960 of 1987.
From the Judgment and Order dated 18.2.
1986 of the Punjab & Haryana High Court in R.S.A. No. 3204 of 1984.
428 0 K. Khuller and R .C.
Kohli for the Appellant.
C.M. Nayar for the Respondent.
This appeal by special leave is against the judgment and decree dated February 18, 1986 in Second Appeal No. 3204 of 1984 of Punjab & Haryana High Court at Chandigarh.
The appellant/plaintiff while was working as Inspector.
Food and Supplies at Algaon.
the Director.
Food and Supplies.
Punjab on June 10.
1976 visited the place and found him to have purchased sub standard wheat landing him in receiving a charge sheet on June 29. 1976 for his miscon duct.
The appellant had submitted his explanation.
Rules 8 and 9 of the Punjab Civil Services (Punishment and Appeal) Rules.
1970 for short 'the Rules ' envisage the procedure to conduct an enquiry into the misconduct.
But the disciplinary authority.
on consideration of the explanation found that the appellant committed a minor misconduct.
Accordingly by order dated April 12.
1977 directed stoppage of two incre ments with cumulative effect.
The appellant laid the suit for a declaration that the offending order amounts to major penalty and imposition thereof without conducting enquiry as enjoined under Rules 8 and 9 is illegal.
On contest by the respondent state, the trial court held that the impugned order amounts to major penalty and granted a decree invali dating the order.
On appeal, though the Distt.
Court con firmed, on further Second Appeal the High Court held it to be minor penalty within the meaning of Rule 5(iv) of the Rules obviating the need to make regular enquiry.
Assailing the legality thereof this appeal has been filed.
The only question that needs decision is whether stop page of two increments with cumulative effect is a major penalty '? Admittedly Rules 8 and 9 envisage conducting an enquiry into misconduct after giving an opportunity to the delinquent employee in the manner prescribed therein and on establishing the charge to pass an appropriate order impos ing a major penalty prescribed in either clauses V to IX or minor penalty under clauses I to IV of Rule 5 of the Rules.
If it is a minor penalty indisputably the need to conduct regular enquiry has been dispensed with.
Rule 5 prescribes the penalties thus: "5.
Penalties: The following penalties may, for good and sufficient reasons.
and as hereinafter provided.
be imposed on a Government employee.
namely: 429 Minor Penalties (i) Censure; (ii) withholding of his promotions; (iii) recovery from his pay of the whole or part of any pecuniary loss caused by him to the Government by negligence of breach of orders; (iv) withholding of increments of pay; Major Penalties (v) reduction to a lower stage in the time scale of pay for a specified period, with further directions as to whether or not the Government employee will earn increments of pay during the period of such reduction and whether on the expiry of such period, the reduction will or will not have the effect of postponing the future increments of his pay; (vi) reduction to a lower time scale of pay, grade, post or service which shall ordinarily be a bar to the promotion of the Government employee to the time scale of pay, grade, post or service from which he was reduced, with or without further directions regarding conditions of restoration to the grade or post or service from which the Government employee was reduced and his seniority and pay on such restoration that grade, post or service; (vii) compulsory retirement; (viii) removal from service which shall be a disqualifica tion for future employment under the Government; (ix) dismissal from service which shall ordinarily be a disqualification for future employment under the Govern ment '.
Clauses VI to IX are not relevant to the facts of the case.
Withholding of increments of pay simpliciter undoubtedly is a minor penalty within the meaning of Rule 5(iv).
But sub rule (v) postulates reduction to a lower stage in the time scale of pay for a specified 430 period with further directions as to whether or not the Government employee shall earn increments of pay during the period of such reductions and whether on the expiry of such period the reduction will or will not have the effect of postponing the future increments of his pay.
It is an inde pendent head of penalty and it could be imposed as punish ment in an appropriate case.
It is one of the major penalties.
The impugned order of stoppage of two increments with cumulative effect whether would fall within the meaning of Rule 5(v)? If it so fails Rules 8 and 9 of the Rules require conducting of regular enquiry.
The contention of Shri Nayar, learned counsel for the State is that withholding two increments with cumulative effect is only a minor penalty as it does not amount to reduction to a lower stage in the time scale of pay.
We find it extremely difficult to countenance the contention.
With holding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rule 5(iv) of the Rules.
But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably mean that the two increments earned by the employee was cut off as a measure of penalty for ever in his upward march of earning higher scale of pay.
In other words the clock is put back to a lower stage in the time scale of pay and on expiry of two years the clock starts working from that stage afresh.
The insidious effect of the impugned order, by necessary implication, is that the appel lant employee is reduced in his time scale by two places and it is in perpetuity during the rest of the tenure of his service with a direction that two years ' increments would not be counted in his time scale of pay as a measure of penalty.
The words are the skin to the language which if pealed off its true colour or its resultant effects would become apparent.
When we broach the problem from this per spective the effect is as envisaged under Rule 5(v) of the Rules.
It is undoubted that the Division Bench in Sarwan Singh vs State of Punjab & Ors., I.L.R. , P.C. Jain, A.C.J. speaking for the division bench, while considering similar question, in paragraph 8 held that the stoppage of increments with cumulative effect, by no stretch of imagination falls within clause (v) of Rule 5 or in rule 4.12 of Punjab Civil Services Rules.
It was further held that under clause (v) of Rule 5 there has to be a reduction to a lower stage in the time scale of pay by the competent authority as a measure of penalty and the period for which such a reduction is to be effective has to be stated and on restoration it has further to be specified whether the reduction shall operate to postpone the future increments of his pay.
In such cases withholding of the increments without cumulative effect does not at all arise.
In case 431 where the increments are withhold with or without cumulative effect the Government employee is never reduced to a lower stage of time scale of pay.
Accordingly it was held that clause (iv) of Rule 5 is applicable to the facts of that case.
With respect we are unable to agree with the High Court.
If the literal interpretation is adopted the learned Judges may be right to arrive at that conclusion.
But if the effect is kept at the back of the mind, it would always be so, the result will be the conclusion as we have arrived at.
If the reasoning of the High Court is given acceptance, it would empower the disciplinary authority to impose, under the garb of stoppage of increments, of earning future incre ments in the time scale of pay even permanently with ex pressly stating so.
This preposterous consequences cannot be permitted to be permeated.
Rule 5(IV) does not empower the disciplinary authority to impose penalty of withholding increments of pay with cumulative effect except after hold ing inquiry and following the prescribed procedure.
Then the order would be without jurisdiction or authority of law, and it would be per se void.
considering from this angle we have no hesitation to hold that the impugned order would come within the meaning of Rule 5(v) of the Rules; it is a major penalty and imposition of the impugned penalty without enquiry is per se illegal.
The further contention of Shri Nayar that the procedure under Rule 8 was followed by issuance of the show cause notice and consideration of the explanation given by the appellant would meet the test of Rules 8 and 9 of the Rules is devoid of any substance.
Conducting an enquiry, dehorse the rules is no enquiry in the eye of law.
It cannot be countenanced that the pretence of an enquiry without reason able opportunity of adducing evidence both by the Dept.
as well as by the appellant in rebuttal, examination and cross examination of the witnesses, if examined, to be an enquiry within the meaning of Rules 8 and 9 of the Rules.
Those rules admittedly envisage, on denial of the charge by the delinquent officer, to conduct an enquiry giving reason able opportunity to the presenting officer as well as the delinquent officer to lead evidence in support of the charge and in rebuttal thereof, giving adequate opportunity to the delinquent officer to crossexamine the witnesses produced by the Dept. and to examine witnesses if intended on his behalf and to place his version; consideration thereof by the enquiry officer, if the disciplinary authority himself is not the enquiry officer.
A report of the enquiry in that behalf is to be placed before the disciplinary authority who then would consider it in the manner prescribed and pass an appropriate order as per the procedure in vogue under the Rules.
The gamut of this procedure was not gone through.
Therefore, the issuance of the notice and consideration of the 432 explanation is not a procedure in accordance with Rules 8 and 9.
Obviously, the disciplinary authority felt that the enquiry into minor penalty is not necessary and adhering to the principles of natural justice issued the show cause notice and on receipt of the reply from the delinquent officer passed the impugned order imposing penalty thinking it to be a minor penalty.
If it is considered, as stated earlier, that it would be only a minor penalty, the proce dure followed certainly meets the test of the principles of natural justice and it would be a sufficient compliance with the procedure.
In view of the finding that the impugned order is a major penalty certainly then a regular enquiry has got to be conducted and so the impugned order is clearly illegal.
The Trial Court rightly granted the decree.
The judgment and the decree of the High Court is vitiated by manifest illegality.
At this distance of time it is not expedient to direct an enquiry under rules 8 and 9 of the Rules.
The appeal is accordingly allowed and the judgment and decree of the High Court is set aside and that of the trial court is restored but in the circumstances without costs.
G.N. Appeal allowed.
|
The appellant, while working as Inspector, Food and Supplies, was found to have purchased sub standard wheat and hence chargesheeted for misconduct.
He submitted his expla nation.
Though Rules 8 and 9 of Punjab Civil Services (Punishment and Appeal) Rules, 1970 envisage the procedure to conduct an enquiry into the misconduct, the disciplinary authority, only on considering the explanation, found that that the appellant committed a minor misconduct.
According ly, an order was passed for stoppage of two increments with cumulative effect.
Appellant filed a suit for declaration that the said order imposed a major penalty which was ille gal in the absence of an enquiry under Rules 8 and 9.
The Trial Court granted a decree invalidating the said order.
On appeal, the District Court confirmed the decree.
However, on second appeal, the High Court held that the penalty imposed was a minor penalty within the meaning of Rules 5(iv) of the Rules obviating the need to make regular enquiry.
Aggrieved, the appellant has preferred this appeal, by special leave.
Allowing the appeal, HELD: 1.
Withholding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rule 5(iv) of the Punjab Civil Services (Punishment and Appeal) Rules.
But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably mean that the two increments earned by the employee was cut off as a measure of penalty for ever in his upward march of earning higher scale of pay.
In other words the clock is put back to a lower stage in the time scale of pay and on expiry of two years the clock starts working from that stage afresh.
The insi 427 dious effect of the impugned order by necessary implication, is that the appellant employee is reduced in his time scale by two places and it is in perpetuity during the rest of the tenure of his service with a direction that two years ' increments would not be counted in his time scale of pay as a measure of penalty.
Rule 5(iv) does not empower the disciplinary authori ty to impose penalty of withholding increments of pay with cumulative effect except after holding inquiry and following the prescribed procedure.
Then the order would be without jurisdiction or authority of law, and it would be per se void.
Considering from this angle the impugned order would come within the meaning of Rule 5(v) of the Rules, and the imposition of major penalty without enquiry is per se ille gal.
Sarwan Singh vs State of Punjab & Ors., ILR , overruled.
Rules 8 and 9 admittedly envisage, on denial of the charge by the delinquent officer, to conduct an enquiry giving reasonable opportunity to the presenting officer as well as the delinquent officer to lead evidence in support of the charge and in rebuttal thereof, giving adequate opportunity to the delinquent officer to cross examine the witnesses produced by the Department and to examine witness es if intended on his behalf and to place his version; consideration thereof by the enquiry officer, if the disci plinary authority himself is not the enquiry officer.
A report of the enquiry in that behalf is to be placed before the disciplinary authority who then would consider it in the manner prescribed and pass an appropriate order as per the procedure in vogue under the Rules.
The gamut of this proce dure was not gone through.
Therefore, the issuance of the notice and consideration of the explanations not a procedure in accordance with Rules 8 and 9. 4.
The Trial Court rightly granted the decree, and it is restored.
The judgment and the decree of the High Court is vitiated by manifest illegality and is set aside.
At this distance of time it is not expedient to direct an enquiry under Rules 8 and 9 of the Rules.
|
ivil Appeal No. 173 of 1986.
From the Judgment and Order dated 29.3.
1985 of the Andhra Pradesh Administrative Tribunal, Hyderabad in Repre sentation Petition No. 1589 of 1983.
WITH Writ Petition (Civil) Nos.
11135 37 of 1984.
485 (Under Article 32 of the Constitution of India).
C. Sitharamaiah, G. Prabhakar, D. Prakash Reddy, B. Rajeshwar Rao and Vimal Dave for the Appellants.
Subodh Markandeya, W.A. Nomani, Seshagiri Rao, Mrs. Chitra Markandeya and A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
Civil Appeal No. 173 of 1986: By the judgment under appeal the Andhra Pradesh Adminis trative Tribunal has accepted the claim of seniority pressed by the respondents in their Representation Petition No. 1589 of 1983.
The respondents were working as Lower Division Clerks (LDCs) in the district police offices/units in Andhra Pra desh, when the question of appointing LDCs in the Chief Office arose.
It was decided to give an opportunity to the LDCs working in the district police offices/units on the condition that they would be willing not to rely upon their service rendered in the district police offices/units for the purpose of seniority and that their seniority would be counted with effect from the date they joined the Chief Office.
Accordingly a Memorandum Rc.
No. 1020/S1/68 dated 21.11.
1968 (Annexure 'A ') was issued to the district police offices/units.
The choice was limited to probationers and approved probationers having good service records.
The letter expressly stated that the appointees were to be put at the bottom of the list of probationers or approved proba tioners already working in the Chief Office.
Immediately thereafter the respondents and two other LDCs, who are not parties to the present case, expressed their desire to join the Chief Office on the condition as mentioned in the said memorandum.
They in positive terms declared in Annexure 'C ' series their willingness to forego their seniority.
After examination of their service records, orders were passed and accordingly Memorandum Rc.
No. 1020/S1/68 dated 1.6.
197 (1 Annexure '0 ') was issued to the heads of departments of the concerned district police offices/units.
A pointed reference to the memorandum of 21.11.
1968 was made stating that the clerks in question were to take their seniority from the date of their joining the duty in the Chief Office as already mentioned in their letters.
Accordingly, all the five respondents joined their duty in the Chief Office after submitting, with reference to the memorandum dated 1.6.
1970, separate letters (at pages 40 44 of the 486 paper book) addressed to the Inspector General of Police, stating that: "I submit that I am willing to take the last rank in senior ity in the category of LDCs.
in Chief Office from the date reporting duty in Chief Office.
" Their respective dates of joining the Chief Office are detailed in the Memorandum dated 7.9.1970, Annexure 'H ' (page 47 of the paper book).
They were placed on probation with the condition that if they failed to complete their probation satisfactorily they would be sent back to their original district/unit offices.
The respondents satisfactorily completed their proba tion and were substantively confirmed in the Chief Office and their seniority was counted with effect from the dates they joined the Chief Office.
In 1983 they filed an applica tion before the Andhra Pradesh Administrative Tribunal claiming that they were entitled to count their service rendered in the district police offices/units for the pur pose of their seniority in the Chief Office, which has been allowed by the impugned judgment.
In support of their claim the respondents relied on the Memorandum Rc.
No. 1020/S1/68 dated 18.1.
1969 (Annexure 'B ') issued by the office of the Inspector General of Police to the heads of the district police organisations/units, stating that, "In continuation of the Chief Office memorandum cited, the Commissioner of Police, all Superintendents of Police and Commandants etc., are requested to state whether there are any L.D. Clerks willing to come on transfer to Chief Office, if the condition stipulated in the Memorandum cited regarding taking of last rank is not insisted upon.
The records of the L.D. Clerks recommended should be good.
" It has been argued before the Tribunal as also before us that this letter clearly indicates that adequate number of clerks from the district police offices/units were not available and a decision to forgo the condition in regard to the seniority of the clerks was taken.
It has been contended that in view of this departmental decision the respondents should not be bound down by their statements made in Annex ures 'C ' series and in their letters Annexures 'E ' series.
The Tribunal has accepted their plea.
487 5.
Mr. C. Sitharamaiah, the learned counsel appearing in support of the appeal, has urged that the Memorandum Annex ure 'B ' does not indicate any final decision taken by the Department.
The learned counsel appears to be right.
A perusal of the letter makes it clear that the office of the Inspector General of Police was only making an inquiry in the terms indicated therein.
It is true that presumably.
sufficient number of volunteers from the district police offices/units were not available which promoted the authori ty concerned to issue the letter Annexure 'B ', but it does not go beyond circulating a query.
It cannot be suggested on its basis that there was a reversal of the policy with respect to the counting of the seniority of the incoming LDCs from the district police offices/units.
It has been asserted in the counter affidavit of the State filed before the Tribunal that not a single person was allowed to join the Chief Office on the condition indicated in Annexure 'B ', and it has not been denied on behalf of the respondents either before the Tribunal or before us.
The respondents have not been able to produce a copy of any decision taken on the lines indicated in Annexure 'B ' nor have they been able to cite even a single case of an LDC joining the Chief Office on such a supposed decision.
We have, therefore, no hesitation in holding that the condition mentioned in Annex ure 'B ' is of no avail to the respondents.
The learned counsel for the respondents referred to r. 16 of the A.P. Ministerial Service Rules (hereinafter referred to as the Rules) and urged that when the respond ents were permitted to join the Chief Office, they were allowed to do so by way of a regular transfer from one department to another and this was done for administrative exigencies of the Police Department, within the meaning of the said Rules, and not on their own request.
They are, therefore, entitled to count their earlier service for the purpose of seniority.
It is alleged that the fact that the respondents were paid travelling allowances for joining the Chief Office corroborates their stand.
We have considered the argument addressed on behalf of the respondents along with the relevant documents but do not find any merit in their stand.
It has to be appreciated that the cadre of the Chief Office is altogether different from cadre,of the district police offices/units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office.
The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services.
It is true that the differential advantage was not so substantial as to attract every LDC working in the dis trict offices/units, and in that situation the letter Annex ure 'B ' had to be circulated.
However, so far the respond ents and the two others 488 were concerned, they found it in their own interest to forego their claim of seniority on the Oasis of their past services and they did so.
It is significant to note that their letters Annexures 'E ' series were sent to the Inspec tor General of Police many months after the issuance of Annexure 'B ' and they were allowed to join the Chief Office on clear Understanding that they would not be entitled to count their past services.
It is, therefore, idle to suggest that the respondents can.now turn back and repudiate their commitment expressly made many months after Annexure 'B '.
So far the allegation regarding payment of travelling allowance is concerned, the same has been dealt with in paragraph 6 of the counter affidavit of the appellant filed before the Tribunal in the following terms: "They cannot claim seniority now after a lapse of 13 years on the ground that they were given T.T.A. at the time of their transfer.
No orders were issued from this office to the Subordinate Officer that the petitioners are eligible for T.T.A. and joining time.
In fact the Dy.
Inspr.
of Police, Hyderabad Range in his order No. 534/E/256/70 Hr.
Dt. 5.6.70, addressed to Supdt.
of Police, Medak had specif ically informed that the petitioners No. 1 and 2 are not entitled for any T.T.A. and joining time." [t is urged that inspite of the clarification made by the Deputy Inspector General of Police, as stated above, if some officers permitted the respondents to draw travelling allow ance, this cannot be a ground to hold that it was a case of regular departmental transfer.
The '.
16 cannot, therefore, be held to be applicable in the present case.
Mr. Sitharamaiah urged that having regard to the entire circumstances as spelt out of the different documents on the records of the present case, it should be held that the Memorandum Annexure A ' issued by the Office of the 'Inspector General of Police was a mere invitation to the LDCs in the district police offices/units to apply for appointment in the Chief Office with the condition mentioned therein.
and availing of the opportunity, the respondents accordingly requested by their statements and letters for appointment in the Chief Office.
It is suggested by the learned counsel that if the case be treated to be one of transfer, it has to be held, in the circumstances, to be at the request of the LDCs concerned within the meaning of r. 16 of the Rules.
There considerable substance in the alter native argument of Mr. Sithara 489 maiah also, but, it is not necessary to go into this ques tion deeper as the absorption of the respondents in the Chief Office cannot be treated by way of transfer within the meaning of the Rules.
Besides the above infirmities there are two other important considerations which weigh heavily against the respondents.
The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum Annexure 'A ' must have been passed in favour of the other incumbents of the service.
The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period.
Besides, the respond ents, in the application before the Tribunal, did not im plead their colleagues who have been prejudicially affected by the impugned judgment.
It cannot be assumed that the respondents had no knowledge about them.
As was rightly pointed out by Mr. Sitharamaiah, although in paragraph 4(d) of their application before the Tribunal (page 53 of the paper book) the respondents mentioned one Vijaya Chand alleged to be an officiating LDC who was put over them, they did not implead even him.
We are, therefore, of the view that apart from the merits of the case, the petition of the respondents before the Tribunal was fit to be rejected on the ground of the above mentioned last two points.
Finally the learned counsel for the respondents said that in any event they should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there.
We do not find any merit in this submission either.
Accordingly, the judgment under appeal passed by the Andhra Pradesh Administrative Tribunal is set aside and the Representation petition of the respondents is dismissed.
The appeal is allowed, but, in the circumstances, there will be no order as to costs.
Writ Petitions (Civil) Nos.
11135 37 of 1984: 11.
These applications under Article 32 of the Constitu tion have been filed by the three petitioners who were appointed during the years 1965 67 in the Central Office of the Inspector General of Police (now redesignated as Direc tor General and Inspector General of Police), Andhra Pra desh.
Since they had not passed the general examination held for the purpose, a special qualifying examination was held in 1968 to facilitate the petitioners and other similarly situated persons to pass at the test.
The petitioners, however, did not appear at this 490 examination.
Another special qualifying examination was held in 1974 and the petitioners successfully cleared the same.
Thereafter, by an order dated 17.6.
1976 (Annexure 'E '), their services were regularised with effect from 1.8.1972.
Their claim in the present case is for counting their sen iority with effect from their initial dates of appointment in the years 1965 67 12.
It has been contended by the learned counsel for the petitioners that they were not qualified for the 1968 exami nation and at the very first opportunity available to them in 1974, they passed the special qualifying examination and, therefore, they should not be penalised by ignoring their services rendered before 1.8. 1972.
It is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years.
By way of a preliminary objection, Mr. Subbarao, the learned counsel appearing for some of the officers impleaded as respondents in this petition, has drawn our attention to the fact that earlier a writ application, being W.P. No. 106 of 1980, was filed by some of the employees of the central office making similar claim of seniority and the present petitioners specifically stated that their case would be governed by the judgment in the earlier writ petition which was ultimately dismissed by this Court on August 8, 1986 (M. Nirmala and Others vs State of Andhra Pradesh and Others, Mr. Subbarao contends that after the dismissal of the earlier case, the petitioners now cannot be permitted to urge any new ground in support of their claim.
The reply on behalf of the petitioners is that if the earli er writ application had been allowed, they would also be entitled to succeed, but after its dismissal their claim cannot be rejected without examination of the additional questions which did not arise in the earlier case.
On merits the reply on behalf of the Government of Andhra Pradesh is that the respondent officers had joined the office of the Inspector General of Police after qualify ing at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers.
The general examinations for recruitment to the central office were held in 1964, 1965, 1966, 1967 and 1968, but the peti tioners did not choose to avail of the ordinary method for joining the service.
Instead 491 they entered the service by the side door and their depart ment, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations.
It is contended that in these circumstances the rule as laid down in Memorandum No. 473/Y1/70 5 dated 24.7.
1970 (Annex ure 'VII ') is clearly applicable, and for the purpose of seniority the petitioners were given the advantage of two years of service rendered by them prior to their successful ly completing the special qualifying examination.
The argu ment is well founded.
The learned counsel also pointed out that the standard of the special qualifying examination was not the same as that of the general examination held for recruitment.
Besides the weakness in the case of the petitioners as mentioned above, the delay of 8 years on their part to initiate legal remedy is fatal and these writ petitions are fit to be rejected on this ground alone.
The writ applica tions are, therefore, dismissed with costs payable to the respondents represented by Mr. Subbarao.
G.N. Appeal allowed and writ petition dismissed.
|
The respondents in the Civil Appeal, were working as Lower Division Clerks in the district police offices/units.
Some posts of Lower Division Clerks fell vacant in the Chief Office and it was decided to fill up the same by appointing Lower Division Clerks with good service record from the district police offices.
Accordingly a Memorandum was issued on 21.11.
1968 which expressly stated that the appointees would be put at the bottom of the list of Lower Division Clerks already working in the Chief Office.
The respondents and two others expressed their willingness to join and also to forego their seniority.
Accordingly an order was passed and the respondents joined duty in the Chief Office in 1970 and were placed on probation.
They completed the probation satisfactorily and were confirmed with their seniority counted from the dates they joined Chief Office.
Later, in 1983 they filed a Representation Petition before the State Administrative Tribunal that in view of Memorandum dated 18.1.1969 which stated that the condition regarding taking last rank would not be insisted upon, the respondents were entitled to count their service rendered in the district police offices/units for the purpose of senior ity in the Chief Office.
The Tribunal allowed the petition.
The State has preferred the appeal against the said order.
The petitioners in the Writ Petitions were appointed in the years 1965 to 1967.
Since they did not pass the general examination, a special qualifying examination was held in 1968.
They did not appear at the examination.
Another chance was given in 1974 and the petitioners successfully cleared the same.
By an order dated 17.6.1976, their services were regularised with effect from 1.8.1972.
The petitioners challenged the validity of the order, claiming, that their seniority 483 should be counted from the dates they were appointed.
Allowing the appeal and dismissing the Writ Petitions, HELD: 1.
It has to be appreciated that the cadre of the Chief Office is altogether different from the cadre of the district police offices/ units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office.
The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services.
It is true that the differential advantage was not so substantial as to attract every Lower Division Clerk working in the district offices/units, and in that situation the letter dated 21.11.1968 had to be circulated.
However, so far the respondents and the two others were concerned, they found it in their own interest to forego their claim of seniority on the basis of their past services and they did so.
It is significant to note that their letters expressing their willingness to join Chief Office by foregoing their seniority were sent to the Inspector General of Police many months after the issuance of circular dated 18.1.1969 stat ing that the condition of foregoing seniority would not be insisted upon and they were allowed to join the Chief Office on clear understanding that they would not be entitled to count their past services.
It is, therefore, idle to suggest that the respondents can now turn back and repudiate their commitment expressly made many months after the said circu lar.
[297G H; 298A B] 2.
So far the allegation regarding payment of travelling allowance is concerned, if some officers permitted the respondents to draw travelling allowance, this cannot be a ground to hold that it was a case of regular departmental transfer.
Rule 16 of the Andhra Pradesh Ministerial Service Rules cannot, therefore, be held to be applicable in the present case.
[298C E] 3.
The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum dated 21.11.1968, must have been passed in favour of the other incumbents of the service.
The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period.
Besides, the respondents, in the application before the Tribunal, did not implead their colleagues who have been prejudicially affect ed by the impugned judgment.
It cannot be assumed that the respondents had no knowledge about them.
Apart from the merits of the case, the petition of the respondents before the Tribunal 484 was fit to be rejected on these grounds.
[298B D] 4.
There is also no merit in the contention that the respondents should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there.
[299E] 5.1 As regards the Writ Petitions, it is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years.
[300C] 5.2 Though a Writ Petition was filed by some of the employees of the Central Office making similar claim of seniority the same was ultimately dismissed by this Court on August 8, 1986.
[300E] M. Nirmala and others vs State of Andhra Pradesh and Others, , referred to.
5.3 The respondent officers had joined the Central Office after qualifying at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers.
The general examinations for recruitment to the Central Office were held in 1964, 1965, 1966, 1967 and 1968, but the petitioners did not choose to avail of the ordinary method for joining the service.
Instead they entered the service by the side door and their department, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations.
However, for the purpose of seniority the petitioners were given the advan tage of two years of service rendered by them prior to their successfully completing the special qualifying examination.
Even the standard of the special qualifying examination was not the same as that of the general examination held for recruitment.
[300G H; 301A B]
|
vil Appeal Nos. 778 and 781 of 1976.
From the Judgment and Order dated 30.6. 1975 and 8.8. 1975 of the Kerala High Court in Writ Appeal Nos. 126 and 378 of 1973.
V. Gaurishanker, section Rajappa and Ms. A. Subhashmi for the Appellant.
G. Vishwanatha Iyer.
Mrs. K. Prasanti and N. Sudhakaran for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
These appeals on certificate issued by the High Court under Article 133 of the Constitution are direct ed against the order and judgment of the High Court of Kerala.
Briefly, the facts giving rise to these appeals are: the respondent was a member of the erstwhile Nilambut Kovilagam governed by the Madras Marumakkathyyam Act, she was assessed to Income Tax as Hindu Undivided Family as the family pos sessed considerable property including lands.
forests and other properties.
The Income Tax Officer assessed the re spondent for the assessment years 1967 68, 1968 69 and 1969 70 treating the members of the family included within the HUF.
Before the Income Tax Officer, the respondent raised a plea, that there had been division of Tavazhi under a partition agreement dated 3.7.
1958 whereby all lands except forest lands were divided among the members of the family.
The respondent further claimed that the members of the Tavazhi swelled to 14 and these members effected a division in status by a registered document dated 21.2.
She further alleged that the division of Tavazhi into 14 shares was effected by a Civil Court decree in partition suit No. O.S. 22/1961 in the Court of Kozhikode.
It was pointed out on behalf of the respondent that the partition suit was decreed and the properties were 477 allotted to the respective share holders.
The Civil Court had appointed a commissioner to divide the property by metes and bounds in accordance to the shares of individual mem bers.
The respondent further claimed that since the status of HUF was disrupted on account of the decree of partition the HUF could not be assessed to income tax, instead the income derived by individual members could be considered for assessment.
The Income Tax Officer rejected the respondent 's claim and assessed the respondent as the head of the Tavazhi for the assessment years 1967 68, 1968 69 and 1969 70 by his order dated 16.3.
1970/ 27.3.
The Income Tax Officer held that the decree of the Civil Court merely conferred right on the members of the family for separate possession of the land falling to their share after the physical parti tion, and the final partition could be made on application made by _ individual members after depositing Commissioner 's fee.
Since the Civil Court decree was a preliminary decree and no final decree had been passed and no actual partition had been effected and no physical partition by metes and bounds had taken place in pursuance of the decree of partition, the status of HUF continued for purposes of assessment.
The Income Tax Officer observed that earlier the assessee was assessed having the status of HUF, and since no other evi dence except the decree of the Civil Court had been produced by her to show that there has been a real partition, there fore, the assessee 's claim for partition could not be ac cepted.
The respondent filed a writ petition in the High Court under Article 226 of the Constitution for quashing the orders of the Income Tax Officer on the ground that he failed to recognise the disruption of HUF in making the assessment.
A learned single of the High Court allowed the writ petition and quashed the assessment orders.
On appeal at the instance of the Revenue, a Division Bench of the High Court affirmed the order of the single Judge.
On an applica tion made on behalf of the Revenue the High Court granted certificate under Article 133 of the Constitution.
Hence these appeals.
The learned single Judge held that Section 171 of the Income Tax Act does not apply to a case where the division was effected before commencement of the accounting period, and the HUF having received no income during the accounting period it could not be assessed tax notwithstanding the fiction introduced by Section 171.
In appeal the Division Bench held that there was no express provision in Section 171 nor was there any necessary implication arising from the provisions of the Section that the income of the family after its division must 478 be treated or deemed to be the income of the HUF inspite of disruption of joint status '.
The Bench held that a HUF is a separate and distinct entity from the members constituting it and if that entity does not receive any income, the members ' income could not be assessed as income of the HUF.
The Division Bench further held that since there had been partition in the family and Tavazhi had ceased to be HUF long before the accounting periods, the provisions of the Act could not be pressed into service for the purpose of taxing the income of the individual members of the family treating them having the status of HUF with the aid of Section 17 1 of the Act.
The main question which fails for consideration is as to whether the partition as effected by the agreement dated 21.2.
1963 and also the decree of the Civil Court amount to "partition" under the explanation to Section 171 of the Act and further whether the Income Tax Officer acted contrary to law in holding that inspite of the partition as alleged by the respondent, the status of HUF was not disrupted and that status continued for the purposes of assessment during the relevant assessment years.
Under Section 171 a Hindu Family assessed as HUF, is deemed for the purposes of the Act to continue as HUF except where partition is proved to have been effected in accordance with the section.
The section further provides that if any person at the time of making of assessment claims that partition total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of partition.
If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them.
What would amount to partition for the purposes of the Section is contained in the Explanation to the Section which defines partition as under: "Explanation In this Section (a) 'partition ' means (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or (ii) where the property does not admit of a physical divi sion, then such division as the property admits of, but a 479 mere severance of status shall not be deemed to be a parti tion.
" The above definition of the partition does not recognise a partition even if it is effected by a decree of court unless there is a physical division of the property and if the property is not capable of being physically divided then there should be division of the property to the extent it is possible otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court.
Ordinarily decree of a Civil Court in a partition suit is good evidence in proof of partition but under Sec tion 171 a legal fiction has been introduced according to which a preliminary decree of partition is not enough.
instead there should be actual physical division of the property pursuant to final decree.
by metes and bounds.
The Legislature has assigned special meaning to partition under the aforesaid Explanation with a view to safeguard the interest of the Revenue.
Any assessee claiming partition of HUF must prove the disruption of the status of HUF in ac cordance with the provisions of Section 171 having special regard to the Explanation.
The assessee must prove that a partition effected by agreement or through court 's decree, was followed by actual physical division of the property.
In the absence of such proof partition is not sufficient to disrupt the status of Hindu Undivided Family for the purpose of assessment of tax.
Under the Hindu Law members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court 's decree.
Members of the family may also agree to share the income from the property according to their re spective share.
In all such eventualities joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of Income Tax.
Section 171 of the Act and the Explanation to it, prescribes a special meaning to partition which is different from the general principles of Hindu Law.
It contains a deeming provision under which partition of the property of HUF is accepted only if there has been actual physical division of the property, in the absence of any such proof, the HUF shall be deemed to continue for the purpose of assessment of tax.
Any agreement between the members of the joint family effecting partition, or a decree of the Court for partition cannot terminate the status of HUF unless it is shown that the joint family property was physically divided in accordance with the agreement or decree of the Court.
480 On behalf of the respondent it was urged that the High Court has placed reliance on a Full Bench decision of Kerala High Court in Parameswaran Nambudiripad vs Inspecting As sistant Commissioner of Agricultural Income tax, 72 I.T.R. 664 where it was held that if the HUF was in fact not in existence during any part of an accounting period.
and the HUF as such had not received any income, the family could not be assessed to tax as HUF.
The view taken by the Full Bench has been approved by this Court in Inspecting Assist ant Commissioner of Agricultural Income Tax and Sales Tax (Special), Kozhikode vs Poomuli Manekkal Parameswaran Nam boodiripad, 33 I .T.R. 108.
On a careful scrutiny of the judgment of this Court we find that in that case interpreta tion of Section 29 of the Kerala Agricultural Income Tax Act 1950 as amended in 1964 was involved.
Section 29 after its amendment in 1964 made provision for assessment of Agricul tural tax after partition of a Hindu Undivided Family.
Under that Section there was no provision in the nature of Expla nation to Section 171 of the Income Tax Act.
This Court had no occasion to interpret Section 171 instead the Court interpreted Section 29 of that Act which is quite different from Section 17 1, therefore the appellant cannot draw any support from that decision.
In Kaloomal Tapeshwar Prasad vs
C.I.T., Kanpur, this Court interpreted Section 171 of the Act in detail.
On an elaborate discussion the Court held that under the Hindu Law it is not necessary that the property must in every case be partitioned by metes and bounds or physically into different portions to complete a partition.
Disruption of status can be brought about by any of the modes permissible under the Hindu Law and it is open to the parties to enjoy their share of property in any manner known to law according to their desire but the Income Tax Law does not accept any such partition for the purposes of assessment of tax instead it has introduced certain conditions of its own to give effect to the partition under Section 17 1 of the Act.
The Court held that in order to claim disruption of HUF on the basis of partition it is necessary to show that the partition had been effected physically by metes ,red bounds.
and in the absence of any such proof, the property would continue to be treated as belonging to the HUF and its income would continue to be included in its total income treating the assesse as HUF.
The High Court referred to Section 25A of the Income Tax Act, 1922 and placed reliance on a number of decisions in holding that in view of the decree of Civil Court for parti tion.
the HUF status had been disrupted and since there was no evidence on record to show that the HUF had received any income in the accounting year, the income received by indi vidual members of the joint family could not be 481 treated to be the income of HUF.
The High Court placed reliance on the Privy Council decision in Sunder Singh Majithia vs Commissioner of Income Tax, and a number of other decisions also in holding that the legal fiction introduced under Section 171 of the Act could not be extended to create tax liability on the HUF even after disruption of its status, pursuant to the Civil Court 's decree for partition.
We do not consider it neces sary to discuss those decisions, as the purpose and object of Section 171 and the extent of the legal fiction intro duced by it has already been considered by this Court in Kaloomal 's case.
The view taken by the High Court under the impugned judgment is not sustainable in law as it is con trary to that decision.
In Shankar Narayanan vs Income Tax Officer, 153 I .T.R. 562 a learned Judge of the Kerala High Court while considering the interpretation of Section 171 held that the view taken by the High Court in the Judgment trader appeal Income Tax Officer, Assessment V Calicut vs Smt.
N.K. Sarada Thampatty, ceased to be good law in view of the decision of this Court in Kaloomal 's case.
In the instant case since there was no dispute that prior to the assessment year 1967 68 the assessment was made against the HUF of which the respondent was a member.
The respondent for the first time raised the plea of partition and disruption of HUF in the proceedings for the assessment years 1967 68, 1968 69 and 1969 70.
There was no dispute before the income Tax Officer that there had been no physi cal division of the properties by metes and bounds, there fore the Income Tax Officer was justified in holding that the status of HUF had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the HUF character.
The High Court in our opinion committed error in quashing the order of the Income Tax Officer.
In the result, we allow the appeals and set aside the order of the High Court and dis miss the writ petition filed by the respondent.
There will be no order as to costs.
V.P. Appeals allowed.
|
Respondent was assessed for the assessment years of 1967 68, 1968 69 and 1969 70 treating her as the head of the HUF.
She contended before the income Tax Officer that under the partition agreement dated 3.7.1958 the Tavazhi was divided, the HUF status of the Tavazhi was disrupted on account of the CIvil Court decree made in a partition suit and the properties were divided into 14 shares and the HUF could not be assessed to income tax.
The Income Tax Officer rejected the claim of the respondent on the ground that since the preliminary decree of the Civil Court, and not become final and no physical or actual partition had taken place; the status of HUF continued for the purpose of Tax.
The Single Judge of the High Court allowed the Writ Petition of the respondent holding that Section 171 of the Income Tax Act does not apply to a case where the division was effected before the commence 474 ment of the accounting period and HUF having received no income during the accounting period it could not be assessed to tax notwithstanding the legal fiction under Section 171.
In appeal the Division Bench held that there was no express provision in Section 171 nor was there any necessary impli cation arising from the provisions of the section that the income of the family after its division must be treated or deemed to be the income of the HUF inspite of disruption of joint status.
The Bench held that HUF is a separate and distinct entity from the members constituting it and if that entity does not receive any income, the members ' income could not he assessed as income of the HUF.
The Division Bench further held that since there had been partition in the family and Tavazhi had ceased to he HUF long before the accounting periods, the provisions of the Act could not he pressed into service for the purpose of taxing the income of the individual members of the family treating them having the status of HUF with the aid of Section 171 of the Act.
The High Court granted certificate to the Revenue under Article 133 of the Constitution.
Hence these appeals.
Allowing the appeal, the Court, HELD: 1.
Under Section 171 a Hindu Family assessed as HUF, is deemed for the purposes of the Act to continue as HUF except where partition is proved to have been effected in accordance with the section.
The section further provides that if any person at the time of making of assessment claims that partition total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of parti tion.
If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them.
The definition of partition does not recognise a partition even if it is effected by a decree of court unless there is a physical division of the property and if the property is not capable of being physically divided then there should be division of the property to the extent it is possible otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court.
Ordinarily decree of a Civil Court in a partition suit is good evidence in proof of partition but under Sec tion 171 a legal fiction has 475 been introduced according to which a preliminary decree of partition is not enough, instead there should be actual physical division of the property pursuant to final decree, by metes and bounds.
The Legislature has assigned a special meaning to partition under the aforesaid Explanation with a view to safeguard the interest of the Revenue.
Any assessee claiming partition of HUF must prove the disruption of the status of HUF in accordance with the provisions of Section 171 having special regard to the Explanation.
The assessee must prove that a partition ef fected by agreement or through court 's decree, was followed by actual physical division of the property.
In the absence of such proof partition is not sufficient to disrupt the status of Hindu Undivided Family for the purpose of assess ment of tax.
Under the Hindu Law members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court 's de cree.
Members of the family may also agree to share the income from the property according to their respective share.
In all such eventualities joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of Income Tax.
Section 171 of the Act and the Explanation to it, prescribes a special meaning to partition which is different from the general principles of Hindu Law.
It contains a deeming provision under which partition of the property of HUF is accepted only if there has been actual physical division of the property, in the absence of any such proof, the HUF shall be deemed to continue for the purpose of assessment of tax.
Any agreement between the members of the joint family effecting partition, or a decree of the Court for partition cannot terminate the status of HUF unless it is shown that the joint family property was physically divided in accord ance with the agreement or decree of the Court.
The respondent for the first time raised the plea of partition and disruption of HUF in the proceedings for the assessment years 1967 68, 1968 69 and 1969 70.
There had been no physical division of the properties by metes and bounds.
The status of HUF had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the HUF character.
Parameswaran Nambudiripad vs Inspecting Assistant Com missioner of Agricultural Income tax, ; In specting Assistant Commissioner of Agricultural Income Tax and Sales Tax (Special), Kozhikode vs Poomulli Manekkal Parameswaran Namboodiripad, , distinguished.
476 Kaloomal Tapeshwar Prasad vs
C.I.T., Kanpur, 133 I.T.R. 690, followed.
Sunder Singh Majithia vs Commissioner of Income Tax, Shankar Narayanan vs Income Tax Offi cer, , referred.
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Criminal Appeal No. 206 of 1979.
From the Judgment and Order dated 27.9.
1978 of the Punjab and Haryana High Court in Criminal Appeal No. 17 13 of 1975.
494 A.S. Sohal and S.K. Jain for the Appellant.
Mahabir Singh and A.G. Prasad for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Raj Kumari (20), the daughter of Ishar Dass.
was married to the appellant Baldev Raj a year before her tragic death in February, 1975.
It appears that all was not well with the couple.
Raj Kumari left for her parents house in village Raison 75 Kms.
away from her matrimonial home in village Urlana Khurd.
She stayed with her parents for some days complaining ill teatment by the husband.
On the assurance of the father in law, she was sent back with her husband hardly a couple of months before the incident on 14.2.
On that fateful day, it is said that Raj Kumari took meals to the appellant who was working in the wheat field near his tubewell. ' Raj Kumari did not return home.
Her dead body was discovered in the drain on 16.2.
Multiple injuries were seen on her person.
Complaint was lodged at the police station on February 16, 1975 at about 5.30 P.M. against the appellant who was finally chargesheet ed for the offence under section 302 and 201, I.P.C. The learned Sessions Judge convicted the appellant under section 302, I.P.C., and sentenced him to undergo imprisonment for life.
The High Court dismissed the appeal against the con viction and sentence.
This appeal by special leave is di rected against the judgment of the High Court.
The conviction of the appellant is based on circumstan tial evidence only.
The main item of the evidence consists of the extrajudicial confession stated to have been made by the appellant in the presence of Ishar Dass (PW 3).
Ramji Dass (PW 4) and Satnam Dass (PW 5) at the panchayat on 16.2.
besides the recovery of incriminating articles at the instance of the appellant and the motive as spoken to by Ishar Dass.
According to the prosecution, on 15.2.1975 the appellant 's father Hakam Chand contracted Ishar Dass when Raj Kumari was found missing from 14.2.
Ishar Dass arrived at village Urlana Khurd accompanied by Satnam Dass, Sarpanch of his village, and others.
At the panchayat held in the presence of Ramji Dass, Nand Lal, Satnam Dass and others, the appellant stated that he killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments.
PWs 3, 4 and 5 testified the fact but Nand Lal (DW I) did not support the prosecution version.
It is also the prosecution case that the appellant was handed over to and arrested by the police at the time the complaint was lodged after the 495 discovery of the dead body and that the appellant had pro duced the kassi and the gold ornaments concealed in the hut near the tubewell.
PW 10.
the Sub Inspector of Police, deposed to having interrogated the appellant and effected the recovery on the basis of the statements made by the appellant.
Ishar Dass (PW 3) narrated the events that pre ceded the occurrence and also proved the letter he had received from the appellant 's father when Raj Kumari was staying with him.
He also stated the circumstances under which he happened to be at the panchayat on 16.2.
1975 along with the others after being informed by Hakam Chand.
PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence.
The evidence was accepted by the trial court and the High Court to sustain the conviction against the appellant.
The argument on behalf of the appellant that the medical evidence is conflicting with the prosecution case was re jected by the High Court finding that the ante mortem in juries found on the body of Kumari could have been caused with the weapon recovered even on the statement made by the Doctor (PW 1).
The recovery of the bloodstained earth from the wheat field near the tubewell, recovery blood stained kassi and the ornaments worn by Raj Kumari by PW 10 in the opinion of the High Court lent assurance to the statement mad,: by the appellant before the panchayat.
The High Court was of the view that the various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt.
The main contention advanced on behalf of the appellant before us is that the High Court failed to appreciate the inherent infirmities in the prosecution evidence and that there is no legal evidence to support the findings.
It was maintained that the testimony of PWs 3, 4 and 5 relating to the extra judicial confession is discrepant and incredible, that the confession even if true, was not voluntary but induced and the same having been retraced cannot form the basis for a conviction in the absence of any material cor roboration.
The learned counsel for the appellant contended that the High Court had refused to give benefit of doubt to the accused despite facts apparent on the face of the record any interference is called for.
The extra judicial confession, according to the learned counsel, being a very weak piece of evidence, could not have been accepted as true or voluntary in view of the admission made by the prosecution witnesses and improvement in the story given by Ishar Dass.
He pointed out that at the panchayat the appellant was induced to make a statement on the 496 promise that he would be pardoned and therefore the confes sion is unacceptable.
Normally this Court does not interfere with the concur rent findings of the facts of the courts below in the ab sence of very special circumstances or gross errors of law committed by the High Court and violation of the well estab lished principles of the appreciation of circumstantial evidence, which results in serious and substantial miscar riage of justice to the accused.
We heard the learned coun sel at length.
We find that the High Court was right in its conclusion and there is no good ground for interference.
The first information was lodged by Ishar Dass at the police station where the appellant was also present.
In the first information report itself Ishar Dass has narrated the story of the panchayat having been held in the presence of PWs 4 and 5 and the appellant having made the confession.
PW 5 accompanied Ishar Dass from village Raison.
It is difficult to hold that these persons hailing from another village would have been in a position to influence the local people against the appellant and foist a case against him.
PW 4, Lambardar (Ramji Dass) substantially supported the prosecution case.
The courts below have carefully analysed the evidence and accepted the same.
As rightly pointed out by the High Court, we find no merit in the submission that the medical evidence is not in consonance with the prosecu tion case.
The facts that the autopsy was held nearly 72 hours after the injuries were caused and the witnesses were examined long after the weapon was recovered are relevant in appreciating the evidence of the medical witness.
The evi dence of this witness read as a whole is only consistent with the case that the injuries could have been caused with the weapon.
The fact that the appellant made the confession is proved by cogent evidence.
The circumstances that his father was present throughout and the appellant himself did not protest when he was present at the police station nega tives the suggestion of inducement or threat.
The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from, the roof of the hut and blood stained kassi from its premises near the tubewell are material circumstances pro viding connecting links in the chain of circumstantial evidence.
The appellant when examined did not offer any explanation except to deny his involvement.
Ishar Dass testified to the fact that Raj Kumari had complained about the ill treatment by her husband.
In the light of such evidence, it is preposterous to maintain that the deceased may have been assaulted by some unidentified assailant somewhere in the fields and the appellant 497 had been falsely implicated in the offence.
The confessional statement is not a long narration.
The substance of the statement is that the appellant killed his wife and threw the dead body in the drain.
PW 4 is the Lambardar of village Urlana Khurd and PW 5 the Sarpanch of Gram Panchayat of village Raison.
The fact that a panchayat was held at village Urlana Khurd is admitted even by the hostile witness Nand Lal (DW I).
Ishar Dass when informed by Hakam Chand at his village that Raj Kumari was found missing entertained suspicion.
He met his villagers and proceeded to the appellant 's village the next day, along with the Sar panch and other persons.
The panchayat was held there on 16.2.
The appellant and his father were brought before the panchayat.
The appellant was questioned and was asked to speak the truth and then the appellant with folded hands said that he murdered his wife in the wheat field when she came there with meals and later threw the dead body in the drain.
The prompting by the panchayat does not amount to inducement or threat and the circumstances under which the statement was made leave no room for doubt that the confes sion was voluntary.
An extra judicial confession, if voluntary, can be relied upon by the court along with other evidence in con victing the accused.
The value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made.
It is true that the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invariable rule that the court should not accept the evidence, if not the actual words but the substance were given.
It is for the court having regard to the credibility of the witness to accept the evidence or not.
When the court believes the witness before whom the confession is made and it is satisfied that the confession was voluntary, conviction can be rounded on such evidence.
Keeping these principles in mind, we find that the confession has been properly accepted and acted upon by the courts below and there is no scope for any doubt regarding the complicity of the appellant in the crime.
The confession of the appellant was voluntary.
The testimony of PW 4 and PW 5 being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appellant.
The very presence of the appellant and his father with the party of Ishar Dass throughout the operation upto lodging of com plaint at the police station dispel any suspicion against the prosecution case and clearly point to the truthfulness of the same.
We are, therefore, unable to find any infirmity in the confession which has been accepted and relied upon by the courts below.
498 The circumstances proved are conclusive of the guilt of the appellant and incapable of being explained on any other reasonable, hypothesis.
Conviction has therefore to be maintained.
The appeal is accordingly dismissed.
The appel lant who is on bail shall surrender to custody to undergo the sentence of imprisonment.
P.S.S. Appeal dismissed.
|
The appellant was convicted under section 302 IPC for murder ing his wife.
The prosecution case was that on the fateful day the deceased had taken meals to the appellant while he was working in the field near his tubewell.
Her dead body was recovered two days later in a nearby drain.
He made an extra judicial confession the same day at the panchayat in the presence of PWs 3, 4 and 5 to the effect that he had killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments.
The FIR was lodged thereafter in the presence of the appellant and the fact of his statement was recorded therein.
The weapon of offence, the kassi, and the ornaments were recovered from the hut near the tubewell at his instance.
PW 3 narrated the events that preceded the occurrence.
PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence.
The evidence was accepted by the trial court.
The High Court sustained the conviction on the view that various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt.
In the appeal it was contended for the appellant that the extrajudicial confession even if true, was not voluntary but induced on the promise that he would he pardoned and the same having been retracted could not form the basis for a conviction in the absence of any material corroboration.
Dismissing the appeal, HELD: 1.
The High Court was right in its conclusion and there was no ground for interference.
2.1 An extra judicial confession, if voluntary can be relied upon by the court alongwith other evidence in con victing the accused.
The 493 value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made.
Though the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invaria ble rule that the court should not accept the evidence, if not the actual words but the substance were given.
It is for the court having regard to the credibility of the witness to accept the evidence or not.
When the court believes the witness before whom the confession is made and it is satis fied that the confession was voluntary, conviction can be rounded on such evidence.
2.2 In the instant case, the fact that the appellant made the confession is proved by cogent evidence.
He and his father were brought before the panchayat held in the presence of PWs 3, 4 and 5.
He was questioned and was asked to speak the truth.
This prompting by the panchayat does not amount to inducement or threat.
The testimony of PW 4, a lambardar, and PW 5, the Sarpanch being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appel lant.
The circumstances under which the statement was made leaves no room for doubt that the confession was voluntary.
2.3 The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from the roof of the hut and blood stained kassi from the hut near the tubewell were material circumstances providing connecting links in the chain of circumstantial evidence.
The appellant when exam ined did not offer any explanation except to deny his in volvement.
PW 3 had testified to the fact that the deceased had complained about the illtreatment by her husband.
In the light of such evidence, it is preposterous to maintain that she may have been assaulted by some unidentified assailant somewhere in the fields and the appellant had been falsely implicated in the offence.
The circumstances thus proved were conclusive of the guilt of the appellant and incapable of being explained on any other reasonable hypothesis.
Conviction has, therefore, to be maintained.
|
: Writ Petition (Crimi nal) Nos.
757,759 & 760 of 1990 (Under Article 32 of the Constitution of India.) N. Devarajan and V. Krishnamurthy for the Petitioners.
Kapil Sibal Additional Solicitor General and A Subba Rao for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Three persons, namely, (1) M.M. Shahul Hameed @ Gani Asiam, (2) Haja Mohideen @ Shahul Hameed Asarudeen and (3) Naina Mohammed @ Raja Mohd. Zafar were intercepted by the officers of Department of Revenue Intelligence on 5th October, 1989 at the Sahar International Airport, Bombay, as they were suspected to be involved in smuggling activities.
They were escorted to the office of Directorate of Revenue Intelligence, Waldorf, Colaba, Bombay, where they were interrogated.
On interrogation it was found that M.M. Shahul Hameed was to board flight No. CX 750 to Hongkong while the other two were to proceed to Dubai by Emirate Flight No. E 5 10 on that day.
The said three persons were searched.
Two balloon covered rolls secreted in the rectum of M.M. Shahul Hameed were removed and were found to contain diamonds and precious stones weighing about 905.70 carats and 77.37 carats, respectively.
The said diamonds and precious stones valued at about Rs.70 lacs were attached under a Panchnama.
In addition to the same foreign currency of the value of Rs. 10,706 was also recovered and attached.
His passport was also seized.
The other two persons were found to have swallowed 100 capsules each containing foreign currency of the total value of Rs.6,99,930.
The capsules were extracted from their persons and the currency was recovered and attached under a Panchnama.
In addition thereto foreign currency of the value of Rs. 1,466.50 was also found on their person during their search and the same too was attached and seized.
Their passports were also seized.
460 All the aforesaid three persons belonged to Village Namboothalai of District Ramnath, Tamilnadu.
Their state ments were recorded on the same day i.e. 5th October, 1989.
M.M. Shahul Hameed disclosed that his cousin Kasim, owner of a film company at Madras, had offered him a sum of Rs.4,000 for smuggling diamonds, etc., to Hongkong.
On his agreeing, he was trained and was sent to Bombay with one Mohammad who was to introduce him to Mohideen and Rahim who were supposed to entrust him with the diamonds, etc., to be carried to Hongkong.
Accordingly he came to Bombay with the said Moham mad and was duly introduced to the aforesaid two persons at a fiat in Chembur where he stayed.
The said Mohideen and Rahim arranged for his passport and ticket and gave him two roll wrapped in balloons containing diamonds, etc., on the night of 4th October, 1989 for being carried to Hongkong.
As per the training he had received, he concealed these bal loons in his rectum before leaving for the Airport to catch the flight to Hongkong.
In addition to the same he was given a paper on which something was scribbled in Arabic.
In the course of his interrogation he admitted the recovery and seizure of diamonds and precious stones and also gave the description of Kasim and Rahim.
On 12th October, 1989 he wrote a letter retracting his statement made on 5th October, 1989.
However, in his further statement recorded on 19th October, 1989 he admitted that his signature was obtained on the letter of 12th October, 1989 without disclosing the contents thereof to him and that his earlier statement of 5th October, 1989 was both voluntary and correct.
Inciden tally the statement of retraction was rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989.
The other two persons whose statements were also record ed on 5th October, 1989 disclosed that they were both work ing at a Tea shop in Madras and knew Mohideen and Rahim who too were working with them.
Rahim had suggested that they would be paid Rs.2,000 each if they were willing to smuggle foreign currency to Dubai by swallowing capsules containing the same.
On their agreeing they too were trained and were then taken to Bombay where they were lodged in Vimi Lodge at Bhindi Bazar.
On 4th October, 1989 they were given an tick ets for travel to Dubai and 100 capsules each containing foreign currency.
They swallowed the capsules and left by taxi for the Airport in the early hours of 5th October, 1989.
They too were given a paper containing some scribbling in Arabic by Mohideen and Rahim.
While they were waiting to catch their flight, they were intercepted as stated earlier.
Both of them also signed letters dated 12th October, 1989 retracting their statements made under Section 108 of the Customs on 5th October, 1989.
However, in their subsequent statement of 19th October, 1989 they admitted that they were not aware of the contents of the letter of 12th October, 1989.
They further admitted that what they had disclosed on 5th October, 1989 was both voluntary and correct.
Their statements of retraction were also rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989.
All the three aforesaid persons were produced before the learned Additional Chief Metropolitan Magistrate, Esplanade.
Bombay on 6th October, 1989.
They were taken on remand by the police for investigation.
Barring M.M. Shahul Hameed, the other two had preferred applications for bail which were kept for hearing initially on 27th October 1989 but the date was later extended upto 16th November, 1989.
Their co accused, Kasim was arrested on 6th October.
1989 and was produced before the Additional Chief Metropolitan Magistrate, Egmore, Madras.
He too was taken on remand.
On 19th October, 1989 he too had preferred a bail application which was kept pending as the investigation was in progress.
Since the period of remand was extended from rime to time in the case of all the aforesaid four persons finally upto 16th November, 1989, the bail applications were also fixed for hearing on that date.
In the meantime on 10th November, 1989 the Joint Secretary to the Government of India in the Ministry of Finance, Department of Revenue, passed an order under sub section (1) of Section 3 of the (hereinafter called 'the Act ') directing the detention of all the three persons 'with a view to preventing him from smuggling goods '.
They were directed to be detained in the Central Prison.
Bombay.
This order of detention, though passed on 10th November.
1989 was in fact served on the three detenus on 21st November, 1989.
i.e., after a lapse of about 11 days.
The grounds of detention dated 10th November, 1989 were also served on the three the same day.
Thereafter the Additional Secretary to the Government of India in the Ministry of Finance, Department of Revenue made a declara tion concerning the three detenus dated 20th December 1989, under sub section (1) of section 9 of the Act after record ing a satisfaction that they were likely to smuggle goods out of and through Bombay Airport.
an area highly vulnerable to smuggling within the meaning of Explanation 1 to that section.
This declaration was served on the detenus within the time allowed by law.
Thereupon.
the wives of all the three detenus filed separate habeas corpus writ petitions under Article 226 of the Constitution in the High Court of 462 Bombay on 19th January.
These writ petitions were numbered 66, 67 and 68 of 1990.
Four contentions were raised before the High Court, namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed nonapplication of mind by describing the offence with which the detenus were charged as 'bail able '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the authorities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation.
All the three petitions came up for hearing before a Division Bench of the High Court on 21st March, 1990.
The High Court rejected all the four contentions and dismissed the writ petitions.
The said dismissal has led to the filing of Special Leave Petitions (Criminal) Nos.
73 1,732 & 733 of 1990.
Besides filing the said special leave petitions under Article 136 of the Con stitution, the wives of the detenus have also filed separate Writ Petitions (Criminal) Nos. 757,759 and 760 of 1990 under Article 32 of the Constitution.
We have heard the three special leave petitions as well as the three writ petitions together and we proceed to dispose them of by this common judgment.
The learned counsel for the petitioners raised several contentions including the contentions negatived by the High Court of Bombay.
It was firstly contended that the detenus had made representations on 18th December, 1989 which were rejected by the communication dated 30th January, 1990 after an inordinate delay.
The representations dated 18th Decem ber, 1989 were delivered to the Jail Authorities on 20th December, 1989.
The Jail Authorities despatched them by registered post.
23rd, 24th and 25th of December, 1989 were non working days.
The representations were received by the COFEPOSA Unit on 28th December, 1989.
On the very next day i.e 29th December, 1989 they were forwarded to the sponsor ing authority for comments.
30th and 31st December, 1989 were non working days.
Similarly 6th and 7th January, 1990 were non working days.
The comments of the sponsoring au thority were forwarded to the COFEPOSA Unit on 9th January, 1990.
Thus it is obvious that the sponsoring authority could not have received the representations before 1st January, 1990.
Between 1st January, 1990 and 8th January, 1990 there were two non working days, namely, 6th and 7th January, 1990 and, therefore, the sponsoring authority can be said to have offered the comments within the four or five days available to it.
It cannot, therefore, be said that the sponsoring authority was guilty of inordinate delay.
The contention that the views of the sponsoring authority were 463 totally unnecessary and the time taken by that authority could have been saved does not appeal to us because consult ing the authority which initiated the proposal can never be said to be an unwarranted exercise.
After the COFEPOSA Unit received the comments of the sponsoring authority it dealt with the representations and rejected them on 16th January, 1990.
The comments were despatched on 9th January, 1990 and were received by the COFEPOSA Unit on 11th January, 1990.
The file was promptly submitted to the Finance Minister on the 12th; 13th and 14th being non working days, he took the decision to reject the representations on 16th January, 1990.
The file was received back in the COFEPOSA Unit on 17th January, 1990 and the Memo of rejection was despatched by the post on 18th January, 1990.
It appears that there was postal delay in the receipt of the communication by the detenus but for that the detaining authority cannot be blamed.
It is, therefore, obvious from the explanation given in the counter that there was no delay on the part of the detaining authority in dealing with the representations of the detenus.
Our attention was drawn to the case law in this behalf but we do not consider it necessary to refer to the same as the question of delay has to be answered in the facts and circumstances of each case.
Whether or not the delay, if any, is properly explained would depend on the facts of each case and in the present case we are satisfied that there was no delay at all as is apparent from the facts narrated above.
We, therefore, do not find any merit in this submission.
It was next submitted by the learned counsel for the petitioners that there was no compelling reason for the detaining authority to pass the impugned orders of detention as the detenus were already in custody on the date of the passing of the detention orders as well as the service thereof.
Besides, he submitted.
it is apparent from the averments in paragraph 15 of the grounds of detention that the concerned authority was labouring under a misconception that the detenus were charged with a 'bailable ' offence which betrays total non application of mind.
He further submitted that the delay in the service of the detention orders discloses that there was no urgency about ordering detention.
Taking the last limb of the argument first, we may refer to the counter filed in the writ petitions in this behalf.
Therein it is stated that after the detention orders were signed on 10th November, 1989, it was realised that certain documents which were not in Tamil language would have to be translated.
The services of a professional trans lator were requisitioned.
Between 10th and 21st November, 1989 there were five holidays on 11th, 12th, 13th, 18th & 19th.
As soon as the translations were ready and received by the Department, the police autho 464 rities were directed on 20th November, 1989 to execute the detention orders.
This was done on 21st November, 1989, Thus the time taken between 10th and 21st November.
exclud ing 5 holidays, was only of six days during which all the documents were got translated in Tamil language and were served on the detenus along with grounds of detention.
These facts clearly show that the time taken in the service of the detention orders cannot be attributed to lack of sense of urgency on the part of the authorities but it was to get the documents translated in Tamil language before they were supplied to the detenus.
Under the circumstances we do not see any delay which would vitiate the detention orders.
It is indeed true that in paragraph 15 of the grounds of detention the detaining authority has averted that the detenus are charged with a bailable offence.
After setting out the fact that two of the detenus had made an application for bail in the Bombay Court and their co accused Kasim had made a similar application in the Madras Court, the authori ty proceeds to state as under: "Though you are in judicial custody but can be released on bail any time as the offence with which you have been charged is bailable in which case you may indulge in similar prejudicial activities.
It is necessary to bear in mind the context in which the expression bailable ' is used.
In the counter filed by the Joint Secretary who passed the detention orders and prepared the grounds for detention it is stated that his past experi ence in such eases was that normally and almost as a matter of rule courts grant bail after the investigation is com pleted.
It was in this background, says the officer, that he used the expression 'bailable '.
We may reproduce his exact words from the counter: "It is also submitted that the word bailable which has not been used in the legal sense, it was intended to convey that normally in such cases one gets bail and in that context, the word 'bailable ' was used".
Proceeding further it is averred in the counter that even in nonbailable offences the Sessions Court and the High Court are empowered to grant bail.
He was, therefore, of the view that in such cases courts normally grant bail.
It was in this background that he used the word bailable in the grounds of detention.
465 Mr. Sibbal the learned Additional Solicitor General, contended that the expression bailable was used in the backdrop of the fact that two of the detenus and Kasim had already applied for bail.
The court had not rejected their applications but had adjourned them as the investigation was in progress.
That gave rise to the belief that bail would be granted.
His normal experience also was that in such cases courts ordinarily granted bail on the conclusion of the investigation.
He, therefore, loosely described the offence as bailable and did not use that word in the technical sense of section 2(a) of the Code of Criminal Procedure.
The High Court also pointed out that even in respect of non bailable offences it is generally open to the Sessions Court and the High Court to release the accused on bail.
It further points out that it is equally open to the Magistrate to release the accused on bail after a period of two months.
In the circum stances the High Court was of the opinion that the use of the expression 'bailable ' cannot lead one to the conclusion that there was no application of mind.
We are inclined to think that having regard to the background in which this expression is used in paragraph 15 of the grounds of deten tion and bearing in mind the explanation and the fact that in such cases courts normally grant bail, it cannot be said that the use of the said expression discloses non applica tion of mind.
It was then submitted that the detenu M.M. Shahul Hameed had not applied for bail and, therefore, there was no question of his being released on bail.
We do not think that there is any merit in this submission for the simple reason that if the co accused are released on bail he too could seek enlargement on bail at any time.
Therefore, the possibility of all the detenus being released on bail was a real one and not an imaginary one.
This was based on past experience which is re inforced by the observations of the High Court that even in non bailable cases courts of Sessions and High Court do grant bail.
The second limb of the contention is, therefore, clearly devoid of merit.
Counsel for the detenus, however, vehemently argued that since the detenus were in custody, there was no compelling necessity to pass the detention orders for the obvious reason that while in custody they were not likely to indulge in any prejudicial activity such as smuggling.
In support of this contention reliance was placed on a host of decisions 01 ' this Court beginning with the case of Vijay Narain Singh vs State of Bihar, and ending with the case of Dharmendra Suganchand Chelawat vs Union of India, ; It is necessary to bear in mind the fact that the grounds of detention clearly reveal that the detaining authority was aware of the fact that the detenus were appre hended while they were about to board the flights 466 to Hongkong and Dubai on 5th October, 1989.
He was also aware that the detenu M.M. Shahul Hameed had secreted dia monds and precious stones in his rectum while the other two detenus had swallowed 100 capsules each containing foreign currency notes.
He was also aware of the fact that all the three detenus were produced before the Additional Chief Metropolitan Magistrate, Espalande, Bombay and two of them had applied for bail.
He was also conscious of the fact that the hearing of the bail applications was postponed because investigation was in progress.
His past experience was also to the effect that in such cases courts ordinarily enlarge the accused on bail.
He was also aware of the fact that the detenu M.M. Shahul Hameed had not applied for bail.
Con scious of the fact that all the three detenus were in custo dy, he passed the impugned orders of detention on 10th November, 1989 as he had reason to believe that the detenus would in all probability secure bail and if they are at large, they would indulge in the same prejudicial activity.
This inference of the concerned officer cannot be described as bald and not based on existing material since the manner in which the three detenus were in the process of smuggling diamonds and currency notes was itself indicative of they having received training in this behalf.
Even the detenus in their statements recorded on 5th October, 1989 admitted that they had embarked on this activity after receiving training.
The fact that one of them secreted diamonds and precious stones in two balloon rolls in his rectum speaks for itself.
Similarly the fact that the other two detenus had created cavities for secreting as many as 100 capsules each in their bodies was indicative of the fact that this was not to be a solitary instance.
All the three detenus had prepared them selves for indulging in smuggling by creating cavities in their bodies after receiving training.
These were not ordi nary carriers.
These were persons who had prepared them selves for a long term smuggling programme and, therefore, the officer passing the detention orders was justified in inferring that they would indulge in similar activity in future because they were otherwise incapable of earning such substantial amounts in ordinary life.
Therefore, the criti cism that the officer had jumped to the conclusion that the detenus would indulge in similar prejudicial activity with out there being any material on record is not justified.
It is in this backdrop of facts that we must consider the contention of the learned counsel for the detenus whether or not there existed compelling circumstances to pass the impugned orders of detention.
We are inclined to think, keeping in view the manner in which these detenus received training before they indulged in the smuggling activity, this was not a solitary effort, they had in fact prepared themselves for a long term programme.
The decisions of this Court to which our attention was drawn by the learned 467 counsel for the petitioners lay down in no uncertain terms that detention orders can validly be passed against detenus who are in jail, provided the officer passing the order is alive to the fact of the detenus being in custody and there is material on record to justify his conclusion that they would indulge in similar activity if set at*liberty.
We will now consider the case law in brief.
In Vijay Narain Singh (supra) this Court stated that the law of preventive detention being a drastic and hard law must be strictly construed and should not ordinarily be used for clipping the wings of an accused if criminal prosecution would suffice; So also in Ramesh Yadav vs District Magis trate ET, this Court stated that ordinarily a detention order should not be passed merely on the ground that the detenu who was carrying on smuggling activities was likely to be enlarged on bail.
In such cases the proper course would be to oppose the bail application and if grant ed, challenge the order in the higher forum but not circum vent it by passing an order of detention merely to supersede the bail order.
In Suraj Pal Sahu vs State of Maharashtra, ; the same principle was reiterated.
In Binod Singh vs District Magistrate, Dhanbad, ; it was held that if a person is in custody and there is no imminent possibility of his being released therefrom, the power of detention should not ordinarily be exercised.
There must be cogent material before the officer passing the detention order for inferring that the detenu was likely to be released on bail.
This inference must be drawn from material on record and must not be the ipse dixit of the officer passing the detention order.
Eternal vigilance on the part of the authority charged with the duty of maintain ing law and order and public order is the price which the democracy in this country extracts to protect the fundamen tal freedoms of the citizens.
This Court, therefore, empha sized that before passing a detention order in respect of the person who is in jail the concerned authority must satisfy himself and that satisfaction must be reached on the basis of cogent material that there is a real possibility of the detenu being released on bail and further if released on bail the material on record reveals that he will indulge in prejudicial activity if not detained.
That is why in Abdul Wahab Sheikh vs
S.N. Sinha; , this Court held that there must be awareness in the mind of the detaining authority that the detenu is in custody at the time of actual detention and that cogent and relevant material disclosed the necessity for making an order of detention.
In that case the detention order was quashed on the ground of non application of mind as it was found that the detaining authority was unaware that the detenu 's application for being released on bail was rejected by the 468 designated Court, In Meera Rant ' vs State of Tamil Nadu, ; the case law was examined in extension.
This Court pointed out that the mere fact that the detenu was in custody was not sufficient to invalidate a detention order and the decision must depend on the facts of each case.
Since the law of preventive detention was intended to prevent a detenu from acting in any manner considered preju dicial under the law.
ordinarily it need not be resorted to if the detenu is in custody unless the detaining authority has reason to believe that the subsisting custody of the detenu may soon terminate by his being released on bail and having regard to his recent antecedents he is likely to indulge in similar prejudicial activity unless he is pre vented from doing so by an appropriate order of preventive detention.
In Shashi Aggarwal vs State of Uttar Pradesh, ; it was emphasized that the possibility of the court granting bail is not sufficient nor is a bald state ment that the detenu would repeat his criminal activities enough to pass an order of detention unless there is credi ble information and cogent reason apparent on the record that the detenu, if enlarged on bail, would act prejudicial ly.
The same view was reiterated in Anand Prakash vs State of Uttar Pradesh, ; and Dharmendra 's case (supra).
In Sanjay Kurnar Aggarwal vs Union of India, ; the detenu who was in jail was served with a detention order as it was apprehended that he would indulge in prejudicial activities on being released on bail.
The contention that the bail application could be opposed, if granted, the same could be questioned in a higher forum, etc., was negatived on the ground that it was not the law that no order of detention could validly be passed against a person in custody under any circumstances.
From the catena of decisions referred to above it seems clear to us that even in the case of a person in custody a detention order can validly be passed (1) if the authority passing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity and (3) if it is felt essential to detain him to prevent him from so doing.
If the authority passes an order after recording his satisfaction in this behalf, such an order cannot be struck down on the ground that the proper course for the authority was to oppose the bail and if bail is granted notwithstanding such opposition, to question it before a higher court.
What this court stated in the case of Ramesh Yadav (supra) was that ordinarily a detention order should not be passed merely to pre empt or circumvent enlargement on bail in cases which 469 are essentially criminal in nature and can be dealt with under the ordinary law.
It seems to us well settled that even in a case where a person is in custody, if the facts and circumstances of the case so demand.
resort can be had to the law of preventive detention.
This seems to be quite clear from the case law discussed above and there is no need to refer to the High Court decisions to which our attention was drawn since they do not hold otherwise.
We, therefore.
find it difficult to accept the contention of the counsel for the petitioners that there was no valid and compelling reason for passing the impugned orders of detention because the, deronus were in custody.
Counsel for the petitioners next submitted that while making the representation dated 18th December.
1989 the detenus had requested for the supply of copies of the decla rations made by them before the customs authorities at the Bombay Airport before boarding their respective flights and for copies of the search warrants mentioned in the grounds of detention.
It was stated that the detenus needed these documents for the purpose of making a representation.
While rejecting their representation by the memorandum of 18th January.
1989 the detenus were informed that the sponsoring authority was requested to supply the copies of search authorisations to the detenus.
The petitioners complained that despite this communication the sponsoring authority did not supply copies of the search authorisations whereupon another letter dated 6th February, 1990 was written to the detaining authority asking for the said documents.
By the memorandum of 14th February, 1990, the detenus were informed that the Deputy Director of Revenue Intelligence.
Bombay, was requested to supply the documents asked for by the deronus.
In response to the same the detenus were supplied copies of the search warrants but not copies of the declara tions made to the customs officers at the airport.
It is further complained that this delay had resulted in depriving the detenus of their valuable right to make an effective representation against the impugned detention orders.
The High Court while dealing with this contention came to the conclusion that the declarations made by the detenus at the airport were neither relied on nor referred to in the grounds of detention.
As regards the search authorisations, it may be pointed out that although there is a mention of the premises searched in the grounds of detention, the incriminating material found has neither been used nor made the basis for formulating the grounds of detention.
Mere reference to these searches by way of completing the narra tion cannot entitle the detenus to claim copies of the search authorisations.
The High Court, therefore, rejected this contention by observing as under: 470 "We fail to understand how the Detaining Authority can be compelled to give documents which were not relied upon while arriving at the subjective satisfaction.
We are also unable to appreciate how the declaration made by the detenu before proceedings to board the aircraft has any relevance while considering whether the order of detention should be passed to prevent the detenu from indulging in any prejudicial activities in future.
In our judgment, the complaint that some documents which according to the detenu were relevant for making representation were not furnished by the Detain ing Authority and, therefore, the order or the continuation of the detention is bad, is without any substance.
" In the counter it is specifically mentioned that 'these documents were not placed before the detaining authority nor the detaining authority has relied upon those documents while issuing the detention order '.
The detenus would have been entitled to any document which was taken into consider ation while formulating the grounds of detention but mere mention of the fact that certain searches were carried our in the course of investigation, which have no relevance to the detention of the detenus, cannot cast an obligation on the detaining authority to supply copies of those documents.
Much less can an obligation be cast on the detaining author ity to supply copies of those documents in Tamil language.
In the peculiar circumstances of the present petitions we are of the opinion that the view taken by the High Court cannot be assailed.
Reliance was, however, placed on a decision of the Delhi High Court in Gurdip Singh vs Union of India & Ors., Criminal Writ No. 257 of 1988 decided on 7th October, 1988 (1989 Crl.
L.J. NOC 41 Delhi) wherein Malik Sharief ud din, J. observed that the settled legal position was that all the documents relied upon for the purpose of ordering detention ought to be supplied pari passu with the grounds of detention to the detenu and documents not relied upon but casually referred to for the purpose of narration of facts were also to be supplied to the detenu if demanded.
Where documents of the latter category are supplied after the meeting of the Advisory Board is over it was held that that would seriously impair the detenu 's right to make an effective and purposeful representation which would vitiate the detention.
Counsel for the petitioners, therefore, submitted that in the present case also since the search authorisations were supplied after the meeting of the Advi sory Board, the detention orders stood vitiated.
But in order to succeed it must be shown that the search authorisa tions had a bearing on the detention orders.
If, merely an incidental refe 471 rence is made to some part ' of the investigation concerning a coaccused in the grounds of detention which has no rele vance to the case set up against the detenu it is difficult to understand how the detenus could contend that they were denied the right to make an effective representation.
It is not sufficient to say that the detenus were not supplied the copies of the documents in time on demand but it must fur ther be shown that the non supply has impaired the detenu 's right to make an effective and purposeful representation.
Demand of any or every document, however irrelevant it may be for the concerned detenu, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order.
No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that the failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insig nificant it may be.
In the present case, except stating that the documents were not supplied before the meeting of the Advisory Board, there is no pleading that it had resulted in the impairment of his right nor could counsel for the peti tioners point out any such prejudice.
We are, therefore, of the opinion that the view taken by the Bombay High Court in this behalf is unassailable.
The declaration under section 9(1) dated 20th December, 1989 is challenged on the ground that the second respondent failed to forward the copies of the document on which he placed reliance for arriving at the subject to satisfaction that the detenu were likely to smuggle goods out of and through Bombay Airport, an area highly vulnerable to smug gling as defined in Explanation 1 to section 9(1) of the Act.
Now if we turn to paragraph 2 of the declaration it becomes evident that the second respondent merely relied on the grounds of detention and the material in support thereto which had already been served on the detenu and nothing more.
Counsel for the petitioners relying on a decision of the Bombay High Court in Nand Kishore Purohit vs Home Secre tary, Maharashtra, [2986]2 Bombay C.R. 25, however urged that it was obligatory for the second respondent to supply the grounds of detention and the accompanying documents 'afresh ' if the declaration 'was based thereon.
We are afraid we cannot subscribe to this point of view.
If the documents relied on for the purpose of framing a declaration under section 9(2) are the very same which were earlier supplied to the detenu along with the grounds of detention under section 3(1), we fail to see what purpose would be served by insisting that those very documents should be supplied afresh.
Such a view would only result in wasteful.
expenditure and avoidable duplication.
We do not think that 472 we would be justified in quashing the declaration made under section 9(1) of the Act on such a hyper technical ground.
We, therefore, do not see any merit in this contention.
There are a few other minor grounds on which the deten tion orders are challenged.
These may stated to be rejected.
Firstly, it was contended that under section 3(1) of the Act a detention order can be passed on one or more of the five grounds set out in clauses (i) to (v) thereof.
Since the impugned orders make no mention of the clause number on which they are rounded they are bad in law.
The detention orders clearly state that the power is being exercised with a view to preventing the smuggling of goods referrable to clause (i) of the subsection.
Merely because the number of that clause is not mentioned, it can make no difference whatsoever.
So also we see no merit in the contention that the value of goods seized varies in the grounds of detention from that mentioned in the panchnama or appraisal report.
How that has prejudiced the detenus is difficult to compre hend in the absence of any material on record.
The submis sion that the declaration under section 9(1) was required to be communicated within five weeks from the date of its making is not specifically raised in the writ petitions nor was it argued before the High Court.
We were, however, told that the declaration was communicated in the first week of January 1990, a statement which was not contested on behalf of the petitioners.
In fact the submission was not pursued after this fact was disclosed.
We also see no merit in it.
Lastly, it was said that the authority had failed to take notice of the retraction of the statement recorded under section 108 of the .
In fact there is a specific reference to the retraction letter dated 12th October, 1989 and the subsequent letter of 19th October, 1989, wherein the detenus stated that they had signed the letter of 12th October, 1989 without knowing the contents thereof and had in fact not disowned their earlier statement of 5th October, 1989.
It is clear from the above that this challenge is also without substance.
These were the only contentions urged at the hearing of the special leave petitions as well as the writ petitions.
As we do not see any merit in any of these contentions we dismiss the special leave petitions as well as the writ petitions and discharge the rule in each case.
R.N.J. SLPs and Writ Petition dismissed.
|
The petitioners are the wives of three detenus who had been detained under an order dated 10th November, 1989 passed under subsection (1) of section 3 of the against each of them with a view to preventing them from smuggling goods '.
The order of detention as well as the grounds of detention dated November 10, 1989 were served on the three detenus on 21st November, 1989 while they were already in jail custody on remand following their arrest at the Sahar International Airport on October 5, 1989 when on suspicion they were searched which resulted in the recovery of diamonds, precious stones and foreign currency which they had planned to smuggle out.
Thereafter on Decem ber 20, 1989 a declaration under section 9(1) of the Act was passed in respect of each detenu which was served on them within the time allowed by law.
Thereupon the wives of all the three detenus filed separate habeas corpus writ peti tions in the High Court of Bombay.
Four contentions were raised before the High Court namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed non application of mind by describing 458 the offence as 'bailable '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the author ities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation.
The High Court nega tived all the contentions and dismissed the writ petitions.
Against that the wives of the detenus have filed Special Leave Petitions and also separate writ petitions under Article 32 of the Constitution raising several contentions including those negatived by the High Court.
Dismissing all the Special Leave Petitions and Writ Petitions and upholding the view taken by the High Court this, Court, HELD: Even in the case of a person in custody a deten tion order can validly be passed (1) if the authority pass ing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity; and (3) if it is felt essential to detain him to prevent him from so doing.
[278F G] It is not sufficient to say that the detenu was not supplied the copies of the documents in time on demand but it must further be shown that non supply has impaired the detenu 's right to make an effective and purposeful represen tation.
[281B] Demand of any and every document, however irrelevant it may be, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order.
No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insignificant it may be.
[281B C] Vijay Narain Singh vs State of Bihar, [1984] 3 S.C.C. 14; Dharmendra Suganchand Chelawat vs Union of India, ; ; Ramesh Yadav vs District Magistrate E.T., ; Suraj Pal Sahu vs State of Maharashtra, ; ; Binod Singh vs District Magistrate, Dhanbad, ; ; Abdul Wahab Sheikh vs
S.N. Sinha; , ; Meera Rani vs State of Tamil Nadu, ; ; Shashi Aggarwal vs State of Uttar Pradesh, ; ; Anand Prakash vs State of Uttar Pradesh, ; ; Sanjay Kumar Aggarwal vs Union of 459 India; , ; Gurdip Singh vs Union of India & Ors., [1989] Crl.
L.J. NOC 41 Delhi and Nand Kishore Purohit vs Home Secretary, Maharashtra, [1986] 2 Bombay C.R. 25 referred to.
|
ivil Appeal No. 4457 of 1989.
Appeal under Section 35 L(b) of the Central Excise and Salt Act, 1944 from the Order No. 285/89 C dated the 29th June, 1989 of the Customs, Excise and Gold (Control), Appel late Tribunal, New Delhi in Appeal No. E/2489/87 C. K.K. Venugopal, D. Shroff, Ravinder Narain, Raj Darak, P.K. Ram and D.N. Mishra for the Appellant.
Kapil Sibal, Additional Solicitor General, P. Parmeshwa ran and Ms, Indu Malhotra for the Respondent.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal involves the question whether the products, Bifuran Supplement, Neftin 50 and Neftin 200, manufactured by the appellant, are chargeable to excise duty as 'patent or proprietary medicines ' under Item 14 E of the First Schedule to the Central Excise and Salt Act, 1944, (hereinafter referred to as the 'Excise Tariff ') or the said products are exempted from excise duty under notification No. 6/84 dated February 15, 1984, as animal feed supplement.
At the relevant time Item 14 E of the Excise Tariff was as under. "14 E Patent or proprietary medicines not containing alco hol, opium, Indian Hemp or other narcotic drugs or 446 other narcotics other than those medicines which are exclu sively Ayurvedic, Unani, Sidha or Homeopathic.
Explanation I 'Patent or Proprietary Medicines ' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals which bears either or itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulacy or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade mark under the (43 of 1958), or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as a proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.
Explanation II 'Alcohol ', 'Opium ', 'Indian Hemp ', 'Narcotic Drugs ' and 'Narcotics ' have the meanings respec tively assigned to them in Section 2 of the .
" Item 68 of the Excise Tariff was in the nature of a residuary provision and it read as under: "All other goods, not elsewhere specified but excluding: (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian Hemp and other narcotic drugs and narcot ics; and (c) dutiable goods as defined in Section 2(c) of the Medici nal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955).
Explanation For the purpose of this Item, goods which 447 are referred to in any preceding Item in this Schedule for the purpose of excluding such goods from the description of goods in that Item (whether such exclusion is by means of an Explanation to such Item or by words of exclusion in the description itself or in any other manner) shall be deemed to be goods not specified in that Item." In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Gov ernment issued notification dated February 28, 1982 whereby the goods of the descriptions specified in the Schedule annexed to the said notification and falling under Item 68 of the Excise Tariff were exempted from the levy of central excise duty.
Entry at section No. 10 in the Schedule annexed to the said notification was: "Animal feed including compound live stock feed." The said notification dated February 28, 1982 was super seded by notification dated November 1, 1982, which also exempted from levy of central excise duty goods of the description specified in the Schedule annexed to the said notification falling under Item 68 of the Excise Tariff.
Entry at section No. 10 in the Schedule annexed to the said notification was in the same terms as in the previous noti fication dated February 28, 1982.
The notification dated November 1, 1982 was amended by notification dated February 15, 1984 whereby entry at section No. 10 in the Schedule annexed to the notification dated November 1982 was substituted by the following entry: "Animal feed including compound live stock feed, animal feed supplements and animal feed concentrates.
" By the aforesaid notification dated February 15, 1984, the following explanation was also inserted: "Explanation II For the purposes of this notification.
the expression (i) "animal feed supplements" means an ingredient or combi nation of ingredients, added to the basic feed mix or parts thereof.
to fulfil a specific need, usually used in micro quantities and requiring careful handling and mixing; (ii) "animal feed concentrates" means a feed intended to 448 be diluted with other feed ingredients to produce complete food of optimum nutrient balance.
" The appellant carries on business as manufacturer of pharmaceuticals.
Among the products manufactured by it are Bifuran Supplement, Neftin 50 and Neftin 200.
Prior to the notification dated February 15, 1984 the appellant was classifying the products mentioned above under Item 14E and was paying central excise duty on that basis.
After the notification dated February 15, 1984 the appellant filed a classification list effective from March 1, 1984 whereby the above mentioned products were classified as 'animal feed supplements ' under Item 68 and exemption was claimed under notification dated February 15, 1984.
The said classifica tion list submitted by the appellant was approved by the Assistant Collector of Central Excise on June 4, 1984.
Subsequently the Assistant Collector realised that the said classification had been wrongly approved and he gave a show cause notice dated January 31, 1985 to the appellant wherein it was stated that the above mentioned products classified by the appellant to be "animal feed supplement" do not appear to fulfil the conditions enumerated in the notifica tion dated February 15, 1984 and the appellant was required to show cause why the exemption granted to the said products should not be withdrawn.
The appellant submitted a reply dated March 29, 1985 to the said show cause notice.
After considering the said reply Assistant Collector passed an order dated August 21, 1985 whereby it was held that the exemption granted to the above mentioned products of the appellant has to be withdrawn with effect from March 1, 1984 as the conditions set out in the Notification No. 6/84 dated February 15, 1984 had not been fulfilled and the duty involved on the clearance of the said formulations had to be paid and further clearance could be effected under the revised classification list by including these items in Tariff Item 14E. The ' said order was set aside, on appeal, by the Collector of Central Excise (Appeals) by his order dated December 12, 1985 and the matter was remanded to the Assistant Collector to decide the classification in de novo proceedings after recording evidence to establish that the product has definite therapeutic or preventive value for disease in animals.
Thereafter the Assistant Collector initiated de novo proceedings.
The appellant submitted written submissions and filed documents.
After giving a personal hearing to the representation of the appellant the Assistant Collector passed an order dated November 17/21, 1986 holding that products Neftin 50, Neftin 200 and Bifuran Supplement manufactured by the appellant are correctly classifiable under erstwhile Tariff Item 14E and that effec tive from February 8, 1986 the said products are 449 classifiable under sub heading 3003.9.
The said order was set aside by the Collector of Central Excise (Appeals) by his order dated May 28. 1987.
who held that the said products are animal feed supplements and these products merit classification only under the erstwhile Tariff Item 68 and not under Tariff Item 14E. Aggrieved by the said order of the Collector (Appeals) the Department filed an appeal before the Customs, Excise & Gold Control Appellate Tribu nal, which was allowed by order dated June 29, 1989.
The tribunal held that the aforesaid three products manufactured by the appellant are patent and proprietary medicines as defined in Tariff Item 14E inasmuch as they have therapeutic and preventive use in respect of the specific ailments in animals.
The tribunal was also of the view that if the products satisfy the requirements of Tariff Item 14E there was no question of considering their classification under Tariff Item 68, which is a residuary item.
Aggrieved by the said order of the tribunal the appellant has filed this appeal under Section 35L of the Central Excise and SaIL Act, 1944.
During the course of arguments Shri K.K. Venugopal, the learned counsel for the appellant fairly stated that accord ing to the printed pamphlet issued by the appellant the use of Bifuran Supplement is to promote growth rate, weight gains and feed conversion efficiency in growers and broilers by keeping coccidiosis away during growing period, and that the said product can be regarded as preventive medicine failing under Tariff Item 14E and he has confined his sub missions in respect of the other two products, namely, Neftin 50 and Neftin 200.
Shri Venugopal has urged that Neftin 50 and Neftin 200 are manufactured by the appellant for use as animal feed supplement and not for use as medicine and therefore they should have been classified as animal feed supplement under Tariff Item 68 and were exempted from payment of central excise duty under notification dated February 15. 1984.
Shri Venugopal has invited our attention to the printed litera ture issued by the appellant for the sale of these products as well as certain certificate issued with regard to the use of these products as additive to poultry feed and their usefulness for that purpose.
Shri Venugopal has pointed out that in the printed literature it has been specifically mentioned: "For use in poultry feed only.
Not for medicinal use.
" Shri Venugopal also pointed out that as regards uses of Neftin 50 and Neftin 200 it is stated in the said printed literature: 450 "To improve egg production, feed/egg ratio and hatchability in layers; to increase weight gains and growth rate in broilers and growers." The learned Additional Solicitor General, on the other hand, has urged that both these products are patent and proprietary medicines chargeable to central excise duty under Tariff Item 14E.
In this connection the learned Addi tional Solicitor General has pointed out that Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazo lidone 20% W/W.
The submission of the learned Additional Solicitor General is that Furazolidone is used as an aid in the prevention of coccidiosis as well as for treatment of coccidiosis and that Furazolidone is a patent drug and in England it is sold to the public on the prescription of a registered practitioner only.
The learned Additional Solici tor General also urged that the finding that aforesaid two products are patent and proprietary medicines falling under Tariff Item 14E is essentially a finding of fact based on the materials placed before the excise authorities and the said finding is not normally open to challenge in appeal before this Court.
The submission of the learned Additional Solicitor General is further that in the present case it cannot be said that the aforesaid products manufactured by the appellants can be regarded as animal feed supplement as defined in Explanation II, inserted by notification dated February 15,1984 in the notification dated November 1, 1982.
In the instant case we are not required to consider the scope of two competing entries of the Excise Tariff because Item 68 was a residuary entry which dealt with all other goods not elsewhere specified.
A product which is found to be covered by the other items of the Schedule of the Excise Tariff would be outside the ambit of Item 68.
Therefore, the primary question to be considered is whether the products in question, namely, Neftin~50 and Neftin 200, are patent and proprietary medicines falling within Item 14E.
In this context we may refer to the decision of this Court in Dunlop India Ltd. vs Union of India and Others, ; where the question was whether V.P. Latex manufactured by the appellant in that case was raw rubber and classifiable under Item 39 or it was classifiable under the residuary entry contained in Item 87.
It was found that V.P. Latex fell within Item 39 and in view of the said finding it was held that it could not fall within the resid uary entry of Item 87.
It was observed: 451 "When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classifi cation to deny it the parentage and consign it to an orphan age of the residuary clause.
The question of competition between two rival classification will, however, stand on a different footing." (P. 113).
Similarly in Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co.; , the question was whether carbon paper was taxable under Item 17 or under the residuary entry at Item 68.
It was found that carbon paper was taxable as paper under Item 17(2) and, therefore, it would not fall in the residuary entry at Item 68.
As noticed earlier, Item 14E refers to patent or pro prietary medicines.
The expression 'patent or proprietary medicines ' has been defined in Explanation I in Item 14E to mean any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailment in human beings or animals.
What is, therefore, required is that the product must be a prepara tion for use in the treatment or prevention of ailments in human beings or animals.
Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazolidone 20% W. The Assist ant Collector in his order dated 17/21 November, 1986 has referred to the following authorities on the subject.
(a) British Pharmacopoeia 1980, Vol.
I, wherein with refer ence to Furazolidone it has been stated: "A yellow crystalline powder, odourless, to be protected from light.
An antibacterial, antifungal and antiprotozol." (P. 205) (b) British Pharmacopoeia Codex 1979 wherein it has been stated: "A bacteriacide which is observed only slightly from the intestinal mucosa and has therefore been used in the treat ment of bacterial diarrhoea and gestro enteritis.
It is also active against, "Giardia lamblia." "Furazolidone is used in animals as an antibacterial agent 452 and for the promotion and treatment of histomoniasis." "For histomoniasis in poultry, the usual prophylectic dosage is 100 ppm in the feed and the usual therapeutic dosage is 400 ppm in the feed for 10 days." (P. 376) (c) Scientific Foundations of Veterinary Medicine, 1980 Edn.
: "Bloody or cecal coccidiosis is an acute hemorrhagic disease and is the most severe form of coccidiosis in chickens." "Furazolidone is fed continuously at 0.0055% in the feed as an aid in the prevention of coccidiosis caused by E. tenel la, E. necatrix, and E. acervulina.
Furazolidone can also be used for the treatment of these same coccidia species when fed at 0.011% for 5 to 7 days." (P. 193) (d) Medicines and Poisons Guide, 2nd Edn. 1980, prepared by the Law Department of Pharmaceutical Society of Great Brit ain: "Furazolidone is a prescription only veterinary drug and by virtue of an entry in the medicines order (prescription only) may be sold or supplied to the public only on a prac titioner 's prescription." (P. 59) These observations indicate that Furazolidone is an antibacterial, antifungal and antiprotozol compound and it is used for prevention and treatment of coccidiosis as well as histomoniasis in poultry.
From this material it also appears that in England Furazolidone is a prescription only veterinary drug and it can be sold or supplied to the public on a practitioner 's prescription only.
Furazolidone is thus a drug or medicinal preparation used for treatment and prevention of ailments in poultry and since Neftin 50 and Neftin 200 contain only Furazolidone, the said products are also drugs or medicinal preparations for use in the treat ment and prevention of ailments in poultry.
In this context it would be relevant to mention that apart from Neftin 50 and Neftin 200 the appellant also manufactures Neftin Tab lets.
The appellant has not disputed that Neftin Tablets manufactured by it are drugs or medicines falling within the ambit of Item 14E and it pays central excise duty on the same.
Shri Venugopal has laid stress on the word "used" in Explanation I in Item 14 ,red has submitted that Neftin Tablets are manufactured 453 for use as medicine whereas Neftin 50 and Neftin 200 are manufactured for use as animal feed supplement and are not manufactured for use as medicine.
Shri Venugopal has invited our attention to the decision of this Court in Annapurna Carbon Industries Co. vs State of Andhra Pradesh, ; In that case the question for consideration was whether Cinema Arc Carbons were taxable to sales tax under the entry relating to cinematographic equipment and parts and accessories 'required for use therewith '.
This Court held that the main use of the arc carbon was proved to be that of production of powerful light used in projectors in cinemas and the fact that they can also be used for search lights, signalling, stage lighting or where powerful light ing for photography or other purposes may be required, could not detract from the classification to which the carbon arc belong, which is determined by their ordinary or commonly known purpose or user and hence their sale was subject to sales tax under the said entry.
Here we find that Neftin 50 and Neftin 200 contain Furazolidone which is administered for prevention and treatment of ailments viz., Coccidiosis and Histomoniasis in poultry.
Merely because Neftin 50 and Neftin 200 can also be used for improving egg production and increase in growth rate of broilers would not in any way detract from the fact that the said products are medicines for use in the treatment and prevention of ailments in poultry.
Once it is found that Neftin 50 and Neftin 200 are medicines for use for treatment and prevention of ailments in poultry they have to be regarded as patent and proprie tary medicines chargeable to excise duty under Item No. 14E and the question whether the said products fail in the residuary, entry at Item 68 does not arise.
The exemption from payment of central excise duty which has been granted under notification dated November 1, 1982 as amended by notification dated February 15, 1984, is confined in its application to goods specified in the Sched ule annexed to the said notification which fall under Item 68.
The said notification does not grant exemption in re spect of a product falling in any other entry of the excise tariff.
It cannot be construed as transferring a product from an entry other than Item 68 to Item 68.
The insertion of animal feed supplement in the Schedule to the Notifica tion dated November 1, 1982 by the Notification dated Febru ary 15, 1984, would not mean that a product which was liable to payment of central excise duly under Item 14E prior to such insertion would cease to be so liable and would become exempt from such payment of duty by virtue of this notifica tion.
It is not disputed that prior to the notification dated February 15, 1984.
the appellant was paying central excise duty on Neftin 50 and Neftin 200 454 patent and proprietary medicines falling under Item 14E.
In the absence of any notification granting exemption in respect of products falling under Item 14E, Neftin 50 and Neftin 200, which are patent and proprietary medicines falling under Tariff Item 14E and which do not fall under the residuary entry at Item 68, cannot be claimed to be exempt from central excise duty as animal feed supplement under notification dated November 1, 1982, as amended by notification dated February 15. 1984.
Shri Venugopal has contended that the appellant has been subjected to arbitrary and hostile discrimination inasmuch as similar products of other manufacturers which contain the same percentage of Furazolidone as Neftin 50 and Neftin 200 are being exempted from payment of central excise duty under notification dated November 1, 1982.
as amended by notifica tion dated February 15, 1984.
In support of this submis sion Shri Venugopal has invited our attention to the pam phlets issued by other manufacturers about their products and the contents of those products.
Shri Venugopal has placed reliance on the decisions of the U.S. Supreme Court in Cumberland Coal Co. vs Board of Revision, 76 Law Edn. 147 and Iowa Des Moines National Bank vs E.R. Bennett, 76 Law Edn. 265 as well as the decision of this Court in Vishnudas Hindumal Etc.
vs State of Madhya Pradesh and Ors.
, ; The learned Additional Solicitor General has submitted that the other manufacturers referred to by Shri Venugopal are located at different places and are assessable to excise duty by different authorities and that merely because the relevant notifications have been wrongly applied to those manufacturers by the concerned authorities and the said manufacturers are enjoying exemption from duty in respect of their products would not mean that the impugned order passed against the appellant is liable to be quashed on the ground on violation of the right to equality under Article 14 of the Constitution.
The learned Additional Solicitor General has also stated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
It is not the case of the appellant that the same au thority has passed orders discriminating between the appel lant and other producers of similar products.
The grievance of the appellant is that on account of difference in the interpretation of notification dated February 15, 1984, amending notification dated November 1, 1982, by the excise authorities in other regions while the appellant is being required to pay excise duty on Neftin 50 and Neftin 200 manufactured by it, other manufacturers of similar products in other regions are 455 enjoying exemption from payment of such duty.
The appellant, in substance, wants that because other producers have been granted exemption, though wrongly, the same exemption should be extended to it.
In our opinion this is impermissible.
The appellant cannot obtain such an exemption in disregard of the law by invoking the right to equality before the law and equal protection of the laws guaranteed under Article 14 of the Constitution.
A similar question arose before this Court in Narain Dass vs The Improvement Trust, Amritsar & Another, AIR 1972 S.C. 865.
In that case it was contended that while administering Section 56 of the Punjab Town Improvement Act, 1922, there had been hostile discrimination against the appellants because lands under orchards belonging to persons similarly placed had been exempted whereas the appellants had been refused exemption.
Rejecting this contention this Court has observed: "In any event if the appellants had failed to bring their case within Section 56 of the Act, then merely because some other party had erroneously succeeded in getting his lands exempted ostensibly under that Section that by itself would not clothe the present appellants with a right to secure exemption for their lands.
The rule of equality before the law or of the equal protection of the laws under Article 14 could not be invoked in such a case.
" In Cumberland Coal Co. (Supra) and Iowa Des Moines National Bank (supra) it was found that there was intention al and systematic discrimination in favour of certain per sons by the officials administering the law.
In the instant case it is not said that there has been intentional and systematic discrimination in favour of the producers other than the appellant.
The said decisions have, therefore no application to the present case.
Vishnudas Hindureal vs State of Madhya Pradesh (Supra) was in respect of a scheme for nationalisation of motor transport whereunder the permits of the appellants before this Court had been curtailed and they were prohibited from operating their stage carriages on that portion of the route for which they had permits which was overlapping with the notified route while others similarly situate were permitted to ply their stage carriages over the routes for which they had permits passing over a portion of the notified route without any let or hindrance and their permits were neither curtailed nor cancelled.
This Court found that this was due to an error or omission on the part of the Regional Trans port Authority in not supplying full information to the 456 Special Secretary about all the valid permits in force at the relevant date, After referring to the decision of this Court in Ramnath Verma vs State of Rajasthan, ; wherein it was held that discrimination under Article 14 is conscious discrimination and not accidental discrimination that arises from oversight which the State is ready to rectify, this Court observed: " We did not find any willingness on the part of the State authorities to rectify the error in the High Court or before this Court." In these circumstances.
this Court, instead of rejecting the whole scheme, considered it appropriate to rectify the same by removing the discrimination by putting the appel lants before it in the same class as those who had enjoyed favourable treatment by inadvertance on the part of the Regional Transport Authority.
The present case stands on a different footing.
Here the discrimination complained of arises on account of orders passed by different excise authorities acting quasi judicially.
Moreover it cannot be said that there is no willingness on the part of the author ities to recover excise duty on similar products manufac tured by other producers because the learned Additional Solicitor General, during the course of his arguments, has indicated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
The decision in Vishnudas 's case (supra) has, therefore, no application to the present case.
For the reasons aforesaid we find no substance in this appeal and it is accordingly dismissed.
There will be no order as to costs.
P.S.S. Appeal dismissed.
|
Item 14 E of the First Schedule to the at the relevant time dealt with patent or proprietary medicines not containing alcohol, opium, Indian hemp or other narcotic drugs or narcotics.
Explanation I thereto defined 'patent or proprietary medicines ' to mean any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the preven tion of ailments In human beings or animals.
Item 68 dealt with all other goods, not elsewhere specified but excluding alcohol, opium, Indian hemp and other narcotic drugs and narcotics.
The Central Government by a notification dated February 28, 1982 exempted certain goods falling under Item 68 from the levy of central excise duty.
Entry at section No. 10 in the schedule annexed thereto read "animal feed including com pound livestock feed".
The said notification was superseded by notification dated November 1, 1982 which also provided the same exemption.
This notification was again amended by notification dated February 15, 1984.
Entry at section No. 10 in the schedule thereto read "animal feed including compound livestock feed, animal feed supplement and animal feed concentrates".
A question arose as to whether Bifuran Supplement, Neftin 50 and Neftin 200 manufactured by the appellant were chargeable to excise duty as patent or proprietary medicines under Item 14 E or could be classified as "animal feed supplement" under Item 68 and exempted from payment of excise duty.
The Assistant Collector of Central Excise held that the said formulations were classifiable under Tariff Item 14 E.
His order was, however, set aside by the Collec tor of Central Excise (Appeals) who held that the said products were animal feed supplements which merited classi fication only under the erstwhile Tariff Item 68 and not under Tariff Item 14 E.
On appeal by the Department, the Tribunal held that the aforesaid three products manufactured by the 443 appellant were patent and 'proprietary medicines as defined in Tariff Item 14 E inasmuch as they have therapeutic and preventive use in respect of the specific ailments in ani mals, that if the products satisfied the requirements of Tariff Item 14 E there was no question of considering their classification under Tariff Item 68 which was a residuary item.
In this appeal under section 35 L of the Act it was stated on behalf of the appellant that since the use of Bifuran Sup plement was to promote growth rate, weight gains and feed conversion efficiency in growers and broilers by keeping coccidiosis away during growing period, it could be regarded as a preventive medicine falling under Tariff Item 14 E.
However, in respect of Neftin 50 and Neftin 200 it was urged that these were manufactured for use as animal feed supple ment and not for use as medicines and, therefore, they should have been classified as animal feed supplement under Tariff Item 68 and exempted from payment of excise duty under notification dated February 15, 1984.
It was further contended that the appellant had been subjected to arbitrary and hostile discrimination as similar products of other manufacturers were being exempted from payment of excise duty under the said notification.
For the respondent it was contended that Neftin 50 contains Furazolidone 5% w/w and Neftin 200 contains Furazolidone 20% w/w, that Furazolidone is used as an aid in the prevention of coccidiosis as well as for treatment of coccidiosis, that Furazolidone is a patent drug and in England it is sold to the public on the prescription of a registered practitioner only that the finding that these two products were patent and proprietary medicines failing under Tariff Item 14 E was essentially a finding of fact based on the materials placed before the excise authorities and the said finding was not normally open to challenge in appeal, that the other manufacturers whose products were exempted were located at different places and were assessable to excise duty by different authorities, and that the relevant notifications have been wrongly applied to those manufacturers by the concerned authorities.
Dismissing the appeal, the Court, HELD: 1.
Item 68 of the Excise Tariff was a residuary entry which dealt with all other goods not elsewhere speci fied.
A product which is found to be covered by the other items of the Schedule of the Excise Tariff would be outside the ambit of Item 68.
[260F] Dunlop India Ltd. vs Union of India & Ors., ; and Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., ; , referred to.
444 2.
What is required for purposes of Item 14 E is that the product must be a preparation for use in the treatment or prevention of ailments in human beings or animals.
Furaz olidone is an antibacterial, antifungal and antiprotozoal compound.
It is used for prevention and treatment of coccid iosis as well as histomoniasis in poultry.
In England it.is a veterinary drug and it can be sold or supplied to the public on a practitioner 's prescription only.
Furazolidone is thus a drug or medicinal preparation used for treatment and prevention of ailments in poultry.
Since Neftin 50 and Neftin 200 contain only Furazolidone, the said products are also drugs or medicinal preparations for use in the treat ment and prevention of ailments in poultry.
They have, therefore, to be regarded as patent and proprietary medi cines chargeable to excise duty under Item No. 14 E. [262E G] Annapurna Carbon Industries Co. vs State of A.P ; , referred to.
The exemption under notification dated November 1, 1982, as amended by notification dated February 15, 1984 was confined in its application to specified goods which fell under Item 68.
The said notification did not grant exemption in respect of a product failing in any other entry 'of the excise tariff.
It could not be construed as transferring a product from an entry other than Item 68 to Item 68.
The insertion of 'animal feed supplement ' in Entry No. 10 in the schedule to the notification dated November 1, 1982 by the notification dated February 15, 1984, would not mean that a product which was liable to payment of excise duty under Item 14 E prior to such insertion would cease to be so liable and would become exempt from such payment of duty by virtue of that notification.
Prior to the notification dated February 15, 1984, the appellant was paying excise duty on Neftin 50 and Neftin 200 as patent and proprietary medicines failing under Item 14 E.
In the absence of any notification granting exemption in respect of products falling under Item 14 E, Neftin 50 and Neftin 200 could not be claimed to be exempt from Central Excise duty as animal feed supplement.
[263F H; 264A B] 4.
It was not the case of the appellant that the same authority had passed orders discriminating between the appellant and other producers of similar products.
Nor it is said that there has been intentional and systematic discrim ination in favour of the producers other than the appellant.
The discrimination complained of arose on account of orders passed by different excise authorities acting quasi judi cially.
Merely because on account of difference in the interpretation of the relevant notifications by the excise authorities in other regions other manufac 445 turers of similar products in those regions were enjoying exemption from payment of such duty the same exemption could not be extended to it.
The appellant could not obtain such an exemption in disregard of the law by invoking the right to equality before the law and equal protection of the laws guaranteed under Article 14 of the Constitution.
[264G H; 265A B] Narain Dass vs The Improvement Dust, Amritsar, & Anr., AIR 1972 S.C. 865, referred to.
Cumberland Coal Co. vs Board of Revision, 76 Law Edn. 147; Iowa Des Moines National Bank vs E.R. Bennett, 76 Law Edn.
265; Vishnudas Hindumal vs State of Madhya Pradesh & Ors., ; and Ramnath Verma vs State of Rajasthan, ; , distinguished.
|
Civil Appeal Nos.
2 166/87 & 2 146/84.
From the Judgment and Order dated 26.6.
1987 & 16.11.
1983 of the Bombay High Court in W.P. Nos.
2161/86 and 500 of 1983.
V.A. Bobde.
R.N. Keshwani, A.G. Ratnaparkhi and S.D. Mudaliar for the Appellant.
523 S.B. Bhasme, Dr. N.M. Ghatate, S.V. Deshpande and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The interpretation of Rule 3 of the Maharashtra Ground Water Service, Class I (Recruitment) Rules.
1976 (hereinafter called 'the rule ') arises for consideration in these appeals.
That Rule related to the appointment to the post of a Deputy Director in Maharashtra Ground Water Service, Class I and the relevant portions of it as is stood in 1983 read as follows: "3.(1) Appointment to the post of a Deputy Director in the Maharashtra Ground Water service Class 1 shall be made either (a) by promotion from amongst Senior Geologists in the Ground Water Surveys and Development Agency of Government, possessing the qualifications mentioned in sub clauses (ii) and (iii) of Clause (c) of this sub rule; (b) by transfer of a suitable officer from the Department of Geology and Mining of Government; (c) by nomination from amongst the candidates who (i) unless already in the service of Government are not more than 45 years of age on the first day of the month in which the post is advertised, and (ii) Possess a post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mine, Dhanbad, or any quali fications recognised by Government to be equivalent thereto, and (iii) have practical experience in the field of (a) carrying out systematic hydro geological surveys in ingeneous sedi mentary and metamorphic terrains (b) ground water explora tion and assessment by drilling and testing and (c) process ing, interpretation of field date and in preparing and editing technical reports for a total period of ten years out of which three years.
experience shall be in organising.
supervising and guiding field units.
" We are now concerned with the case of promotion from amongst the Senior Geologists under Sub Clause (a) of Rule 3(1) of the Rules.
524 The appellant herein joined in the Agricultural Depart ment of the State some time in the year 1963 and at that time he possessed the qualification of B.Sc.
with Geology as a principal subject.
He was promoted as Senior Geologist on 25.6. 1979.
He passed his M.Sc.
(Geology) in 1982 with first class and he was also first in the Nagpur University in the subject of pure Geology.
He is also the senior most in the seniority list of senior Geologists.
He was also holding the additional charge as Deputy Director from 16.6.
1982 for quite some time.
The Maharashtra Public Service Commission by the notification dated 21st May. 1983 called applications for direct recruitment to the post of Deputy Director in the Ground Water Survey and Development Agency.
which is gov erned by Rule 3(1)(c) of the Rules.
In regard to the quali fication for appointment the advertisement stated: Qualifications: Candidates must possess: (i) A post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mines, Dhanbad or any qualification recog nised by Govt., to be equivalent thereto; (ii) 10 years practical experience in the field of (a) Carrying out systematic hydrological surveys in ingene ous sedimentary and metamorphic terrains.
(b) Ground water exploration and assessment by drilling and testing and (c) Processing, interpretation of field data and in prepar ing and editing technical reports, of which three years ' experience shall be in organising supervising and guiding field units.
N.B. (1) The academic qualifications and experience ac quired upto the last date prescribed for receipt of applica tions alone will be taken into account in determining the eligibility of candidates for the posts and for selecting them for the interview.
(2) Academic qualification shall be deemed to have been acquired on the date on which the result of the relevant examination is declared by the competent authority.
(3) Experience acquired after obtaining the prescribed 525 academic qualifications only will be taken into account.
" The appellant applied to the Service Commission but he was not called for an interview on the ground that he acquired the post graduate degree in Geology only in the year 1982 and he does not possess the necessary qualification of 10 years practical experience after obtaining the post graduate degree.
The appellant filed Writ Petition No. 500 of 1983 before the High Court of Judicature of Bombay at Aurangabad contending that rule 3(1)(c) of the Maharashtra rules does require the practical experience after obtaining the quali fication of a post graduate degree in Geology and the in sistence on such experience after obtaining the prescribed academic qualification was illegal.
In this connection he contended that sub clauses (ii) and (iii) of clause (c) of Rule 3(1) of the rules are two independent requirements, that they have to be read disjunctively and the experience required under subclause (iii) need not be after possessing the basic educational qualification of a post graduate degree in Geology.
This contention was not accepted by a Division Bench of that Court and by order dated 16.
1983 Writ Petition No. 500 of 1983 was dismissed.
Against that judgment the appellant has preferred Civil Appeal No. 2146 of 1984.
While granting special leave this Court in its order dated 16.4.
1984 observed "The Government will decide itself as to whether the petitioner should or should not be reverted".
However it appears the petitioner was reverted on 4.7. 1985 to the position of Senior Geologist.
Subsequently the Government created a new post of Deputy Director Ground Water Survey at Aurangabad.
This post was sought to be filled by promotion under Rule 3(1)(a) of the rules by the Selection Committee.
The appellant was selected and appoint ed as Deputy Director on 14.12.
This appointment was challenged under Writ Petition No. 2161 of 1986 on the file of Nagpur Bench of the Bombay High Court by one Bhaiyya s/o Govindrao Karale on the ground that even for promotion from amongst the Senior Geologists the candidate should possess not only a post graduate degree in Geology but also IO years experience posterior to such acquisition of post graduate degree and that since the appellant does not have the neces sary experience he is not qualified to be promoted under clause (a) of Rule 3(1) of the rules.
This Division Bench also took similar view as in the earlier case and by an order dated 26th June, 1987 the writ petition was allowed and the selection and promotion of the appellant as Deputy Director under Rule 3(1)(a) of the rules was also quashed.
Against this judgment Civil Appeal 2 166 of 1987 has been filed.
When this appeal was pending the Government of Maha rashtra amended Rule 3(1)(a) by 526 substituting for the words "sub clauses (ii) and (iii) of clause (c)", the words "sub clause (ii) of clause (c)".
Thus the requirement of 10 years experience mentioned in sub clause (iii) of clause (c) was deleted in respect of ap pointment by promotion.
In the counter affidavit filed by the State Government it is stated that this was done because in the case of a promotion the requirement of 10 years experience subsequent to the acquisition of post graduate degree in Geology was redundant and, therefore.
should not be insisted upon and it is in that view the rule was amend ed.
However, in direct recruitment the 10 years experience after acquiring the post graduate qualification was re tained.
On the interpretation of the rule prior to its amendment which was relevant for considering Civil Appeal No. 2 146 of 1984 we are of the view that the view taken by the Aurangabad bench does not call for any interference.
Normally when we talk of an experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications required and.
there fore.
necessarily will have to be posterior to the acquisi tion of the qualification.
However, in the case of a promo tion the same interpretation may not be just or warranted.
It would depend on the relevant provisions as also the particular type of experience which is required.
However.
this need not detain us because as we have already stated the Government have now omitted the requirement of experi ence by the said Amendment.
The Amendment was made on 16th February.
1988 and published in the Gazette on 24.3.
Though the Rule does not say anything about its retrospec tive operation there could be no doubt that it is retroac tive.
This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and this appointment is with reference to a case of promotion and appointment, It is true that at the time when the appellant was promoted the Rule had not been amended.
However it may also be mentioned that the appellant is the senior most among the Senior Geologists and even if he is to be considered again trader the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now.
In the circumstances we are of the view that the appeal against the decision in Writ Petition No. 2161 of 1986 will have to be allowed though Civil Appeal No. 2146 of 1984 will have to be dismissed.
Accordingly we allow Civil Appeal No. 2166 of 1987 set aside the judgment of the Division Bench in Writ Petition No. 2161 of 1986.
Civil Appeal No. 2146 of 1984 is however dismissed.
There will be no order as to costs.
G.N. CA No. 2166/87 allowed.
and CA No. 2146/85 dismissed.
|
The appellant joined the Agricultural Department in 1963 with B.Sc.
(Geology).
Later, in 1979 he was promoted as Senior Geologist.
In 1982 he passed his M.Sc.
(Geology) and stood first in the University.
Sometime in 1982 he was also holding additional charge as Deputy Director.
In 1983, the State Public Service Commission called for applications for direct recruitment of Deputy Director in the Ground Water Survey and Development Agency.
The appel lant applied in response to the said advertisement, but was not called for interview, on the ground that he did not possess the necessary qualification of 10 years practical experience after acquiring the post graduate degree.
Ag grieved, the appellant filed a Writ Petition before the High Court contending that educational qualification and experi ence are two independent requirements and have to be read disjunctively and the experience required need not be after possessing basic educational qualification.
However, the High Court did not agree with the contention and dismissed the Writ Petition.
Against the said dismissal, the appellant preferred an appeal by special leave which was granted, by this Court in 1984, with an observation that the petitioner should not be reverted.
However, he was reverted to the post of Senior Geologist but subsequently promoted as Deputy Director in a new post created.
The appellant 's promotion was challenged by one of his colleagues by way of a Writ Petition contend ing that even for promotion, 10 years experience posterior to acquisition of post graduate degree was essential.
The High Court quashed the promotion of the appellant.
The appellant appealed against the said order after obtaining special leave of this Court in 1987.
522 During the pendency of these two appeals the State Government amended Rule 3(1)(a) whereby the requirement of 10 years experience mentioned in sub clause (iii) was delet ed in respect of appointment by promotion.
According to the State Government since the said requirement was redundant, it was deleted.
Allowing the 1987 appeal, and dismissing the 1984 ap peal, this Court, HELD: 1.1.
On the interpretation of Rule 3 of Maharash tra Ground Water Service, Class I (Recruitment) Rules, 1976 prior to its amendment, the view taken by the High Court on the Writ Petition filed by the appellant, does not call for any interference.
Normally when one talks of experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications re quired and, therefore, necessarily will have to posterior to the acquisition of the qualification.
However, in the case of promotion the same interpretation may not be just or warranted.
It would depend on the relevant provisions as also the particular type of experience which is required.
[336C D] 1.2.
The requirement of experience has been omitted by an amendment made on 16th February, 1988 and published in the Gazette on 24.3.1988.
Though the Rule does not say anything about its retrospective operation there could be no doubt that it is retroactive.
This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and the appointment in question is by promotion.
It is true that at the time when the appellant was promoted, the Rule had not been amended.
However, the appellant is the senior most among the Senior Geologists and even if he is to be considered again under the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now.
[336E F]
|
Appeal No. 183 of 1984.
From the Judgment and Order dated 23.10.1982 of the Kerala High Court in A.S. No. 309 of 1977.
Dr. Y.S. Chitale, Aseem Mehrotra, Mukul Mudgal, R.K. Aggarwal, S.K. Aggarwal and Sudhir Gopi for the Appellant.
545 G. Viswanatha Iyer and P.K. Pillai for the Respondents.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
In this appeal an important question touching upon the interpretation of Section 9 of The ( 'Act ' for short) defining 'holder in due course ' falls for consideration.
The appeal is directed against the judgment of the High Court of Kerala confirming the judgment of the Subordinate Judge, Tellicherry in Original Suit No. 74 of 1975.
To appreciate the question involved it becomes necessary to state the relevant facts and while stating so we shall refer to the parties as arrayed in the suit for convenience sake.
The plaintiff Catholic Syrian Bank Ltd. is a banking company incorporated under the Indian Companies having its Head Office in Trichur and branches at various places.
The first defendant firm consisting of defendant Nos. 2 to 4 as partners who are brothers, was doing business in Telli cherry in hill produces and they were allowed credit facili ties by the plaintiff Bank, like accommodation by way of Hundi discount, key loan and cheque purchases upto a limit of Rs.35,00,000.
A promissory note was executed by defend ants Nos. 2 to 4 in favour of their mother, the 5th defend ant for an amount of Rs.35,00,000 and the same was endorsed in favour of the plaintiff as security for the facilities granted to the first defendant firm.
The 5th defendant had also deposited the title deeds of her properties shown in the plaint schedule to create an equitable mortgage to secure the repayment of the amounts due from first defend ant.
The first defendant firm had dealings with 6th defend ant as well as others.
The first defendant firm was supply ing goods consisting of hill products and used to receive payments by way of cheques.
On 26.10.74, 6th defendant drew a cheque on the Union Bank of India, Palghat Branch in favour of the first defendant payable to the first defendant firm on order a sum of Rs.2,00,000.
The cheque was purchased by the plaintiff Bank from the first defendant on 30.10.1974 on valid consideration and proceeds were credited by the Bank to the account of the first defendant.
Similarly anoth er cheque was drawn on 31.10.1974 and the first defendant endorsed the same to the plaintiff for valid consideration and the proceeds were credited to the account of the first defendant who withdrew the amount at various dates.
The plaintiff Bank sent the cheques for collection but the Union Bank of India returned the same with the endorsement "full cover not received".
The defendant Nos. 2 to 5 by two sepa rate agreements offered to pay 546 the amounts to the plaintiff Bank and as per the terms therein they were to pay Rs. 1,000 per month and the 5th defendant was to pay the amount realised by her from the tenants by way of rent and they could pay only 12,3 13.35 p. Thereupon after exchange of notices between defendant No. 6 and other defendants a suit was filed for the recovery of the balance amount from defendant No. 6 also who issued the cheques.
The defendant No. 6 who is the appellant herein, con tended that the cheques were issued to the first defendant on their representation that they would supply a large consignment of pepper, dry ginger etc.
and the understanding was that the cheques would be presented only after the consignment was despatched.
Since the first defendant failed to despatch the goods, the 6th defendant could not pay the money in the Bank and therefore the cheques were not ho noured.
He also pleaded that he would not admit the purchase of cheques by the plaintiff and that plaintiff was only a collection agent and there was no consideration for purchase and therefore the plaintiff was not a holder in due course.
It was also contended that plaintiff acted negligently and in disregard of the provisions of law, therefore there was no valid cause of action against the defendant.
It may not be necessary for us to refer to the stand taken by the other defendants.
The trial court held that the plaintiff is a 'holder in due course ' and as such is entitled to enforce the liability against the 6th defendant, who is the maker of the cheques.
The trial court also held that the defendant Nos. 2 to 4 were personally liable for the plaint claim and the assets of the first defendant would also be liable if the hypothecation is not sufficient to discharge the decree amount.
The 6th defendant alone filed an appeal in the High Court and the others figured as respondents.
The High Court confirmed the findings of the trial court but modified the decree holding that immovable properties described in the Schedule to the plaint would be proceeded against in the first instance and if the entire decree amount cannot be realised by the sale of those properties, the plaintiff Bank would proceed against the assets of the first defendantfirm, and for the balance, if any, the decree holder would proceed against defendants Nos. 2 to 4 and 6 and the liability of the 5th defendant is restricted to the extent of immovable properties mortgaged by her.
Aggrieved by the said judgment and decree, the 6th defendant has preferred this appeal.
Dr. Chitale, learned counsel appearing for the appellant submitted that respondent No. 1 herein namely the plaintiff Bank is not a 'holder in due course ' and therefore cannot maintain any legal action 547 against the appellant i.e. defendant No. 6 who had drawn the cheques.
His main submission is that the plaintiff Bank acted negligently and did not act in good faith in paying the amounts due under the cheques to the defendant firm without making any enquiries regarding the "title" of the person namely defendant No. 1 from whom the Bank claims to have purchased the cheques for consideration.
It is submit ted that the cheques were issued by defendant No. 6, the appellant, with the understanding that the goods would be supplied and the plaintiff Bank without making any enquiries whether the goods were supplied or not and without any verification from the Union Bank of India paid the amounts to the payee namely defendant No. 1 within few days in a hasty and negligent manner.
Therefore, according to the learned counsel, the necessary ingredients of the definition of 'holder in due course ' in the case of plaintiff are not satisfied and consequently the plaintiff Bank can not main tain any claim against the appellant.
Section 9 of the which defines 'holder in due course ' reads as under: "Holder in due course" means any person who for considera tion became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order before the amount mentioned in it became payable, and with out having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
" The definition makes it clear that to be a 'holder in due course ' a person must be a holder for consideration and the instrument must have been transferred to him before it becomes overdue and he must be a transferee 'in good faith and another important condition is that the transferee namely the person who for consideration became the possessor of the cheque should not have any reason to believe that there was any defect in the title of the transferor.
It is beyond dispute that the plaintiff bank credited the proceeds to the account of the first defendant who also withdrew the amount on various dates.
Therefore it has been rightly held that the plaintiff purchased the cheques for valid consideration after the necessary endorsement by the bearer before they became overdue.
In this con 548 text, the learned counsel.
however, contended that the plaintiff was only a holder and was only a collection agent as per the endorsement made by the defendant No. 1.
Section 8 defines 'holder ' as a person entitled in his own name to the possession of a cheque or bill of exchange or a promis sory note and to receive or recover the amount due thereon from the parties thereto.
Section 118 of the which deals with the presumptions as to negotiable instruments provides in clause (g) that the holder of a negotiable instrument shall be presumed as a holder in due course.
Section 118(g) reads as under: "118.
Until the contrary is proved, the following presump tions shall be made: XX XX XX XX XX XX (g) that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or accept or thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
" In the instant case, the holder namely defendant No. 1 made the necessary endorsements in the two cheques in favour of the plaintiff Bank and the Bank endorsed "payee account credited".
The defendant No. 1 withdrew this amount and there is no dispute about it.
It must also be noted in this context that there is no endorsement on the cheque made by the drawer namely the appellant that the cheques are not negotiable.
In the absence of the cheques being crossed as "not negotiable" nothing prevented the plaintiff Bank to purchase the cheques for a valuable consideration and the presumption under Section 118(g) comes to his rescue and there is no material whatsoever show that the cheques were obtained in any unlawful manner or for any unlawful consid eration.
Now the question is whether the other requirement of the definition i.e. "without having sufficient cause t9 believe that any defect existed in the title of the person from whom he derived his title" is satisfied.
It is contended on behalf of the appellant that the cheques were issued on the representation that the defendant No. 1 would 549 supply the goods and that the cheques would be presented after the despatch and delivery of the goods but defendant No. 1 failed to despatch the goods and that plaintiff with out any enquiries about the title of the payee could not have purchased the cheques because there was sufficient cause to believe that the title of the bearer was not free from defects.
According to the learned counsel, the Indian Law is stricter, and is not satisfied merely with the hones ty of the person taking the instrument, but requires the person to exercise due diligence.
and goes a step further then English Law in scrutinising the causes which go to make up the belief in the mind of the transferee.
To appreciate the submission of the learned counsel it becomes necessary to refer to the various authorities cited by him including the text books, in the first instance an English law and then on Indian Law on the subject.
In Eng lish Law, Section 29 of the Bills of Exchange Act, 1882 defines 'holder in due course '.
The relevant part of Section 29(1)(b) reads thus: "29.
Holder in due course (a) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions.
namely: (a) xx xx xx (b) that he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negoti ated it.
" Section 90 of this Act reads as under: "90.
Good faith: A thing is deemed to be done in good faith within the meaning of this Act, where it is in fact done honestly, whether it is done negligently or not." These provisions have been understood and interpreted to mean that the holder should take the bill in good faith and he is deemed to have 'acted in good faith and if he acts honestly and negligence will not affect his title.
In Byles of Bills of Exchange, 25th Edn.
Page 206 a passage reads thus: 550 "A wilful and fradulent absence of inquiry into the circum stances, when they are known to be such as to invite in quiry, will (if the jury thinks that the abstinence from inquiry arose from a suspicion or belief that inquiry would disclose a vice in the bills) amount to general or implied notice.
" There must, however, be something to put the holder on inquiry." In Nelson vs Larholt, the defendant re ceived cheques for value drawn by an executor in fraud of the testator.
Denning, J. held that the defendant could not escape liability because he knew or ought to have known of the executor 's want of authority.
In Baker vs Barclays Bank Ltd., the expression "notice" occur ring in Section 2(1)(b) of the Bills of Exchange Act, 1882 is interpreted to mean actual notice and there is no ques tion of constructive notice.
In Chitty on Contracts, 26th Edn.
the learned author states the requirement that must be fulfilled before a person may be considered a holder in due course as under: "First, he must take the bill when it is complete and regu lar on its face.
Secondly, he must take it before it is overdue and without notice that it was previously disho noured, if such was the fact.
Knowledge that a bill is bound to be dishonoured may also be relevant.
Thus, a Canadian authority suggests that a holder, who has taken a cheque with the knowledge of its having been countermanded, is not a holder in due course.
Thirdly, he must take it in good faith and without having notice of any defect in the title of the person who negotiates the bill to him.
In particular the title of the person who negotiates the bill is defective when he obtained the bill or its acceptance by fraud, duress or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith or under circum stances amounting to fraud.
Last, a holder in due course must take the bill for value i.e. consideration.
" The learned author dealing with the presumption of good faith has noted in paragraph 2781 thus: "Presumption of good faith.
Every party whose signature appears on a bill is prima facie deemed to have become a 551 party thereto for value.
Every holder of a bill is prima facie deemed to be a holder in due course; but if the ac ceptance, issue or subsequent negotiation of the bill was affected with fraud, duress or illegality, the burden of proof is shifted, and the holder must prove that.
subsequent to the alleged fraud or illegality, value was in good faith given for the bill.
Thus, once a fraud is proved.
the burden of proof is shifted to the holder who must then show not only that value has been given for the bill.
but also that he took the bill in good faith and without notice of the fraud.
If the holder can discharge this onus he is, again, in the position of a holder in due course." (emphasis supplied) The learned author Chitty in paragraph 2778 dealing with the subject 'The Consideration for a Bill ' has stated thus: "For example, if a person whose banking account is overdrawn negotiates to this bankers a cheque.
drawn by a third party, to reduce the overdraft, the banker becomes a holder for value of the cheque.
The pre existing debt of the overdraft is a sufficient consideration for the negotiation of the cheque to the banker.
" A consideration of the above passages and decisions goes to show that English law requires that the holder in taking the instrument should act in good faith and that he had no notice of any defect in the title and if he has acted hon estly, he is deemed to have acted in good faith whether it is negligently or not.
With the above background of English Law.
we shall now examine the Indian law on the subject.
In Bhashyam & Adiga on the , 15th Edn.
at page 171, the authors have dealt with the position in Indian law and it is observed that it would be Seen that the Indian Legislature has adopted the older English law as laid down by Abbott.
C.J., (later Lord Tent erden) in Gill vs Cubitt, English Reports 107~ King 's Bench 806.
Relying on this passage the learned counsel proceeded to submit that the Indian law is stricter than English law and requires the person to exercise due diligence and in this context the Indian law goes even a step further than English law in scrutinising the causes which go to make up the belief in the mind of the transferee.
Gill 's case (supra) is a case where a bill of exchange was stolen during the night.
and taken to the office of a discount broker early in the following 552 morning by a person whose features were known, but whose name was unknown to the broker and the latter being satis fied with the name of the acceptor, discounted the bill, according to his usual practice, without making any enquiry of the person who brought it.
On these facts it was held that the plaintiff had taken the bill under circumstances which ought to have excited the suspicion of a prudent and careful man.
Abbott.
C.J. (later Lord Tenterden) observed: "It appears to me to be for the interest of commerce, that no person should take a security of this kind from another without using reasonable caution.
If he takes such security from a person whom he knows, and whom he can find out, no complaint can be made of him.
In that case he has done all any person could do.
But if it is to be laid down as the law of the land.
that a person may take a security of this kind from a man of whom he knows nothing, and of whom he makes no enquiry at all, it appears to me that such a decision would be more injurious to commerce than convenient for it.
by reason of the encouragement it would afford to the purloin ing, stealing, and defrauding.persons of securities of this sort.
The interest of commerce requires that bona fide and real holders of bills, known to be such by those with whom they are dealing, should have no difficulties thrown in their way in parting with them.
But it is not for the inter est of commerce that any individual should be enabled to dispose of bills or notes without being subject to inquiry.
" Bayley, J. agreeing with Abbott, C.J. however, added: admit that has been generally the case; but I consider it was parcel of the bona fides whether the plain tiff had asked all those questions which, in the ordinary and proper manner in which trade is conducted, a party ought to ask.
I think from the manner in which my Lord Chief Justice presented this case to the consideration of the jury, he put it as being part and parcel of the bona fides; and it has been so put in former cases.
" Holroyd. J., having agreed with Abbott, C.J. further ob served that: 553 "The question whether a bill or note has been taken bona fide involves in it the question whether it has been taken with due caution.
It is a question of]act for the jury, under all the circumstances of the case.
whether a bill has been taken bona fide or not; and whether due and reasonable caution has been used by the person taking it.
And if a bill be drawn upon parties of respectability capable of answering it, and another person discounts it merely because the acceptance is good, without using due caution, and without inquiring how the holder came by it, I think that the law will not, under such circumstances, assist the parties so taking the bill, in recovering the money.
If the bill be taken without using due means to ascertain that it has been honestly come by, the party, so taking on himself the risk for gain.
must take the consequence if it should turn out that it was not honestly acquired by the person of whom he received it.
Here the person in possession of the bill was a perfect stranger to the plaintiff, and he discounted it, and made no inquiry of whom the bill had been obtained, or to whom he was to apply if the bill should not be taken up by the acceptor.
I think those circumstances tend strongly to show that the party who discounted the bill did not choose to make inquiry, but supposing the questions might not be satisfactorily answered, rather than refuse to take the bill, took the risk in order to get the profit arising from commission and interest." (emphasis supplied) In Chalmers on Bills of Exchange, 13th Edn.
at page 283 the learned author deals with the expression good faith ' occur ring in Section 90 of the said Act and it is stated as under: "Test of bona fides The test of bona fides as regards bill transactions has varied greatly.
Previous to 1820 the law was much as it now is under the Act.
But under the influence of Lord Tenterden (Abbott, C.J. in Gill vs Cubbitt) due care and caution was made the test, and this principle seems to be adopted by Section 9 of the Indian ." (emphasis supplied) The learned author Parathasarathy in his book 'Cheques in Law and 554 Practice '.
4th Edn. has also noted this aspect.
At page 74, a passage reads thus: "The Indian definition imposes a more stringent condition on the holder in due course than does the English definition.
Under English law, he should not have notice of a defect in the transferor 's title and he should have taken the instru ment in good faith.
Under Indian law, there should be no cause to believe that any such defect existed.
Hence, it is not sufficient if the holder acts in good faith.
He should also exercise due care and caution in taking the instrument.
Perhaps, the Indian definition is based on Gill vs Cubbit, ; In Raghavji Vizpal vs Narandas Parmanandas, Bombay Law Reporter Vol.
VIII (1906) 921 the Bombay High Court, howev er.
held that negligence does not affect the title of a person taking the instrument in good faith for value.
It is observed thus: "The test of good faith in such cases is thus: Regard to the facts of which the taker of such instruments had notice is most material whether he took in good faith.
If there be anything which excites suspicion that there is something wrong in the transaction, the taker of the instrument is not acting in good faith if he shuts his eyes to the facts presented to him and puts the suspicions aside without further inquiry." (emphasis supplied) We may also mention it here that there is no reference to Gill 's case in the above decision.
In Bhashyam & Adiga on the , 15th Edn.
at page 172.
the author having noticed the ratio in Raghavji 's case observed: "The Bombay High Court quoted the later English decisions with approval and applied them to the facts of the case before them, but the question is not discussed in the light of the words of this Section, and the decision is opposed to the opinion expressed by Chalmers in his commentaries on the Indian Act.
" In Durga Shah Mohan Lal Bankers vs Governor General in Council & Others, AIR 1952 Allahabad 590 a Division Bench examined the scope 555 of the provisions of Section 9 of the Act and held that: "The provision that the person must have become possessor of a cheque "without having sufficient cause to believe" is more favourable to the person who claims to ' have become holder in due course than the words "acting bona fide".
His claim would be defeated only if it is found that there was sufficient cause for him to believe that a defect existed.
If he fails to prove bona fides or absence of negligence, it would not negative his claim.
There must be evidence of positive circumstances on account of which he ought to have believed that some defect existed." (emphasis supplied) In this case also there is no reference to Gill 's case.
The learned counsel for the appellant submitted that the deci sion in Raghavji 's case is in favour of the appellant.
however.
conceded that the Durga Shah 's case is in favour of the respondent i.e. the plaintiff Bank.
We may, however, note another judgment of the learned Single Judge of the Bombay High Court in Sunderdas Sobhraj, a firm vs Liberty Pictures, a firm, AIR 1956 Bombay 618 wherein the scope of Section 9 is considered and it is held thus: "The rule as laid down in section 9 of the which defines "holder in due course" is stricter than the rule of English law on the subject and a payee or endor see of a negotiable instrument can, under our.law.
prefer a claim to be a holder in due course of the instrument only if he obtained the same without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
A bona fide holder for value without notice is, of course.
as I have already observed.
in a different position.
" The learned Single Judge has not.
however.
referred to the Raghavji 's case.
We have.
already noted that in Raghavji 's case reliance was placed on English decisions later to the decision in Gill 's case.
The authors Chalmers.
Bhashyam & Adiga and Parathasarathy have uniformly stated that Section 9 of the Act is based on the ratio in Gill 's case.
Learned counsel appearing on both sides could not place any other decision directly on the question.
The view taken by the Allahabad High Court in Durga Shah 's case is more or less in accordance 556 with the principle laid down in Gill 's case.
However, with regard to the legal importance of negli gence in appreciating the principle of "sufficient cause to believe" a passage from Chalmers ' took "The Law Relating to Negotiable Instruments in British India" 4th Edn.
may use fully be noted: "All the circumstances of the transactions whereby the holder became possessed of the instrument have a bearing on the question whether he had "sufficient cause to believe ' ' that any defect existed.
It is left to the Court to decide, in any case where the holder has been negligent in taking the instrument without close enquiry as to the title of his transferor.
whether such negligence is so extraordinary as to lead to the presumption that the holder had cause to believe that such title was defective." (emphasis supplied) This view is more sound and logical.
The legal position as explained by Chitty may be noted in this context which reads as under: "While the doctrine of constructive notice does not apply in the law of negotiable instruments the holder is not entitled to disregard a "red flag" which has raised his suspicions.
therefore.
modify the view taken by the Allahabad High Court in Durga Shah 's case to the extent that though the failure to prove bona fide or absence of negligence would not negative the claim of the holder to be a holder in due course.
yet in the circumstances of a given case.
if there is patent gross negligence on his part which by itself indicates lack of due diligence.
it can negative his claim.
for he can not negligently disregard a "red flag" which arouses suspicion regarding the title.
In this view of the matter we hold that the decision in Raghav.
ii 's case does not lay down correct law.
We agree with the view taken by the Allahabad High Court with above modification.
Before we apply the above principles to the facts of this case we would like to advert to another submission of the learned counsel Dr. Chitale.
He urged that in the in stant case the plaintiff Bank has not acted in good faith and with due diligence in crediting the proceeds to 557 the account of the defendant No. 1 inasmuch as there is no authority either by way of express or implied contract between them and the defendant No. 1.
In support of this submission he relied on certain passages in Halsbury 's Laws of England.
In Halsburv 's Law of England, 4th Edn.
in para graph 22 1 (page 186) the author says: "Bank as holder for value.
A banker who is asked by a cus tomer to collect a cheque and who.
pursuant to a contract express or implied to do so.
credits the customer forthwith with the amount of the cheque before the proceeds are re ceived, in fact receives the sum for himself and not for the customer; but he has the same statutory protection in such circumstances as if he had received payment of the cheque for the customer.
XX XX XX Every holder is deemed to be a holder in due course; but.
if the instrument is shown to be affected by fraud.
a banker dealing with it must show that he gave value in good faith subsequent to the fraud.
The status of holder for value may be claimed by the bank; where cash has been given for the cheque over the counter; where the cheque is paid in intro duction of an overdraft.
where the cheque is paid in on the footing that it may be at once drawn against, whether in fact it is drawn against or not; or where the cheque is subject to a lien.
However, the mere existence of an over draft.
though the banker 's lien in respect thereof makes him a holder for value to the extent of that lien, would not preclude the protection.
XX XX XX A banker who gives value for.
or has a lien on, a cheque payable to order which the holder derives to him for collec tion without endorsing it as such, if any rights as he would have had if, upon delivery, the holder has endorsed the cheque in blank.
A banker taking such a cheque is the holder thereof and.
if the requisite conditions are present, a holder for value or in due course.
It is not essential that the cheque be credited to the account of the holder.
" Yet another important passage in paragraph 222 reads as under: "222.
Crediting as cash.
The mere fact that the banker has 558 credited the cheque in his customer 's account before receiv ing the proceeds does not deprive him of protection against the true owner in the event of his customer having no title.
or a defective title, to the cheque.
Crediting the custom er 's account does not of itself alter the position of the banker from that of agent for collection to that of holder for value.
It is a question of fact in each case.
In order to constitute the banker a holder for value on his ground there must be a contract, express or implied, that the customer should be entitled to draw against the amount of the cheque before it is cleared.
If the banker becomes a holder for value.
he may.
in the absence of a forged endorsement and unless the cheque is crossed 'not negotiable ' sue upon a cheque in his own name as a holder in due course and may debit the customer if the cheque is dishonoured.
, He may apparently plead that he is a holder for value as against the person claiming as true owner, except where the endorsement is forged or the cheque is marked 'not negotiable. '" (emphasis supplied) The above two passages indicate that the Banker who is asked to collect a cheque can credit the customer with the amount before the proceeds are received and if he has acted in good faith he has the necessary statutory protection and credit ing the customer account does not by itself alter his posi tion but that however is a question of fact in each case namely whether there was such a contract express or implied that the customer should be entitled to draw against the amount of cheque before it is cleared.
In A.L. Underwood Ltd. vs Bank of Liverpool and Martins, Same vs Barclays Bank, at page 241 Atkin, L.J. dealing with the protection that can be availed by a banker in such case, observed as under: "It is sufficient to say that the mere fact that the bank.
in their books.
enter the value of the cheques on the credit side of the account on the day on which they receive the cheques for collection.
does not, without more.
constitute the bank a holder for value.
To constitute value there must be in such a case a contract between banker and customer.
express or implied.
that the bank will, before receipt of the 559 proceeds.
honour cheques of the customer drawn against the cheques.
Such a contract can be established by course of business and may be established by entry in the customer 's pass book, communicated to the customer and acted upon by him.
Here there is no evidence of any such contract." (emphasis supplied) To the same effect is the ratio laid down in Baker vs Bar clays Bank Ltd. After applying the dictum of Atkin, L.J. in Underwood 's case it is observed therein that "it was not enough to show merely that the bank had entered the value of the cheques on the credit side of the account on which the bank received the cheques.
To constitute value there must be in such a case a contract between banker and customer, express or implied, that the bank will before receipt of the proceeds honour cheques of the customer drawn against the cheques.
" We find another passage in the above decision at page 581 which reads thus: "What is suggested is that the bank did not give value.
and the question arises which often arises in cases of this sort.
namely, whether, when a cheque is given to a bank in these circumstances, the bank takes the cheque giving value for and then becoming a holder in due course, or whether the bank takes the cheque merely to collect the amount of the cheque for someone else.
That is a question of fact.
The true relationship has to be inferred from the acts of the parties." (emphasis supplied) From the above discussion it emerges that the Indian definition imposes a more stringent condition on the holder in due course then the English definition and as the learned authors have noted the definition is based on Gill 's case.
Under the Indian law, a holder, to be a holder in due course, must not only have acquired the bill, note or cheque for valid consideration but should have acquired the cheque without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
This condition requires that he should act in good faith and with reasonable caution.
However, mere failure to prove bona fide or absence of negligence on his part would not negative his claim.
But in a given case it is left to the 560 Court to decide whether the negligence on part of the holder is so gross and extraordinary as to presume that he had sufficient cause to believe that such title was defective.
However.
when the presumption in his favour as provided under Section 118(g) gets rebutted under the circumstances mentioned therein than the burden of proving that he is a 'holder in due course ' lies upon him.
In a given case, the Court.
while examining these requirements including valid consideration must also go into the question whether there was a contract express or implied for crediting the proceeds to the account of the bearer before receiving the same.
The enquiry regarding the satisfaction of this requirement invariably depends upon the facts and circumstances in each case.
The words "without having sufficient cause to believe" have to be understood in this background.
In the instant case there is sufficient evidence estab lishing the fact that the defendants were allowed credit facilities upto a limit of Rs.35,00.000 by the Bank and this fact is not in dispute.
The pledging of the title deed by 5th defendant of her properties with the bank with an inten tion to create an equitable mortgage to secure the repayment of the amounts due from 1st defendant and the fact that a pronote for an amount of Rs.35,00,000 executed by defendant Nos.
2 to 4 in favour of the 5th defendant was endorsed in favour of the plaintiff Bank would establish that there was an express contract for providing the credit facilities.
It should therefore necessarily be inferred that there is also an implied contract to credit the proceeds of the cheques in favour of defendant No. 1 to his account before actually receiving them.
As a question of fact this aspect is estab lished by the evidence on record.
In such a situation the plaintiff need not make enquiries about the transactions of supply of goods etc.
that were going on between defendants Nos. 1 and 6.
Even if defendant No. 1 has not supplied the goods in respect of which the cheque in question were issued by defendant No. 6 there was no cause at any rate sufficient cause for the plaintiff to doubt the title of defendant No. 1 nor can it be said that the plaintiff acted negligently disregarding 'red flag ' raising suspicion.
Viewed from this background it cannot be said that there was sufficient cause to doubt the title nor there is scope to infer gross negli gence on the part of the plaintiff.
There is no material which amounts to rebuttal of the presumption in his favour as provided under Section 118(g).
On the other hand.
the plaintiff has discharged the neces sary burden to the extent on him and has proved that he is a holder in due course for valid consideration.
Therefore, we hold that he could validly maintain an action 561 against all the defendants including defendant No. 6.
There fore, we affirm the judgments of the courts below and dis miss the appeal.
In the circumstances of the case, parties are directed to bear their own costs throughout.
Y. Lal Appeal dismissed.
|
What is the true meaning and scope of the expression 'holder in due course ' as defined in Section 9 of the Nego tiable Instruments Act, 1881, was the question that arose for consideration in this appeal.
Consequent upon the pleading of promissory note and other title deeds relating to her property by Defendant No. 5, (mother of Defendants 2 to 4) in favour of the respondent Bank as security, thereby creating an equitable mortgage, the respondent Bank allowed credit facilities like accommo dation by way of Hundi discount, Key loan and cheque pur chases upto a limit of Rs.35,00,000 to Defendant No. 1, a firm consisting of defendants Nos. 2 to 4 as partners.
The first defendant firm had business dealings with the appel lant defendant No. 6.
In course of business it was supplying goods consisting of hill products and used to receive pay ment by way of cheques from defendant No. 6.
Defendant No. 6 issued two cheques drawn on the Union Bank of India, Palgh at, in favour of the first defendant payable to the first defendant firm on order.
The cheques were purchased by the Respondent bank and proceeds thereof were credited by the bank to the account of first defendant, on valid considera tion.
The first defendant withdrew the amount at various dates.
When the respondent bank sent the cheques for collec tion, the Union Bank of India returned the cheques with the endorsement "full cover not received".
Defendants 2 to 5 agreed to pay the amounts to the Bank but could not pay the full amount, with the result the Bank filed a suit for recovery of the balance amount from Defendant No. 6 also who had issued the cheques in question.
At the trial, Defendant No. 6 contended that since the firm (defendant No. 1) did not supply the goods, it could not pay the money in the bank.
According to Defendant No. 6, the appellant, did not admit the purchase of cheques by the respondent bank for valid consideration and hence denied that the bank was 'holder in due course '.
The trial court held that the re spondent bank is a 'holder in due course ' and as such enti tled to enforce the liability against the appellant defend ant No. 6.
543 The trial court also held defendants 2 to 4 personally liable for the plaint claim.
Against the order of the trial court the appellant defendant No. 6 alone appealed to the High Court.
The High Court affirmed the findings of the trial court but modified the decree holding that the immova ble properties mentioned in the schedule to the plaint would first be proceeded against and in case the entire amount of decree is not realised by the sale of those properties, the Bank would proceed against the assets of the firm defendant No. 1 and for the balance, if any, the decreeholder would proceed against the defendants Nos. 2 4 and 6.
Aggrieved by the said order of the High Court, the 6th defendant has preferred this appeal.
Dismissing the appeal, this Court, HELD: Indian Law is stricter, and is not satisfied merely with the honesty of the person taking the instrument, but requires the person to exercise due diligence, and goes a step further than English Law in scrutinising the causes which go to make up the belief in the mind of the transfer ee.
[359B] In the instant case, the holder namely defendant No. 1 made the necessary endorsements in the two cheques in favour of the plaintiff Bank and the Bank endorsed "payee account credited".
The defendant No. 1 withdrew this amount and there is no dispute about it.
It must also be noted in this context that there is no endorsement on the cheque made by the drawer namely the appellant that cheques are not nego tiable.
In the absence of the cheques being crossed "not negotiable" nothing prevented the plaintiff Bank to purchase the cheques for a valuable consideration and the presumption under Section 118(g) comes to his rescue and there is no material whatsoever to show that the cheques were obtained in any unlawful manner or for any unlawful consideration.
[358E G] In a given case it is left to the court to decide wheth er the negligence on part of the holder is so gross and extraordinary as to presume that he had sufficient cause to believe that such title was defective.
[370A] The court while examining these requirements including valid consideration must also go into the question whether there was a contract express or implied for crediting the proceeds to the account of the bearer before receiving the same.
The enquiry regarding the satisfaction of this re quirement invariably depends upon the facts and cir 544 cumstances in each case.
The words "without having suffi cient cause to believe" have to be understood in this back ground.
[370B C] In the instant case, there is also an implied contract to credit the proceeds of the cheques in favour of defendant No. 1 to his account before actually receiving them.
As a question of fact this aspect is established by the evidence on record.
In such a situation the plaintiff need not make enquiries about the transactions of supply of goods etc.
that were going on between defendants No. 1 and 6.
Even if defendant No. 1 has not supplied the goods in respect of which the cheques in question were issued by defendant No. 6 there was no cause at any rate sufficient cause for the plaintiff to doubt the title of defendant No. 1 nor can it be said that the plaintiff acted negligently.
Viewed from this background it cannot be said that there was sufficient cause to doubt the title nor there is scope to infer gross negligence on the part of the plaintiff.
[370E G] Nelson vs Larhold, ; Baker vs Barclays Bank Ltd., ; Gill vs Cubitt English Reports, 107 Kings ' Bench 806; Durg Shah Mohan Lal Bankers vs Governor General in Council and Others, AIR 1952 Allaha bad 590; Sunderdas Sobhraj, a firm vs Liberty Pictures, a firm, AIR 1956 Bombay 618; A.L. Underwood Ltd. vs Bank of Liverpool and Martins; Same vs Barclays Bank, at page 241, referred to.
Raghavji Vizpal v Narandas Parmanandas Bombay Law Re porter, Vol.
VIII (1906) 921, Overruled.
Chitty on Contracts, 26th Edn.
Paragraphs 2778 & 2781; Chalmers on Bills of Exchange, 13th Edn.
at p. 283; Paratha sarathy on Cheques in Law and Practice, 4th Edn.
p. 74; Halsbury 's Laws of England, 4th Edn.
paragraph 221 page 186 and paragraph 222, referred to.
|
ON: Civil Appeal No. 786 of 1976.
From the Judgment and Order dated 12.1.
1976 of the Gujarat High Court in Special Civil Application No. 873 of 1970.
516 P.H. Parekh for the Appellant.
Krishan Kumar for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Gujarat dismissing the appel lant 's writ petition made under Article 227 of the Constitu tion of India challenging the validity of the order of the Revenue Courts in dismissing the appellant 's suit for evic tion of respondents.
Briefly, the facts giving rise to this appeal are: the respondents are tenants of agricultural land which had been let out to them by the appellant 's predecessors in title.
The appellant made applications on behalf of minor Ashok Kumar for the eviction of the respondents on the ground that the agricultural land in dispute was bona fide required by the landlord for his personal cultivation.
The appellant pleaded that the land in dispute had been bequeathed to him by his maternal grandmother under a Will and as such he was the landlord of the disputed land entitled to maintain the applications for eviction of the respondents under Section 29 read with Section 3 IA of the Bombay Tenancy and Agricul tural Lands Act 1948 (hereinafter referred to as the Act) as applicable to the State of Gujarat.
The tenants raised a preliminary objection to the maintainability of the suit on the ground that the appellant being a transferee of the land from his maternal grandmother was not entitled to maintain the suit as a landlord under Section 31A of the Act, inas much as he had not inherited the property from his ances tors.
The Mamlatdar upheld the preliminary objection and dismissed the eviction ' suit.
On appeal the District Deputy Collector upheld the order of the Mamlatdar.
The appellant preferred revision application before the Gujarat Revenue Tribunal at Ahmedabad but the same too was dismissed uphold ing the tenants ' objection.
The appellant thereafter filed a writ petition under Article 227 of the Constitution before the High Court challenging the correctness of the view taken by the Revenue Courts.
The High Court by its order dated 12.1.
1976 dismissed the writ petition on the finding that the view taken by the Revenue Courts in upholding the ten ants ' objection to the maintainability of the eviction suit was correct.
The appellant has preferred this appeal against the aforesaid order of the High Court.
There is no dispute that under Section 31A of the Act a landlord has a right to determine tenancy of agricultural land and to evict the 517 tenant on fulfilling the conditions prescribed therein.
The conditions prescribed are that if the landlord has no other land of his own and if he has not. been cultivating person ally any other land, he is entitled to take possession of the land let out to a tenant to the extent of permissible ceiling area.
If the land cultivated by the landlord person ally is less than the ceiling area he is entitled to take possession of so much area of land as would be sufficient to make up the area in his possession to the extent of ceiling area.
further the income by the cultivation of the land of which he is entitled to take possession should be the prin cipal source of income for his maintenance.
These conditions as laid down in clauses (a), (b) and (c) of Section 31A of the Act must be satisfied for making an application for the eviction of a tenant from agricultural land.
In addition to these conditions, clause (d) further prescribes additional conditions which must also be fulfilled by the landlord.
Section 31A(d) as amended by the Gujarat Act No. XVI of 196(1 reads as under: "31.A The right of a landlord to terminate a tenancy for cultivating the land personally under Section 31 shall be subject to the following conditions.
(a) . . . . . . . . (b) . . . . . . . . (c) . . . . . . . . (d) The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January, 1952 and thereafter during the period between the said ,date and the appointed day in the name of the landlord himself.
or of any of his ancestors (but not of any person from whom title is derived, whether by assignment or Court sale or otherwise) or if the landlord is a member of a joint family, in the name of a member of such family.
" The above provision primarily requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.
1952 and he should further be recorded as landlord on the appointed day, namely, 15.6. 1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction of the tenant will not be maintainable.
The provision 518 of clause (d) further provides that even if the landlord 's name is not recorded.
but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provision indicates the legisla tive intent that a person succeeding to the property from his ancestor is entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
Clause (d) of Section 31A of the Act as it stood before its amendment by the Gujarat Act XVI of 1960 reads as follows: "The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January 1952 and thereafter during the period between the said date and the appointed day in the name of the landlord himself, or of any of his ancestors, or if the landlord is a member of a joint family in the name of a member of such family.
" The above provision before its amendment was interpreted by the Bombay High Court in Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267.
The High Court placing reliance on Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201 held that the term 'landlord ' according to clause (d) of Section 31A of the Act included any person from or through whom he may have derived his title to the land, and therefore for proper compliance of the conditions mentioned in clause (d) of Section 3 IA it is sufficient that either the name of the claimant or his predecessors in title stands in the record of fights during the required period.
A Full Bench of the Gujarat High Court in Bhanushanker Ambalal vs Laxman Kala & Ors., [1960] 1 Gujarat Law Reporter 169 disagreed with the view taken by the Bombay High Court in Warnan Ganesh Joshi 's case (supra).
The Full Bench held that the expression "in the name of landlord himself" occurring in clause (d) of Section 3 IA must be read as the landlord individually and not any one claiming through him as a successor in interest, therefore a transferee from a landlord in whose name the land is shown to stand cannot fit into the structure of the clause.
The Full Bench judgment was rendered on 28.7.
1960 prior to the amendment of the Section by the Gujarat Act XVI of 1960.
After the amendment of Section by Gujarat Act XVI of 1960, the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of 519 right during the relevant period were not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment.
court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
The Legislature has clearly laid down that a person inheriting property from his ancestor would be landlord provided his ancestor 's name appears in the record of right during the required period.
But a person claiming title on the basis of transfer, assignment, auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendants by gift or will to evade the ceiling law and to evict tenants.
Under Section 31A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
In Umraomiya Akbarmiya Malek vs Bhulabhai Mathurbhai Patel & Anr., [1965] 6 Gujarat Law Reporter 788 the peti tioner therein made application for eviction of tenant claiming to be landlord on the basis of a gift made in his favour by his maternal grand father who was recorded in the record of rights during the required period.
The question arose whether the once who had acquired the property under a gift made by his maternal grand father was a landlord within the meaning of clause (d) of Section 31A.
The High Court on an elaborate discussion held that the petitioner therein was not a landlord within the meaning of the Section.
A Division Bench of the High Court of Gujarat in Special Civil Appeal No. 112/63 decided on March 3, 1972 considered the question whether a person who obtained the property under a Will from his grand mother was a landlord under clause (d) of Section 31A of the Act, the Division Bench held that having regard to the context, the object and scheme of the enactment such a person was not a landlord within the meaning of clause (d) of Section 31A.
The Bench further held that the Legislature intended to restrict the right of landlord to obtain possession for bona fide cultivation purposes, and it did not intend to include the case of a landlord who derived title under a Will.
We arc in agreement with the view taken by the Division" Bench.
The learned single Judge of the High Court while rendering the, impugned judgment followed the view taken by the aforesaid Division 520 Bench.
In this view, we find no legal infirmity in the impugned judgment of the High Court.
Learned counsel for the appellant referred to certain decisions of the Bombay High Court where contrary view had been taken.
Since the interpretation of Section 31A(d) of the Act as made by the Gujarat High Court in the aforesaid decision has been the law for the last 25 years.
and as that interpretation is justified having regard to the legislative history of the Section, we do not consider it necessary to deal with those decisions.
The appeal fails and is accord ingly dismissed.
but there will be no order as to costs.
V.P.R. Appeal dismissed.
|
Appellant on behalf of minor landlord, who got title by will, initiated eviction proceeding against the respondent tenants under Section 29 read with section 31 A(d) of the Bombay Tenancy and Agricultural Lands Act.
1948 before the Mamlatdar on the ground of bona fide requirement of the land for his personal cultivation.
Respondent tenants raised preliminary objection on the question of maintainability of the suit on the ground that as the appellant, being a trans feree of the land and having not inherited the same was not the 'landlord ' under Section 31 A. Upholding the objection of the Respondents the Mamlatdar dismissed the application.
Appellant 's appeal before District Deputy Collector and his revision before the Revenue Tribunal were dismissed.
Chal lenging the orders of the Revenue Courts, writ application was filed in the High Court, which was also dismissed and against which the present appeal was filed.
Dismissing the appeal, this Court, HELD: 1.
Section 31(d) requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.1952 and he should further be recorded as landlord on the appointed day, namely.
15.6.1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction the tenant is not maintainable.
The provisions of clause (d) further provides that even if the landlord 's name is not recorded, but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provi sion indicates the legislative intent that a person succeed ing to the property from his ancestor is 515 entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
After the amendment of Section 31A(d) the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of rights during the relevant period are not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment, court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
A person inherit ing property from his ancestor would be landlord provided his ancestor 's name appears in the record of rights during the required period.
But a person claiming title on the basis of transfer, assignment.
auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendents by gift or will to evade the ceiling law and to evict tenants.
Under Section 31 A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267; Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201;over ruled.
Bhanushanker Ambalal vs Laxman Kala & Ors., [1960], Gujarat Law Reporter 169, approved.
Umraomiya Akbartniya Malek vs Bhulabhai Mathurbhai Patel Appeal No. 112/63 decided on 3.3.
1972 (High Court of Guja rat) referred.
|
ivil Appeal No. 2231 of 1988.
From the Judgment and Order dated 19.8.1987 of the Madras High Court in Appeal No. 86 of 1982.
R. Venkataramani for the Appellants.
section Balakrishnan and M.K.D. Namboodiri for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave is directed against the decree passed by the High Court in favour of the plaintiff respondents in a suit for partition.
The property in suit belonged to Smt.
Rathinammal, who after executing a registered will died in 1942.
Accord ing to the terms of the will, her two sons Natesan.
defend ant No. 1, and Subramanian.
plaintiffs ' witness No. 2 (PW 2), were to remain in possession of the properties without any power of alienation and had to pay the taxes and conduct regularly certain religious festivals; and thereafter their sons were to manage the properties on similar terms.
The will further provides that after their attaining majority the great grand sons, i.e., 510 the son 's sons ' sons of the testatrix will get the proper ties as absolute owners.
Subramanian, the younger son of the testatrix, who has been in 'the present suit examined as the second witness on behalf of the plaintiffs, has one son Arunachalam, de fendant No. 15.
The three plaintiffs, Ramesh, Ganesh and Sivalingam are the sons of the defendant No. 15.
The defend ant No. 1 got four sons and ten sons ' sons.
The main dispute in the suit is about the share which the plaintiffs are entitled to, under the terms of the will.
They claim that they being the only grand sons of Subramanian have half share in the properties, the remaining half going to the grand sons of the defendant No. 1, namely, defendants No. 5 to 14.
On behalf of the defendants it is pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares.
The defendants also contended that the suit was fit to be dismissed as the defendant No. 1 and the defendant No. 15 had finally parti tioned the properties in 1975, and no question of a further partition arises.
The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity.
The trial court rejected the plea based on the rule against perpetuity.
Having regard to the interest of the defendant No. 1, his brother Subramanian and Arunachalam, defendant No. 15, the court held that the alleged partition of 1975 was illegal and not binding on the plaintiffs.
So far the shares of the plaintiffs and the defendants No. 5 to 14 are concerned, agreeing with the defence case, the court held that the parties would take the properties as per capita.
However, the suit was dismissed on the ground that the plaintiffs were still minor.
On appeal by the plaintiffs, the High Court confirmed the finding of the trial court that the 1975 partition was illegal.
On the question of the shares of the parties, the High Court agreed with the plaintiffs and held that the division would take place as per stirpes.
Taking into ac count the fact that during the pendency of the appeal two of the plaintiffs had attained majority, the High Court passed a decree in their favour for one sixth share each.
So far the third plaintiff is concerned, the High Court declared his right without passing a decree for partition.
The de fendants are challenging the decision of the High Court by the present civil appeal.
The learned counsel for the appellants has contended that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and the conclusion of the 511 High Court on this aspect is illegal.
The English version of the operative portion of the will has been quoted in para graph 7 of the judgment of the trial court and is not chal lenged by either party before us.
After mentioning the rights and the duties of her sons the testatrix has stated the position of her grand sons and great grand sons thus: "They (that is, sons ' sons) have also to pay the taxes and out of their income conduct the aforesaid festivals regular ly.
Then their male issues after attaining majority, have to take possession of the said properties in equal shares and enjoy them with all powers of alienation.
" It has been stated by the learned counsel for the parties before us that the words "the said properties in equal shares" are the English version of the words SAMABHAGAMAGA ADAINTHU.
The learned counsel for the appellants translated this portion of the will as stating that, "they (that is, the sons ' sons) shall pay the taxes due to the Government and will carry on the charitable/religious activities without fail and their male issues would on attaining majority get the properties in equal portion (SAMABHAGAMAGA ADAINTHU) and will possess, own and enjoy it absolutely.
" The crucial expression is SAMABHAGAMAGA ADAINTHU which according to the learned counsel for the parties means in equal portions.
The question is as to whether in view of this provision in the will, the entire properties left by the testatrix are to be divided equally amongst all her great grand sons; or, the three plaintiffs shall amongst themselves take half, the remaining half going to their cousins.
The High Court has interpreted the crucial part of the will, mentioned in the preceding paragraph, as directing the plaintiffs on the one hand and the defendants 5 to 14 on the other respectively to "share equally out of each branch".
It has been assumed that the properties finally descended on the two branches in equal shares, and conse quently parties belonging to the two branches inherited the properties as stirpes.
The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; ; were more or less similar, which this Court construed in the manner as suggested by the plaintiffs in the case before us.
We are not in agreement with the.
approach of the High Court.
512 8.
It is well settled that a court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances, the posi tion of the testator.
his family relationship 'and the probability that he used the words in a particular sense also must be taken into account.
They lend a valuable aid in arriving at the correct construction of the will.
Since these considerations are changing from person to person.
it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases, the disputed will approximates closely.
Recourse to prece dents, therefore, should be confined for the purpose of general principle of construction only.
which, by now, are well settled.
There is still another reason as to why the construction put on certain expressions in a will should not be applied to a similar expression in the will under ques tion for, a will has to be considered and construed as a whole, and not piecemeal.
It follows that a fair and reason able construction of the same expression may vary from will to will.
For these reasons it has been again and again held that in the matter of construction of a will.
authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur (see Ramachandra Shenoy and Another vs Mrs. Hilda Brite and Others, ; at p. 736.
The risk in not appreciating this wholesome rule is demonstrated by the case before us.
Assuming that the will in the case of Boddu Venka takrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; ; was somewhat similar to that in the present case.
the High Court.
following the construction given on the will in the reported case, has held in the judgment under appeal that the great grand sons of the testatrix shall be taking the properties as per stripes.
While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case.
There.
the testatrix who was a childless widow.
had bequeathed under the will life es tates to two children who were defendants 4 and 5 in the case and whom she had brought up from their infancy.
and subject to the same, the property was to go to their chil dren after their death.
The conclusion of the High Court on the construction of the will.
with which this Court agreed.
was expressed thus.
"the bequest in favour of defendants 4 and 5 was that of a life estate with a vested remainder in favour of their children and that the children should take the vested re mainder per stripes and not per capita".
513 In the case before us no life estate was created in favour of anybody.
otherwise there would not arise any question of the plaintiffs ' getting any share in the proper ty even on their attaining majority during the lifetime of their father and uncle.
The High Court has also.
under the impugned judgment, observed that a Hindu is not ordinarily expected to create a joint tenancy but, failed to appreciate that there is only presumption.
to this effect, which can not override the provisions 'of the will, if the language is unambiguous and clear.
In the present case there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate in the properties.
It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property abso lutely without waiting for the death of their respective fathers or grand fathers.
We should, therefore.
interpret the will without being influenced by the meaning given to the will in the reported case.
The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time "under equal shares".
Since this is the first occasion for the shares in the property to be defined the expression "equal shares" must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix.
In other words.
they take the properties as per capita.
Admittedly the third plaintiff has also attained majority during the pendency of the present appeal and has, therefore.
become entitled to a share in the properties now.
The suit.
is accordingly decreed in favour of all the plain tiffs, their share being one thirteenth each.
The plea that the disposition under the will was hit by the rule against perpetuity was rejected by the trial court in paragraph 7 of judgment on the ground that the sons of the testatrix, namely, the first defendant and the plain tiff 's witness No. 2 as also their respective sons the defendants No. 2 to 4 are alive.
The point was not pressed in the High Court.
The view of the trial court appears to be correct, and does.
not require reconsideration at this stage.
In the result, the appeal is allowed in part as indicated above.
The suit is accordingly decreed in favour of all the three plaintiff.
The share of the three plain tiffs and the ten defendants, that is, defendants No. 5 to 14, shall be onethirteenth each in the suit properties.
There shall be no order as to costs.
N.V.K. Appeal party allowed.
|
The property in the suit belonged to the great grand mother of the plaintiffs and defendant Nos. 5 to 14 who executed a registered will.
According to the terms of the will, her two sons, defendant No. 1 and plaintiffs ' witness No. 2 were to remain in possession of the properties without any power of alienation, to pay the taxes and conduct regu larly certain religions festivals, and their male issues on attaining majority were to get the property in equal por tions and enjoy it absolutely.
The main dispute in the suit was about the share which the plaintiffs are entitled to under the terms of the afore said will.
The plaintiffs claimed that they being the only grand sons of the younger son of the testatrix were entitled to half share in the properties, the remaining half going to the grand sons of defendant No. 1 namely, defendant Nos. 5 to 14.
The suit was contested on behalf of the defendants, who pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares, and that the suit was fit to be dismissed as defendant No. 1 defendent No. 15 had finally partitioned the properties in 1975, and no question of further partition arises.
The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity.
The trial Court rejected the plea based on the rule against perpetuity but having regard to the interest of defendant No. 1, his brother, and defendant No. 15, it held that the alleged partition of 1975 was illegal and not binding on the plaintiffs and that so far as the shares of the plaintiffs and defendant Nos. 5 to 14 are concerned held that the parties would take the properties as per capita.
The suit was however dismissed on the ground that the plain tiffs were still minor.
In the appeal to the High Court by the plaintiffs, the High Court confirmed the findings of the trial court that the 1975 partition was illegal, but held that the division would take place as per stirpes, and taking into account the fact that during the pendency of the appeal, two of the plaintiffs had attained majority, the High Court passed a decree in theft favour for one sixth share each.
So far as the third plaintiff was concerned, it declared his right without passing a decree for partition.
The appellants defendants challenged the decision of the High Court in 508 this Court by special leave, contending that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and that the conclusion of the High Court on this aspects was illegal, and that reliance by the High Court, on Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; was inapplicable to the facts of this case.
Allowing the appeal in part, and decreeing the suit in favour of all the plaintiffs, that the share of the three plaintiffs and defendant Nos. 5 to 14 shah be one thirteen each in the suit properties this Court, HELD: 1.
A Court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances the position of the testator, his family relationship and the probability that he used the words in a particular sense also must be taken into account.
They lend a valuable aid in arriving at the correct construction of the will.
Since these considerations are changing from person to person it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases.
the disputed will approx imates closely.
Recourse to precedents, therefore, should be confined for the purpose of general principles of construc tion only.
2.There is still another reason as to why the construc tion put on certain expressions in a will should not be applied to a similar expression in the will under question for, a will has to be considered and construed as a whole, and not piecemeal.
It follows that a fair and reasonable construction of the same expression may vary from will to will.
Therefore, in the matter of construction of a will, authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur.
In the instant case, the High Court has interpreted the crucial part of the will containing the expression 'SAMABHA GAMAGA ADAINTHU ' as directing the plaintiffs on the one hand and the defendants5 to 14 on the other to "share equally out of each branch".
The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venka takrishna Rao & Ors.
vs Shrbnati Boddu Satvavathi & Ors., ; ; were more or less similar.
It has also been assumed that the properties finally descended on the two branches in equal shares and consequently parties be longing to the two branches inherited the properties as per stripes.
While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case.
The conclusion of the High Court on the construction of the will was therefore not correct.
In the instant case, there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate 509 in the properties.
It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property absolutely without waiting for the death of their respective fathers or grandfather.
The will has therefore to be interpreted with out being influenced by the meaning given to the will in the reported case.
The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time 'under equal shares '.
Since this is the first occasion for the shares in the property to be defined, the expression 'equal shares ' must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix.
In other words they take the properties as per capita.
The third plaintiff has also attained majority during the pendency of the present appeal and has therefore become entitled to a share in the properties.
The suit is decreed in favour of all the plaintiffs their share being one thirteenth each.
Ramachandra Shenoy and Another vs Mrs.Hilda brite and Others; , , relied on.
Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Sat vavathi & Ors.
; , , distinguished.
The plea that disposition under the will was hit by the rule against perpetuity was rightly rejected by the trial court on the ground that the sons of the testatrix as also their respective sons were alive.
|
Civil Appeal No. 626 of 1975 etc.
From the Judgment and Order dated 28.7.
1972 of the Calcutta High Court in Civil Rule No. 2029 of 1967.
P.K. Mukherjee.
D.N. Mukherjee, N.R. Choudhary.
Ranjan Mukherjee.
Somnath Mukherjee.
for the Appellants.
Sukumar Ghosh.
D.P. Mukherjee and G.S. Chatterjee.
for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
All these cases involve a common point which has been decided by a Full Bench of the Calcutta High Court reported as Madan Mohan Ghosh vs Shishu Bala Atta, AIR 1972 Cal.
Civil Appeal No. 626/75 is a direct appeal from the judgment of the Full Bench in one of the batch of cases dealt with therein.
In the other cases, the High Court has decided the matter by following the Full Bench decision and that is the subject matter of appeal before this Court.
Basically, the question is whether the right of pre emption conferred on co sharers under the Bengal Tenancy Act, 1885 (hereinafter referred to as 'the Tenancy Act '), is available to the holders after their interests in the holding have vested in the Government under the West Bengal Estates Acquisition Act, 1953 (hereinafter referred to as 'the 1953 Act ').
This question has been answered by the Full Bench (Coram: A.K. Mukherjea, Sabyasachi Mukharji and M.M. Dutt, JJ.) in the negative and it is the correctness of this conclusion that is assailed in these proceedings.
To provide a factual background it may be sufficient to set out the brief facts in C.A. No. 626/75.
The respondent, Smt.
Gangamoni Mondal, purchased, on 29.
1963, the suit property being land measuring about 15 acres.
She excavated a portion of the land, filled up other portions of it, constructed a small structure thereon and started living there from 1964.
About three years and five months after her purchase, Ardhendu Bhusan Halder, the predecessor in inter est of the appellants, made an application for pre emption under section 26 F of the Tenancy Act.
His case was that he was a Co sharer Of the holding which comprised the land purchased by the respondent.
The holding was previously a Raiyati Mokarari interest and it had vested in the State under the provisions of the 1953 Act.
The case of the re spon 530 dent was that.
though the predecessor in interest of the appellant and her vendor were the joint holders of the property in question.
the right of pre emption available to the co sharer had ceased with the coming into force of the 1953 Act.
The pre emption.
application was allowed by the learned Munsif and his order was confirmed by the learned Additional District Judge.
The respondent moved the High Court in revision.
The matter came up for hearing before the two learned Judges of the Calcutta High Court who referred the matter to the Full Bench.
The question.
as already stated.
was answered by the Full Bench in the negative with the result that the application for preemption stood dis missed.
Hence the appeal before us.
The other appeals before us also involve the same point but there are some difference.
We shall refer to these aspects later, to the extent necessary.
The question raised lies within a very narrow compass.
The relevant statutory provisions may first be set out.
As already mentioned, the Tenancy Act provides, in section 26 F. that except in the case of a transfer to a co sharer in the tenancy whose existing interest has accrued otherwise than by purchase, one or more cosharer tenants of the hold ing, a portion or share of which is transferred.
may apply to the Court for the said portion or share to be transferred to himself of themselves.
In other words, the section con ferred, On a co sharer tenant of an occupancy holding, a right to compel another co sharer tenant to sell his share in the holding to him instead of to a stranger.
The term "co sharer" envisages that the holding must be under the ownership of more than one person.
The holding must be an OCCupanCy holding: that is.
it must be the holding of raiy ats having occupancy rights.
So long as a division of the holding does not take place in accordance with section 88 of the Tenancy Act.
the holding remains a joint holding and each co sharer will be entitled to pre empt in case of transfer of a share or portion of the holding by a co sharer to a stranger.
The 1953 Act came into force on February 12, 1954.
Sub section (1) of section 4 of the Act provides that the State Government may from time to time by notification declare that with effect from the dale mentioned in the notifica tion.
all estates and the rights of every intermediary in each such estate situate in any district or part of a dis trict specified in the notification shall vest in the State free from all incumbrances.
Pursuant to section 4(1), a notification was published, which prescribed the date of vesting as 15th April.
The term 531 "intermediary" was defined in the Act to mean "a proprietor, tenureholder.
under tenure holder or any other intermediary above a raiyat or a non agricultural tenant ' '.
Thus a raiyat was not an intermediary.
However, Chapter VI of the Act contains provisions for acquisition of interests of raiyats and under raiyats.
Under section 49, the provisions of Chapter VI were to come into force on such date and in such district or part of a district as the State Government may, by notification in the Official gazette, appoint.
The notification under section 49 was published on 9th April, 1956, by which Chapter VI was brought into force in all the districts of West Bengal with effect from April 10, 1956.
The effect of such a notification was that the provisions of the earlier Chapters of the Act became operative mutatis mundandis "to raiyats and under raiyats as if such raiyats and under raiyats were intermediaries and the land held by them were estates and a person holding under a raiyat or an under raiyat were a raiyat for the purpose of clauses (c) and (d) of section 5." Notifications were issued under section 4 by the State Government as a result of which the interests of raiyats and under raiyats vested in the State with effect from April 14, 1956.
As already mentioned, the effect of 1953 Act was to vest the rights of intermediaries (an expression subsequently extended to cover raiyats and under raiyats) in the State Government.
However, section 6 confers certain rights on the intermediaries to retain certain lands.
The relevant por tions of section 6 can be extracted for purpose of conven ient reference.
Right of intermediary to retain certain lands.
(1) Notwithstanding anything contained in sections 4 and 5, an intermediary shall, except in the cases mentioned in the proviso to sub section (2) but subject to the other provi sions of that sub section, be entitled to retain with effect from the date of vesting (a) land comprised in homesteads; (b) land comprised in or appertaining to buildings and structures, owned by the intermediary or by any person, not being a tenant, holding under him by leave or licence.
XXX XXX XXX (c) non agricultural land in his khas possession, including land held under him by any person not being a tenant, by 532 leave or licence, not exceeding fifteen acres in area, and excluding any land retained under clause (a); Provided that the total area of land retained by an interme diary under clauses (a) and (c) shall not exceed twenty acres, as may be chosen by him: Provided further that if the land retained by an intermedi ary under clause (c) or any part thereof is not utilised for a period of five consecutive years from the date of vesting, for a gainful or productive purpose, the land or the part thereof may be resumed by the State Government subject to payment of compensation determined in accordance with the principles laid down in section 23 and 24 of the Land Acqui sition Act, 1894 (Act I of 1894); (d) agricultural land in his khas possession not exceeding twenty five acres in area.
as may be chosen by him; Provided that in such portions of the district of Darjeeling as may be declared by notification by the State Government to be hilly portions, an intermediary shall be entitled to retain all agricultural land in his khas possession, or any part thereof as may be chosen by him." In other words.
broadly speaking, the intermediary was allowed to retain agricultural land upto the extent of twenty five acres and nonagricultural land to the extent of fifteen acres, leaving out the special provisions in respect of homesteads, lands on which buildings are put up and lands in the hilly areas of Darjeeling.
Section 52 while applying these provisions to raiyats and under raiyats, states: "Provided that where raiyat or an under raiyat retains.
under section 6 read with this section.
any land comprised in a holding, then notwithstanding anything to the contrary contained in sub section (2) of section 6, he shall pay : (a) in cases where he was paying rent for the land comprised in the holding and held by him immediately before the date of vesting (hereafter in this proviso referred to as the holding lands), (i) if he retains all the holding lands, the same rent as he 533 was paying therefore immediately before the date of vesting, and (ii) if the land retained by him forms part of the holding lands, such rent as bears the same proportion to the rent which he was paying for the holding lands immediately before the date of vesting as the area of the land retained by him bears to the area of all the holding lands; (b) in cases where he was liable to pay rent but was not paying any rent for the holding lands immediately before the date of vesting on the ground that the rent payable by him therefore was not assessed, such rent as may be assessed, mutatis mutandis, in accordance with the provisions of section 42; (c) in cases where he was liable to pay rent wholly in kind or partly in kind and partly in cash, then notwithstanding anything contained in clause (c) of section 5, such rent as may be assessed in accordance with the provisions of section 40, and (d) in cases where he was liable immediately before the date of vesting to pay for the holding lands a variable cash rent periodically assessed, such rent as may be assessed, mutatis mutandis in accordance with the provisions of section 42.
" By a notification dated 28.5.
1984, the Government of West Bengal framed rules called the West Bengal Estates Acquisition Rules.
1954 (hereinafter referred to as 'the rules ').
Rule 4 originally provided that: "every intermediary who retains possession of any land by virtue of the provisions of sub section (1) of section 6, shall, subject to the provisions of the Act, be deemed to hold such land from the date of vesting (a) If it is agricultural land, on the same terms and condi tions as an occupancy raiyat under the Bengal Tenancy Act, 1885; (b) If it is non agricultural land on the same terms and 534 conditions as a tenant under the West Bengal Non agricultur al Tenancy Act, 1949, holding non agricultural land for not less than 12 years without any lease in writing.
" The following rule 4 was substituted for the above rule by a notification dated 7th September, 1962: "4.
Any land retained by an intermediary under the provi sions of sub section (1) of section 6 shall, subject to the provisions of the Act be held by him from the date of vest ing on the terms and conditions specified below: XXX XXX XXX (3) if the land held by the intermediary be agricultural land, then (1) he shall hold it, mutatis mutandis, on the terms and conditions mentioned in sections 23, 23A, clause (a) of section 25, sections 26 to 26G . " The rule was again amended by a notification dated August 1, 1964 by which, for the words and figures "Sections 26 to 26G, 52 to 55", the words "sections 26, 26B, 26C, 26G, sections 52 to 55" were substituted.
In other words, the original rule 4 merely provided that in the case of agricul tural land retained by the intermediary, he shall hold it on the same terms and conditions as an occupancy raiyat under the Tenancy Act leaving it undefined as to whether these terms and conditions would also include the right of pre emption available under the Act.
The amendment of 1962 specifically included the right of preemption available under section 26 F but the reference to section 26 F was omitted by the amendment of 1964.
The provisions of these various enactments and the availability of the right of pre emption to the former joint tenants of the holding came up for consideration before a number of Benches of the Calcutta High Court.
It is not necessary to refer to the details of these decisions inas much as the matter has been considered at length by the Full Bench.
The arguments addressed in support of the survival of the right of pre emption despite these legislative changes were broadly these: (i) The 1953 Act, after Chapter VI came into force only vested the holding of the raiyats and under raiyat in the State.
The word 535 'intermediary ' in section 6 ' includes the plural 'intermedi aries '.
Hence, the previous co sharers continue to be co sharers; only instead of being tenants under an intermedi ary, they become tenants under the State.
The vesting is of the holding as a whole; its integrity is not impaired.
(ii) The Act, the rules and the forms prescribed thereunder provide for the partition, demarcation, separate determina tion of the rents for the lands so partitioned and demarcat ed and consequent modification of the record of rights; until all this is done, the holding remains single and the erstwhile co sharers continue to be such.
(iii) Rule 4(3), as it originally stood, preserved the rights of tenants to co sharers.
The 1962 amendment made this clear.
The 1964 deletion of the reference to section 26 F was not with a view to take away the right of pre emption under section 26 F.
It was only consequential to the enactment of the 1955 Act, section 8 of which provided for a pre emption right corresponding to section 26 F of the Tenancy Act.
The Full Bench, however, repelled the contentions and held that the right of pre emption did not survive.
Its reasons may be summarised thus: (1) By virtue of section 52, read with section 6, each raiyat becomes a direct tenant under the State with effect from the date of vesting in respect of the land which he is entitled to retain.
The proviso to the section provides for the apportionment of the rent among the various holders making it clear that the land retained by a raiyat of a holding becomes the subject matter of a separate tenancy.
It was, therefore, no longer possible to call them co sharers.
Each became entitled to a direct tenancy in respect of a share of the previous holding and, in regard to his inter est, the previous holders had no manner of right or title.
One raiyat could not claim to have any interest in the land comprising the holding which the others are entitled to retain or have retained.
Before vesting, each of the raiyats of a holding had an interest or share in every part of the land comprised in the holding and each was a co sharer of the other, but this is not the position after the vesting when each of the raiyats of the holding becomes a direct tenant under the State in respect of the land of the holding which he is entitled to retain under the provisions of sub section ( 1 ) of section 6. 536 (2) The expression "an intermediary" in sub section (1), (2) and (5) of section 6 cannot be read as including the plural.
If the word "intermediaries" was substituted in the place of "an intermediary" in sub section (1) of section 6 the result will be that all the intermediaries would be jointly entitled to retain only 25 acres of agricultural land in his khas possession whereas clause (d) envisages that each intermediary is entitled to retain 25 acres of agricultural land in his khas possession and to exercise his choice of retention of land within such time and in such manner as may be prescribed.
The forms prescribed under the schedule in this connection and the foot notes thereto make it clear beyond all doubt that each intermediary separately, and not the intermediaries jointly, could exercise their choice of retention.
This was clear from clauses (iii), (iv), (v) and (vi) of the foot notes appended to the form.
This Was also the only reasonable interpretation for differ ent co sharers of a holding may have other lands in their possession and unless the right of choice and the computa tion of 25 acres is separately read into the provisions it would be impossible to work the same.
(3) While it is true that on the vesting no partition of any holding is effected and the various records are also not immediately corrected, the definition of 'holding ' in the Tenancy Act clearly shows that an undivided share in land can be the subject matter of a separate tenancy and can constitute a holding of a raiyat or a under raiyat.
There fore, though the land remains undivided till it is demarcat ed by metes and bounds there is nothing wrong in saying that the undivided share for a raiyat becomes the subject matter of a separate tenancy directly under the State as from the date of vesting.
Merely because the finally published re cord of rights has not been drawn up under section 47 read with rule 31A, it cannot be said that the holding continues to be a joint holding or that the raiyats continue to be the co sharers of each other.
(4) It is true that the expression "terms and condi tions" in rule 4 includes the right of pre emption under section 26 F and section 26 F has also been specifically included within the meaning of Rule 4(3) as amended in 1962.
However, the exercise of a right of pre emption under sec tion 26 F is conditional on the person claiming to exercise the right being a co sharer of the holding a portion or share of which has been transferred to outsider.
In view of the conclusion that the individual co sharers of the holding cease to be co sharers after the vesting, there will be no scope for any application under section 26 F. This, however, does not mean that rule 4(3) as amended in section 537 26 F is redundant.
It may be that on the date of vesting there may be no co sharer in a raiyati holding.
But, where after the date of vesting, the individual holder dies and a number of co sharers come into being by devolution of his interest, the provisions of section 26 F read with rule 4(3) will come into play.
Similarly, if subsequent to the date of vesting, one of the erstwhile co sharers transfers a portion of his holding to another, that person becomes a co sharer of the holding along with his vendor.
If one of these two co sharers transfers a portion of the holding to another person, section 26 F will apply.
Thus section 26 F has a part to play even in the new scheme of things and is not rendered otiose or redundant by the findings given earlier.
(5) It is true that sub rule (3) of rule 4 was further amended on 1st August, 1964, deleting the reference to section 26 F in that sub rule.
This deletion, however, did not mean that the right of preemption has been taken away.
This amendment took place because the West Bengal Land Reforms Act, 1955, by section 8 created a right of pre emption similar to the one conferred by section 26 F.
This section came into force on 22nd October, 1963.
Initially there were some differences between section 26 F and section 8 of the West Bengal Land Reforms Act in that, under the former, the application had to be made to the Court while, under the later, it had to be made to the Revenue Officer.
After the enforcement of section 8 it became wholly unneces sary to allow section 26 F to remain in sub rule (3) of rule 4.
It took some time for this amendment to be given effect to.
Section 8 will apply regarding transfers taking place after the enforcement of section 8.
We have heard arguments on behalf of several counsel in respect of the points at issue in these appeals.
The Full Bench judgment of the Calcutta High Court has discussed all the various aspects and it has come to the conclusion for the reasons summarised above, and elaborated by it, that the right of pre emption could not survive the 1953 Act.
Counsel have been unable to persuade us to take a view different from that of the Full Bench.
We, therefore, express complete concurrence with the views of the Full Bench.
We would also like to point out that the decision of the Full Bench has been in force in the State of West Bengal since 1972.
Interests in land must have been transferred during the past eighteen years on the basis that the princi ples of the Full Bench decision would apply.
So, even if there were any force in the contention urged on behalf of the appellants and as we have already pointed out, no 538 grounds have been urged before us strong enough to persuade us to differ from the Full Bench we would have been very reluctant to alter the legal position as settled for a very long time in the State of West Bengal by the decision of the High Court.
By this observation we should not be understood to have expressed any reservations on our part in accepting the Full Bench decision as correct.
On the other hand, having considered the pros and cons urged before us, which had also been urged before the High Court, we are in full agreement with the Full Bench decision.
We, therefore, affirm the judgment of the Full Bench.
In the light of the above discussion, we may now consid er the several appeals before us: (1) C.A. 626/75 is a direct appeal from the Full Bench judgment.
It stands dismissed.
Sri Ghosh, for the respondents, also urged that the application for pre emption in the present case was made section 26 F of the Tenancy Act which had ceased to be effec tive after 1964 amendment and hence should have been reject ed.
He also contended that section 26 F could be availed of only in respect of an occupancy raiyat whereas the interest transferred in the present case was a "mokarari" interest.
These points do not appear to have been raised in the High Court.
Anyhow, it is unnecessary to go into these conten tions as we have held, even otherwise, that the application for pre emption is not maintainable.
(2) C.A. 291 of 1976 A11 the Courts have concurrently applied the Full Bench decision.
The appeal, therefore, fails and is dismissed.
(3) C.A. 2449/80 1n this matter, the land in question is nonagricultural land.
The High Court held that the Full Bench decision relates only to agricultural lands and that the interests of non agricultural tenants remains unaffected by the 1955 Act.
This point requires a little consideration.
So far as non agricultural tenancies are concerned, a right of pre emption among co sharers was conferred by section 24 of the West Bengal Non agricultural Tenancy Act, 1949.
We have earlier seen that the 1953 Act originally provided for vesting only of the interest of 'intermediaries ' in the State and the definition of 'intermediary ' took in only a holder above 'a raiyat or under raiyats ' in respect of agricultural land and above 'a non agricultural tenant '.
The rights of 539 'raiyats and under raiyats ' were brought within the purview of the vesting provisions when Chapter VI of the 1953 Act was brought into force; but there is no statutory provision that brings non agricultural tenants within the scope of the vesting provisions.
This has been pointed out by this Court in Shibasankar vs Prabartak Sangha, at p. 563 which has been followed in a number of decisions of the Calcutta High Court and applied, after the Full Bench deci sion, in Sastidas Mullick vs J.L.R.O. Parrackpore Circle and Ors., at p. 701 by a Bench comprising of Sabyasachi Mukharji and M.M Dutt.
The High Court, in our view, was right in making the distinction and upholding the right of pre emption in this case.
The appeal.
therefore.
fails and is dismissed.
(4) C.A. 825/81 This is a case for claim of pre emption under section 8 of the 1955 Act.
It is necessary to set out a few facts.
The lands in R.S. Khatian No. 331 belonged to four brothers Jadhunath, Madhusudan.
Siddeshwar and Maniklal.
Later, Madhusudhan died and his interest devolved on his father Ashutosh and his brother Mukti.
Siborani purchased plot Nos.
1947, 2199 and 363 in this khatian by a registered deed dated 28/5/68 from the holders.
The second petitioner purchased plot No. 2169 in the khatian on 19.5.69 from the holders.
The respondent Shravani Ghosh is a stranger who purchased the disputed property from Jadhunath, Siddeswar and Maniklal by a deed dated 4.5.71.
Subsequently, a deed dated 21.6.71 was executed in her favour by Maniklal and Ashutosh purportedly to rectify a defect in the earlier deed.
Thereupon, the purchasers under the earlier deeds, Siborani and another claimed a right of pre emption under section 8 of the 1955 Act.
The application was allowed by the Munsif and the District Judge but disallowed, on revision, by the High Court.
Learned counsel for the appellant contended that the present case 'fell within the exceptions outlined in the Full Bench case, under which the right of pre emption sur vives.
He relied, in support of this contention, on sub paras (2) and (3) in the following passage from the Full Bench judgment, where the High Court summed up its conclu sions: "28.
For the reasons aforesaid, we hold as follows (1) After the enforcement of Chapter VI of the Act and the vesting of interest of raiyats and under raiyats on and from April 14, 1956 corresponding to Baisakh 1, 1363 B.S. the co sharer raiyats of a holding ceased to be coshar ers and each raiyat of the holding became a direct 540 tenant under the State in respect of the land of that hold ing which he is entitled to retain under sub section (1) of section 6.
As the co sharer raiyats ceased to be co sharers on and from the date of vesting the question of exercise of the right of pre emption under section 26 F cannot arise, for, the condition precedent to the exercise of the right of pre emption under Section 26 F being that the person exercising that right must be a co sharer of the person making the transfer.
(2) When a raiyat having a separate holding or tenancy created by virtue of sub section (2) of section 6 relating to the land retained by him under sub section(1) of section 6 dies leaving more than one heir, such heirs will become co sharers of such holding and will be entitled to the right of preemption under Section 26 F. Similarly, when the raiyat of such a holding transfers a portion of the holding to another person, that person will become a co sharer of the raiyat and the right of pre emption will also be available in such a case.
(3) A transfer made by a co sharer raiyat as contemplated by CI.
(2) above before the enforcement of Section 8 of the West Bengal Land Reforms Act, 1955, may be pre empted by another co sharer in the tenancy in accordance with Section 26 F, but a transfer made after the enforcement of Section 8, the right of pre emption by a co sharer can only be exercised in the manner laid down in Section 8 of the West Bengal Land Reforms Act.
(4) The under raiyats have been elevated to the status of raiyats on the enforcement of Chapter VI.
There is no dif ference between the position of raiyats and that of under raiyats and our decision on the question as to the effect of the enforcement of Chapter VI on the right of pre emption of raiyats will also apply to under raiyats.
(5) The decisions in 68 Cal.
W.N. 574 (A.I.R. 1964 Cal.
460) and Jyotish Chandra Das vs Dhananiay Bag., [1964] 68 Cal.
W.N. 1055 in so far as they proceeded on the footing that the raiyats of a holding continued to be co sharers even after vesting, are erroneous but they have correctly inter preted the expression 'terms and conditions ' in Rule 4." 541 Learned counsel for the respondents, on the other hand, contended that, while the first instance given in sub para (2) above by the Full Bench may be correct, the second instance and its follow up in subpara (3) are not correct.
He pointed out that once each co sharer in the earlier holding is held to become an independent tenant directly under the State, any alienee from him acquires his interest pro tanto and cannot become his co sharer.
His submission was that the Full Bench has erred in considering them to be co sharers.
It is not necessary to express any views on this contention as, in our opinion, the above observations are not applicable on the facts found in the present case.
Here the "co owners" of the former R.S. Khatian 313 have sold identifiable plots under different sale deeds to different parties.
In this state of affairs, the transferees under the 1968 and 1969 deeds have acquired title to identifiable plots and are not co sharers in the original transferors.
There is no question of their claiming pre emption as against the transferees under the 1971 documents merely because all the plots at one time formed part of one inte gral holding.
We are, therefore, of opinion that the High Court was correct in holding that no right of pre emption could be exercised by the petitioners.
This appeal, there fore, fails and stands dismissed.
(5) C.A. 2231/82 This appeal has to be dismissed in view of our order upholding the Full Bench decision.
We direct accordingly.
(6) S.L.P. (Civil) 1037/74 1n this case, the High Court, following the Full Bench decision, held that the petitioner was not entitled to claim pre emption.
The peti tion has, therefore, to be dismissed.
We order accordingly.
(7) S.L.P. (Civil) 1577/74 The High Court disposed of this matter by following the Full Bench decision.
The deci sion is affirmed and this petition dismissed.
(8) S.L.P. (Civil) 9882/80 Since the High Court has only followed the Full Bench decision, there are no merits in this appeal which is dismissed.
All the appeals and SLPs, therefore, fail and are dis missed.
But in the circumstances we make no order as to costs.
R.S.S. Appeals and SLPs dismissed.
|
Gangamoni Mondal, the respondent in one of the appeals, purchased on 29.1.1963 the suit property.
About three years and five months after her purchase, the prede cessor in interest of the appellants made an application for pre emption under section 26 F of the Bengal Tenancy Act, 1885 on the ground that he was a co sharer of the holding which comprised the land purchased by the respondent.
The holding was previously a Raiyati Mokarari interest which had vested in the State under the provisions of the West Bengal Estates Acquisition Act, 1953.
the defence of the respondent was that, though the predecessor in interest of the appel lant and her vendor were the joint holders of the property in question, the right of pre emption available to the co sharer had ceased with the coming into force of the Estates Acquisition Act of 1953.
The pre emption application was allowed by the learned Munsif and his order was confirmed by the learned Additional District Judge.
In revision, the Full Bench of the High Court negatived the contention of the applicant and dis missed the pre emption application.
Dismissing the appeals and SLPs, this Court, HELD: (1) The Full Bench has rightly come to the conclu sion that the right of pre emption could not survive under the West Bengal Estates Acquisition Act, 1953.
[348B] (2) Section 26 F of the Tenancy Act, 1885 conferred on a cosharer tenant of an occupancy holding, a right to compel another co 528 sharer tenant to sell his share 'in the holding to him instead of to a stranger.
The term "co sharer" envisages that the holding must be under the ownership of more than one person.
The holding must be an occupancy holding: that is, it must be the holding of raiyats having occupancy rights.
So long as a division of the holding does not take place in accordance with section 88 of the Tenancy Act, the holding remains a joint holding and each co sharer will be entitled to preemption in case of transfer of a share or portion of the holding by a co sharer to a stranger.
[340E F] (3) By virtue of the notifications issued by the State Government under section 4 of the 1953 Act from time to time the interests of raiyats and under raiyats vested in the State with effect from April 14, 1956.
[341C] (4) The effect of 1953 Act was to vest the rights of intermediaries (an expression subsequently extended to cover raiyats and under raiyats) in the State Government.
Each raiyat became a direct tenant under the State and the land retained by a raiyat of a holding became the subject matter of a separate tenancy.
It was, therefore, no longer possible to call them co sharers entitled to pre emption case of a transfer to a stranger.
[341D; 345E] (5) By a notification dated 28.5.
1954, the Government of West Bengal framed rules called the West Bengal Estates Acquisition Rules, 1954.
The original rule 4 merely provided that in the case of agricultural land retained by the inter mediary, he shall hold it on the same terms and conditions as an occupancy raiyat under the Tenancy Act, leaving it undefined as to whether these terms and conditions would also include the right of pre emption available under the Tenancy Act.
The amendment of 1962 specifically included the right of pre emption available under section 26 F but the reference to section 26 F was omitted by the amendment of 1964.
This definition, however, did not mean that the right of pre emption was taken away.
[343F; 344E F; 347F] (6) There is no statutory provision that brings non agricultural tenants within the scope of the vesting provi sions.
The High Court was right in making the distinction and upholding the right of pre emption in the case of non agricultural tenancies.
[349A B] Shibasankar vs Prabartak Sanghs, Sastidas Mullick vs J.L.R.O. Parrachpore Circle and Ors., , referred to.
|
ON: Civil Appeal No. 2876 of 1986.
From the Judgment and Order dated 14.5.1986 of the Delhi High Court in Civil Writ No. 1422 of 1985.
Soli J. Sorabji, Attorney General, Ashok Desai, Solici tor General, Vinod Bobade, M.C. Bhandare, M.K. Ramamurthy, R.K. Garg, Mrs. Shyamala Pappu, P.P. Rao, Mrs. J. Wad, Mrs. Aruna Mathur, Ms. A. Subhashini.
P. Parmeshwaran, D.K. Garg, A.K. Sil, G. Joshi, S.K. Gupta, B.R. Sabharwal, Mrs. Seita Vidyalingam, S.K. Bisaria (NP), Salman Kurshid, Irshad Ahmad, V.D. Phadke, A. Sharan, Lalit Bhasin, Ms. Nina Gupta, Vineet Kumar, R.C. Bhatia, P.C. Kapur (NP), B.S. Charya (NP), Vijay K. Verma, C.M. Nayar, H.S. Munjral and A.V.S.L. Somayajulu (NP) for the appearing parties.
Satnam Singh appellant in person in C.A. No. 1115 of 1976.
The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ.
These civil appeals, special leave petitions and civil miscellaneous petitions deal with the question of constitutional validity of the right of the employer to terminate the 175 services of permanent employees without holding any inquiry in certain circumstances by reasonable notice or pay in lieu of notice.
The facts involved in these matters are diverse but the central question involved in all these is one, i.e. whether the clauses permitting the employers or the authori ties concerned to terminate the employment of the employees by giving reasonable notice or pay in lieu of notice but without holding any inquiry, are constitutionally valid and, if not, what would be the consequences of termination by virtue of such clauses or powers, and further whether such powers and clauses could be so read with such conditions which would make such powers constitutionally and legally valid? In order to appreciate the question the factual matrix of these cases so far as these are relevant for the ' determination of the aforesaid questions, will have to be borne in mind in the light of the actual legal provisions involved in the respective cases.
It will, therefore, be proper and appropriate to deal with the relevant facts in civil appeal No. 2876 of 1986 first.
The appellant herein the Delhi Transport Corpora tion, is a statutory body formed and established under Section 3 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 (hereinafter called 'the Act ').
The appellant carries out the objects of vital public utility, according to the appellant, i.e. transport of passengers in the Union Territory of Delhi and other areas.
Respondent No. 2, Sri Ishwar Singh was appoint ed as conductor therein on probation for a period of 1 year in 1970.
The probation period was extended thereafter for a further period of one year and thereafter he was regularised in service of the appellant.
Similarly, respondent No. 3 Sri Ram Phal was appointed as Assistant Traffic Incharge and after the probation period he was regularised in serv ice.
Respondent No. 4 Sri Vir Bhan was appointed as driver and after completing the probation period he was also regu larised in service.
It is stated that respondents Nos. 2 to 4 became, according to the appellant, inefficient in their work and started inciting other staff members not to perform their duties.
They were served with termination notices on 4th June, 1985 under Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952.
On 11th June, 1985 respondents Nos. 2 to 4 and their Union being respondent No. I DTC Mazdoor Con gress, filed writ petition No. 1422/85 in Delhi High Court, challenging the constitutional validity of Regulation 9(b) of the Delhi Road Transport Act.
On 11th May, 1986 the division bench of the High Court of Delhi allowed the said writ petition and struck down Regulation 9(b) of the said Regulations, and directed the appellant to 176 pay back respondents ' wages and benefits within 3 months from the date of the said judgment.
This is an appeal, therefrom, by special leave.
The question, therefore, is, was the High Court justified in the view it took? It may be mentioned that regulations 9(a) & (b) were framed in exer cise of the powers conferred u/s 53 of the said Act, which enables the formulation of Regulations.
Regulation 9 of the said regulations, which is material for the present contro versy, reads as follows: "9.
Termination of service: (a) Except as otherwise speci fied in the appointment orders, the services of an employee of the authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reason thereof.
(ii) For misconduct, (iii) On the completion of specific period of appointment.
(iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment.
(b) Where the termination is made due to reduction of estab lishment or in circumstances other than those mentioned at (a) above, one month notice or pay in lieu thereof will be given to all categories of employees.
(c) Where a regular/temporary employee wishes to resign from his post under the authority he shall give three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the conditions regarding the period of notice of resignation or pay in lieu thereof." The said Regulation, as set out hereinbefore, deals with termination of services.
Four contingencies are contemplated vide clause (a) of Regulation 9, whereupon the services of employees may be terminated without any notice or pay in lieu thereof except as otherwise provided in the appointment order.
Apart from these four contingencies where termination is made due to reduction of establishment 177 or in circumstances other than those mentioned in clause (a) above, one month 's notice of pay in lieu thereof is required to be given to all categories of employees.
Therefore, except in the said four cases, if there is reduction of establishment or there is any termination uncovered by these four contingencies referred to in clause (a) the same shall be by giving one month 's notice or pay in lieu thereof to all categories of employees.
Clause (c) postulates when a regular or temporary employee wishes to resign from his post under the authority then in such a situation one month 's notice in writing or pay in lieu thereof to the authority may be provided.
The High Court in the judgment under appeal noted that since the filing of this petition the notices issued by D.T.C. to its various employees have been withdrawn and all these persons have been reinstated, therefore, the court was not concerned with the validity of clause (a) of Regulation 9 but respondents Nos. 2 to 4 against whom action had been taken by the appellant by issuing notices of termination under Regulation 9(b) had not been reinstated and the court considered the validity of Regulation 9(b).
It was held by the court that the said provision gave absolute, unbridled and arbitrary powers to the Management to terminate the services of any permanent or temporary employee.
It was contended that such power was violative of Article 14 of the Constitution.
In support of this contention, reliance had been placed, on which the High Court also relied upon, on the decision of this Court in Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors., ; In that case, Standing Order 31 of M/s. Hindustan Steel Ltd., a public sector undertaking, had prescribed for a detailed procedure for dealing with cases of misconduct; and for imposing major penalty, the employer had to draw up a chargesheet and give an opportunity to the delinquent workman to make his repre sentation within 7 days.
If the allegations were controvert ed, an enquiry had to be held by an officer to be nominated by the management and in such an enquiry reasonable opportu nity of explaining and defending the alleged misconduct had to be given to the workman.
Suspension of the delinquent workman pending enquiry was also permitted.
At the end of the enquiry, if the charges were proved, and it was provi sionally decided to impose any major penalty, the delinquent workman had to be afforded a further reasonable opportunity to represent why the penalty should not be imposed on him.
Standing Order 32 provided for a special procedure in case a workman was convicted for a criminal offence in a court of law or where the General 178 Manager was satisfied for reasons to be recorded in writing that it was inexpedient or against the interests of security to continue to employ the workmen ' viz. the workman could be removed or dismissed from service without following the procedure laid down in Standing Order No. 31.
There the appellant was an Assistant in the respondent 's undertaking, who was removed from service on the ground that it was no longer expedient to employ him.
The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant therein had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the po lice.
In the reference to the Industrial Tribunal, the Tribunal held that as the employer dispensed with the disci plinary enquiry in exercise of the power conferred by Stand ing Order 32, it could not be said that the dismissal was unjustified, and that if there were allegations of miscon duct, the employer was quite competent to pass an order of removal from service without holding any enquiry in view of the provisions contained in Standing Order 32, and rejected the reference.
There was an appeal to this Court.
This Court held that the reasons for dispensing with the enquiry do not spell out what was the nature of the misconduct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry.
As there was no justification for dispensing with the enquiry, imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 was illegal and invalid.
It was directed that the respondent should recall and cancel the order dated 24th August, 1970 removing the appellant from service, and reinstate him and on the same day the appellant was directed to tender resignation of his post which should be accepted by the respondent.
The respondent should pay as and by way of back wages and future wages, a sum of Rs.1.5 lakhs to the appellant within 2 months which should be spread over from year to year commencing from the date of removal from service.
It was reiterated that where an order casts a stigma or affected livelihood, before making the order, principles of natural justice of a reason able opportunity to present one 's case and controvert the adverse evidence must have full play.
Even under the Consti tution which permits dispensing with the inquiry under Article 311(2) a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the inquiry.
Standing Order 32 nowhere obligates the General Manager to record reasons for dispensing with the inquiry as prescribed by Standing Order 31.
On the contrary, it was held that the language of Standing Order 32 enjoins a duty upon the Gener al Manager to record reasons for his satisfaction why it was inexpedient 179 or against the interest of the security of the State to continue to employ the workman.
Reasons for dispensing with the enquiry and reasons for not continuing to employ the workman, stand wholly apart from each other.
This Court finally observed that it was time for the public sector undertaking to recast Standing Order, and to bring it in tune with the philosophy of the Constitution failing which the vires of the said Standing Order ,would have to be examined in an appropriate proceeding.
Reliance was also placed before this Hon 'ble Court on the decision of this Court in the case of West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116, where this Court was concerned with regulations 33 and 34 of the West Bengal State Electricity Board.
The said regulations 33(1) and 34 were as follows: "33(1) Unless otherwise specified in the appointment order in any particular case, the services of a permanent employee of the Board may be terminated without notice (i) on his attaining the age of retirement or by reason of a declaration by the competent medical authority that he is unfit for further service; or (ii) as a result of disciplinary action; (iii) if he remains absent from duty, on leave or otherwise, for a continuous period exceeding 2 years.
In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof.
" The High Court had come to the conclusion in that case that Regulation 34 was arbitrary in nature and suffered from the vice of enabling discrimination.
The High Court, there fore, struck down the first paragraph of Regulation 34 and as a consequence quashed the order terminating the services of the first respondent therein.
It was contended before this court on appeal that the Regulation 34 did not offend Article 14 of the Constitution, that Sections 18 A and 19 of the Electricity Supply Act laid down sufficient guidelines for the exercise of the power under Regulation 34 and in any case the power to terminate the services of any permanent employee was vested in high ranking officials who might be expected to exercise the same in a 180 reasonable way.
This Court was unable to accept that argu ment.
This Court was of the view that the regulation was totally arbitrary and conferred on the Board a power which was capable of vicious discrimination.
This Court was of the view that it was naked 'hire and fire ' rule, the time for banishing which, according to this Court in the said deci sion, altogether from employer employee relationship was fast approaching.
It is only parallel, this Court was of the view, to the Henry VIII clause so familiar to administrative lawyers.
Reference was made to the decision of this Court in Moti Ram Deka vs North East Frontier Railway, , where Rules 148(3) and 149(3) of the Indian Railway Estab lishment Code had been challenged on the ground that these Rules were contrary to Article 311(2) of the Constitution.
The challenge was upheld though no opinion was expressed on the question whether the rule offended Article 14 of the Constitution or not since then Article 14 has been inter preted in several decisions of this Court and conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this Court as offending Article 14 of the Constitution.
Indeed, it was noted in S.S. Muley vs J.R.D. Tara, by this Court that, Justice Sawant, of Bombay High Court had considered at great length Regulation 48(a) of the Air India Employees ' Service Regulations which conferred similar power on the Corporation as Regulation 34 confers on the Board in the present case.
The learned Judge therein (Sawant, J.) had struck down that Regulation.
Reli ance had also been placed on another decision of the Bombay High Court in the case of Manohar P. Kharkhar vs Raghuraj.
This Court found it difficult to accept the reasoning therein.
In that view of the matter the appeal was dismissed.
Reference in this connection may also be made to the decision of this Court in Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Anr., There the appellant Corporation was a Government company incorporated under the Companies Act.
The majority shares of the Corporation were held by the States of West Bengal and Assam.
Article 51 of the Articles of Association of the Corporation conferred upon the President of India power to issue directions/instructions regarding affairs and conduct of the business of the Corporation or of the Directors thereof as also regarding exercise and per formance of its functions pertaining to national security and public interest.
Article 51 A of the 181 said articles entitled the President to call for returns, accounts etc.
of the Corporation.
Articles 14, 15, 16, 17 and 37 conferred on the President power to appoint and remove Chairman and the Board of Directors of the Corpora tion.
Articles 41 and 42 were regarding the ' President 's control over the working of the Corporation.
Article 47 provided for appointment of the auditors of the Corporation to be made by the Central Government on the advice of the Comptroller ' and Auditor General of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts.
Since another company namely the Rivers Steam Navigation Co. Ltd. was carrying on the same business as the Corporation was doing, a Scheme of Arrangement was entered into between the Corpo ration and that Company for dissolution of the latter and taking over of its business and liabilities by the former.
The Scheme, inter alia, stipulated that the Corporation shall take as many of the existing staff or labour as were possible and that those who could not be taken over shall be paid by the transferor company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Disputes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues.
The Calcutta High Court approved the Scheme.
Each of the respondents therein were in the service of the said company.
Their services were taken over by the Corpora tion after the High Court 's sanction to the Scheme of Ar rangement.
While the respondent Ganguly therein was appoint ed as the Deputy Chief Accounts Officer and was later pro moted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was later promoted as General Manager (River Services) Their appoint ment letters were in stereotype forms under which the Corpo ration could without any previous notice terminate their services, if the Corporation was satisfied that the employee was unfit medically or if he was guilty of any insubordina tion, intemperance or other misconduct, or of any breach of any rules pertaining to this service or conduct or non performance of his duties.
The letters of appointment fur ther stipulated that they would have been subject to the rules and regulations of Corporation.
Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 had provided that the services of permanent employee could be terminated on three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case might be in lieu of the notice.
By confidential letter the respondent Ganguly was asked to reply within 24 hours to the allegations of negligence made against him.
After having his representation and detailed reply, a notice under 182 Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay.
Similarly a charge sheet was issued to the respondent Sengupta intimat ing that a disciplinary inquiry was proposed against him under the Rules and calling upon him to file his written statement of defence.
Sengupta denied the charges made against him and asked for inspection of documents and copies of statements of witnesses mentioned in the said charge sheet.
But a notice was serviced on him under Rule 9(i) terminating his services with immediate effect of paying three months ' salary.
Both Ganguly and Sengupta filed Writ Petitions before High Court.
A Division Bench of that Court allowed the same.
The Corporation filed appeals before this Court.
The main questions for determination therein were (i) whether the appellant Corporation was an instrumentality of the State as to be covered by Article 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 of the Constitution and as such whether Rule 19(i) which formed part of the contract of employment be tween the Corporation and its employees to whom the said Rules applied, was void? This Court confirmed the judgment of the High Court with modification in the declaration made and dismissed the Corporation 's appeal to this Court.
This Court held that the appellant was State within the meaning of Article 12 of the Constitution.
This Court further held that an unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court.
This Court was of the view that the doctrine of distributive justice is another jurisprudential concept which has affected the law of contracts.
According to that doctrine, distributive fairness and justice in the possession of wealth and property could be achieved not only by taxation and regulatory control of private and contractu al transactions even though this might involve some sacri fice of individual liberty.
This Court referred to articles 38 and 39 of the Constitution so far as the test of reasona bleness was concerned.
The test of reasonableness or fair ness of a clause in a contract where there was inequality of bargaining power is another theory recognised in the sphere of law of contacts.
It was reiterated in that decision that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or a clause in the contract.
Reference was made to the observa tions of Lord Diplock in A. Schroeder Music Publishing Co. Ltd. vs Macaulay (formerly Instone), [1974] i W.L.R. 1308 and that test was: 183 "Whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promiser under the contract? For the purpose of this test all the provisions of the contract must be taken into consideration." Justice Madon of this Court in the said decision found that this was in consonance with right and reason, intended to secure social and economic justice and conformed to the mandate of the equality clause in Article 14 of the Consti tution.
It was further recognised that there might be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power.
These cases can neither be enumer ated nor fully illustrated.
The Court must judge each case on its own facts and circumstances.
The above principle would apply, this Court reiterated, where the inequality of bargaining power is the result of the disparity in the economic strength of the contracting parties or where the inequality is the result of circumstances, whether of the creation of the parties or not or where the weaker party is in a position in which he could obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them or where a man had no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in pre scribed or standard form or to accept a set of rules as part of the contract, however, unfair, unreasonable and uncon scionable clause in that contract or form or rules might be.
This Court, however, reiterated that this principle would not apply where the bargaining power of the contracting parties is equal or almost equal.
This principle would not apply where both parties are businessmen and the contract is a commercial transaction.
The contracts of this type to which the principle formulated above applied were not con tracts which were tainted with illegality but were contracts which contained terms which were so unfair and unreasonable that they shock the conscience of the Court.
In the vast majority of cases such contracts are entered into by the weaker party under pressure of circumstances, generally economic, which results in inequality of bargaining power.
Such contracts will not fall within the four corners of the definition of "undue influence" given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other.
Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with large number of persons or 184 a group of persons, if they are unconscionable, unfair and unreasonable, are injurious to the public interest, should be adjudged void according to Justice Madon, under Section 23 of the Contract Act on the ground of being opposed to public policy.
Public policy, it was reiterated, is not the policy of any particular Government.
It connotes some matter which concerns the public good and the public interest.
The principles governing public policy must be and are capable on proper occasion, of expansion or modification.
If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public goods and public interest declare such practice to be opposed to public policy.
In any case which is not covered by authority, courts should be guided by the Preamble to the Constitution and the principles underlying the Fundamental Rights and the Directive Principles.
Rule 9(i) can aptly be called 'the Henry VIII Clause" this Court opined therein.
It confers an absolute, arbitrary and un guided power upon the Corporation to exercise that power.
This Court was concerned with the "Central Inland Water Transport Corporation Ltd. Service Discipline and Appeal Rules" framed by the Corporation.
The relevant provisions of the said Rule 9 relating to permanent employees therein were as follows: "9.
Termination of employment for Acts other than misdemea nour (i) The employment of a permanent employee shall be subject to termination on three months ' notice on either side.
The notice shall be in writing on either side.
The Company may pay the equivalent of three months basic pay and dearness allowances, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice.
(ii) The services of a permanent employee can be terminated on the grounds of "services no longer required in the inter est of the Company" without assigning any reason.
A perma nent employee whose services are terminated under this clause shall be paid 15 days ' basic pay and dearness allow ance for each completed year of continuous service in the Company as compensation.
In addition he will be entitled to encashment of leave to his credit." This Court found that Rule 9(i) can be called 'the Henry VIII 185 Clause '.
It confers an absolute, arbitrary and unguided power upon the Corporation.
It does not even say who on behalf of the Corporation was to exercise that power.
While the Rules provided for four different modes in which the services of a permanent employee could be terminated earlier than his attaining the age of superannuation, namely, Rules 9(i), 9(ii), 36(iv)(b) read with 38 and 37, Rule 9(i) is the only rule which does not state in what circumstances the power conferred by that rule is to be exercised.
Thus even where the Corporation could proceed under a regular disci plinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the trouble of an inquiry.
No opportunity of a hearing was at all intended to be afforded to the permanent employee whose service was being terminated in the exercise of that power.
It violated audi alteram partem rule of natural justice also which was implicit in Article 14 of the Constitution.
It is not covered by any of the situations which would justify the total exclusion of the audi alteram parterm rule.
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it con sisted of responsible and highly placed persons ignored, it was held, the fact that however highly placed a person might be, he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts absolutely.
" It was, however, held that Rule 9(i) was also discriminatory for the Corporation was given power to discriminate between employee and employee.
It was stated that it could back up one employee and apply to him Rule 9(i).
It could pick up another employee and apply to him Rule 9(ii).
It was further reiterated that the Corporation was a large organisation.
The said Rules formed part of the contract of employment between the Corporation and its employees who were not workmen.
These employees had no powerful Union to support them.
They had no voice in the framing of the said Rules.
They had no choice but to accept the said Rules as part of their contract of employment.
There was gross disparity between the Corporation and its employees, whether they be workmen or officers.
The Corporation could afford to dis pense with the services of an officer and will find many others to take his place but an officer cannot afford to lose his job because if he does so, there are not many jobs waiting for him.
It was, therefore, held that clause 9(i) of the said regulation was against right and reasons and it was wholly unconscionable.
It had been entered into between parties between whom there was gross inequality of bargain ing power.
Rule 9(i) was a term of the contract between the Corporation and all its officers, it was noted.
It affected a large number of persons and it squarely fell within the principle stated earlier.
The Government and its agen cies and instrumentalities constitute the largest employer in the country.
A 186 clause such as Rule 9(i) in a contract of employment, it was noted, affecting large sections of the public was harmful and injurious to the public interest for it tended to create a sense of insecurity in the minds of those to whom it applied and consequently against public good.
Such a clause, therefore, was opposed to public policy and as such it is void under Section 23 of the Contract Act, it was held.
It was further held that it was not possible to accept the contention that this was a contract entered into by the Corporation like any other contract entered into by it in the course of its trading activities and the Court, there fore, ought not to interfere with it.
The employees could not be equated with goods which could be bought and sold, nor could a contract of employment be equated with a mercan tile transaction between two businessmen much less when the contract of employment was between a powerful employer and a weak employee.
Although it was reiterated that the aforesaid rule 9(i) was supported by mutuality inasmuch as it con ferred an equal right upon both the parties but considering the unequal position of the Corporation and its employees, there was no real mutuality, this Court opined.
It was reiterated that the Corporation being covered by Article 12, its actions must also be in accordance with the Directive Principles prescribed by Part IV of the Constitution.
Refer ence may be made to paragraph 39 of the aforesaid decision where this Court noted that in the working of the Constitu tion, it was found that some of the provisions of the Con stitution were not adequate for the needs of the country or for ushering in a Welfare State and the constituent body empowered in that behalf amended the Constitution several times.
By the very first amendment made in the Constitution, namely, by the Constitution (First Amendment) Act, 1951 clause (6) of Article 19 was amended with retrospectitive effect.
Under this amemdment, sub clause (g) of Article 19(1) which guarantees to all citizens the right to carry on occupation, trade or business, was not to prevent the State from making any law relating to the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial of citizens or otherwise.
This amendment also validated the operation of all existing laws insofar as these had made similar provisions.
Article 298 of the Constitution, as originally enacted, provided that the executive power of the Union and of each State was to extend, subject to any law made by the appropriate legis lature, to the grant, sale, disposition or mortgage of any property held for the purposes of the Union or of such State as the case may be, and to the purchase or acquisition of property for those purposes respectively, and to the making of contracts.
and it further provided that all property acquired for the purposes of the Union or of 187 State was to vest in the Union or in such State, as the case might be.
This Court referred to the decision of this Court in Sukhdev vs Bhagatrarn Sardar Singh Raghuvanshi, ; , "the Governing power wherever located must be subject to the fundamental constitutional limitations.
" The High Court in the judgment under appeal was unable to accept the plea of alternative remedy and allowed the Writ Petition and declared regulation 9(b) of the Regula tions to be illegal and ultra vires and as a consequence thereof the orders terminating the services of respondents Nos. 1 to 4 were quashed and these respondents were deemed to be in the service of DTC and back wages and all other benefits by way of annual increments were directed to be paid.
Learned Solicitor General of India contended before us that in the facts and the circumstances of this case, there was sufficient guideline in the Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution.
It may be mentioned that under the general law of contract of employ ment, which was commonly known as the 'law of master and servant ', which is not termed as law of employer and employ ee, whether the contract of service is for a fixed period or not, if it contained a provision for its termination by notice, it could be so terminated.
If there was no provision for giving notice and the contract was not for a fixed period, the law implied an obligation to give a reasonable notice.
Where no notice in the first case or no reasonable notice in the second case was given and the contract was wrongfully terminated, such wrongful termination would give rise to a claim for damages.
In this connection, reference may be made to the observations of this Court in the five judge bench decision in Union of India & Anr.
vs Tulsi Ram Patel, [1985] Supp.
2 SCR 131 at p. 166.
This is also the position at common law.
See Chitty on Contract; 26th Edition Vol.
II, p. 808 or 25th Edition Vol.
II p. 712, paragraph 3490.
In this connection, reliance may also be placed at paragraphs 607 and 608 of Volume No. 16, 4th Edition of Halsbury 's Law of England.
Under the Industrial Law, subject to the relevant statu tory provision, the services of an employee could be termi nated by reasonable notice.
In such a case it was always open to the Industrial Tribunal to examine whether the power of termination by reasonable notice was exercised bona fide or mala fide.
If, however, the industrial Court was satis fied that the order of discharge was punitive, that it was mala fide, or that it amounted to victimisation or unfair labour practice, the 188 industrial court was competent to set aside the order and in proper cases, direct the reinstatement of the employee.
Reference may also be made to the observations of this Court in Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130.
If, however, the exercise of such power was challenged on the ground of being colourable or mala fide or on account of victimisation or unfair labour practice, the employer must disclose to the Court the ground of his im pugned action, so that the same may be tested judicially.
See the observations of this Court in L. Michael & Anr.
vs M/s Johnston Pumps India Ltd.; , at 498.
The relationship between a statutory corporation and its employees is normally governed by the relevant rules, regu lations and standing orders.
A statutory Corporation is "State" within the meaning of Article 12 of the Constitution and its action is subject to judicial review in certain cases and certain circumstances.
In the facts and circum stances of these cases, we have proceeded on that basis and we are of the opinion that it is the correct basis.
The exercise of such power under regulations similar to the one impugned which has been upheld in various types of cases are instructive in their variety.
It may be mentioned that the exercise of power under the very same Regulation 9(b) was upheld by the Court in a matter, wherein in an action by the employee of D.T.C., this Court in Delhi Transport Corpora tion Undertaking vs Balbir Saran Goel, ; at 764 held that even if the employees of the respondent thought that he was a cantankerous man and it was not de sirable to retain him in service it was open to them to terminate his services in terms of Regulation 9(b) and it was not necessary to dismiss by way of punishment for mis conduct.
Reliance was placed on this decision by the High Court in the Judgment under appeal.
The High Court in our opinion rightly pointed out, however, that the decision was on a different basis and could not be availed of in deciding controversy involved in the present determination.
In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , this Court dealing with the power of the Air India to terminate the services of a person who was alleged to have misbehaved with air hostesses, observed on page 6 16 of the report that the anxiety of the Legislature to effective ly achieve the object of duly protecting the workmen against victimisation of unfair labour practice consistently with the preservation of the employer 's bona fide right to main tain discipline and efficiency in the industry for securing the maximum production in peaceful, harmonious atmosphere is obvious from the 189 overall scheme of these sections.
This Court on page 620 of the report observed that the record merely disclosed that the appellant had suspicion about the complainant 's suit ability for the job in which he was employed and this led to loss of confidence in him with the result that his services were terminated under Regulation 48.
Loss of confidence in such circumstances could not be considered to be mala fide, it was held.
Similarly in Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006, where it was alleged that the services of an employee of Bombay Municipal Corporation were unsatisfactory, this Court held that the powers of dismissal after an inquiry and the powers of simpliciter termination are to distinct and independent powers and as far as possible neither should be construed so as to emasculate the other or to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequence.
It may be mentioned that the case of civil servants is, however, governed by their special constitutional position which accords them status; the legal relationship (between the Government and its servants) is something entirely different, something in the nature of status.
It is much more than a purely contractual relationship voluntarily entered into between the parties.
The duties of state are fixed by the law and in the enforcement of these duties society has an interest.
In the language of jurisprudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned.
See the observa tions of this Court in Roshan Lal Tandon vs Union of India, ; at 195 D E.
But even then the services of a temporary civil servant (although entitled to the protection of Article 311 of the Constitution) is subject to termina tion by notice.
But beside the above, the government may find it necessary to terminate the services of a temporary servant if it is not satisfied with his conduct or his suitability for the job and/or his work.
See the observa tions of this Court in Champak Lal Chiman Lal Shah vs The Union of India, at 204.
The services of a temporary government servant, further.
may be terminated on one month 's notice whenever the government thinks it neces sary or expedient to do so for administrative reasons.
It is impossible, this Court observed, to define before hand all the circumstances in which the discretion can be exercised.
The discretion was necessarily left to the Government.
See observations of this Court in Ram Gopal Chaturvedi vs State of M. P., ; at 475. 190 The aforesaid position of a government servant has been analysed in depth by the decision of this Court in Union of India vs Tulsi Ram Patel, (supra), where it was reiterated that the doctrine of pleasure is not a relic of the feudal ages or based upon any special prerogative of the Crown but is based on public interest and for the public good because it is as much in public interest and for public good that government servants who are inefficient, dishonest or cor rupt or have become a security risk should not continue in service and that the protection afforded to them by the Acts and the Rules made under Article 309 and by Article 311 of the Constitution be not abused by them to the detriment of the public interest and public good.
It was reiterated on page 190 of the report that if in a situation as envisaged in one of the three clauses of the second proviso to Clause (2) of Article 311 arises and the relevant clause is proper ly applied and the disciplinary inquiry dispensed with, the concerned government servant cannot be heard to complain that he is deprived of his livelihood.
This Court reiterated that the livelihood of an individual is a matter of great concern to him and his family but his livelihood is a matter of his private interest where such livelihood is provided by the public exchequer and the taking away of such livelihood is in the public interest and for the public good, and the former must yield to the latter public policy, it was reit erated, requires, public interest needs and public good demands that there should be such a doctrine.
It was further reiterated that the rules of natural justice are not immuta ble but flexible.
These rules can be adopted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is governed.
Not only, can the principles of natural justice be modified but in exceptional cases they can even be excluded.
See the observations of this Court at page 237 G of the aforesaid report.
Reference was also made to the observations of this Court at pages 214 215 of the aforesaid report.
Thus, the Constitution Bench laid down that even where a government servant enjoys constitutional status there can be exclusion of inquiry in the cases prescribed for termination of employment.
It must, however, be borne in mind that in some recent cases this Court has taken the view that a regulation pro viding for the termination of the service of an employee of the public corporation by notice only or pay in lieu thereof is invalid under Article 14 of the Constitution.
We have referred to the decisions of the Workmen of Hindustan Steel 's case (supra); West Bengal State Electricity Board 's case (supra) and Central Inland Water Transport Corpora tion 's case (supra).
Mr. 191 Ashok Desai, learned Solicitor General of India submitted that the decisions in the West Bengal State Electricity Board 's (supra) and Central Inland Water Transport Corpora tion 's case (supra) were incorrectly decided and the deci sion proceeded on the theory of unconscionable bargains and that termination by notice is against public policy.
He, however, drew our attention to Gheru Lal Parekh vs Mahadeo das Maiya & Others, [1959] Supp.
2 SCR 406 and 440 where it was held that though theoretically it may be permissible to evolve a new head under exceptional circumstances in a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads of avoidance of such clauses in these days.
Furthermore, as stated above, learned Solicitor General submitted that in the ordinary law of contract termination of employment by reasonable notice on either side has never been regarded as unconscionable.
Therefore, the learned Solicitor General submitted that this part of the above judgments was errone ous and should be overruled.
It must, however, be noted that in a later judgment of this Court, which followed this line of reasoning, it was recognised that a public corporation requires protection from employees who are inefficient or those who lacked probity or even made faulty policy decisions.
Reference was made to the decision of this Court in O.P. Bhandari vs 1.
T.D.C. & Ors.
, ; where this Court held that so far as some of the higher placed employees are concerned (described as 'gold collar ' employees) public sector under takings may be exposed to irreversible damage on account of faulty policy decisions or on account of lack of efficiency or probity of such employees and its very existence might be endangered beyond recall.
A public corporation may not be able to cut the dead wood and get rid of a managerial cadre employee in case he is considered to be wanting in perform ance or integrity.
Reference may be made to page 343 para graph 5 (supra) of the report.
It may be mentioned that in Moti Ram Deka 's case (supra) at p. 707 of the said report, a similar rule was considered by seven learned Judges in the context of government servants in Railway.
The majority judgment did not express opinion on the question of the Railway rule being bad on the ground of unguided and uncana lised power.
In his judgment, Mr. Justice Das Gupta held that the rule gave no guidance and was, therefore, violative of Article 14.
(See page 769 of the report).
On this point Mr. Justice Shah, as the learned Chief Justice then was, in his judgment observed at page 799 800 of the aforesaid report: "In considering the validity of an order an assumption that the power may be exercised mala fide and on that ground 192 discrimination may be practised is wholly out of place.
Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the author ity, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of power would appropriately be exercised for the protection of public interest on grounds of adminis trative convenience.
Power to exercise discretion is not necessarily to be assumed to be a power which will invali date the conferment of power.
Conferment of power has neces sarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power.
If in the scheme of the rule, a clear policy relating to the circum stances in which the power is to be exercised is discerni ble, the conferment of power must be regarded as being made in furtherance of the scheme, and is not open to attack as infringing the ' equality clause.
It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers conferred thereby.
The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger.
interest of the public being served by retaining the public servant concerned in service.
" Learned Solicitor General submitted that the question is whether it is the very existence of power which is bad or the exercise is bad in any specific case.
It was submitted that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power is exer cised only for that purpose.
It was submitted that even if a statute makes no clarification Court would ascertain if the statute laid down any principle or policy.
In such a case, the statute will be upheld although a given exercise may be struck down in particular cases.
See 193 the observations of this Court in Shri Ram Krishna Dalmia vs Justice Tandolkar; , at 299.
The guidance in the statute for the exercise of discretion may be found from the preamble read in the light of surrounding circumstances or even from the policy or the purpose of the enactment or generally from the object sought to be achieved.
See the observations of this Court in Jyoti Prasad vs The Adminis trator for the Union Territory of Delhi; , at 139.
Even a term like 'public interest ' can be sufficient guidance in the matter of retirement of a government employ ee.
See the observations of this Court in Union of India vs Col. J.N. Sinha & Anr., at 461 and such a provision can be read into a statute even when it is not otherwise expressly there.
Learned Solicitor General draw our attention to the observations of this Court in N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619.
It is well settled and the learned Solicitor General made a point of it that the Court will sustain the presumption of constitutionality by considering matters of common knowledge and to assume every state of facts which can be conceived and can even read down the section, it was submitted, if it becomes necessary to uphold the validity of the provision.
Reliance was placed on the decision of this Court in Commissioner of Sales Tax, M.P., Indore & Ors.
vs Radhakrishan & Ors.
, ; at 257.
In the case of Olga Tellis & Ors.
vs Bombay Munici pal Corporation & Ors., [1985] Suppl.
2 SCR 51 at 89 this Court has held that considering the scheme of the act, a section which enabled the Commissioner to remove encroach ment without notice must be read to mean that notice would be given unless circumstances are such that it is not rea sonably practicable to give it.
This Court further held that the discretion is to be exercised in a reasonable manner so as to comply with the constitutional mandate that the proce dure accompanying the performance of a public act must be fair and reasonable.
We must lean in favour of that inter pretation because it helps to sustain the validity of the law.
Learned Solicitor General submitted that the appeal involved herein the power of Delhi Transport Corporation (a statutory corporation) regarding termination of service simpliciter under Regulation 9(b).
These Regulations were framed as mentioned under Section 53 of the Delhi Road Transport Authority Act, 1950.
The said Act was replaced by the Delhi Municipal Corporation Act, 1957 but the regula tions have been saved and even though in 1971 a new Corpora tion, viz. the Delhi Transport Corporation (the appellant), was constituted 194 under the Road Transport Corporation Act, 1950, the regula tions have been continued.
The guidelines for the exercise of such power, according to the Solicitor General, could be found in the statutory provisions of the 1950 Act under which the regulations have been framed, the preamble; Sections 19 and 20 (equivalent to Sections 18 and 19 of the Road Transport Corporation Act, 1950); Section 53 (equivalent to 45 of the Road Transport Corporation Act, 1950); the context of Regulation 9(b) read with 9(a) and 15.
Even for the exercise of this power, reasons could be recorded although they need not be communi cated.
This will ensure according to the Solicitor General, a check on the arbitrary exercise of power and effective judicial review in a given case.
The present regulations are parallel, to but not identical with, the exceptions carved out under Article 311(2) proviso.
It was submitted that even the power of termination simpliciter under Regulation 9(b) can only be exercised in circumstances other than those in Regulation 9(a), i.e., not where the foundation of the order is 'misconduct '.
The exercise of such power can only be for purposes germane and relevant to the statute.
It was submit ted by the learned Solicitor General that these would in clude several cases which have been held by Courts to give rise to termination simpliciter including where the employee shows such incompetence or unsuitability as to make his continuance in employment detrimental in the interest of the Corporation, where the continuance of the employee is a grave security risk making his continuance detrimental in the interest of the Corporation, if there is a justifiable lack of confidence which makes it necessary in the interest of the Corporation to immediately terminate the services.
These are illustrative and not exhaustive.
It was submitted by the learned Solicitor General that the above guidelines of recording reasons and confining action under Regulation 9(b) for purposes germane and rele vant to the statute would prevent arbitrary action by the Corporation while enabling it to run its services efficient ly and in public interest.
Thus, there is no vice of arbi trariness in the regulation.
The judgment of the High Court, therefore, cannot and should not be upheld according to the learned Solicitor General.
In Civil Appeal No. 2876 of 1986, the learned Attorney General urged that the settled rule judicially evolved in matters of constitutional adjudication is that in order to sustain the constitutionality of legislation, the words of a statute may be qualified, its operation limited and condi tions, limitations and obligations may be implied or 195 read into the statute in order to make it conform to consti tutional requirements.
The underlying rationale, according to the learned Attorney General, of this rule of interpreta tion, or the doctrine of reading down of a statute is that when a legislature, whose powers are not unlimited, enacts a statute, it is aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requi site limitations and conditions to immunise it from the virus of unconstitutionality.
From what the learned Attorney General submitted and what appears to be the correct that every legislature intends to act within its powers.
There fore, in a limited Government, the legislature attempts to function within its limited powers.
It would not, therefore, be expected to have intended to transgress its limits.
In Re The Hindu Women 's Rights to Property Act, , the question before the Federal Court was about the meaning of the word 'property ' in the Act.
The Court limited the opera tion of the word 'property ' to property other than agricul tural land because otherwise the Central Legislature would have had no competence to enact the statute.
The Court observed at pages 26 and 27 of the Report as follows: "No doubt if the Act does affect agricultural land in the Governors ' Provinces, it was beyond the competence of the Legislature to enact it: and whether or not it does so much depend upon the meaning which is to be given to the word 'property ' in the Act.
If that word necessarily and inevita bly comprises all forms of property, including agricultural land, then clearly the Act went beyond the powers of the Legislature; but when a Legislature with limited and re stricted powers makes use of a word of such wide and general import, the presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.
The question is thus one of construction, and unless the Act is to be regarded as wholly meaningless and ineffective, the Court is bound to construe the word 'property ' as referring only to those forms of property with respect to which the Legislature which enacted the Act was competent to legis late; that is to say, the property other than agricultural land . " See also the observations of Chief Justice Gwyer at pages 27 to 29 of the Report on how legislations of legisla ture with limited powers should be construed.
See also the observations of this Court in R.M.D. 196 Chamarbaugwalla vs Union of India, ; , at p. 935 and 938.
There section 2(d) of defined 'prize competition ' as meaning any competition in which prizes are offered for the solution of any puzzle.
As defined, the statute covered not only competition in which success depended on chance but also those which involved substantial degree of skill.
It was conceded that the Act would be violative of Article 19(1)(g) of the Constitution if competitions which involved substantial degree of skill were included in the statutory definition.
See the observa tions of this Court at p. 935 of the report.
This Court rejected the argument of the petitioners therein that since the language of the definition of prize competition was wide and unqualified, it was not open to the Court to read into it a limitation which was not there.
This principle was reiterated and applied by this Court in the case of Kedar Nath Singh vs State of Bihar, [1962] Supp.
(2) SCR 769.
The question before this Court was about the validity of section 124A of the Indian Penal Code.
This Court in order to sustain the validity of the section on the touch stone of Article 19(1)(a) of the Constitution of India, limited its applica tion only to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence.
This Court held that it was well settled that if certain provisions of law construed in one way would make them consistent with the Constitution, and another interpre tation would render them unconstitutional, the Court would lean in favour of the former construction.
The provisions of the sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence.
Reference may also be made to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, ; where the question was about the Constitutionality of sec tion 41(aa) of the .
This Court upheld the validity of the section following the principle of interpreting the said rule in a way which would be consistent with the Constitution.
See the observations of this Court at p. 797 of the said report.
The technique of reading down has been adopted in numer ous cases to sustain the validity of the provision.
For example, in Jagdish Pandey vs The Chancellor, University of Bihar & Anr., ; 1, at pages 236 37, this Court made resort to section 4 of the Bihar State Universities Act, 1962.
It was observed that section 4 so read literally it did appear to give uncanalised powers to the Chancellor to 197 do what he liked on the recommendation of the Commission with respect to teachers covered by it.
But this Court was of the opinion that the legislature did not intend to give such an arbitrary power to the Chancellor and was of the opinion that section 4 should be read down and if it is read down, there was no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor and that power cannot be struck down ,as discriminatory under Article 14 of the Constitution.
See the observations of this Court in Sunil Batra vs Delhi Administration & Ors., ; There the constitutionality of section 30, sub section (2) and section 56 of the was in question.
Krishna Iyer, J, speaking for this Court at p. 511, para 34, of the report observed that the Court does not 'rush in ' to demolish provisions where judicial endeavour, amelioratively interpretational, may achieve both constitutionality and compassionate resurrection.
This salutary strategy, the learned Judge observed, of sustaining the validity of the law and softening its application was of lovely dexterity.
The semantic technique of updating the living sense of a dated legislation is, in our view, perfectly legitimate.
Semantic readjustments are necessary to obviate alegicidal sequel and a validation oriented approach becomes the phi losophy of statutory construction sometimes.
Similar obser vations were made in N.C. Dalwadi vs State of Gujarat, (supra).
In Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; , this Court upheld the valid ity of sections 9 and 10 of the Act by reading in several matters by necessary implication in order to sustain the validity of the sections.
In Charan Lal Sahu & Ors.
vs Union of India, [1989] Supp.
SCALE 1, at pages 53 and 54, paras 101 as well as p. 61, para 114, it was observed that this principle of reading down has been adopted in U.S. Supreme Court in several cases.
See also United States of America vs Edward A. Rumely, 97 Lawyers Edition 770 at 775.
The princi ple as enunciated in Rumely 's case (supra) has been approved by this Court in Shah & Co. vs State of Maharashtra, ; at 477 78.
This principle of reading down or placing limited construction has been adopted by courts in England in deciding the validity of bye laws and regula tions.
See Reg.
vs Sadlers Co., ; , at 460 and 463 and Faramus vs Film Artists Association, at 542.
The courts must iron out the creases, as said Lord Denning in Seaford Court Estates, This Court has also on numerous occasions followed this practice.
See the observations of this Court in M. Pentiah and Ors.
vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc.
vs A. Rajappa & Ors., ; See also H.M. Seervai 's 'Constitutional Law of India ', 3rd Edn.
I, pages 119 120.
In the background of this, the learned Attorney General also 198 drew our attention that the present regulation, as mentioned hereinbefore, should be read and construed in the said manner and the reasons and conditions of its exercise can be spelt out and it may be so construed.
He submitted that it should be spelt out that the regulation requires reasons to be there, reasons which are germane and relevant.
The principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma.
The principles of natural justice are not incapable of exclusion in a given situation.
For example, Article 311(2) of the Constitution which essentially em bodies the concept of natural justice, itself contemplates that there may be situations which warrant or permit the non applicability of the principles underlying Article 311(2) of the Constitution.
Reference may be made to the second proviso to Article 311 of the Constitution.
This court has also recognised that the rule of audi alteram partera can be excluded where having regard to the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provision, fairness in action does not demand its application and even warrants its exclusion.
If importing the right to be heard has the effect promptitude or the urgency of the situation so demands, natural justice could be avoided.
See the observations of this Court in Maneka Gandhi 's case at p. 681 of the report (supra).
This Court in Tulsi Ram Patel 's case (supra) had in terms ruled that not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded.
But the principles of natural justice must not be displaced save in exceptional cases.
Consequent ly, the learned Attorney General submitted that the words "where it is not reasonably practicable to hold an enquiry" may be imported into the regulations.
It was submitted by the learned Attorney General that the exclusion of audi alteram partera rule in circumstances which are circum scribed and coupled with the safeguard of recording of reasons which are germane and relevant, the termination in such a situation would not render the regulation unreasona ble or arbitrary.
Then it could not be said that the power was uncanalised or unguided if the regulation is construed and read down in the manner indicated above, according to the learned Attorney General.
The reading down, the learned Attorney General conceded cannot, however, be done where there was no valid reason and where it would be contrary to proclaimed purpose.
See the observations of this Court in Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , at p. 239 and 259.
On behalf of the workmen of the respondent DTC, Shri 199 Ramamurthi, submitted that the Constitutional questions of great public importance arising in the present appeal, have to be examined in the light of the law laid down by the Full Court in the case of R.C. Cooper vs Union of India, ; at 577 and by larger Constitution Benches in the cases of Maneka Gandhi vs Union of India (supra), Moti Ram Deka vs Union of India (supra), State of West Bengal vs Union of India, (supra) and the Constitution Bench decisions in the cases of Olga Tellis and Others vs Bombay Municipal Corporation and Others, (supra), Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61, Union of India vs Tulsiram Patel and Others (supra), Sukhdev Singh & Others vs Bhagat Ram Sardar Singh Raghuvanshi and Another (supra) and Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102.
According to Shri Ramamurthi these deci sions are authority for the following propositions: (a) The declarations in the provisions contained in the Fundamental Rights Chapter involve an obligation imposed not merely upon the "State" but upon all persons to respect the rights declared, unless the context indicates otherwise, against every person or agency seeking to infringe them.
See the observations of this Court in State of West Bengal vs Union of India, [1964] 1 SCR 371 at page 438: (b) Part III of the Constitution weaves a pattern of guarantee on the texture of basic human rights.
The guaran tees delimit the protection of those rights in their allot ted field.
They do not attempt to enunciate distinct right.
[See R.C. Cooper 's case (supra( at p. 577 of the report].
The extent of protection against impairment of a fundamental right is determined not by the object of the Legislature nor 2by the form of the action, but by its direct operation upon the individual 's rights.
(c) Any person who is deprived of his right to live lihood except according to just and fair procedure estab lished by law can challenge the deprivation as offending the right to life, conferred by Article 21.
See the observations of this Court in Olga Tellis 's case (supra( at 80 81 and 85 of the report.
Therefore, the holding to the contrary in A.V. Nachane & Anr.
vs Union of India & Anr., ; is no longer good law.
In any event Counsel is right that the observations made at p. 259 of the report (supra) were in a different context and the challenge 200 based on Articles 19(1)(g) and 31 does not appear to have any substance in resolving the present controversy before us.
Mr. Ramamurthi submitted that provision of any Rule that service shall be liable to termination on notice for the period prescribed therein contravenes Article 14 of the Constitution as arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken.
See the observations of this Court in Moti Ram Deka 's case (supra) at p. 770 and 751 of the re port.
It was submitted that Articles 14, 19 and 21 of the Constitution are inter related and the law must, therefore, now be taken to be well settled that Article 21 does not exclude Article 19 and even if there is a law providing a procedure for depriving a person of personal liberty (this will equally apply to life) and there is, consequently, no infringement of fundamental right conferred by Article 21, such law in so far as it abridges or takes away any funda mental right under Article 19 would have to meet the chal lenge of the Article.
See the observations of this Court in Maneka Gandhi 's case (supra).
Article 19(1)(g), it was urged, confers a broad and general right which is available to all persons to do work of any particular kind and of their choice.
See the observations in Fertilizer Corporation Kamgar Union 's case (supra) at p. 60 61 of the report.
According to Mr. Ramamurthi, there is a distinction between Public Employment or service and "pure master and servant cases".
He referred to the observations of this Court in India Tobacco Co. Ltd. vs The Commercial Tax Offi cer, Bhavanipore & Ors., at 657; followed in A.L. Kalra vs The Project and Equipment Corporation of India Ltd., ; at 664; Whenever, therefore, according to Shri Ramamurthi, there is arbitrariness in State Action whether it be of the Legislature or of the Executive or of an authority under Article 12, article 14 immediately springs into action and strikes down such State action.
In fact, the concept of reasonableness and non/arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution.
See the observations of this Court in Bandhua Mukti Morcha vs Union of India & Ors., at 101.
A violation of a principle of natu ral justice by State action is a violation of Article 14 of the Constitution, which can be excluded only in exceptional circumstances.
See the observations of this Court in Tulsi Ram Patel 's case (supra) at 229, and at 233 of the report.
It was, therefore, submitted that a clause authorising the ?201 employer to terminate the services of an employee whose contract of service is for an indefinite period or till the age of retirement, by serving notice violates the fundamen tal rights guaranteed under Articles 14, 19(1) (g) and 21 of the Constitution for Article 21 is violated when right to livelihood is taken away by termination of service of a person; employed for an indefinite period or till the age of retirement except for proved misconduct.
Assuming, it was argued, that in such a case right to livelihood can be taken away by termination of service by giving notice, nonetheless it could be validly done only, according to Shri Ramamurthi, if: (i) There is a fair and just procedure by way of (1) recording of reasons and (2) notice to show cause; (ii) And the right to terminate is restricted to exceptional grounds.
When the service of a person employed for an indefinite period or till the age of retirement is terminated, Shri Ramamurthi assets, then Article 14 is violated when there is no guidance for the exercise of power and reasons are not required to be recorded and principles of natural justice are abrogated.
Similarly Article 19(1)(g) is violated, according to him, for the reasons that there is no guidance, no requirement of reasons to be recorded and there is viola tion of the principles of natural justice.
Shri Ramamurthi reminded us that before India became independent in 1947, the was ap plicable only to British India on its own force.
By Merged State Laws Act, 1949 it was extended to the new provinces and merged States to the States of Manipur, Tripura by Vindhya Pradesh by Union territories Law Act 1950.
It was also extended to the States merged in the States of Bombay and Punjab by Bombay Act 4 of 1950 and Punjab Act 5 of 1950.
With the promulgation of the Constitution, the Indian Con tract Act 1872 extends to the whole of India except the State of Jammu & Kashmir.
Shri Ramamurthi asserted the what ever might have been the position in regard to the provinces comprised in British India before independence, as far as other areas, forming part of the Union of India under the Constitution are concerned, only the is applicable.
By article 372 of the Constitution, this Act has been continued in operation even after the Constitu tion came into force, subject to the other provisions of the Constitution.
202 A contract of service, according to Shri Ramamurthi is a species of contract and will, therefore, be governed by the provisions of the .
This Act has been held to be an Amending as well as a Consolidating Act.
Therefore, there can be no question of common law of Eng land, as made applicable in India during the British Rule, being the basis for deciding any question relating to con tract of employment after 1950.
In any event any provisions of either the , or of the English Common Law Applicable in British India before the Constitu tion came into force would be void by reason of Article 13 of the Constitution if it infringed any of the fundamental rights contained in Part III of the Constitution, pleaded Mr. Ramamurthi before us.
Under Section 2(h) of the an agreement (including an agreement of service) becomes a contract only when it is enforceable by law.
If it is not enforceable in law, it would be void by reason of section 2(g) of the Contract Act.
The question for consideration would, therefore, be whether a clause in an agreement of service when it is for an indefinite period or till the age of retirement providing for termination by giving notice would be enforceable? It was submitted by the workers ' union that it would not be enforceable if it vio lates the fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution.
See the observations of this Court in Moti Ram Deka 's case (supra) at 709 of the Report.
It was submitted that the broader submission was that under our Constitution there can be no contract of employment providing for termination of service by an em ployer of an employee by giving notice, when the employment is for indefinite period or till the age of retirement.
In any event, such a clause cannot find a place either in the contract of service or in the statutory provisions governing the conditions of service in the case of public employment under the 'state ' as defined in Article 12 of the Constitu tion.
Shri Ramamurthi urged that the observations contained in the judgment of this Court in Tulsiram Patel 's case (supra) at 166 of the report, regarding the ordinary law of master and servant cannot be construed as laying down the proposi tion that under the Indian law, even if a contract of serv ice is for an indefinite period or till the age of retire ment, it can still be terminated by giving reasonable period of notice.
In any event, even in the Common Law of England, a distinction is made between public employment and "pure master and servant cases" [See the observations of this Court in Sukhdev Singh 's case (supra) at page 657 of the report.
Mr. Ramamurthi submitted that the doctrine of pleasure 203 advanced by the learned Solicitor General of India was confined to employment under the Union of India and States dealt with under Part XIV, Chapter I of the Constitution and cannot and do not extend to employment under local or other authorities referred to under Article 12 of the Constitu tion.
There cannot be any pleasure by such authority in respect of employment of the permanent employee.
It was submitted by Shri Ramamurthi further that even in cases of employment under the Union and the States, the pleasure doctrine is limited by the express provisions of Article 311 of the Constitution.
For that reason, according to him, it has lost some of its majesty and power.
He referred us to the observations of this Court in Moti Ram Deka 's case (supra) at p. 704 and Tulsi Ram Patels 's case (supra) at page 196.
In dealing with the question of validity of rules autho rising the Government to terminate the services of temporary servants as upheld by this court in Champaklal Chimanlal Shah 's case (supra) and Ram Gopal Chaturvedi 's case (supra) it was submitted that it is important to note that the validity of the rules was challenged on the ground of denial of equality of opportunity in employment under the State guaranteed by Article 16 of the Constitution.
In that con text this Court observed at p. 20 1 (supra) of the report that there can also be no doubt, if such a class of tempo rary servants could be recruited, there could be nothing discriminatory or violative of equal opportunity if the conditions of service of such servants are different from those of permanent employees.
It is thus apparent that this Court, it was submitted, had no occasion to consider the reasonableness of a provision for termination of service on giving notice under Article 14 of the Constitution and, therefore, this decision can be of no assistance to the appellants.
Shri Ramamurthi submitted that since, audi alteram partem is a requirement of Article 14, in view of recent decisions of this Court, and conferment of arbitrary power itself is contrary to Article 14, the rule in question can, according to Shri Ramamurthi, no larger be sustained as valid.
As far as the decision in Ram Gopal Chaturvedi 's case (supra) was concerned, Shri Ramamurthi submitted that the reasons given for rejecting the argument that the rule confers an arbitrary and unguided power are not valid for in Moti Ram Deka ' case (supra), where the view of two learned judges of this Court who had held similar power to be arbi trary had not ever been noticed.
The observation that it is impossible to define before hand all the circumstances in which the discretion can be exercised and the discretion had necessarily to be left to the Government, has not taken into consideration the circumstance 204 that the denial of audi alteram parlem which is a require ment of Article 14, can be only in exceptional circumstances and, therefore, such circumstances have necessarily to be spelt out.
This Court had no occasion, according to Shri Ramamurthi, to consider the cumulative impact of the funda mental rights guaranteed by Article 14, 19(1)(g) and 21 of the Constitution.
Shri Ramamurthi sought to urge before us that industrial law recognises the right of the employer to exercise, bona fide, the power to terminate the services of workman by giving notice, except in case of misconduct, which is unlike the law of master and servant.
Shri Ramamurthi urged that it is important to note that in all cases under industrial law, decisions have been rendered by industrial tribunal when disputes had been raised by workmen challenging the action of the employer terminating their services by giving notice, under the terms of the contract of service or the Certified Standing Orders.
The question was never raised, nor could it be raised, before the Tribunals that the very term in the contract of service or in Standing Orders would have to stand the test of Articles 14, 19(1)(g) and 21 of the Con stitution.
Further a constitution bench of this Court had rejected the contention that Industrial Tribunals should make a distinction between public sector and private sector industries.
Reliance was placed on the observations of this Court in Hindustan Antibiotics Ltd. vs The Workmen & Ors., at 669.
On the consideration of the rele vant material placed before us, we are asked to come to the conclusion that the same principles evolved by industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence.
Therefore, all the decisions referred to by the appellant, it was argued, and interven ers, were all concerned with applying the industrial law even though some Of them dealt with employees, working in statutory corporations or public sector undertakings.
It was, therefore, submitted by Shri Ramamurthi that these decisions could afford no assistance to the Court, in decid ing the issues raised in the present case, where the validi ty of a term of employment, permitting the employer to terminate the services of a permanent employee by simply giving notice, is challenged on the ground that such a term violates fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution.
It was submitted fur ther that the constitutional guarantees under Articles 14 and 21 of the Constitution are for all persons and there can be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws apply and those who are outside their purview.
The laws applicable to the former 205 can only add to and not detract from the rights guaranteed by Part III of the Constitution.
It was important to note that all the decisions so far rendered by this Court striking down rules and regulations or a provision in the contract of service, authorising termination of service of permanent employees by giving notice relate to cases of non workman and we were referred to the decisions in West Bengal State Electricity Board 's case (supra), Central Inland Water Transport Corporation Ltd. 's case (supra) and O.P. Bhandari 's case (supra).
There is the theory that possibility of abuse of power is no ground for striking down the law.
Attention may be drawn to the observations of this Court in The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 and Commissioner of Sales Tax, Madhya Pradesh vs Radhakri shan & Ors.
(supra).
However, these decisions, it was sub mitted on behalf of the respondents, would have no relevance for the present case because the power to terminate the services of a person employed to serve indefinitely or till the age of retirement can be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Articles 14, 19(1)(g) and 21 of the Constitution.
Unless the exceptional circumstances are spelt out the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, it was urged.
This was particularly so because the requirement of audi alteram partem which is a part of the guarantee of Article 14 is sought to be excluded.
There can be no guidance available in the body of the law itself because the purpose for which an undertaking is established and the provisions dealing with the same in the law can provide no guidance regarding excep tional circumstances under which alone the power can be exercised.
The question involved, Shri Ramamurthi empha sised, in these cases is not the exercise of power which an employer possesses to terminate the services of his employee but the extent of that power.
Shri Ramamurthi drew our attention to the award and referred to paragraph 5.6 of the Shastri Award and other provisions of the award defining misconduct and also para graph 522 of the Award dealing with the procedure for termi nation of employment and 523 onwards.
Mr. Ramamurthi further submitted that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 cannot be rendered constitutional by reading the requirement of recording reasons and confin ing it to cases where it is not reasonably practicable to hold an enquiry 206 and reading it down further as being applicable to only exceptional cases would not be permissible construction and proper.
Shri Ramamurthi drew our attention to the true scope of Regulation 9(b) of the aforesaid Regulations in the light of the judgment of this Court in Balbir Saran Goel 's case (supra).
This rule, it has to be borne in mind, according to him, has been interpreted as applicable to all cases of termination including termination for misconduct as defined in the Standing Orders.
In the aforesaid decision, at p. 761 of the report.
this Court observed that: "Regulation 9(b) clearly provides for termination of serv ices in two modes: the first is where the services may be terminated without any notice or pay in lieu of notice.
This can be done among other reasons for misconduct.
The second mode is of terminating the services owning to reduction of establishment or in circumstances other than those mentioned in clause (a) which relate to termination without notice.
When termination is made under clause (b) one month 's notice or pay in lieu thereof is to be given to the employee.
Thus it is clear that if the employer chooses to terminate the services in accordance with clause (b) after giving one month 's notice or pay in lieu thereof it cannot amount to termination of service for misconduct within the meaning of clause (a).
It is only when some punishment is inflicted of the nature specified in Regulation 15 for misconduct that the procedure laid down therein for an enquiry etc.
becomes applicable.
" If this was the true scope of the Regulation, Shri Ramamurthi contended, then it was obvious that it leaves the choice entirely to the DTC Management either to proceed against the person for misconduct by holding an enquiry or for the same misconduct terminate his services by giving one month 's notice.
It is the conferment of such a power that has been held to be unguided and arbitrary in all decisions from Moti Ram Deka 's case (supra) to the more recent deci sions of this Court such as West Bengal Electricity Board 's case (supra), etc.
Therefore, it was submitted that the argument based on the assumption that Regulation 9(b) was confined to cases under than misconduct really overlooked the interpretation placed upon this Regulation by this Court.
Shri Ramamurthi further submitted that if regulation 9(b) con 207 fers this arbitrary power of leaving it to the DTC manage ment to pick and choose then it is plain that there is nothing in the provisions of the Act or the regulations from which the DTC management can find any guidance.
It was, therefore, the submission of the respondents that in order to conform to the Constitutional guarantees contained in Articles 14, 19(1)(g) and 21 of the Constitution as inter preted by this Court, the first and foremost the regulation will have to make a distinction between cases where services are sought to be terminated for misconduct and cases of termination on grounds other than what would constitute misconduct.
As far as termination or dismissal on ground of misconduct is concerned, ordinarily the detailed procedure for establishing misconduct had to be followed.
In cases where it is not possible to follow the detailed procedure, then at least the minimum procedure of issuing a show cause notice should be followed after recording reasons why it is not practicable to hold a full fledged enquiry.
In cases where even this requirement of the elementary principles of natural justice is not to be followed, then the regulation must itself indicate those cases in which principles of natural justice can be totally abrogated after recording reasons.
As far as termination of service of a permanent employee on grounds which do not constitute misconduct is concerned, assuming that this is held to be permissible, it can be only in very exceptional cases and that too after observing at least the elementary principle of natural justice of asking for explanation before terminating the services and also recording reasons.
Shri Ramamurthi urged that to read all this into the regulations would literally mean re writing the regulations which is not permissible under any of the decisions or the law.
As one of the cases cover termination under The Punjab Civil Services Rules, 1952, Shri Ramamurthi drew our atten tion to some of the provisions of these rules.
He drew our attention to rule 3.12 which provides that unless in any case it be otherwise provided in those rules, a Government employee on substantive appointment to any permanent post acquired a lien on that post and ceased to hold any lien previously acquired on any other post.
He also drew our attention to rule 3.15(a) which provided that except as provided in clause (b) and (c) of that rule and in note under rule 3.13, a Government employee 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result would be to leave him without a lien or a suspended lien upon a permanent post.
Clause (b) of rule 3.15 provided that notwithstanding the provisions of rule 3.14(a), the lien of a Govern 208 ment employee holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 6.21; or on his appoint ment substantively to the post of Chief Engineer of the Public Works Department.
And clause (c) of this rule provid ed that a Government employee 's lien on a permanent post, shall stand terminated on his acquiring a lien on a perma nent post (whether under the Central Government or a State Government) outside the cadre on which he is borne.
Note under rule 3.13 speaks about a Government employee holding substantially the post of a Chief Engineer of the Public Works Department, taking leave immediately on vacating his post he then shall during the leave be left without a lien on any permanent post.
The expression 'vacate ' used in the note refers only to vacation as a result of completion of tenure of attainment of superannuation.
Mr. R.K. Garg, appearing for the respondents in C.A. No. 4073 of 1986 stated that the Attorney General had rightly pointed out that employee 's services were terminated under Para 522 of the Shastri Award merely because he had failed to mention a loan of Rs. 1.5 lakhs taken from another Branch of the Bank.
Mr. Garg pointed out that the loan had been repaid.
The failure to mention this loan had deprived the appellant of his livelihood.
The use of this power claimed under Para 522 of the Shastri Award was not defended by the Attorney General in this case.
We had fairly conceded that he might not support this termination when the case is heard on merits.
But, that does not derogate from the wide ampli tude of this uncontrolled, arbitrary power claimed by the management under Para 522 of the Shastri Award.
Powers claimed under Para 522 must, therefore, be examined in the background of the facts and circumstances of this Appeal.
It was submitted that this Court must hold that nothing in Para 522 of the Shastri Award confers on the management power so far as they can get rid of permanent employees of the Banks merely after service of notice on the imaginary belief that they were doing so for "efficient Management" of the Banks.
Mr. Garg reminded us that it is common knowledge that all despots act as tyrants in the firm belief that the intolera ble indignities and atrocities they inflict, were necessary in public interest and to save the Society.
Mr. Garg submit ted that the rule of law cannot be preserved if absolute, uncontrolled powers are tolerated and fundamental rights or Directive Principles are allowed to be reduced to a "dead letter".
Mr. Garg urged that the fundamental requirements of natural justice are not dispensible luxury.
The express language of Para 522 of 209 the Shastri Award is totally destructive of this require ment.
The express language as mentioned hereinbefore of Para 522 of the Shastri Award provides: "(1) In cases not involving disciplinary action for miscon duct and subject to clause (6) below.
The employment of a permanent employee may be terminated by three months ' notice or on payment of three months ' pay and allowances in lieu of notice.
The services of a probationer may be terminated by one month 's notice or on payment of a month 's pay and allow ances in lieu of notice." Rule 148(3) reads: "(3) Other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" "Note: The appointing authorities are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded.
" Rule 348(4) reads: "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice." Rule 149(3) reads: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not howev er, required in cases of dismissal or removal as a discipli nary measure after compliance with the provisions 210 of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" It was urged by Mr. Garg that the services of a perma nent bank employee cannot be terminated without charge of 'misconduct ' and without an enquiry and the aforesaid para graph gives no indication as to on what conditions this arbitrary uncontrolled power can be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts.
It was further urged that this provision provides for "insecurity of tenure" for lakhs of permanent employees, Articles 14, 19(1)(g) and 21 of the Constitution and the integrated protection of these Fundamental Rights excludes the "doctrine of pleasure" and insists on security of tenure "during good behaviour".
The right to livelihood cannot be rendered precarious or reduced to a glorious uncertainty", it was urged by Mr. Garg.
Mr. Garg submitted that the right to "hire and fire" was the prerogative claimed by the employer in the days of uncontrolled "laissez faire.
" This was the "doctrine of pleasure of the Crown" in case of Government servants, who held office during the pleasure of the King who had absolute powers over his sub jects.
Articles 14, 19(1)(g) and 21 secure the rights of the citizen and act as limits on the powers of the "State" in Democratic Republic of India.
Unjust, arbitrary, uncon trolled power of "premature" termination of services of permanent employees should not be tolerated according to Mr. Garg by the Constitution of free India.
In case of Government servants, Articles 311(1) and 311(2) of the Constitution expressly restrict the "doctrine of pleasure" contained in Article 310.
Article 14 also insists on natural justice as was provided in Article 311(2), in order to prevent arbitrary use of power of termi nation.
Articles 19(1)(g) and 21 read together require just, fair and reasonable procedure for termination of services for good cause.
Without these safeguards, employees are reduced to the status of slaves of their masters.
Employers are no longer masters as in the days of slavery of feudal relations, Mr. Garg tried to emphasise.
He submitted that Article 14 of the Constitution did not permit permanent railway employees to be exposed to termination of their services on notice without charge of misconduct or a reason able opportunity to answer the charge.
Rules 148 and 149 of the Railway Establishment Code which have been set only hereinbefore have the same effect, as is the effect of para 522 of the Shastry Award, and both these Rules were declared unconstitutional in Moti Ram Deka 's case (supra) by a seven 211 Judges ' Bench, according to Mr. Garg.
Rules 148 and 149 were found violative of Article 14 for two reasons, it was submitted: (i) Railway servants in the matter of termination of service could not form a separate Class from other Govern ment servants (As per majority view, in the Judgment of Justice Gajendragadkar, in Moti Ram Deka '5 case ; ,729 731).
(ii) Rule 148 conferred unguided, uncontrolled power of termination and, therefore, was hit by Article 14.
(As per Justice Subba Rao and Justice Das Gupta, in Moti Ram Deka 's case (supra).
Mr. Garg sought to urge that this binding decision of seven Judges ' Bench in Moti Ram Deka 's (supra) was applied in Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593 by the Constitution Bench of five Judges to strike down a Service Rule which permitted compulsory retirement on completion of 10 years ' services on the ground of 'inefficiency ' etc.
This Court held that Compulsory retirement could not be tolerated even after 10 years of service in view Of such retirement being not based on rele vant considerations, including expected longivity of life of the employees in India.
If the power of removal by way of compulsory retirement even after ten years was held uncon stitutional in Gurdev Singh 's case (supra) para 522 of the Shastri Award was far more arbitrary, unjust and unreasona ble, it was urged before us.
It was reiterated before us that in view of the binding decision of seven Judges in Moti Ram Deka 's Case and its application by five Judges in Case of compulsory retirement after 10 years in Gurdev Singh 's Case (supra), it is not open to the employees to submit that similar powers claimed under paragraph 522 of the Shastri Award, even without 10 years ' service for removal without charge of 'misconduct ' and without enquiry, can be upheld as constitutional on any grounds whatsoever.
It cannot be upheld as constitutional on any grounds whatsoever.
It cannot be done without over ruling Moti Ram Deka 's case or without an express constitu tional provision like second Proviso (a), (b) or (C) to Article 311(2), which was adopted.by the Constituent Assem bly, not by a court of law, it was reiterated before us.
212 It was submitted that no principle of interpretation permits reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate.
(R. M.D.C. 's case (supra).
It was urged that it was established law that on reading down a provision, Court cannot preserve a power for a pur pose which is just the opposite of what the legislature had intended.
Para 522 of the Shastri Award was not at all intended to be used within limits expressed or implied.
The Court must not legislate conditions such as were adopted by the Constituent Assembly in case of second Proviso to Arti cle 311(2) in the Constitution of India.
Even Parliament could not graft such limitations on Article 311(2), if second Proviso to Article 311 was not there in the Constitu tion.
This Court cannot and ought.
it was submitted not to arrogate powers to legislate what was patently outside even the competence of Parliament of India.
It was submitted that in Tulsi Ram Patel 's Case, the majority decision could not hold second Proviso to Article 311(2) unconstitutional.
In order to give effect to the express language of second Proviso to Article 311(2), Court denied the protection of Article 14 to permit the President to terminate the services without following principles of natural justice ' in cases covered by the said Proviso.
In every other case, natural justice is the command of Article 311(2) of the Constitution was submitted.
The operation of Articles 14, 19(1)(g) and 311(2) of the Constitution does not permit Courts to lay down essential legislative policy, such as was laid down by the Constituent Assembly to over ride 311(2) of the Constitution.
Mr. Garg, therefore, submitted that the requirement of defining 'misconduct ' in the Standing Orders and providing by meticulous provisions for a just, fair and reasonable enquiry into charges of 'misconduct ' are the mandatory requirement of Industrial Employment Standing Orders Act.
(U. P State Electricity Board vs Hari Shankar Jain, Shri Garg urged that the I.L.O. Conventions, accepted by India.
required all employers to frame Standing Orders.
He further urged that the demands of natural justice, which form part of Article 14 of the Constitution have been raised to the status of 'public policy ' controlling section 23 of the .
On that basis, clauses in 213 contract of employment which provide for removal from serv ice on the will of the employer have been condemned as 'The Henry VIII Clause ' (see the observations of this Court in Central Inland Water Transports case (supra) against the ethos of the Constitution of Socialist Democratic Republic of India.
In this connection, reference was made to the decision of this Court in Central Inland Water Transport 's case (supra) and Maneka Gandhi 's case (supra).
In India, Shri Garg submitted.
workers have a right to participate in the management.
The participation in the management cannot exclude the 'power to be heard ' and thus participate in a decision to remove a permanent employee.
Government alone has power to refer to the industrial tribunal, Shri Garg submitted.
He was against any reading down which is contrary to the principles of interpretation.
He referred to the observations of the Privy Council in Nazir Ahmed 's case [AIR 1936 PC 253].
He submitted that if two provisions exist, firstly, to remove from service after holding an enquiry on a charge of a 'misconduct '; and secondly without serving a charge sheet or holding an enquiry all provisions for hold ing enquiry will be rendered otiose and will be reduced to a mere redundancy.
Such an interpretation will expose workers to harsher treatment than those guilty of misconduct, who will enjoy greater protection than those who have committed no misconduct.
Such powers are patently discriminatory.
Reference under section 10 of the Industrial Disputes Act would serve no purpose, submitted Mr. Garg.
Court has a duty, according to him.
to correct wrongs even if orders have been made which are later found to be violative of any fundamental right and to recall its orders to avoid injus tice.
He referred to the decision of this Court in A.R. Antulay vs R.S. Nayak and Anr., ; He remind ed us that no draft had been submitted by the Attorney General or the Solicitor General, which could be added as a proviso to para 522 of the Shastri Award by this Court as a piece of judicial legislation to amend the impugned para 522.
Substantive provision of para 522 could not be con trolled or curtailed effectively so that its operation could be confined within narrow constitutional limits.
Mr. Garg reminded us that it is not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogate uncontrolled unconstitutional powers, which are neither necessary nor germane for supposed efficiency of services in the Banks as a business enter prise.
Mr. Garg submitted that in a system governed by rule of law, discretion when conferred upon executive authorities must be confined within clearly defined limits.
The rule of law from this point means that decisions should be made by the application of known 214 principles and rules and.
in general, such decisions should be predictable and the citizen should know where he is.
Law can only reach its finest moments when it has freed man from the unlimited discretion of ruler.
He referred to the obser vations of this Court in S.C. Jaisinhhani vs Union of India and Ors., ; at p. 718 19.
On behalf of the Interveners in Civil Appeal No. 2876, Mr. P.P. Rao submitted that the aforesaid decision in Tulsi Ram Patel 's case (supra) was an authority for the proposi tion that but for clause (b) of the second proviso to Arti cle 311(2) of the Constitution, the principles of natural justice could not have been excluded from the scope of Article 14 of the Constitution.
It was urged by him that the said second proviso to Article 311(2) being itself a consti tutional provision, such exclusion was upheld by this Court in the said Tulsi Ram Patel 's case (supra).
page 237 and at last para to p. 242.
Mr. Rao drew our attention to the well settled rule of interpretation and submitted that where two interpretations are possible, one of which would pre serve and gave the constitutionality of the particular statutory provision while the other would render it uncon stitutional and void, the one which saves and preserves its constitutionality should be adopted and the other should be rejected.
Fie, further, submitted that unless the provision of the Constitution itself excludes the principles of natu ral justice, they continue to be applicable as an integral part of the right to equality guaranteed by the Constitu tion.
It was further reiterated that as the employees of the DTC were not Government employees, Article 311(2) of the Constitution was not applicable.
Consequently, the second proviso thereof was also not applicable, with the result that Article 14 of the Constitution fully applied to them and it included the principles of natural justice as held in Tulsi Ram Patel 's (supra) itself at p. 233, last paragraph.
Mr. Rao submitted that it is not permissible to read down statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever.
That would be reading down contrary to the expressed or manifest intention of the legislature.
He drew our attention to the observations of this Court in Minerva Mills Limited vs Union of India & Ors., ; at 261.
Therein, at p. 259 of the report, it was reiterated that the principles of reading down could not be distorted even when words of width are used inadvertently.
In the instant case, Mr. Rao submit ted, reading down would amount to distortion of the right to equality conferred by Article 14, which was regarded as a basic feature of the Constitution.
Nothing short of an amendment of the Constitution could cut down the scope of the basic 215 principle of equality, submitted Mr. Rao then referred to us Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 S.C.R. 1 and submitted that any constitutional amendment which impairs the doctrine of equality would be liable to be declared unconstitutional on the ground of violation of the basic structure of the Constitution.
In the instant case, Mr. Rao submitted, regulation 9(b) deliberately conferred wide power of termination of service without giving a reasonable opportunity to an employee even if he is a regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry.
Therefore, the intention of the regulation making authority was clear and unambiguous.
The provision is not capable of two interpretations.
Consequent ly, the question of reading down did not arise.
Mr. Rao drew our attention to the observations of the Supreme Court of America in Elliott Ashton Welsh, II vs United States, 26 Lawyers ' Edition 2nd, 308 at 327.
Mr. Rao submitted that the decisions referred to by the learned Attorney General were not applicable to the instant case.
He submitted that the decision of the Federal Court in Re The Hindu Women 's Rights to Property Act 's case (supra) involved the interpretation of a single word in the context of legislative competence.
That was not the context of the present controversy, submit ted Mr. Rao.
Mr. Rao submitted that R.M.D. Chamarbaughwal la 's case (supra) was a case on severability.
That was a case where the word 'competition ' was interpreted.
In the present case, the suggested reading down involves, according to Mr. Rao, not interpretation of any single word in regula tion 9(b) but adding a whole clause to it which amounted to rewriting the provisions.
Courts have refused to rewrite legislation to make up for the omissions of the legislature.
Reliance was placed by Mr. Rao on Nalinakhya Bysack vs Shyam Sunder Halder & Ors., ; , at p. 544 545.
Mr Rao referred to the observations of this Court in Kedar Nath Singh vs State of Bihar, (supra) involving the interpreta tion of section 124A IPC in the context of Article 19(1)(a) of the Constitution.
The content of Article 19(1)(a) was not cut down.
In the present case, the suggested reading down would inevitably drain out Article 14 of its vitality.
Shri Rao drew our attention to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, (supra) and submitted that the said decision did not involve cutting down the scope of a fundamental right.
He also drew our attention to the decision of this Court in Jagdish Pandey vs The Chancellor, University of Bihar (supra) which did not involve reading down so as to sacrifice the principle of natural justice 216 which are considered an essential part of the rule of law.
In Municipal Committee, Amritsar & Anr.
vs State of Punjab & Ors.
, ; , this Court was concerned with the intention of the legislature and interpreted the Act con sistent with the said intention.
In the instant case.
the intention was to confer power of termination of services of all categories of employees without any further enquiry.
Sunil Batra vs Delhi Administration (supra) was again a decision where this Court found that the intention of the legislature was not to confer arbitrary power.
In the in stant case, the intention was different.
N.C. Dalwadi vs State of Gujarat.
(supra) was a case of giving reasonable interpretation to a provision which was capable of such an interpretation.
In the scheme of DTC Regulations.
regulation 9(b) was not susceptable to two interpretations.
submitted Mr. Rao.
According to Mr. Rao, the principle of reading down was not applicable where the intention of the law maker was to confer too wide a power intended to be exercised without giving an opportunity to the affected party to be heard.
It was, therefore, submitted that the principle of reading down was not applicable and if applied would amount to cutting down the scope of Article 14 and subjecting permanent em ployees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution.
Mr Nayar, appearing in Civil Appeal No. 1115 of 1976 (Shri Samara Singh vs Zila Parishad Ferozepure) for the respondent, drew our attention to the fact that the appellant, Shri Satnam Singh was appointed by the respondent vide letter of appointment dated 9th March.
1961 the appel lant ceased to work for the respondent, when his services were terminated simpliciter vide Resolution dated 26th November, 1965.
He, therefore, had worked for the respondent only for a short period of less than four years.
The serv ices of the appellant ceased on the basis of the contract.
the terms of which were mutually agreed between the parties.
In case he had continued to work, he would have reached the age of superannuation in the year 1984.
His total emoluments with effect from 1st November, 1964 to 30th September, 1984 would have been approximately Rs.2,46,464.
Mr. Nayar filed a detailed statement and stated that the appellant ceased to work for the respondent with effect from 26th November, 1964 when he was discharged from service.
In this case, it is necessary to bear in mind that the appellant, Shri Satnam Singh was appointed by the respond ent, Zila Parishad, Ferozepure by letter of appointments dated 9th March.
The Board approved his terms of appointment and the same were duly 217 accepted by the appellant.
The 'relevant clause of Contract between the parties for present purposes was clause 4 which was as follows: "His services will be terminated on one month 's notice on either side provided it will be open to pay him his salary for the period by which the notice falls short of one month.
Similarly, if he wishes to resign he may do so by depositing with the District Board his salary for the period by which the notice given by him fails short of one month.
" The appellant, however, was continued to be governed by the Statutory Rules, known as District Board Rules, 1926.
According to the respondent, the appellant did not cooperate inasmuch as he was not available in the Headquarters and presumably left without permission and without handing over important record and documents of the District Board, etc.
But the appellant 's version, as stated in the grounds of appeal, was entirely different.
He urged that it was on account of vindictive attitude on the part of some of the employees of the respondent, which had produced his termina tion order without enquiry.
The District Board resolved that in terms of condition 4 of the terms of appointment, his services should be terminated on one month 's notice or pay in lieu thereof.
Mr. Nayar submitted that rule 1(i) of District Board Rules, 1926, Part V also gave right to both the parties to terminate the contract of employment on one month 's notice, etc.
The said rule reads as follows: "In the absence of a written contract to the contrary every officer or servant employed by a District Board shall be entitled to one month 's notice before discharge or to one month 's wages in lieu thereof, unless he is discharged during the period of probation or for misconduct or was engaged for a specified term and discharged at the end of it.
" The services of the appellant were terminated vide Resolution dated 26th November, 1964 of the Board and he was discharged by allowing him one month 's salary in lieu of notice.
The termination order was dated 14th December, 1964.
The appellant, Shri Satnam Singh filed a suit for declara tion in the Court of Senior Sub Judge, Ferozepure, challeng ing the order of termination dated 14th December, 1964 as illegal, void, ultra vires, etc.
The Senior Sub Judge, Ferozepure, vide judgment and decree dated 9th January, 1969 held 218 that the discharge of the appellant amounted to dismissal and as clearly no enquiry was held against him, the termina tion simpliciter was bad in law.
The respondent, Zila Pari shad filed an appeal in the Court of 3rd Additional District Judge, Ferozepure, who vide order dated 22nd December, 1969 affirmed the decision of the trial Judge and dismissed the appeal of the respondent.
The respondent filed regular appeal in the High Court of Punjab and Haryana at Chandi garh, inter alia, pleading that the appellant was validly discharged in terms of his appointment order and rule 1(i), Part V A of the District Board Rules, 1926.
The learned Single Judge of the High Court considered the matter in detail and referred to various judgments of this Court and held that it could not be said that the action of termination prima facie amounted to an order of dismissal even though the appellant was at the time a con firmed employee of the respondent.
The learned Single Judge found that the respondent had a contractual right to termi nate the services of the appellant by giving a month 's notice or a month 's salary in lieu of notice.
According to Shri Garg, the removal of the appellant from service was in accordance with the terms governing his appointment.
Merely because on the 7th of November, 1964, the respondent re solved to charge sheet the appellant for acts of omission and commission and ordered an enquiry, and such an enquiry never commenced, would certainly not be enough reason to hold that the termination of the appellant 's services, was ordered by way of punishment and therefore, amounted to his dismissal, argued Mr. Nayar.
It was submitted by Mr. Nayar that the appellant had conceded that condition No. 4 was legally good but he had argued that it was not meant to be effective after the appellant had been confirmed.
Aggrieved by the order mentioned above, the appellant had filed Letters Patent Appeal before the Division Bench of the High Court.
The Division Bench of the High Court by an order dated 13th September, 1972 referred the question of law for the decision of the full bench.
The full bench of the High Court refrained the question of law as under: "Whether, the termination of services of a permanent Dis trict Board Employee by giving him one month 's notice or pay in lieu thereof in terms of the conditions of his appoint ment and/or rule 1 in part V A of the District Board Rules, 1926, is bad in law and cannot be made? 219 The majority of the learned Judges, inter alia, held that the appellant not being a government servant cannot have the protection of Article 311 of the Constitution as he was not a civil servant under the Central Government of the State Government.
He was an employee of the District Board and his tenure of appointment was governed by the provisions of the District Board 's Act, 1883 and the rules flamed thereunder as well as by the terms and conditions of his appointment.
The condition No. 4 gave mutual right to the District Board as well as to the appellant to terminate the service by giving one month 's notice or pay in lieu of notice, etc.
The condition in the appointment letter shall not be deemed to have been abrogated by the Punjab Civil Services Rules.
The Court held further that the condition stated in the letter of appointment of the appellant contin ued to bind the parties even after the appellant 's confirma tion and his services could be terminated by an order of discharge simpliciter in accordance with the condition No. 4 thereof as this condition was almost in the same terms as Rule I in Part V A of the Rules.
It was further held by the full bench of the High Court that the Punjab Civil Service Rules had no over riding effect and these rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be".
Rule 8.1 of the Business Rules reads as under: "In all matters relating to the conditions of service of its employees the Board shall so far as may be follow the rules from time to time in force for servants of the Punjab Gov ernment.
" The finding of the Letters Patent Bench in this regard was as under: "According to Rule 8.1 ibid, the Punjab Civil Services Rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be".
Naturally, if a provision was made anywhere else, which went counter to the Punjab Civil Services Rules, the application of the latter rules It thus follows that the Punjab Civil Services Rules were not to apply to the appel lant in respect of matters for which specific provision was made in his letter of appointment, which constituted the contract of service between him and the District Board, as he joined 220 service on those terms.after accepting the same.
" The learned Chief Justice of Punjab & Haryana High Court, however, dissented.
The answer to the question, therefore, was given in the negative vide order dated 3rd April, 1974.
The Division Bench of the High Court which heard the matter after the question of law was answered by the Full Bench, dismissed the appeal of the appellant vide order dated 28th October, 1974 and this appeal to this Court arises from this order.
The appellant in Civil Appeal No. 1115/76, who appeared in person before us reiterated the relevant facts and urged that his removal was bad and the rule under which he was removed may be quashed.
It may be mentioned that as regards letter of Shri Kuldip Singh Virk to the Senior Superintend ent of Police, Ferozepure regarding the charges of corrup tion against the appellant, a case under section 5(2) of the Prevention of Corruption Act was registered.
The appellant was tried for the said alleged offence and acquitted of the charges by the Special Judge Ferozepure.
A further case was registered under sections 381/ 409 of IPC against the appellant.
Accordingly, the appellant was tried by the Judicial Magis trate Ferozepure.
The charge was framed by the Judicial Magistrate against the appellant.
Against the aforesaid, the appellant filed a petition in the High Court and the charge and the proceedings in question were thereupon quashed by the High Court in July/August, 1967.
There were three more cases tried by the Special Judge, Ferozepure and acquitted.
The appellant filed a document in this Court claiming the monetary claim on the basis that his termination was wrongful.
According to the appellant, he was entitled to recover Rs.4,83,061.90 paise.
However.
according to the statement filed by Shri Nayar, learned counsel for the respondents in this case, the appellant was entitled to withdraw from the District Board Rs.2,46,464.46 paise, in case he would have been in service before his date of super annuation, i.e., 30th September, 1984.
There is no evidence from either side as to whether the appellant had worked somewhere else though the appellant did not work with the respondent because of his suspension.
The appellant had, however, stated that he did not so work.
In that view of the matter, if the contentions or ' the appellant are accepted that the clause under which the terms of employment of the appellant was agreed and under which the termination was effected without any enquiry and further in view of the fact that the learned trial Judge before whom the appellant had filed the suit first and decreed the suit declaring the 221 appellant to be entitled to be in service, the appellant, in our opinion.
should rightly be granted a monetary claim for Rs.4,83,061.90 paise and further interest at 6% from 30th September, 1984.
This would be in consonance with justice and equity in the facts and the circumstances of this case.
This order, however, will have to be passed if we accept the contention on behalf of the appellant herein on the con struction of the clause.
In the matter of M/s Indian Airlines, which is the subject matter of the Application for Intervention No. 1 of 1990:in Civil Appeal No. 2846 of 1986, Mr. Lalit Bhasin, on behalf of the interveners contended that there has been distinction between the discharge simpliciter and dismissal from service by way of punishment.
According to Mr. Bhasin the effect of the judgments of this Court in the Central Inland Water 's case (supra) and West Bengal 's (supra) was to take away the right of the employer to terminate the serv ices of an employee by way of discharge simpliciter.
Accord ing to Mr. Bhasin, this Court had recognised the existence of the inherent right of an employer to terminate the serv ices of an employee in terms of the contract of employment and also under the various labour enactments.
Attention of this Court was invited to the provisions of the , which applies to all industrial establishments whether in the public or private sector.
Under and as a part of the said Act, model standing ' orders are set out and Standing Order No. 13 provides for simple termination of employment by giving one month 's notice etc.
Similarly, there are provi sions under various Shops and Establishments Acts of differ ent States providing for termination of employment of perma nent employee after giving one month 's notice or pay in lieu of notice.
Attention of this Court was invited to section 30 of Delhi Shops and Establishments Act.
The Industrial Disputes Act itself makes distinction between discharge and dismissal and attention of this Court was invited to section 2(00) of the Industrial Disputes Act, which defines 'retrenchment '.
This section expressly ex cludes termination of services as a result of nonrenewal of contract of employment.
Section 2(s) of the Industrial Disputes Act defines 'workman ' to include any person who has been dismissed, discharged or retrenched.
Section 2A distin guishes discharge, dismissal and retrenchment.
It is pertinent to point out that the Original Regula tion 13 of Indian Airlines Employees Service Regulations was set out as under: 222 "13.
The services of an employee are terminable at 30 days on either side or basic pay in lieu: Provided however, the Corporation will be at liberty to refuse to accept the termination of his service by an em ployee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management.
" After the decisions of this Court in Central Inland Water 's case (supra), Indian Airlines initiated steps to amend its Regulation 13 and bring it in line with Article 311(2) of the Constitution as directed by this Court in Hindustan Steels Lid ' case (supra).
It appears that the Board of Directors of Indian Airlines had accordingly ap proved of the amendments to Regulation 13 and the amended Regulation reads as under: "(a) The services of an employee may be terminated without assigning any reasons to him/her and without any prior notice but only on the following grounds not amounting to misconduct under the Standing Orders, namely: (i) If he/she is, in the opinion of the Corporation (the Board of Directors of Indian Airlines) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the inter est of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Indian Airlines), a grave security risk making his/her continuance in a service detrimental to the interests of the Corporat ion; OR if in the opinion of the Corporation (the Board of Directors of Indian Airlines) there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary in the interest of the Corporation, to immediately terminate his/her services.
223 (b) The employee can seek termination of his/her employment by giving 30 days notice or basic pay in lieu: Provided however the Corporation will be at liberty to refuse to accept the termination of his/her service by an employee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management." According to Mr. Bhasin, in the amended Regulation 13, Indian Airlines had taken care to set out the circumstances in which the services of an employee can be terminated by way of discharge and without holding enquiry.
Mr Bhasin urged that these are eventualities which do not constitute misconduct and yet retention of an employee in the service by the management for any one of the grounds mentioned in the aforesaid Regulation might be considered as detrimental for the management or against public interest.
Mr. Bhasin submitted that the power has been vested with the Board of Directors and not with any individual.
According to Mr. Bhasin, plain reading of Regulation 13, as amended, would clearly establish that the vice.
if any, or arbitrariness is completely removed and sufficient guidelines are made avail able to the highest functionary, namely, the Board of Direc tors to exercise the restricted and limited power now avail able to the employer under these Regulations.
Similar submissions have been made on behalf of Air India, who are interveners.
Submissions made hereinbefore were alternative submissions.
The original Regulation 48 of Air India Employees Service Regulations was as follows: "Termination . ' The services of an employee may be terminated without as signing any reason, as under: (a) of a permanent employee by giving him 30 day 's notice in writing or pay in lieu of notice; (b) of any employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice: (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice.
224 Explanation. ' For the purposes of the regulation, the word "pay" shall include all emoluments which would be admissible if he were on Privilege leave.
" After the decisions of this Court declaring the afore said Regulation as void in Civil Appeal No. 19 of 1982 in the Case of Manohar P. Kharkar & Anr. vs Kaghu Raj & Anr., Air India amended the aforesaid Regulation, which now reads as under: "(a) The services of a permanent employee may be terminated without assigning any reasons to him/her and without any prior notice but only to the following grounds not amounting to misconduct under Service Regulation 42, namely: (i) if he/she is, in the opinion of the Corporation (the Board of Directors of Air India) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the interests of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Air India), a/grave security risk making his/her continuance in service detrimental) to the interests of the Corporation; OR If, in the opinion of the Corporation (the Board of Direc tors of Air India), there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary, in the interest of the Corporation, to immediately terminate his/her services.
(b) The services of an employee on probation may be termi nated without assigning any reason to him/her but on giving 30 days notice in writing or pay in lieu thereof.
(c) The services of a temporary employee may be terminated without assigning any reason to him/her but on giving 15 days notice in writing or pay in lieu thereof.
225 Explanation For the purpose of this Regulation the word "pay" shall include all emoluments which would be admissible if he were on privilege leave.
" The question regarding justification of the action taken by the management was touched by this Court, but since the action was based on the old Regulation 48, it had to be quashed.
It was submitted on behalf of the Air India that care had been taken to suit the circumstances in which the services of an employee could be terminated by way of dis charge simpliciter and without holding enquiry.
These are eventualities which do not constitute misconduct and yet retention of an employee in the service of the management for any one of the grounds mentioned in the said Regulation might be considered as detrimental for the management or against public interest.
It was submitted that the said regulation 48 has to be read with Regulation 44(A) which reads as under: "44(A)(i) Notwithstanding anything contained in these Regu lations and if, in the opinion of the Corporation (the Board of Directors of Air India), it is not possible or practica ble to hold an enquiry under the relevant provisions of these Regulations, the Corporation may, if satisfied that the employee has been guilty of any misconduct, any one of the punishment mentioned in Regulation 43 on the employee concerned.
Provided that before exercising his extra ordinary power, the Board shall give 30 days prior notice to the employee concerned of the act of misconduct that the reasons why it is not possible or practicable to hold an enquiry into such misconduct, and the punishment proposed by the Board and the employee shall be entitled to make a full written represen tation to the Board in response to such notice.
(ii) No action shall be taken under the Regulation until the Board has taken into consideration the representation made by the concerned employee under the proviso to Section (i) within the notice period.
" The original regulation 44 was also modified.
According to the interveners, the cumulative reading of regulation 48, as amended, and regulation 44, as amended, would clearly establish that the vice, if any, of arbitrariness is com pletely removed and sufficient guidelines are 226 made available to the Board of Directors to exercise the restricted and limited power now available to the employer under these Regulations.
In C.M.P. No. 30309 of 1988, on behalf of the New India Assurance Co., the intervention application was filed.
It was stated that in the courts below the writ petition No. 835 of 1975 was filed by the employee challenging his termi nation and the appeal filed thereon were decided on grounds available to the petitioner at that time.
A special leave petition was filed by the employee concerned which has now become C.A. No. 655 of 1984.
After the judgment in the Central Inland Water 's case (supra), an additional ground is now being taken to contend that a contract entered into way back in the sixties when the employee concerned was an employee of the Orissa Cooperative Insurance Society Ltd., Cuttack could not be enforced now and the same ought to be declared void in view of the Central Inland Water 's case (supra).
The intervention was allowed on 24th January, 1990 and Smt.
Shyamla Pappu, Senior Advocate submitted written sub missions.
It was submitted that adjudication on the merits and the consideration of the facts and circumstances of the case may be left to the Bench hearing the matter after the decision of the question of law referred to the Constitution Bench.
In this connection, it may, however, be noted that the General Insurance was nationaIised under the provisions of the General Insurance Provisions (Nationalisation) Act, 1972 and the said Act came into force on 20th September, 1972.
Prior to this, was passed under the provisions of which Act all under takings of all Insurers vested in the Central Government with effect from I3th May, 1971.
This was pending nationali sation which took place in 1972 as aforesaid.
Section 7(1) of the said Act which provided for the takeover of former employees reads as under: "Every whole time officer or other employee of an existing Insurer other than an Indian Insurance Company, who was employed by that insurer, wholly or mainly with his general insurance business immediately before the appointed day, shall, on the appointed day, become an officer or other employee, as the case may be, of the Insurance Company, in which the Undertaking to which the service of the officer 227 or other employee relates has vested and shall hold his office or service on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so until his employment in the Indian Insurance Company in which the undertaking or part has vested, is terminated or until his remuneration, terms and conditions are duly altered by that Indian Insur ance Company.
" The original terms and conditions had not been altered and the employees like the appellant in C.A. No. 855/84 continued to be governed by the original terms and condi tions of the contract at the time of termination.
The origi nal terms and conditions of employment, therefore, continued in force.
The contract of service was entered into when the appellant joined the Orissa Cooperative Insurance Society Ltd. way back in 196 1 and at the time of take over by the Central Government was the Divisional Manager of the said society.
After the take over by the Central Government of general insurance in 1972, a great deal of reorganisation had to be effected in order to tone up the system of general insurance which had become unwieldy due to the mushroom growth of societies with no control whatsoever when insur ance was in private hands.
It was submitted by Smt.
Shyamla Pappu that there are many such cases where action was taken soon after nationali sation of general insurance in 1972.
If such orders are set aside today, Smt.
Shyamla Pappu posed the question, what would be the result? Would the order set aside, at this stage give the employee a right to be reinstated '? If the answer to the above is in the affirmative, would it be conducive to efficiency in the conduct of a public utility such as general insurance, Smt.
Pappu raised the question.
Would it not hamper the Company 's business considering that the reduction/reorganisation of staff was essential for the effective functioning of the public service? Smt.
Pappu asked the question would the public service not be saddled with unnecessary and/or incompetent staff, thus, burdening the public utility/service with unmanageable costs and staff that is ineffective '? It was urged that the New India Assur ance Company had a clause, in the contract at the relevant time, which was as follows: "in the event of the society not having any further need of any employees services, whether permanent or temporary, which shall be decided by the board, the Principal Officer 228 shall give 30 days notice in writing for termination of his services or in lieu thereof pay such employee a sum equiva lent to one month pay including allowance upto the period of notice.
" The above clause covered cases of retrenchment, aboli tion of posts and other situations which had been adjudicat ed upon by this Court.
If, however, the Central Inland Water 's case (supra) is applied, Smt.
Shyamla Pappu submit ted, then the management of the Intervene r Company will be powerless even in a case of abolition of posts or retrench ment or any other allied situation.
It is seen that the power to terminate an employee is co existent with the power to appoint.
Shyamla Pappu relied on the General Clauses Act and submitted that the Central Inland Water 's case (supra) was erroneous in so far as it made a complete nega tion of this power.
Then, it was submitted by her that in case of an employer who had made all the necessary investi gation and the employee concerned has been fully heard before the order 01 ' termination and if the decision of Central Inland Water 's case was applied, then even such a case would be a case of illegal termination, considering that there would be no power to terminate.
It was submitted that the Central Inland Water 's case had to be read down because paras 77, 92 and 93 of the report take in even private employment.
The sweep of the judgment cannot hold good and had to be curtailed.
According to Smt.
Pappu, what then was the position of terminations effected when the law was different? It cannot be said that they are entitled to relief now.
It should be clarified that the judgment of this Court would apply pro spectively, it was submitted.
Past cases might be treated as concluded in view of the law prevailing at that time and also in view of the contentions urged by the parties in the courts below at various stages.
In the event, this Court comes to the conclusion that even old cases would be covered by the judgment now rendered, the orders already passed may be upheld and a post decisional hearing might be directed so that the management concerned has the opportunity of showing that there existed good reasons for termination though the same were not communicated to the employee concerned because the law then existing did not require such a communication.
In the interest of justice, we should allow such a course.
In the light of the provisions and in the facts and the circumstances of the case, it is, therefore, necessary to consider the validity of the power of termination of employ ment by the employers or authorities of the employees with out holding any enquiry in the circum 229 stances noted in the several civil appeals and applications herein.
In these civil appeals.
the question of actual user of power is not the main issue.
but the validity of clauses or regulations containing the aforesaid power.
The instances of actual user of power, however, are not wholly irrelevant on the question of the validity or extent of the power because these explain the extent and content of power and/or occa sion for such user.
Firstly.
we have to.
in view of the facts and the circumstances of the Civil Appeal No. 2876 of 1986, consider the amplitude of the power under clause (b) of Regulation 9 of the Regulations concerned.
We have noted the contents of that Regulation.
We have also noted the amplitude of the expression of that power as was canvassed before the High Court in the matter under appeal and as noticed by the decision of this Court in Delhi Transport Undertaking vs Balbir Saran Goel 's case (supra).
A survey of the several authorities of law and the development of law from time to time would lead one to the conclusion that the philosophy of the Indian Constitution, as it has evolved, from precedent to precedent.
has broaden the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employ ment.
This is the basic concept of the evolution from the different angles of law of master and servant or in the evolution of employer and employee relationship.
It is true that.
the law has travelled in different channels, govern ment servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations.
But it has to be borne in mind that we are concerned in these matters with the employees either of semi Government or statutory corporations or public undertakings who enjoy the rights.
privileges.
limitations and inhibitions of institutions who come within the ambit of Article 12 of the Constitution.
It is in the background of these parameters that we must consider the question essentially and basically posed in these matters.
The basic and the fundamental ques tion to be judged is.
in what manner and to what extent, the employees of these bodies or corporations or institutions could be affected in their security of tenure by the employ ers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted.
We have noted the exhaustive and the learned analysis of the background of the diverse facts projected in the several cases and appeals before us.
230 Efficiency of the administration of these undertakings is very relevant consideration.
Production must continue, services must be maintained and run.
Efficacy of the serv ices can be manned by the disciplined employees or workers.
Discipline, decency and order will have to be maintained.
Employees should have sense of participation and involvement and necessarily sense of security in semi permanent or quasi permanent or permanent employment.
There must be scope for encouragement for good work.
In what manner and in what measure.
this should be planned and ensured within the framework of the Constitution and, power mingled with obli gations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitution.
We have noted several decisions, numerous as these are, and the diverse facts, as we have found.
We have noted that in some cases arbitrary action or whimsical action or dis criminatory action can flow or follow by the preponderance of these powers.
The fact that the power so entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse.
At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency.
Yet, discipline has to be maintained, efficiency of the institution has to be ensured.
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern.
It is not always possible to have enquiry because disclosure is difficult; evidence is hesitant and difficult, often impossible.
In those circum stances, what should be the approach to the location of power and what should be the content and extent of power, possession and exercise of which is essential for efficient running of the industries or services '? It has to be a matter both of balancing and adjustment on which one can wager the salvation of rights and liberties of the employees concerned and the future of the industries or the services involved.
Bearing in mind the aforesaid principles and objects, it appears to us that the power to terminate the employment of permanent employment must be there.
Efficiency and expedien cy and the necessity of running an industry or service make it imperative to have these powers.
Power must, therefore,.
with authorities to take decision quickly, objectively and independently.
Power must be assumed with certain conditions of duty.
The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions 231 of exercise of such powers.
The manner in which such exer cise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power.
All these are essential to ensure that power is fairly exercised and there is fair play in action.
Reasons, good and sound, must control the exercise of power.
We have noted the rival submissions.
Learned Attorney General of India and the learned Solicitor General and others appearing those who sought for sustaining the power by the employers or the authorities, contend that for effi ciency of the industry, for the attainment of the very purpose for which institutions are created, there should be power to terminate the employment of undesirable, ineffi cient, corrupt, indolent, disobedient employees in those cases where holding of enquiry or prolonging these employees for that purpose would be detrimental, difficult and frus trating.
It is in this context that we should examine the power under the aforesaid Regulation 9(b).
The power must be there, the power must be utilised by person or authority, high ranking enough or senior enough who can be trusted or who can be presumed to be able to act fairly, objectively and independently.
The occasion for the exercise of the power must be delimited with precision, clarity or objectiv ity.
And those occasions must be correlated to the purpose for which the powers are sought to be exercised.
In concrete terms, for the running of the industry or the service, efficiently, quickly and in a better manner or to avoid deadlocks or inefficiency or friction, the vesting of the power in circumstances must be such that will evoke credita bility and confidence.
Reasons must be there, reasons must be perspectable, reasons must be relevant and the reasons must be of authority independently, fairly and objectively arrived at.
Notice of hearing may or may not be given, opportunity in the form of an enquiry may or not be given, yet arbi trariness and discrimination and acting whimsically must be avoided.
These power must, therefore, be so read that the powers can be exercised on reasons, reasons should be re corded, reasons need not always be communicated, must be by authorities who are competent and are expected to act fair ly, objectively and independently.
The occasion for the use of power must be clearly circumscribed in the above limits.
These must also circumscribe that the need for exercise of those power without holding a detailed or prolonged enquiry is there.
As we have noted, a good deal of controversy was that these 232 inhibitions or limitations or conditions are not there in the amplitude or the extent of the power enumerated or stated in Regulation 9(b) of the aforesaid Regulations concerned or of similar provisions that we have examined in these cases.
We have noted the argument, learned and interesting, on the question of judicial law making imputing to the legisla tures what these have not articulated.
Should the courts say or can say what the legislatures have not said '? We have noted the controversy of how should legislation of limited legislatures, Parliaments or rule making bodies, who are not expected or enjoined to make rules or laws contrary to or in derogation or the constitutional prohibitions and inhibi tions be read.
We have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the persons involved in the exercise of those powers and, therefore, should be attributed those powers on conditions which will only make these legal or valid.
Our law making bodies are not law into themselves and cannot create or make all laws.
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid.
Such powers conferred must conform to the consitu tional inhibitions.
The question, therefore, is is it possible or desirable to read down the power conferred under Regulation 9(b) or similar regulations permitting employer or the authority to terminate the employment of the employ ees by giving reasonable notice or pay in lieu of notice without holding enquiry with the conditions indicated or mentioned hereinbefore? Will it or will it not amount to making laws of stating which the legislature or the law making body has not stated? We have been reminded that judges should not make laws.
But the question is can the judges articulate what is inarticulate and what can be reasonably and plainly found to be inherent on the presumption that a legislature or a law making body with the limited authority would act only within limitations so as to make the legislation or law valid and the legislature must be presumed to act with certain amount of knowledge and fairness protecting the rights of people concerned and aiming at fairness in action? We have noted the rival contentions.
We have noted the submission that Mr. Garg, Mr. Ramamurthi and others invited us not to read down and against legislating positively with conditions.
But the question is are those conditions which we are invited to attribute to 233 the legislature or the law making bodies contrary to or against the manifest intention of the legislature? Legislation, both statutory and constitutional, is enacted, it is true, from experience of evils.
But its general language should not, therefore, necessarily be confined to the form that evil had taken.
Time works changes, brings into existence new conditions and purposes and new awareness of limitations.
Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth.
This is particularly true of the constitutional constructions.
Constitutions are not ephemeral enactments designed to meet passing occasions.
These are, to use the words of Chief Justice Marshall, "designed to approach immortality as nearly as human insti tutions can approach it . . ".
In the application of a Constitutional limitation or inhibition, our interpretation cannot be only of 'what has been ' but of 'what may be '.
See the observations of this Court in Sunil Batra vs Delhi Administration (supra).
Where, therefore, in the interpreta tion of the provisions of an Act, two constructions are possible, one which leads towards constitutionality of the legislation would be preferred to that which has the effect of destroying it.
If we do not read the conferment of the power in the manner we have envisaged before, the power is liable to be struck down as bad.
This, we say in spite of the argument by many including learned Solicitor General of India and Smt.
Shyamla Pappu that in contractual obligations while institutions or organisations or authorities, who come within the arebit of Article 12 of the Constitution are free to contract on the basis of 'hire and fire ' and the theory of the concept of unequal bargain and the power conferred subject to constitutional limitations would not be applica ble.
We are not impressed and not agreeable to accept that proposition at this stage of the evolution of the constitu tional philosophy of master and servant framework or if you would like to call it employer or employee relationship.
Therefore, these conferments of the powers on the employer must be judged on the constitutional peg and so judged without the limitations indicated aforesaid, the power is liable to be considered as arbitrary and struck down.
Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to ,foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity.
The English language, and for that matter any language in use today, is not an instrument of mathematical precision.
It has been said that our literature would have been much the poorer if it were.
Leaving, how 234 ever.
the question of richness or poverty of our literature apart, we must proceed on the assumption that human mind cannot foresee everything.
It has, therefore, been said that when a question arises whether the power has been properly conferred and even if so, the extent of it.
Lord Denning has opined that a Judge in such a situation cannot simply fold his hand and blame the draftsmen and look for new enactment.
Lord Denning invites us to set to work on the construction task of finding the intention of the Parliament or the law making body and we must.
however.
do this not only from the language of the statute.
because.
as we have seen.
language is an imperfect medium and very often thoughts are perpetu ally in search of 'broken language '.
But the judge must also do it from a consideration of the social conditions which give rise to it, and o[ the mischief which it was intended to remedy and also in the light of the constitutional inhi bitions and then supplant the written words and add to it end give 'force and life ' to the intention and purpose of the legislature or the law making authority.
A judge must not alter the material of which a law or an instrument is woven, but he can and should iron out the creases and if one may venture to say, make articulate the inarticulate premise but make articulate only which follow from necessary compul sions of the situations and the constitutional position.
See in this connection the observations of Lord Denning in "The Discipline of Law" at p. 12.
It is true that judicial jealously of legislature in law making has long been outdrawn, but the strict construction remains still an established rule.
It is generally accepted principle that judges in interpreting statutes, should give effect to the legislators ' intent.
By doing so.
the courts do recognise their subordinate position and their obligation to help the legislature to achieve its purpose.
But in that effort.
creativity is essential.
There have been differences of opinion on the practices that the courts may employ in attempting to discover the legislative intent.
In the begin ning, conventional practice was only to look to the words of the statutes.
Now the entire spectrum has to be examined.
It has been said that judges are not unfettered glossators.
is true that there is no actual expression used ena bling the legislation or the statute in question indicating the limitations or conditions as aforesaid.
But it must proceed on the premise that the law making authority intend ed to make a valid law to confer power validly or which will be valid.
The freedom, therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of the Parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid.
This is a power which 235 is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed intention of the legislature or the implied pur pose of the legislation.
It was not as Shri Ramamurthi tried to argue that legislature wanted to give an uncontrolled and absolute power to discharge employees on the part of the employers without any enquiry in all circumstances.
That cannot be and that was not intended to be as can be implied from all the circumstances.
In the aforesaid view of the matter, I would sustain the constitutionality of this conferment of power by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies.
It should be done objective ly, the reasons should be recorded, it should record this and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution.
The reasons should be recorded, it need not be communicated and only for the purpose of the running of the institution, there should be factors which hamper the running of the institution without the termination of the employment of the employee concerned at that particular time either because he is a surplus, inefficient, disobedient and dangerous.
Construction or interpretation of legislative or rule provisions proceeds on the assumption that courts must seek to discover and translate the intention of the legislature or the rule making body.
This is one of the legal fictions upon the hypothesis of which the framework of adjudication of the intention of a piece of legislation or rule proceeds.
But these are fictional myths to a large extent as experi ence should tell us.
In most of the cases legislature, that is to say, vast majority of the people who are supposed to represent the views and opinions of the people, do not have any intention, even if they have, they cannot and do not articulate those intentions.
On most of these issues their is no comprehension or understanding.
Reality would reveal that it is only those who are able to exert their view points, in a common parliamentary jargon, the power lobby, gets what it wants, and the machinery is of a bureaucratic set up who draft the legislation or rule or law.
So, there fore, what is passed on very often as the will of the people in a particular enactment is the handy work of a bureaucrat ic machine produced at the behest of a power lobby control ling the corridors of power in a particular situation.
This takes the mythetical 236 shape of the 'intention of the people ' in the form of legis lation.
Again, very often, the bureaucratic machine is not able to correctly and properly transmute what was intended to be conveyed.
In such a situation, is it or is it not better, one would ponder to ask, whether the courts should attribute to the law making body the knowledge of the values and limitations of the Constitution, and knowledge of the evils that should be remedied at a particular time and in a situation that should be met by a particular piece of legis lation, and the court with the experience and knowledge of law, with the assistance of lawyers trained in this behalf, should endeavour to find out what will be the correct and appropriate solution, and construe the rule of the legisla tion within the ambit of constitutional limitations and upon reasonable judgment of what should have been expressed.
In reality, that happens in most of the cases.
Can it be con demned as judicial usurpation of law making functions of the legislature thereby depriving the people of their right to express their will? This is a practical dilemma which Judges must always, in cases of interpretation and construction, face and a question which they must answer.
I have noted the guidelines for the exercise of the power, preamble, relevant sections from which the reasons should be inferred and recorded, although they need not be communicate.
These should be recorded in order to ensure effective judicial review in a given case.
Termination simpliciter under Regulation 9(b) or similar powers can be exercised only in circumstances other than those in regula tion 9(a).
The exercise of such powers can only be for purposes germane and relevant to the statute.
There are several illustrations of that, namely, the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee.
These, however, are illustrative and not exhaustive.
There fore, each case of the conferment of the power involved should be decided on the aforesaid basis.
I am conscious that clear intention as indicated in a legislation cannot be permitted to be defeated by means of construction.
It has been said that if the legislature has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
I do not agree.
Our 237 legislatures are limited by the constitutional inhibitions and it is time, in my opinion, that we should read their Acts and enactments with the attribute that they know their limits and could not have intended to violate the Constitu tion.
It is true that where there are clear, unambiguous and positive terms in a legislation, the Court should be loath to read down.
It should proceed with a straight forward method of striking down such legislations.
But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly.
It is true perhaps, as has been said, that in the history of constitutional law, statutes are seldom read down to mean what they say and intend.
It is begging the question.
If the statutes are seldom read down to mean what they say and intend.
It is begging the question.
If the statute does not specifically say, in such circumstances, as to how do we find the intention to transgress the constitutional limita tions.
At least, the relevant provisions of the relevant statutes and the rules, mentioned hereinbefore, are, in my opinion, on these points, not expressive enough to betray an intention transgress constitutional limitations.
I am afraid that reference to Elliott Ashton Welsh, II vs United States, ; ; is inept in the background of the principles we are confronted with.
The plain thrust of legislative enactment has to be found out in the inarticu late expressions and in the silence of the legislation.
In doing so, to say what the legislature did not specifically say, is not distortion to avert any constitutional colli sion, In the language of the relevant provisions with which we are confronted, I do not find that intention of the legislature to flout the constitutional limitations.
I am also unable to accept the contention of Mr. Garg as well as Mr. Ramamurthi that it is clear as a result of the constitutional position of the security of tenure of the employees as well as the expressed language of the provi sions of several enactments that there is no valid power of the termination of employment of the permanent employees without holding an enquiry or giving an opportunity to the employees to rebut the charges on the grounds of termination in all circumstances.
It was contended, as I have noted, by Shri R.K. Garg that no principle of interpretation permitted reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate.
Reference was made to the decision of this Court in R.M.D.C. 's case (supra).
I am unable to accept this contention.
It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended.
238 Legislature had not intended arbitrary or uncontrolled or whimsical power.
Indeed it considered.
This is not the proper way to read that power in the said Regulation 9(b).
Para 522 of the Shastri Award, read properly, must be cir cumscribed with the conditions indicated above as a neces sary corollary or consequence of that power.
It is also not reading to the legislature conditions which were not there in the second proviso Article 311(2) of the Constitution.
In view of the ratio of the five judge Bench decision of this Court in Tulsiram 's case (supra), which had examined all the relevant decisions, I am unable to accept the submission of Shri R.K. Garg and Mr. Ramamurthi.
Absolute powers, it is true, cannot be regulated without essential legislative policy, but here properly read, absolute power was not there.
Power that was only constitutionally valid, that power can be presumed to have been given and if that pre sumption is made, conditions indicated above inevitably attach.
We are not concerned with the concept of industrial democracy sought to be propounded by Mr. Garg in this case.
The validity and the propriety of having industrial democra cy is not in issue.
What is in issue is demonstrable fair play and justice, as sought for by Mr. Garg, in the exercise of the power which must be conceded as an essential at tribute for proper functioning of the institution.
It is true that no drafts as such have been submitted by the learned Attorney General or by the learned Solicitor General nor by any counsel appearing for the management.
But these conditions, which we have noted, are necessary corol lary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and effi cient running of the industry.
In the aforesaid view of the matter, 1 am unable to accept the submissions of Mr. Garg and Mr. Ramamurthi.
The power must be there, the power must be read down in the manner and to the extent indicated above, in my opinion, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be by either virtue of the silence of the provision indicating the contingencies of termination or by virtue of constitutional inhibitions.
That reading would not violate the theory that judges should not make laws.
In the aforesaid view of the matter, I direct that whenever question of exercise of the power of termination of permanent employees by reasonable notice without holding any enquiry arises, the extent of 239 the power should be read in the manner indicated above and we reiterate that such powers can be exercised for the purposes of the Act which will be determinable by the pream ble and by relevant enacting provisions and the contingen cies for the exercise of the power must be specified and powers should be exercised by authority competent and inde pendent enough and should be articulated by reasons stated even if not communicated.
These are the limitations inherent and latent in the framework of our Constitution and the power with these limitations is valid.
Having regard to the aforesaid view, I will have to dispose of the appeals in terms of the aforesaid principles.
Next the question arises what would be the position of the rights and liabilities determined as anterior to or before our reading these powers to be conditioned as afore said.
Having regard to the finality of the position of law and having regard to the theory that parties have adjusted their rights on the understanding of the law as it was, in our opinion, justice of the situation would be met if we declare and hold that pending litigations should be examined in the light of the aforesaid principles and dispose of in the aforesaid light, namely, where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have not been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues are pending in the light of these principles, that is say, the exercise of the power should be judged on these conditions and in the light of those conditions.
If in the light of these conditions, the exercise of the power is valid, the termination should be held to be valid, if on the other hand, there was exercise without compliance with these conditions, the termination would be invalid and conse quences in law of damages or reinstatement or others will follow.
But previous terminations where the lis is no longer pending before any authority will not be reopened.
To that extent.
I will declare this to be the law prospectively.
I had, after circulating the draft judgment herein, the advantage of the views of my learned brothers.
They do not agree with me.
With respect.
I am definitely of the opinion that time has come for the judicial interpretation to play far more active, creative and purposeful role in deciding what is "according to law".
Law as evolved in India today, in my opinion, makes the limitations on user of power quite clear and distinct, in this branch.
These are constitutional limitations.
Therefore, every provision in any legislation by limited legislatures, in 240 my opinion, should be judged bearing in mind that the legis lature and the law making authorities were aware and are bound by these constitutional limitations.
These inhibitions must be read into these provisions so that law becomes effective, purposeful and legal.
In that view of the matter, I am of the opinion that we should approach the question of constitutional limitations or inhibitions in our interpreta tion in deciding in each individual cases by not 'what has been ' but 'what may be '.
This is the role and purpose of constitutional interpretation by the apex Court of the country.
I know that this view of mine is not shared in this decision by my learned brothers.
I respect their views, but I would like to hope that one day or the other this Court would be mature enough to fulfil what is purposeful and I believe to be the true role and purpose of the Court in interpretation in the light of constitutional inhibitions.
Having had the advantage of the views of my learned broth ers, I regret, with respect, I cannot join them in their views.
I am the loser for the same, but I will fondly hope only for the time being.
I believe that we must do away with 'the childish fic tion ' that law is not made by the judiciary.
Austin in his Jurisprudent at page 65, 4th edn.
has described the BIack stone 's principle of finding the law as 'the childish fic tion '.
Chief Justice K. Subba Rao in I.C. Golak Nath & Ors.
vs State of Punjab & Ant '.
, ; at p. 811 has referred to these observations.
This Court under Article 14 1 of the Constitution is enjoined to declare law.
The ex pression 'declared ' is wider than the words 'found or made '.
To declare is to announce opinion.
Indeed, the latter in volves the process, while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law.
The law declared by this Court is the law of the land.
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful in strument of justice placed in the hands of the highest judiciary of this country.
See the observations of Chief Justice K. Subba Rao in 1.
C. Golak Nath & Ors '.
vs State of Punjab & Anr.
, (supra at pp.
813/14).
I would, therefore, plead for a more active and creative role for the courts in declaring what the law is.
In the aforesaid light, in Civil Appeal No. 2876 of 1986, having regard to the facts and the circumstances and the attitude taken by the Delhi Transport Corporation, I do not interfere with the order of the High Court.
The appeal shall, therefore, fail.
241 Having regard to the facts and the circumstances and the observations above.
Civil Appeal No. 655 of 1984 (M.L. Kamra vs Chairman cum Managing Director, New India Assurance Co. ) will be placed before a division bench of this Court to be disposed of in accordance with law and the light of the observations made herein.
For the reasons that I have indicated above, in Civil Appeal No. 1115 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Anr., ), with the facts herein where apparently no reasons were recorded, the appeal of Satnam Singh suc ceeds and in the interest of justice, the monetary relief should be given to the appellant which is quantified at Rs.4,83,061.90 paise (Rupees four lakhs eighty three thou sand and sixty one and ninety paise).
I have indicated before the basis on which this quantification has been made.
For the same reasons, Civil Appeal No. 4073(NL) of 1986 (Mahesh Kumar Giroti vs Regional Manager, Region 11, Region al Office, State Bank of India, Bareilly & Ors.), Civil Appeal No. 331 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Hans Raj), Civil Appeal No. 328 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Rohtash Singh), Special Leave Petition No. 75 12 of 1987 (Delhi Transport Corporation vs Shri Mohinder Singh & Anr.), and Civil Appeal No. 330 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Prem Singh) should be placed before the divi sion bench of this Court to be disposed of in accordance with the observations made herein and in accordance with law.
The appeals I would dispose of accordingly.
Intervention of the parties are allowed and the C.M.Ps.
are disposed of in the aforesaid terms.
RAY, J. I have had the privilege of deciphering the judgment rendered by the learned Chief Justice.
As the question involved in these groups of appeals for decision is very important, it is deemed necessary to express my views on this important matter.
The pivotal question which arises for consideration is whether Regulation 9(b) of the Regulations framed under section 53 of the Delhi Road Transport Act, 1950 which provides for termination of services of permanent employees on giving simply one month 's notice or pay in lieu thereof without recording any reason therefore in the order of termination is arbitrary, illegal, discriminatory and viola tive of Audi Alteram Partern Rule and so constitutionaly invalid and void.
It is 242 also necessary to consider in this respect whether the said Rule 9(b) can be interpreted and read down in such a manner to hold that it was not discriminatory nor arbitrary nor does it confer unbridled and uncanalised power on the trans port authority to, terminate, however, the services of any employee including permanent employee without any reason whatsoever by the Delhi State Transport Authority.
It is also necessary to consider whether such a power can be exercised without conforming to the fundamental right em bodied in the Article 14 as interpreted by this Court in E.P. Royappa 's case that arbitrariness is the anti thesis of equality enshrined in Article 14 of the Constitution.
In other words, whether such a regulation has to comply with the observance of fundamental rights guaranteed by Part III of the Constitution and whether such a power is to be exer cised in furtherance of and in consonance with the Directive Principles embodied in Article 38 and 39 of the Constitu tion.
It is convenient to set out the relevant provisions of Regulation 9(b) framed by the Delhi Road Transport Authority under the 1950 Act.
9(b) Termination of services (b) Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) one month 's notice or pay in lieu thereof will be given to all categories of employees.
On a plain reading of this Regulation it is apparent that the authority has been conferred the power to terminate the services of any employee whether permanent or temporary by giving the month 's notice or pay in lieu thereof without recording any reason whatsoever in the purported order of termination of services.
Thus a regular, temporary or perma nent employee of the State Transport Authority can be dis missed or removed from service at the whims and caprices of the concerned authority without any reason whatsoever and undoubtedly this evidence that such unbridled, indiscrimi nate and uncanalised power to terminate the services even of a permanent employee without assigning any reason and with out giving any opportunity of hearing as far play and jus tice demands a reasonable procedure is per se, arbitrary and discriminatory.
It has been contended by the Attorney Gener al, appearing on behalf of the State that such a power is not uncanalised or unbridled and arbitrary in as much as firstly such power has been conferred on the responsible authority namely D.T.C. 243 for public purposes and secondly, the Regulation 9(b) is to be read down so as to make it constitutionally valid.
It will be seen that there is guidance for exercise of this power in the regulation itself.
It has also been submitted in this connection by the learned Attorney General that a provision of the Constitution has to be presumed to be valid unless it is proved by the other side challenging the con stitutional validity of such a provision that the same is arbitrary and so void.
Several authorities have been cited at the Bar on this point.
It is profitable to refer to the earlier pronouncements of this Court on this crucial question.
Rules 148(3) and 149(3) in contravention of the provision of Article 14 of the Constitution were challenged before this Court in the case Moti Ram Deka etc.
vs General Manager, N.E.F. Railways, Maligaon, Pandu, etc.
; , Rule 148(3) of the Railways Establishment Code is set out here under: "148(3) "Other (non pensionable) railway servants: The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity.
" In this case the service of Moti Ram Deka, a peon em ployed by the Railway and Sudhir Kumar Das a confirmed clerk, whose services have been terminated under Rule 148(3) of the said Rules challenged the termination of their serv ices before the Assam High Court which rejected the same and ultimately it came up to this Court on Special Leave.
It was held by the Majority that Rules 148(3) and 149(3) are in valid in as such as they are inconsistent with the provi sions of article 311(2), as they purport to removal from serv ice of permanent servants without compliance with the proce dure prescribed by Article 311(2).
It was also held that the Rule 148(3) contravenes article 14 as it does not give any guidance for exercise of the discretion by the authority concerned and hence it is invalid.
It is necessary to refer in this connection to the pronouncement of this Court in the case of Parshotam Lal Dhingra vs Union of India, ; where it has been held that protection of Article 311 is 244 available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise.
Thus even the probationer or temporary employee if removed from service or dismissed from service as a penal measure having civil consequences has to conform to the procedure prescribed by Article 311(2) of the Constitution.
Even a probationer who has no right to the post cannot be removed from service as a penal measure without complying with Article 311(2) of the Constitution.
In the case of Shyam Lal vs The State of Uttar Pradesh and Anr., ; it was held by this Court that a compulsory retirement from service under the Civil Services (Classification, Control and Appeal) Rules does not amount to dismissal or removal within the meaning of Article 311 of the Constitution and therefore does not fall within the provision of the said Act.
In the case of Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, ; the constitutionali ty of the Commission of Enquiry Act, 1952 was challenged.
It was held that the Act was valid and intra vires and that the notification was also valid excepting the words "as and by way of securing redress or punishment" in CI.
10 thereof which went beyond the Act.
It has been further held that it is now well settled that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legis lation.
Thus, to pass the test of permissible classification two conditions must be fulfilled, namely, that (i) That the classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question.
It has also been held that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
This Court observed in Jyoti Pershad vs The Administra tor For the Union Territory of Delhi; , while holding that Section 19 of the , was not obnoxious to the equal protec tion of laws guaranteed by Art, 14 of the Constitution, there was enough guidance to the competent 245 authority in the use of his discretion under Section 19(1) of the Act.
The restrictions imposed by Section 19 of the Act could not be said to be unreasonable.
It has been further observed that (1) If the statute itself or the rule made under it applies unequally to per sons or things similarly situated, it would be an instance of a direct violation of the Constitutional Guarantee and the provision of the statute or the rule in question would have to be struck down.
(2) The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated.
This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official acting either as an executive officer or even in a quasi judicial capacity by a legisla tion which does not lay down any policy or disclose any tangible or intelligible purpose, thus clothing the authori ty with unguided and arbitrary powers enabling it to dis criminate.
In State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; the respondent joined service of the State Government in 1938.
In the service record certain date of birth was recorded.
In 196 1 Government held enquiry as to date of birth and she was asked to show cause why a certain date of birth should not be taken as a date of birth.
The enquiry report was not disclosed to her and she was not given any opportunity to meet the evidence.
The Government refixed her date of birth and ordered that she will be compulsorily retired.
It was held that such a enquiry and decision were contrary to the basis concept of justice and cannot have any value.
It is true that the order is adminis trative in character, but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after inform ing the first respondent of the case of State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence.
No such steps were admittedly taken; the High Court was, in our judgment, right in setting aside the order of the State.
In A.K. Kraipak and Others vs Union of India and Others, it has been held at page 268 269 Paragraph 13: "The dividing line between an administrative power and a 246 quasi judicial power 'is quite thin and is being gradually obliterated.
For determining whether a power is an adminis trative power or a quasi judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised.
Under our Constitution the rule of law per vades over the entire field of administration.
Every organ of the State under our Constitution is regulated and con trolled by the rule of law.
In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate.
The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner.
The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously.
The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision . .
What was considered as an administrative power some years back is now being considered as a quasi 'judicial power. ' ' In the case of Union of India vs Col. J.N. Sinha and Anr., 1.
J.N. Sinha was compulsorily retired by an order of the President of India dated 13.8.69 under Section 56(j) of the Fundamental Rules from Government service without assigning any reason in the order.
The High Court on a writ petition against the impugned order held that there was violation of principles of natural justice.
On an appeal on Special Leave this Court held: "Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights.
As observed by this Court in Kraipak and Ors.
vs Union of India "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules can operate only in areas not covered by any law validly made.
If a statutory provision can be read consist ently with the principles of natural justice, the courts should do so because it must be presumed that the legisla 247 ture and the statutory authorities intend to act in accord ance with the principles of natural justice.
But on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the princi ples of natural justice.
Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the ex press words of the provisions conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power.
" It was held that Fundamental Rule 56(j) does not in term require that any opportunity should be given to the con cerned servant to show cause against the compulsory retire ment.
The order of the President is, therefore, not bad as the authority bona fide forms that opinion.
In the case of Air India Corporation vs V.A. Rebello & Anr., ; the service of the respondent was terminated under Regulation 48 of the Air India Employees ' Service Regulations.
The said Regulation 48 reads as under: CHAPTER VIII Cessation of Service X X X X X X X X X X X X X X X X X X 48.
Termination: The service of an employee may be terminat ed without assigning any reason, as under: (a) of a permanent employee by giving him 30 days ' notice in writing or pay in lieu of notice; (b) of an employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice; (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice.
In this case the complainant, V.A. Rebello was dismissed from service under Regulation 48 by paying salary of 30 days in lieu of notice.
The order does not suggest any misconduct on behalf of the 248 complainant and it is not possible to hold that the order was passed on any misconduct.
This has been challenged by the complainant by filing a complaint before the National Industrial Tribunal.
Under Section 33 A of the the order was challenged as amounting to dismissal from service.
The Tribunal held in its award that the discharge of the respondent is not a discharge simplic iter but in breach of section 33 A of and as such directed the complaint to be considered on the merits.
On appeal by Special Leave this Court while considering the purpose and scope of Section 33(1) and 33(2) of the , held following its decision in The Workmen of Sudder Office Cinnamara vs The Management, as follows: "That if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination.
In order to find out whether the order of termination is one of termination simpliciter under the provisions of contract or of standing orders, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter.
The form of the order of termination, is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct.
It is, therefore, open to the Tribunal to go behind the form of the order and look at the substance.
If the Tribunal comes to the conclusion that though in form the order amounts to termination simpliciter but in reality cloaks a dismissal for misconduct, it will be open to it to set aside the orders as a colourable exercise of power by the management.
" The same principles have also been reiterated in the later decision of this Court in Tara Oil Mills Co. Ltd. vs Workmen & Anr., ; It has been observed in this case: "That the position of the industrial workman is different from that of a Government servant because an industrial employer cannot "hire and fire" his workmen on the basis of an unfettered right under the contract of employment, that right now being subject to industrial adjudication; and there is also on the other hand no provision of the Consti tution like articles 3 10 and 311 requiring consideration in the 249 case of industrial workmen.
" It has been further observed: "That Regulation 48 which has been set out earlier as its plain language shows does not lay down or contemplate any defined essential pre requisite for invoking its operation.
Action under this Regulation can be validly taken by the employer at his sweet will without assigning any reason.
He is not bound to disclose why he does not want to continue in service the employee concerned.
It may be conceded that an employer must always.
have some reason for terminating the services of his employee.
Such reasons apart from misconduct may, inter alia, by want of full satisfaction with his overall suitability in the fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee does not necessarily imply misconduct on his part." In the case of Maneka Gandhi vs Union of India, 1.
The petitioner was issued a passport on June 1, 1976 under the Passport Act, 1967.
On the 4th July, 1977, the petitioner received a letter dated 2nd July, 1977, from the Regional Passport Officer, Delhi, intimating to her that it was decided by the Government of India to impound her passport under section 10(3)(c) of the Act "in public interest.
" The petitioner was required to surrender her passport within 7 days from the receipt of that letter.
The petitioner immediately addressed a letter to the Regional Passport Officer requesting him to furnish a copy of the statement of reasons for making the order as provided in Section 10(5), reply was sent by the Government of India, Ministry of External Affairs on 6th July 1977 stating inter alia that the Government decided "in the interest of the general public" not to furnish her copy of the statement of reasons for the making of the order.
The petitioner challenges the action of the Government in impounding her passport by a writ petition.
Sub section (1) of Section 10 empowers the Passport Authority to vary or cancel the endorsement on a passport or travel document or to vary or cancel it on the conditions subject to which a passport or travel document has been issued having regard to, inter alia, the provisions of section 6(1) or any notification under Section 19.
Sub section (2) confers powers on the Passport Authority to vary or cancel the conditions of the passport or travel document on the application of the holder of the passport or travel document and with the previous approval of the Central Government, Sub section (3) pro 250 vides that the Passport Authority may impound or cause to be impounded or revoke a passport or travel document on the grounds set out in cl.(a) to (h).
The order impounding the passport in the present case was made by the Central Govern ment under cl.
(c) which reads as follows: "(c) If the passport authority deems it necessary so to do in the interest of the sovereignty and integrity of India, the security of India, friendly relations of India with the foreign country, or in the interest of the general public.
" It was held that the right to travel and go outside the country is included in the right to Personal Liberty.
In order to apply the test contained in articles 14 and 19 of the Constitution we have to consider the objects for which the exercise of inherent rights recognised by article 21 of the Constitution are restricted as well as the procedure by which these restrictions are sought to be imposed, both substantive and procedural laws and actions taken under them will have to pass the test imposed by articles 14 and 19, whenever facts justifying the invocation of either of these Articles may be disclosed.
Violation for both articles 21 and 19(1)(g) may be put forward making it necessary for the authorities concerned to justify the restriction imposed by showing satisfaction of tests of validity contemplated by each of these two Articles.
The tests of reason and justice cannot be abstract.
They cannot be divorced from the needs of the nation.
The tests have to be pragmatic otherwise they would cease to be rea sonable.
The discretion left to the authority to impound a passport in public interest cannot invalidate the law it self.
The orders under Section 10(3) must be based upon some material even if the material concerns in some cases of reasonable suspicion arising from certain credible asser tions made by reliable individual.
In an emergent situation, the impounding of a passport may become necessary without even giving an opportunity to be heard against such a step which could be reversed after an opportunity is given to the holder of the passport to show why the step was unnecessary.
It is well settled that even if there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an indi vidual, which affects the right of 251 that individual the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action.
An order impounding a passport must be made quasi judi cially.
This was not done in the present case.
It cannot be said that a good enough reason has been shown to exist for impounding the passport of the petitioner.
The petitioner had no opportunity of showing that the ground for impounding it given in this Court either does not exist or has no bearing on public interest or that the public interest can be better served in some other manner.
The order should be quashed and the respondent should be directed to give an opportunity to the petitioner to show cause against any proposed action on such grounds as may be available.
Even executive authorities when taking administrative action which involves any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done.
They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness.
They have to act in a manner which is patent ly impartial and meets the requirements of natural justice.
It is also pertinent to refer in this connection the pronouncement of this Court in the case of E.P. Royappa vs State of Tamil Nadu and Anr., ; "Equality and arbitrariness are sworn enemies, one belongs to the rule of law in a public while the other to the whim and caprice of an absolute monarch.
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment.
The principle of reasonableness which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omni presence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14, it must be right and just and fair and not arbitrary, fanciful or oppressive.
" In the case of Municipal Corporation of Greater Bombay vs Malvenkar and Ors., ; the services of respondent No. 2, a permanent clerk in the Bombay Electric Supply and Transport Undertaking, which is run by the appel lant were terminated from the 252 close of work on January 23, ' 1968 as her record of service was unsatisfactory.
The order of termination stated that the respondent No. 2 should be paid one month 's wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking.
The respondent No. 2 made an application before the Labour Court under Section 42(4) of the Bombay Industrial Relations Act contending that the order terminating her services was invalid as it was not passed by the competent authority as envisaged by the Stand ing Order and that the so called Executive Assistant to the General Manager had no authority to terminate her services because no validly sanctioned post of that designation existed on 20th or 23rd January, 1968.
It was also contended that the aforesaid oders besides being mala fide was viola tive of the principles of natural justice in as much as the same was passed without holding any enquiry.
The Labour Court dismissed the application.
The respondent 's appeal before the President of the Industrial Court was however allowed.
The Industrial Court held that the impugned orders bore only the initials of the Central Manager and therefore it was passed by an authority which was lacking in authori ty, the wording "unsatisfactory service record" cast a stigma and was patently punitive attracting the non observ ance of Standing Order No. 26 which did not create an abso lute right in the management to terminate the services of an employee for misconduct without holding an enquiry or giving her a fair opportunity of being heard.
A Writ application filed by the appellant was dismissed holding inter alia that the appellant was dismissed holding inter alia that the fact that Standing Order 26 required reasons to be mentioned in the order terminating the services of an employee did not mean that an order of dismissal on the ground of misconduct could be converted into an order of discharge simpliciter by mentioning therein the nature of misconduct.
While allowing the appeal on Special Leave it was held by this Court that under Standing Order 26 powers have been given to the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form.
One is the power of holding disciplinary enquiry under clause (3) of Standing Order 231 read with standing Order 23 and the other is the power to terminate the services of an employee by one calendar month 's written notice or pay in lieu thereof under Standing Order 26.
The question is as to which power has been exer cised by the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form.
There are two distinct and independent powers and as far as possible, neither should 253 be construed so as to emasculate the other or to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequences.
Proviso (i) to clause (1) of Standing Order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of services of the employee under Standing Order 26.
The Management is required to articulate the reason which operated in its mind for terminating the services of the employee.
But merely because the reason must obviously not be arbitrary.
capricious or irrelevant, it would not necessarily in every case make the order of termination punitive in character so as to require compliance with the requirements of clause (2) of Standing Order 21 read with Standing Order 23.
It was further held that the service of the respondent was not satisfactory was undoubtedly based on past incidents set out in the record but for each of these incidents punishment is one form or another had already been meted out to her and it was not by way of punishment for any of these incidents, but because as gathered from these incidents, her record of service was unsatisfactory that her service was terminated by the man agement under Standing Order 26.
The appellant produced satisfactory evidence to show that the impugned order termi nating the service of the respondent was justified and hence the impugned order must be sustained despite its having been passed without complying with the requirements of clause (2) of Standing Order 21 read with Standing Order 23.
This decision has been made in the special facts and circum stances in that particular case.
In the case of Manohar P. Kharkhar And Anr.
vs Raghuraj & Anr., the petitioners challenged the order of termination of services dated 29.4.
1981, under Regulation 48 of Air India Employees ' Service Regulations.
The petitioner No. 1 was The Director of Engineering and the Head of the Engineering Department while the petitioner No. 2 was Deputy Director of Engineering (Maintenance) and the Head of the Maintenance Division of the Air India Corpora tion.
The Chairman and Managing Director of the said Corpo ration lost confidence in their ability and suitability to hold such important posts of Head of Departments which were reasonable for maintenance of the Air Crafts, safety of the Air Crafts and safety of the passengers carried therein and the order of termination were based on the note of The Chairman dated 29.4.
Loss of confidence was the result of the negligence and failure to discharge their duty culmi nating in the admitted sabotage in the case of Makalu, an air craft 254 for the flight of VVIP.
On this occasion the petitioners services were terminated on April 29, 1981 by the Chairman who recorded in its record the ground of loss of confidence.
This order was challenged as arbitrary and capricious and Regulation 48 was violative of Article 14 of the Constitu tion as it contained to guidelines for choosing between employees and employees, occasion to occasion for the con templated action.
In negativing the contentions, it was held after exhaus tively analysing the note dated 29.4.1981, that sheer un suitability and unfitness to hold office is not a misconduct in its generic sense or in its artificial meaning under Regulation 42.
Regulations 42 to 44 have no application.
Confidence in the petitioners ' suitability was lost due to such overall inefficiency of the departments under the petitioners.
Conclusions could not be different even if it assumed that the note contemplated finding of the petition ers guilty of gross inefficiency and negligence.
Inefficien cy by itself did not amount to misconduct in its generic sense.
It was further held that the petitioners have no right to the post and do not possess any security of tenure.
It was also held that if the Corporation choose to act under Regulation 48 and the action is not mala fide, arbitrary or capricious the question of its having acted in colourable exercise of its power could not arise.
It was further held that the power conferred under Regulation 48 to terminate the services of permanent employees on 30 days notice with out assigning any reason is not violative of Article 14 of the Constitution.
Accordingly the writ petition was dis missed and the rule was discharged.
This decision however has not duly considered the ratio of the decision made by this Court in L. Michael & Anr.
vs Johnaton Pumps India Ltd., ; and also in the case of Air India Corporation vs V.A. Rebello, (supra) as well as the ratio of the decision in the case of Sukhdev Singh & Ors.
vs Bhagat Ram Sardar Singh Raghuvanshi & Anr., [1975] 1 SCC421.
In the case of S.S. Muley vs J.R.D. Tata & Ors., constitutionality came up for consideration and this Court held the said Regulation 48 to be discriminatory and void as it gives unrestricted and unguided power on the Authority concerned to terminate the services of a permanent employee by issuing a notice or pay in lieu thereof without giving any opportunity of hearing to the employee concerned and thereby violating the principles of natural justice and also Article 14 of the Constitution.
255 In West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh and Others, [1985] 3 SCC 116 the first respond ent, a permanent employee of the West Bengal State Electric ity Board, filed the writ petition out of which the appeal arises in the Calcutta High Court to quash an order dated March 22, 1984 of the Secretary, West Bengal State Electric ity Board terminating his services as Deputy Secretary with immediate effect on payment of three months ' salary in lieu of three months ' notice.
The order was made under Regulation 34 of the Board 's Regulations which enables the Board to terminate the services of any permanent employee 'by serving three months ' notice or on payment of salary for the corre sponding period in lieu thereof.
" The Regulation 34 reads as follows: "34.
In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof.
" This order of termination was challenged on the ground that Regulation 34 was arbitrary in nature and it was pat ently discriminatory.
The High Court struck down the first paragraph of Regulation 34 and quashed the order of termina tion of service of the first respondent.
In the case of Workmen of Hindustan Steel Ltd. and Anr.
vs Hindustan Steel Ltd. and Ors., ; Standing Order 32 which provided for conferment of power in the General Manager to terminate the services of an employee if satisfied for reasons recorded in writing that it was inex pedient or against the order of security to employ the workman, the workman could be removed or dismissed from service without following the procedure laid down in Stand ing Order 31.
Special Procedure in certain cases.
Where a workman has been convicted for a criminal offence in a Court of law or where the General Manager is satisfied, for reasons to be recorded in writing, that it is inexpedi ent or against the interests of security to continue to employ the workman, the workman may be removed or dismissed from service without following the procedure laid down in Standing Order 31." The appellant, an Assistant in the 1st Respondent under taking was removed from service on the ground that it was 'no longer expe 256 dient ' to employ him.
The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the police.
The Tribunal held that as the employer dispensed with the disciplinary enquiry in exercise of the power conferred by Standing Order 32, it could not be said that the dismissal from service was not justified and the respondent was quite competent to dismiss him from service without holding any enquiry.
It was held that the reasons for dispensing with the enquiry do not spell out what was the nature of the miscon duct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry.
As there was no justification for dispensing with the enquiry imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 is illegal and invalid.
It was further held that : "A Standing Order which confers such arbitrary.
uncanalised and drastic power to dismiss an employee by merely stating that it is inexpedient or against the interest of the security to continue to employ the workman is violative of the basic requirement of natural justice inasmuch as that the General Manager can impose penalty of such a drastic nature as to affect the livelihood and put a stigma on the character of the workman without recording reasons why disciplinary inquiry is dis pensed with and what was the misconduct alleged against the employees.
It is time for such a public sector undertaking as Hindustan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under article 12 in an appropriate proceeding, the vires of S.O. 32 will have to be examined.
It is not necessary to do so in the present case because even on the terms of S.O. 32, the order made by the General Manager is unsustainable.
" In the case of Tata Oil Mills Co. Ltd. vs Workmen & Anr., (supra) the service of Mr. Banerjee, an employee of the appellant, was terminated on the ground that the appel lant had lost confidence in him and in lieu of notice he was paid one month 's salary.
The Union to which Mr. Banerjee belonged took up his cause and on the failure of 'he par ties to reach a settlement the matter was referred to the Industrial Tribunal by the Government.
It was contended before the Tribunal by the appellant that the order of termination of services of Mr. 257 Banerjee was an order of discharge which it was competent to make under R. 40(1) of the Service Rules, whereas the re spondent contended that the termination was not a discharge simpliciter but was in substance dismissal and that the Tribunal was entitled to consider the propriety of the appellant 's action.
The Tribunal held that it had jurisdiction to look into the reasons behind the discharge of an employee.
On the examination of the evidence the Tribunal found that no mala fides on the part of the employer had been proved and that the termination of service did not amount to victimisation or unfair labour practice.
Even so it held that the dis charge was not justified and directed the reinstatement of Mr. Banerjee.
This Court held that in the matter of an order of dis charge of an employee the form of the order is not decisive.
An Industrial Tribunal has jurisdiction to examine the substance of the matter and decide whether the termination is, in fact, discharge simpliciter or it amounts to dismiss al which has put on the cloak of discharge simpliciter.
The test always has to be whether the act of the employer is bona fide or whether it is a mala fide and colourable exer cise of the powers conferred by the terms of contract or by the standing orders.
In O.P. Bhandari vs Indian Tourism Development Corpora tion Ltd. and Others, ; The question of constitutionality of Rule 31(v) of the Indian Tourist Devel opment Corporation Rules came up for consideration before this Court in this case.
Rule 31 is quoted below: "31.
Termination of services The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner: (v) of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days ' notice or pay in lieu thereof.
" It has been observed by this Court: "This rule cannot co exist with Articles 14 and 16(1) of the Constitution of India.
The said rule must therefore die, so that the fundamental rights guaranteed by the aforesaid 258 constitutional provisions remain alive.
For otherwise.
the guarantee enshrined in Articles 14 and 16 of the Constitu tion can be set at naught simply by framing a rule authoriz ing termination of an employee by merely giving a notice.
In order of uphold the validity of the rule in question it will have to be held that the tenure of service of a citizen who takes up employment with the State will depend on the pleas ure or whim of the competent authority unguided by any principle or policy.
And that the services of an employee can be terminated though there is no rational ground for doing so.
even arbitrarily or capriciously.
To uphold this right is to accord a "magna carta" to the authorities in vested with these powers to practice uncontrolled discrimi nation at their pleasure and caprice on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices.
An employee may be retained solely on the ground that he is asycophancy and indulges in flattery, whereas the services of one who is meritorious (but who is wanting in the art of sycophancy and tempermen tally incapable of indulging in flattery) may be terminated.
The power may be exercised even on the unarticulated ground that the former belongs to the same religious faith or is the disciple of the same religious teacher or holds opinions congenial to him.
The power may be exercised depending on whether or not the concerned employee belongs to the same region.
or to the same caste as that of the authority exer cising the power, of course without saying so.
Such power may be exercised even in order to make way for another employee who is favourite of the concerned authority.
Pro vincialism, casteism, nepotism, religious fanaticism, and several other obnoxious factors may in that case freely operate in the mind of the competent authority on deciding whom to retain and whom to get rid of.
And these dangers are not imaginary ones.
They are very much real in organisations where there is a confluence of employees streaming in from different States.
Such a rule is capable of robbing an employee of his dignity, and making him a supine person whose destiny is at the mercy of the concerned authority (whom he must humour) notwithstanding the constitutional guarantee enshrined in Articles 14 and 16 of the Constitu tion of India.
To hold otherwise is to hold that the funda 259 mental right embedded in Articles 14 and 16(1) is a mere paper tiger and that is so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorizes termination of the service of an employee by merely giving a notice of termination.
Under the circum stances the rule in question must be held to be unconstitu tional and void.
" This decision followed the observations of this Court in Central Inland Water Transport Corporation Limited And Another vs Brojo Nath Gangtdy and Another and West Bengal State Electricity Board vs Desh Bandhu Ghosh and Ors., (Supra).
In Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Another, the appellant Corporation is a Government Company incor porated under the Companies Act.
The Majority shares of the Corporation are held by the Union of India and the remaining shares are held by the State of West Bengal and Assam.
Article 47 provided for appointment and reappointment of the auditors of the Corporation to be made by the Central Gov ernment on the advice of the Comptroller and AuditorGeneral of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts.
Article 51 A entitled the President to call for returns, accounts etc.
of the Corporation.
The respondents in the two appeals were in the service of the said company.
Their appointment letters were in a stereotype form under which the Corporation could without any previous notice terminate their services.
A Scheme of Arrangement was en tered into between the Corporation and that company for dissolution of the latter and takeover of its business and liabilities by the former.
The Scheme inter alia stipulated that the Corporation shall take as many of the existing staff or labour as possible and that those who could not be taken over shall be paid by the concerned company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Dis putes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues.
The two re spondents were in the service of the said company and their services were taken over by the Corporation after the Scheme of Arrangement was sanctioned by the High Court.
The re spondent Ganguly was appointed as the Deputy Chief Accounts Officer and was later promoted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was 260 later promoted as General Manager (River Services).
Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 provided that the services of a perma nent employee could be terminated on three months ' notice on either side or on payment of three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case may be in lieu of the notice.
A notice under Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay.
Both Ganguly and Sengupta filed writ petition before High Court and a Division Bench of that Court allowed the same.
The Corporation filed appeals before Supreme Court.
The impugned questions for determination were (i) whether the appellant Corporation was an instrumentality of the State so as to be covered by Articles 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 and as such whether Rule 9(i) which formed a part of the contract of employment between the Corporation and its employees to whom the said Rules applied, was void? This Court held that it being a Government Company within the meaning of Article 12 of the Constitution has to comply with the rights embodied in Part III of the Constitution and the Directive Principles in Part IV of the Constitution.
It was further held that by extending the executive power of the Union and each of the States to the carrying on any trade or business.
Article 298 does not convert either the Union of India or any of the States which collectively form the Union into a merchant buying and selling goods or carrying on either trading or business activity, for the executive power of the Union and the States, whether in the field of trade or business or in any other field, is always subject to constitutional limitations and particularly the provisions relating to Fundamental Rights in Part III and is exercisa ble in accordance with and for the furtherance of the Direc tive Principles of State Policy.
Rule 9(i) can aptly be called the 'Henry VIII Clause '.
It confers an absolute.
arbitrary and unguided power upon the Corporation.
It does not even state who on behalf of the Corporation is to exercise that power.
While the Rules provide for four different modes in which the services of a permanent employee can be terminated earlier than his at taining the age of superannuation, namely, Rules 9(i), 9(ii).
36(iv)(b) read with Rules 38 and 37.
Rule 9(i) is the only rule which does not state in what circumstances the power conferred by the rule is 261 to be exercised.
Thus even where the Corporation could proceed under Rule 36 and dismiss an employee on the ground of misconduct after holding a regular disciplinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the hassle of an inquiry.
No opportunity of a hearing is at all to be afforded to the permanent employee whose service is being terminated in the exercise of this power.
It thus violates audi alteram partent rule of natural justice also which is implicit in Article 14.
It is not covered by any of the situations which would justify the total exclusion of the audi alteram partem rule.
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it consists of responsible and highly placed persons ignores the fact that however highly placed a person may be he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts abso lutely." Rule 9(i)is also discriminatory for it enables the Corporation to discriminate between employee and employee.
It can pick up one employee and apply to him Rule 9(i).
It can pick up another employee and apply to him Rule 9(ii).
It can pick up yet another employee and apply to him Rule 36(iv)(b) read with Rule 38 and to yet another employee it can apply Rule 37.
All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee.
This court in Delhi Transport Undertaking vs Balbir Saran Goel, ; considered the question whether the services of a permanent employee under Delhi Transport Undertaking could be terminated under Regulation 9(b) of the Regulation without complying with the procedure prescribed by Regulation 15 and (ii) whether although the order was made in perfectly harmless and innocuous terms purporting to be within Regulation 9(b) it was a mere camouflage for inflicting punishment for breach of Standing Order 17.
as the respondent approached the High Court without exhausting the Departmental remedies and held that the order was not proved to be made mala tide on the part of the authority terminating the service nor the question of mala fide was gone into by the Courts below.
Regulation 9(b) empowered the authorities to terminate the service after giving one month 's notice or pay in lieu thereof.
The order was held to have been made unequivocally in terms of the Regulation 9(h) as the employee was a con tankerous person and it was desirable to retain him in service.
The order was upheld.
The question 262 whether Regulation 9(b) was illegal and void as it conferred arbitrary and uncanalised power to terminate the service of a permanent employee without recording any reason and with out giving any opportunity of hearing before passing the purported order as required under Article 14 of the Consti tution was neither raised nor considered in this case.
In L. Michael & Anr.
vs M/s Johnston Pumps India Ltd., (supra) the services of the appellant, an employee of the respondent, were terminated by the latter giving him one month 's notice as per.
the standing orders without assigning any reasons for the termination.
An industrial dispute was referred to the Labour Court.
The management alleged that the employee misused his position by passing an important and secret information about affairs of the company to certain outsiders, that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders, and that therefore, the management lost confidence in the employee and terminated his services by a bona fide order.
The Labour Court confirmed the order.
On appeal this Court set aside the order holding that the Labour Court has misled itself on the law.
This Court directed reinstatement of the employee with all back wages.
The manner of dressing up an order does not matter.
The Court will lift the veil to view the reality or substance of the order.
The Tribunal has the power and indeed the duty to X ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated.
But if the management, to cover up the ina bility to establish by an inquiry, illegitimately but inge niously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside.
Loss of confidence is no new armour for the manage ment; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catend of cases of this Court can be subverted by this neo formula Loss of Confidence in the law will be the consequence of the Loss of Confidence doctrine.
An employer who believes and suspects that his employee particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of employment permit 263 terminate his employment and discharge him without any stigma attaching to the discharge.
But such belief or suspi cion or ' the employer should not be a mere whim or fancy.
It should be bona fide and reasonable.
It must rest on some tangible basis and the power has to be exercised by the employer objectively ', in good faith.
which means honestly and with due care and prudence.
If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour prac tice.
the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicial ly.
This Court in the case of workmen of Hindustan Steel Ltd. and Ant.
vs Hindustan Steel Ltd. and Ors.
, (supra) while considering the constitutionality of Standing Order 32 of the Hindustan Steel Ltd. which conferred power on the General Manager to remove or dismiss a workman without following the procedure for holding a disciplinary enquiry laid down in Standing Order 31 observed that: "It is time for such a public sector undertaking as Hindu stan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under Article 12 in an appropriate proceeding, the views of S.O. 32 will have to be examined.
" It is convenient to refer in this context relevant passage in paragraph 4 in Chitty on Contracts, 25th Edition, Volume 1: "These ideas have to a large extent lost their appeal today. 'Freedom of contract ', it has been said, 'is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interest of the community at large. ' Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered.
Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the other.
These are called 'contracts d 'adhesion ' by French lawyers.
Traders frequently contract, not on individually negotiated terms, but on those contained in a standard form of contract settled by a trade association.
And the 264 terms of an employee 's contract of employment may be deter mined by agreement between his trade union and his employer, or by a statutory scheme of employment.
Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking.
" This Court has observed in Central Inland Water Trans port Corporation Ltd. and Anr.
vs Brojo Nath Ganguly and Anr. (supra)as under: .
Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws.
The principle deducible from the above discus sions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14.
This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreason able clause in a contract.
entered into between parties who arc not equal in bargaining power . .
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them." The Court has.
therefore, the jurisdiction and power to strike or set aside the unfavourable terms in a contract of employment which purports to give effect to unconscienable bargain violating article 14 of the Constitution Thus on a conspectus of the catena of cases decided by this Court the only conclusion follows is that Regulation 9(b) which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the impugned order is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution.
It has also been held consistently by this Court that the Govern ment carries on various trades and business activity through the instrumentality of the State such as Government Company or Public Corporations.
Such Government Company or 265 Public Corporation being State 'instrumentalities are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part III as well as to conform to the directive principles in Part IV of the Constitution.
In other words the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of Consti tution.
Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
Regulation 9(b), therefore, confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the principles of natural justice.
There is no guideline in the Regulations or in the Act, as to when or in which cases and circumstances this power of termination by giving notice or pay in lieu of notice can be exercised.
It is now well settled that the 'audi alteram partem ' rule which is es sence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here.
Rules of natural justice do not supplant but supplement the Rules and Regulations.
Moreover, the Rule of Law which permeates our Constitution demands that it has to be observed both substantially and procedure ly.
Considering from all aspects Regulation 9(b) is illegal and void as it is arbitrary, discriminatory and without any guidelines for exercise of the power.
Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.
Regula tion 9(b) does not expressly exclude the application of the 'audi alteram partern ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice under Regulation 9(b) or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purport ed order is made.
It will be profitable to refer in this connection the observations of this Court in the case of Union of India and Anr.
vs Tulsiram Patel and Ors., [1985] Supp.
(2) SCR 131 where the constitutionality of provisions of article 311 par ticularly the 2nd proviso to clause (2) of 'the said Article came up for consideration.
This Court referred to the find ings in Roshan Lal Tandon vs Union of India, ; wherein it was held that though the origin of a Govern ment service is contractual 266 yet when once appointed to his post or office, the Govern ment servant acquires a status and his rights and obliga tions are no longer determined by the consent of both the parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government.
In other words, the legal position of a Government servant is more one of status than of contract.
The hall work of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties.
It has been observed that article 14 does not govern or control article 311.
The Constitution must be read as a whole.
article 311(2) embodies the principles of natural jus tice including audi alteram partem rule.
Once the applica tion of clause (2) is expressly excluded by the Constitution itself, there can be no question of making applicable what has been so excluded by seeking recourse to Article 14 of the Constitution.
In the case of Sukdev Singh & Ors.
vs Bhagatrarn Sardar Singh Raghuvanshi & Anr.
(supra), Mathew, J. pointed out that: "The governing power wherever located must be subject to the fundamental constitutional limitations.
" This has been referred to and relied upon in Central Inland Water Transport Corporation Ltd. and Anr.
vs Brojo Nath Ganguly and Anr.
(supra) and a similar Rule 9(i) was termed as "Henry VIII clause" as it confers arbitrary and absolute power upon the Corporation to terminate the service of a permanent employee by simply issuing a notice or pay in lieu thereof without recording any reason in the order and without giving any opportunity of hearting to the employee.
Thus, the Rule 9(i) of the Services Discipline and Appeal Rules, 1979 was held void under Section 23 of the , as being opposed to public policy and is also ultra vires of Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months ' notice in writing or by paying him the equivalent of three months ' basic pay and dearness allowance in lieu of such notice.
Regulation 9(b) of the impugned Regulation framed under the Delhi Transport Corporation Act which is in pare materia with the said Rule 9(i) is void under Section 23 of the Contract Act as being opposed to public policy and is also ultra vires of Article 14 of the Constitution.
Another crucial question is to consider how far the impugned provisions of Regulation 9(b) framed under the Delhi Road Transport 267 Act can be read down in order to save it from unconstitu tionality.
Several decisions have been cited at the bar in order to impress upon the Court that the impugned provisions have been made for public purposes and for public interest and as such it should be read down in a manner that will save the said provisions from the on slaught of constitu tional invalidity.
In the case of Commissioner of Sales Tax, Madhya Pra desh, Indore and Ors.
vs Radhakrishnan and Ors.
, ; it has been held by this Court that for sustaining the presumption of constitutionality, the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived and can even read down this section.
It is convenient to mention here the meaning and scope of the word 'reading down ' and 'Severance ' dealt with on page 7, para B in Australian Federal Constitutional Law by Colin Howard which reads as follows: "The High Court presumes the validity of legislation to the extent that it will not of its own motion raise questions of constitutionality.
Legislation is treated as valid unless the parties to litigation challenge it on constitutional grounds.
The techniques of construction known as reading down and severance are corollaries of this presumption.
Reading down puts into operation the principle that so far as it is reasonably possible to do so, legisla tion should be construed as being within power.
It has the practical effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more limited sense so as to keep it within power.
XX XX XX XX XX XX It does not necessarily follow that because a statute cannot be read down it is wholly invalid.
The presumption of valid ity leads naturally to the view that where a statute cannot be held wholly valid it should be held valid at least to the 268 extent that it is reasonably possible or practicable to do so.
Where reading down is not available the court next decides where there is a case for severing the invalid parts of the statute from the parts which, standing alone, are valid.
If this can be done the court declares only the invalid parts to be beyond power and leaves the remainder operative.
In Re The Hindu Women 's Rights to Property Act, 1937, and The Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 2 13 of the Government of India Act, 1935, the question arose whether the Hindu Women 's Rights to Property Act, 1937 (Central Act XVIII of 1937) and the Hindu Women 's Rights to Property (Amendment) Act, 1938 (Central Act XI of 1938), are applicable to agricultural land and what was the meaning of the word 'property '.
It was observed that: "When a Legislature with limited and restricted powers makes use in an Act of a word of such wide and general import as "property", the presumption must be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.
The word "proper ty" in the Hindu Women 's Right to Property Act must accord ingly be construed as referring to property other than agricultural land.
There is a general presumption that a Legislature does not intend to exceed its jurisdiction.
" In the case of R.M.D. Chamarbaugwalla vs The Union of India, ; the petitioners who had been promoting and conducting prize competitions in the different States of India, challenged the constitutionality of sections 4 and 5 of the (42 of 1955) and rr. 11 and 12 framed under section 20 of the Act on the grounds that prize competition as defined in section 2(d) of the Act included not merely competitions that were of a gambling nature but also those in which success depended to a substantial degree on skill and the sections and the rules violated their funda mental right to carry on business, and were unsupportable under Act.
19(6) of the Constitution, that they constituted a single inseverable enactment and, consequently.
must fail entirely.
It was held that validity of the restrictions imposed by sections 4 and 5 and rr 11 and 12 of the Act as re gards gambling competitions was no longer open to challenge under article 19(6) of the Constitution in view of the decision of this Court that gambling did not 269 fall within the purview of article 19(1)(g) of the Constitu tion.
It has been further observed that: "When a question arises as to the interpretation to be put on an enactment, what the Court has to do is to ascertain "the intent of them that make it" and that must of course.
be gathered from the words actually used in the statute.
To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act . .
To decide the true scope of the present Act, therefore, we must have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the legislation and the purposes thereof, the mischief which it intended to suppress and the other provisions of the statute, and construe the language of section 2(d) in the light of the indications furnished by them." Having regard to the circumstances, it was held that the law which the State Legislatures moved Parliament to enact under article 252(1) was one to control and regulate prize competitions of a gambling character and as such it was held that the Act was valid It has been further observed that where the legislation falls in part within the area allotted to it and in part outside it, it is undoubtedly void as to the latter.
In the case of R. 1.
Arora vs State of Uttar Pradesh and Ors., ; challenge was thrown to the constitu tionality of the amendments made to Ss. 40, 41 and section 7 by the Land Acquisition Amendment Act (Act 31 of 1962) on the ground that it contravened article 31(2) inasmuch as it makes acquisition for a company before July 20, 1962 as being for a public purpose even though it may not be so in fact.
Section 7 was also challenged on the ground that it contra venes article 14 inasmuch as it makes an unreasonable discrimi nation in the matter of acquisition for a company before July 20, 1962 and after that date insolaf as the former acquisitions are validated on the basis of their being deemed to be for a public purpose while the latter acquisi tions are not so deemed and have to satisfy the test of public purpose.
it has been held that if the language of a provision of law is capable of only one construction and if according to that construction 270 the provision contravenes a constitutional provision it must be struck down.
A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used.
It has been further held following the observa tions in The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp.
2 SCR 127 that it is well settled that if certain provisions of law construed in one way will be consistent with the Constitution and if another interpretation would render them unconstitutional the court would bear in favour of the former construction.
In the case of Jagdish Pandey vs The Chancellor Univer sity of Bihar & Anr., ; 1 the challenge was to the constitutionality of section 4 of Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 as discriminatory and violative of article 14 of the Constitution.
It has been urged that section 4 confers uncana lised powers on the Chancellor without indicating any crite rion on the basis of which the power under section 4 can be exercised.
It has been observed that: " .
There is no doubt that if one reads section 4 literal ly it does appear to give uncanalised powers to the Chancel lor to do what he likes on the recommendations of the Com mission with respect to teachers covered by it.
We do not however think that the Legislature intended to give such an arbitrary power to the Chancellor.
We are of opinion that section 4 must be read down and if we read it down there is no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor.
" Seervai in his book 'Constitutional Law of India ', Third Edition has stated at p. 119 that: " . the Court are guided by the following rules in discharging their solemn duty to declare laws passed by a legislature unconstitutional: (1) There is a presumption in favour of constitutionality and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; "to doubt the 271 constitutionality of a law is to resolve it in favour of its validity." . . . . . . . . . . . . . . . (6) A Statute cannot be declared unconstitutional merely because in the opinion of the Court it violates one or more of the principles of liberty, or the spirit of the Constitu tion, unless such principles and that spirit are found in the terms of the Constitution.
" On a proper consideration of the cases cited hereinbe fore as well as the observations of Seervai in his book 'Constitutional Law of India ' and also the meaning that has been given in the Australian Federal Constitutional Law by Coin Howard, it is clear and apparent that where any term has been used in the Act which per se seems to be without jurisdiction but can be read down in order to make it con stitutionally valid by separating and excluding the part which is invalid or by interpretting the word in such a fashion in order to make it constitutionally valid and within jurisdiction of the legislature which passed the said enactment by reading down the provisions of the Act.
This, however, does not under any cicumstances mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulation that it confers arbitrary, uncanlised, unbridled, unrestricted power to terminate the services of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, cannot be read down to save the said provision from constitutional invalidity by bringing or adding words in the said legisla tion such as saying that it implies that reasons for the order of termination have to be recorded.
In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambigu ous meaning can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity.
Therefore, on a consideration of the above decisions, it is impossible to hold by reading down the impugned provisions of Regulation 9(b) framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the prin ciples of natural justice and equality as 272 envisaged in Article 14 of the Constitution of India.
I am, therefore, constrained to uphold the judgment of the Delhi High Court in C.W.P. No. 1422 of 1985 and dismiss Civil Appeal No. 2876 of 1986.
I allow Civil Appeal No.1115 of 1976 and agree with the order proposed to be passed thereon by the learned Chief Justice.
The other appeals as referred to in detail in the judgment of the learned Chief Justice be placed before the Division Bench of this Court to be dis posed of in accordance with the observations made herein.
I agree with conclusion arrived of by my learned brother K. Ramaswamy, J. SHARMA.J.
I have gone through the judgments prepared by the learned Chief Justice and by my other learned Brothers.
In view 01 the elaborate consideration by them of the ques tions raised by the parties, from both points of view.
I proceed to indicate my conclusions without further discus sion.
I agree with the learned Chief Justice that the rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the manage ment cannot have unrestricted and unqualified power of terminating the services of the employees.
In the interest of efficiency of the public bodies, however.
they should have the authority to terminate the employment of undesira ble, inefficient, corrupt.
indolent and disobedient employ ees.
but it must be exercised fairly, objectively and inde pendently: and the occasion for the exercise must be delim ited with precision and clarity.
Further, there should be adequate reason for the use of such a power.
and a decision in this regard has to be taken in a manner which should show fairness.
avoid arbitrariness and evoke credibility.
And this.
in my view, is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation.
An element of uncertainty is likely to lead to grave and undesirable consequences.
Clarity and precision are.
there fore.
essential for the guidelines.
Examining in this back ground, I am of the view that Regulation 9(b) of the Delhi Road Transport Authority (Condition of Appointment and Service) Regulation, 1952 cannot be upheld for lack of adequate and appropriate guidelines.
For these reasons Civil Appeal No. 2876 of 1986 is dismissed.
I also agree that the Civil Appeal No. 1115/76 should be allowed in the terms indicated in the judgment of the learned Chief Justice.
The other cases shall be placed before a division bench for final disposal.
273 SAWANT.
I had the advantage of reading the judg ments of the learned Chief Justice and B.C. Ray and K. Ramaswamy, JJ.
While with respect I agree with the conclu sion of the learned Chief Justice in Civil Appeal No. 1115/76, with utmost respect to him, I am unable to share his view of law on the subject in Civil Appeal No. 2876/86.
I am in respectful agreement with the view on the point expressed by Ray and Ramaswamy, JJ.
in the said Civil Ap peal.
I give my separate reasons for the same.
The only question involved in all these matters is whether the absolute power given to the Management of the public undertakings under their respective rules/regulations to terminate the services of an employee without assigning any reason, is constitutionally valid.
It is not necessary to refer to the facts and service rules in each case.
It will be sufficient if I reproduce hereinbelow the relevant service regulation of one of the public undertakings, viz., Delhi Transport Corporation (DTC ' for short) the validity of which is in question in the present case.
The said regulation being Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appoint ment & Service) Regulations, 1952 (hereinafter referred to as the "Regulations") reads as follows: Termination of service: (a) Except as otherwise specified in the appointment orders, the services of an employee of the Authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reasons thereof, (ii) For misconduct, (;,ii) On the completion of specific period of appointment, (iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment.
(b) Where the termination is made due to reduc tion of establishment or in circumstances other than those mentioned at (a) above, one month 's notice or pay in lieu 274 thereof will be given to all categories of employees.
(c) Where a regular/temporary employee wishes to resign from his post under the Authority he shall given three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the condition regard ing the period of notice of resignation or pay in lieu thereof.
" It will be obvious from the provisions of clause (b) the above that it applies not only in the case of retrenchment of employees on account of reduction in the establishment but also in circumstances other than those mentioned in clause (a).
The circumstances mentioned in clause (a) are (i) probationary period, (ii) misconduct, (iii) completion of specific period of appointment and (iv) expiration of contractual period of appointment when the appointment is contractual.
In other words, when the management decides to terminate the services of an employee but not for his mis conduct 'or during his probation or because his tenure of appointment, contractual or otherwise, has come to an end, it is free to do so without assigning any reason and by merely giving either a notice of the specific period or pay in lieu of such notice.
Reduced to simple non technical language, clause (b) contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract.
There is no dispute that although the language differs, the substance of the relevant rules of the other public undertakings which are before us, is the same and hence what applies to Regulation 9(b) of the Regulations will apply equally to the relevant rules of the other undertakings as well.
The contentions advanced before us on behalf of the managements of the undertakings acknowledge at the very outset that such a service rule without anything further was not only ultra vires the Constitution but was indefensible in law even otherwise being opposed to the principles of natural justice vesting as it does the naked arbitrary power in the management.
The contention, however, was that the rule had to be read down to imply that the power vested by it could be exercised only in certain circumstances and for valid reasons and not otherwise.
It was further contended that the rigour of the rule is mitigated because the power granted by it is exercised by a high ranking officer.
It was also urged that the exercise of the said power can be con trolled by holding that it is open to scrutiny by the court, in individual cases.
In other words, the contention was that the rule by itself 275 is innocent and legal and its movements are properly con trolled being under elderly care.
Its occasional wayward behaviour in unguarded moments can be corrected by chastise ment by the courts.
But the rule, it was solemnly urged, was necessary since otherwise the management of the undertakings will be well high impossible.
The controversy before us thus lies in a narrow compass, viz., whether the rule whatever its admitted demerits, should continue to blot the statute book because it is necessary and will be used in certain circumstances only and its use in any other circumstances can be checked by the Court.
It can at once be discerned that at the bottom of all the lengthy ardent arguments lies an anxiety not to specify the circumstances under which the power given by the rule will be exercised on the spacious plea that such circum stances cannot be stated in advance and in the interests of the administration of the undertakings it is best that they are not so stated.
For once I thought that the framers of our Constitution had committed an irretrievable mistake by ignoring the interests of the Union and the State Govern ments and enumerating such circumstances in the second proviso to Article 311(2) of the Constitution.
But then I was mistaken.
The interests of the public undertakings appear to be more important than those of the Governments.
May be they are super Governments.
By claiming the privilege not to enumerate even the broad guidelines as contained in Article 311(2), the managements of the undertakings are indeed wearing a supercrown.
The posture adopted by them is all the more obdurate and untenable in law when they ask the court to read down the rule, and read in it circumstances under which the power can be used, but maintain that they will under no circumstances mend it nor should they be asked to do it, by incorporating in it those very circumstances.
With this prologue to the controversy, I may now examine the contentions advanced before us.
It is contended that it is necessary to retain the rule in its present ambiguous form because it is not possible to envisage in advance all the circumstances which may arise necessitating its use.
When we asked the learned counsel for the manage ments whether there were any circumstances which would not be governed by the broad guidelines given in the second proviso to subclause (2) of Article 311 of the Constitution, and why at least such intelligible guidelines should not be incorporated in the rule, we received no reply.
We could appreciate the embarrassment of the counsel, and as stated earlier.
there lies the nub of the matter.
What this Court in the various decisions has struck down is a similar rule in its present naked form without any guideline whatsoever, broad or 276 otherwise.
It was never the argument on behalf of the em ployees nor indeed is it to day before us that all the possible circumstances in which the rule may be used should be enumerated in it.
Their argument has been that at least the broad circumstances under which its exercise may become necessary should be incorporated to avoid an arbitrary use or rather the abuse of power, and to guarantee the security of employment.
That argument has been accepted by this Court in the past by holding that such a rule is violative of the Constitution and was not necessary to safeguard the inter ests of the undertakings or the interests of the public.
The decisions which appear to take an inconsistent view show on close analysis that either they were not dealing with the validity of the rule or were rendered when the dimensions of both Articles 14 and 21 were not expanded as they have been subsequently.
In the year 1990, it is not necessary for me to discuss in detail the authorities which have widened the horizons of Article 14 of the Constitution.
Some of these precedents are directly on the point in as much as the validity of similar service rules was considered there.
It is enough if I summarise the position of law as it obtains to day.
There is need to minimise the scope of the arbitrary use of power in all walks of life.
It is inadvisable to depend on the good sense of the individuals, however high placed they may be.
It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies.
It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however high they may be.
There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational.
History does not support it and reality does not warrant it.
In particular, in a society pledged to uphold the rule of law, it would be both unwise and impoli tic to leave any aspect of its life to be governed by dis cretion when it can conveniently and easily be covered by the rule of law.
The employment under the public undertakings is a public employment and a public property.
It is not only the under takings but also the society which has a stake in their proper and efficient working.
Both discipline and devotion are necessary for efficiency.
To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimsical.
With capricious service conditions, both discipline and devotion are endan 277 gered, and efficiency is impaired.
The right to life includes right to livelihood.
The right to livelihood therefore cannot hang on to the fancies of individuals in authority.
The employment is not a bounty from them nor can its survival be at their mercy.
Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental.
Fundamental rights can ill afford to be con signed to the limbo of undefined premises and uncertain applications.
That will be a mockery of them.
Both the society and the individual employees, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible.
The arbi trary rules, such as the one under discussion, which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.
These are the conclusions which flow from Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi & Anr., ; ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; The Manager, Government Branch Press & Anr.
vs D.B. Felliappa; , ; Managing Director, Uttar Pra desh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpay ee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Limited, ; ; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors.
vs Bombay Municipal Corporation & Ors.
etc., [1985] Supp. 2 SCR 51; Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 13 1; Central Inland Water Trans port Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr.
, ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors., ; ; N.C. Dalwadi vs State of Gujarat, ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp.
SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc.
vs Union of India & Ors., 7.
Since, before us the rule in question which admitted ly did not lay down explicit guidelines for its use was sought to be defended only on two grounds, viz., that the power conferred by it is to be exercised only by high au thorities and that it is capable of being read down to imply circumstances under which alone it can be used, I need deal only with the said grounds.
278 8.
The "high authority" theory so called has already been adverted to earlier.
Beyond the self deluding and self asserting righteous presumption, there is nothing to support it.
This theory undoubtedly weighed with some au thorities for some time in the past.
But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it.
Even while Shah, J. in his dissent ing opinion in Moti Ram Deka etc.
vs General Manager, N.E.P. Railways, Maligaon, Pandu, etc.
; , had given vent to it, Das Gupta, J. in his concurring judgment but dealing with the same point of unguided provisions of Rule 148(3) of the Railway Establishment Code, had not supported that view and had struck down the rule as being violative of Article 14 of the Constitution.
The majority did not deal with this point at all and struck down the Rule as being void on account of the discrimination it introduced between railway servants and other government servants.
The reliance placed on the decision in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; to support the above theory is also according to me not correct.
As has been pointed out there, the Commission of Inquiry Act, 1952, the validity of which was challenged on the ground of unguided powers to institute inquiries, was not violative of Article 14 because the long title and Section 3 of the Act had contained sufficient guidelines for exercise of the power.
Section 3 has stated that the appro priate government can appoint a Commission of Inquiry only for the purpose of making inquiry into any definite matter of public importance.
It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the government and not any petty official.
Hence a bare possibility that the power may be abused cannot per se invalidate the Act itself.
The proposi tion of law stated there is to be read as a whole and not in its truncated form.
The authority does not lay down the proposition that even in the absence of guidelines, the conferment of power is valid merely because the power is to be exercised by a high official.
It must further be remem bered that in this case, the contention was that although the appropriate government was given power to appoint Com mission of Inquiry into any definite matter of public impor tance, the delegation of power was excessive since it was left to the government to decide for itself in each case what constituted such matter.
The court repelled the argu ment by pointing out that "definite matter of public impor tance" constituted sufficient guideline to the government.
It was not, therefore, a case of no guideline but of the absence of details of the guideline.
279 Of similar nature is the reliance placed on the decision in The Collector of Customs, Madras vs Nathella Sampathu Chetty & Anr., ; for the proposition that the possibility of the abuse of the powers is no ground for declaring the provision to be unreasonable or void.
The relevant observations are made while repelling the conten tion there that the burden thrown under provisions of Sec tion 178A of the on the possessor of the goods to show that they were not smuggled was violative of Article 19(1)(f) and (g) of the Constitution.
The obser vations are as follows: "The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity.
The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being adminis tered in a reasonable manner.
The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
If so judged it passes the test of reasonable ness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Consti tution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements.
In saying this we are not to be understood as laying down that a law which might operate harshly but still be constitutionally valid should be operated always with harshness or that reasonableness and justness ought not to guide the actual administration of such laws.
" The statute there was saved by the provisions of Article 19(6) of the Constitution and was otherwise valid.
It was not a case of a provision which was constitutionally invalid being saved by recourse to the spacious assumption of its reasonable exercise in individual cases.
In Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; , it was a case of an employee of a private company who was given a discharge simpliciter.
This Court following its earlier decisions on the point observed that in several cases, contract of employment or Standing Orders authorise an industrial employer to terminate the employee 's service by giving one month 's notice or salary of one month in lieu of notice and normally an employer may, in a proper 280 case be entitled to exercise the power.
But where such order gives rise to an industrial dispute, the form of the order would not be decisive and the industrial adjudicator would be entitled to probe it to find out whether it is mala fide or is made in colourable exercise of the power.
Being a private employment, the power so conferred was not as sailed on the ground that it violated Article 14 of the Constitution.
I fail to understand the reliance placed on this authority to support the appellants ' case before us.
The other authorities relied on behalf of the appellants have similarly no relevance to the point.
In Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; , the Slum Clearance Act which was challenged there contained enough guidelines for the exer cise of the power.
In Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; , Order 26 of the Standing Orders and Service Regulations which was in question there required reasons to be given for effecting termination simpliciter of an employee.
In Organo Chemical Industries & Anr.
vs Union of India & Ors.
, ; , Section 143 of the Provident Fund Act which was challenged was held to be valid since the Act contained enough guide lines for imposing penal damages.
In Champaklal Chimanlal Shah vs The Union of India, , Rule 5 of the Central Civil Services (Temporary Services) Rules, 1949 was challenged on the ground that it discriminated between temporary and permanent employees.
There was no challenge to the absolute power given by the said rule to terminate the services of temporary employees.
In Ram Gopal Chaturve di vs State of Madhya Pradesh; , , it was a case of termination of a temporary Government servant 's services.
In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , the challenge was to the termina tion of services on the ground that it was done in colour able exercise of power under Regulation 48 of the Air India Employees ' Service Regulations.
The said regulation was not challenged on the ground that it gave unchannelised and unguided power of terminating the services of employees.
In Hira Nath Mishra & Ors.
vs The Principal, Rajendra Medical College, Ranchi and Anr.
, , it was the case of the expulsior of students from college for two academic sessions pursuant to the order passed by the Principal of that college.
The expulsion was effected following a confi dential complaint received from 36 girl students residing in the girls ' hostels alleging that the students in question d entered the compound of the girls ' hostels at belated night and walked without clothes on them.
The students were heard but the evidence of the girls was not recorded in their presence.
281 The Court held that under the circumstances the requirements of natural justice were fulfilled since the principles of natural justice were not inflexible and differed in differ ent circumstances.
I have not been able to appreciate the relevance of this decision to the point in issue.
I may now deal with the second contention vehemently urged on behalf of the appellants.
The contention was that if it is possible to save a legislation by reading it down to read in it words, expressions or provisions, it should not be struck down.
In order to save the present rule, it was urged on behalf of the appellants that the Court should read in it circumstances under which alone it can be used.
What precise circumstances should be read in it, however, was not stated by the learned counsel.
I am afraid that the doctrine of reading down a statute has been wrongly pressed into service in the present case.
The authorities relied upon by the learned counsel for the appellants not only do not help the appellants but go against their case.
It would be better if I first deal with the authorities cited at the Bar for they will also bring out the correct meaning and application of the said doctrine as well as its limitations.
In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc.
, [19411 FCR 12 what fell for consideration was whether the said two Act which were the Central pieces of legislation operated to regulate succession to agricultural land in the then Governors ' Provinces.
Admittedly, under the scheme of the then Government of India Act, 1935, after April 1, 1937, the Central Legislature was precluded from dealing with the subjects numerated in List II of the 7th Schedule so far as the Governors ' Provinces were concerned.
Laws with respect to the "devolution of agricultural land" could be enacted only by the Provincial Legislatures (Entry No. 21 of List II) and wills, intestacy and succession, save as regards agricultural land appeared as Entry No. 7 of List III, i.e., the Concurrent List.
Hence, it was obvious that the said Acts enacted as they were by the Central Legisla ture could not have dealt with succession to agricultural land so far as the Governors ' Provinces were concerned.
It is in these circumstances that the Federal Court read the two Acts of 1937 and 1938 as being not operative to regulate succession to agricultural land in the Governors ' Provinces but operative to regulate devolution by survivorship of property other than agricultural land.
It will thus be obvious that the limited purpose for which the doctrine of reading down was called into play in that case was to ex clude from the purview of the Act a subject which was not within the competence of the legislature which had enacted it.
282 In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors.
, ; the expression "decree for recovery of pos session" in Section 18(1) of the West Bengal Premises Rent Control (Temporary Provisions) Act (XVII of 1950) fell for consideration, and the controversy was whether it included also an order for recovery of possession made under Section 43 of the Presidency Small Cause Court Act, 1882 and hence a person against whom an order under the latter provision was made was not entitled to claim relief under the former provision.
In that connection the Court observed as follows: "It must always be borne in mind, as said by Lord Halsbury in Commissioner for Special Purposes of Income Tax vs Pem sel, LR 189 1 AC 53 1 at p. 549, that it is not competent to any Court to proceed upon the assumption that the Legisla ture has made a mistake.
The Court must proceed on the footing that the Legislature intended what it has said.
Even if there is some defect in the phraseology used by the Legislature the Court cannot, as pointed out in Crawford vs Spooner; , ; 4 MIA 179; aid the Legislature 's defective phrasing of an Act or add and amend or, by con struction, make up deficiencies which are left in the Act.
Even where there is a casus omissus, it is, as said by Lord Russel of Killowen in Hansraj Gupta vs Official Liquidator of Dehra Dun Mussoorie Electric Tramway Co. Ltd., [1933] LR 60 IA 13; AIR 1953 PC 63 for others than the Courts to remedy the defect.
In our view it is not right to give to the word "decree" a meaning other than its ordinary accepted meaning and we are bound to say, in spite of our profound respect for the opinions of the learned Judges who decided them, that the several cases relied on by the respondent were not correctly decided." In R.M.D. Chamarbaugwalla vs The Union of India, ; , more or less a similar situation arose.
The Parlia ment had enacted the to provide for the control and regulation of the prize competitions, and Section 2 of the Act had defined "Prize Competitions" to mean "any competition (whether called a crossword prize competition, a missing word competition, a picture prize competition or by any other name), in which prizes are offered for the solution of any puzzle based upon the build ing up, arrangement, combination or permutation of letters, words or figures".
The validity of.the restrictions imposed by the Act was challenged as going beyond Article 19(6) of the Constitution.
The Court took a recourse to the 283 doctrine of reading down and held that the definition of prize competition given in Section 2(d) of the Act had in view only such competitions as were of gambling nature and no others.
The Court further held there that in interpreting an enactment the Court should ascertain the intention of the legislature not merely from a literal meaning of the words used but also from such matters as the history of the legis lation, its purpose and the mischief which it seeks to suppress.
In Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 SCR 769, the challenge was to the constitutional validity of Section 124A of the Indian Penal Code.
Two views were before this Court with regard to the ambit of the said section.
One which held that words, deeds or writings constituted the offence of sedition under the said section only when they had the intention or tendency to disturb public tranquility, to create public disturbance or to promote disorder.
The other view was that it was not an essential ingredient of the offence of sedition under the said section that the words, deeds or writings should be intended to or be likely to incite public disorder.
The latter view of the section would have rendered it unconstitutional.
It is in these circumstances that this Court held that the former view ' should be taken which would render the said section consti tutional.
The Court in that connection also further held that keeping in mind the reasons for the introduction of the said section and the history of sedition the former view was the correct interpretation of the ambit of the said section.
In R.L. Arora vs State of Uttar Pradesh & Ors.
, ; , the validity of Sections 40 and 41 of the Land Acquisition Act, 1894, and of Section 7 of the Amending Act, was similarly upheld by placing on them construction which would render them constitutional.
The relevant provisions were construed to mean that where land is acquired for the construction of a building or work which subserves the public purpose of the industry or work in which a company is engaged or is about to be engaged, it can be said that the land was acquired for a public purpose.
In Jagdish Pandey vs The Chancellor, University of Bihar & Anr.
; , Section 4 of the Bihar State Uni versities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 was called in question as being violative of Article 14 of the Constitution on the ground that the said section did not make any provision for giving the teacher a hearing before passing the order thereunder.
By that section, every appointment, dismissal etc.
of any teacher of a college affiliated to the University (but not belonging to 284 the State) made on or after 27th November, 1961 and before 1st March, 1962 was to be subject to such order as the Chancellor of the University may on the recommendation of the University Service Commission established under Section 48 of the said Act pass with respect thereto.
The Court held that the said section was not invalid on the ground of unchannelised power given to the Chancellor because it never authorised the Chancellor to scrutinise the relevant ap pointments for satisfying himself that they were in accord ance with University Act and its Statutes etc.
The Court further held that although the said section did not make a provision for giving the teacher a hearing before passing order thereunder, such hearing must be read in the said section which the Commission had to give according to the principles of natural justice before making its recommenda tions to the Chancellor.
In Shri Umed vs Raj Singh & Ors., ; , one of the questions which fell for consideration was whether the expression "to withdraw or not to withdraw from being a candidate" referred to the stage of withdrawal of candida ture under Section 37 and whether it applied to a situation where a contesting candidate announced that he does not wish to contest the election or declared his intention to sit down after the last date for withdrawal of candidature under Section 37 had passed.
Over ruling its earlier decision in Mohd. Yunus Salim 's case AIR 1974 SC 12 18, the Court held that the function of the Court is to gather the intention of the legislature from the words used by it, and it would not be right for the Court to attribute an intention to the legislature which though not justified by the language used by it, accords with what the Court conceives to be reason and good sense and then bend the language of the enactment so as to carry out such presumed intention of the legisla ture.
For the Court to do so would be to overstep its lim its.
The Court also held that the words used by the legisla ture must be construed according to their plain natural meaning, and in order to ascertain the true intention of the legislature, the Court must not only look at the words used by the legislature but should also have regard to the con text and the setting in which they occur.
The word "context" has to be construed in a wide sense to mean all the provi sions of the Act which bear upon the same subject matter and these provisions have to be read as a whole and in their entirety each throwing light and illumining the meaning of the other.
In Sunil Batra etc.
vs Delhi Administration & Ors., it was held that under Section 30(2)of the which provided that a prisoner under sentence of death shall be confined in a 285 cell apart from all other prisoners, did not mean that he has to be confined cellularly or separately from the rest of the prisoners so as to put him in a solitary confinement.
The said expression had a restricted meaning and it only meant that such a prisoner has to be kept in a separate cell but one which is not away from the other cells.
Thus, the said expression, viz. "shall be confined in a cell apart from all other prisoners" in the said provision was read down to exclude solitary confinement.
In Excel Wear etc.
vs Union of India & Ors.
, ; , one of the questions before this Court was whether the Court could read in Section 25 O (2) of the that it was incumbent on the authority to give reasons in his order for refusing permission to close down the undertaking.
The Court answered it in the negative.
Although in the discussion that follows explicit reasons for the same are not found, it is legitimate to presume that the Court did not accept the said contention because of the clear and explicit language of the said section.
In Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , the majority judgment has discussed the limitations of the doctrine of reading down which is rele vant for our purpose.
In that case, it was contended on behalf of the State that Article 31C should be read down so as to save it from the challenge of unconstitutionality and it was urged that it would be legitimate to read into that Article the intendment that only such laws would be immu nised from the challenge under Article 14 and 19 as did not damage or destroy the basic structure of the Constitution.
The Court opined that "to do so in that case would involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently." According to the Court, "the device of reading down is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed.
One must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment . . . .
If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissi ble to read down the amplitude of that power so as to make it limited.
The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature.
We suppose that in the history of the constitu tional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends.
In fact, to accept the argument that we should read down Article 31C, so as to make it 286 conform to the ratio of the majority decision in Kesavananda Bharati, is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31, 3 lB and 31C are grouped.
Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it seems to us impossible to hold that we should still save Article 3 iC from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose." The Court then dealt with the argument of the learned Additional Solicitor General who contended that it was still open to the Court under Article 3 IC of the Constitution to decide whether the law enacted pursuant to it secured any of the Directive Principles of the State Policy and whether the object of the Directive Principles could not be secured without encroaching upon the Fundamental Rights and the extent to which encroachment was necessary and whether such encroachment violated the basic structure of the Constitu tion.
The Court opined that this argument was open to the same criticism to which the argument of Attorney General was open and that "it would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which according to the learned Additional Solicitor General, the courts are free to undertake." The Court fur ther held that in the very nature of things it was difficult for a court to determine whether a particular law gave effect to a particular policy and whether a law was adequate enough to give effect to that policy.
It was pointed out by the Court that it was not possible for the Court to set aside the law so enacted as invalid merely because in the opinion of the Court, the law was not adequate enough to give effect to that policy.
The Court further pointed out that "the only question open to judicial review was whether there was a direct and reasonable nexus between the impugned law and the provisions of the Directive Principles.
The reasonableness was to be examined with regard to such nexus and not with regard to the impugned law.
Hence, it was not open to the Court to undertake the kind of enquiry suggested by the Additional Solicitor General.
That would involve an extensive judicial review which was impermissible in law." The Court then pointed out that where the express words of the statute are clear and intended to give power without limitation, the statute cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content.
The Court opined that provisions such as these provide a 287 striking illustration of the limitations of the doctrine of reading down.
In Union of India & Anr.
vs Tulsiram Patel etc.
; , the majority judgment asserts that when the statute expressly excludes the rule of audi alteram partem, there is no scope for reintroducing it by a side door to provide the enquiry which has been expressly prohibited.
In Elliott Ashton Welsh, II vs United States, ; ; 26 L. ed.
2nd 308 while making useful observations on the doctrine of reading down and of recasting the statute, in his concurring opinion Harlan, J. stated as follows: "When the plain thrust of a legislative enactment can only be circumvented by distortion to avert an inevita ble constitutional collision, it is only by exalting form over substance that one can justify this veering off the path that has been plainly marked by the statute.
Such a course betrays extreme skepticism as to constitutionality, and, in this instance, reflects a groping to preserve the conscientious objector exemption at all cost.
I cannot subscribe to a wholly emasculated con struction of a statute to avoid facing a latent constitu tional question, in purported fidelity to the salutary doctrine of avoiding unnecessary resolution of constitution al issues, a principle to which I fully adhere.
It is, of course, desirable to salvage by construction legislative enactments whenever there is good reason to believe that Congress did not intend to legislate consequences that are unconstitutional, but it is not permissible, in my judgment, to take a lateral step that robs legislation of all meaning in order to avert the collision between its plainly intended purpose and the commands of the Constitution.
It must be remembered that although this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . or judicially rewriting it.
To put the matter another way, this Court will not consider the abstract question of whether Congress might have enacted a valid statute but instead must ask whether the statute that Con gress did enact will 288 permissibly bear a construction rendering it free from constitutional defects.
The issue comes sharply into focus in Mr. Justice Cardozo 's statement for the Court in Moore Ice Cream Co. vs Rose; , ,379; 77 L ed.
1245, 1270: 'A statute must be construed, if fairly possi ble, so as to avoid not only the conclusion that it is unconstitutional, but also grave doubts upon that score. ' .
But avoidance of a difficulty will not be pressed to the point of disingenuous evasion.
Here the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power.
The problem must be faced and answered.
" If an important congressional policy is to be perpetuated by recasting unconstitutional legislation, as the prevailing opinion has done here, the analytically sound approach is to accept responsibility for this decision.
Its justification cannot be by resort to legislative intent, as that term is usually employed, but by a different kind of legislative intent, namely the presumed grant of power to the courts to decide, whether it more nearly accords with Congress ' wishes to eliminate its policy altogether or extend it in order to render what Congress plainly did intend, constitutional.
It is thus clear that the doctrine of reading down or of recasting the statute can be applied in limited situa tions.
It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionali ty.
It is an extention of the principle that when two inter pretations are possible one rendering it constitutional and the other making it unconstitutional, the former should be preferred.
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitu tion.
The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute, the context in which the provi sion occurs and the purpose for which it is made.
However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord 289 with good reason and conscience.
In such circumstances, it is not possible for the Court to remake the statute.
Its only duty is to strike it down and leave it to the legisla ture if it so desires, to amend it.
What is further, if the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided.
One of the situations further where the doctrine can never be called into play is where the statute requires an extensive additions and deletions.
Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so.
Judged in the context of the above principles I am of the view that the doctrine cannot be availed of for saving the present regulation In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Transport Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950 (hereinafter referred to as the "Act").
The object of the Act is to provide for the establishment and the regulation of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi.
There is nothing either in the object of the service regulations of which the present regulation is a part or in the object of the Act which has a bearing on the said Regulation 9(b).
If anything, the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertak ing.
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation.
Secondly, the language of the regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permissible to read in it any meaning other than what is clearly sought to be conveyed by it.
Thirdly, the context of the said regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees.
Sub clause (a) of the said Regulation 9 mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice.
Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of establishment or in circumstances other than those mentioned in subclause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employee 's services.
The intention of the rule making authority, therefore, is more than clear.
It 290 was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee.
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision.
What is more, the kind of recasting which is suggested on behalf of the appellants would not only distort the intention of the rule making authority but would also require extensive amendment to it of a very vague nature.
The appellants suggest firstly that we should read into the regulation a provision that the concerned employee would be given a hearing.
The suggestion itself begs the question: Hearing for what? Is he to be heard with regard to his misconduct? If so, it will require that he should first be intimated of the misconduct of which he is guilty.
But that kind of a situation is taken care of by sub clause (a) of the said regulation.
There is, therefore, no need of a separate provision for the same.
If, on the other hand, the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing.
The reading in the rule of a mere provision of a hearing is, therefore, meaningless.
The other suggestion made on behalf of the appellants is still more objectionable.
The suggestion was that we should read in the rule all circumstances where it is not possible or necessary to hold an enquiry.
1 thought that such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311(2).
In fact, one of the public undertakings viz., Indian Airlines has come out with such regulation being amended Regulation 13 of its Employ ees ' Service Regulations, and the same has been placed on record by them.
What is necessary to note in this connection is that the reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do.
1 know of no authority which supports such wide reading down of any provision of the statute or rule/regulation.
For all these reasons the doctrine of reading down is according to me singularly inapplicable to the present case and the arguments in sup port of the same have to be rejected.
I am, therefore, of the view that there is no sub stance in this appeal.
I would rather that the long departed rule rests in peace at least now.
Hence I dismiss Civil Appeal No. 2876/86 with costs.
1 allow Civil Appeal No. 1115 of 1976 and agree with the order proposed to be passed therein by the learned Chief Justice.
291 The rest of the civil appeals, and Special Leave Peti tion (Civil) No. 7612 of 1987 be referred to the Division Bench for disposal in accordance with the opinion expressed in Civil Appeal No. 2876 of 1986 hereinabove.
The applica tion for intervention are allowed.
K. RAMASWAMY, J: 1.
These batch cases concern, a refer ence.
the correctness of the ratio rendered in Central Inland Water Transport Company Limited vs Brojonath Ganguly, = (for short Brojo Nath).
The facts in C.A. No. 2886/86 lie in a short compass and sufficient for deciding the controversy are stated thus: 2.
The Delhi Transport Corporation, a statutory body terminated the services of its three permanent employees, the Conductor (R. 2), Asstt.
Traffic Incharge (R. 3), and the Driver (R. 4) for their alleged inefficiency, by exer cising the power of Regulation 9(b) of Delhi Road Transport Authority (Conditions of appointment and Services) Regula tion, 1952 (for short "the Regulation") framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Transport (Amendment) Act, 1971 (for short "the Act").
The first respondent union assailed the validity of the Regula tion which the High Court of Delhi struck it down as offend ing Articles 14 and 16 of the Constitution.
The High Court solely relied on the ratio in Brojo Nath whose correctness is the subject of the reference: My learned brother, My Lord the Chief Justice extensively stated the argument of the counsel on either side.
Therefore, to avoid needless burden on this judgment, I consider it redundant to reiterate them once over.
Regulation 9(b) of the Regulations read thus: Termi nation of Services: "Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) above, one.
month 's notice or pay in lieu thereof will be given to all categories of employees" as is similar to Rule 9 of the Rules in Brojo Nath 's case (supra) which this Court declared to be Henry VIII clause, conferring an absolute, arbitrary and unguided power upon that Corporation and was held to be ultra vires of the provisions of the Constitution and was void under section 23 of the .
As stated earlier, the correctness thereof is the primary question in these appeals.
Sri Ashok Desai, the learned Solicitor General vehe mently contended that, under ordinary law of "master and servant" the 292 Corporation is empowered by the Contract of Service to terminate the services of its employees in terms thereof.
The declaration in Brojo Nath 's case that such a contract is void, under section 23 of the or opposed to public policy offending the Fundamental Rights and the Directive Principles, is not sound in law.
He contends that as a master the Corporation has unbridled right to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employ ees.
The termination, if is found to be wrongful, the only remedy available to the employees is to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case.
In support thereof, he cited passages from Chitti on Contract, Halsbury 's Laws of England and the ratio in Union of India vs Tulsiram PateI, [1985] Supp.
2 SCR 131 = AI He also placed strong reliance on Industrial Law and the decisions of this Court cited by my learned brother, the Chief Justice.
Alternatively he contended that the relevant regulations would be read down so as to be consistent with articles 14 and 16(1) read with article 19(1)(g) of the Constitution and the authority invested with such power could in an appropriate case, report to terminate the services of an employee expeditiously without recourse to an elaborated enquiry and opportunity of hear ing.
The latter contention of reading down the relevant rules received support from the learned Attorney General Sri Soli J. Sorabjee and other counsel appearing for the employ ers.
M/s. M.K. Ramamurthi, R.K. Garg, and P.P. Rao, learned counsel appearing for the employees resisted these conten tions.
The main controversy centres round the question whether the employer, Statutory Corporation or instrumental ity or other authority under article 12 of the Constitution has unbridled power to terminate the services of a permanent employee by issue of notice or pay in lieu thereof without inquiry or opportunity, in exercise of the power in terms of contract which include statutory Rules or Regulations or instructions having force of law.
It is undoubted that under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provisions for termination of service by notice, in terms thereof, it can be so determined and if the contract finds no provisions to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice.
Where no notice or a reasonable notice was issued, before terminating the contract, the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages.
But this common law principle could be applied to the employees, appointed by a Statutory Corporation or authority or an instrumentality within 293 the meaning of Article 12 of the Constitution is the square question.
It is not disputed that Delhi Road Transport Corporation is a Statutory Corporation under the Act and the Regulations are statutory and its employees are entitled to the fundamental Rights enshrined in Part III of the Consti tution.
It is well settled law by a heed role of decisions of this Court that the Corporation or a Statutory Authority or an instrumentality or other authority under article 12 of the Constitution is not free, like an ordinary master (a private employer), to terminate the services of its employ ees at its whim or caprices or vagary.
It is bound by the Act and the Regulation and the paramount law of the land, the Constitution.
Nature of the Power Statutory Authority to terminate the services of its employees.
In Sukhdev Singh vs Bhagatram, ; = ; , the Constitution Bench of this Court put a nail in the coffin of the play of the private master 's power to hire and fire his employees and held that Regula tions or Rules made under a Statute apply uniformly to everyone or to all members of the same group or class.
They impose obligations on the statutory authorities who cannot deviate from the conditions of service and any deviation will be enforced through legal sanction of declaration by Courts to invalidate the actions in violation of the Rules or Regulations.
The statutory bodies have no free hand in framing the terms or conditions of service of their employ ees.
The Regulations bind both the authorities and also the public.
The powers of the statutory bodies are derived, controlled and restricted by the Statutes which create them and the Rules and Regulations framed thereunder.
The Stat ute, thereby fetters on the freedom of contract.
Accordingly declaration was granted that dismissal or removal of an employee by statutory Corporation in contravention of statu tory provision as void.
Mathew, J. in a separate but concur rent judgment held that a Public Corporation being the creation of a Statute is subject to statutory limitations as a State itself.
The preconditions of this Part II viz., that the corporation is created by Statute and the existence of power in the corporation is to invade a statutory right of the individual.
Therefore, the governing power must be subject to fundamental statutory limitations.
The need to subject the power centres to the control of the Constitution requires an expansion of concept of State action.
The duty of State is affirmative duty seeing that all essentials of life are made available to all persons.
The task of State today is to make the achievement of good life both by remov ing obstacles in the path of such achievement and by assist ing individual in realis 294 ing his ideal of self perfection.
The employment under public corporation is a public employment and, therefore, the employee should have the protection which appurtains to public employment.
(emphasis supplied).
The Court must, therefore, adopt the attitude that declara tion is a normal remedy for a wrongful dismissal in case of public employees which can be refused in exceptional circum stances.
The remedy of declaration should be a remedy made an instrument to provide reinstatement in public sector.
This principle was extended to numerous instances where the termination of services of the employees of a statutory corporation was affected in violation of the principles of natural justice or in transgression of the statutory rules etc.
In U.P. State Warehousing Corporation vs N.V. Vajpayee, at p 780 F to G and 783G to 784A this Court held that statutory body cannot terminate the services of its employees without due enquiry held in accordance with the principles of natural justice.
The persons in public employment are entitled to the protection of Articles 14 and 16 of the Constitution, when the service was arbitrarily terminated.
The question, therefore, is whether the statuto ry corporations are entitled to be invested with absolute freedom to terminate the services of its employees in terms of the contract of service.
In Ramana vs International Airport Authority of India, ; = (1979) SC.
p. 1628 this Court held that expression of welfare and social service functions necessitates the State to assume control over natural and economic resources and large scale natural and commercial activities.
For the attainment of socio economic justice, there is vast and notable increase of frequency with which ordinary citizens come into relationship of direct encoun ters with the State.
The Government in a welfare state is the regulator and dispenser of social services and provider of large number of benefits, including jobs etc.
Thousands of people are employed in Central/State Government Services and also under local authorities.
The Government, therefore, cannot act arbitrarily.
It does not stand in the same posi tion as a private individual.
In a democratic Government by rule of law, the executive Government or any of its officers cannot held to be possessed of arbitrary power over the interests of the individuals.
Every action of the Government must be informed with reason and should be free from arbi trariness.
That is the very essence of rule of law.
It was further held: "It was, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of 295 giving jobs or entering into contracts . . the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard of norm which, is not arbitrary, irrational or irrelevant.
The power of discretion of the Government in the matter of grant of largess including award of jobs, . . . . . must be conditioned and structured by rational relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action or the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.
" This statement of law, though was made in the context of contractual relations, it is a general law with width and amplitude which permeates the entire spectrum of actions, legislative as well as executive.
The Constitution is the permanent law of the land and its preamble is an integral part thereof.
It assures Social and Economic Justice and also accords equality of opportuni ty and status as well as equality before law assuring digni ty of the individual.
The Constitution Forty Second Amend ment Act introduced "Socialism" in the Preamble and made explicit of what is latent in the Constitutional Scheme.
Article 14 accords equal protection of law and equality before law.
Article 16(1) provides right to an appointment or employment to an office or post under the State.
Article 19(1)(g) assures right to occupation or avocation.
article 21 assures right to life and any deprivation is as per the procedure established by law.
In General Manager, Southern Railway vs Rangachari, [1962] S.C.R. page 586 it was held that matters relating to employment would include salary, increments, leave, gratuity, pension, age of superannuation etc.
Similarly, in respect of appointments, such matters would include all the terms and conditions of service per taining to the said office.
All those matters are included in the expression "matters relating to employment or ap pointment" within the meaning of article 16(1) of the Constitu tion.
This was reiterated in State of M.P.v.
Shardul Singh, [19701 3 S.C.R. page 302 at 305 306 that conditions of service include holding of posts right from the time of appointment till his retirement beyond it like pension etc.
The middle class, lower middle class and lower classes ' educated 296 youths generally, if not mainly, depend on employment or appointment to an office or posts under the States which include corporations, statutory body or instrumentality under article 12 of the Constitution as source to their liveli hood and means to improve their intellectual excellence and liner facets of life individually and collectively as a member of the society so that himself and his dependents are economically sound, educationally advanced and socially dignified so that the nation constantly rises to standards of higher level in an egalitarian social order under rule of law as is obligated under article 51A(J ).
Right to life scope of 9.
The right to life, a basic human right assured by article 21 of the Constitution comprehends something more than mere animal existence i.e. dignity of the individual.
Field J. in Munn vs Illinois, ; and 154 held that by the term "life" as here used, something more is meant than mere animal existence.
The inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed.
The deprivation not only of life but of . . if it a efficacy be not lettered away by Judicial decision.
In Kharak Singh vs State of U.P., [1964] 1 SCR 332 this Court approved the definition of life given by Field J. in his dissenting opinion.
In Olga Tellis vs Bombay Munici pal Corporation, [1985] 2 Suppl.
SCR page 51 at 79 this Court further laid that an equally important facet of the right to life is the right to livelihood because no person can live without the means of livelihood.
If the right to livelihood is not treated as a part of the Constitutional right to life, the easiest way of depriving a person of his right to life would be to deprive him of his means of live lihood to the point of abrogation . .
That, which alone can make it possible to live, leave aside which makes life liveable, must be deemed to be an integral component of the right to life . .
The motive force which propels their desertion of their hearths and homes in the village is the struggle for survival, that is the struggle for life.
So unimpeachable is the nexus between life and the means of livelihood.
Right to life does not only mean physicaI exist ence but includes basic human dignity, vide Menaka Gandhi vs Union of India, [1978] 2 SCR 621 John Stuart Mill in his 'Consideration of Representative Govt. ' said years ago that "the power of the State is to promote virtue and intelli gence of the people".
In State of Maharashtra vs Chunder Bhan, = ; Chinnappa Reddy, J. held that public employment opportunity is a national wealth in which all citizens are equally entitled to share and Varadarajan, J. held that public employment is the property of the nation which has to be shared equally.
This rule 297 was laid when rule 15(1)(ii)(b ') of B.C.S. Rules to pay subsistence allowance during period of suspension @ Rs. 1 per month pending departmental enquiry was challenged and declared the rule as ultra vires by operation of articles 14, 16, 21 and 311(2).
The right to public employment and its concomitant right to livelihood, thus, receive their succour and nourishment under the canopy of the protective umbrella of articles 14, 16(1), 19(1)(g) and 21.
Could statutory law arbitrarily take away or abridged or abrogated it? In Board of Trustees, Port of Bombay vs Dilip Kumar, ; = ; this Court held that the expression "life" does not merely connote animal existence or a continued drudgery through life, the expression life has a much wider meaning.
Where, therefore, the, outcome of a departmental enquiry is likely to affect reputation or livelihood of a person, some of the liner graces of human civilisation which makes life worth living would be jeopardised and the same can be put in jeopardy only by law which inheres fair procedure.
In Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors., ; it was held that the standing order 31 which confers arbitrary, uncanalised and drastic power on the Manager to dismiss an employee without enquiry, apart from being in violation of basic requirement of natu ral justice, is such a drastic nature as to effect the livelihood and put a stigma on the character of the workman.
In Francis Corallie vs U.T. of Delhi, ; = ; this Court held that "it is for the Court to decide, in exercise of its constitutional power of judicial review, whether the deprivation of life or personal liberty in a given case is by procedure which is reasonable, fair and just and fair treatment".
The tests of reason and jus tice cannot be abstract nor can be divorced from the actual ities of life and the needs of the Society.
The tests ap plied must be pragmatic and purposive lest they cease to be reasonable.
Reasonableness must be meaningful and effica cious in content as well as in form.
The procedure provided in Rule 9(b) or allied rules, therefore, must not be just, fair and reasonable so as to be in conformity with articles 14 and 21 is the cry of the case.
The position of the public employee is whether status: The distinguishing feature of public employment is status.
In Roshanlal Tandon vs Union of India, ; at 195 196 the Constitution Bench held that the legal position of a Government servant is more one of status than of contract.
The hall mark of status 298 is the attachment to a legal relationship of rights and duties imposed by, the public law and not by mere agreement of the parties.
The employment of the Government servant and his terms of service are governed by statute or statutory rules.
Once he is appointed to the post or office, the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by Statute or Statutory Rules.
The relationship between the Government and its servants is not like an ordinary contract of service between a master and servant.
The legal relationship is in the nature of status.
The duties of statute are fixed by the law and in the enforce ment of the duties society has an interest.
Status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agree ment between the parties concerned.
In Calcutta Dock Labour Board vs Jarfar Imam, it was held that the statutory scheme of employment confers on the worker a status.
An unlawful act is an interference with status.
This view was followed in Sirsi Municipality vs Cecelia Kom Francis Tellis, ; Beg, J. (as he then was) held that the principles applicable to the relation of a Private Master and servant unregulated by statute, could not apply to the cases of a public statutory body exercising powers of punishment lettered or limited by statute and relevant rules of procedure.
This Court in a recent decision extended all the benefits of pay scales to all the Central Government Corporate Sector employees.
It is, thus, I hold that the employees of the corporations, statutory authority or instrumentality under article 12 have statutory status as a member of its employees.
The rights and obligations are governed by the relevant statutory provisions and the em ployer and employee are equally bound by that statutory provisions.
Nature of the right of a permanent employee to a post In Purushottam Lal Dhingra vs Union of India, ; at 84 1 843 it was held that the appointment to a perma nent post may be substantive or on probation or on officiat ing basis.
A substantive appointment to a permanent post in a public service confers normally substantive right to the post and he becomes entitled to hold a lien on the post.
He is entitled to continue in office till he attains the age of superannuation as per rules or is dismissed or removed from service for inefficiency, misconduct or negligence or any other disqualification in accordance with the procedure prescribed in the rules, and fair and reasonable opportunity of being heard or on compulsory retirement or in certain circumstances, subject to the conditions like re employment on abolition of post.
In Motiram Daka vs General Manager, [1964] 5 299 SCR 683 at 718 721=AIR 1964 SC 600 at 608 & 609 majority of seven Judges ' Bench held that a permanent post carries a definite rate of pay without a limit of time and a servant who substantively holds a permanent post has a title to hold the post to which he is substantively appointed, and that in terms, means that a permanent servant has a right to hold the post until, of course, he reaches superannuation or until he is compulsorily retired under the relevant rule.
If for any other reason that right is invaded and he is asked to leave the service the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of penalty and amounts to removal.
In other words, termination of service of a permanent servant, otherwise than on superannuation of compulsory retirement, must per se amount to his removal and so, by Rule 148(3) or Rule 149(3) of Rly.
Establishment Rules if such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid.
A permanent employment assures security of tenure which is essential for the efficiency and incorruptibility of public administration.
In Guruder Singh Sidhu vs State of Pepsu, ; another Constitu tion Bench held that for efficient administration of the State, it is absolutely essential that permanent public servant should enjoy a sense of security of tenure.
The safeguard which article 311(2) affords is no more than this that in case it is intended to dismiss or remove or reduce them in rank, a reasonable opportunity should be given to them of showing cause against the action proposed to be taken in regard to them.
In Motiram Daka 's case (supra) it was further held that in a modern democratic State, the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority.
If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straight forward and effi cient permanent civil servants, it is of utmost importance, even from the point of view of the State, that they should enjoy a sense of security which alone can make them inde pendent and truly efficient.
The sword of damocles hanging over the heads of permanent railway servants in the form of Rule 148(3) or Rule 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused.
Thereby this Court laid emphasis that a permanent employee has a right or lien on the post he holds until his tenure of service reaches superannuation so as to earn pension at the evening of his life unless it is determined as 300 per law.
An assurance of security of service to a public employee is an essential requisite for efficiency and incor ruptibility of public administration.
It is also an assur ance to take independent drive and initiative in the dis charge of the public duties to alongate the goals of social justice set down in the Constitution.
This Court in Daily Rated Casual Labour vs Union of India, 1 SCC 122 at 130 131 further held that the right to work, the right to free choice of employment, the right to just and favourable conditions of work, the right to protection against unemployment etc., and the right to security of work are some of the rights which have to be ensured by appropriate legislative and executive measures.
It is true that all these rights cannot be extend ed simultaneously.
But they do indicate the socialist goal.
The degree of achievement in this direction depends upon the economic resources, willingness of the people to produce and more than all the existence of industrial peace throughout the country.
Of those rights the question of security of work is of most importance.
If a person does not have the feeling that he belongs to an organisation engaged in pro duction he will not put forward his best effort to produce more.
(emphasis supplied) That sense of belonging arises only when he feels that he will not be turned out of employ ment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contrib ute to the maximisation of production.
It must, therefore, be held that a permanent employ ee of a statutory authority, corporation or instrumentality under article 12 has a lien on the post till he attains super annuation or compulsorily retired or service is duly termi nated in accordance with the procedure established by law.
Security of tenure ensures the benefit of pension on retire ment.
Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty.
He/ she has a right to security of tenure which is essential to inculcate a sense of belonging to the serv ice or organisation and involvement for maximum production or efficient service.
It is also a valuable right which is to be duly put an end to only as per valid law.
How to angulate the effect of termination of service Law is a social engineering to remove the existing irabal ance and 301 to further the progress, serving the needs of the Socialist Democratic Bharat under rule of law.
The prevailing social conditions and actualities of life are to be taken into account to adjudging whether the impugned legislation would subserve the purpose of the society.
The arbitrary, unbrid dled and naked power of wide discretion to dismiss a perma nent employee without any guidelines or procedure would tend to defeat the constitutional purpose of equality and allied purposes referred to above.
Courts would take note of actu alities of life that persons actuated to corrupt practices are capable, to maneuver with higher echolons in diverse ways and also camouflage their activities by becoming syco phants or chronies to the superior officers.
Sincere, honest and devoted subordinate officer unlikely to lick the boots of the corrupt superior officer.
They develop a sense of self pride for their honesty, integrity and apathy and inertia towards the corrupt and tent to undermine or show signs of disrespect or disregard towards them.
Thereby, they not only become inconvenient to the corrupt officer but also stand an impediment to the on going smooth sipbony of cor ruption at a grave risk to their prospects in career or even to their tenure of office.
The term efficiency is an elusive and relative one to the adept capable to be applied in diverse circumstances.
if a superior officer develops likes towards sycophant, tough corrupt, he would tolerate him and found him to be efficient and pay encomiums and corruption in such eases stand no impediment.
When he finds a sincere, devoted and honest officer to be inconvenient, it is easy to cast him/her off by writing confidential with delightfully vague language imputing to be 'not upto the mark ', 'wanting public relations ' etc.
Yet times they may be termed to be "security risk" (to their activities).
Thus they spoil the career of the honest, sincere and devoted officers.
In stances either way are gallore in this regard.
Therefore, one would be circumspect, pragmatic and realistic to these actualities of life while angulating constitutional validity of wide arbitrary, uncanalised and unbriddled discretionary power of dismissal vested in an appropriate authority either by a statute or a statutory rule.
Vesting arbitrary power would be a feeding ground for nepotism and insolence; in stead of subserving the constitutional purpose, it would defeat the very object, in particular, when the tribe of officers of honesty, integrity and devotion are struggling under despondence to continue to maintain honesty, integrity and devotion to the duty, in particular, when moral values and ethical standards are fast corroding in all walks of life including public services as well.
It is but the need and imperative of the society to pat on the back of those band of honest, hard working officers of integrity and devotion to duty.
It is the society 's interest to accord such officers security of service and avenues of promotion.
302 That apart, the haunting fear of dismissal from service at the vagary of the concerned officer would dry up all springs of idealism of the employee and in the process coarsens the conscience and degrades his spirit.
The nobler impulses of minds and the higher values of life would not co exist with fear.
When fear haunts a man, happiness van ishes.
Where fear is, justice cannot be, where fear is, freedom cannot be.
There is always a carving in the human for satisfaction of the needs of the spirit, by arming by certain freedom for some basic values without which life is not worth living.
It is only when the satisfaction of the physical needs and the demands of the spirit coexists, there will be true efflorescence of the human personality and the free exercise of individual faculties.
Therefore, when the Constitution assures dignity of the individual and the right to livelihood the exercise of the power by the executive should be cushioned with adequate safeguards for the rights of the employees against any arbitrary and capracicous use of those powers.
Contract of service must be consistent with the Constitu tion.
From the above perspective vis a vis constitutional, social goals and rights of the citizens assured in the preamble, Parts III & IV i.e. the trinity, the question whether the statutory corporation or the instrumentality or the authority under article 12 of the Constitution is validly empowered to terminate the services of a permanent employee in terms of the contract of employment or rules without conducting an enquiry or an opportunity of show cause of proposed order of termination of the service.
The operating in British India was extended to the merged States in 1949 & 1950 except to the State of Jammu & Kashmir.
Therefore, after Bharat attained independ ence on August 15, 1947, the is applica ble to all States except Jammu & Kashmir.
By operation of Article 372 of the Constitution, the continues to be in operation subject to the provisions of the Constitution.
The is an amending as well as consolidating Act as held in Ramdas Vithaldas Durbar vs
section Amerchand & Co., 43 Indian Appeals 164.
Thereby common law principles applicable in England, if they are inconsist ent with or derogation to the provisions of the or the Constitution to that extent they stand excluded.
Any law, muchless the provisions of Contract Act, are inconsistent with the fundamental rights which guaran teed in Part III of the Constitution, by operation of Arti cles 13 of the Constitution, are void.
Section 2(h) of the defines "an agreement" including an agreement of service and becomes a Contract only when it is enforceable by 303 law.
If it is not enforceable it would be void by reason of section 2(g) thereof.
The question, therefore, is whether the contract of service or Regulation 9(b) in derogation to the Fundamental Rights guaranteed in of the Consti tution is valid in law and would be enforceable.
Contract whether changeable with changing times.
The law of contract, like the legal system itself, involves a balance between competing sets of values.
Freedom of contract emphasises the need of stability, certainty and predictability.
But, important as is values are, they are not absolute, and there comes a point where they "face a serious challenge" against them must be set the values of protecting the weak, oppressed and the thoughtless from imposition and oppressed.
Naturally, at a particular time, one set of value tends to be emphasised at the expense of the other as the time changes the values get changed and the old values are under replacement and new values take their due place.
Though certainty and predictability in ordinary commercial contract law is emphasised and insisted upon the need for progress of the society and to removing the disa bilities faced by the citizens and their relations when encounter with the State or its instrumentalities are in conflict with the assured constitutional rights demand new values and begin to assert themselves, for no civilised system of law can accept the implications of absolute sanc tity of contractual obligations and of their immutability.
In paragraph 4 of Chitty on Contracts (25th Edition, Volume I) it is stated that "freedom of contract is a rea sonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed and no injury is done to the economic interest of the commu nity at large.
In Anson 's Law of Contract at p. 6 & 7 stated the scope of freedom of contract in the changing circumstances thus: "Today the position is seen in a very different light.
Freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the econom ic interests of the community at large.
In the more compli cated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction.
It is now realised that economic equality often does not exists in any real sense, and that individual interests have to be 304 made to subserve those of the community hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract and the law today interferes at numerous points with the freedom of the par ties to make what contract they like.
The relation between employers and employed, for example, have been regulated by statutes designed to ensure that the employees condition of work are safe, that he is properly protected against redun dancy and that he knows his terms of service.
The public has been protected against economic pressure by such measures as the Rent Acts, the supply of goods (implied terms) at, the consumer Credit Act and other similar enactments.
These legislative provisions will override any contrary terms which the parties may make for themselves.
Further, the legislature has intervened in the Restrictive Trade Practice Act 1956 and the Fair Trading Act, 1973 to promote competi tion in industry and to safeguard the interests of consum ers.
This intervention is specially necessary today when most contracts entered by ordinary people are not the result of individual negotiation.
It is not possible for a private person to settle the terms of his agreement with a British Railways Board or with a local electricity authority.
The standard form ' contract is the rule.
He must either accept the terms of this contract in toto, or go without.
Since, however, it is not feasible to deprive onself of such necessary services, the individual is compelled to accept on those terms.
In view of this fact, it is quite clear that freedom of contract is now largely an illusion.
The trinity of the Constitution assure to every citizen Social and Economic Justice, Equality of Status and of opportunity with dignity of the person.
The State is to strive to minimise the inequality in income and eliminate inequality in status between individuals or groups of peo ple.
The State has intervened with the freedom of contract and interposed by making statutory law like Rent Acts, Debt Relief Acts, Tenancy Acts, Social Welfare and Industrial Laws and Statutory Rules prescribing conditions of service and a host of other laws.
All these Acts and Rules are made to further the social solidarity and as a step towards establishing an egalitaran socialist order.
This Court, as a court of constitutional conscience enjoined and a jealously to project and uphold new values in establishing the egali tarian social order.
As a court of constitutional function ary exercising equity juris 305 diction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscienable rules or conditions when the citizen is really unable to meet on equal terms with the State.
It is to find whether the citizen, when entered into contracts or service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appropriate declaration.
Therefore, though certainty is an important value in normal commercial contract law, it is not an absolute and immutable one but is subject to change in the changing social condi tions.
In Brojonath 's case, Madan, J., elaborately consid ered the development of law relating to unfair or unreasona ble terms of the contract or clauses thereof in extenso and it is unnecessary for me to traverse the same grounds once over.
The learned Judge also considered the arbitrary, unfair and unbridled power on the envil of distributive justice or justness or fairness of the procedure envisaged therein.
The relevant case law in that regard was dealt with in extenso in the light of the development of law in the Supreme Court of United States of America and the House of Lords in England and in the continental countries.
To avoid needless burden on the judgment, I do not repeat the same reasoning.
I entirely agree with the reasoning and the conclusions reached therein on all these aspects.
Whether State can impose unconstitutional Conditions.
The problem also would be broached from the angle whether the State can impose unconstitutional conditions as part of the contract or statute or rule etc.
In 1959 60 73 Harvard Law Review, in the Note under the Caption 'Unconsti tutional Condition ' at page 1595 96 it is postulated that the State is devoid of power to impose unconstitutional conditions in the contract that the power to withhold lar gess has been asserted by the State in four areas i.e., (1) regulating the right to engage in certain activities; (2) Administration of Government welfare programme; (3) Govern ment employment; and (4) Procurement of contracts.
It was further adumberated at pages 1602 1603 thus: "The sovereign 's constitutional authority to choose those with whom it will contract for goods and services is in effect a power to withhold the benefits to be deprived from economic dealings with the government.
As government 306 activity in the economic sphere increases, the contracting power enables the government to control many hitherto unreg ulated activities of contracting parties through the imposi tion of conditions.
Thus, regarding the government as a private entrepreneur threatens to impair constitutional rights . .
The Government, unlike a private individual, is limited in its ability to contract by the Constitution.
The federal contracting power is based upon the Constitu tion 's authorisation of these acts 'necessary and proper ' to the carrying out of the functions which it allocates to the national government, Unless the objectives sought by terms and conditions in government contracts requiring the surren der of rights are constitutionally authorised, the condi tions must fall as ultra vires exercise of power.
" Again at page 1603, it is further emphasised thus: "When conditions limit the economic benefits to be derived from dealings with the government to those who forego the exercise of constitutional rights, the exclusion of those retaining their rights from participation in the enjoyment of these benefits may be a violative of the prohibition, implicit in the due process clause of fifth amendment and explicit in the equal protection clause of the fourteenth amendment against unreasonable discrimination in the Govern mental bestow of advantages.
Finally, disabling those exer cising certain rights from participating in the advantages to be derived from contractual relations with the government may be a form of penalty lacking in due process.
To avoid invalidation for any of the above reasons, it must be shown that the conditions imposed are necessary to secure the legitimate objectives of the contract ensure its effective use, or protect society from the potential harm which may result from the contractual relationship between the govern ment and the individual.
Professor Guido Calabresi of Yale University Law School in his "Retroactivity, Paramount power and Contractu al Changes" ( 196 1 62) 71 Yale Law Journal P. 119 1 at 1196) stated that the Government can make contracts that are necessary and proper for carrying out any of the specific clauses of the Constitution or power to spend for general welfare.
The Federal Government has no power, inherent or sovereign, other than those specifically or explicitly granted to it by 307 the Constitution.
At page 1197, it is further stated thus: "The Government acts according to due process standards for the due process clause is quite up to that task without the rule.
Alterations of Government contracts are not desirable in a free country even when they do not constitute a 'tak ing ' of property or impinge on questions of fundamental fairness of the type comprehended in due process.
The gov ernment may make changes, but only if war or commerce re quire them and not on the broader and more ephemeral grounds that the general welfare would be served by the change.
Any other rule would allow the Government to which almost at will.
These principles were accepted and followed by the Andhra Pradesh High Court in V. Raghunadha Rao vs State of Andhra Pradesh, dealing with A.P. Stand ard specification Clauses 11, 29, 59, 62(b) and 73 and declared some clauses to be ultra vires of Articles 14, 19(1)(g) and 21 of the Constitution and Sections 23 and 27 of the Contract Act.
In Brojonath 's case (supra) after elaborate consid eration of the doctrine of "reasonableness or fairness" of the terms and conditions of the contract vis a vis the relative bargaining power of the contracting parties this Court laid down that the principles deductable from the discussion made therein is in consonance with right or reason intended to secure socio economic justice and con forms to mandate of the equality clause in Article 14.
The principle laid was that courts will not enforce and will, when called upon to do so, strike down an unfair and unrea sonable contact or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power . .
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them.
It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscienable a clause in that contract or form or rules may be.
This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal or where both parties are businessmen and the contract is a commercial transaction.
308 22.
In today 's complex world of giant corporations with their vast infra structural organisations and with the State through its instrumentalities and agencies has been entering into almost every branch of industry and commerce and field of service, there can be myriad situations which result in unfair and unreasonable bargains between parties possess wholly disproportionate and unequal bargaining power.
These cases can neither be enumerated nor fully illustrated.
The court must judge each case on its own facts and circum stances.
Public policy whether changeable.
This Court also angulated the question from the perspective of public policy or contract being opposed to public policy.
The phrases "public policy", "opposed to public policy", or "contrary to public policy" are incapable of precise definition.
It is valued to meet the public good or the public interest.
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances.
New concepts take place of old one.
The transactions which were considered at one time as against public policy were held by the courts to be in public interest and were found to be enforceable.
Therefore, this Court held in Brojonath 's case that "there has been no well recognised head of public policy, the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public." Lord Wright in his legal Essays and Addresses Vol.
III p. 76 and 78 stated that public policy like any other branch of the common law ought to be and I think is, governed by the judicial use of precedents . .
If it is said that rules of public policy have to be moulded to suit new condi tions of a changing world, that is true, but the same is true with the principles of the cannon law generally; Lord Lindley held in Janson vs Driefontein Mines Ltd., [1902] A.C.p. 484 and 507 that "a contract or other branch which is against public policy i.e. against the general interest of the country is illegal.
In Anson 's Law of Contract, 24th Edition by A.G. Guest at p. 335 stated the scope of variability of public policy attune to the needs of the day and the march of law thus: "At the present time, however, there is an increasing recog nition of the positive function of the Courts in matters 309 of public policy: 'The law relating to public policy cannot remain immutable.
It must change with the passage of time.
The wind of change blows upon it '.
Some aspects of public policy are more susceptible to change than others, during the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules.
The principles applicable to agreements in restraint of trade, for example, have on a number of occasions been modified or extended to accord with prevailing economic conditions, and this process still continues.
In law of Contract by G.H. Treitei, 7th Edition at p, 366 on the topic 'scope of the public policy ' it is stated thus: "Public policy is a variable notion, depending on changing manners, morals and economic conditions.
In theory, this flexibility of the doctrine of public policy could provide a judge with an excuse for invalidating any contract which he violently disliked.
On the other hand, the law does adapt itself to change in economic and social conditions, as can be seen particularly from the development of the rules as to contracts in restraint of public policy has often been recognised judicially.
Thus Lord Haldane has said; "What the law recognises as contrary to public policy turns out to vary greatly from time to time.
" And Lord Denning has put a similar point of view. "with a good man in the saddle, the unruly horse can be kept in control.
It can jump over obsta cles.
" The present attitude of the Courts represents a compromise between the flexibility inherent in the notion of public policy and the need for certainty in commercial affairs.
From this perspective, it must be held that in the absence of specific head of public policy which covers a case, then the court must in consonance with public con science and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy.
The rules which stem from the public policy must of necessity be laid to further the progress of the society in particular when social change is to bring about an egalitarian social order through rule of law.
In deciding a case which may not be covered by authority courts have before them the beacon light of the trinity of the Constitu tion and the play of legal light and shade must lead on the path of justice social, 310 economical and political.
Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution.
Public policy can be drawn from the Constitution.
Sutherland, in his Statutes and Statutory Construc tion Third Edition Vol.
3 paragraph 5904 at page 13 1 132 has stated that the most reliable source of public policy is to be found in the federal and state constitutions.
Since constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capaci ty to meet changing conditions, constitutional policy pro vides a valuable aid in determining the legitimate bound aries of statutory meaning.
Thus public policy having its inception in constitutions may accomplish either a restrict ed or extended interpretation of the literal expression a statute.
A statute is always presumed to be constitu tional and where necessary a constitutional meaning will be inferred to preserve validity.
Likewise, where a statute tends to extend or preserve a constitutional principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statu tory aim or objective.
Article 14 sheds the light to public policy to curb arbi trariness.
26A. In Basheshar Nath vs The Commissioner of Income Tax & Anr., [1959] Suppl.
1 SCR 528 S.R. Das, CJ., held that Article 14 is founded on a sound public policy recognised and valued in all States and it admonishes the State when it disregards the obligations imposed upon the State.
26B. In E.P. Royappa vs State of Tamil Nadu & Ant., ; Bhagwati.
J. (as he then was) held that Article 14 is the genus while Article 16 is a specie.
Arti cle 16 gives effect to the doctrine of equality in all matters relating to public employment.
The basic principle which.
therefore, informs both Articles 14 and 16 is equali ty and inhibition against discrimination.
"Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed, cabined and confined" within traditional and doctrinaire limits.
From a positivistic point of view.
equality is antithetic to arbitrariness.
In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and ca price of an absolute monarch.
Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore 311 violative of Article 14, and if it affects any matter relat ing to public employment, it is also violative of Article 16.
Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
In Menaka Gandhi 's case it was further held that the principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence.
In Rama na 's case it was held that it is merely a judicial formula for determining whether the legislative or.
executive action in question is arbitrary and therefore constituting denial of equality.
If the classification is not reasonable and does not satisfy the two conditions namely, rational rela tion and nexus the impugned legislative or executive action would plainly be arbitrary and the guarantees of equality under Article 14 would be breached.
Wherever, therefore, there is arbitrariness in State action whether it be of legislature or of the executive or of an "authority" under Article 12, Article 14, "immediately springs into action and strikes down such State action.
" In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the constitution.
In Volga Tellies 'Case it was held that the Constitu tion is not only paramount law of the land but also it is a source of sustenance of all laws.
Its provisions are con ceived in public interest and are intended to serve public purpose.
Therefore, when the provisions of an Act or Regula tions or Rules are assailed as arbitrary, unjust, unreasona ble, unconstitutional, public law element makes it incumbent to consider the validity there 'of on the envil of inter play of articles 14 ', 16(1), 19(1)(g) and 21 and of the inevitable effect of the impugned provision on the rights of a citizen and to find whether they are constitutionally valid.
Interplay of articles 14, 16(1), 19(1)(g) & 21 as guarantors of public employment as a source of right to livelihood.
It is well settled constitutional law that different Articles in the Chapter on Fundamental Rights and the Direc tive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlap ping with the subject matter of what is to be protected by its various provisions particularly the Fundamental Rights.
By the Full Court in R.C. Cooper vs Union of India, ; it was held that the law must not impair the guarantee of any 312 of the fundamental rights in Part III.
The law authorising to impose reasonable restrictions under Article 19(1) must be intended to advance the larger public interest.
Under the Constitution, protection against impairment of the guarantee of the fundamental rights is determined by the nature of the right, interest of the aggrieved party and the degree of harm resulting from the state action.
Impairment of the right of the individual and not the object of the State in taking the impugned action is the measure of protection.
To concentrate merely on the power of the State and the object of the State action in exercising that power is, therefore, to ignore the true intent of the constitution.
The nature and content of the protection of the fundamental rights is measured not by the operation of the State action upon the rights of the individual but by its objects.
The validity of the State action must be adjudged in the light of its opera tion upon the rights of the individuals or groups of the individual in all their dimensions.
It is not the object of the authority making the law imparing the right of the citizen nor the form of action taken that determines the protection he can claim; it is the effect of the law and of the action upon the right which attract the jurisdiction of the court to grant relief.
In Minerva Mills Ltd. vs Union of India, ; the fundamental rights and directive principles are held to be the conscience of the Constitution and disregard of either would upset the equibalance built up therein.
In Menaka Gandhi 's case, it was held that different articles in the chapter of Fundamental Rights of the Consti tution must be read as an.
integral whole, with possible overlapping of the subject matter of what is sought to be protected by its various provisions particularly by articles relating to fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points.
They are all parts of an integrated scheme in the Constitution.
Their waters must mix to constitute that grand flow of unimpeded and impartial justice; social, economic and political, and of equality of status and opportunity which imply absence of unreasonable or unfair discrimination between individuals or groups or classes.
The fundamental rights protected by Part III of the constitution, out of which Articles 14, 19 and 21 are the most frequently invoked to test the validity of executive as well as legislative actions when these actions are subjected to judicial scrutiny.
Fundamental Rights are necessary means to develop one 's own personality and to carve out one 's own life in the manner one likes best, subject to reasonable restrictions imposed in the paramount interest of the Society and to a just, fair and reasonable procedure.
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test.
It is already seen that the right to a public employ 313 ment is a constitutional right under article 16(1).
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules, regulations or instructions having statutory flavour made thereunder, But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion, Article 21 guarantees the_ right to live which in cludes right to livelihood, to a many the assured tenure of service is the source, the deprivation thereof must be in accordance with the procedure prescribed by law conformable to the mandates of Articles 14 and 21 as be fair, just and reasonable but not fancyful oppressive or at vagary.
The need for the fairness, justness or reason ableness of the procedure was elaborately considered in Menaka Gandhi 's case (supra) and it hardly needs reiteration.
Principles of natural justice in Part of Article 14.
The Menaka Gandhi 's case is also an authority for the proposition that the principles of natural justice is an integral part of the guarantee of equality assured by Arti cle 14 of the Constitution.
In Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Suppl.
2 SCR 13 1 at 233, this Court held that the principles of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equali ty which is the subject matter of that Article.
Shortly put, the syllogism runs thus: "Violation of a rule of natural justice results in arbi trariness which is the same as discrimination; where dis crimination is the result of the State action, it is a violation of article 14, therefore, a violation of a principle of natural justice by a State action is a violation of Art 14.
Article 14, however; is not the sole repository of the principles of natural justice.
What it does is to guarantee that any law or State action violating them will be struck down.
The principles of natural justice, however, apply not only to the legislation and State action but also where any tribunal, authority or body of men, not coming within the definition of 'State ' in article 12, is charged with the duty of deciding a matter.
In such a case, the principles of natural justice require that it must decide such a matter fairly and impartially.
" 314 In Moti Ram Deka 's case this Court already held that "the rule making authority contemplated by Article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(2).
Article 311(2) is intended to afford a sense of scrutiny to public servants who are substantively appointed to a permanent post and one of the principle benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules.
It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffec tive or illusory.
Once the scope of article 311(1) and (2) is duly determined, it must be held that no rule framed under article 309 can trespass on the rights guaranteed by article 311.
This position is of basic importance and must be borne in mind in dealing with the controversy in question.
In A.K. Kraipak & Ors etc.
vs Union of India & Ors., this Court held that Rules of natural justice aims at securing justice or to prevent injustice.
They operate only in the areas not covered by any law valid ly made.
In Union of India vs Col. J.N. Sinha and Anr., [197 1] 1 SCR 791 it was held that principles of natural justice do not supplant the law but supplement it.
If a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision of the principles of natural justice.
In that case this Court held that principles of natural justice cannot be read into Fundamental Rule and no opportunity need be given before compulsorily retiring an employee as that implication does not arise by reason of express statutory language.
The principle of natural justice embodied as an integral part of equality clause.
Article 14 is the general principle while article 311(2) is a special provision applica ble to all civil services under the State.
Article 311(2) embodies the principles of natural justice but proviso to Clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given circumstances enumerated in three clauses of the proviso to article 311(2) of the Constitution.
Article 14 read with articles 16(1) and 311 are to be harmoniously inter preted that the proviso to article 311(2) excludes the applica tion of the principles of natural justice as an exception; and the applicability of article 311(2) must, therefore, be circumscribed to the civil services and to be construed accordingly.
In respect of all other 315 employees covered by article 12 of the Constitution the dynamic role of article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition, unless the statutory rules themselves, consistent with the mandate of articles 14, 16, 19 & 21 provide, expressly such an exception.
Article 19(1)(g) empowers every citizen right to avoca tion or profession etc., which includes right to be contin ued in employment under the State unless the tenure is validly terminated consistent with the scheme enshrined in the fundamental rights of the Constitution.
Therefore, if any procedure is provided for deprivation of the right to employment or right to the continued employment till the age of superannuation as is a source to right to livelihood, such a procedure must be just, fair and reasonable.
This Court in Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors.
vs Union of India & Ors.
, ; at 60 61 held that article 19(1)(g) confers a broad and general right which is available to all persons to do works of any partic ular kind and of their choice.
Therefore, whenever there is arbitrariness in state action whether it be of the legisla ture or of the Executive or of an authority under article 12, articles 14 and 21 spring into action and strikes down such an action.
The concept of reasonableness and nonarbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitu tion.
Therefore, the provision of the statute, the regula tion or the rule which empowers an employer to terminate the services of an employee whose service is of an indefinite period till he attains the age of superannuation, by serving a notice of pay in lieu thereof must be conformable to the mandates of articles 14, 19(1)(g) and 21 of the Constitution.
Otherwise per se it would be void.
In Motiram Deka 's case, Gajendragadkhar, J , (as he then was) after invalidating the rules 149(3) and 148(3) under article 311(2) which impari materia Rule 9(b) of the Regulation also considered their validity in the light of article 14 and held thus: "Therefore, we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed.
" This was on the test of reasonable classification as the principle then was applied.
Subba Rao, J., (as he then was) in a separate but concurrent judgment, apart from.
invali dating the rule under Article 311(2) also held that the Rule infringed Article 14 as well, though there is no elaborate discussion in that regard.
But, Das Gupta, J., considered 316 elaborately on this aspect and held: "Applying the principle laid down in the above case to the present rule, I find on the scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification.
Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken.
The Rule, thus enables the authority concerned to discriminate between two railway servants to both of whom R. 148(3) equally applied by taking action in one case and not taking it in the other.
In the exercise of the discretion by the authority the rule has therefore to be struck down as contravening the requirements of article 14 of the Constitu tion.
Even in Tulsiram Patel 's case (supra) this Court declared that it must satisfy the test of justness, fairness and reasonableness of the procedure prescribed.
But the proviso to article 311(2) was upheld for the reason that the Constitution itself made proviso an exception to the prin ciple of audi alteram partem engrafted in article 311(2) of the Constitution.
As a fact, it expressed thus: "As the making of such laws and the framing of such rules are subject to the provisions of the Constitution, if any such act or rules violates any of the provisions of the Constitution, it would be void.
Thus, as held in Moti Ram Deka 's case ; if any such act or rule tres passes on the rights guaranteed to government servants by article 311, it would be void.
Similarly, such acts and rules cannot abridge or restrict the pleasure of the President or the Governor of a State exercisable under article 3 10(1) further than what the Constitution has expressly done.
In the same way, such Act or rule would be void if it violates any fundamental right guaranteed by part III of the Consti tution.
" Gurdev Singh 's case declares the rules that empowered to order compulsory retirement of the Government employee after putting ten years of service as ultra vires.
In S.S. Muley vs
J.R.D. Tata, my learned brother Sawant, J. (as he then was) held that Regulation 48 which empowered the employer uncanalised, unrestricted and arbi trary power to terminate the service of an employee with notice or pay in lieu thereof without any opportunity of 317 hearing as violative of principles of natural justice under article 14 of the Constitution.
In Superintendent of Post Office vs
K. Vasayya, [1984] 3 Andhra Pradesh Law Journal 9 the respondent Vasayya was denied of the appointment as a Clerk on the ground that the Confidential Reports submitted by the Police disclosed adverse comments on the conduct of the respondent.
When the appointment was denied on that basis it was held that though the selection to a public office is a privilege and no vested right has been accrued till the candidate is appoint ed, in the context of fair play in action subserving the mandate of article 14 held at p. 45 thus: "Often times, convenience and justice are not on speaking terms.
It is the actual administration of law and not only the manner in which it is done that reflects the action of the State in assuring the equal protection to a citizen.
In adopting the procedure, as held by Frankfurther, J. in Joint Anti Facist Refugee Commission vs Mc.
Grath, 34 ; that a conclusion satisfies one 's private conscience does not attest its reliability.
The validity and moral authority of a conclusion largely depends on the mode by which it was reached.
Secrecy is not congenial to truth.
Seeking and self righteousness gives too slander an assurance of right ness.
No better instrument has been devised for arriving at the truth than to give a person in jeopardy of a serious loss, a notice of the case against him and an opportunity to meet it, nor has a better way been found for generating the feeling so important to a popular Government that justice has been done.
" Bradley, J. in United States vs Samuel D. singleton; , has held that: "No State shall make or enforce any law which abrogate the privileges or immunities of citizens of the United States.
" In Ramana 's case (supra), it has been held that: is indeed unthinkable that in a democracy governed by the rule of law, the executive Govt.
or any of its offi cers should possess arbitrary power over the interests of the individual . . 318 The procedure adopted should match with what justice de mands.
History shows that it is always subtle and insidious encroachments made ostensibly for a good cause that imper ceptibly but surely erode the foundations of liberty.
" Doughlas, J. in Joint Anti Facist Refugee Commission 's case (supra) held that: "This is a Government of laws not of men.
The powers being used are the powers of the Government over the reputation and fortunes of citizens.
In situations far less severe or important than those a party is told the nature of the charge against him." Harry W. Jones in his "Rule of law and Welfare State", at 146 stated that: "What is needed then is to make the welfare state itself a source of new "rights" and to surround the "rights" in public benefaction with legal safeguards both procedural and substantive comparable to those enjoyed by the traditional right of property in our law.
" Accordingly it was held that prior opportunity of hearing before denying appointment is a mandate of article 14 of the Constitution.
In West Bengal Electricity Board & Ors.
vs D.B. Ghosh & Ors., [1985] 2 SCR 1014 in similar circumstances, it was held that the regulation as "Herry VIII Clause as ultra vires of article 14 of the Constitution.
The same principle was reiterated in Brojonath 's case.
In Workman of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; the standing order that empowers the manager to dispense with the enquiry and to dismiss an employee without any obligation to record reasons was held to be drastic power but directed to amend the standing orders consistent with proviso to article 311(2) of the Constitution.
This Court in O.P. Bhandari vs Indian Tourism Development Corpn.
Ltd. & Ors., ; struck down the similar rule on the same doctrine of 'hire and fire ' and that it is impermissible under the constitu tion of the scheme to sustain the doctrine of 'hire and fire '.
In Chandrabhan 's case, Rule 15(1)(ii)(b) of Bombay Service Rule was held to be void.
In A.P.S.R.T. Corpn.
vs 319 Labour Court, AIR (1980) A.P. 132 a Full Bench of Andhra Pradesh High Court held that the legislature is not compe tent to make law abridging the right to work.
In R.M.D. Chamarbaugwalla vs State of Punjab, ; it was held that any Act violating fundamental rights is void.
In Kanhialal vs District Judge & Ors., this Court held that termination of the service of a tempo rary employee without affording opportunity is penal in character and violates article 311(2) and was void.
In M.K. Agarwal v, Gurgaon Gramin Bank & Ors., [1987] Suppl.
643 this Court struck down regulation 10(2)(a) of the Gurg aon Gramin Bank (Staff) Services Rules, 1980.
In this light it is not open to the State to contend that "look here; though Constitution enjoins and admonishes us saying that it is no longer open to the State to make law or rule violating the rights created under articles 14 and 21, the citizen, with a view to secure public employment from us had contracted out of the constitutional rights and agreed to abide by rules including the termination of his/her services at any time at our will without notice or opportunity even for misconduct, negligence, inefficiency, corruption or rank nepotism, so we are free to impose the said punishment.
" Even in the case of minority institutions, when the employ ees are dismissed on the principle of hire and fire, this Court held it to be impermissible vide All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employ ees ' Union & Anr.
vs Christian Medical College, Veilore Association & Ors., ; & 562.
In Moti Ram Deka 's case this Court held that rules 148(3) and 149(3) trespassed upon the rights guaranteed to government servants by article 311(2) and would be void.
In Kameshwar Prasad vs State of Bihar, [1962] Suppl.
3 SCR 369.
Rule 4A of the Bihar Government Servants ' Conduct Rules, 1956, in so far as it prohibited any form of demon stration was struck down by this Court as being violative of sub clauses (a) and (b) of clause (1) of article 19.
In O.K. Ghosh vs EZX Joseph, [1963] Suppl.
1 SCR 789 this Court 'struck down Rule 4A of the Central Civil Services (Conduct Rules), 1955, on the ground that it violated sub clause (c) of clause (1) of article 19 of the Constitution and that por tion of Rule 4A which prohibited participation in any demon stration as being violative of sub clauses (a) and (b) of clause (1) of Article 19.
It must, therefore, be hold that any act or provision therein, Rules or Regulations or 320 instructions having statutory force violating fundamental rights under Articles 14, 16(1), 19(1)(g) and 21 are void.
Thus it could be hold that article 14 read with 16(1) accords right to an equality or an equal treatment consist ent with the principles of natural justice.
Any law made or action taken by the employer, corporate statutory or instru mentality under Article 12 must act fairly, justly and reasonably.
Right to fair treatment is an essential inbuilt of natural justice.
Exercise of unbridled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively judiciously and without prejudice.
Wider the discretion, the greater the chances of abuse.
Absolute discretion is destructive of freedom.
than of man 's other inventions.
Absolute discretion marks the beginning of the end of the liberty.
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment.
The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice.
The provisions of a statute, regulations or rules that empower an employer or the 'management to dismiss, remove or reduce in rank of an employee, must be consistent with just, rea sonable and fair procedure.
It would, further, be held that right to public employment which includes right to continued public employment till the employee is superannuated as per rules or compulsorily retired or duly terminated in accord ance with the procedure established by law is an integral part of right to livelihood which in turn is an integral facet of right to life assured by article 21 of the Constitu tion.
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure.
In other words an employee in a public employment also must not be arbitrarily unjustly and unrea sonably be deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure.
Otherwise any law or rule in violation thereof is void.
Need for harmony between social interest and individual right 34.
Undoubtedly efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services.
Disci pline in that regard among the employees is its essential facet and has to be maintained.
The society is vitally interested in the due discharge of the duties by the govern ment employees or 321 employees of corporate bodies 'or statutory authorities or instrumentalities under article 12 of the Constitution.
As held in Tulsiram Patel 's case the public are vitally interested in the efficiency and integrity of the public service.
The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes.
The employees are charged with public duty and they should perform their public duties with deep sense of responsibility.
The collective responsi bility of all the officers from top most to the lowest maximises the efficient public administration.
They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully, honestly with full dedication and utmost devotion to duty for the progress of the country.
Equally the employees must also have a feeling that they have security of tenure.
They should also have an involvement on their part in the organi sation or institution, corporation, etc.
They need assurance of service and they need protection.
The public interest and the public good demand, that those who discharge their duties honestly, efficiently and with a sense of devotion and dedication to duty should receive adequate protection and security of tenure.
Equally inefficient, dishonest and corrupt or who became security risk should be weeded out so that successful functioning of the industry or manufacture of the goods or rendering or services would be available at the maximum level to the society and society thereby re ceives optimum benefit from the public money expanded on them as salary and other perks.
Therefore, when a situation envisaged under statute or statutory rule or regulation or instructions having statutory force to remove or dismiss an employee the question arises whether they need at least minimum protection of fair play in action.
34A. In Vasayya 's case when a similar contention was raised I have stated at p. 47 in Para 130 & 13 1 that.
The Audi alteram partem rule must be flexible; malleable and an adaptable concept to adjust and harmonise the need for speed and obligation to act fairly.
When the rights of the Government are widely stressed, the rights of the person are often threatened, when the latter are ever emphasised Government becomes weak to keep order.
Therefore, the rule can be tailored and the measure of its application cut short in reasonable proportion to the exigencies of the situation.
The administrative agency can develop a technique of deci sion worthy being called "ethos of adjudication".
Meaningful statutory standards, realistic procedural requirements and discriminatory techniques of judicial review are among the tools to control the discretionary 322 power.
It makes no difference whether the occasion for the exercise of power is personal default or act of policy.
Good administration demands fair consultation in each case and this the law can and should enforce.
The insistence of the observance of fundamental fairness in the procedure becomes a balancing balm to alleviate apprehension of arbitrary decision by the executive Government while assuring opportu nity to disabuse the prima facie impression formed against the person to usher in a era of largest good to largest number of people with proper checks and balances between needs of the State and the rights of the individual.
The brooding omni benevolence and omnicompetency of the need for expediency and claim for justness interplay ethos of fair adjudication in action.
34B. Therefore, it is no well tuned solace to say that in a court of law at the fag end of the currier or after superannuation in the interregnum which often over takes the litigation, that the employee would be meted out with jus tice (a grave uncertainty and exposing to frustrating pro crastination of judicial process and expenses and social humiliation).
Before depriving an employee of the means of livelihood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must, therefore, be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasona ble restrictions under article 19(5).
Conferment of power on a high rank officer is not always an assurance, in particular when the moral standards are generally degenerated that the power would be exercised objectively, reasonably, conscien tiously, fairly and justly without inbuilt protection to an employee.
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls.
Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need con sistent with the constitutional scheme.
Statutory Construction: 35.
Statutory construction raises a presumption that an Act or a provision therein a constitutionally valid unless it appears to be ultra vires or invalid.
The legislature, subject to the provisions of the Constitution, has undoubt edly unlimited powers to make law.
In fairness to the learned Attorney General, he agrees that the impugned provi sions are per se invalid.
But he attempted to salvage them by resorting to the doctrine of reading down.
323 Reading a provision down when permissible.
The question emerges whether the doctrine of reading down would be applied to avoid a void law vesting with arbitrary power with a naked hire and fire draconian rule.
It is difficult to give acceptance to extreme contention raised by Sri Garg and Sri Rama Murthy that the Courts cannot in the process of interpretation of the Statute would not make law but leave it to the legislature for necessary amendments.
In an appropriate case Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the freezes.
But the object is to alongate the purpose of the Act.
In this regard 1 respectfully agree with my learned brother, my Lord the Chief Justice, on the prin ciple of statutory construction.
The question is whether Legislature intended to confer absolute power or would it be construed in such a way that would supplant the law but not supplement law made by the Legislature.
35A. Natural construction.
The golden rule of statutory construction is that the words and phrases or sentences should be construed according to the intent of legislature that passed the Act.
All the provisions should be read together.
If the words of the statutes are in themselves precise and unambiguous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense.
But if any doubt arises from the terms employed by the legislature, it has always been held a safe means of collecting the inten tion, to call in aid the ground and cause of making the statute, and to have the recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intend to redress.
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context.
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature then it is proper to look for some other possible meaning then the court cannot go fur ther.
Craie 's Statute Law, Seventh Edition in Chapter 5, at page 64 it is stated that where the words of an Act are clear, there is no need for applying any of the principles of interpretation which are merely presumptions in cases of ambiguity in the statute.
The safer and more correct course of dealing with the question of construction is to take 324 the words themselves and arrive, if possible, at their meaning without in the first place refer to cases.
Where an ambiguity arises to supposed intention of the legislature, one of the statutory constructions, the court profounded is the doctrine.
of reading down.
Lord Reid in Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 (as also extracted by Cross Statutory Interpretation, Butterworths ' Edition, 1976 at page 43 in preposition 3) has stated thus: "the judge may read in words which he considers to be neces sarily implied by words which are already in the statute and he has a limited power to add to, alter or ignore statutory words in order to prevent a provision from being unintelli gible, absured or totally unreasonable, unworkable, or totally irre concileabIe with the rest of the statute.
" At page 92 of the Cross Statutory Interpretation, the author has stated that "The power to add to, alter or ignore statutory words is an extremely limited one.
Generally speaking it can only be exercised where there has been a demonstrable mistake on the part of the draftsman or where the consequence of applying the words in their ordinary, 6r discernible secondary, meaning would be utterly unreasona ble.
Even then the mistake may be thought to be beyond correction by the court, or the tenor of the statute may be such as to preclude the addition of words to avoid an unrea sonable result.
" Therefore, the Doctrine of Reading Down is an internal aid to construe the word or phrase in statute to give reasonable meaning, but not to detract distort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality 35C.
This Court in Saints High School, Hyderabad vs Govt.
of A.P.; , held that: "this Court has in several cases adopted the reading down the provisions of the Statute.
The reading down of a provi sion of a statute puts into operation the principle that so far as is reasonably possible to do so, the legislation should be construed as being within its power.
It is the principle effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond relevant legislative power, the Court would construe it in a more limited sense so as to keep it within the power.
" 325 Similarly restricted meaning was ascribed by Maxwell in his Interpretation of the Statutes XII Edn.
at p. 109 under the caption "Restriction of operation" that sometimes to keep the Act within the limits of its scope and not to disturb the existing law beyond what the object requires, it is construed as operative between certain purposes only even though the language expresses no such circumspection of field of operation.
It is, thus, clear that the object of reading down is to keep the operation of the statute within the purpose of the Act and consitutionally valid.
In this regard it is equally of necessity to remind ourselves as held by this Court in Minerva Mills ' case that when the effect of article 31 was asked to be read down so as to save it from unconstitu tionality this Court held that it is not permissible to read down the statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever and that at p. 259D and G it was held that the principle of reading down cannot be used to distort when words of width are used even advertantly.
In Elliott Ashton Welsh, II vs United States.
; (26 Lawyer 's Edition 2nd, 308 at 327) Herfan, J. at 327 held that "when the plain thrust of a legislative enactment can only be circumvented by distortion to avert constitutional collision, it can only by exalting form over substance that one can justify veering of the path that has been plainly marked by the Statute.
Such a course betrays extreme skepticism as to constitutionality and in this instance reflects a groping to preserve conscientious objecter exemption at all costs I cannot subscribe wholly to emasculated construction of a statute to avoid facing con stitutional question in purported fidelity to the statutory doctrine of avoiding unnecessary resolution of constitution al issues.
" 36A. In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45 this Court has refused to rewrite legislation to make up omissions of the Legislature.
In Moti Ram Deka 's case when Rule 148(3) and Rule 149(3) of the Railway Establishment Code were sought to be sus tained on the 'principle of reading down ', this court held thus: "There is one more point which still remains to be consid ered and that is the point of construction.
The learned Addl.
Solicitor General argued that in construing the im pugned R. 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so 326 framed as to avoid conflict with or non compliance of, the provisions of article 311(2), and so, he suggests that we should adopt that interpretation of the Rule which would be consistent with article 311(2).
The argument is that the termi nation of services permissible under the impugned rules really proceeds on administrative grounds or considerations of exigencies of service.
If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount his removal because the termination of his service is not based on any consideration personal to the servant.
In support of this argument, the Addl.
Solici tor General wants us to test the provision contained in the latter portion of the impugned rules.
We are not impressed by this argument.
What are not impressed by this argument.
What the latter portion of the impugned Rules provide is that in case a railway servant is dealt with under that portion, no notice need be served on him.
The first part of the Rules can reasonably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the speci fied period or salary in lieu of such notice is given to the railway servant.
There is no doubt that on a fair construc tion, the impugned Rules authorise the Railway Administra tion to terminate the services of all the permanent servants to whom the Rules apply merely on giving notice for the specified period or on payment of salary in lieu thereof and that clearly amounts to the removal of the servant in ques tion.
Therefore, we are satisfied that the impugned rules are invalid inasmuch as they are inconsistent with the provisions contained in article 311(2).
The termination of the permanent servant 's tenure which is authorised by the said Rules is no more and no less than their removal from serv ice, and so, article 311(2) must come into play in respect of such cases.
That being so, the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid.
I am, therefore, inclined to hold that the Courts though, have no power to amend the law by process of inter pretation, but do have power to mend it so as to be in confirmity with the intendment of the legislature.
Doctrine of reading down is one of the principles of 327 interpretation of statute in that process.
But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save from uncon stitutionality or to confer jurisdiction on the legislature.
Similarly it cannot be taken aid of to emasculate the pre cise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Constitution and to direct the authorities to record reasons, unknown or unintended procedure, in the manner argued by the learned counsel for the appellants.
At the cost of repetition it is to reiterate that when the authority intends to take disciplinary action for imposing penalty of dismissal, removal or reduction in rank of an employee, an elaborate procedure has been provided in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity.
Residuary power has been avowedly conferred in Regulation 9(b) with wide discretion on the appropriate authority to take actions on similar set of facts but without any guidelines or procedure at the absolute discretion of the same authority.
The language of Regulation 9(b) is not capable of two interpretations.
This power appears to be in addition to the normal power in Regulation 15.
Thereby the legislative intention is manifest that it intended to confer such draconian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenterhook under constant pressure of uncertainty, precarious tenure at all times right from the date of appointment till date of superannuation.
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the serv ice arbitrarily and capriciously.
Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee without following the principle of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee.
It is well settled rule of statutory construction that when two interpretations are possible one which would preserve and save constitutionality of a particular Statute, would be preferred to the other that would render it unconstitutional and void.
When the language is clear, unambiguous and specific and it does not lead to the constructions, it is not permissible to read into those provisions something which is not intended.
It is undoubtedly true as rightly contended by 328 Mr. Ashok Desai, the learned Solicitor General that the power to take appropriate and expeditious action to meet the exigencies of weeding out inefficient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority.
Any action taken without any modicum of reasonable procedure and prior oppor tunity always generates an unquenchable feeling that unfair treatment was meted out to the aggrieved employee.
To pre vent miscarriage of justice or to arrest a nursing grievance that arbitrary, whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstances as adumbrated in proviso to article 311(2) of the Constitution.
If an individual action is taken as per the procedure on its own facts its legality may be tested.
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fair ness and reasonableness envisaged under articles 14 and 21 of the Constitution.
In this context it is important to empha sise that the absence of arbitrary power is the first essen tial of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
(See Dicey "Law of the Constitution" 10th Edn., Introduction cx).
"Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick; , "then it has freed man from the unlimited discretion of some rules . . where discre tion is absolute, man has always suffered".
It is in this sense that the rule of law may be said to be the sworn enemy of caprice.
Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes "means should discretion guided by law.
It must be governed by rule, not by humour; it must not be arbitrary, vague and fanciful," as followed in this Court in S.G. Jaisinghani vs Union of India.
, ; 40.
In an appropriate case where there is no sufficient evidence available to inflict by way of disciplinary meas ure, penalty of dismissal or removal from service and to meet such a situation, it is not as if that the authority is lacking any power to make Rules or regulations to give a notice of opportunity with the grounds or the material on records on 329 which it proposed to take action, consider the objections and record reasons on the basis of which it had taken action and communicate the same.
However scanty the material may be, it must form foundation.
This minimal procedure should be made part of the procedure lest the exercise of the power is capable of abuse for good as well as for whimsical or capricious purposes for reasons best known to the authority and not germane for the purpose for which the power was conferred.
The action based on recording reasoning without communication would always be viewed with suspicion.
There fore, 1 hold that conferment of power with wide discretion without any guidelines, without any just, fair or reasonable procedure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
Doctrine of reading down cannot be extended to such a situation.
It is undoubted that in In re Hindu Women 's Right to Property Act, involve the interpretation of single word "property" in the context to legislative compe tency but that cannot be extended to the facts of these cases.
R.M.D. Charnarbaugwalla 's case is of severability and of a single word competition.
The interpretation therein also cannot be extended to the facts of these cases.
Even the case of K.N. Singh vs State of Bihar, [19621 Suppl.
2 SCR 769 involve interpretation of Section 124(A) I.P.C. in the context of freedom of speech enshrined under article 19(1)(a) of the Constitution.
The interpretation was put as to subserve the freedom under article 19(1)(a).
R.L. Arora vs State of U.P.; , does not involve of the doctrine of reading down so as to cut down the scope of Fundamental Right.
Similarly Jagdish Pandey vs Chancellor of the Bihar, 1 also does not concern with application of doctrine of reading down so as to sacrifice the principle of natural justice which are considered as essential part of rule of law.
In Amritsar Municipality vs State of Punjab; , the court ascertained the intention of the Legislature and interpreted the Act con sistent with the said intention.
Sunil Batra vs Delhi Admn.
, ; is also a decision where it was found that the intention of the Legislature was not to confer arbitrary power.
N.C. Dalwadi vs State of Gujarat, is also a case giving reasonable interpretation of the inten tion of the provisions of the Statute and is not capable of the meaning.
In Charanlal Sahu vs Union of India, [1989] Suppl.
Scale (1) at p. 61 on which strong reliance was placed by both the learned Attorney General and Solicitor General, is a case capable of two interpretations to Sec. 4.
The decisions cited by Shri Ashok Desai i.e. Delhi Transport 330 Undertaking vs Balbir Saran Goel, ; ; Air India Corporation vs Rebellow, ; ; Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; concern the industrial Iaw wherein the validity of rules on the touch stone of the reasonableness, fairness or justness was not considered.
The prevailing doctrine of reasonable classification and nexus had their play to uphold the validity of the provisions.
It is undoubtedly true as contended by Sri Bhasin, learned counsel for the intervener, that it is open to the authorities to terminate the services of a temporary employ ee without holding an enquiry.
But in view of the match of law made, viz., that it is not the form of the action but the substance of the order is to be looked into, it is open to the Court to lift the veil and pierce the impugned action to find whether the impugned action is the foundation to impose punishment or is only a motive.
A larger Bench of seven Judges of this Court in Shamsher Singh vs State of Punjab, elaborately considered the question and laid down the rule in this regard.
The play of fair play is to secure justice procedural as well as substantive.
The substance of the order, the effect thereof is to be looked into.
Whether no misconduct spurns the action or whether the services of a probationer is terminated without imputation of misconduct is the test.
Termination simpliciter, either due to loss of confidence or unsuitability to the post may be a relevant factor to terminate the services of a proba tioner.
But it must be hedged with a bonafide over all consideration of the previous conduct without trained with either mala fide or colourable exercise of power or for extraneous considerations.
Such actions were upheld by this Court.
The action must be done honestly with due care and prudence.
In view of the march of law made by article 14, in particular after Maneka Gandhi 's case, it is too late in the day to contend that the competent authority would be vested with wide discretionary power without any proper guidelines or the procedure.
The further contention that the preamble, the other rules and the circumstances could be taken aid of in reading down the provisions of the impugned rules or the regulations is also of no assistance when it is found that the legislative intention is unmistakably clear, unambiguous and specific.
Thus considered, I have no hesitation to conclude that the impugned regulation 9(b) of the Regula tions are arbitrary, unjust, unfair and unreasonable offend ing articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
It is also opposite to the public policy and thereby is void under Section 23 of the .
331 44.
It is made clear that, as suggested by this Court in Hindustan Steel Case that it is for concerned to make appro priate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consist ent with the constitutional scheme.
The correctness of the decision in Tulsiram Patel 's case though was doubted in Ram Chunder vs Union of India, it is unneces sary to go into that question.
For the purpose of this case it is sufficient to hold that proviso to article 311(2) itself is a constitutional provision which excluded the applicabil ity of article 311(2) as an exception for stated grounds.
It must be remembered that the authority taking action under either of the clauses (b) or (c) to proviso are enjoined to record reasons, though the reasons are not subject to judi cial scrutiny, but to find the basis of which or the ground on which or the circumstances under which they are satisfied to resort to the exercise of the power under either of the two relevant clauses to proviso to article 311(2) of the Con stitution.
Recording reasons itself is a safeguard for preventing to take arbitrary or unjust action.
That ratio cannot be made applicable to the statutory rules.
Accordingly I hold that the ratio in Brojonath 's case was correctly laid and requires no reconsideration and the cases are to be decided in the light of the law laid above.
From the light shed by the path I tread, I express my deep regrets for my inability to agree with my learned brother, the Hon 'ble Chief Justice on the applicability of the doctrine of reading down to sustain the offending provi sions.
I agree with my brothren B.C. Ray and P.B. Sawant, JJ.
with their reasoning and conclusions in addition to what I have laid earlier.
The appeal is accordingly dismissed, but without costs.
Similarly Civil Appeal No. 1115 of 1976 is allowed and the monetary relief granted is reasonable, but parties are directed to bear their own costs.
Rest of the matters will be disposed of by the Division Bench in the light of the above law.
In view of the majority judgment, Civil Appeal No. 2876 of 1986 (Delhi Transport Corporation vs D.T.C. Mazdoor Con gress) is dismissed.
Civil Appeal No. 11 15 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Ant., is allowed and the other cases snail be placed before a division bench for final disposal.
C.A. 2876/86 is dismissed N.P.V. &C.A. 1115/76 isallowed.
|
Respondents No. 2 to 4, regular employees of the appel lant Delhi Transport Corporation, were served with termina tion notices under Regulation 9(b) of the Delhi Road Trans port Authority (Conditions of Appointment & Service) Regula tions, 1952 by the appellant Corporation on the ground that they became inefficient in their work and started inciting other members not to perform their duties.
The three respondents and their Union, respondent No. 1 filed writ petition in High Court, challenging the constitu tional validity of Regulation 9(b), which gave the manage ment right to terminate the services of an employee by giving one month 's notice or pay in lieu thereof.
The Divi sion Bench of the High Court struck down the Regulation, holding that the Regulation gave absolute, unbridled and arbitrary powers to the management to terminate the services of any permanent or temporary employee, and such power was violative of Article 14 of the Constitution.
Hence, the Corporation filed the appeal before this Court, by special leave.
The validity of similar provisions in Para 522 of the Shastri Award, rule 1(i) of the District Board Rules 1926, Part V, Regulation 13 of Indian Airlines Employees ' Service Regulations, Regulation 48 of Air India Employees ' Service Regulations and also the clause in the contract of appoint ment in respect of employees of Zilla Parishad and the New India Assurance Company, also came up for consideration in the connected appeals and applications filed before this Court.
It was contended on behalf of the Delhi Transport Corpo ration that there was sufficient guideline in Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution, that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power was exercised only for that purpose, that even a term like 'public interest ' could be sufficient guidance in the matter of retirement of a government employee, and such a provision could be read into a statute even when it was not otherwise expressly there, that it was well settled that the Court would sustain the presumption of constitutionality by con sidering matters of common knowledge and to assume every state of facts which could be conceived and could even read down the section, if it became necessary to uphold the validity of the provision, that the underlying 144 rationale of this rule of interpretation, or the doctrine of reading down of a statute being that when a legislature, whose powers were not unlimited, enacted a statute, it was aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requisite limitations and conditions to immunise it from the virus of unconstitutionality, that since every legislature intended to act within its powers, in a limited Government, the legislature would attempt to function within its limited powers and it would not be expected to have intended to transgress its limits, that the guidelines for the exercise of the power of termination simpliciter under Regulation 9(b) could be found in the statutory provisions of the 1950 Act under which the regulations had been framed, the pream ble; Sections 19, 20 and 53, the context of Regulation 9(b) read with Regulations 9(a) and 15, that even for the exer cise of this power, reasons could be recorded although they need not be communicated which would ensure a check on the arbitrary exercise of power and effective judicial review in a given case, ensuring efficient running of services and in public interest and the regulations in question were paral lel to, but not identical with, the exceptions carved out under proviso to Article 311(2), that even the power of termination simipliciter under Regulation 9(b) could only be exercised in circumstances other than those in Regulation 9(a), i.e. not where the foundation of the order was 'mis conduct ', the exercise of such power could only be for purposes germane and relevant to the statute, that the principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma and the principles of natural justice were not incapa ble of exclusion in a given situation, if importing the right to be heard has the effect of paralysing the adminis trative process or the need for promptitude or the urgency of the situation so demands, natural justice could be avoided; that the words "where it is not reasonably prac ticable to hold an enquiry" may be imported into the regula tion, that where termination took place by the exclusion of audi alteram partem rule in circumstances which were circum scribed and coupled with the safeguard of recording of reasons which were germane and relevant, then the termina tion would not render the regulation unreasonable or arbi trary, and if the regulation was read in this manner it could not be said that the power was uncanalised or unguid ed, that under ordinary law of "master and servant" the Corporation was empowered by the Contract of Service to terminate the services of its employees in terms thereof; the Declaration in Brojo Nath 's case that such a contract was void under section 23 of the Indian Contract Act or opposed to public policy offending the Fundamental Rights and the Directive Principles was not sound in law; as a master, the Corporation had unbridled right 145 to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employees, and if the termination, was found to be wrongful, the only remedy available to the employees was to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case.
On behalf of the workmen/intervenors, it was submitted that provision of any rule that service would be liable to termination on notice for the period prescribed therein contravened Article 14 of the Constitution, as arbitrary and uncontrolled power was left in the authority to select at its will any person against whom action would be taken; that Articles 14, 19 and 21 were inter related and Article 21 did not exclude Article 19 and even if there was a law providing a procedure for depriving a person of personal liberty and there was, consequently no infringement of fundamental right conferred by Article 21, such law in so far as it abridged or took away any fundamental right under Article 19 would have to meet the challenge of that Article, that violation of principle of natural justice by State action was viola tion of Article 14 which could be excluded only in excep tional circumstances, and, therefore, a clause which autho rised the employer to terminate the services of an employee, whose contract of service was for indefinite period or till the age of retirement, by serving notice, and which did not contain any guidance for the exercise of the power and without recording reasons for such termination, violated the fundamental rights guaranteed under Articles 14, 19(1)(g) and 21 and principles of natural justice and was void under Section 2(g) of the , and unforce able under Section 2(hi; that since audi alteram partem was a requirement of Article 14.
and conferment of arbitrary power itself was contrary to Article 14, the rule in ques tion could not be sustained as valid; that the Constitution al guarantees under Articles 14 and 21 were for all persons and there could be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws applied and those who were outside their purview, and the law applicable to the former could only add to and not detract from the rights guaranteed by Part 111 of the Constitution; that the power to terminate the services of a person employed to serve indefinitely or till the age of retirement could be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Article 14, 19(1)(g) and 21 and unless the exceptional circumstances were spelt out, the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, particularly because, the requirement of audi alteram partem which was a part of the guarantee of 146 Article 14 was sought to be excluded, and there could be no guidance available in the body of the law itself, since the purpose for which an undertaking was established and the provisions dealing with the same in the law could provide no guidance regarding exceptional circumstances under which alone the power could be exercised, that the question in volved, in the instant cases was not the exercise of power which an employer possessed to terminate the services of his employee, but the extent of that power; that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, could not be rendered constitutional by reading the require ment of recording reasons and confining it to cases where it was not reasonably practicable to hold an enquiry and read ing it down further as being applicable to only exceptional cases would not be permissible construction and proper; that the Regulation conferred arbitrary power of leaving it to the DTC Management to pick and choose, either to hold an enquiry or terminate the services for the same misconduct and there was nothing in the provisions of the Act or the regulations from which the Management could find any guid ance and, therefore, in order to conform to the constitu tional guarantees contained in Articles 14, 19(1)(g) and 21, the regulation would have to make a distinction between cases where services were sought to be terminated for mis conduct and cases of termination on grounds other than what would constitute misconduct; that regulation 9(b) deliber ately conferred wide power of termination of service without giving reasonable opportunity to an employee even if he was regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry, thus, the intention of the regulation making au thority was clear and unambiguous; the provision was not capable of two interpretations, and consequently, the ques tion of reading down did not arise, and reading down in the instant cases involved not interpretation of any single word in regulation 9(b) but adding a whole clause to it, which amounted to rewriting the provisions, which courts had refused to make up for the omission of the legislature, and would inevitably drain out Article 14 of its vitality, and the right to equality which was regarded as a basic feature of the Constitution, and subject permanent employees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution, that unless the provision of the Constitution itself excluded the principles of natural justice, they continued to be applicable as an integral part of the right to equality guaranteed by the Constitution, that as the employees of the DTC were not Government employees, Article 311(2) was not applicable, and Article 14 fully applied to them, including the principles of natural justice.
147 On behalf of the Indian Airlines Corporation and the Air India, which filed intervention applications, it was submit ted that there had been distinction between the discharge simpliciter and dismissal from service by way of punishment, that the effect of the judgments of this Court in the Cen tral Inland Water 's case and West Bengal 's case was to take away the right of the employer to terminate the services of an employee by way of discharge simpliciter, that this Court had recognised the existence of the inherent right of an employer to terminate the services of an employee in terms of the contract of employment and also under the various labour enactments, that a plain reading of the amended Regulation 13 of the Indian Airlines Employees ' Regulations and a cumulative reading of the amended regulations 48 and 44 of the Air India Employees Service Regulations clearly established that the vice, if any, of arbitrariness had been completely removed and that the power to terminate had been vested with the Board of Directors, and not with any indi vidual, and sufficient guidelines made available to the Board to exercise the restricted and limited power available to the employer under these regulations.
On behalf of another intervenor, New India Assurance Co., it was submitted that the Central Inland Water 's case was erroneous, insofar as it made complete negation of power of the employer to terminate and rendered the termination illegal even where the employer had made all the necessary investigation and had given hearing to the employee con cerned before making the order, and took in even private employment; therefore, the judgment of this Court should be read down and made applicable prospectively.
In Civil Appeal No. 4073 of 1986 it was contended on behalf of the Bank employee whose services were terminated under para 522 of the Shastri Award, that mere failure of the employee to mention the loan taken by him from another branch of the Bank, which was repaid subsequently, had deprived him of his livelihood, and his services were termi nated without charge of 'misconduct ' and without an enquiry, and paragraph 522 of the Shastri Award gave no indication as to on what conditions this arbitrary uncontrolled power could be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts, and that this provision provided for "insecurity of tenure" for lakhs of permanent employees; Articles 14, 19(1)(g) and 21 and the integrated protection of these Fundamental Rights excluded the "doctrine of pleasure" and insisted on security of tenure "during good behaviour", and the right to livelihood could not be rendered precari 148 ous or reduced to a "glorious 'uncertainty", that no princi ple of interpretation permitted reading down a provision so as to make it into a different provision altogether differ ent from what was intended by the legislature or its dele gate, and there could not be any reading down which was contrary to the principles of interpretation; that if two provisions existed, firstly to remove from service after holding an enquiry on a charge of 'misconduct ' and secondly, without serving a charge sheet or holding an enquiry, all provisions for holding enquiry would be rendered otiose and would be reduced to a mere redundancy, that the Court had a duty to correct wrongs even if orders had been made which were later found to be violative of any fundamental right and to recall its orders to avoid injustice; that substan tive provision of para 522 could not be controlled or cur tailed effectively so as to confine its operation within narrow constitutional limits; that it was not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogated uncon trolled unconstitutional powers, which were neither neces sary nor germane for supposed efficiency of services in the Banks as a business enterprise, and that in a system gov erned by rule of law, discretion when conferred upon execu tive authorities must be confined within clearly defined limits.
In Civil Appeal No. I 115 of 1976, the appellant employ ee of the Zila Parishad contended that his services were terminated on account of the vindictiveness of some of the employees of the respondent, and without enquiry.
The em ployer submitted that the termination order was passed on the basis of the condition in the mutually agreed terms of contract of appointment, and resolution passed by the Board, and that Rule 1(i) of District Board Rules, 1926, Part V gave right to both the parties to terminate the employment on one month 's notice.
On the questions (i) whether Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, was arbitrary, illegal, discriminatory and violative of audi alteram partem and so constitutionally invalid and void; and (ii) whether the Regulation could be interpreted and read down in such a manner as to hold that it was not discriminatory, or arbi trary and did not confer unbriddled and uncanalised power on the authority to terminate the service of an employee, including a permanent employee, without any reason whatsoev er.
Dismissing Civil Appeal No. 2876 of 1986 (appeal by the Delhi Transport Corporation), allowing Civil Appeal No. 1115 of 1976, and directing other matters to be placed before a Division Bench, in ac 149 cordance with the majority decision (per Ray, Sharma, Sawant and K. Ramaswamy, JJ.) this Court, HELD: Per Ray, J.: 1.
I Regulation 9(b) of the Delhi Road Transport Author ity (Conditions of Appointment and Service) Regulations, 1952 which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the orders is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution.
There is no guide line in the Regulations or in the Delhi Road Transport Authority Act, 1950 as to when or in which cases and circum stances this power of termination by giving notice or pay in lieu thereof can be exercised.
[264G, 285C] 1.2 Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part 111 as well as to conform to the directive principles in Part IV of the Constitution.
In other words, the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of the Constitution.
Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
[264H, 265A B] 1.3 The 'audi alteram partem ' rule which, in essence, enforces the equality clause in Article 14 of the Constitu tion is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been ex pressly excluded by the Act or Regulation or Rule which is not the case here.
Rules of natural justice do no supplant but supplement the Rules and Regulations.
Moreover, the Rule of Law, which permeates the Constitution of India, demands that it has to be observed both substantially and procedurally.
Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.
[265D E] Regulation 9(b) does not expressly exclude the application of the 150 'audi alteram parterm ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made.
[265F] 1.4 Considering from all these aspects Regulation 9(b) is illegal and void, as it is arbitrary, discriminatory and without any guidelines for exercise of the power.
It confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the princi ples of natural justice.
It is also void under Section 23 of the Contract Act, as being opposed to public policy and also ultra vires of Article 14 of the Constitution.
[265E, 265B C, 266G] Moti Ram Deka Etc.
vs General Manager, NEF Railways, Maligaon.
Pandu, Etc., ; ; Parshotam Lal Dhingra vs Union of India, ; ; Shyam Lal vs The State of Uttar Pradesh and Anr., ; ; Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; ; Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; ; State of Orissa vs Dr. (Miss) Binapani Devi & Ors., ; ; A.K. Kraipak of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; Air India Corporation vs V.A. Rebello & Ant., AIR 1972 S.C. 1343; The Workmen of Sudder Office Cinnamara vs The Manage ment, ; Tata Oil Mills Co. Ltd. vs Work men & Anr.; , ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; E.P. Royappa vs State of Tamil Nadu and Anr. ; ; Municipal Corporation of Greater Bombay vs Malvenkar & Ors., ; ; Manohar P. Kharkher and Anr.
vs Raghuraj & Anr., ; 1.
Michael & Anr.
vs Johnaton Pumps India Ltd., ; ; Sukhdev Singh & Ors.
vs Bhagat Ram Sardar Singh Raghu vanshi & Anr.; , ; S.S. Muley vs J.R.D. Tata & Ors., ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh and Ors., [1985] 3 SCC 116; Workmen Of Hindustan Steel Ltd. and Anr.
vs Hindustan Steel Ltd. and Ors., ; ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors.
, ; ; Central Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr., and Delhi Transport Undertaking vs Balbir Saran Goel, ; , referred to.
2.1 An Act can be declared to be valid wherein any term has been 151 used which per se seems to be without jurisdiction, but can be read ' down in order to make it constitutionally valid by separating and excluding the part which is invalid or by interpreting the word in such a fashion as to make it con stitutionally valid and within jurisdiction of the legisla ture which passed the said enactment, by reading down the provisions of the Act.
This however, does not under any circumstances, mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulations that it confers arbitrary uncana lised, unbridled unrestricted power to terminate the serv ices of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, it can be read down to save the said provision from constitutional invalidity, by bring ing or adding words in the said legislation, such as saying that it implies that reasons for the order of termination have to be recorded.
[271C F] 2.2 In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambiguous meaning that it can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity.
Therefore, it is impossible to hold by reading down the provisions of Regula tion 9(b) framed under section 53 of the Delhi Road Trans port Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the principles of natural justice and equality as envisaged in Article 14 of the Constitution of India.
[271F H, 272A] Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131; Roshan Lal Tandon vs Union of India, ; ; Commissioner of Sales Tax, Madhya Pradesh, Indore & Ors.
vs Radhakrishan & Ors.
, ; ; In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 213 of the Government of India Act, 1935, ; R.M.D. Chamarbaugwalla vs The Union of India; , ; R.L. Arora vs State of Uttar Pradesh & Ors.
, ; and The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp.
2 SCR 127, Jagaish Pandey vs The Chancellor of Bihar & Anr.
, ; , referred to.
H.N. Seervai: Constitutional Law of India, Third Edi tion, p. 119, referred to.
152 Per Sharma, J. 1.1 The rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the management cannot have unrestricted and unqualified power of terminating the services of the employ ees.
In the interest of efficiency of the public bodies, however, they should have the authority to terminate the employment of undesirable, inefficient, corrupt, indolent and disobedient employees, but it must be exercised fairly, objectively and independently; and the occasion for the exercise must be delimited with precision and clarity.
Further, there should be adequate reason for the use of such a power, and a decision in this regard has to be taken in a manner which should show fairness, avoid arbitrariness and evoke credibility.
And this is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation.
An element of uncertainty is likely to lead to grave and undesirable consequences.
Clarity and precision are.
therefore, essential for the guidelines.
[272D F] 1.2 Regulation 9(b) of the Delhi Road Transport Authori ty (Condition of Appointment and Service) Regulation, 1952 cannot, therefore.
be upheld for lack of adequate and appro priate guidelines.
[272G] Per Saw,ant, J. 1.1.
There is need to minimise the scope of the arbi trary use of power in all walks of life.
It is inadvisable to depend on the good sense of the individuals.
however high placed they may be.
It is all the more improper and undesirable to expose the precious rights like the rights of life.
liberty and property to the vagaries of the individual whims and fancies.
It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness do not go with the posts, however high they may be.
There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational.
History does not support it and reality does not warrant it.
In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law.
[276E F] 1.2 Beyond the self deluding and self asserting right eous presumption, there is nothing to support the 'high authority ' theory.
This 153 theory undoubtedly weighed with some authorities for some time in the past.
But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it.
[278A B] 1.3 The employment under the public undertakings is a public employment and a public property.
It is not only the undertakings but also the society which has a stake in their proper and efficient working.
Both discipline and devotion are necessary for efficiency.
To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimiscal.
With capricious service conditions, both discipline and devotion are endangered, and efficiency is impaired.
[276G H, 277A] 1.4 The right to life includes right to livelihood.
The right to livelihood, therefore, cannot hang on to the fan cies of individuals in authority.
The employment is not a bounty from them nor can its survival be at their mercy.
Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental.
Fundamental rights can ill afford to be consigned to the limb of undefined premises and uncertain applications.
That will be a mockery of them.
[277B] 1.5 Both the society and the individual employed, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible.
The arbi trary rules which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.
[277C] Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghu vanshi & Anr.
; , ; Maneka Gandhi vs Union of India, ; The Manager, Government Branch Press & Ant.
vs D.R. Belliappa, ; ; The Manag ing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Ltd., ; ; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors.
vs Bombay Municipal Corpora tion & Ors.
, [1985] Supp. 2 SCR 51; Union of India & Anr.
vs Tulsiram Patel& Ors., [1985] Supp. 2 SCR 131; Cen tral Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr.
, ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors. ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 154 SCC 611; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp.
SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc.
vs Union of India & Ors., , referred to.
2.1 The doctrine of reading down or of recasting the statute can be applied in limited situations.
It is essen tially used, firstly, for saving a statute from being struck down on account of its unconstitutionality.
It is an exten sion of the principle that when two interpretations are possible one rendering it constitutional and the other making it constitutional the former should be preferred.
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its viola tion of any of the provisions of the Constitution.
The second situation which summons its aid is where the provi sions of the statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made.
However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord with good reason and conscience.
In such circumstances, it is not possible for the Court to remake the statute.
Its only duty is to strike it down and leave it to the legislature if it so desires, to amend it.
If the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided.
The doctrine can never be called into play where the statute requires extensive additions and deletions.
Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so.
[288F H, 289A B] Re Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc., ; Nalinakhya Bysack vs Shyam Sunder Halder & Ors.
, ; ; R.M.D. Chamarbaugwalla vs The Union of India, ; ; Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 SCR 769; R.L Arora vs State of Uttar Pradesh & Ors., ; ; Jagdish Pandey vs The Chancellor, University of Bihar & Anr., [1968] I SCR 231; Shri Umed vs Raj Singh & Ors., [1975] I SCR 918; Mohd. Yunus Salim 's case; , ; Sunil Batra etc.
vs Delhi Adminis tration & Ors.; , ; Excel Wear etc.
vs Union of India & Ors.
, ; ; Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; ; Union of India & Anr. etc.
vs Tulsiram Patel etc.
; , and Elliott Ashton Welsh, 11 vs United States; , ; 308, referred to.
155 2.2 Therefore, the doctrine of reading down cannot be availed of for saving the regulation in the instant case.
In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Trans port Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950, whose object is to provide for the establishment and the regula tion of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi.
There is nothing either in the object of the service regula tions or in the object of the Act which has a bearing on Regulation 9(b).
If anything the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertaking.
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation.
Secondly, the language of regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permis sible to read in it any meaning other than what is clearly sought to be conveyed by it.
Thirdly, the context of the regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees.
Sub clause (a) of the Regulation mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice.
Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of estab lishment or in circumstances other than those mentioned in sub clause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employ ee 's services.
The intention of the rule making authority, therefore, is more than clear.
It was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee.
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision.
[289C H, 290A] 2.3 Moreover, reading in the rule circumstances under which alone the rule can be used, and reading it down to read in it words or expressions or provisions in order to save the legislation would not only distort the intention of the rule making authority but would also require extensive amendment of a very vague nature to it.
The reading in the regulation of a provision that the concerned employees should be given a hearing with regard to his mis conduct will require that be should first be intimated of the mis conduct of which he is guilty.
But 156 that kind of a situation is taken care of by sub clause (a) of the said regulation.
There is.
therefore.
no need of a separate prevision for the same.
on the other hand.
the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing.
The Court cannot read in the rule all circumstances where it is not possible or necessary to hold an enquiry.
Such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311( 2).
The reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do.
There is no authority which supports such wide reading down of any provision of the statute or rule/regulation.
Therefore the doctrine of reading down is singularly inapplicable to the present case.
[281B, 290B, 291A F] 3.
Clause (b) of Regulation 9 contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract.
[274E] Per Ramaswamy.
J 1. 1.1 The question of security of work is of most impor tance.
If a person does not have the feeling that he belongs to an organisation engaged in promotion.
he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
Therefore, as far as possible security of work should be assured the employees so that they may contribute to the maximisation of production.
[300D E] Daily Rated Casual Labour vs Union of India, at 130 131, referred to.
1.2 A permanent employee of a statutory authority, corporation or instrumentality under Article 12 has a lien on the post till he attained superannuation or compulsorily retired or service is duly terminated in accordance with the procedure established by law.
Security of tenure enures the benefit of pension on retirement.
Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty.
He/She has a right to security of tenure which is essential to inculcate a sense of belonging to the service or organisation and in volvement for maximum production or efficient 157 service.
It is also a valuable right which is to be duly put an end to only as per valid law.
[300A G] Roshan Lal Tandon vs Union of India, ; at 195 196; Calcutta Dock Labour Board vs Jarfar Imam, and Sirsi Municipality vs Cecelia Kom Francis Tal lis; , , referred to.
1.3 The right to life, a basic human right, assured by Article 21 of the Constitution comprehends some thing more than mere animal existence; it does not only mean physical existence, but includes basic human dignity.
The right to public employment and its concomitant right to livelihood receive their succour and nourishment under the canopy of the protective umbrella of Articles 14, 16(1), 19(1)(g) and 21.
[296A, 297B] Munn vs Illinois, ; and 154, referred to.
Kharak Singh vs State of U.P., [1964] 1 SCR 332; Olga Tellis vs Bombay Municipal Corporation, [1985] 2 Suppl.
SCR page 51 at 79; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; State of Maharashtra vs Chander Bhan, and Board of Trustees, Port of Bombay vs Dilip Kumar; , , referred to.
1.4 The arbitrary, unbridled and naked power of wide discretion to dismiss a permanent employee without any guidelines or procedure would tend to defeat the constitu tional purpose of equality and allied purposes.
Therefore, when the Constitution assures dignity of the individual and the right to livelihood, the exercise of power by the execu tive should be combined with adequate safeguards for the rights of the employees against any arbitrary and capricious use of those powers.
Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors.; , and Francis Corallie vs
U.T. of Delhi; , = ; , referred to.
1.5 It is well settled constitutional law that different Articles the Chapter on Fundamental Rights and the Directive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlapping with the subject matter of what is to be protected by its various provisions, particularly the Fundamental Rights.
The fundamental rights, protected by Part III of the constitu tion, out of which Articles 14.
19 and 21 are the most frequently 158 invoked to test the validity of executive as well as legis lative actions when these actions are subjected to judicial scrutiny, are necessary means to develop one 's own person ality and to carve out one 's own life in the manner one likes best subject to reasonable restrictions imposed in the paramount interest of the society and to a just.
fair and reasonable procedure.
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test.
Thus, the right to a public employ ment is a constitutional right under Article 16(1).
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules.
regulations or instructions having statutory flavour made thereunder.
But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion.
Article 21 guarantees the right to live which includes right to livelihood.
to many.
assured tenure of service is the source.
[311G; 312G H, 313A B] R.C. Cooper vs Union of India, ; ; Minerva Mills Ltd. vs Union of India, and Union of India & Ant.
vs Tulsiram Patel & 0rs. [1985] Suppl.
2 SCR 131 at 233 referred to.
1.6 Article 14 is the general principle while article 311(2) is a special provision applicable to all civil serv ices under the State.
Article 311(2) embodies the principles of natural justice but proviso to clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given cir cumstances enumerated in these clauses of the proviso to article 311(2) of the Constitution.
Article 14 read with Arti cles 16(1) and 311 are to be harmoniously interpreted that the proviso to article 311(2) excludes the application of the principles of natural justice as an exception; and the applicability of Article 311(2) must, therefore, be circum scribed to the civil services and to be construed according ly.
In respect of all other employees covered by Article 12 of the Constitution the dynamic role of Article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition.
unless the statutory rules them selves, consistent with the mandate of Articles 14.16.19 and 21 provide, expressly, such an exception.
[317F H, 315A] Union of India & Ant.
vs Tulsiram Patel & Ors., [1985] Suppl.
2 SCR 131 at 233; A.K. Kraipak & Ors. etc.
vs Union of India & Ors., and Union of India vs Col J.N. Sinha & Ors., [1971] 1 SCR 791, referred to.
159 1.7 Article 19(1)(g) empowers every citizen right to avocation or profession etc., which includes right to be continued in employment under the State unless the tenure is validly terminated and consistent with the scheme enshrined in the fundamental rights of the Constitution.
Whenever there is arbitrariness in State action whether it be of the Legislature or of the Executive or of an authority under Article 12.
Articles 14 and 21 spring into action and strike down such an action.
The concept of reasonableness and non arbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitution.
[315B D] 1.8 Thus, Article 14 read with 16(1) accords right to an equality or an equal treatment consistent with principles of natural justice.
Any law made or action taken by the employ er, corporate statutory or instrumentality under Article 12 must act fairly and reasonably.
Right.
to fair treatment is an essential inbuilt of natural justice.
Exercise of unbri dled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively, judiciously and with out prejudice.
Wider the discretion, the greater the chances of abuse.
Absolute discretion is destructive of freedom than of man 's inventions.
Absolute discretion marks the beginning of the end of the liberty.
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment.
The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice.
[320B D] 1.9 The right to public employment which includes right to continued public employment till the employee is superan nuated as per rules or compulsorily retired or duly termi nated in accordance with the procedure established by law is an integral part of right to livelihood which in turn is an integral part of right to life assured by article 21 of the Constitution.
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure and conformable to the mandate of Articles 14 and 21.
In other words, an employee in a public employment also must not be arbitrarily, unjustly or unreasonably deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure.
Otherwise any law or rule in violation thereof is void.
[320E F] A.K. Kraipak & Ors. etc.
vs Union of India & Ors.
, ; Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; 160 Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors.
vs Union of India & Ors.
, ; at 60 61; S.S. Muley vs J.R.D. Tata, ; Superin tendent of Post Office vs K. Vasayya, [1984] 3 Andhra Pra desh law Journal 9; West Bengal Electricity Board & Ors. vs D.B. Ghosh & Orb '., [1985] 2 SCR 1014; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; O.P. Bhandari vs Indian Tourism Development Corp. Ltd. & Ors.
, ; ; A.P.S.R.T. Corp. vs Labour Court, AIR 1980 A.P. 132; R.M.D. Chamarbaugwalla vs State of Punjab, ; ; Kanhialal vs District Judge & Ors., ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., ; All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employees ' Union & Anr.
vs Christian Medical College Veilore Association & Ors., ; & 562; Kameshwar Prasad vs State of Bihar, [1962] Suppl.
3 SCR 369 and O.K. Ghosh vs EZX Joseph, [1963] Supp. 1 SCR 789, referred to.
United States vs Samuel D. singleton; , , referred 1.10 Undoubtedly, efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services.
Disci pline in that regard amongst the employees is its essential facet and bas to be maintained.
The society is vitally interested in the due discharge of the duties by the govern ment employees or employees of corporate bodies or statutory authorities or instrumentalities under article 12 of the Con stitution.
The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes.
The employees are charged with public duty and they should perform their public duties with deep sense of responsibili ty.
The collective responsibility of all the officers from top most to the lowest maximises the efficient public admin istration.
They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully honestly with full dedication and utmost devotion to duty.
Equally the employees must also have a feeling that they have security of tenure.
They should also have an involvement on their part in the organisation or institution, corporation, etc.
They need assurance of serv ice and protection.
The public interest and the public good demands that those who discharge their duties honestly, efficiently and 161 with a sense of devotion and dedication to duty should receive adequate protection and security of tenure.
There fore, before depriving an employee of the means of liveli hood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasonable restrictions under article 19(5).
[320G H, 321A D, 322D] 1.11 Conferment of power on a high rank officer is not always an assurance, in particular, when the moral standards are generally degenerated, that the power would be exercised objectively, reasonably, conscientiously, fairly and justly without inbuilt protection to an employee.
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls.
Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need consistent with the constitutional scheme.
[322D E] 1.12 Regulation 9(b) of the Delhi Road Transport (Condi tions of Appointment and Service) Regulations, 1952, is arbitrary, unjust, unfair and unreasonable offending Arti cles 14, 16(1), 19(1)(g) and 21 of the Constitution.
It is also opposite to the public policy and thereby is void under Section 23 of the .
[330G] 1.13 Under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provision for termination of service by notice, in terms thereof, it can be so determined and if the con tract finds no provision to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice.
Where no notice or a reasonable notice was issued.
before terminating the contract.
the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages.
It is not disputed that the Delhi Road Transport Corporation is a statutory Corporation under the Delhi Road Transport Act and the Regulations are statutory and its employees are entitled to the fundamental rights enshrined in Part 111 of the Constitution.
The Corporation or an instrumentality or other authority under Article 12 is not free, like an ordinary master (a private employer) to terminate the services of its employees at its whim or caprices or vagary.
It is bound by the Act and the Regulation and paramount law of the land, the Constitution.
[292G H; 293A B] 1.14 Any law, much less the provisions of Contract Act, which are inconsistent with the fundamental rights guaran teed in Part III of 162 the Constitution, are void by operation of Article 13 of the Constitution.
The law of contract, like the legal system itself, involves a balance between competing sets of values.
Freedom of contract emphasises the need for stability.
certainty and predictability.
But, important as values are.
they are not absolute, and there comes a point when they face a serious challenge. 'This Court, as a court of consti tutional conscience enjoined and is jealously to project and uphold new values in establishing the egalitarian social order.
As a court of constitutional functionary exercising equity jurisdiction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscionable rules or conditions when the citizen is really unable to meet on equal terms with the State.
It is to find whether the citi zen, when entered into contracts of service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appro priate declaration.
[302G, 303B, 304H, 305A B] Central Inland Water Transport Company Limited vs Brojo nath Ganguly, 1986 SC 1571, affirmed.
Ramdas Vithaldas Durbar vs section Amarchand & 60., 43 Indian Appeals.
164 and V. Raghunadha Rao vs State of Andhra Pra desh, , referred to.
Anson 's Law of Contract, p. 6 and 7 and Professor Guido Calabresi of Yale University Law School "Refractivity, Paramount power and Contractual Changes", 1961 62 71 Yale Law Journal, P 1191, referred to.
2.1 The golden rule of statutory construction is that the words and phrases or sentences should be interpreted according to the intent of the legislature that passed the Act.
All the provisions should be read together.
If the words of the statutes are in themselves precise and unambig uous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense.
But if any doubt arises from the terms employed by the legislature, it is always safe means of collecting the intention, to call in aid the ground and cause of making the statute, and have recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intends to redress.
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that 163 word or phrase in its context.
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature, then it is proper to look for some other possible meaning and the court cannot go further.
[323D G] 2.2 The Doctrine of Reading Down is, therefore, an internal aid to construe the word or phrase in a statute to give reasonable meaning, but not to detract, disort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality.
Thus, the object of reading down is to keep the operation of the statute within the purpose of the Act and constitutionally valid.
[324E, 325B] 2.3 It cannot be accepted that the Courts, in the proc ess of interpretation of the Statute, would not make law but leave it to the legislature for necessary amendments.
In an appropriate case, Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the creezes.
The object is to elongate the purpose of the Act.
[323B] 2.4 The Courts, though, have no power to amend the law by process of interpretation, but do have power to mend it so as to be in conformity with the intendment of the legis lature.
Doctrine of reading down is one of the principles of interpretation of statute in that process.
But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save it from unconstitutionality or to confer jurisdiction on the legis lature.
Similarly it cannot be taken aid of to emasculate the precise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Consti tution and to direct the authorities to record reasons, unknown or unintended procedure.
[326H, 327A B] Elliott Ashton Walsh, H vs United States, ; ; Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45; United States vs Wunderlick, ; S.C. Jaisinghani vs Union of India, ; ; In re Hindu Women 's Right to Property Act, ; K.N. Singh vs State of Bihar, [1962] Suppl. 2 SCR 769; R.L. Arora vs State of U.P., ; ; Jagdish Pandev vs Chan cellor of the Bihar, ; Amritsar Municipality vs State of Punjab, ; ;Sunil Batra vs Delhi Admn., ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 164 SCC 611; Charanlal Sahu vs Union of India, [1989] Suppl.
Scale 1 at p. 61; Delhi Transport Undertaking vs Balbir Saran Goel, ; Air India Corporation vs Rebellow; , and Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; , re ferred to.
Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 and Saints High School, Hyderabad vs Govt.
of A. P., ; , re ferred to.
Craies Statute Law, 7th Ed.
V, P. 64.
2.5 The language of Regulation 9(b) is not capable of two interpretations.
This power is in addition to the normal power in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity.
Thereby the legislative intention is manifest that it intended to confer such draco nian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenter hook under constant pressure of uncer tainty, precarious tenure at all times right from the date of appointment till date of superannuation.
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the service arbitrarily and capri ciously.
Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee with out following the principles of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee.
[327E G] 2.6 No doubt, the power to take appropriate and expedi tious action to meet the exigencies of weeding out ineffi cient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority but any action taken without any modicum of reasonable procedure and prior opportunity always generates an un quenchable feeling that unfair treatment was meted out to the aggrieved employee.
To prevent miscarriage of justice or to arrest a nursing grievance that arbitrary whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstance as adumbrated in proviso to article 311(2) of the Constitution.
If an individual action is taken as per the procedure on its own facts its legality may be tested.
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fairness and reasonable 165 ness envisaged under articles 14 and 21 of the Constitution.
Therefore, conferment of power with wide discretion without any guidelines, without any just, fair or reasonable proce dure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
Doctrine of reading down cannot be extended to such a situation.
[328A C, 329B C] 2.7 In view of the march of law, made by Article 14 it is too late in the day to contend that the competent author ity would be vested with wide discretionary power without any proper guidelines or the procedure.
When it is found that the legislative intention is unmistakably clear, unam biguous and specific, the preamble, the other rules and the circumstances could not be taken aid of in reading down the provisions of the rules or the regulations of the constitu tional scheme.
[330F G] 3.1 The phrases "public policy", opposed to public policy, or "contrary to public policy" are incapable of precise definition.
It is valued to meet the public good or the public interest.
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances.
Therefore, in the absence of specific head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy.
The rules which stem from the public policy must of necessity be laid to further the progress of the society, in particular when social change is to bring about an egalitar ian social order through rule of law.
In deciding a case which may not be covered by authority, courts have before them the beacon light of the trinity of the Constitution viz., the preamble, Part III and Part IV and the play of legal light and shade must lead on the path of justice social, economic and political.
Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution.
[308C D, 309G H, 310A] 3.2 Since Constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capacity to meet changing conditions, con stitutional policy provides a valuable aid in determining the legitimate boundaries of statutory meaning.
Thus public policy having its inception in Constitutions may accomplish either a restricted or extended interpretation of the liter al expression of a statute.
A statute is always presumed to be constitutional and where necessary, a constitutional meaning will be inferred to preserve validity.
Likewise, where a statute tends to extend or preserve a constitutional 166 principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statutory aim or objective.
Therefore, when the provi sions of an Act or Regulations or Rules are assailed as arbitrary, unjust, unreasonable, unconstitutional, public law element makes it incumbent to consider the validity thereof on the anvil of inter play of articles 14, 16(1), 19(1)(g) and 21 and of the inevitable effect of the provi sion challenged on the rights of a citizen and to find whether they are constitutionally valid.
[310C D, 311E] 4.
The absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
[328D E] 5.
No doubt, it is open to the authorities to terminate the services of a temporary employee without holding an enquiry.
But in view of the march of law made, viz., that it is not the form of the action but the substance of the order which is to be looked into, it is open to the Court to lift the veil and pierce the action challenged to find whether the said action is the foundation to impose punishment or is only a motive.
The play of fair play is to secure justice procedural as well as substantive.
The substance of the order, the effect thereof is to be looked into.
[330C D] Shamsher Singh vs State of Punjab, , re ferred to.
It is for concerned authorities to make appropriate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consistent with the constitutional scheme.
[331A] Workmen of Hindustan Steel Ltd. vs Hindustan Steel Ltd. & Ors.
; , , referred to.
Ram Chander vs Union of India, , referred to.
The ratio in Brojonath 's case was correctly laid down and requires no reconsideration.
[331D] 167 Central Inland Water Transport Company Limited vs Brojo nath Ganguly, , affirmed.
Per Mukharji, CJ., (Contra) 1.
The constitutionality of the conferment of power to terminate services of a permanent employee without holding an enquiry is sustained by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies.
It should be done objectively, the reasons should be recorded, and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution.
The reasons though recorded, need not be communicated, it is only for the purpose of running of the institution.
There should be factors which hamper running of the institution without the termination of the employment of the employee concerned at the particular time, either because he is a surplus or inefficient, disobedient and dangerous.
[235C E] 2.1 The philosophy of the Indian Constitution, as it has evolved, from precedent to precedent, has broadened the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employment.
This is the basic concept of the evolu tion from the different angles of law of master and servant or in the evolution of employer and employee relationship.
It is true that the law has traveled in different channels, government servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations.
However, the basic and fundamental question to be judged is, in what manner and to what extent, the employees of either of semi Government or statutory corporations or public undertakings who enjoy the rights, privileges, limitations and inhibitions of institu tions who come within the ambit of Article 12 of the Consti tution could be affected in their security of tenure by the employers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted.
[229D G] 2.2 Efficiency of the administration of these undertak ings is very vital and relevant consideration.
Production must continue, services must be maintained and run.
Efficacy of the services can be manned only by the disciplined em ployees or workers.
Discipline. decency and 168 order will have to be maintained.
Employees should have sense of participation and involvement and necessarily sense of security in semipermanent or quasi permanent or permanent employment.
There must be scope for encouragement for good work.
In what manner and in what measure, this should be planned and ensured within the framework of the Constitution and, power mingled with obligations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitu tion.
[230A C] 2.3 Arbitrary, whimsical or discriminatory action can flow or follow in some cases by the preponderance of these powers to terminate.
The tact that the power is entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse.
At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency.
Yet discipline has to be maintained, efficiency of the institution has to be ensured.
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern.
It is not always possible to have enquiry because disclosure is diffi cult; evidence is hesitant and difficult, often impossible.
In those circumstances, the approach to the location of power, possession and exercise of which is essential for efficient running of the industries or services, has to be a matter both of balancing and adjustment, on which one can wager the salivation of rights and liberties of the employ ees concerned and the future of the industries or the serv ices involved.
[330D F] 2.4 The power to terminate the employment of permanent employment must be there.
Efficiency and expediency and the necessity of running an industry or service make it impera tive to have these powers.
Power must, therefore, be with authorities to take decision quickly, objectively and inde pendently.
Power must be assumed with certain conditions of duty.
The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions of exercise of such powers.
The manner in which such exercise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power.
All these are essential to ensure that power is fairly exercised and there is fair play in action.
Reasons good and sound, must control the exercise of power.
[230G H, 231A] Thus, for the running of the industry or the service, effi ciently, 169 quickly and in a better manner or to avoid dead locks or inefficiency or friction, the vesting of the power in cir cumstances must be such that it will evoke credibility and confidence.
Notice of hearing and opportunity in the form of an enquiry may or may not be given, yet arbitrariness and discrimination and acting whimsically must be avoided.
These powers must, therefore, be so read that the powers can be exercised on reasons, which should be recorded, though need not always be communicated, and must be by authorities who are high ranking or senior enough and competent and are expected to act fairly, objectively and independently.
The occasion for the use of power must be clearly circumscribed in the above limits.
These must also circumscribe that the need for exercise of those powers without holding a detailed or prolonged enquiry is there.
[231E, F G] Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116; Moti Ram Deka vs North East Frontier Railway, ; S.S. Muley vs J.R.D. Tata, ; Manohar P. Kharkhar vs Raghuraj, ; Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Anr., ; Sukhdev Singh vs Bhagatram Sardar Singh Raghuvanshi, ; ; Union of India & Anr.
vs Tulsi Ram PateI, [1985] Suppl.
2 SCR 131 at p. 166; Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130; L. Michael & Anr.
vs M/s Johnston Pumps India Ltd.; , at 498; Delhi Transport Corporation Undertaking vs Balbir Saran Goel, ; at 764; Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; ; Municipal Corpo ration of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006; Roshan Lal Tandon vs Union of India, ; at 195 D E; Champak Lal Chiman Lal Shah vs The Union of India, at 204; Ram Gopal Chaturvedi vs State of M.P., ; at 475; Gheru Lal Parekh vs Mahadeodas Maiva & Others, [1959] Supp. 2 SCR 406 at 440; O.P. Bhandari vs I.T.D.C. & Ors., ; ; The Hindu Women 's Rights to Property Act, ; Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61; Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102; A.V. Nachane & Anr.
vs Union of India & Anr.
, ; ; India Tobacco Co. Ltd. vs The Commercial Tax Officer, Bhavanipore & Ors., at 657; A.L. Kalra vs The Project and Equipment Corpora tion of India Ltd.; , at 664; Bandhua Mukti Morcha vs Union of India & Ors., [1984] 2 170 SCR 79 at 101; Hindustan Antibiotics Ltd. vs The Workmen & Ors.
, ; at 669; The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825; Commissioner of Sales Tax, Madhya Pradesh vs Radhakrishan & Ors., (supra); Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593; U.P. State Electricity Board vs Hari Shankar Jain, ; A.R. Antulay vs R.S. Nayak and Anr., ; ; S.G. Jaisinghani vs Union of India and Ors., ; at p. 718 19 and Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 SCR 1, referred to.
A. Schroeder Music Publishing Co. Ltd. vs Macaulay, (formerly Instone), , referred to.
Chitty on Contract, 46th Edition Vol.
II, p. 808 or 25th Edition Vol.
II p. 712 paragraph and Halsbury 's Law of England, 4th Edition Vol.
No. 16 paras 607 and 608, referred to.
3.1 Courts have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the per sons involved in the exercise of those powers and, there fore, should be attributed those powers on conditions which will only make these legal or valid.
Our law making bodies are not law unto themselves and cannot create or make all laws.
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid.
Such powers conferred must conform to the constitu tional inhibitions.
[232C D] 3.2 Legislation, both statutory and constitutional, is enacted from experience of evils.
But its general language should not necessarily be confined to the form that the evil had taken place.
Time works changes, brings into existence new conditions and purposes and new awareness of limita tions.
Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth.
This is particularly true of the constitutional construc tions.
Constitutions are not ephemeral enactments designed to meet passing occasions, but designed to approach immor tality as nearly as human institutions can approach it.
In the application of a Constitutional limitation or inhibi tion, the interpretation cannot be only of 'what has been ' but of 'what may be '.
Therefore.
in the interpretation of the provisions of an Act, where two constructions are possi ble, the one which leads towards constitutionality of the legislation would be preferred to that which has the effect of 171 destroying it.
If the Courts do not read the conferment of power in the aforesaid manner, the power is liable to be struck down as bad.
[233B D] 3.3 The Court must proceed on the premise that the law making authority intended to make a valid law to confer power validly or which will be valid.
The freedom therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid.
This is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed inten tion of the legislature or the implied purpose of the legis lation.
[234G H; 235A] 3.4 It has been said that if the legislature has mani fested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
This cannot be agreed to.
Our legis latures are limited by the constitutional inhibitions and it is made, that the Court should read their Acts and enact ments with the attribute that they know their limits and could not have intended to violate the Constitution.
It is true that the Court should be loath to read down where there are clear, unambiguous and positive terms in a legislation and should proceed with a straight forward method of strik ing down such legislations.
But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the Constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly.
[236H, 237A B] 3.5 The plain thrust of legislative enactment has to be found out in the inarticulate expressions and in the silence of the legislation.
In doing so, to say what the legislature did not specifically say is not distortion to avert any constitutional collision.
[237E] In the language of the relevant provisions of the instant cases, there is no intention of the legislature to flout the constitutional limitations.
[237E] Elliot Ashto Welsh 11 vs United States; , , 26 Ed.
308, referred to.
3.6 It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended.
Legislature had not 172 intended arbitrary or uncontrolled or whimsical power.
Indeed it considered.
This is not the proper way to read that power in the Regulation 9(b).
Para 522 of the Shastri Award, read properly, must be circumscribed with the condi tions indicated above as a necessary corollary or conse quence of that power.
It is also not reading to the legisla ture conditions which were not there in the second proviso to Article 311(2) of the Constitution.
[237H, 238A B] Union of India & Anr.
vs Tulsiram Patel, [1985] Supp.
2 SCR 131, relied on.
No doubt, absolute powers cannot be regulated without essential legislative policy, but in the instant cases properly read, absolute power was not there.
Power that was only constitutionally valid, that power can be presumed to have been given and if that presumption is made, conditions indicated above inevitably attach.
But these conditions are necessary corollary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and efficient running of the industry.
[238C, E] 3.7 In the circumstances power must be there, the power must be read down in the manner and to the extent indicated above, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be either by virtue of the silence of the provi sion indicating the contingencies of termination or by virtue of constitutional inhibitions.
That reading would not violate the theory that judges should not make laws.
[238F G] Shri Ram Krishna Dalmia vs Justice Tandolkar, ; at 299; Jyoti Prasad vs The Administrator for the Union Territory of Delhi, ; at 139; Union of India vs Col. J.N. Sinha & Anr., ; at 461; N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619; Commissioner of Sales Tax, M.P., Indore & Ors.
vs Radhakrishan & Ors.
, ; at 257; Olga Tellis & Ors. etc.
vs Bombay Municipal Corporation & Ors., [1985] Suppl.
2 SCR 51 at 89; R.M.D. Chamarbaugwalla vs Union of India; , at p. 935 and 938; Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769; R.L. Arora vs State of Uttar Pradesh, ; ; Jagdish Pandev vs The Chancellor, University of Bihar & Anr., ; , at pages 236 237; Sunil Batra vs Delhi Administration & Ors., ; ; Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; ; Charan Lal Sahu & Ors.
vs Union of India, , at 173 pages 53 and 54, paras 101 as well as p. 61 para 114; Shah & Co. vs State of Maharashtra, ; at 477 78; M. Pentiah and Ors.
vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc.
vs A. Rajappa & Ors., ; ; Minerva Mills Ltd.& Ors., vs Union of India & Ors.
, ; , at p. 239 and 259; Elliott Ashton Welsh, 11 vs United States, 26 Lawyers ' Edition 2nd, 308 at 327; Malinakhva Bysack vs Shyam Sunder Haldar & Ors., ; , at p. 544 545 and Municipal Committee, Amritsar & Anr.
vs State of Punjab & ors.
; , , referred to.
United States of America vs Edward A.
Rumely, 97 Law yers Edition 770 at 775; Reg.
vs Sadiers Co., ; , 460 and 463; Framamus vs Film Artists Association, at 542 and Seaford Court Estates, , referred to.
H.M. Seervaid 'Constitutional Law of India ', 3rd Edn.
1 pages 119 120 and Lord Denning: "The discipline of Law", at p. 12, referred to.
3.8 Termination simpliciter under Regulation 9(b) of the Regulation 1952, Delhi Road Transport Authority (Conditions of Appointment and Services) or similar powers can be exer cised only in circumstances other than those in Regulation 9(a).
The exercise of such powers can only be for purposes germane and relevant to the statute, viz., the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, or where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, or there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee etc., etc.
Therefore, each case of conferment of power involved should be judged on the aforesaid basis.
[236E G] 3.9 Having regard to the finality of the position of law and having regard to the theory that parties have ad justed their rights on the understanding of the law as it was, justice of the situation would be met if pending liti gations are examined and disposed of in the light of afore said principles.
Where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues 174 are pending, but previous terminations, where no lis is pending, will not be reopened.
To that extent, the law will be prospective.
[239D F] 4.
This Court.
under Article 141 of the Constitution, is enjoined to declare law.
The expression 'declared ' is wider than the words 'found or made '.
To declare is to announce opinion.
Indeed, the latter involves the process.
while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as a law.
The law de clared by this Court is the law of the land.
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful instrument of justice placed in the hands of the highest judiciary of this country.
Therefore.
there should be a more active and creative role for the courts in declaring what the law is.
[240E G] 1.
C. Golaknath & Ors.
vs State of Punjab & Anr.
, ; @ 811,813/84, referred to.
|
ivil Appeal No. 1372 of 1980.
From the Judgment and Order dated the 19.5.
1980 of the Punjab and Haryana High Court in C.W.P. No. 1378 of 1973.
G.L. Sanghi, Vivek Gambhir, Dhruv Mehta, S.K. Gambhir and Surender Karnail for the Appellants.
C.M. Nayar for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This appeal by special leave arises from the Judgment of the Punjab & Haryana High Court in Civil Writ Petition No. 1378 of 1973.
The appellants in the writ peti tion challenged the constitutionality of the East Punjab Molasses (Control) Amendment (hereinafter referred to as the "Amendment Act, 1973") on the ground that the said amendment had not re ceived the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved by the impugned amendment.
The Amendment Act.
1973 amended the provisions of the East Punjab Molasses (Control) Act.
1948 (East Punjab Act No. 11 of 1948) (hereinafter referred to as the "Principal Act").
as it stood at the relevant time.
The Principal Act had been earlier amended in 1950.
1964 and 1968.
It was subsequently amended in 1976.
The appellants have.
however.
challenged only the Amendment Act, 1973 and have significantly not challenged the earlier or subsequent amendments.
Rejecting the appellants ' contentions.
the High Court observed: .
We have very carefully gone through the petition and we have asked the learned counsel for the petitioners to point out any averment from the petition.
to show that the petitioners were dealing with molasses which were not covered under the definition of molasses given in the unamended Act.
but arc covered within the definition of molasses under the Amending Act.
No such averment has been made . .
The grievance of the petitioners that they have been made subject to the provisions of the Act in view of the Amending Act. thus does not stand substantiated from the averments made in the petition .
The appellants admitted before the High Court that, apart from the Principal Act, as enacted in 1948.
being an 'existing law '.
and therefore beyond challenge.
none of its provisions could be regarded as an unreasonable restriction on the freedom of trade.
commerce and intercourse.
The appellants, however. contended that the impugned provisions inserted in 1973 were null and void for the reason that the restrictions so introduced had not received the previous sanction of the President.
Section 2 of the Principal Act was amended in 1973 to define 'molasses ' as well as 'khandsari unit '.
By this amendment, a new definition of 'molasses ' was substituted in the place of the original definition [See Clause (c)].
Clause (f) of Section 2 was added to define a 'khandsari unit '.
502 Section 3 of the Principal 'Act empowered the Controller to "direct the owner or occupier of a sugar factory or any other person" to furnish returns of the stock of molasses in his possession.
This Section was amended in 1973 to bring a khandsari unit or distillery within the statutory ambit.
Section 3(A) had been added in 1964.
to empower the Control ler to direct the owner or occupier of a sugar factory or distillery, or any other person permitted to store and preserve molasses, to construct tanks for the storage of molasses.
This Section was amended in 1973 to bring a khand sari unit within its ambit.
Section 4 of the Principal Act says that no person shall, without a permit issued by the Controller, move molasses by road, rail, river or by any other means or sell or otherwise dispose of molasses to any person other than the Government or a person licensed by the Government in this regard.
It also authorises the Controller to direct the owner or occupier of a sugar factory to supply molasses of specified quantity and quality to such persons as the Con troller may direct.
This section was amended in 1964 to provide that no person shall store or preserve molasses without the Controller 's permit.
It was further amended in 1973 to bring a khandsari unit within the ambit of the controller 's power to direct supply of molasses.
Section 5 of the Principal Act empowers the Government to regulate prices from time to time and prescribes the manner in which molasses has to be graded, marketed, packed or stored for sale.
It was amended in 1976 in certain re spects which are not material.
Section 6 provides for the imposition of penalty in the event of contravention of any provision of the Act.
The Section was substituted in 1964 for the original Section.
It was amended in 1973 in certain respects.
Section 7 of the Principal Act refers to liability for breaches by corporation or company.
This Section has not undergone any change.
Section 8 of the Principal Act provid ed that no court should take cognizance of any offence punishable under the Act except on a report made by the Controller.
This section was substituted in 1964 to provide for the exercise of supervision and control by the Control ler over sugar factories through subordinates.
It was amend ed in 1973 by including a khandsari unit within its ambit.
Section 9 of the Principal Act provided for power of entry and seizure.
It was substituted in 1973 by a new section with certain changes which are immaterial.
Section 10 of the Principal Act provided for the procedure of seizure.
It was substituted by a new section in 1973, but the changes are not material.
Section 11 deals with the delegation of pow ers.
It has not undergone any change.
Section 12 of the Principal Act deals with the power of the Govern 503 ment to exempt any area or person from the provisions of the Act.
This Section was amended in 1973 to empower the Govern ment to exempt any kind of molasses from the provisions of the Act.
Section 13 of the Principal Act deals with the rule making power of the Government.
It was amended in 1973 to include khandsari unit or distillery within the scope of that Section.
These are the changes made in the Principal Act.
The substantial change introduced by the Amendment Act, 1973 is in the substituted definition of 'molasses ' so as to include within its meaning mother liquor produced in the final stage of manufacture of sugar or khandsari sugar.
The appellants being dealers in khandsari molasses are stated to be aggrieved by the expanded definition of 'mo lasses '.
'Molasses ' was defined under the unamended Section 2(c) of the Principal Act as follows: "2(c) 'Molasses ' means the heavy, dark coloured residual syrup drained away in the final stage of the manufacture of sugar by vacuum pans or in open pans in sugar factories either from sugarcane or by refining gur; when such syrup has a density of not less than 75 degrees brix and a for mentable sugar content (expresent as reducing sugars) 19 per cent. ' ' This definition was substituted by the Amendment Act, 1973 as follows: "2(c) 'molasses ' means the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar, by vacuum pans or in open pans, from sugarcane or gur, with or without the aid of power.
" The new definition of 'molasses ' under the amendment provi sion specifically refers to khandsari sugar, apart from sugar, while the unamended section 2(c) referred only to sugar.
Section 2(f), as introduced by the Amendment Act, 1973 defines 'khandsari unit ' as follows: "2(f) 'khandsari unit ' means any premises, including the land, godowns or out houses appurtenant thereto, wherein, or in any part of which a manufacturing process con 504 nected with the production of khandsari sugar from sugar cane or gur in open pans is carried on with or without the aid of power.
" The 'occupier of a khandsari unit ' is defined as "a person who has control over the affairs of a khandsari unit".
The definition of sugar factory ' has not undergone any change, and it reads as follows: "2(d) 'sugar factory ' means any premises, including the land, godowns or outhouses appurtenant thereto, whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans or in open pans is being carried on or is ordinarily so carried on, with the aid of power.
" The main object of the Amendment Act, 1973 is to clarify that the Principal Act applies in equal measure to a khand sari unit as it does to any other sugar factory.
The contention is that the provisions of the Amendment Act, 1973.
though not in themselves unreasonable restric tions, nevertheless bring the appellants under greater statutory control, and are, therefore.
invalid for want of previous sanction of the President in terms of the proviso to Article 304(b).
This challenge.
as seen above, has been rejected by the High Court for the reason that the appel lants ' business has been in equal measure controlled by the Principal Act itself.
The appellants being dealers in mo lasses.
the new definition of the term "molasses", which includes "khandsari sugar", does not subject their business to any greater control.
The appellants ' counsel.
Mr. G.L. Sanghi contends that the provisions of the Amendment Act.
1973 impose direct and immediate restrictions upon the appellants ' trade.
They are a burden on trade and they deter the appellants from trad ing.
They directly affect the freedom of trade and commerce.
They are not merely regulatory for the purpose of facilitat ing the free flow of trade and commerce.
They are restric tions hampering trade.
They may be justifiable as reasonable restrictions, but being restrictions unsupported by previous sanction of the President, they are nevertheless invalid.
Mr. C.M. Nayar, appearing for the respondents, on the other 505 hand.
contends that the impugned provisions of the Amendment Act, 1973 are regulatory measures enacted to facilitate trade and they do not come within the ban of the proviso to clause (b) of Article 304.
These provisions do not require the previous sanction of the President in terms of the proviso to Article 304(b).
Counsel on both sides.
in support of the respective contentions.
refer to the principle stated by this Court in Ariabari Tea Co., Ltd. vs State of Assam & Ors., ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 and State 0f Bihar & Ors.
vs Harihar Prasad Debuka & Ors. ; and other cases.
[1967] (21 SCR 361; [1971] (11 SCC 59; [1986](1) SCR 939;[1989] (31 SCC 211;[1990] (31 SCC 87; ; ; [1970] (11 SCR 400; [1955] (11 SCR 380; SCC 541.
It is not and cannot be.
disputed that if the impugned provisions are not merely regulatory with a view to facili tating trade.
but are in quality and substance restrictive.
though reasonable as restrictions can be.
and if they in effect constitute a hinderance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President.
The question, however is the Principal Act.
being an "existing law" and, therefore, beyond challenge.
do the impugned provisions.
introduced in 1973.
being additional provisions.
enlarge in substance and quality the scope and ambit of the Principal Act.
thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the provi so to clause (b) of Article 304? In other words. does the Amendment Act.1973.
restrict the appellants ' business to a greater extent or is it merely clarificatory in so far as.
at any rate.
the appellants are concerned? The point then really is.
has the amendment made the Act more stringent in so for as the appellants are concerned? If the answer is negative.
as the High Court has held.
the appellants are not aggrieved.
and cannot therefore.
success fully challenge the Amendment Act.
Referring to the principle of contemporanea exposition.
Mr. Sanghi says that the Act.
as it stood before the amend ment.
was not understood to apply to khandsari unit.
and consequently to the business of the appellants.
and it became applicable only as a result of the amendment.
We do not agree that this submission is right.
The High 506 Court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them.
The High Court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure.
This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari.
Even if it is true that persons who dealt with the statute under stood its provisions in a restricted sense, such mistaken construction of the statute did not bind the Court, so as to prevent it from giving it its true construction.
(see the observation of Lord Blackburn in The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670), as quoted in National & Grindlays Bank Ltd. vs The Municipal Corporation of Greater Bombay, ; We are of the view that the reasoning of the High Court was correct.
The Principal Act being an 'existing law ' within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarifica tory, the previous sanction of the President was not re quired.
See the principle stated in Syed Ahmad Aga vs State of Mysore, We do not, however, ex press any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic.
The appeal is dismissed with costs throughout.
P.S.S. Appeal dismissed.
|
The East Punjab Molasses Control (Amendment) Act, 1973 substituted the definition of "molasses" in section 2(c) of the East Punjab Molasses (Control) Act, 1948 to mean "the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar".
The unamended section 2(c) had hitherto referred only to sugar.
Consequent changes were also made in other provisions of the Principal Act to give effect to the amendment.
The appellants dealers in khandsari molasses aggrieved by the expanded definition of molasses challenged the con stitutionality of the Amendment Act, 1973 on the ground that it had imposed direct and immediate restrictions upon their trade and commerce unsupported by the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved solely by reason of the amendment on the view that their business had been in equal measure controlled by the Principal Act itself.
In this appeal by special leave, the appellants reiter ated their contentions advanced before the High Court.
For the respondents it was contended that the provisions of the Amendment Act, 1973 were regulatory measures enacted to facilitate trade and therefore they did not come within the ban of the proviso to clause (b) of Article 304 to require the previous sanction of the President.
500 Dismissing the appeal, the Court, HELD: 1.
The main object of the Amendment Act, 1973 was to clarify that the Principal Act applies in equal measure to a khandsari unit as it does to any other sugar factory.
It was always well understood in trade that khandsari sugar was also sugar and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khand sari.
The Act did not become applicable to the appellants only as a result of the amendment.
Even though persons who dealt with the statute may have understood its provisions in a restricted sense, such mistaken construction of the stat ute did not bind the Court so as to prevent it from giving it its true construction.
[316A C] The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670 and National & Grindlays Bank Ltd. vs The Munic ipal Corporalion of Greater Bombay; , , re ferred to. 2.
The Principal Act being an "existing law" within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act being clarificatory, the previous sanction of the President was not required.
[316D E] Syed Ahmad Aga vs Stale of Mysore, , referred to.
|
ivil Appeal No. 1213 of 1979.
583 From the Judgment and Order dated 24.4.
1978 of the Gujarat High Court in L.P.A. No. 97 of 1978.
Appellant in person.
H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellant, D.M. Bharati, challenges the validity of an order dated 30.9.
1976 passed by the Deputy Municipal Commissioner of the Municipal Corporation of the City of Ahmedabad.
By the said order, the Deputy Municipal Commissioner, consequent on the staff of the Municipal Corporation working in the Town Planning Estab lishment having to be absorbed in the Municipal Corporation, "reverted" the appellant from the post of junior draftsman in the Establishment and appointed him to act in the post of a tracer in the Town Development Department of the Corpora tion.
The High Court rejected his writ petition and hence the present appeal.
It is necessary to state the relevant facts.
The appel lant had been appointed as a tracer in the Estate Department of the Municipal Corporation on 26.6.
1955 and worked there till 18th February, 1957.
It appears that the Government appointed a Town Planning Officer under the provisions of section 31 of the Bombay Town Planning Act.
The Town Planning Officer had to be supplied with an establishment.
The establishment of the Town Planning Officer was admitted ly temporary.
An arrangement was entered into between the two authorities that the arbitrator in the planning office could select such persons from the Corporation for his establishment as he thought fit.
The Town Planning Officer demanded the services of the appellant and he was appointed as a tracer in the Town Planning Establishment on 22.2. 1957.
It is not clear whether the appellant went therein by way of transfer or by way of deputation as the original order dated 22.2.
1957 is not available with us.
However, the High Court and the appellant have proceeded on the footing that the appellant was deputed from the Municipal Corporation to the Town Planning Establishment.
Sometime later, the post of a junior draftsman fell vacant in the Town Planning Establishment.
The appellant tells us that he was asked to take charge of that post on 4.12.
It appears that Mr. Yevla (Respondent No. 6 in the W.P.) was posted to fill in that vacancy but, 584 on 21.4.
1960, his appointment was cancelled and the appel lant was appointed as junior draftsman in the Town Planning Establishment w.e.f.
The appellant tells us that he had also been subsequently recommended for appointment to the post of Surveyor cum Draftsman, which was a higher post and which had fallen vacant on 28.2.
But before this proposal could materialise the appellant was suspended on 5th December, 1962 by the Corporation and was removed from service on 13.5.64.
The Industrial Court granted approval to the removal of the appellant from service but made certain observations suggesting that he may be re appointed to the said post.
The appellant filed a writ petition against the order of the industrial court.
The High Court eventually, set aside the order of the industrial court on 1.2.
1969 and remanded the matter for fresh disposal to the industrial court.
The Municipal Corporation preferred S.L.P. 48/71 in this Court which was dismissed on 27.1.71.
The industrial court re heard the matter pursuant to the order of the High Court and declined approval to the order of removal of the appellant from service with the result that the order of removal dated 13.5.64 stood vacated and an order was passed on 3.3.71 by the Municipal Commissioner that the appellant was reappointed as a junior draftsman in the Town Planning Establishment.
In the meantime, on 16.8.
1965, consequent on the recom mendations of the industrial court, the appellant was ap pointed as junior draftsman in the Estates Department of the Municipal Corporation where he had been previously working.
This purported to be a fresh appointment and so the appel lant made a representation that he should be appointed in this post according to his seniority.
No orders were passed on this representation except a direction that the appellant should join service within a week of receipt of the memo and then represent his case for seniority, if he so desired.
Thereupon the appellant accepted the order re appointing him as junior draftsman in the Estates Department and took charge of his office.
The order of the High Court has found that the appellant was relieved from service on 1.10.1967 because of retrenchment.
When the above proceedings in the case of the appellant were taking place respondents 6 to 11 were directly selected as junior draftsmen by the Staff Selection Committee and promoted to the said post.
The appellant did not appear before the Staff Selection Committee perhaps because of the various proceedings above referred to, as a result of which he was under suspension from 5.12. 1962 to 13.5.
1964, when he was removed and then again till 16.8.65, when he was re 585 appointed as a draftsman.
Once the proceedings against the appellant came to a close, the Municipal Commissioner passed order on 3.3. 1971, cancelling the order dated 13.5.
1964 removing the appellant from service.
He was re appointed as a junior draftsman in the Town Planning establishment.
Subsequently, however, the Town Planning Establishment was abolished, and the appellant was served with the order dated 30.9.
1976, by which he was reverted to the services of the Municipal Corporation.
On such reverter, however, as we have seen, he was posted as a tracer and not as a junior drafts man.
The appellant filed an appeal against the said order before the Standing Committee but his appeal was rejected on 15.3.
1977 on the ground that in the Corporation direct recruits were already working as junior draftsmen, and that there was no post of junior draftsman vacant in the Corpora tion, to which the appellant could be appointed.
The appel lant thereupon filed a writ petition and, as already stated, he was unsuccessful therein and hence this present appeal.
The appellant 's contention before the High Court was two fold.
The first contention was that since he had been ap pointed as junior draftsman in the Town Planning establish ment by the order dated 21.4.
1960, he could not be repatri ated as a tracer in the Municipal Corporation, that is, to a lower post.
It was also contended that the order dated 30.9.
1976 has been passed by the Deputy Municipal Commissioner, who is a person lower in rank than the person who appointed him, namely, the Municipal Commissioner and that, therefore, the order dated 30.9.76 was passed by an officer without jurisdiction.
These two arguments have been reiterated before us also.
So far as the second contention is concerned it may at once be pointed out that if the order dated 30.9.76 is an order of reversion by way punishment, the appellant 's contention may be correct in view of the provi sions contained in sections 53 and 56 of the Bombay Provin cial Municipal Corporation Act.
However, if the order dated 30.9.76 has merely given effect to the abolition of the Town Planning establishment and restored the appellant to the post he can properly hold in the Municipal Corporation then no element of reversion would be involved and the Deputy Commissioner would be quite competent to pass the order in question.
The only question therefore that survives for consideration is regarding the validity of an order dated 30.9.76 in so far as it purported to appoint the appellant as a tracer in the Municipal Corporation instead of as a junior draftsman.
We may mention here that a point was also made that the appellant should not have been appointed as an "acting" tracer but it has been explained by the Corporation that it was a verbal inaccuracy and that the appointment 586 of the appellant in the Municipal Corporation is not an acting but a substantive one.
This point, therefore, does not survive.
We shall proceed on the assumption that the appellant went to the Town Planning establishment (which was a tempo rary one) by way of deputation from the Municipal Corpora tion.
There is some controversy as to whether the appellant was properly promoted as junior draftsman in the Town Plan ning establishment.
There is a suggestion that both the demand by the Town Planning establishment for the services of the appellant as well as his promotion therein were not acceptable to the Corporation and that they were the conse quence of undue favour shown to the appellant by the Arbi trator who was the appointing authority.
We do not think it is necessary to go into this controversy here because it is quite clear that the appellant 's promotion as junior drafts man and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpo ration and joined the Town Planning establishment he was a tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e., as tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post, that benefit cannot be denied to him.
In the present case, unfortunately, what happened was that when junior draftsmen were recruited by the Municipal Corporation in 1959 60 and in 1963 64, persons were selected and ap pointed to the said posts through the machinery of a Staff Selection Committee.
The appellant submits that he had been wrongly overlooked and that the respondents had been wrongly promoted as junior draftsmen.
He points out that, under the regulations, junior draftsmen had to be appointed by promo tion on the basis of seniority cure fitness and that the question of Staff Selection Committee did not at all arise.
According to him, the procedure for selecting by Staff Selection Committee would not come into force when the recruitment was restricted to persons in the municipal service.
In the present case, however, all the persons, who were appointed as junior draftsmen during the appellant 's absence were from the municipal service.
The appointment should, therefore, have been made directly by promotion without the intervening machinery of the Staff Selection Committee and the appellant being the seniormost tracer should have been appointed as junior draftsman in preference to respondents 6 to 11.
There are considerable difficulties in accepting this case of the appellant.
In the first place, what he is really attempting is to challenge 587 the appointments of respondents 6 to 11, which had been made in 1963 64, by a writ petition filed in 1978, more than a decade after the above selections and appointments had been made It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had disapproved the appellant 's removal from service by the order dated 13.5.
At least in 1971.
when the order was passed restoring him to the position of junior draftsman in the Town Planning establishment, he could and should have taken steps to obtain his "pro forma" promotion in the parent department.
The appellant says he was making some representations but this was not enough.
The fact is that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the writ petition or atleast upto 1.10.1976, when he made a represen tation against the order of reversion.
Quite apart from the above consideration, there is no material before us to show that the appointments of respond ents 6 to 11 were made irregularly and that the constitution of a Staff Selection Committee for selecting junior drafts men did not conform to the regulations and the provisions of the Bombay Provincial Municipal Corporations Act.
The Corpo ration has stated that they have been directly recruited.
The High Court has pointed out that the relevant regulation gave a discretion to the Commissioner to make the appoint ments by promotion or by direct recruitment.
section 54(2) of the Municipal Act, on which the petitioner relies, no doubt dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found as a fact at more than one place in the judgment that the respondents 6 to 11 had been directly selected as junior draftsmen after proper scrutiny by the Staff Selection Committee.
Even the appel lant stated before us that there was a circular among the municipal employees in regard to these appointments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appro priate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and not forward his claim for promotion as junior draftsman by virtue of his 588 seniority.
That he failed to do at the crucial time.
It may be that this was because he had certain difficulties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no imme diate steps to claim his rights in the parent department.
He was apparently satisfied with his restoration as junior draftsmen in the Town Planning establishment.
We are in agreement with the High Court that, having regard to the circumstances of the appointment of respondents 6 to 11, he was not entitled to any promotion in preference to them and that he cannot claim appointment as junior draftsman when there was no such post in 1976 to which he could be appoint ed.
It is not his case that any posts of junior draftsmen became vacant after his reversion to the parent department to which he could have been promoted.
The appellant contends that the fact that his eligibili ty for appointment as a junior draftsman in the parent department had been accepted by the order dated 16.8.1965 referred to earlier.
It is also pointed out that subsequent ly a question arose of the seniority as between the appel lant and one Kavadia.
This was gone into and the Municipal Corporation accepted the position that the appellant pos sessed qualifications required for the post of junior draftsman and that he was senior to Mr. Kavadia.
This was sometime in 1966.
We, however, find that this aspect of the matter does not help the appellant because the order dated 16.8.
1965 was passed in pursuance of the recommendation of the industrial court, while approving the appellant 's remov al, that he may be reconsidered for appointment.
In view of this order of the industrial court, the appellant had to be given a posting and since he had been discharged from serv ice when he was a junior draftsman, orders were passed appointing him as junior draftsman.
This again was made as an order of fresh appointment and the appellant 's represen tation that he should be given seniority was not accepted, rightly, for the reason mentioned above.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparent ly, no challenge to this order.
Moreover, these orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of seniority be tween appellant and Kavadia in 1966 do not help the appel lant 's case.
Learned counsel for the Municipal Corporation submitted to us that the appellant had not joined his post as a tracer in compliance 589 with the order dated 30.9.76 and that by now he has also reached the age of superannuation.
We are not here concerned in this appeal with the consequences of "non acceptance" of the order dated 30.9.76 by the appellant.
We are only con cerned with the question whether the appellant was rightly appointed as tracer on his reverter to the Municipal Corpo ration and that question we have answered in the affirma tive.
We do not express any opinion on the questions raised by the learned counsel for the respondent.
In the circumstances, we are of the opinion that there are no grounds to interfere with the order of the High Court.
We, therefore, dismiss this appeal but, in the cir cumstances, we make no order as to costs.
G.N. Appeal dis missed.
|
The appellant was appointed as a Tracer in the Municipal Corporation in 1955.
with the appointment of a Town Planning Officer in 1957.
the appellant came to be appointed as a Tracer in the Town Planning Establishment.
Later, the post of Junior Draftsman fell vacant in the Town Planning Estab lishment.
Respondent No. 6 was posted to fill the vacancy.
However, his appointment was cancelled shortly thereafter and the appellant was appointed as Junior Draftsman with effect from 4.12.
The next higher post of Surveyor cum Draftsman fell vacant in 1962.
Meanwhile, the appellant was suspended.
The Industrial Court granted approval for his removal from service, but suggested that he may be reappointed.
Accord ingly.
the appellant was appointed afresh as junior Drafts man in the Estates Department of the Municipal Corporation where he was previously working.
Aggrieved, the appellant filed a writ Petition before the High Court.
Setting aside the order.
the High Court remanded the matter to the Industrial Court for fresh dis posal.
The Special Leave Petition preferred by the employer, viz., the Municipal Corporation against the High Court 's order was dismissed.
The Industrial Court reheard the matter and declined approval for the removal of the appellant from service.
The appellant was reappointed as Junior Draftsman in the Town Planning Establishment which was abolished subsequently, and he was reverted to the service of the Municipal Corporation as a Tracer, and not as a Junior Draftsman.
The appellant filed an appeal against the said order.
but it was rejected on the ground that direct recruits were already working as Junior Draftsmen and that there was no vacancy against which the appellant could be appointed.
581 The appellant moved the High Court by way of a Writ petition.
contending that since he had been appointed as junior Draftsman in the Town Planning Establishment, he could not be repatriated to a lower post, viz. Tracer in the Municipal Corporation.
It was also contended that the Deputy Municipal Commissioner, was a person lower in rank than the appointing authority viz., the Municipal Commis sioner and hence the order passed by him was without juris diction.
The High Court proceeded on the footing that the appel lant was on deputation from Municipal Corporation to the Town Planning Establishment and dismissed the writ Petition.
The appellant has preferred this appeal against the High Court 's order dismissing his Writ Petition.
Dismissing the appeal, this Court.
HELD: 1.
I The appellant 's promotion as junior Draftsman and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpora tion and joined the Town Planning Establishment he was a Tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e. as Tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post.
that benefit cannot be denied to him.
1.2 The order dated 16.8.
1965 was passed in pursuance of the recommendation of the Industrial Court, while approv ing the appellant 's removal, that he may be reconsidered for appointment.
In view of this order of the Industrial Court, the appellant had to be given a posting and since he had been discharged from service when he was a Junior Draftsman.
orders were passed appointing him as junior Draftsman.
This again was made as an order of fresh appointment and the appellant 's representation that he should be given seniority was rightly not accepted.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparently, no chal lenge to this order.
Moreover, theses orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of his seniority in 1966 are of no relevance to the present case.
2.1 What the appellant is really attempting is to challenge the 582 appointments of Respondents 6 to 11, which had been made in 1963 64, by a Writ Petition filed in 1978, more than a decade after the above selections and appointments had been made.
It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had and disapproved the appellant 's removal from service by the order dated 13.5.1964.
Atleast in 1971, when the order was passed re storing him to the position of Junior Draftsman in the Town Planning Establishment, he could and should have taken steps to Obtain his "pro forma" promotion in the parent depart ment.
The fact remains that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the Writ Petition or atleast upto 1.10.1976, when he made a representation against the order of reversion.
2.2 section 54(2) of the Municipal Act, dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found that respondents 6 to 11 had been directly selected as Junior Draftsmen after proper scrutiny by the Staff Selection Committee.
Admittedly there was a circular among the Municipal employees in regard to these appoint ments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appropriate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and put forward his claim for promotion as Junior Draftsman by virtue of his seniority.
That he tailed to do at the crucial time.
It may be that this was because he had certain diffi culties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no immediate steps to claim his rights in the parent depart ment.
He.was apparently satisfied with his restoration as Junior Draftsman in the Town Planning Establishment.
Having regard to the circumstances of the appointment of respond ents 6 to 11, the appellant was not entitled to any promo tion in preference to them and he cannot claim appointment as Junior Draftsman when there was no such post in 1976 to which he could he appointed.
|
tion (Civil) No. 112 of 1990 etc.
(Under Article 32 of the Constitution of India.) P.S. Poti.
E.M.S. Anam, V.J. Francis and M.N. PopIi for the Petitioners.
T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambi ar.
K.R. Kurup.
section Balakrishanan, Vijay Kumar, T.T. Kunhi Kannan.
section Vasudevan and P.K. Manohar for the Respond ents.
564 The Judgment of the Court was delivered by AHMADI, J.
In special leave petitions, leave granted.
An autonomous body called the Kerala Water and Waste Water Authority was constituted with effect from 1st April, 1984 under Section 3(1) of the Kerala Water and Waste Water Ordinance, 1984 (No, 14 of 1984) which Ordinance was brought into force w.e.f.
1st March, 1984.
This ordinance was re placed by similar Ordinances issued from time to time, the last being Ordinance No. 27 of 1986 which was in turn re placed by the Kerala Water Supply and Sewerage Act, 1986 (Act No. 14 of 1986), (hereinafter called 'the Act '); Sec tion 1(3) whereof provides that it shall be deemed to have come into force on 1st March, 1984.
This Act, besides pro viding for the establishment of an autonomous authority to be called the Kerala Water Authority, makes provision for the development and regulation of water supply and waste water collection and disposal and for matters connected therewith.
There is no dispute that the functions which were carried on by the Public Health Engineering Department (PHED) were transferred to the autonomous body on the enact ment of the Ordinance No. 14 of 1984.
After the enactment of the Act, every person working in the PHED became the employ ee of the Kerala Water Authority (for short 'the Authority ') by virtue of Section 19(1) of the Act, which reads as under: "Transfer of employees to the Authority Save as otherwise provided in this section, every person who was employed in the Public Health Engineering Department of the Government shall, on and from the appointed day become an employee of the Authority and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions, and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if this Act had not come into force and shall continue to do so until his employment in the Authority is terminated or until his remuneration or other terms and conditions of service are revised or altered by the Authority under or in pursuance of any law or in accordance with any provision which for the time being governs his service: Provided that nothing contained in this sub section shall apply to an employee in the cadres of the Administrative ? 565 Officers, Financial Assistants Divisional Accounts, Typists and Stenographers, who, by notice in writing given to the Government and the Authority within such time as the Govern ment may, by general or special order, specify, intimates his intention of not becoming an employee of the Authority: Provided further than an employee referred to in the preced ing proviso shall continue to be an employee under the Government and shall be provided elsewhere in any post or other service under the Government.
" Sub sections (3) and (6) of Section 19 make it clear that such transfer of service shall not entitle the employee to claim any compensation under the nor shall it amount to retrenchment or abolition of post under any extant rule, regulation or order applicable to Government servants.
Thus, the erstwhile staff of the PHED was by the thrust of Section 19(1) transferred on the establishment of the Authority.
This would naturally concern those persons only who were in the employment of the PHED before the establishment of the Authority w.e.f.
1st April, 1984.
The staff members employed by the Authority after its constitution were naturally appointed under the provisions of the concerned statute.
Since the Act has retrospective effect, reference may be made to Section 8(1) of the Act which reads thus: "Appointment of officers and staff Subject to the provi sions of sub section (2), the Authority may appoint for the purpose of enabling it to carry out its powers, duties and functions under this Act, a Secretary and such other offi cers and staff as may be required against posts duly sanc tioned by it: Provided that the Authority shall obtain the previous ap proval of the Government for the creation of post above the rank of the Executive Engineer.
" By virtue of Section 8(3), except as provided by sub sec tions (1) & (2), the appointment and conditions of service of the officers and employees of the Authority are to be governed by rules made by the Government from time to time.
Although the Act is deemed to have come into force w.e.f.
1st March.
1984, Section 69 became effective 566 from the date of publication of the Act in the Gazette i.e. 4th August, 1986.
That section reads as follows: "Amendment of Act 19 of 1970 With effect from the date of publication of this Act in the Gazette, the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 (19 of 1970) shall have effect subject to the following amendment, namely: in clause (a) of Section 2, the words and figures "or the Kerala Water Authority" established under section 3 of the Kerala Water Supply and Sewerage Act 1986;", shall be added at the end.
" Even though Act 19 of 1970 stood so amended by the force of Section 69, actual effect could be given after issuance of Notification No. G.O. (MS) No. 38/88/P & ARD dated 30th July, 1988 on which date item (LIII) was added to the rele vant rules as "Amendment of the Rules In the Kerala Public Service Com mission (consultation by Corporation and Companies) Rules, 1971, in Clause (d) of rule 2, after item (LII), the follow ing item shall be added, namely: (LIII) The Kerala Water Authority.
" This amendment was considered necessary with a view to bringing the Authority within the purview of PSC so that it may seek the advice of that body on matters relating to the methods of recruitment of its employees, etc.
From the above discussion it becomes clear that the employees of the Authority can be divided into four distinct groups, viz., (i) those who were in the employment of PHED before the constitution of the Authority and were trans ferred to the Authority (ii) those whom the Authority em ployed between 1st April.
1984 and 4th August, 1986 (iii) those who were appointed between 4th August, 1986 and 30th July, 1988 and (iv) those who were appointed after 30th July, 1988.
The petitioners in this batch of matters are serving in different capacities, such as, cleaners, pump operators, draftsmen, drivers, etc.
They claim that they were appointed through the Employment Ex 567 change between 1981 and 1988.
They contend that they have been compelled to approach this Court as their services are likely to be terminated as has been done in the case of a few of their colleagues.
They contend that till the issuance of the notification dated 30th July.
1988 amending the concerned PSC rule (amendment extracted earlier) there was no question of the Authority consulting the PSC and there fore, appointments made prior to that date cannot be termed as irregular or unauthorised and cannot be determined on that ground.
They contend that as in a few cases the High Court of Kerala failed to appreciate this true legal posi tion and refused to grant relief to employees whose services were threatened, the Managing Director of the Authority issued instructions to his subordinates to terminate the services of similarly placed employees, thereby compelling the present petitioners to approach this Court so that all such employees are uniformly governed by this Court 's order.
They point out that in Civil Appeals Nos. 472 to 478 of 1988 arising from the High Court decision.
and Writ Petitions (Civil) Nos. 857 and 1135 of 1987, this Court passed the following order on 1st February, 1988: "Special leave granted.
Heard counsel for the parties.
We are of the view that in the facts and circumstances of these cases the services of such of the appellants as pos sess the requisite qualifications should be regulated in accordance with the Kerala Public Service Commission (Addi tional functions as respects certain Corporations and Compa nies) Act, 1970 and until such regularisation is made, no appointment on similar posts from outside be made.
If there be any excess employees now in service employment, it will be open to the Authority to terminate their services on condition that as and when vacancies arise, they shall first be considered for appointment keeping the direction indicat ed above in view.
Recruitments in future will, however, be in accordance with the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 and the Kerala Water Supply and Sewerage Act, 1986.
" Thereafter in another batch of special leave petitions Nos. 4385 to 4387 of 1988 this Court passed the following order on 24th March, 1988: 568 "Heard learned counsel for parties.
The only direction which we can give in the facts and circumstances of the case will be in case after all those who have been regularly selected by the Public Service Commission are appointed and thereaf ter any vacancies are left, the same should be given to those who, like the petitioners, have already been in serv ice taking into consideration their seniority.
Every step should be taken by the Water Authorities to regularise the services of such people who can be appointed under our direction as indicated above.
There will be no further direction in this case.
The other person who may be thrown out of employment on account of the direction of the Water Authority which is impugned before us, may appear before the Public Service Commission in the next examination, The State of Kerala has informed us that age bar would be waived.
The petitions are disposed of accordingly.
" The Authority treated these orders as confined to the work men who had filed the proceedings and did not extend the ratio to others similarly placed.
Not only that, the Author ity, contend the petitioners, placed different interpreta tions on the aforesaid orders and continued to terminate the services of the employees.
Another group of writ petitions Nos.
525,527,528, and 503 of 1988 came up before this Court on 28th November, 1988 when this Court passed the following Order: "Mr. Krishna Murthy Iyer appearing for the Kerala Water Authority states that the claims of the petitioners can be divided into three categories, namely (1) those who had been employed by Public Health Engineering Department before the Kerala Water Authority was constituted, (2) those who get employed between 1.4.1984 and 1986 and (3) the persons appointed after 1986.
The Kerala Water Authority is given three months ' time to examine the individual cases of these groups and take its decision accordingly.
We direct the Authority to place its conclusions before the Court before giving effect to them.
Status quo as on today will continue until further orders.
" The grievance of the petitioners is that no action was taken by the Authority within the time allowed nor has it taken any action till today to implement the said order.
The petitioners also contend that the employees are compelled to knock at the doors of different courts as the Authority continues to terminate the services of the employees 569 not with standing the aforequoted orders passed by this Court.
Mr. P.S. Poti, the learned counsel for the petition ers, therefore, made a fervent appeal that this Court should pass an order laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that these low income group employees are not required to knock at the doors of differ ent courts to protect themselves from the threatened arbi trary action of the Authority terminating their services.
In other words he wants this Court to formulate a scheme for the regularisation of the services of all similarly placed employees which would put an end to all pending cases and future cases which are bound to arise if the Authority continues its present policy.
The claims made by the employees in this group of cases is contested mainly on the plea that their tenure and serv ice conditions were regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service Rules, 1958 (hereinafter called `the Rules ') which were statutory in character and were, therefore, binding on the Authority as well as the employees.
It is contended that the employees belonging to different categories were appointed on different dates by the PHED prior to 1st April, 1984 under this rule and, therefore, their services could only be regulated thereun der.
After the autonomous Authority was constituted w.e.f.
1st April, 1984 on the enactment of Ordinance 14 of 1984, the Authority passed a Resolution No. 8 on 25th April, 1984 adopting the aforesaid Rules and hence all appointments made after 1st April, 1984 also came to governed by Rule 9(a)(i) of the Rules till Section 69 of the Act came into force w.e.f.
4th August, 1986 and not 30th July, 1988 when the relevant rule was amended by the introduction of item (LIII) referred to earlier.
Appointments made after 4th August, 1986 are clearly subject to the requirement of Section 69 of the Act and the Authority cannot act in contravention there of.
Had it not been for Court orders restraining the Author ity from terminating their services, the services of all those who were governed by Rule 9(a)(i) would have been terminated on the expiry of 180 days.
The text of that rule may be noticed at this stage: "Where it is necessary in the public interest, owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the appointing authority may appoint a person, otherwise than in accordance with the said rules, temporarily.
" 570 The first proviso is not relevant for our purpose but reli ance was placed on the second proviso which reads as under: "Provided further that a person appointed under this clause by direct recruitment to a post other than teaching post and a post covered by the proviso to clause (iii) of rule 10(b)] shall not be allowed to continue in such post for a period exceeding three months." (i.e. one hundred eighty days) The rule further requires that a person appointed under clause (i) should be replaced as soon as possible by a member of the service or an approved candidate qualified to hold the post under the said rules.
Such replacement must take place in the order of seniority based on length of temporary service in the unit.
It is, therefore, the case of the Authority that appointments made under this rule were purely temporary, not to exceed three months, and had to be terminated on the expiry of the said period and it was not open to the Authority to continue their services even by reappointment unless fresh candidates were not available for reappointment through employment exchange.
Therefore, had it not been for the restraint orders issued by different Courts, the Authority contends it was under an obligation to act in conformity with the above rules.
However, as regards those who had joined service prior to 1st April.
1984 in different categories, the Authority passed a resolution on 30th January, 1987 to the following effect: "Resolved to recommend the Government the regularisation of the service of the employees recruited in the erstwhile PHED and still working in the Kerala Water Authority.
" The Government, it seems, has not taken any decision in this behalf as yet.
Since the counter filed on behalf of the State Government is silent on this point we inquired of the learned counsel for the State to clarify the position.
We were told that since the Authority was an autonomous body it was free to regularise the services of such employees, if it so desired, without the concurrence of the State Government.
While admitting the fact that appointments were made from the lists submitted by various District Employment Officers, the Authority contends that as the appointments were gov erned by Rule 9(a)(i) they could not ensure beyond three months and the termination of their employment did not fall within the ambit of `retrenchment ' as understood under the 571 .
In any case even otherwise the application of that law is specifically excluded by Section 19(3) of the Act and hence the benefit of that law cannot be extended to the employees of the Authority.
The contention that the action of the Authority to terminate the services is violative of Article 14 is repelled on the plea that acting in conformity with a statutory Rule 9(a)(i) can never be branded as arbitrary.
Lastly it is contended that the Authority was not directed to apply this Court 's orders passed in some of the proceedings referred to earlier to all similarly situated employees as the Court 's orders were based on `the fact and circumstances of these cases ' and were not intended to be of general application.
With refer ence to the order of 24th March, 1988 it is said that the Authority has moved a review application which is pending.
The Authority contends that as there is no infringement of any fundamental right, the writ petitions brought under Article 32 of the Constitution cannot be sustained.
The above is the stand taken by the Authority.
The State Govern ment has by and large supported this stand and, therefore, we need not restate the contentions raised in their counter.
The respondents, therefore, contend that the employees are not entitled to any relief whatsoever and the appeals/peti tions deserve to be dismissed with costs.
The question of regularisation in service must be exam ined keeping in mind the historical as well as the constitu tional perspectives.
During the colonial rule industrial growth in the country was tardy and most of the large sized industries were controlled by British interests.
These establishments employed Indian labour on wages far below the sustenance levels.
Men, women and even children were required to work for long hours in thoroughly unhygien ic conditions.
Because of large scale unemployment there was a surplus labour market which the employers could and did exploit.
This virtually forced the labour to accept employ ment on terms unilaterally dictated by the employers.
The relationship between the employer and the employee being purely contractual, the hire and fire rule governed.
Those were the days of laissez faire when contractual rights were placed above human rights.
The concepts of dignity of labour and fair remuneration for work done were wholly alien.
The workers had to work in appalling conditions and at low wages with no job security.
After we attained independence the pace of industrial growth accelerated.
Our Constitution makers were aware of the hardships and insecurity faced by the working classes.
The Preamble of our Constitution obligates the State to secure to all its citizens social and economic justice, besides political justice.
By the 42nd Amendment, the Pream 572 ble of the Constitution was amended to say that ours will be a socialistic democracy.
In furtherance of these promises certain fundamental rights were engrafted in Part 111 of the Constitution.
The Constitution guarantees `equality ', abhors discrimination, prohibits and penalises forced labour in any form whatsoever and extends protection against exploitation of labour including child labour.
After extending these guarantees, amongst others, the Constitution makers proceed ed to chart out the course for the governance of the country in Part IV of the Constitution entitled `Directive Princi ples of State Policy '.
These principles reflect the hopes and aspirations of the people.
Although the provisions of this part are not enforceable by any court, the principles laid down therein are nevertheless fundamental in the gover nance Of the country and the State is under an obligation to apply them in making laws.
The principles laid down therein.
therefore, define the Objectives and goals which the State must endeavour to achieve over a period of time.
Therefore, whenever the State is required to make laws It must do so consistently with these principles with a view to secur ing social and economic freedom so essential for the estab lishment of an egalitarian society.
This part, therefore, mandates that the State shall strive to promote the welfare of the people by minimising the inequalities in income and eliminating inequalities in status, facilities and opportu nities; by directing its policy towards securing, amongst others, the distribution of the material resources of the community to subserve the common good; by so operating the economic system as not to result in concentration of wealth; and by making effective provision for securing the right to work as also to public assistance in cases of unemployment, albeit within the limits of its economic capacities.
There are certain other provisions which enjoin on the State certain duties, e.g. securing to all workers work, a living wage, just and humane conditions of work, a decent standard of life.
participation in management, etc., which are aimed at improving the lot of the working classes.
Thus the Pream ble promises socio economic justice, the fundamental rights confer certain justiciable socio economic rights and the Directive Principles fix the socio economic goals which the State must strive to attain.
These three together constitute the core and conscience of the Constitution.
India is a developing country.
It has a vast surplus labour market.
Large scale unemployment offers a matching opportunity to the employer to exploit the needy.
Under such market conditions the employer can dictate.
I his terms of employment taking advantage of the absence of the bargaining power in the other.
The unorganised job seeker is left with no option but to accept employment on take it or 573 leave it terms offered by the employer.
Such terms of em ployment offer no job security and the employee is left to the mercy of the employer.
Employers have betrayed an in creasing tendency to employ temporary hands even on regular and permanent jobs with a view to circumventing the protec tion offered to the working classes under the benevolent legislations enacted from time to time, One such device adopted is to get the work done through contract labour, It is in this backdrop that we must Consider the request for regularisation in service.
Before we deal with the case on hand it would be advan tageous to refer to some of the decision bearing on the question of regularisation.
In Smt.
P.K. Narayani & Ors.
vs State of Kerala & Ors,, the petition ers who had been serving as employees of the State of Kerala or its public sector undertakings for the past few years challenged the action of the employer in terminating their services to make room for the candidates selected by the Kerala Public Service Commission.
This Court directed that the petitioners and all others similarly placed should be allowed to appear at the next examination that the Public Service Commission may hold without raising the age bar; till then the petitioners and others may be continued in service provided there are vacancies.
This, clarified the Court, will not confer any right on the employees to contin ue in service or of being selected by the Commission other wise than in accordance with the extant rules and regula tions.
These directions were given to resolve what this Court described as `a human problem which has more than one facet ', Again in Dr. A.K. Jain & Ors.
v, Union of India & Ors., ; the services of ad hoc Assistant Medical Officers who were initially appointed for six months but were continued for periods ranging upto four years, were sought to be terminated to accommodate the candidates se lected by the Union Public Service Commission.
The petition ers claimed that their services should be regularised and their seniority should be fixed from the date of their initial entry in service as ad hoc appointees.
In the coun ter, the Union of India contended that `ad hoc ' appointments were made by the General Managers of the Zonal Railways to tide over temporary shortages of doctors and their tenures were extended till regular selection was made by the UPSC and appointments were made by the President of India.
Since the appointing authority was the President of India such ad hoc appointments by the General Managers of the Zonal Rail ways could not be regularised.
It was further contended that the ad hoc appointees were granted age relaxation and were asked to appear at two special selections based on interview alone held by the 574 UPSC in 1982 and 1985.
The petitioners were those ad hoc appointees who had either failed to avail of the special benefit of selection or had appeared and failed to qualify.
In the circumstances it was contended that they could not be regularised in service.
Notwithstanding the same this Court directed regularisation of services of all doctors appointed upto October 1, 1984 in consultation with UPSC on the evalu ation of their work and conduct based on the confidential reports in respect of the period subsequent to October 1, 1982.
Such regularisation was to be from the dates from which they were continuously working.
The services of those not regularised were allowed to be terminated.
The petitions of those appointed after October 1, 1984 were however dis missed.
In the case of Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., this Court, while dealing with the question of their absorption, referred to the State 's obligations (referred to as an individual 's rights) under Part IV of the Constitution and observed as under: "Of those rights the question of security of work is of utmost importance.
If a person does not have the feeling that he belongs to an organization engaged in production he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contribute to the maximisation of produc tion.
It is again for this reason that managements and the governmental agencies in particular should not allow workers to remain as casual labourers or temporary employees for an unreasonable long period of time." This Court emphasised that unless a sense of belonging arises, the worker will not give his best and consequently production will suffer which in turn will result in economic loss to the nation.
This Court, therefore, directed the department to prepare a scheme on a rational basis for absorbing those who have worked for a continuous period of one year.
575 Tested on the above and keeping in mind the constitu tional philosophy adverted to earlier, we may now proceed to consider the main plank of the contention raised by the Authority.
But before we do so we may dispose of the non controversial part of the case.
From the pleadings in this case one thing that clearly emerges is that the Authority had taken a decision on 30th January, 1987 to regularise the services of those who were employed by the erstwhile PHED and whose services stood transferred to the Authority by the thrust of the statute.
According to the resolution extracted earlier, the Authority recommended to the State Government that the services of the employees recruited in the erstwhile PHED and who continued to work on the establishment of the Authority should be regularised.
The learned counsel for the State Government contended that since these employees were now borne on the establishment of the Authority on the statutory transfer of their services, it was for the Authority to regularise their services, and it was quite unnecessary to make a recommenda tion to the State Government in that behalf.
To put it differently, the stand of the State Government through its counsel is that the question of regularisation of the serv ices of ex PHED employees now borne on the establishment of the Authority is exclusively within the purview of the Authority and the State Government has no role to play.
That means it was wholly unnecessary on the part of the Authority to make the recommendation it made by the resolution of 30th January, 1987 to the State Government for the regularisation of the ex PHED employees serving on its establishment on that date.
To us the position, therefore, appears crystal clear that it is for the Authority and the Authority alone to regularise the services of such employees without waiting for a nod from the State Government.
The sphinx like silence on the part of the State Government for now over three years from the date of the resolution is indeed disturbing and betrays total lack of concern for this pressing human prob lem.
The second batch of workers comprise those who were appointed between 1st April.
1984 and 4th August, 1986 by the Authority itself.
Under section 8(1) of the Act the power to appoint the Secretary and other officers and staff members vests in the Authority.
Only when a post above the rank of an Executive Engineer is to be created that the sanction of the State Government becomes necessary under the proviso.
Sub section (2) to which sub section (1) is subject expects the Authority to seek the previous sanction of the Government if it desires to employ a servant of the Central or State Government on deputation and not otherwise.
It is, therefore, clear beyond any manner of doubt 576 that the power to appoint the staff members with whom we are concerned, solely vests in the Authority.
Since the Act is brought into force w.e.f.
1st March, 1984 the question of regularisation of the services of staff members appointed after that date must be examined with reference to the power found in section 8(1) of the Act.
However, the contention of the Authority is based on Rule 9(a)(i) of the Rules, which it claims to have adopted under Resolution No. 8 dated 25th April.
The Authority contends that by the thrust of this rule the appointments were limited to 180 days only and since the said rules had statutory flavour the Authority was bound to act in accordance therewith.
We have extracted the relevant part of this rule earlier.
since these rules were framed in exercise of power conferred by the proviso to Article 309 of the Constitution they are undoubtedly statu tory in character but Mr. Poti was right in his contention that they do not retain that character in their application to the staff members of the Authority since they have been adopted by the Authority under a resolution.
These rules would undoubtedly be statutory in character in their appli cation to the members of the Kerala Subordinate services for whom they were enacted but when any other authority adopts them by a resolution for regulating the services of its staff, the rules do not continue to remain statutory in their application to the staff of that Authority.
They are like any other administrative rules which do not have statu tory force.
It was not contended, as indeed it could not That these rules derive statutory force from section 64 or 65 of the Act.
Section 64 confers the rule making power on the State while section 65 empowers the Authority to make regulations with the previous approval of the Government.
It is nobody 's case that these rules were adopted after obtain ing the previous approval of the Government.
If that be so.
we must accept Mr. Poti 's submission that these rule their application to the staff members of the Authority appointed after 1 st. April, 1984 have no statutory flavour or force.
Now to the text of Rule 9(a)(i) of the Rules.
It empowers the appointing authority to appoint a person temporarily otherwise than in accordance with the rule if (i) it is necessary in public interest and (ii) where an emergency has arisen to fill any particular post which has fallen vacant, immediately.
In the present case it is diffi cult to say that all appointments made after 1st April, 1984 were required to be filled immediately because of an emergency of the type contemplated by the said rule.
On the contrary it seems appointments were routinely made in purported exercise of power conferred by this rule.
The proviso on which reliance is placed , which we have extract ed earlier.
merely states that ordinarily such appointments will be of those persons who 577 possess the requisite qualifications for the post.
If any person who does not possess the requisite qualifications is appointed under the said clause, he will be liable to be replaced by a qualified person.
Clause (iii) of Rule 9 states that a person appointed under clause (i) shall, as soon as possible, be replaced by a member of the service or an approved candidate qualified to hold the post.
Clause (e) of Rule 9, however, provided for regularisation of service of any person appointed under clause (i) of sub rule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules.
This is a clear indication that in the past the Government also considered it just and fair to regularise the services of those who had been in continuous service for two years prior to the cut off date.
The spirit underlying this treat ment clearly shows that the Government did not consider it just, fair or reasonable to terminate the services of those who were in employment for a period of two or more years prior to the cut off date.
This approach is quite consistent with the spirit of the rule which was intended to be invoked to serve emergent situations which could not brook delay.
Such appointments were intended to be stop gap temporary appointments to serve the stated purpose and not long term ones.
The rule was not intended to fill a large number of posts in the service but only those which could not be kept vacant till regular appointments were made in accordance with the rules.
But once the appointments continued for long, the services had to be regularised if the incumbent possessed the requisite qualifications as was done by sub rule (e).
Such an approach alone would be consistent with the constitutional philosophy adverted to earlier.
Even otherwise, the rule must be so interpreted, if the language of the rule permits, as will advance this philosophy of the Constitution.
If the rule is so interpreted it seems clear to us that employees who have been working on the establish ment since long, and who possess the requisite qualifica tions for the job as obtaining on the date of their employ ment, must be allowed to continue on their jobs and their services should be regularised.
It is unfair and unreasona ble to remove people who have been rendering service since sometime as such removal has serious consequences.
The family of the employee which has settled down and accommo dated its needs to the emoluments received by the bread winner, will face economic ruination if the job is suddenly taken away.
Besides, the precious period of early life devoted in the service of the establishment will be wholly wasted and the incumbent may be rendered `age barred ' for securing a job elsewhere.
It is indeed unfair to use him, generate hope and a feeling of security in him attune his family to live within his earnings and then suddenly to throw him out of job.
Such behaviour would be an 578 affront to the concept of job security and would run counter to the constitutional philosophy, particularly the concept of right to work in Article 41 of the Constitution.
There fore, if we interpret Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
The third and fourth batches concern workers who were appointed between 4th August, 1986 and 30th July, 1988 and after 30th July, 1988, respectively.
Their appointments would be governed by Section 69 which became effective from 4th August, 1986.
By virtue of this section the Kerala Public Service (Additional Functions as respect certain Corporations and Companies) Act, 1970 (19 of 1970) came to be amended with effect from 4th August, 1968 on which date it came to be published in the Gazette.
Thereby in clause (a) of section 2 the "Kerala Water Authority" came to be added.
In law, therefore, the need to consult the PSC had arisen.
True it is that the consequential notification amending the 1971 Rules was issued on 30th July, 1988.
But on that account we do not think it would be proper to treat them differently.
We think it advisable to treat them as forming a single batch since the need to consult the PSC had arisen on Section 69 coming into effect from 4th August, 1986.
In the result we allow these appeals and writ petitions and make the rule absolute as under: "(1) The Authority will with immediate effect regularise the services of all ex PHED employees as per its Resolution of 30th January, 1987 without waiting for State Government approval.
(2) The services of workers employed by the Authority be tween 1st April, 1984 and 4th August, 1986 will be regula rised with immediate effect if they possess the requisite qualifications for the post prescribed on the date of ap pointment of the concerned worker.
(3) The services of workers appointed after 4th August, 1984 and possessing the requisite qualifications should be regu lated in accordance with Act 19 of 1970 provided they have put in continuous service of not less than one year, artifi cial breaks, if any, 579 to be ignored.
The Kerala Service Public Service Commission will take immediate steps to regularise their services as a separate block.
In so doing the Kerala Public Service Com mission will take the age bar as waived.
(4) The Kerala Public Service Commission will consid er the question of regularisation of the services of workers who possess the requisite qualifications but have put in less than one year 's service, separately.
In doing so the Kerala Public Service Commission will take the age bar as waived.
If they are found fit they will be placed on the list along with the newly recruited candidates in the order of their respective merits.
The Kerala Public Service Com mission will be free to rearrange the list accordingly.
Thereafter fresh appointments will issue depending on the total number of posts available.
If the posts are inade quate, those presently in employment will make room for the selected candidates but their names will remain on the list and they will be entitled to appointment as and when their turn arrives in regular course.
The list will enure for such period as is permissible under the extant rules.
(5) The Authority will be at liberty to deal with the serv ices of the workers who do not possess the requisite quali fications as may be it considered appropriate in accordance with law.
(6) Those workers whose services have been terminated in violation of this Court 's order in respect of which Contempt Petition No. 156 of 1990 is taken out shall be entitled to the benefit of this order as if they continue in service and the case of each worker will be governed by the clause applicable to him depending on the category to which he belongs and if he is found eligible for regularisation he will be restored to service and assigned his proper place.
This order will regulate the services not only of the par ties to the present petitions but also all others similarly situated including those who may be parties to other pro ceedings pending in different Courts.
If further directions are required in the matter of working out of the above order the High Court of Kerala may be approached for the same.
All the aforestated proceedings are disposed of accordingly with no order as to costs.
Y. Lal Appeals and petitions allowed.
|
Consequent upon the establishment of Kerala Water Au thority under the Kerala Water Supply and Sewerage Act, 1986, all the functions which were till then carried on by the Public Health Engineering Department (PHED) were trans ferred to the said Authority.
Contemporaneously with that every person working in the PHED became the employee of the Kerala Water Authority by virtue of Section 19(1) of the Act.
Though the said Act was given retrospective operation w.e.f.
1st March 1984, Section 69 thereof came into force from the date of publication of the Act in the Gazettee viz., 4.8.1986; actual effect could be given w.e.f. 30.7. 1988 on which date the necessary notification was issued where by the rule was amended and the Authority came within the purview of the Public Service Commission.
Thus the employees of the Authority fell into four different groups viz., (i) those who were in the employment of PHED before the constitution of the Authority and were transferred to the Authority, (ii) those whom the Authority employed be tween 1st April, 1984 and 4th August 1986, (iii) those who were appointed between 4th August 1986 and 30th July 1988, and (iv) those who were appointed after 30th July 1988.
The Authority it seems terminated the services of various em ployees.
The petitioners apprehending termination of their serv ices by the Authority filed petitions contending inter alia that they were recruited through the Employment Exchange and till the issuance of the notification dated 30.7.1988, amending the concerned PSC rule, there was no question of the Authority consulting the PSC and therefore, appointments made prior to that date could not be termed as irregular or unauthorised and could not be determined on that ground.
It is asserted by them that the High Court refused to grant relief to those employees whose services were threatened and despite favourable orders passed by this Court in cases that came before it, the Authority continued to terminate the services of employees similarly placed treating those 563 orders as having been passed in respect of only those em ployees who were before the Court.
It is, therefore, urged by them that this Court should pass orders laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that the low income employees are not required to knock at the doors of different courts for protection against the threatened arbitrary action of the Authority terminating their services.
The Authority has contested the cases on the plea that all the appointments made before or after April 1, 1984 were governed by Rule 9(a)(i) of the Rules till Section 69 came into force w.e.f. 4.8.1986 and 30.7.1988 when it was amended.
Appointments made after 4.8.1986 are clearly sub ject to the requirement of Section 69 of the Act and the Authority cannot act in contravention thereof.
Services of all those who were governed by Rule 9(a)(i) will have to be determinated on the expiry of 180 days.
Allowing the appeals as also writ petitions, this Court, HELD: Interpreting Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
[388A B] P.K. Narayani & Ors.
vs State of Kerala and Ors.
, ; Dr. A.K. Jain & Ors.
vs Union of India and Ors.
, ; ; Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India and Ors., , referred to.
|
ivil Appeal No. 2840 of 1982.
From the Judgment and Order dated 5.12.
1979 of the Allahabad High Court in Second Appeal No. 82 of 1972.
R.K. Garg and H.K.Puri for the Appellant.
Satish Chandra, Pramod Swarup and A.K. Srivastava for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
In this appeal by grant of special leave, directed against judgment of the Allahabad High Court in second appeal arising out of a suit for arrears of rent and ejectment, the question is if the High Court committed any error of law in allowing the second appeal on the ground that the two courts below had erroneously held that finding recorded in an appeal, filed by one of the defendants who was sued as tenant in an earlier suit, could not operate as res judicata between plaintiff and respondents who were defendants nos.
2 and 3 in that suit.
Unfortunately for appellant equity may or may not be in his favour as his father too acted shrewdly while purchasing house of daughter in law 's father but law is certainly not in his favour.
How dispute arose between parties, who are closely related, is quite interesting.
Shiv Charan Das and Har Charan Das (respondents nos.
1 99 and 3 in this appeal) are first cousins.
Ravindra Kumar (respondent No. 2) is son of Shiv Charan.
His sister was married to son of Ganga Prasad who purchased the only house of Shiv Charan and Ravindra Kumar with condition of repur chase by sellers after five years.
He permitted them to remain in possession, but got a rent note executed by Har Charan.
Purpose of this became apparent later as immediately after expiry of five years when the house was not repur chased Ganga Prasad (referred hereinafter as plaintiff) filed suit for ejectment and arrears of rent against Har Charan, Shiv Charan and Ravindra (hereinafter referred as defendants nos.
1, 2 and 3) claiming that defendant No. 1 was in arrears of rent and defendant No. 2 and 3 were his sub tenants.
The suit was contested by defendants nos.
2 and 3 only.
The Trial Court decreed the suit for arrears of rent against defendant No. 1.
It was held that defendant No. 2 and 3 were not sub tenants.
Therefore suit for ejectment was dismissed.
The plaintiff submitted to this finding.
Ag grieved by the decree for arrears of rent defendant No. 1 filed appeal which was dismissed.
But the appellate court while observing that any evidence led by defendant nos.
2 and 3 could not be read against defendant No. 1 observed that it appeared that they being closely related to defend ant No. 1 were in possession on his behalf.
This furnished occasion for plaintiff to file second suit against three defendants with this change that defendants nos.
2 and 3 were claimed to be licensees of defendant No. 1.
The Trial Court relying on earlier judgment decreed suit for arrears of rent against defendant No. 1 and for ejectment against defendants nos.2 and 3 as they were licensees.
Both defend ant No. 1 separately and defendants nos.
2 and 3 jointly filed two appeals but without any success.
Both the sets approached the High Court also by way of separate appeals.
The appeal of defendant No. 1 came up for hearing earlier but it was dismissed.
The appeal of defendant nos.
2 and 3 came up for hearing before another Hon 'ble Judge who allowed it and held that the finding recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata and the suit for ejectment was dismissed.
It is the correctness of this finding that has been assailed in this Court.
Although long arguments were advanced but in our opinion the only question that arises for consideration is if the finding recorded in the appeal filed by defendant No. 1 in which it was held that defendants nos.
2 and 3 were in possession on his behalf was binding on them in the subse quent suit filed by the plaintiff.
In that suit issue No. 2 was if 100 defendant No. 2 and defendant No. 3 were sub tenants.
And issue No. 5 was if they were liable to be ejected.
The Trial Court while discussing these two issues held that there was no question of sub tenancy of these persons as despite sale there was never a break in their possession.
It was further held that they were not sub tenants nor they claimed to be in possession through defendant No. 1.
Therefore they were not liable to ejectment.
Against this finding plaintiff did not file any appeal.
The finding therefore between the plaintiff and defendants nos.
2 and 3 became final and binding.
The appeal was filed by defendant No. 1 as he was aggrieved by the decree of arrears of rent.
In that appeal it was observed that the evidence led by defendant nos.
2 and 3 could not be read against him.
But the Court while dismissing his appeal and upholding the decree of Trial Court observed that since they were close relations it appears that even though rent note was executed by defendant No. 1 the possession of defendants nos.
2 and 3 was on his behalf.
This finding could not be taken advantage of by the plaintiff for more than one reason.
This observation was unnecessary as the appeal was dismissed.
One could under stand if the appeal would have been allowed and the liabili ty for payment of rent would have been fastened on defendant No. 2 and 3 as they were in possession.
But since appeal was dismissed the order of Trial Court that liability to pay rent was of defendant No. 1 stood affirmed.
Therefore it was an observation which was not only off the mark but unneces sary.
It could not accordingly operate as res judicata between defendant No. 1 and defendants nos.
2 and 3 as much less between plaintiff and defendant nos.
2 and 3.
One of the tests to ascertain if a finding operates as res judicata is if the party aggrieved could challenge it.
Since the dismissal of appeal or the, appellate decree was not against defendants nos.
2 and 3 they could not challenge it by way of appeal.
Even assuming that defendant No. 1 could chal lenge the finding that liability of rent was of defendants nos.
2 and 3 as they were in possession he did not file any written statement in the Trial Court raising any dispute between himself and defendants nos.
2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither pleading nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
Reliance by the appellant on Keshardeo Chamria vs Radha Kissen Chamria, ; , is of no assistance as it only lays down the binding effect of a decision in a subsequent suit.
For the reasons stated above this appeal fails and is dismissed.
There shall be no order as to costs.
T.N.A. Appeal dis missed.
|
The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years.
He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1.
After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants.
The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants.
Defendant No. 1 filed an appeal against the decree for arrears of rent.
The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related.
Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1.
The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3.
Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed.
Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata.
Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3.
Hence this appeal.
Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it.
Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal.
Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
[100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable.
|
ivil Appeal No. 2674 of 1977.
From the Judgment and Order dated 19.8.1977 of the Andhra Pradesh High Court in Writ Appeal No. 527 of 1976.
Dr. K. Parasaran, Mr. A.D.N. Rao and A. Subba Rao for the Appellants.
C. Sitaramiah, T.S. Krishnamurthy Iyer, G. Prabhakar, A.T.M. Sampath and P.N. Ramalingam for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Whether possession of a lessee who ac quires interest of one of the co lessors, before expiration of period of lease, is litigious or lawful? Litigious and lawful possession are concepts of varying legal shades deriving their colour from the setting in which they emerge.
Epithet used itself indicates the field in which they operate.
The one pertains to dispute in which possession may be conterminous with physical or de facto control, only, whereas the domain of other is control with some legal basis.
The former may be uncertain in character and may even be without any basis or interest but the latter is rounded on some rule, sanction or excuse.
Dictionarily 'litigious ' means "disputed" Concise Oxford Dictionary or "disputable" Concise Oxford Dictionary" or "marked by inten tion to quarrel" Webster Third New International Dictionary, "inviting controversy" Webster Third New International Dictionary, "relating to or marked by litigation" Webster Third New International Dictionary, "that which is the subject of law suit".
Black 's Law Dictionary.
Lawful on the other hand is defined as, "legal, warranted or authorised by the law.
" Black 's Law Dictionary.
Jurisprudentially a person in physical control or de facto possession may have an interest but no right to continue whereas a person in pos session, de jure, actually or constructively has the right to use, enjoy, destroy or alienate property.
"Rights are interest protected or recognised by law.
But every interest may not be so.
Its violation may not be wrong.
Many interest exist de facto and not de jure; they receive no recognition or protection from any rule or right".
Solmond on jurispru dence.
With this brief preface it may now be determined if posses sion of 11 appellant who had entered into an agreement of sale with one of co lessors of his interest, and has been found by High Court to have entered into his shoes, was lawful for pur poses of rule 11 framed under Andhra Pradesh Cinemas (Regu lation) Act 1955 which required a licensee either for grant or renewal of license to file all necessary record or ' certified copies with the application, "relating to his lawful possession thereof", if he was not the owner.
That the appellant has been running cinema not as owner but after obtaining lease in 1950 of 2038 2/3 sq.
out of 7000 sq.
from the then Zamindar is not in dispute.
Nor it is in dispute that ownership of land changed twice since then and the last purchaser in July 1974 were one V. Venkatarathnam (in brief V.V. since deceased) his son and grandson who formed a private partnership V.V. Estates in September 1975 and objected to renewal of appellant 's license in December 1975 as the Estate did not intend to renew the lease in favour of appellant which was to expire on 31st March 1976.
But problem arose when on 24th March V.V. entered into an agreement of sale with appellant to sell his entire share which was one half for consideration of Rs. 14,000 cash and partnership of 1/8th in appellants ' cinema business.
He further executed lease of remaining half on next day in favour of appellant as managing partner of the Estate and withdrew the objection, filed before licensing authority for renewal of appellant 's license, unconditionally.
Dispute however arose as V.V. 's son on his behalf and on behalf of his nephew refuted authority of his father to grant lease as he had already withdrawn his authority to act on their behalf on 22nd March.
Therefore the question arose about nature of appellant 's possession.
The High Court found that even though it was not open to the son to remove his father from position of managing partner yet V.V. could not lease out the property on his behalf as the partnership deed did not invest him with such authority.
And so far the agreement of sale was concerned it was ineffective to make him owner.
Consequently the possession of appellant was not lawful as he was neither lessee nor owner.
True the appellant was neither owner nor lessee.
Yet was his possession forbidden in law? Was there no excuse for his possession? The error committed by High Court was to equate lawful with legal.
Legal and lawful, normally, convey same sense and are usually interchangeable.
What is legal is lawful.
But what is lawful may be so without being formally legal.
"The principle distinction between the terms 'lawful ' and 'legal ' is that former contemplates the substance of law, the latter the form of law.
To say of an act that it is lawful implies that it is authorised, Sanctioned or at any rate not forbidden by law".
12 Black 's Law Dictionary.
Same thought about lawful has been brought out by Pollock and Wright by explaining that "Lawful Possession" means a legal possession which is also rightful or at least excusable.
Pollock and Wright Possession in the Common Law.
Thus that which is not stricto legalo may yet be lawful.
It should not be forbidden by law.
In fact legal is associated with provisions in the Act, rules etc.
whereas lawful visualises all that is not illegal against law or even permissible.
Lawful is wider in connotation than legal.
Although provision in specific Relief Act empowering a person or tenant to recover possession if he has been evict ed forcibly by the Landlord, may be juridical and not lawful or a tenant holding over is not in lawful possession unless landlord agrees or acquiesces expressly or impliedly but that does not alter the legal position about possession of a person not legal yet not without interest.
The provision in specific Relief Act is rounded more on public policy than on jurisprudence.
But concept of lawful as opposed or in con tradistinction to litigious assumes different dimension.
M.C. Chockalingam vs M. Manichavasagam, ; is of no help as it was concerned with possession which could not be said to be warranted or authorised by law.
Distinc tion between nature of possession of a lessee after expiry of period of lease can better be explained by resorting to few illustrations.
For instance a lessee may before expiry of lease acquire entire lessor 's interest resulting in "drowning" or "sinking" of inferior right into superior right.
That is right of one merges into another.
It has been statutorily recognised by Section 111(d) of Transfer of Property Act.
Similarly a tenant after expiry of period of lease may be holding over and the lessor may acquiesce in his continuance expressly or impliedly.
That is from conduct of lessor the tenant 's possession may stand converted into lawful.
The other may be where lessor may not agree to renew the lease nor he may acquiesce in his continuance.
Such a lessee cannot claim any right or interest.
His possession is neither legal nor lawful.
Such was the Chockalingam 's case (supra).
The Court held that continuance of lessee 's posses sion after expiry of period of lease was not lawful for purposes of renewal of licence under Madras Cinema Regula tion Act 1955 obviously because lessee was left with no interest which could furnish any excuse or give it even colour of being legal.
Yet another illustration may be, not very common where, lessee acquires some interest in part of the undivided property as in present case.
Can it be said in such a case on ratio of Chockalingam 's authority that possession of such lessee or to be more specific of appellant was unwarranted or contrary to law: Share of V.V. in 7,000 sq.
was half.
He had agreed to sell his half interest.
V.V. was joint owner with his son and grandson.
He had "both single possession and a single 13 joint right to possess" Pollock and Wright.
Whether such joint owner could transfer his share even when he was not in exclusive possession and what would be effect of such trans fer need not be gone into as title suit is pending between parties but when a person having physical control acquires an interest to hold or continue by virtue of an agreement of sale it cannot be said that he had no interest and his possession was forbidden by law.
The High Court lost sight of the fact that by virtue of the transaction entered be tween V.V. and appellant which was not challenged by him nor any cloud was cast over it by creating any subsequent inter est the appellant may not have become owner but he could certainly claim that he was in lawful possession.
In law he was entitled to file suit for specific performance if there was any threat to his right or interest by V.V.
Such right or interest could not be termed as litigious.
It was at least not without any excuse or forbidden by law.
In words and Phrases Permanent Edition Vol.
25A, 2nd reprint 1976 a somewhat similar situation was described as not litigious: "Where client conveyed undivided half interest in land to attorney in consideration of attorney 's rendering services and paying court costs, giving irrevocable power of attorney to sue, settle, or compromise, attorney received good title as third person purchasing upon faith of public records, precluding reformation as against attorney, on the strength of an instrument recorded after deed to attorney and client claimed title, as against contention that attorney acquired a "litigious right".
For reasons stated above this appeal succeeds and is allowed.
The order of High Court and the licensing authority are set aside.
The licensing authority is further directed to consider renewal of license of the cinema in accordance with law treating licensee to be in lawful possession.
Since suit has been filed between parties in respect of title it is clarified that any observation made above shall not be treated as binding or deciding right of parties except to the limited extent that appellant shall be treated to be in lawful possession for renewal of license subject to final adjudication in suit, which shall now proceed as, probably, the proceedings had been stayed.
It shall be disposed of expeditiously.
The appellant shall be entitled to its costs in this Court and High Court.
P.S.S. Appeal allowed.
|
Rule 11 of the A.P. Cinema (Regulation) Rules, 1970 flamed under the A.P. Cinemas (Regulation) Act, 1955, as it stood at the relevant time, required a licensee either for grant or renewal of license to file evidence of his lawful possession of the site.
The appellant firm had been running a cinema since 1950 on a piece of land leased by the then zamindar.
The said lease was to expire on March 31, 1976.
In the meantime the ownership of the land changed hands.
In 1975, when the appellant sought renewal of the license the estate partner ship, consisting of father, son and grandson objected on the ground that it did not intend to renew the lease.
However, on March 24, 1976 one of the co lessors, the father, entered into an agreement of sale with the appellant to sell his entire share which was one half for a consideration.
He also executed lease of the remaining half the next day in favour of the appellant as the managing partner of the estate.
and withdrew the objection filed before the licensing authority unconditionally.
A question arose about the nature of appellant 's posses sion.
The High Court found that the co lessor could not lease out the property on his behalf as the partnership deed did not invest him with such an authority, and that the agreement of sale was ineffective to make him the owner.
Consequently, the possession of appellant was not lawful as last was neither a lessee nor an owner.
Allowing the appeal, the Court, 9 HELD: 1.
When a person having physical control acquires an interest to hold or continue by virtue of an agreement of sale it cannot be said that he had no interest and his possession was forbidden by law.
In the instant case, by virtue of the transaction entered between the co lessor and the appellant which was not challenged by him nor any cloud was cast over it by creating any subsequent interest the appellant may not have become owner but could certainly claim lawful possession.
In law last was entitled to file suit for specific performance if there was any threat to its right or interest by the co lessor.
Such right or interest could not be termed as litigious.
[13A C] 2.
A lessee may before expiry of lease acquire entire lessor 's interest resulting in drowning or sinking of infe rior right into superior right.
That is right of one merges into another.
It has been statutorily recognised by section III(d) of the Transfer of Property Act.
Similarly, a tenant after expiry of period of lease may be holding over and the lessor may acquiesce in his continuance expressly or im pliedly.
That is from conduct of lessor the tenant 's posses sion may stand converted into lawful.
But where the lessor does not agree to renew the lease nor he acquiesce in his continuance a lessee cannot claim any right or interest.
His possession is neither legal nor lawful.
In the instant case, the appellant had acquired some interest in part of the undivided property by virtue of the agreement.
It may not be a lessee, but its possession was not without any excuse or forbidden by law.
[12D G] 3.
The High Court erred in equating lawful with legal.
What is legal is lawful.
But what is lawful may be so with out being formally legal.
That which is not stricto legalo may yet be lawful.
It should not be forbidden by law.
Al though provision in Specific Relief Act empowering a person or tenant to recover possession if he has been evicted forcibly by the landlord, may be juridical and not lawful or a tenant holding over is not in lawful possession unless landlord agrees or acquiesces expressly or impliedly but that does not alter the legal position about possession of a person not legal yet not without interest.
The provision in Specific Relief Act is rounded more on public policy than on jurisprudence.
[11G; 12A C] 4.
The licensing authority is directed to consider renewal of license in accordance with law treating licensee to be in lawful possession.
[13F] M.C. Chockalingam vs M. Manichavasagam, ; distinguished. 10
|
vil Appeal No. 2211 (NT) of 1988 etc.
From the Judgment and Order dated 7.10.1986 of the Madhya Pradesh High Court in M.P. No. 1861 of 1983.
594 Prithvi Raj, R.B. Mishra, Uma Nath Singh, S.K. Gambhir, Vivek Gambhir, Satish K. Agnihotri, Ashok Singh and Mrs. V.D. Khanna for the Appellants.
Harish N. Salve, Ms. Lira Goswami and D.N. Misra for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
The Civil Appeal and S.L.P. 12054/87 are by the State of Madhya Pradesh (M.P.).
The respondents in these two matters and the petitioners in the other five Special Leave Petitions are certain concerns in M.P. assess able to sales tax (hereinafter compendiously referred to as the assesses ').
All these matters can be conveniently dis posed of by a common judgment as they raise a common issue.
The assesses ' claim for exemption from sales tax for certain periods in question was accepted by the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail (a case where the exemption sought for was originally granted but subsequently revoked).
However, subsequently, a Full Bench of the High Court, in the case of Jagadamba Industries, disapproved the view taken by the Division Bench in the G.S. Dhall & Flour Mills case and, following the Full Bench, the writ petitions filed by certain other assesses were dismissed by the High Court.
The State is aggrieved by the judgment in the first two cases and the assesses by the High Court 's decision in the other cases.
Hence these appeals and special leave petitions.
Before dealing with the appeals on merits, an important circumstance needs to be referred to, which is this: The judgment of the Full Bench in the case of Jagadamba Indus tries was itself the subject matter of Special Leave Peti tions in this Court but those petitions (S.L.P. Nos. 15688 90/87) were dismissed, at the stage of admission, on 9.2.
1988, with the observations: "We are in agreement with the views expressed by the High Court.
The Special Leave Peti tions are dismissed".
In view of this, the State submits that C.A. 22 11/87 should be allowed and that the assesses ' S.L.Ps. should be dismissed in limine.
On the other hand, counsel for the assesses seek to distinguish the Jagadamba case by contending that this Court had refused leave against the Full Bench judgment on account of certain special facts which were considered sufficient to disentwine the assesses in those 595 cases from claiming the exemption.
They contend that, in view of this and the fact that the G.S. Dhall & Flour Mills case is in appeal before we may grant leave in the S.L.Ps.
and dispose of all the appeals on merits.
We accept this plea and grant leave in the S.L.Ps.
condoning a delay in the filing of S.L.P. 12054/87.
We shall, however, touch upon the above aspect of the matter in the course of our judgment.
The issue raised is, at first blush, a simple one.
section 12 of the M.P. Sales Tax Act (hereinafter referred to as `the Act ') enables the State Government to grant exemption from the levy of sales tax in certain circumstances.
It says: 12.
Saving: (1) The State Government may, by notification, and subject to such restrictions and condi tions as may be specified therein, exempt, whether prospec tively or retrospectively, in whole or in part (i) any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification; (ii) any dealer or class of dealers from any provision of the Act for such period as may be specified in the notifica tion.
(2) Any notification issued under this section may be re scinded before the expiry of the period for which it was to have remained in force and on such rescission such notifica tion shall cease to be in force.
A notification rescinding an earlier notification shall have prospective effect.
" In exercise of this power, the State Government issued the following notification on 23/26.10.1981 which it is neces sary to extract in full here along with its Annexure.
It reads: "In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) the State Government hereby exempts the class of dealers specified in column (1) of the Schedule below who have set up industry in any of the districts of Madhya Pradesh specified in the annexure to this notification and have commenced production after 1st April, 1981, from pay ment of tax under the said Act for the period specified in column (2), subject to the restrictions and conditions specified in column (3) of the said schedule: 596 Class of dealers Period Restrictions and conditions subject to which exemption has been granted 1 2 3 1.
dealers who Two years The dealer specified in (a) hold a certifi from the column (1) shall continue cate of regis date of to furnish the pres tration under The commence cribed returns under the M.P. General Sales ment of M.P. General Sales Tax Tax Act, 1958: production Act, 1958 and shall pro duce before the assessing (b) are registered authority at the time of small scale indus his assessment a certifi trial units with cate issued by the Direc the Industries Dep tor of Industries, Madhya artment of Govt.
of Pradesh or any officer au M.P., and thorised by him for the purpose, certifying that (c) have set up ind such dealer is eligible to ustry in any of the claim the exemption and districts specified that he has not opted for in part I of the the scheme of deferring Annexure the payment of tax under the rules framed for this purposes.
Dealer who do (a) hold certifi (a) 3 years cate of registra in case of an tion under the industry loca M.P. General Sales ted in a district Tax Act, 1958 specified in `A ' (No.2 of 1959); of part II of the Annexure.
(b) are registered (b) 4 years, in the as Small scale Ind case of an industry ustrial units with located in category the Industries De `B ' of Part II of partment of Govt.
of of the Annexure; M.P. or are regis and tered with the Di rector General of Technical Develop ment as an indus trial unit or are registered 597 as industrial units by any authority duly empowered to do so by the State Govt.
or Cen tral Govt.
or hold a licence under the In dustries (Development & Regulation) Act 1951 (No.65 of 1951); and (c) have set up indus (c) 5 years, in do try in any of the dis the case of an tricts specified in industry located part II of the Anne in a district spe xure.
cified in category `C ' of part II of the Annexure; from the date of commen cement of production.
Dealers who (a) hold certificate (a) 3 years in The dealer speci of registration under the case of an fied in column (1) the M.P.General Sales Industry loca shall produce be Tax 1958 (No.2 of ted in any of fore the assessing 1959); the tehsils of authority at the a district spe time of his assess fied in part I ment a certificate of the Annexure; issued by the Direc tor of Industries, Madhya Pradesh or any (b) are registered (b) 5 years in officer authorised by as industrial units the case of an him for the purpose with the Director industry located of certifying that General of Technical in any of the the dealer is eligi Development or by any tehsils of a ble to claim such authority duly em a district spe exemption under the powered to do so by cified in cate scheme of the Indus State or Central gory `A ' of Part tries.
Department Government or hold II of the Anne being a first dealer licence under the xure; to have commenced Industries (Develop production in the ment and Regula industry set up by him in the tehsils referred to in col umn (2) and that such dealer has not opted for the scheme of deferring the pay ment of tax under the rules framed for this purpose.
598 tion) Act, 1951 (No.65 of 1951) have fixed a capital in vestment between Rs.1 crore and Rs.10 crores and; (c) are the first to (c) 7 years in set up the industry the case of an in any tehsil of the industry loca district of Madhya ted in any of Pradesh specified in the tehsils of the Annexure.
a district spe cified in cate gory `B ' of Part II of the Anne xure; (d) 3 years in the case of an industry located in any of the tehsils to a district specified in category `C ' of Part II of the Annexure; from the date of commencement of production.
ANNEXURE Part I 1.
Indore 2.
Ujjain 3.
Bhopal 4.
Jabalpur 5.
Gwalior 6.
Durg Part II Category `A ' 1.
Bilaspur 2.
Raipur 3.
Dewas 4.
Handsaur 5.
Morena 6.
Vidisha 7.
Hoshangabad 8.
Ratlam 9.
Khandwa 10.
Satna 11.
Shahdol 599 Category `B ' 1.
Geoni 2.
Balaghat 3.
Betul 4.
Raigharh 5.
Guna 6.
Chindwara 7.
Damoh 8.
Sagar 9.
Narsimhpur 10.
Senor 11.
Rajmandgoo Category `C ' 1.
Panna 2.
Sidhi 3.
Rewa 4.
Chhatarpur 5.
Tikamgarh 6.
Khargone 7.
Surguja 8.Mandla 9.
Bhind 10.
Shivpuri 11.
Datia 12.
Raisen 13.
Shajapur 14.
Dhar 15.
Rajgarh 16.
Jhooua 17.
Bastar It is not in dispute that the assessees before us fulfil the qualifications mentioned in the notification.
However, when they approached the Director of Industries for the certificate of exemption envisaged under column (3) of the notification, it was denied to them on the ground that the industries run by them are "traditional industries" which were not eligible for exemption.
The assessees went to Court contending that this was totally unjustified.
They said, the concept of "traditional industries" was one unspecified in the notification.
The authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assessees an exemption they were entitled to under the notification.
It is this contention that was accepted in the G.S. Dhall and Flour Mills case.
The State had relied on the provisions of the M.P. (Deferment of Payment of Tax) Rules, 1983, notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from/deferment of payment of sales tax".
The High Court took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notifica tion of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statu tory notification.
This judgment was delivered on 7.10.1986 by Sohani, C.J. and Faizanuddin, J.
The Full Bench, in its judgment of 2.11.1987 took a different view.
It has, in effect, attached importance to the rules and instructions referred to above and relied considerably on the history of the 600 sales tax levy in the State as furnishing a proper and necessary background in which the terms of the notification of 23.10.1981 have to be read and interpreted.
This history has, therefore, to be set out now in order to appreciate the validity of the conclusions of the Full Bench.
Before doing this, it may be mentioned that the Full Bench comprised of Ojha C.J., Faizanuddin, J. and Adhikari, J.
In fact, the judgment was written by Faizanuddin, J. who has explained in detail the reasons for his change in view.
It may also be mentioned, as a matter of record, that, subsequent to the decision of the Division Bench in G.S. Dhall and Flour Mills, the State Government appears to have issued a notifi cation on 3.7. 1987, intended obviously to overcome the effect of the said decision.
We shall refer to this later in this judgment.
Now, to turn to the history relied on by the Full Bench, we start with a "scheme for the grant of subsidy/interest free loan to new industries set up in Madhya Pradesh".
The scheme was to be effective from 15.9.69 and till the end of the Fourth Five Year Plan period (1970) "or such further period as may be extended by the State Government from time to time".
It would appear that the scheme was being adminis tered informally under executive instructions even beyond 1970.
Though certain "rules" appear to have been framed for the first time on 30.8.73, these rules, it would seem, were not statutory but were only in the nature of executive instructions.
We shall, however, refer to them as "rules".
Rule 3 was clear as to the persons eligible to avail of it.
It read: "Rule 3 "It shall be applicable to all new industrial units except traditional industries like oil mill, flour mill, dall mill, rice mill, ginning and printing factories, who set up in Madhya Pradesh, provided further that such appli cants register themselves with the department after 15.9.69 but before 31.3.74 and in case of SSI units go into produc tion within a period of one year and in case of Large and Medium Industries go into production within 3 years of their date of registration provided further that in case of delay in going into production the period of availability of subsidy or concession will be reduced by the period of delay in going into production.
This will come into force from 1.4.74.
Note: Small Scale Industries who are already registered with the department need not register separately for this concession.
" 601 It would also appear that the districts of the State were divided into two categories advanced and backward and the latter into three categories `A ', `B ', `C '.
The amount and period of the subsidy/loan depended upon this classification and was elaborately set out in para 8 which need not be extracted here.
A note added to para 8 had this to say: Note: (1) Unit who is otherwise entitled to subsidy may on his request be considered for grant of interest free loan to the extent of entitlement of the subsidy.
(2) No unit available concession under the scheme will be allowed to change the location of the whole or any part of the industrial unit or effect any substantial part of its total fixed capital investment within a period of five year after its going in to production.
(3) In case the ownership of a new unit changed during the period of availability of this concession, the new owner would be entitled to this concession for the balance period.
(4) A closed unit, which is re started by an entrepre neur will not be considered to be a new unit for the purpose of this concession.
" Another set of "rules" came into force with effect from 1.4.1977 and superseded the earlier rules.
These were on more or less the same lines as the earlier ones and were to apply to "new industrial units", and "existing industrial units", as defined in rules 2(a) and (b), on fulfillment of certain terms and conditions but industries enumerated in rule 3 were specifically excluded from the purview of the definition.
Rule 3 made it clear that the rules shall not be applicable to "the following traditional industries".
The list of such industries, in addition to those mentioned in the earlier set of rules (excluding roller flour mills and solvent extraction plants in oil mills), took in also saw mills, ice factories and "such other industries as may be notified by the Government from time to time".
The period and extent of the subsidy/ loan here again depended upon the district advanced or backward, and in the latter category `A ' or `B ' or `C ' in which the industry was set up Rule 7 is of some relevance and may be set out: "7.
An industrial unit eligible for this concession will apply 602 to the Asst.
Director of Industries of the district con cerned for verification of the date of going into commercial production and other particulars of new industrial unit or substantial expansion in respect of which the concession is sought.
The Asst.
Director of Industries will make verifica tion in accordance with rules 5(1) and send within 15 days of the receipt of the application his report to the sanc tioning authorities, Dy.
Director of Industries or Director of Industries indicating the date of going into commercial production of the unit.
A copy will be furnished to the applicant.
" The form of the certificate to be issued by the office of the Director of Industries read thus: "No. Date The particulars furnished by M/s . . . . . . have been checked and verified from records including those of consumption of power and raw materials and output of finished products.
The date of commencement of commercial production by the industrial unit is The date from which the unit has exceeded, on a sustained basis production over the licensed or installed capacity of the unit is . . . Asst.
Director of Industries" It appears that the Government had announced "conces sions" regarding the payment of sales tax by new industrial units including pioneer units going into production after 1 4 1981 not only under the notification dated 23/10/81 but also under other notifications dated 1 5 82 and 29 6 82.
Two of these notifications are on record before us.
It is, however, unnecessary to extract them here.
It is sufficient to set out their purport, quoting from the "instructions" of 12 1 83, referred to a little later: "According to the first notification, the new industrial units are exempted from the payment of sales tax.
This notification covered sales tax payable by them on the products manufactured by them.
It entitled them to exemption 603 from payment of purchase tax on purchase made by them from unregistered dealers.
According to the second notification an industrial unit making purchases of its raw material from a registered dealer is exempted from payment of sales tax on the raw materials so purchased by him from the registered dealer.
In other words, registered dealers selling raw materials to a new industrial unit are not required to charge any sales tax from the new industrial unit on sales made by them to such unit.
The third notification exempts the goods manufactured by the new industrial units from the levy of sales tax even when these goods are sold by the dealers who have purchased these goods from the new indus trial units.
In other words, by issue of this notification, the goods manufactured by the new industrial units are fully exempted from the payment of sales tax right upto the stage they reach the consumer.
These three notifications only deal with the grant of exemption from payment of sales tax under the M.P. General Sales Tax Act.
that is to say from the payment of the State Sales Tax.
The fourth notification exempts the new industrial units from payment of the Central Sales Tax on the sale of goods manufactured by them in the course of interstate trade or commerce.
This notification has exempted the new units from payment of sales tax w.e.f. 1 7 82.
" In view of these notifications, the Government considered it necessary to issue certain instructions "for the grant of certificate of eligibility to new industrial units claiming exemption from/deferment of payment of sales tax" on 12 1 1983.
These instructions also proceed on the same lines as the earlier ones.
"Traditional" industries, as listed in para 5. are said to be outside the purview of the scheme.
Para 5 enumerated the following as "traditional industries": flour mills (excluding roller flour mills), oil mills (excluding solvent extraction plants, dall mills.
saw mills, rice mills, printing presses of all types, cotton ginning and pressing factories, in factories and such other indus tries as may be notified from time to time.
It also stated (a) that "industrial units undertaking expansion/modifica tion or diversification will not be eligible for these concessions, (b) that a closed unit revived by the entrepre neur will not be considered as a new unit for the purpose of availing of these concession and (c) that units claiming interest free loans as an existing unit will not be eligible for these concessions.
A certificate of eligibility had to be obtained in the prescribed manner 604 and this procedure was made more elaborate.
District Level Committees and a State Level Committee were constituted for this purpose and they took a decision on the application of the unit read with the comments thereon by the Director of Industries, though the certificate was actually issued by the Director of Industries or the General Manager of the District Industries Centre in a prescribed form.
The Full Bench, after considering the scheme and in structions of the Government discussed above, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the conces sions granted earlier.
The 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes.
The Court observed: "It appears that the mode of concessions granted by the aforesaid instructions involved some inconvenience to the industrial units and duplication of procedure inasmuch as the industrial unit had to first collect the sales tax and the tax so collected and paid along with the returns were later on refunded to the industrial unit in the shape of subsidy.
To avoid the duplication of procedure the State Government thought it fit to altogether exempt the industri al units from payment of sales tax or defer the payment of sales tax.
" The Court observed.
vis a vis the various instructions referred to above: "12 . .
These instructions also contain a complete procedure for application and grant of eligibility certifi cate by the Industries Department.
Thus it is clear from these instructions that the question of grant of eligibility certificate by the Industries Department is not an empty formality but before granting the certificate the Industries Department has to see whether all the requirements as con tained in the instructions are fulfilled and complied with or not.
All the Government Instructions discussed above, issued from time to time right from 1973 onwards till 1983 (Annex ure R I, II and III) clearly indicate not only the consist ent Government policy in the matter of grant of 605 Sales Tax concessions to the New Industrial Units but also the consistent practice that has been followed throughout whereby these concessions were not at any time made avail able to the Traditional Industries like Flour Mills and Dall Mills etc.
Not a single instance is available to show that any of these concessions were ever made available to any Traditional Industries.
It may be pointed out that all these facts and the Government policy as also all the aforesaid Government Instructions on the subject were not placed before the Division Bench which heard and decided Misc.
Petition No. 1861 of 1983 (G. section Dall Mills vs State of M.P.).
However, after the decision of M.P. No. 1861/83 the State Government while issuing a Notification No. 351 dated 21st October, 1986 under section 12 of the Act, a photostat copy of which has been filed on record of M.P. No. 2710/87 (See at page 94 of the paper book) exempting the Industrial Units specified therein from payment of tax under section 6 and 7 AA of the Act again specifically provided in clause (xiii) of the said Notification that the said exemption shall not be available to the Industrial Units enumerated therein including Flour Mills and Dall Mills etc.
" It was true, the Court agreed, that a notification has generally to be construed on its plain language.
But, here: "as pointed out earlier, column 3 of the 1981 Notification (Annexure B) does not contain any guidelines or a procedure in the matter of grant of eligibility certificate or refusal thereof by the Industries Department and as the grant or refusal of such certificate cannot be an empty formality and, therefore, in order to avoid the possibility of arbi trariness and injustice to any one the State Government was justified in issuing executive instructions laying down the guidelines and procedure for the same.
" The Full Bench, therefore, observed: "16.
From what has been stated and discussed above it is clear that at no point of time any concession or exemption from.
payment of sales tax was ever given to the Traditional Industries and not a single example to that effect is avail able.
The State Government while issuing instruction from 606 time to time have been specifically excluding the Tradition al Industries.
Thus the executive authorities and the high est agency and its officers charged with the duty for the administration and enforcement of the said Notification are not only conversant with the underlying policy of the Gov ernment but they are also intimately acquainted with the economic significance of the tax in question and exemption thereof.
The interpretation of the Government regarding the construction of 1981 Notification read with the instructions (Annexure R. I, II and III) excluding the Traditional Indus tries, which has been consistently followed and acted upon accordingly for a period over a decade cannot be given a go by but has to be accepted.
In view of the above discussion the impugned Notifica tion dated 4 7 1987 (Annexure G) is hardly of any conse quence.
More or less it is a clarification of 1981 Notifica tion and not rescission of any grant.
" The contention that "instructions" could not override the effect of the statutory notification was repelled by the Court on the ground that the validity and effectiveness of the instructions can be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification.
An argument based on the doctrine of promissory estoppel was also rejected as "the petitioners were well aware of the fact that the exemption was not available to their new units and they had not established their units because of the exemption".
The Court explained the position thus: "20.
In this behalf firstly it may be pointed out that all the petitioners had established their Industrial Units after the Government issued the executive instructions (Annexure R. III) dated 12 1 1983, of which clause 5(b) specifically speaks that the concessions will not be available to Tradi tional Industries like Flour Mills and Dall Mills etc.
To say that the petitioners were not aware of these executive instructions would be incorrect because clause 6 of these instructions contemplates that New Industrial Units desirous of availing the said concessions shall have to apply in Form I accompanied with a declaration in Form II appended to the said Instructions and the petitioners applied in Form I with declaration in Form II (See Annexure D, D/I and D/2 in M.P. No. 2710/87).
Further these 607 applications for exemption were made by the petitioners only after the order dated 7 10 1986 was passed in G.S. Flour Mills vs State (M.P.) No. 1861 of 1983) which shows that the petitioners were aware of the fact that they were not entitled to exemption and it was only after the aforesaid decisions that they considered to apply for exemption.
This fact is further fortified from the conduct of the petition ers themselves as they continued to submit returns right from 1983 onwards and continued to pay the tax as assessed against them without taking any steps to claim exemption.
In this behalf paragraphs 8 and 9 of the petitions are self explanatory.
Thus having regard to all these facts, the.
question of application of principle of promissory estoppel in the present case does not arise and the petitions deserve to be dismissed.
" Sri Harish Salve, appearing for the G.S. Dhall & Flour Mills, apart from pleading that the view taken in this case is the correct one and not that enunciated by the Full Bench, also raised an alternative contention on the footing that, at best, the notification of 1981 was ambiguous and lent itself to two plausible interpretations.
Assuming that there was initially some ambiguity regarding the applicabil ity of the Notification of 23.10.81 to traditional indus tries, it had been dispelled by the instructions of 12, 1.83.
Once these instructions were published, any assessee setting up a traditional industry took a calculated risk on the issue as to whether the Notification should be confined, on proper interpretation, only to non traditional industries and could not rely on the doctrine of equitable estoppel.
Pointing out that the assesses in the Full Bench case were persons who had set up their industry after 12.1.83, Sri Salve argued that the dismissal of the Special Leave Peti tion against the Full Bench judgment will not affect his case as this assessee had set up its industry, admittedly, before 12.1.
The position is similar in the case of Mohan.
Ismail.
Learned counsel, therefore, submitted that, even if the 1983 instructions were rightly held by the High Court to have validly supplemented the terms of the 1981 Notification, they can have no application to the two earli er cases which had to be decided solely on the terms of the 1981 Notification.
To answer these contentions, one has to look first at the statutory instruments in this case viz. section 12 of the Act and the notification thereunder.
section 12(1)(i), with which we are concerned, lays down four requirements for the grant of exemption from the provisions of the Act: 608 (i) that any exemption to be granted under the section has to be by a notification; (ii) that the notification may exempt any class of dealers or any goods or class of goods from the payment of tax under the Act in whole or in part but only for a definite period to be specified in the notification; (iii) that the exemption will be subject to such restric tions and conditions as may be specified in the notifica tion; (iv) that such exemption could be prospective or retrospec tive.
We are concerned here with the scope of the second and third requirements mentioned above.
So far as the class of dealers entitled to the exemption are concerned, the notifi cation spells out the following requisites: (i) they must belong to one of the classes Of dealers speci fied in column No. (1) of the schedule; (ii) they must have set up industry in any of the districts of Madhya Pradesh specified in the annexure; (iii) they must have commenced production after 1.4.
The period of exemption is also specified in the notifica tion.
So far as the "restrictions and conditions" subject to which the exemption has been granted, they are, as per column No. (3) of the Schedule: (a) that the dealer should continue to furnish the pre scribed returns under the Sales Tax Act; and (b) that they should produce, at the time of their assessment, a certifi cate from the Director of Industries certifying that such dealer is eligible to claim exemption and has not opted for the "scheme of deferring the payment of tax under the rules framed for the purpose".
It is not anybody 's case that the assesses before us did not fall within the class of dealers specified in column (1) or that they did not comply with (a) above or that they had opted for the scheme of deferment of tax.
This being so, the assesses claim that they are eligible for the exemption under the notification and that the Director of Industries should have granted them a certificate to this effect.
It is the denial of 609 this certificate which has brought the assesses to Court.
The question for consideration is whether the Director of Industries can refuse the exemption certificate on a consid eration not specified in the notification.
Prima facie, No. All the conditions for exemption have to be.
and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those condi tions are fulfilled; he cannot travel beyond the terms of the notification.
He can see whether the dealer falls under the description in column (1), whether he has set up a new industry in M.P. State, whether he has commenced production after 1.4.1981 and whether has opted for the deferment scheme.
The condition about the dealer filing returns regu larly would seem to be one under the purview of the sales Tax Officer rather than one under that of the Director of industries.
If these conditions are fulfilled, the exemption certificate will have to be granted.
That seems the straight and simple interpretation of the notification.
But, it is said for the State, this is not the intend ment or effect of the notification.
It is said that the argument overlooks the reference in column (3) to the grant of an eligibility certificate by the Director of Industries.
This is one of the important conditions for the grant of this exemption.
It is pointed out, in this context, that there had been in force in the State, for several years past, a scheme of subsidy/loan.
That scheme was also depend ant on a certificate of the Director of Industries but that certificate could be denied to "traditional industries".
It is argued that, since the notification does not set out the conditions on which, and the procedure in accordance with which the Director of Industries is to issue the eligibility certificate, that earlier scheme and procedure should be read into the notification.
Sri Salve objected to this reading of the notification, infer alia, on the ground that the earlier scheme and the exemption now proposed are total ly different in their object and scope and that, while the former scheme was intended as an incentive to any one who set up a new industry in the State so that "traditional" industries did not get any benefit, the notification presently under consideration was issued with the object of industrialising the backward areas of the State and so it was immaterial what type of industry went in there and whether the industry proposed to be set up was a "tradition al" one or not.
This contention does not appear to be quite correct.
It has been pointed earlier that even the earlier schemes provided for graded incentives for industrialisation effective for varying periods depending upon the backward ness or otherwise of the district in which the industry was proposed to be set up.
But, even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemp tion, it does not necessarily follows that the 610 units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated.
Indeed, there were four new concessions introduced in 1981 82 and there is no mate rial which would justify these being tied down to the param eters of the earlier schemes.
No factual foundation has been laid to establish the hypothesis that the exemption con ferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier.
There are other difficulties in reading the provisions of the earlier schemes into the notification.
In the first place, the earlier schemes spe cifically provided that "traditional industries" were out side their purview.
The language of the notification, which is a piece of subsequent legislation, is silent about this.
This is itself indicative of a legislative intent to widen the scope of relief and grant exemption to traditional industries as well: vide, G.P. Singh: Interpretation of Statutes, 4th Edition, pp. 767 8.
The omission to specifi cally exclude "traditional industries" as was done in the earlier schemes the notification gains added significance in view of section 12 which specifically requires that all condi tions and restrictions governing an exemption should be specified in the notification.
Secondly, the attempt of the State to read a further condition into the notification excluding "traditional industries" from the exemption is based on the words which require that the Director of Indus tries should grant a certificate (a) that the dealer is entitled to claim the exemption and (b) that he has not opted for the scheme of deferring the payment of tax under the rules framed for the purpose.
But these words do not carry the State 's case further, for what the Director of Industries has to do is to certify that the applicant is entitled to the exemption on the terms and conditions set out in the notification and not on the basis of any further requirements not so set out.
The notification does not authorise him to say that, though the applicant fulfills the terms of the notification, he will not grant the eligibility certificate because, under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries".
He could not grant an eligibility certifi cate under the earlier schemes because the instructions which outlined the scheme specifically excluded traditional industries.
Actually, even under the earlier schemes, nei ther the application form nor the form of certificate, which have been extracted earlier, make any reference to the assessee concerned not being a `traditional industry '.
Be that as it may, for granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else.
To say that, when the notifica tion requires an eligibility certificate from the Director it means a certificate on the terms prescribed under the earlier scheme is to read into 611 the notification something which is not there.
Thirdly, the interpretation advocate by the State really narrows down the class of dealers entitled to the exemption as set down in column (1) of the notification.
It amounts to substituting, for the word "dealers" in column 1 of the notification the words "dealers other than those carrying on traditional industries".
Such an interpretation also virtually amounts to allowing certain executive instructions issued in a different context to cut down the scope of a statutory notification.
This cannot clearly be done.
Lastly, a perusal of the earlier schemes would show that the concept of "traditional industries" is a vague one.
The nomenclature of these industries has varied from time to time.
The note in the 1977, and the definition in the 1983, instructions show the eligibility under the earlier schemes was denied not only to "traditional industries" but also certain other industries such as revived or reconstructed industries.
We may also mention in this context a notification of 21.10.1986 referred to by the High Court outlining exemp tions under Ss. 6 and 7AA.
It excludes, from exemption, in addition to saw mills, flour mills etc.
(which the State calls traditional industries) various other industries (total numbering 26) specified in cl.
(xiii) thereof.
This changing definition of eligibility for exemption also shows that there was no common or identical group of beneficiaries intended under the various instructions or notifications and that each set of instructions or notification issued from time to time defined only the categories exempted from its purview and nothing else.
The exemption list under one was not meant to be carried over into another.
We are, there fore, of opinion that it is not permissible to restrict the scope of the notification in the manner suggested.
We may point out that, in construing the notification thus, we are only giving effect to a well settled rule that may be illustrated by a reference to the decision in Hansraj Gordhandas vs H.H. Dave, In that case notifications had been issued under section 8 of the granting exemption to (a) "cotton fabrics produced by any cooperative society formed of owners of cotton powerlooms . ." and (b) "cotton fabrics pro duced on powerlooms owned by any cooperative society or owned by or allotted to the members of the society . . ".
The appellant had sought exemption from excise duty under these notifications in respect of cotton fabrics which had been got manufactured by him on the powerlooms belonging to a cooperative society in pursuance of an agreement entered into with it.
The excise authorities rejected the claim on the ground that the exemption under the notifications could be claimed only when the cotton fabrics were manufactured by a cooperative so 612 ciety for itself.
Upholding the assessee 's claim, this Court observed: "It was contended on behalf of the respondent that the object of granting exemption was to encourage the forma tion of co operative societies which not only produced cotton fabrics but which also consisted of members.
not only owning but having actually operated not more than four power looms during the three years immediately preceding their having joined the society.
The policy was that instead of each such member operating his looms on his own.
he should combine with others by forming a society which.
through the cooperative effort should produce cloth.
The intention was that the goods produced for which exemption could be claimed must be goods produced on its own behalf by the society.
We are unable to accept the contention put forward on behalf of the respondents as correct.
On a true construction of the language of the notifications.
dated July 31, 1959 and April 30.
1960 it is clear that all that is required for claiming exemption is that the cotton fab rics must be produced on power looms owned by the coopera tive society.
There is no further requirement under the two notifications that the cotton fabrics must be produced by the Cooperative Society on the power looms "for itself".
It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words.
The entire matter is governed wholly by the language of the notification.
If the tax payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority.
If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom.
the matter is different, but that is not the case here.
In this connection we may refer to the observations of Lord Watson in Salomon vs Salomon & Co., ; , 38: "Intention of the legislature is a common but very slippery phrase, which, popularly understood may signi fy anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant although there has been an omission to enact it.
In a Court of Law or Equity, what the Legislature intended to be 613 done or "not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication.
" It is an application of this principle that a statutory notification may not be extended so as to meet a casus omissus.
As appears in the judgment of the Privy Council in Crawford vs Spooner, " .
We cannot aid the legislature 's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there.
" Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power looms by constituting themselves into Cooperative Societies.
But the operation of the notifica tions has to be judged not by the object which the rulemak ing authority had in mind but by the words which it has employed to effectuate the legislative intent.
" In our view, this principle applies here squarely.
Indeed, even granting that the notification may be inter preted having regard to the past history and the possible intention of the Government while issuing the notification, the position of the assesses here is much stronger for, while in the reported case the State was trying only to effectuate the clear object of the notification, here it is not at all clear, for the reasons discussed above, that the State intended the exemption to be confined only to the cases covered by the subsidy/loan schemes prevalent earlier.
The 1981 notification does not expressly, or (for the rea sons discussed above) even by necessary implication, exclude "traditional" industries from its scope.
Sri Salve contends that, even if a lenient view is taken and a more liberal construction is sought to be placed on the notification, the best that could be said for the State would be that the notification was ambiguous.
One could either say that the previous procedure and requirements prevalent for obtaining an exemption certificate were in tended to be incorporated by the words requiring such a certificate (as suggested for the appellant or one could say, with equal plausibi 614 lity, that the exemption certificate is to be based only on the conditions and requirements mentioned in the notifica tion (as contended for by the assesses).
In such a state of law, he contends, one can have regard to the conduct of the parties and how they understood the notification.
His argu ment is that the State, by its conduct, had held out to the assessee that it would also be eligible for the exemption.
In this context, he drew our attention to the following circumstance: (1) The M.P. Audhyogik Vikas Nigam, a State instrumen tality, which was administering the notification issued, in November 1981, a pamphlet setting out the various incentives the State was offering for new industries proposed to be set up in the State.
As to "exemption from sales tax", the pamphlet stated that "new industrial units coming into production after 1.4.81" will be entitled to an exemption for a period depending upon the district where it is set up or could alternatively exercise an option to defer payment of sales tax by a period of 10 years.
It did not mention anywhere that the industry should not be a traditional industry.
(2) The Nigam allotted a plot of land of the extent of 1 acre to enable the assessee to establish its unit in the Industrial Area.
Mandideep, Dt.
Raisen.
(3) Other incentives as to power, interest and capital subsidy were extended to the assessee.
Thus, says counsel, the State "lured" the assessee to set up a unit in the record time of ten months and with a substantial capital outlay of over Rs. 10 lakhs in a backward area.
These incen tives were meant to be coextensive with the concession regarding sales tax.
He contends that these representations and acts are sufficient to found a claim of "equitable estoppe" against the State.
We are unable to accept this argument.
The respondents have stated in their counter affidavit that the Nigam had acted in error and misconstrued the notification and was not acting under the authority of the Government in issuing the pamphlet.
The other conces sions extended to the assessee pertained to the setting up of a small scale industry in the State and were unrelated to the exemption from sales tax.
In our opinion, there is force in these submissions.
The circumstances and material relied on by the assessee do not spell out any clear promise of exemption from sales tax even for traditional industries.
The notifications or guidelines under which the other facil ities were granted have not been 615 placed before us and no material is available on record to correlate them to the sales tax exemption or to show that all these were inextricably connected so as to form part of a single "relief packet".
We, therefore, reject this conten tion of Sri Salve.
However, on the interpretation of the notification.
we accept the contention of the assesses that the notification does not warrant denial of exemption solely on the ground that the applicant is having a "traditional industry".
We have indicated earlier that the assesses whose writ petitions were disposed of by the Full Bench had set up their industries after 12.1.
1983 by which time elaborate instructions had been issued to explain the State 's point of view, The question is whether this makes a difference.
We think not.
Even the 1983 document is not a statutory instru ment neither a notification nor a rule framed under the statute.
The Full Bench has considered those instructions to be conclusive on two grounds on the doctrine of contempora nea exposition and on the principle that executive instruc tions can always be issued to supplement statutory instru ments so as to fill up areas on which the latter are silent.
In our opinion, neither of these grounds is tenable.
It is true that the principle of contemporanea exposition is in voked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner.
This doctrine has been explained and applied in a numbers of cases of this Court (e.g. See Varghese vs L.T.O., ; , in addition to the cases referred to by the Full Bench).
As pointed out by Sri Salve, its applicability in the construction of recent statutes.
and that too in the first few years of their enforcement, has been doubted.
vide: Doypack Systems P. Ltd. vs Union of India.
; , para 61.
But, this apart, the principle will not be applicable here for two reasons.
In the first place, the instructions of 1983 do not anywhere "expound" the terms of the notification.
They do not give any indication that the state had applied its mind to the precise terms of the notification or their interpretation.
They do not explain or clarify that, though the notification is silent, it has been intended that the limitations of the previous schemes should be read into it.
Secondly, the cases referred to will show that the doctrine applies in cases where the plea is that, though the language of the statute may appear to be wide enough to seem applicable against the subject in particular situations, the State itself which was the progenitor of the statute had not understood it in that way.
But, to apply the doctrine to widen the are bit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its 616 ipsi dixit.
That, certainly, is not, and cannot be, the scope of the doctrine.
The doctrine can be applied to limit the State to its own narrower interpretation in favour of the subject but not to claim its interpretation in its own favour as conclusive.
The second ground on which the Full Bench has sought to invoke the instructions is also not correct.
Executive instructions can supplement a statute or cover areas to which the statute does not extend.
But they cannot run contrary to statutory provisions or whittle down their effect.
The Full Bench seems to think that, unless the instructions are brought in, the notifications would have been in danger of abuse for want of proper guidelines as to the grant of exemption certificates.
It is suggested that the notification contemplates rules to be issued for the purpose and that, since no rules had been issued, Directors of Industries were left with no parameters for the issue of exemption certificates and might act capriciously or arbi trarily in granting or refusing certificates.
The instruc tions, it is said, have been issued to fill in this lacuna and are hence valid.
There are two misconceptions in this line of reasoning.
The first is that.
though the last few words in column (3) of the notification are capable of a wider meaning, it would appear that these words govern only the immediately preceding words; rules envisaged are not in relation to the grant of exemption certificates and condi tions therefore but in respect of the circumstances in which the assesses can exercise the option between exemption and deferment of sales tax.
This view derives support from the instructions of 1983.
As pointed out earlier, the instruc tions first set out the scope of the various notifications as granting exemption from sales tax; the instructions thereafter proceed to say: "The grant of exemption from the payment of sales tax is contingent upon the issue of a certificate of eligi bility to the new industrial units.
This certificate of eligibility is required to be issued by the Director of Industries or an officer authorised by him for this purpose.
In so Jar as the grant of concessions relating to the exemption from payment of sales tax is concerned, no further notifications are required to be issued.
For ena bling the new industrial units to avail of the second con cession viz., that of deferment of payment of sales tax, a scheme is being issued separately.
For availing of the benefit of the deferment of concession too, a certificate of eligibility is required to be obtained by the industrial unit.
However.
617 pending the issue of the scheme, the grant of certificate of eligibility should not be held up." (underlining ours) Incidentally, we may point out, the first part of the para does not clarify that the eligibility certificate is not to be granted to "traditional industries".
But, so far as the present point is concerned, it is categorically stated that no further notifications are required to be issued and that they are needed only to define the scheme for deferment of tax.
Indeed, rules were framed in order to implement the deferment scheme which came into force with effect from 1 4 1983.
We shall refer a little later to these rules.
Secondly, there is no warrant for assuming that the notifi cation envisages conditions for the issue of the eligibility certificate other than those specified by itself.
There is nothing in the language of the notification to suggest that anything further is needed to enable the Director of Indus tries to grant the exemption.
Without the guidelines, the requirement for an exemption certificate would not become an "empty formality" as suggested by the Full Bench.
The Direc tor of Industries has to issue the same after satisfying himself that the applicant industry falls within the terms of the notification in the following respects (a) that the assessee is one of the class of dealers set out in column ( 1); (b) that he has set up an industry in the State; (c) that it has been set up in one of the districts set out in the annexure and the category to which it belongs; (d) that the industry has commenced production after 1 4 81; (e) that the assessee has not opted for the deferment scheme.
These conditions are many and detailed and do not leave anything to the discretion of the Director of Industries.
We fail to understand what need there was to lay down any elaborate procedure therefore.
Even if there was, and the earlier procedure by way of application form, declaration form and form of certificate were to be adapted, that proce dure, by itself, did not, as pointed out earlier, contain any reference to the assessee being a traditional industry or otherwise.
To assume first that the conditions specified in the notification are not exhaustive or suffi 618 cient and may lead to abuse of power by executive authori ties unless canalised by procedural guidelines and then to say that such a conclusion is borne out by the mere refer ence to a certificate being granted by the Director of Industries because, under some earlier schemes, such certif icate was being granted on a restricted basis, does not appear to be sound logic.
We are, therefore, of opinion that the notification is quite clear and leaves no area of vacuum which needs to be supplemented by guidelines.
Thirdly, if we read the last part of the entry in column (3) of the notifi cation as envisaging rules to be framed for the grant of the eligibility certificate, no such rules were flamed.
Only instructions were issued.
These instructions say that even an assessee, who fulfills all the requirements of the noti fication, will not be eligible for exemption unless he fulfills one more condition outside the notification.
They travel beyond and counter to the notification.
They restrict the scope of exemption under the notification.
They deny exemption to a person who qualifies for it under the statu tory notification.
Indeed, there is force in the contention that if the statutory notification is construed as permit ting the State by rules or executive instructions to pre scribe other conditions for exemption, whether new or based on past practice, it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive.
This, certainly, they cannot do.
A further development which has been relied on by the State but does not really seem to help its case may now be referred to.
State Act 25 of 1982 inserted section 22 D in the Act in the following terms: "22 D. Special provisions relating to deferred payment of tax by Industrial Units Notwithstanding anything contained in any other provisions of this Act, a registered dealer, who is (a) registered as a small scale industrial unit with Indus trial Department of the Government of Madhya Pradesh;or (b) registered with the Director General of Technical Devel opment as an industrial unit; or (c) registered as an industrial unit by any authority duly empowered to do so by the Government of Madhya Pradesh or the Central Government; or (d) holding a licence under the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951).
619 and who in each case has or may set up a new industrial unit in any district of Madhya PradeSh if eligible for grant of the facility of deferred payment of tax under the scheme providing for grant of incentive to enterpreneurs for set ting up new industrial units in the state as the State Government may make in this behalf may make deferred payment subject to such restrictions and conditions as may be speci fied in such scheme.
" Thereafter, the State Government framed the M.P. Deferment of Payment of Tax Rules, 1983 which were gazetted of 1.9.83 but with retrospective effect from 1.4. 1981 (that is, even anterior to the date of the notification).
Rules 3, 4 and 14 are relevant and may be set out here.
"3. Eligibility for grant of Facility of Deferred payment of tax (1) A new industrial unit other than a unit specified in rule 14 which is covered by any of the categories speci fied in section 22D and of the Act and which is engaged in the manufacture and sale of any goods shall qualify for deferred payment of the tax payable by it provided it is eligible for grant of the concession of exemption from payment of tax in terms of notification No. A 3 41 81 (35) ST V, dated the 23rd October, 1981 and No. A 3 41 81(31) ST V, dated the 29th June, 1982 as amended from time to time subject to the provisions of the act.
The period pertaining to which the tax which the new industrial unit can defer will be the same for which it could have obtained the con cession of the exemption from payment of tax, i.e., the period pertaining to which the tax can be deferred will be the period shown in column (2) of the said notification.
(2) The new industrial unit shall be eligible to defer only the payment of tax which is due from it under the Act.
Application for Scheme of deferred payment and grant of certificate of eligibility (1) A new industrial unit opting for the scheme of deferred payment of tax shall apply for and obtain a certificate of eligibility in accordance with the instructions issued by State Government in the Commerce and Industries Department for the said purpose.
An applica tion in writing shall be submitted within forty five days of the publication of these rules or of commencement of the production whichever is later.
In the application form the 620 new industrial unit shall indicate that it has opted for scheme of deferred payment of tax.
The option once exercised shall be irrevocable.
The form of the application as well as the certificate of eligibility shall be as specified in the said instructions.
The application shall be made to the General Manager, District Industries Centre of the district where the new industrial unit is or is proposed to be locat ed and shall be processed further in accordance with the said instructions.
The certificate of eligibility in respect of large and medium scale units shall issued by the Director of Industries (Government of Madhya Pradesh) and in respect of small scale units by the said General Manager, and shall carry a specific and district number given by the said officer.
(2) A copy of the certificate of eligibility shall be for warded by the officer issuing the certificate to the appro priate Sales Tax Officer, i.e. the Sales Tax Officer in whose circle the industrial unit is registered as a dealer.
The Sales Tax Officer receiving the copy of the certificate of eligibility shall maintain a record of the same in such form as may be directed by the Commissioner and shall not enforce recovery of the tax payment whereof has been shown to have been deferred in the certificate of eligibility.
(3) The new industrial unit shall be entitled to defer the payment of the tax for a period of ten years.
This entitle ment shall be available only on receipt of the certificate of eligibility to it under sub rule (1).
The certificate of eligibility shall show the duration for which the payment of the tax has been deferred.
The year in which the tax per taining to any accounting year of the industrial unit is required to be paid consequent upon deferment of tax shall also be shown in the certificate of eligibility.
The entire tax assessed pertaining to any accounting year shall be payable by the industrial unit in lump sum on the expiration of duration of deferment and payment of such tax shall be made within thirty days of the date on which the period of ten years from the end of the relevant accounting year expires.
Non availability of facility of deferred payments The result of the scheme of deferred payment of tax shall not be available to the following new industrial units, namely: 621 (A) (1) flour mills (Excluding Roller Flour Mills); (2) Oil mills (excluding Solvent Extraction Plants); (3) dall mills; (4) saw mills; rice mills; (6) printing presses of all types; (7) cotton ginning and pressing factories; (8) ice factories; (9) such other industries as may be notified by Government from time to time.
(B) industrial units undertaking expansion, modernisation or diversification; (C) a closed unit revived by an entrepreneur; (D) units claiming interest free loans as an existing unit establishing a new unit; (E) an industrial unit set up by transferring or shifting or dismenting an existing industry.
A note was also published in the Gazette explaining the background of the rules.
It reads thus: "NOTE EXPLAINING THE BACKGROUND OF THE SCHEME OF DEFERRED PAYMENTS TAX The Government of Madhya Pradesh, with a view to accelerat ing the pace of industrialisation have announced concessions regarding the payment of tax under the Madhya Pradesh Gener al Sales Tax Act, 1958 and the by new industrial units going into production after 1st April, 1981 which contemplate (a) total exemption from payment of tax whether State or Central by new industrial units going into production after 1st April, 1981 for varying periods depending upon the district in which the new industrial unit is set up; 622 (b) deferment of the payment of tax in lieu of the above said exemption for a period of ten years.
To give effect to the concession of exemption from payment of tax, the Government in the Separate Revenue Department have already issued the following notifications: (i) F. No. A3 41 81(35) ST V, dated 23rd October, 1981.
(ii)F. No. A3 41 81 (25) ST V, dated 1st May, 1982.
(iii) F. No A3 41 81(24) ST.
V, 1st May, 1982.
(iv) F. No. A3 41 81 (31) ST V, dated 29th June, 1982.
With a view to enabling those new industrial units who opt for the alternative concession of deferment of payment of tax, a special provision in the shape of section 22 D has been inserted in the Madhya Pradesh General Sales Tax Act, 1958 with effect from 1st April, 1981, according to which the facility of deferring the payment of tax which become available subject to the provisions of the scheme providing for the grant of incentives for setting up the new industri al Units; The aforesaid rules have therefore been framed to formulate the scheme of deferred payment of tax.
" It might appear, at first sight, that since the relief by way of deferment of tax is only in the nature of an alterna tive to the provision for exemption and the former is not available to traditional industries because of rule 14 above, the same should be the position in regard to the exemption provision also.
There are, however, several diffi culties in accepting this suggestion.
In the first place, the rules relate to tax deferment and not tax exemption.
It is open to the State Government, particularly in view of section 22D, to frame such scheme for the purpose as it may deem fit.
The provision for exemption, however, needs to be spelt out, under section 12, in a statutory notification.
Secondly if, as is being urged on behalf of the State, it is explicit even on the terms of the notification that traditional industries are excluded, it is not necessary for the rules of deferment to specifically provide that they will not be available to the industries listed in rule 14 particularly when rule 4 has incorporated the requirement of an eligibil ity certificate in accordance with 623 the previous instructions for the said purpose.
Thirdly rule 14 excludes from the scheme not merely "traditional indus tries" covered by para (A) but also industrial units (which may not be `traditional industries ') falling under paras (B) to (E).
Fourthly, the rules are not inconsistent with the interpretation that, while all industries fulfilling the terms of the notification can claim exemption under it, only some of those units, which do not fall under rule 14, can opt for the alternative of determent.
We are, therefore, of opinion that even the retrospective promulgation of these rules provide no assistance in the interpretation of the notification.
A reference has now to be made to the notification of 3/7/87 amending the 1981 notification with retrospective effect so as to exclude what may be described in brief as `traditional industries ' though, like rule 14 of the defer ment rules, the exclusion extends even to certain other non traditional units operating in certain situations.
Though this notification purports to be retrospective, it cannot be given such effect for a simple reason.
We have held that the 1981 notification clearly envisages no exclu sion of any industry which fulfills the terms of the notifi cation from availing of the exemption granted under it.
In view of this interpretation, the 1987 amendment has the effect of rescinding the exemption granted by the 1981 notification in respect of the industries mentioned by it.
section 12 is clear that, while a notification under it can be prospective or retrospective, only prospective operation can be given to a notification rescinding an exemption granted earlier.
In the interpretation we have placed on the notifi cation, the 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospective: it enacts the rescission of the earlier exemption and, hence, can operate only prospec tively.
It cannot take away the exemption conferred by the earlier notification.
We would like to add that we agree with the view of the Full Bench that, if the notification is interpreted as done by it or even hold it to be ambiguous, there is no scope for the assessee to invoke the doctrine of promissory estoppel.
We have already dealt with this aspect in regard to the cases in which the State has appealed.
In the other cases covered by the Full Bench decision, the mere fact that an exemption was initially granted and then revoked would be insufficient to found the claim of estoppel particularly when it has been found that the assesses started production after 12.1.
1983 and claimed exemption very much later.
But since, in our view, the terms of the notification are clear and envisage no denial of exemption to traditional indus tries, this question does not survive.
624 Before we conclude, we have to refer to one aspect which we have touched upon at the very beginning of the judgment and that is the dismissal, in limine, of the Special Leave Petition filed in this Court by the petitioners before the Full Bench.
It has been pointed out that the above petition was dismissed notwithstanding that the Special Leave Peti tion in the case of G.S. Dhall & Flour Mills was also then pending for admission.
It would perhaps have been better if both the S.L.Ps. had been taken up and dealt with together.
However, the S.L.P. against the Full Bench was dismissed and, two of us having been members of the Bench that dis missed it, we may observe that Sri Salve is perhaps right in saying that it was the content of paras 20 and 21 of the Full Bench judgment that persuaded this Court to dismiss the S.L.P. there against.
The Full Bench has there pointed out that even if it could be said that two interpretations of the notification were equally plausible.
the assesses in those cases had set up the industries after the explicit instructions of 12.1.
1983 were made public and thus took a deliberate risk and had only themselves to thank.
Neverthe less, the fact is that the view taken by us on the scope of the notification runs counter to the Full Bench decision which must be treated as overruled.
For the above reasons, we have come to the conclusion that the G.S. Dhall and Flour Mills case laid down the correct law and not the Full Bench.
We would like to add that we are not quite happy to arrive at this decision.
It does seem likely that the State Government had not intended the exemption to be availed of by certain categories of industries.
But it has failed to achieve this purpose on account of the wide language in which it couched the exemp tion notification.
We find ourselves unable, for the reasons discussed above, to discover any valid legal basis on which the exemption clearly granted can be withheld from the assesses here.
We, therefore, dismiss the appeals of the State and allow the appeals preferred by the assesses and hold them entitled to the exemption under the 1981 notifica tion.
We, however, make no order regarding costs.
R.S.S. Appeals filed by State dismissed and other appeals allowed.
|
In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 the State Govern ment issued a notification dated 23.10.1981 exempting the specified class of dealers who had set up industry in any of the specified districts of Madhya Pradesh and had commenced production after 1st April, 1981 from payment of tax under the said Act for a specified period subject to certain restrictions and conditions.
However, when the assesses approached the Director of Industries for the certificate of exemption, it was denied to them on the ground that the industries run by them were "traditional industries" which were not eligible for exemption.
The assesses went to the court and urged that the con cept of "traditional industries" was one unspecified in the notification, and that the authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assesses an exemption they were entitled to under the notification.
The State on the other hand, relied on the provisions of the M.P. (Deferment of payment of Tax) Rules, 1983.
notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from or deferment of payment of sales tax".
The assessee 's claim for exemption from sales tax was accepted by the Division Bench of the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail.
The Division Bench took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notification of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statutory notification.
591 Subsequent to the decision of the Division Bench, the State Government issued a notification on 3.7.1987, intended obviously to overcome the effect of the said decision.
Subsequently, however, a Full Bench of the High Court, in the case of Jagadamba Industries disapproved the view taken by the Division Bench in G.S. Dhall case.
The Full Bench attached importance to the rules and instructions referred to above and relied considerably on his history of the sales tax levy in the State as furnishing proper and necessary background in which the terms of the notification of 23.10.1981 had to be read and interpreted.
The Full Bench, after considering the scheme and in structions of the Government, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the concessions granted earlier, and that the 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes.
The contention that "instructions" could not override the effect of the statutory notification was repelled by the Full Bench on the ground that the validity and effectiveness of the instructions could be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification.
The Full Bench considered the 1983 instructions to be conclusive on two grounds on the doctrine of contemporanea exposition and on the principle that executive instructions could always be issued to supplement statutory instruments so as to fill up areas on which the latter were silent.
The State, aggrieved by the judgment of the Division Bench in the two cases, and the assessee by the judgment of the Full Bench in the other case, have filed the appeals and Special Leave Petitions.
Before this Court the parties reiterated their submis sions in support of either of the two judgments.
The main submission on behalf of the State was that, since the 1981 notification did not set out the conditions on which, and the procedure in accordance with which the Director of Industries was to issue the eligibility certificate, the earlier scheme of subsidy/loan and its procedure should be read into the notification for this purpose.
This contention was contested by the assesses inter alia on the ground that the earlier scheme and the exemption now 592 proposed were totally different in their object and scope.
Dismissing the appeals of the State, and allowing the appeals preferred by the assesses, this Court while observ ing that the Division Bench laid down the correct law and not the Full Bench, HELD: (1) The 1981 notification does not expressly, or even by necessary implication, exclude "traditional" indus tries from its scope.
(2) Prima facie, the Director of Industries cannot refuse the exemption on a consideration not specified in the notification.
All the conditions for exemption have to be, and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those conditions are fulfilled; he cannot travel beyond the terms of the notification.
(3) Even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemption, it does not neces sarily follow that the units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated.
(4) No factual foundation has been laid to establish the hypothesis that the exemption conferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier.
(5) The notification does not authorise the Director of Industries to say that, though the applicant fulfill the terms of the notification.
he will not grant the eligibility certificate because,Under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries".
For granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else.
Changing definition of eligibility for exemption also shows that there was no common or identical group of benefi ciaries intended under the various instructions or notifica tions and that each set of instructions or notification issued from time to time defined only the categories exempt ed from its purview and nothing else.
The exemption list under one was not meant to be carried over into another.
Hans Gordon Dan v .H.H.
Dave, referred to.
593 (7) The 1983 document is not a statutory instrument neither a notification nor a rule framed under the statute.
(8) It is true that the principle of contemporanea exposition is invoked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner.
But. to apply the doctrine to widen the ambit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its ipsi dixit.
That, certainly, is not, and cannot be the scope of the doctrine.
The doctrine can be applied to limit the State to its own narrower interpretation to favour of the subject but not to claim its interpretation in its own favour as conclusive.
Varghese vs 1.
T.O.; , and Doypack Sys tems P. Ltd. vs Union of India, ; , referred to.
(9) Executive instructions can supplement a statute or cover areas to which the statute does not extend.
But they cannot run contrary to statutory provisions or whittle down their effect.
(10) There is nothing in the language of the notifica tion to suggest that anything further is needed to enable the Director of Industries to grant the exemption.
Without the guidelines, the requirement for an exemption certificate would not become an "empty formality".
(11) If the statutory notification is construed as permitting the State by rules or executive instructions to prescribe other conditions for exemption, whether new or based on past practice.
it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive.
This, certainly, they cannot do.
(12) The 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospectively; it enacts the rescission of the earlier exemption and, hence, can operate only pro spectively.
It cannot take away the exemption conferred by the earlier notification.
|
Criminal Appeal No. 195 of 1984.
From the Judgment and Order dated 30.11.
1982 of the Punjab & Haryana High Court in Crl.
Appeal No. 425 D.B./1982.
O.P. Soni, Ms. Kamlesh Datta and S.K. Sabharwal for the Appellant.
664 U.R. Lalit and Uma Datta for the Respondents.
Mahabir Singh for the State of Haryana.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The respondents Puran and Tara Chand along with Ved, Balwan, Dhapan, Jagdish and Lal Chand were tried before the Additional Sessions Judge, Sonepat, for the murder of one Partap Singh and causing injuries to others.
The learned Judge by judgment dated 18.5.
1972 convicted these respondents for offences under section 302, I.P.C., and sections 323,325 read with 149, I.P.C. They were sen tenced to undergo imprisonment for life and ordered to pay a sum of Rs.500 each under section 302, I.P.C., R.I. for one year under section 148, I.P.C., R.I. for one year under section 325 and R.I. for six months under section 323, I.P.C.
The other accused were convicted for the minor of fences and released on probation under sections 360/36.1, Cr.
P.C. The respondents appealed against the conviction and sentence.
The High Court by the impugned judgment dated 30.11.
1982 disposed of the appeal thus: "Admittedly there was no prior enmity between the parties.
The quarrel arose out of a very insignificant matter like the burning of dry sugarcane leaves on the common boundary of the fields of the two parties.
The ensuing altercation would probably have been forgotten had Partap Singh deceased not died.
Even when there is an altercation arising out of a minor incident there is some tendency on the part of the prosecution witness to exaggerate matters.
The three eye witnesses have of course fully supported the prosecution case but the investigating officer recorded statement of one Paras Ram at the time of making the inquest report which gives a somewhat different version.
The learned trial judge has himself found that the object of the unlawful assembly was not to commit the murder of the deceased.
It is precise ly for this reason that five accused persons have been released on probation and only two accused, i.e., Puran and Tara Chand appellants, have been convicted under section 302, I.P.C. We do not propose to go into the details of the controversy and in the peculiar circumstances of this case convert the conviction of Puran and Tara Chand appellants into one under section 304.
Part1, 1.
P.C., on the basis that in view of the statement made by 665 Paras Ram at the time when the investigating officer made the inquest report a somewhat different version was given.
This Paras Ram was not produced as a witness by the prosecu tion.
Since there was no prior enmity between the parties, we order that sentence already undergone by Puran and Tara Chand appellants will meet the ends of justice.
They are, however, ordered to pay a fine of Rs. 12,000 each.
In de fault of payment of this fine, the defaulter is ordered to undergo rigorous imprisonment for five years.
The sentences of imprisonment imposed upon Puran and Tara Chand appellants on other counts are also reduced to that already undergone by them.
The total fine, if realised, shall be paid to the next heirs of Partap Singh deceased as compensation." (emphasis supplied) The High Court has, by this Cryptic order, acquitted re spondents of the major charge under section 302, I.P.C., and recorded their conviction under section 304 Part I reducing the sentence of life imprisonment to a term of imprisonment already undergone while enhancing the sentence of fine.
The State has not preferred any appeal against the order of acquittal or reduction of sentence.
The respondents.
it appears, have accepted the judgment.
Sham Sunder, the de facto complainant, however, being aggrieved approached this Court under Article 136 of the Constitution.
This Court has granted special leave to appeal.
The High Court, exercising power under section 386, Cr. P.C., in an appeal from a conviction may reverse the finding and sentence and acquit the accused or alter the finding maintaining the sentence or with or without altering the finding after the nature or the extent or the nature and extent of the sentence but not so as to enhance the same.
The powers of the High Court in dealing with the evidence are as wide as that of the trial Court.
As the final court of facts, the High Court has also duty to examine the evi dence and arrive at its own conclusion on the entire materi al on record as to the guilt or otherwise of the appellants before it.
It is true that the High Court is entitled to reappraise the evidence in the case.
It is also true that under Article 136.
the Supreme Court does not ordinarily reappraise the evidence for itself for determining whether or not the High Court has come to a correct conclusion on facts but where the High Court has completely missed 666 the real point requiring determination and has also on erroneous grounds discredited the evidence and has further failed to consider the fact that on account of long standing enmity between the parties, there is a tendency to involve innocent persons and to exaggerate and lead pre judged evidence in regard to the occurrence, the Supreme Court would be justified in going into the evidence for the pur pose of satisfying itself that the grave injustice has not resulted in the case.
We have extracted the material portion of the judgment of the High Court to indicate that the line of approach adopted by the High Court is wholly wrong.
There is no discussion of the evidence much less any reasoning.
The respondents herein along with five others had been found guilty by the trial court accepting the testimony of the two eye witnesses and other material evidence on record.
A brief resume of the facts is necessary.
Lal Chand and Tara Chand are brothers.
Ved Singh, Puran, Balwan and Ishwar are the sons of Tara Chand and Dhapan is his wife.
Jagdish is the son of Lal Chand.
Partap and Bhim Singh are brothers.
Sham Sunder is the son of Bhim Singh.
Roshan is the son of Partap.
Tara Chand owns sugarcane field adjoining the wheat field of Partap.
On 10.3.
1981 in the morning, Ved Singh burned sugarcane patties causing damage to the wheat crop.
The protest raised by Roshan was not heeded.
Bhim Singh arrived at the scene and altercation 'ensued.
Partap later raised protest before Tara Chand.
His grievance was not redressed.
At about 6.00 P.M. Partap raised the protest before Puran who also turned down the same.
Shortly thereaf ter Puran and the other members of his family including his wife, brother and their children all numbering about eight reached in front of the house of Partap.
They were armed and attacked Partap.
The allegation is that the respondents Tara Chand and Puran had attacked Partap with jailies, first they gave jailies blows from the prong side in the chest and when Partap fell down, they gave jailies blows like lathi on his head, back and shoulder.
Partap died on his way to the hospital.
It is further alleged that in the course of the incident Lal Chand and Jagdish caused injuries to Roshan; Ishwar caused injuries to Dhapan wife of Partap; Puran, Ved, Balwan caused injuries to Sham Sunder.
It has come out in evidence that Ved, Dhapan, Lal Chand, Puran and Ishwar also received injuries in the course of the incident.
Sham Sunder and Roshan are the two eye witnesses, be sides Smt.
Dhapan the wife of deceased Partap.
There had been no independent witness.
Sham Sunder and Roshan said that they had caused 667 injuries to the members of the opposite party in self de fence.
They do not however state in what circumstances they had to use force.
The evidence does not disclose the genesis of the occurrence; how it developed and culminated in fatal injuries to Partap.
There had been no enmity between the two groups.
The immediate provocation for the quarrel is the damage to the wheat crops.
It is admitted that Partap raised his protest right from the morning till the arrival of Puran who was employee of the Medical College, Rohtak.
The prose cution has, it appears, given a twist when they say that at 6.00 P.M. Partap met Puran who turned down his request and went home and after 15 minutes all the members of his family including the womenfolk reached the house of Partap and started the assault.
It is significant to note that the women and even the minor children of both families were present and received injuries recording their presence at the place.
It would therefore appear that it was a continu ous transaction and when Partap persistently raises the protest and started abusing Puran, other members of his household had come out.
The quarrel had taken a serious turn and in the course of further development fatal injuries had been caused to Partap.
The plea of the respondents was that they did not cause any injury, that there was a Panchayat where a large crowd assembled and there had been brick batting and altercation.
The plea of private defence was not specifically set up.
However, if there are material in evidence to indicate that the incident could not have hap pened in the manner spoken to by the eye witnesses and in all probability the respondents had used the force exercis ing the right of private defence, then accused are entitled to the benefit thereof.
Whether the respondents have in such circumstances exceeded their right and are justified in causing death, has necessarily to be considered.
In the absence of a full discussion of the evidence by the High Court, we have been constrained to consider the materials on record.
We have seen that there is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
We have seen that most of the accused have sustained injuries and in explaining the same, the prosecution witnesses have not come forward with a truthful account.
We are led to draw the inference that in the melee and ensued on account of the aggressive attitude of Partap, the respondents and other members of the family participated and used the force against Partap and his associates in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indi 668 cate that injuries sufficient in the ordinary course of nature to cause death had been inflicted intentionally.
In such circumstances.
, the act of the respondents squarely falls under section 304 Part I, EP.C. While we agree with the conclusion arrived at by the High Court, we record that the High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erro neous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
We, however, maintain the conviction under section 304 Part I, I.P.C.
The High Court has reduced the sentence to the term of imprisonment already undergone while enhancing the fine.
It is pointed out that the respondents have undergone only imprisonment for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particular reason has been given by the High Court for awarding such sentence.
The court in fixing the punishment for any particular crime should take into consid eration the nature of the offence, the circumstances in which it was committed and the degree of deliberation shown by the offender.
The measure of punishment should be propor tionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
We are of opinion that to meet the ends of justice, the sentence has to be enhanced.
In the result, we maintain the conviction of the re spondents but enhance the sentence to one of rigorous im prisonment for a period of five years.
The respondents should surrender to the bail to undergo the unexpired por tion of the sentence.
The fine, if paid, shall be refunded to the respondents 1 and 2.
The appeal is disposed of as above.
G.N. Appeal disposed Of.
|
Respondent 1 is the son of Respondent No. 2.
Including Respondent No. 1 Respondent No. 2 had 4 sons.
Respondent No. 2 owned a sugarcane field adjoining the wheat field of one P. One of the sons of Respondent 2 had burnt sugarcane patties causing damage to the wheat crop of P, against which P protested before the respondents.
The protest was turned down.
Shortly thereafter the respondent and the family members reached the house of P. They were all armed.
Re spondents attacked P and he fell down.
On the way to hospi tal P died.
Most of the accused as well as the family mem bers of P sustained injuries.
On a complaint, F.I.R. was registered.
After investigation, Prosecution filed a case before the Additional Sessions Judge.
Two eye witnesses were produced by the prosecution.
They were relatives of the deceased and there was no independent witness.
The Additional District Judge convicted the respondent for offences under sections 302 IPC and 323, 325 read with 149 IPC.
Both were sentenced to imprisonment for life and a fine Rs.500 each under section 302 IPC.
They were also sentenced to rigorous imprisonment ranging from six months to one year for the other offences.
The other accused were convicted for minor offences and released on probation.
The respondent appealed against the conviction and sentence.
The High Court acquitted the respondents of the major charge under section 302 IPC and recorded the conviction under section 304 Part I reducing the sentence of life imprison ment to the term already undergone, and enhanced the sen tence of fine.
No appeal was preferred by the State.
Howev er, the complaint filed an appeal by special leave.
663 Disposing the appeal, this Court, HELD 1.
There is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
Most of the accused have sustained injuries and in explaining the same, the prosecution wit nesses have not come forward with a truthful account.
In the melee that ensued on account of the aggressive attitude of the respondents and other members of the family who partici pated and used force against P and his associates.
in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indicate that they were sufficient in the ordinary course of nature to cause death and had been inflicted intentionally.
In such circum stances, the act of the respondents squarely fails under section 304 Part I, IPC.
The High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erroneous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
However.
the conviction under section 304 Part I, IPC is maintained.
The High CoUrt has reduced the sentence to the term of imprisonment already undergone, and enhanced the fine.
The respondents have undergone imprisonment only for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particu lar reason has been given by the High Court for awarding such sentence.
The Court in fixing the punishment for any particular crime should take into consideration the nature of the offence, the circumstances in which it was committed, and the degree of deliberation shown by the offender.
The measure of punishment should be proportionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
The sentence is enhanced to one of rigorous imprisonment for a period of five years.
|
ivil Appeal No. 4460 Of 1988.
From the Order dated 15.4.
1988 of the Customs Excise and Gold (Control) Appellate Tribunal New Delhi in Appeal No. E/Appeal No. 2225 of 1986 A. 3 V. Sreedharan, V.J. Francis and N.M. Popli for the Appel lant.
Ashok H. Desai, Solicitor General, Dalip Tandon and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This is an appeal under section 35L of the .
The appeal is di rected against the order dated 15.4.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.
The appellant is the manufacturer of Hacksaw blades and Bandsaw Blades failing under Tariff Item No. 51 A(iv) of the Central Excise Tariff.
The appellant filed a classification list as per Rule 173B of the Central Excise Rules 1944 on 26.3.1985 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effec tive rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The aggregate value of the clearance in the preceding year i.e. 1984 85 did not exceed Rs.75 lakhs.
In the case of first clearance upto an aggregate value not exceeding Rs.7.5 lakhs, the effective rates of duty is nil and in the case of next clearance of Rs.7.5 lakhs, the duty is 3.75% Ad valorem.
The Assistant Collector of Central Excise, Hyderabad, approved the Tariff rate 15% Ad valorem on 3.6.1985 instead of the above effective rates as the appellant did not claim the exemption as per Notification No.85/85 CE dated 17.3.1985 due to ignorance.
A revised classification list with the effective rates in respect of the products with retrospective effect from 26.3.1985 was filed on 31.10.1985.
The revised classification list was approved.
The appellant claimed that they had paid excess Rs.2,55,172.55 from 1.4.1985 to 31.8.1985 as excise duty.
They made an application for refund as per rule under sec tion 11B of the on 30.10.1985.
The Assistant Collector of Central Excise by his order dated 13.12.1985 sanctioned the refund claim only partly.
For the period from 1.4.1985 to 27.4.1985, the refund claim was rejected on the ground that the same was time barred.
The Assistant Collector held that the refund claim for the period 1.4.1985 to 27.4.1985 was time barred for the reason that under section 11B, the 'relevant date ' for preferring the claim for a case such as that of the appellant was the date of payment of duty and, according to him, the duty had been paid by adjustment in the personal ledger account as and when goods were removed.
The plea of the appellant is that mere debiting in the personal ledger account should not be taken as the starting point for 4 limitation and the relevant date should be the date on which RT 12 Returns which are filed on a monthly basis are as sessed.
The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
The further appeal to the Tribunal was also unsuccessful.
The question that arises for decision in the appeal is as to the starting point of limitation for filing an appli cation under section 11B of the .
Section 11B so far as it is material reads as under: "11B. Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation For the purposes of this section (B) "relevant date" means, (a) to (d) . . . . . . . . (e) in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty.
" The appellant 's contention before the authorities was that the date of assessment would be the date of payment of duty within the meaning of clause (f) above.
We agree with the learned Solicitor General that this argument is not tenable.
Where an assessee maintains a personal ledger account, duty is paid by way of debit therein and goes to reduce the amount of deposit paid by the assessee.
It is 5 not a mere adjustment entry; it is effective payment.
Before us, however, learned counsel for the assessee has raised an alternative contention.
According to the appellant it is clause (e) which is applicable in the case whereas the contention of the respondent is that clause (f) is attract ed.
To understand this argument, it is necessary to refer to 'Self removal ' procedure under which the appellant cleared the goods.
Chapter VII A of the Rules relates to removal of excise goods on determination of duty by producers, manufacturers of private warehouse licensees.
Under Rule 173B, every assessee shall file with the Proper Officer for approval a list in prescribed form showing full description of all excisable goods or products manufactured, the rate of duty leviable on such goods and such other particulars as the Collector may direct.
The Proper Officer shall, after such enquiry as he deems fit, approve the list with such modifi cations as are considered necessary and return one copy of the approved list to the assessee who shall unless otherwise directed by the Proper Officer determine the duty payable on the goods intended to be removed in accordance with such list.
All clearance shall be made only after the approval of the list by the Proper Officer.
Sub rule (2 A) of Rule 173B provides as under: "(2 A) All clearances shall, subject to the provisions of rule 173CC, be made only after the approval of the list by the proper officer.
If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under rule 9B for provisional assess ment of the goods.
" Where the assessee disputes rate of duty approved by the Proper Officer in respect of goods, he may have to give an intimation to that effect to such officer and to pay duty under protest at the rate approved by such officer.
When the dispute about the rate of duty has been finalised or for any other reason affecting rates of duty, a modification of the rate or rates of duty is necessitated, the Proper Officer shall make such modification and inform the assessee accord ingly.
Under Rule 173C, the assessee shall file with the Proper Officer a price list in prescribed form.
Prior ap proval of the price list by the 6 Proper Officer is necessary in the specified cases.
Here also, sub rule (5) of rule 173C provides: "(5) Subject to the provisions of rule 173CC, an assessee specified in sub rule (2) shall not clear any goods from a factory, warehouse or other approved place of storage unless the price list has been approved by the proper officer.
In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or for any other rea sons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assessee or of his own accord allow such asses see to avail himself of the procedure prescribed under rule 9B for provisional assessment of the goods." Under Rule 173CC, assessee may remove goods in certain cases pending approval by the Proper Officer of the classi fication or price list.
Rule 173F provides that where the assessee has complied with the provisions of Rules 173B, 173D, and where applicable 173C, 173CC, he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as other wise expressly provided, remove such goods unless he has paid the duty as determined.
Under Rule 173G, every assessee shall keep an account current with the Collector.
This rule lays down the procedure which is to be followed by the assessee for payment of duty.
According to sub rule (3) of Rule 173G, within five days after the close of each month every assessee shall file with the Proper Officer a monthly return in the prescribed form showing the quantity of the excisable goods manufactured, duty paid on such quantity and other particulars.
The Proper Officer makes an assessment as provided under Rule 1731 on the basis of the information contained in the return and after such further enquiry as he may consider necessary assess the duty due on the goods removed and the assessment is completed.
The duty determined and paid by the assessee under Rule 173F shall be adjusted against the duty assessed and where the duty so assessed is more than the duty determined and paid, the assessee shall pay the deficiency by making a debit in the current account within 10 days of the receipt of copy of the return and where such duty is less, the assessee shall take credit in the account current for the excess.
This is the scheme for the payment of duty for clearance of goods by the manufacturers.
This procedure is known as self removal procedure.
There will be no time bar for refund if the duty is paid under 7 protest.
The period of 6 months is prescribed in other cases.
As we have already seen, section 1 1B says that the period of 6 months "in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof".
In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985.
From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure pre scribed under Rule 9B for provisional assessment of the goods.
In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
This is the procedure prescribed under Rule 9B except for the circum stance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time.
In these circumstances, the clearances of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11B will be attracted.
In this case the RT 12 Returns for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11B will operate.
In the present case the refund application had been filed on the 30th of October, 1985.
It cannot, therefore, said to be time barred.
We, therefore, accept this contention of the appellant.
The appeal has therefore to be allowed holding the appellant is entitled to the full amount and there is no bar of limi tation as found by the Tribunal.
We, therefore, allow the appeal.
In the facts and circumstances of the case there will be no order as to costs.
T.N.A. Appeal allowed.
|
The appellant was manufacturing Hacksaw blades and Bandsaw falling under Tariff Item No. 51 A(iv) of the Cen tral Excise Tariff.
On 26.3.1985 they filed a classification list as per Rule 173 B of the Central Excise Rules, 1944 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The Assistant Collector of Central Excise ap proved the classification list on 3.6.1985.
On 31.10.1985 the appellant filed a revised classification list with the effective rates of its products with retrospective effect from 26.3.1985 which was also approved by the Assistant Collector of Central Excise.
On 30.10.1985 the appellant made an application under section 11B of the for refund of excise duty claiming that they had paid excess excise duty from 1.4.1985 to 31.8.1985.
By its order dated 13.12.1985 the Assistant Collector of Central Excise allowed the claim only partly but rejected the claim for the period from 1.4.1985 to 27.4.1985 on the ground that the claim was barred under section 11B of the Act because the 'relevant date ' for preferring the claim for the appellant was the date of payment of duty and the duty had been paid by adjustment in the personal ledger account as and when goods were removed; The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
Appellant 's further appeal to the Customs Excise and Gold (Control) Appellate Tribunal was also unsuccessful.
In appeal to this Court under section 35L of the it was contended on behalf of the appellant (i) that mere debiting in the personal ledger account should not be taken as the 2 starting point for limitation and the, relevant date should be the date on which ART 12 Returns, which were filed on a monthly basis, were assessed: and (ii) that clause (e) of Explanation to Section 11 (B) was applicable to the case.
Allowing the appeal, this Court, HELD: 1.
The scheme for payment of duty of goods under which the appellant was clearing his goods is known as 'self removal ' procedure.
There will be no time bar for refund if the duty is paid under protest.
The period of 6 months is prescribed in other cases.
[6H; 7A] 2.
In the instant case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.85.
From provisions of Rules 173B, 173C and 173CC of the Central Excise Rules, 1944 it is clear that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in accordance with the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of goods.
Between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11 B will be attracted.
The RT 12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11 B will operate.
The refund application having been filed on 30th October, 1985 cannot, therefore, said to be time barred.
[7B D; E F]
|
ivil Appeal No.4718 of 1990.
From the Judgment and Order dated 24.8.1988 of the Punjab and Haryana High Court in C.W.P. No. 7136 of 1985.
Dr. Rajeev Dhawan and Arun K. Sinha for the Appellant.
K.G. Bhagat, B.S. Malik and Ms. Galshan for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leave granted.
This appeal is from the Judgment and Order dated August 24, 1988 of the Punjab and Haryana High Court dismissing the appellant 's writ petition for quashing the order of the Financial Commissioner Punjab dated 9.2.1988 declaring the second respondent to be eligible for allotment of the lands in dispute under Rule 34C of the Displaced Persons Compensa tion and Rehabilitation Rules 1955 (hereinafter referred to as the rules ') framed under the Displaced Person Compensa tion and Rehabilitation Act, 1954 (hereinafter referred to as 'the Act ').
The land in dispute (hereinafter referred to as the land ') bearing Khasra Nos.
17/8/1, 8/2, and 8/4 admeasuring 7 Kanals 4 Marlas in the Revenue Estate of Shanzada Nangal, Gurdaspur, was owned by one Vinod Kumar.
The second respond ent claimed to have been in its cultivating possession in the years 1953 54, 1956 57.
In 1957 58 and 1958 59 he was recorded as a sub lessee under one Budha Singh lessee on annual rent of Rs.100.
In 1958 the lease in favour of Budha Singh was cancelled with information to him by the Rehabili tation Department whereupon the second respondent 's right as sub lessee came to an end.
Consequently the second respond ent was no longer recorded as lessee or sub lessee after 1958 59.
In 1961 the second respondent applied to the Settlement Authority for allotment of the land under Rule 34C of the rules claiming as a sublessee.
His application was rejected by the Managing Officer vide his Order dated 25.11.1962 and the second respondent having not filed any appeal or revi sion therefrom the order became final and binding on him.
The Rehabilitation Authorities having decided to dispose of the land an open auction was conducted on 11.8.1967 and the appellant, a retired army Subedar and also a displaced person from West Pakistan offered the highest bid of Rs.9,500 (Rupee nine thousand five hundred) which was ac cepted.
The sale certificate was duly issued by 18 the Rehabilitation Department 'to the appellant with effect from September 15, 1969.
Without resorting to any appeal against the aforesaid Order dated 25.11.1962 refusing allot ment of the land, the respondent made a second attempt for allotment under Rule 34C of the rules by making another application which too was rejected by the Settlement Officer by order dated July 24, 1969 wherefrom the second respondent moved a revision application before the Chief Settlement Commissioner who remanded the case by Order dated July 29, 1970 to the Managing Officer for fresh decision but the latter rejected that application also on 22.3.1973.
The second respondent 's appeal therefrom to the Settlement Commissioner was also rejected by Order dated 13.5.1973 as the second respondent could not prove his continuous culti vating possession as a sub lessee under Budha Singh, from 1.1.1956 till termination of the latter 's lease.
The second respondent thereafter instituted a suit on August 22, 1973 in the Court of Subordinate Judge, Gurdaspur against Budha Singh for declaration of his continuous pos session of the land.
However, neither the appellant who purchased the land in auction nor the Rehabilitation Depart ment which cancelled Budha Singh 's lease was impleaded.
Budha Singh having supported the case, a decree declaring the second respondent to have been in continuous possession was passed.
The second respondent this time filed a revision from the appellate order of the Settlement Commissioner dated 13.5.1973 before the Chief Settlement Commissioner who by his Order dated 5.11.1976 remanded the case to the Managing Officer for fresh decision.
The Managing Officer vide his order dated 6.1.1978 this time allotted the land to the second respondent under Rule 34C of the rules.
The appel lant 's appeal therefrom to the Settlement Commissioner was dismissed vide order dated 6.6.1978 but his revision there from was allowed and the allotment order in favour of second respondent was quashed by the Chief Settlement Commissioner vide his Order dated 11.1.1979.
The Chief Settlement Commis sioner declared the appellant to be the auction purchaser and therefore the true owner of the land.
The second , respondent 's revision therefrom was also rejected by the Financial Commissioner on 23.10.1979.
Thus all the authori ties in the successive rounds found the facts against the second respondent.
The second respondent then filed a writ petition challeng ing the Financial Commissioner 's order dated 23.10.1979 and the High Court, contrary to all the aforesaid findings of fact, remanded the case, by 19 its order dated 7.1.83 to the Financial Commissioner for fresh decision in the light of the decree of the civil court dated 17.11.1973, which the High Court at the same time declared to have been a collusive one, obtained by second respondent in collusion with Budha Singh.
The Financial Commissioner on remand by the High Court has now held vide Order dated 9.2.1988 that the second respondent is eligible for allotment of the land under Rule 34C of the rules and accordingly allotted the land in his favour quashing the auction sale made in favour of the appellant on 11.8.1967 holding that being a sub lessee in continuous possession since 1.1.1956, the second respondent had a superior claim to allotment of the land and, therefore, the auction sale to the appellant was null and void.
The appellant 's writ peti tion challenging that Order having been dismissed in limine by the High Court vide impugned Judgment dated 24.8.1988, he appeals.
Rule 34C included in Chapter V of the rules provides: Allotment of agricultural lands of the value of Rs.10,000 or less.
Where any land to which this Chapter applies has been leased to a displaced person and such land consists of one or more khasras and is valued at Rs.10,000 or less, the land shall be allotted to the lessee: Provided that where any such land or any part thereof has been sub leased to a displaced person and the sublessee has been in occupation of such land or part there of continuously from the first January 1956 such land or part thereof as the case may be, shall be allotted to such sublessee." Mr. Rajeev Dhawan, the learned counsel for the appel lant, submits, inter alia, that after Budha Singh 's lease was cancelled in 1958.
the second respondent 's status as sub lessee ceased and thereafter he was neither a sub lessee nor bid he pay any rent for the land and, in fact, he was a trespasser and not entitled to allotment under Rule 34C of the rules; that his first application was rightly rejected and he having never preferred any appeal or revision there from, the order became final and binding on him, and he was, therefore, not entitled to make the second application.
After the land was already sold in auction to the appellant on 1.8.67, counsel submits, the land ceased to be evacuee property and the second respondent 's second application was not maintainable, and the appellant was declared as auction purchaser on 15.8.1969 and the sale certificate issued to him was with effect from 15.9.1969.
20 Mr. K.G. Bhagat, the learned counsel for the respondent, submits that the decision on his first application for allotment was not communicated to him till he made his second application for allotment and that as a sub lessee he had the right to apply for allotment and that his right has now been rightly recognised and the land allotted to him though his second application was also rejected on 24.7.
It appears that though the land was sold in auction to the appellant under Rule 34H on 11.8.1967, perhaps because of the pendency of the second application of the second respondent, the appellant was not declared as auction pur chaser during the pendency of that application and only after it was rejected on 24.7.1969, the appellant was de clared purchaser on 15.8.1969.
It also appears that after the second respondent 's revision petition against the order rejecting his second application for allotment was remanded by the Chief Settlement Commissioner to the Managing Officer for fresh decision and the latter rejected that application also holding that the second respondent failed to prove his continuous possession of the disputed land as sublessee as required under Rule 34C; and the appeal therefrom was also rejected on 13.5.1973, the Certificate of sale was issued to the appellant on 23.6.1973 with effect from 15.9.1969.
Thus, the matter should have finally ended at that stage.
The second respondent 's suit against Budha Singh leading to the decree declaring that the second respondent was in continuous possession of the disputed land was, argues Mr. Dhawan, not maintainable and the decree was rightly held to have been collusive, but Mr. Bhagat submits that the High Court was wrong in holding so.
Mr. Dhawan 's submission that the sale in favour of the appellant culminating in issue of the sale certificate in his favour had the effect of taking away the land from the pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open for the Rehabilitation authorities to deal with the same appears to be sound.
Rule 34H of the rules reads: "34H. Manner of disposal of land not allotted.
Any land to which this Chapter applies which is not allotted under this Chapter, shall be disposed of in the manner provided in Chapter XIV." 21 Chapter XIV of the rules prescribes the procedure for sale of property in the compensation pool.
Rule 90 pre scribes the procedure for sale of property by public auc tion.
Sub rule 15 of Rule 90 provides for issue of sale certificate and for sending a certified copy of the sale certificate by the Managing Officer to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the property to which the certificate relates is situated.
Rule 92 prescribes the procedure for setting aside the sale.
In Bishan Paul vs Mothu Ram, reported in AIR 1965 SC 1994, it has been held that Rules 90 and 92 show that there are distinct stages in the auction sale of property in the compensation pool, namely, (1) the fail of the hammer and the declaration of the highest bid, (2) the approval of the highest bid by the Settlement Commissioner or Officer ap pointed by him, (3) payment of the full price after this approval, (4) grant of certificate, and (5) Registration of the certificate.
That is the intention behind the rules.
The new form of the sale certificate requires a mention that the purchaser had been declared the purchaser of the said property with effect from the certificate date.
The title, however, would not be abeyance till the certificate was issued but would be based on the confirmation of the sale.
The intention behind the rules appears to be that title shall pass when the full price is realised and this is now clear from the new form of the certificate, and title must be deemed to have passed and the certificate must relate back to the date when the sale became absolute.
The appel lant, therefore, must be held to have obtained title to the land on the date of confirmation of the sale.
That is why the Sale Certificate in the instant case was expressly stated to be with effect from 25.9.1969.
Rule 92 provides: "92.
Procedure for setting aside a sale. (1) Where a person desires that the sale of any property made under rule 90 or 91 should be set aside because of any alleged irregularity or fraud in the conduct of the sale (including in the case of a sale by public auction in the notice of the sale) he may make an application to that effect to the Settlement Commissioner or any officer, authorised by him in this behalf to approve the acceptance of the bid or tender, as the case may be.
(2) Every application for setting aside a sale under this rule shall be made 22 (a) where the sale is made by public auction within seven days from the date of the acceptance of the bid; (b) where the sale is made by inviting tenders, within seven days from the date when the tenders were opened.
XX XX XX XX XX XX XX XX XX XX Under Sub rule (4), notwithstanding anything contained in Rule 92, the Settlement Commissioner may, of his own motion, set aside any sale under this Chapter if he is satisfied that any material irregularity or fraud which was resulted in a substantial injury to any person has been committed in the conduct of the sale.
In the instant case we have not been shown any application for setting aside of the auction sale and the sale certificate in favour of the appellant made according to rules.
Nor have we been shown that the Settlement Commissioner of his own motion had set aside the sale being satisfied that any material irregularity or fraud which had resulted in a substantial injury to any person had been committed in the conduct of the sale.
Section 14 of the Act provides for constitution of the compensation pool.
Section 15 of the Act exempts the proper ty in compensation pool from processes of courts.
Section 20 of the Act empowers the Managing Officer or managing corpo ration to transfer any property within the compensation pool (a) by sale of such property to a displaced person or any association of displaced person whether incorporated or not, or to any other person, whether the property sold by public auction or otherwise.
Under sub section (2) of that section every Managing Officer or managing corporation selling any immovable property by public auction under sub section (1) shall be deemed to be a Revenue Officer within the meaning of sub section (4) of section 89 of the Indian .
Under section 27 of the Act save as otherwise expressly provided in the Act every order made by any officer or authority under the Act, including a managing corporation, shall be final and shall not be called in question in any court by way of appeal or revision or in any original suit, application or execution proceeding.
The jurisdiction of the Civil Court was therefore barred in the matter of the sale.
It is true that where the special tribu nal or authority acts ultra vires or illegally, the Civil Court has by virtue of section 9 of the Civil Procedure Code power to interfere and set matters right.
As was laid down by the Judicial Committee of the Privy 23 Council in Secretary of State vs Mask and Co., AIR 1940 PC 105, if the provisions of the Statute have not been complied with or the Statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure, the Civil Courts have jurisdiction to examine those cases.
This rule was reiterated by the Supreme Court in State of Kerala vs M/s. N. Ramaswami Iyer and Sons, AIR 1966 SC 1938.
In the instant case the second respondent 's civil suit against Budha Singh for declaration of possession was not against any order passed by any officer under the Act.
That decree, even if it was not declared collusive could not have collat erally affected the auction sale order.
Mr. Dhawan is, therefore, right in his submission that the appellant, a displaced person, having bona fide pur chased the land in public auction for Rs.9,500 and having paid that amount with the sincere hope of his rehabilita tion, has been subjected to expensive protracted litigation for the last 22 years during which he has earned nothing out of the land while the second respondent had until the im pugned orders, been enjoying the usufruct of the land and this is because of the State not honouring its own final commitment made in the sale certificate in favour of the appellant.
Mr. Bhagat answers that the second respondent was in possession, in 1956, and till the cancellation of Budha Singh 's lease in 1958, and thereafter.
He was admittedly a sub lessee of Budha Singh till 1958 and then was a sub tenant holding over on the date he applied for allotment in 196 1.
The decision rejecting his first application having not been communicated to him he made his second application which was also wrongly rejected by the Chief Settlement Officer; and the Financial Commissioner ultimately on remand from the High Court, on the basis of the second respondent 's possession of the land, rightly set aside the order of the Chief Settlement Commissioner dated 11.1.1979 and allotted the land to the second respondent declaring him to be sub lessee for the period after 1958 setting aside the sale made by the Rehabilitation Department made in favour of the appellant and that the High Court by the impugned Order dated 24.8.88 rightly dismissed the appellant 's writ appli cation in limine.
Mr. Bhagat also persuades us to consider that the second respondent, also a displaced person, had been demanding justice for the last 22 years and has finally succeeded in obtaining the allotment and he ought not to be deprived of the same.
Sri Dhawan attacks the order of the Financial Commissioner on the ground that he had no material before him other than what was there before his predecessor on 23.10.1979, except the judgment in the civil suit, which for obvious reasons, cannot be taken 24 into account Mr. Dhawan emphasises that, it having been repeatedly held earlier that continuous cultivating posses sion of the second respondent was not proved, there was no basis for the Financial Commissioner in his order dated 9.2.
1988 to have observed that "a favourable presumption regard ing continuity of his possession during the intervening period that is from kharif 1961 to rabi 1964 ought to have been drawn and benefit of doubt given" to the second re spondent, in spite of the absence of Girdawari for the year 1961 62 and 1962 63 and mutilations in the entries of Girda wari for 1963 64.
In a sense.
, he is no doubt correct but the previous order of 23.10.1979 having been set aside by the High Court, it was open to the Financial Commissioner consider the matter afresh.
Doing so, he has found that since the possession of the second respondent from 1953 to 1961 and again in 1964 65 and 1965 66 was borne out from the records, the absence of the records for 1961 62 ad 1962 63 and their illegibility due to mutilation for 1963 64 and 1964 65 should not be held against him and that his continu ous possession since 1962 can be presumed entitling him to an allotment under section 34C.
This was a conclusion on facts, which the High Court has declined to interfere with.
Thus, we have a peculiar position in this case.
While Mr. Dhawan is right in saying that the appellant, as a bona fide purchaser of the land for value at public auction, should be put in the same position in which he would have been had his auction purchase as evidenced by the Sale Certificate been effective from the date of purchase, Mr. Bhagat appears to be justified in saying that it would not be just and proper to deprive the second respondent who was inducted by Budha Singh as a sub lessee and who has contin ued in possession of the land till date, of the fruits of his protracted litigation culminating in allotment of the land to him.
The difficulty in the present case has arisen because the State confirmed the sale in favour of the appel lant in 1969 and issued a sale certificate to him in 1973 without waiting for the final outcome of the second respond ent 's revision application to the Chief Settlement Commis sioner and further proceedings consequent thereon.
The odd situation, creating equities in favour of both the parties, that has thus resulted in the present case is due to the fault of the appellant or the second respondent.
It could have been avoided if the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application.
It is true that the second respondent could have taken steps to challenge the auction in favour of the appellant but, perhaps misguidedly, he was concentrating on getting an allotment under section 34C for which he cannot be 25 wholly blamed.
Whatever that may be, the final position is that both parties have had to suffer and indulge in lengthy litigation .
Under the above circumstances we feel that while this Court is to administer justice according to law there may be scope for doing justice and equity between the parties.
In such a situation we remember what the Institute of Justin ian, De Justitia Et Jure, in 'Liber Primus ' Tit.
I said: "Justice est constans et perpetua voluntas jus suum cuique tribuendi.
" Justice is the constant and perpetual wish to render every one his due. "Jurisprudentia est divinarum atgue humanarum rerum notitia, justi atgue injusti scientia." Jurisprudence is the knowledge of the things divine and human; the science of the just and the unjust.
The divine is that which right reason commends.
The human is a|so in the contents of the law.
As Max Rumelin said, in the Struggle to govern Law, "Justice is rivaled by equity.
" The dilemma that equity is to be better than justice and yet not quite opposed to justice, but rather a kind of justice has troubled us.
Gustav Radbruch clarifies the mutual relation between two kinds of justice, namely, commutative and dis tributive.
We may call "just" either the application or observance of law, or that law itself. "The former kind of justice, especially the justice of the Judge true to the law," according to him, "might better be called righteous ness.
" Here "we are concerned not with justice which is measured by positive law, but rather with that by which positive law is measured.
" Justice in this sense means equality.
Aristotle 's doctrine of justice or equality is called by him commutative justice which requires at least two persons while distribute justice requires at least three.
Relative equality in treating different persons while granting relief according to need, or reward and punishment according to merit and guilt is the essence of distributive justice.
While in commutative justice the two persons con front each other as co equals.
three or more persons are necessary in distributive justice in which one, who imposes burdens upon or grants advantages to the others, is superior to them.
"Therefore, it presupposes an act of distributive justice which has granted to those concerned, equality of rights, equal capacity to act, equal status." (The Legal Philosophies of Lask, Radbruch and Dabin P. 74) According to Radbruch, "distributive justice is the prototype of justice.
In it we have found the idea of justice, toward which the concept of law must be oriented.
" Law offers and protects and conditions necessary for the life of man and his perfection.
In the words of Cardozo, "What we are seek ing is not merely the justice that one receives when his rights and status are determined by the law as it is, what we are seeking is 1 justice to which law in its making should 26 conform.
" The sense of justice will be stable when it is firmly guided by the 'pragma ' of objective and subjective interests.
In the instant case the Financial Commissioner is a party.
What we find in the instant case is that the Rehabil itation authorities acting under the Act and the Rules decided the competing claims of the appellant as well as the second respondent as to the land.
If the Rehabilitation authorities can provide an equal extent of land with equal benefits to both the parties justice, may appear to be done but that being uncertain, the availability of land being limited, this Court can only look towards equity for solu tion.
Considering the facts of the instant case including the extent of the land and the purposes of the Act and the Rules, and the reality that the land must have become scarce and much more valuable now than in 1967, we feel that the ends of justice on the facts of the present case require that the impugned Orders be set aside and the land be caused to be divided by the Financial Commissioner into two equal halves and one half be given possession of to the appellant by dint of his auction purchase and the other half be allot ted and given possession of to the second respondent under Rule 34C of the rules.
We order accordingly.
We direct the Financial Commissioner or the Chief Settlement Commissioner, after notice to the appellant and the second respondent, to divide the land forthwith into two qual halves and deliver possession of the appellant 's moiety to him.
They should carry out the above directions within three months from the date of receipt of this order.
The parties shall cooperate in carrying out of the directions and we hope that they will be able to live in peace thereafter.
The appeal is disposed of accordingly.
Under the facts and the circumstances of the case, we make no order as to costs.
A copy of the Judgment may be forwarded forthwith to the Financial Commissioner.
S.B. Appeal allowed.
|
The appellant, a retired army subedar and also a dis placed person from west Pakistan purchased the Land in public auction conducted by The Rehabilitation Department, by offering the highest bid of Rs.9,500.
The laud in dispute measured 7 Kanals & 4 Marlas and was owned by one Vinod Kumar.
Having paid the purchase money with the sincere hope of his rehabilitation, he had to be in protracted litigation for 22 years during which he earned nothing out of the land because the State did not honour its final commitment made in the sale certificate in favour of the appellant.
The State confirmed the sale in favour of the appellant in 1969 but issued sale certificate on 23 June, 1973 being effective from September 15, 1969 without waiting for the final out come of the second respondent 's revision application to the Chief Settlement Commissioner, and further consequent pro ceedings thereon.
It was submitted by the second respondent that the said land was in his cultivatory possession since 1956 and as per public records he was sub lessee under Budha Singh Lessee, and the Lease in favour of Budha Singh was cancelled in 1958 by the Rehabilitation Department and thereafter he became a sub tenant holding over on the date he applied for allotment in 1961, under Rule 34C of the Rules.
The decision rejecting his first application was not communicated to him.
So he made his second application which was rejected by The Chief Settlement Officer vide his order dated July 24th, 1969.
Then he moved a revision application before the Chief Set tlement Commissioner who remanded the case to the Managing Officer for fresh decision by his order dated July 29, 1970.
The second respondent 's second application was rejected on March 22, 1973.
The second appeal to the Settlement Commis sioner was also rejected on May 13, 1973 as he could not prove his continuous cultivator) possession as a sub lessee under Budha Singh from January 1956 till the termination of the latter 's lease.
Thereafter second 15 respondent instituted a suit against Budha Singh for decla ration of his continuous possession of the land and got a decree in his favour as being in continuous possession of the land.
The second respondent again filed a revision against the appellate order of the Settlement Commissioner, which was remanded to the Managing officer and he got land allotted under Rule 34C of the Rules vide order dated January 6th, 1978.
The appellant 's appeal therefrom was dismissed by the Settlement Commissioner, but in his revision application therefrom, the allotment order in favour of the second respondent was quashed by the Chief Settlement Commissioner vide his order dated January 1, 1979 declaring the appellant to be the auction purchaser and therefore the true owner of the Land.
The second respondent 's revision was rejected by the Financial Commissioner on Oct. 23, 1979.
Thus all au thorities in the successive rounds found the facts against the second respondent.
Therefore, the second respondent filed a writ petition challenging the Financial Commissioner 's order in the High Court.
High Court remanded the case to the Financial Commis sioner for fresh decision on January 7, 1983.
The Financial Commissioner vide his order February 2, 1988 held that the second respondent was eligible for allotment of land under rule 34C of the rules, holding that being a sub lessee in continuous possession since January 1, 1956, and thereafter he had a superior claim to the allotment of the land and quashed the auction sale made in favour of the appellant on August 11, 1967.
The Financial Commissioner found that since 1953 to 1961 the second respondent was in possession of the land and again in 1964 65, 65 66 the records also bore out this fact.
The absence of records for 1961 62, 62 63 due to their illegibility due to mutilation should not be held against him and his continuous possession since 1962 can be presumed entitling him to an allotment under Rule 34 C of the Rules.
This was a conclusion on facts which the High Court declined to interfere with and dismissed the appellant 's writ peti tion in limine on August 24, 1988.
Allowing the Appeal, the Court, HELD: In the instant case, the appellant as a bone fide purchaser of the disputed land for value at public auction under Rule 34H of the rules on August 11, 1967 should have been put in the same position which he would have been, had his auction purchase as evidenced by the 16 Sale Certificate been effective from the date of purchase.
Rule 90 of the Rules prescribes the procedure for sale of property by public auction.
Sub rule 15 of Rule 90 provides for issue of sale certificate and Rule 92 prescribes the procedure for setting aside the sale.
but once the sale certificate was issued in favour of the appellant, he became the true owner and it had the effect of taking away the land from pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open to the Rehabilitation Department to deal with the sale.
The diffi culty in the present case has arisen because the State confirmed the sale in favour of the appellant in 1969, whereas it issued sale certificate to him on June 23,1973 with effect from September 15, 1969 without waiting for the final outcome of the second respondent 's revision applica tion to the Chief Settlement Commissioner & further proceed ings thereafter.
Thus the odd situation resulted in creating equities favour of both the parties with no fault of the appellant or the second respondent.
If the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application, the second respondent could have challenged the auction in favour of the appellant but perhaps misguidedly he was concentrating on getting an allotment under section 34C.
So both the parties had to suffer and indulge in lengthy protracted litigation for 22 years.
Had the Rehabilitation authorities acting under the Act and the Rules decided the competing claims of the appel lant as well as the second respondent as to the disputed land and provided an equal extent of land with equal bene fits to both the parties justice may appear to be done but that being uncertain the availability of land being limited.
the court can only look towards equity for solution.
The dilemma that equity is to be better than justice and yet not quite opposed to justice but rather a kind of justice and the distinction between commutative justice and distributive justice discussed.
[24E; F I I; 23G H; 26B; 25C] Passages from justinian, gustav Radbrach, Aristotle and Cardozo referred to.
Considering the facts, the extent of land and the pur poses of the Act and the Rules and the reality that land must have become scarce and much more expensive than in 1967 to meet the ends of justice on the basis of facts, the Court directed that the disputed land be divided by the Financial Commissioner into two equal halves and one half and one half be given possession of to the appellant by dint of his being auction purchaser and the other half be allotted and given possession of to the second respondent under Rule 34C of the Rules.
This order be carried out accordingly within three months.
[26C D] 17
|
ition No. 706 of 1990.
(Under Article 32 of the Constitution of India).
Dr. L.M. Singhvi, Dr. Y.S. Chitale, R.K. Garg, R.N. Trivedi, Addl.
Advocate General for the State of U.P,, Mrs. Swaran Mahajan.
Mrs. Geetanjali Mohan, Ms. Anuradha Mahajan.
Sunil Gupta, R. Venkataramani, S.M. Garg, Suresh Harkauli.
Sushil Harkauli, Sunil Gupta, A.S. Pundir, Suresh Kumar Misra, Mahesh Shrivastava, H.D. Pathak, Vishnu Mathur and Mrs. Shobha Dikshit for the appearing parties.
The Judgment of the Court was delivered by VERMA, J.
This judgment disposes of a bunch of matters comprising of some writ petitions under Article 32 of the Constitution of India and special leave petitions under Article 136 of the Constitution of India, all of which involve for decision certain common questions.
The special leave petitions are directed against a common judgment of the Allahabad High Court dismissing some writ petitions in which the same questions were raised.
In view of the deci sion of the High Court rejecting those contentions, the writ petitions were filed in this Court directly for the same purpose.
By one stroke, seemingly resorting to the Spoils System alien to our constitutional scheme, the Government of State of Uttar Pradesh has terminated by a general order the appointments of all Government Counsel (Civil, Criminal, Revenue) in all the districts of the State of U.P.w.e.f.
1990 and directed preparation of fresh panels to make appointments in place of the existing incumbents.
This has been done by Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990, terminating all the existing appointments w.e.f.
1990, irrespective of the fact whether the term of the incumbent had expired or was subsisting.
The validity of this State action is challenged in these matters after the challenge has been rejected by the Allahabad High Court.
They have all been heard together since the common question 631 in all of them is the validity of the Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990 issued by the Govern ment of State of Uttar Pradesh.
Leave is granted in the Special Leave Petitions and the appeals are also heard on merits along with the Writ Peti tions.
Broadly, two questions arise for decision by us in this bunch of matters.
These are: Is the impugned circular amena ble to judicial review?; and if so, is it liable to be quashed as violative of Article 14 of the Constitution of India, being arbitrary? The challenge in all these matters is to validity of G.O. No. D 284 Seven Law Ministry dated 6th February, 1990, from Shri A.K. Singh, Joint Legal Remembrancer, Justice (Law Ministry) Section, Government of Uttar Pradesh, to all the District Magistrates of Uttar Pradesh with copy to all the District Judges of the State for information and necessary action.
The main question for decision in these matters being the validity of this circular, it would be appropriate to quote the same in extenso.
It reads as under: "Subject:RENEWAL OF TENURE OF ALL THE EXISTING GOVERNMENT COUNSEL, CALLING OF NEW PANELS FOR NEW APPOINTMENT.
XXXX I have been directed to inform you on the subject mentioned above that the Administration has taken a decision to extend the tenure of all the Government Counsel, who are presently working, till 28th February, 1990 only and to immediately receive new panels from the District Magistrates for new appointments in their places.
I, therefore, have been directed to state that all the Government Counsel, presently engaged for the work of Civil/Revenue/Criminal (including Anti Dacoity) and Urban Ceiling may be permitted to work till 28.2.1990 only and for appointments in their place, Administration may send the new panels, after preparing the same in following manner: 1.
Separate single panal in each of the Civil side, Revenue 632 side, Criminal side (including Anti Dacoity) and Urban ceiling side fixed for 12 districts, and separate single panel in each of the courts, functioning at District and Tehsil Headquarters, may be prepared.
It may be enlisted therein the names of the work zone, number of courts related to it, the number of sanctioned posts for Government Counsel and recommended names of the Counsel in terms of their seniority.
It may be clearly mentioned in the panel which counsel belong to Scheduled Caste, Scheduled Tribes, Back ward Caste and Minority group.
The panels prepared for civil, revenue and urban ceiling side may contain the recommendations of names only three times of the presently sanctioned posts.
In the criminal side, five times of the names of the present sanctioned posts may be recommended.
The attested copies of Bio Data of the Counsel recommended, attested details of their work during last two years, certificate of registration as an Advocate, certifi cate of birth and the attested copies of certificates of educational qualifications may also be sent.
The names of any such counsel, who has practice experience for less than 7 years, or who has more than 60 years of age as on 1.1.
1990, or the person who is already working at a salaried Government or nonGovernmental posts, a full time lecturer in a college, Notary, Marriage Officer, Executive Qazi or State, may not be included in the panels.
However, on resignation from the present post, they can be included in the panel.
For preparation of new panel, a general notice which enlists the application, age, conditions of appointment and the last date for submission of Bio Data, may be prepared.
This notice may be put on the Notice Boards of the Local Bar Associations, and in the offices of District Magistrate, District Judge, Zonal Commissioner, S.D.M. and Munsif Magis trate.
633 8.
It will be a condition for appointment as a Government Counsel that he will not be permitted to do private prac tice.
He will be entitled to plead, with permission from the Administration, only the cases of State Government and Central Government, State Company Council, Local Bodies, Autonomous Institution and Authorities.
He will be paid only the monthly remuneration fixed by the Administration and no fee will be paid according to the valuation of the case/appeal.
No extra fee will also be paid for any other work/consultation.
It may also be clarified that appointment of a Government Counsel will be different from the Govern ment employees and no facilities to Government employees will be applicable to them.
The appointment of Government Counsel will be done in the form of business engagement and the State Government will be entitled to terminate engage ment at any time, without giving reasons for it.
The Bio Data and other desired papers, if received from the counsel within the prescribed date, may be examined minutely, as a special drive and after getting approval from the District Judge/Munsif Magistrate/SDM, as the case may be, the names may be recommended in the panel as per senior ity position.
The details of last two years work, along with the attested copies of the certificates and information desired in the enclosed format,`Ka ' and `Kha ' may be sent to the Administration along with the panel.
I have also been directed to state that the appointments made on or after January, 1990, shall not be affected by the above mentioned policy decision and the same shall continue for the prescribed period.
I have also been directed to clarify that the panels received prior to release of this Government Order, on the basis of which, no appointments or.
renewal has been made or which are still pending, may be understood as cancelled.
I have also been directed to request you that the new panels may be prepared in accordance with the above direc tion on top priority basis, `and the same may be ensured to be sent to the undersigned in a confidential 634 envelope through a special messenger by 25th February, 1990.
sd/ (A.K. Singh) Joint Legal Remembrancer" By the above quoted circular letter dated 6.2.
1990, the decision of the State Government to terminate the engagement of all the Government Counsel engaged throughout the State of U.P. for civil/ revenue/criminal (including anti dacoity) and urban ceiling work on and from 28.2. 1990 and to make appointments in their place on the basis of new panel pre pared for the purpose was communicated to all the District Magistrates in the State.
Admittedly, this circular was made applicable to all the Government Counsel throughout the State at the district level, howsoever designated such as district Government Counsel, Additional District Government Counsel, etc.
There is no dispute that the circular related to and applied equally to all the Government Counsel throughout the State irrespective of their tenure whose appointments were terminated w.e.f. 28.2.1990 for being replaced by new appointees.
The circular applied equally to not only those Government Counsel whose tenure had already expired or whose tenure was to expire before 28.2.
1990, but also to those whose tenure, as a result of their earlier appointment, was to extend beyond 28.2.
1990, as well as those who were entitled to be considered for renewal of the tenure on expiry of their earlier tenure.
The Challenge in these matters is not only by some individuals who were adversely affected by the said circular but also by Associa tion of District Government Counsel.
Since the impact of the circular is on all Government Counsel engaged at the dis trict level throughout the State, the challenge is really in representative capacity on behalf of all of them and this is how the challenge has been met on behalf of the State of U.P. in reply.
It is common ground that the decision of these matters will govern the appointment of all Government Counsel throughout the State of U.P.at the district level, in all branches, irrespective of the name or designation given to the appointment such as District Government Coun sel, Additional District Government Counsel, etc.
Several arguments were advanced by the learned counsel on both sides relating to the nature of these appointments about which there is a serious contest between the parties.
In the present case, it is not necessary for us to consider at length the exact nature of these appoint 635 ments which is material only for indicating the extent of security of tenure of the appointee to these offices since in our opinion the main attack to the impugned circular on the ground of arbitrariness can be upheld even assuming the security of tenure of the appointees to be minimal as claimed for and on behalf of the State of U.P.
We shall, therefore, only refer to the rival contentions regarding the nature of appointments and then proceed on the basis of the minimum status attaching to these appointments to examine whether the ground of arbitrariness is available and viti ates the circular.
According to the learned Additional Advocate General of the State of U.P., the relationship of the appointees to these offices of Government Counsel in the districts is purely contractual depending on the terms of the contract and is in the nature of an engagement of a Counsel by a private party who can be changed at any time at the will of the litigant, with there being no right in the Counsel to insist on continuance of the engagement.
The learned Addi tional Advocate General contended that for this reason, the relationship being purely contractual, which cannot be continued against the will of either party, there is no scope for the argument that the State does not have the right to change the Government Counsel at its will.
It is common ground that the appointment, termination and renewal of tenure of all Government Counsel in the districts is governed by certain provisions contained in the Legal Remem brancer 's Manual, in addition to Section 24 of the Code of Criminal Procedure, 1973, applicable in the case of public prosecutors.
The learned Additional Advocate General did not dispute that if Article 14 of the Constitution of India is attracted to this case like all State actions, the impugned circular would be liable to be quashed if it suffers from the vice of arbitrariness.
However, his argument is that there is no such vice.
In the ultimate analysis, it is the challenge of arbitrariness which the circular must withstand in order to survive.
This really is the main point involved for decision by us in the present case.
The nature of appointment of the Government Counsel in the districts on the civil, criminal and revenue sides was hotly debated during the hearing.
It was urged on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government is not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel cannot be equated with the termination by a private litigant of his Counsel 's engage ment, which is purely contractual, with 636 out any public element attaching to it.
It was urged that appointment of public prosecutors has a statutory status also in view of such appointments being required to be made in accordance with Section 24 of the Code of Criminal Proce dure, 1973.
Reliance was also placed on certain provisions of the Legal Remembrancer 's Manual, which admittedly govern and regulate the appointment of all Government Counsel in the districts as well as the termination of their appoint ment and renewal of their tenures.
It was contended that the relationship between the Government and the Government Counsel is therefore, not purely contractual in nature as in the case of a private litigant and his counsel.
An attempt was also made to urge that the appointment of Government Counsel is in the nature of a public employment with the attendant security of tenure of office and the necessary concomitants attaching to it.
On the other hand, the learned Additional Advocate General appearing for the State of U.P. contended that the relationship between the Government and the Government Counsel is purely contractual like that of a private litigant and his counsel which enables the Govern ment to change its counsel at any time as may be done by a private litigant in the event of loss of confidence between them.
He contended that there is no element of public em ployment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure are merely to provide for making a suit able choice.
We shall briefly refer to some provisions which admittedly regulate and govern such appointments, termi nation and renewal of tenure of the appointees.
Chapter I of the Legal Remembrancer 's Manual, 1975 Ed., contains the interpretations and Para 1.01 says that the L.R. Manual is the authoritative compilation of the Govern ment orders and instructions for the conduct of legal af fairs of the State Government.
Para 1.06 enumerates the Law Officers of the Government which includes the District Government Counsel (Civil, Revenue, Criminal) along with many others such as Judicial Secretary and Legislative Secretary.
it is obvious that all of them including D.G.Cs. are described as holders of some `office ' of the State Govt.
Chapter VII contains the necessary provisions relating to District Government Counsel.
Part A therein deals with appointment and conditions of engagement of the District Government Counsel.
Para 7.02 deals with the power of Gov ernment to appoint Government Counsel in the districts which requires the Government to appoint District Government Counsel (Civil, Revenue, Criminal) and also, wherever necessary, in the interest of efficient and expeditious disposal of business, to appoint Additional or/and Assistant District Government Counsel to assist the District 637 Government Counsel (Criminal) or (Civil) in discharge of his duties: Subordinate District Government Counsel for the conduct of civil cases in outlying towns of a district; and Assistant District Government Counsel in outlying towns of the district for the conduct of criminal or civil cases or both.
Para 7.03 provides for applications and qualifications for appointment to these offices or posts.
The District Officer is required to consider all the applications re ceived in consultation with the District Judge, giving due weight to the claim of the existing incumbents, if any, and to submit in order of preference the names of legal practi tioners, together with the opinion of the District Judge on the suitability and merits of each candidate.
The process of selection expressly involves the District Judge and gives due weight to his opinion for the obvious reason that the District Judge is expected to know best the comparative merits of the candidates for such appointments.
Para 7.04 requires the Legal Remembrancer to submit the recommenda tions of the District Officer along with his own opinion for the orders of the Government Para 7.06 provides for ap pointment and renewal, para 7.08 for renewal of term ,red para for maintenance of character roll of the appointees.
Para 7.07 forbids the D.G.C. so long as he holds the `post ' from participating in political activity like all other Government officers and unlike a lawyer engaged by a private part vs These provisions read as under: "7.06.
Appointment and renewal (1) The legal practitioner finally selected by the Government may be appointed District Government Counsel for one year from the date of his taking over charge.
(2) At the end of the aforesaid period, the Dis trict Officer after consulting the District judge shall submit a report On his work and conduct to the Legal Remem brancer together with the statement of work done in Form No. 9.
Should his work or conduct be found to be unsatisfac tory the matter shall be reported to the Government for orders.
If the report in respect of his work and conduct is satisfactory, he may be furnished with a deed engagement in Form No. 1 for a term not exceeding three years.
On his first engagement a copy of Form No. 2 shall be supplied to him and he shall complete and return it the Legal Remem brancer for record.
(3) The appointment of any legal practitioner as a District Government Counsel is only professional engage 638 ment terminable at will on either side and is not appoint ment to a post under the Government.
Accordingly the Govern ment reserves the power to terminate the appointment of any District Government Counsel at any time without assigning any cause.
7.07 Political Activity The District Government Counsel shall not participate in political activities so long they work as such; otherwise they shall incur a dis qualification to hold the post.
7.08 Renewal of term (1) at least three months before the expiry of the term of a District Government Counsel, the District Officer shall after consulting the District Judge and considering his past record of work, conduct and age, report to the Legal Remembrancer, together with the statement of work done by him in Form No. 9 whether in his opinion the term of appointment of such counsel should be renewed or not.
A copy of the opinion of the District Judge should also be sent along with the recommen dations of the District Officer.
(2) Where recommendation for the extension of the term of a District Government Counsel is made for a speci fied period only, the reasons therefore shall also be stated by the District Officer.
(3) While forwarding his recommendation for renewal of the term of a District Government Counsel (i) the District Judge shall give an estimate of the quality of the Counsels 's work from the Judicial standpoint, keeping in view the different aspects of a lawyer 's capacity as it is manifested before him in conducting State cases, and specially his professional conduct; (ii) the District Officer shall give his report about the suitability of the District Government Counsel from the administrative point of view, his public reputation in general, his character, integrity and professional conduct.
639 (4) If the Government agrees with the recommendations of the District Officer for the renewal of the term of the Government Counsel, it may pass orders for reappointing him for a period not exceeding three years.
(5) If the Government decides not to re appoint a Gov ernment Counsel, the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03.
(6) The procedure prescribed in this para shall be followed on the expiry of every successive period of renewed appointment of a District Government Counsel.
Note The renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the Counsel.
Character roll (1) The District Officer and the District Judge shall, before the end of every year and also while leaving the district on transfer, place on record his opinion on the capacity and work of the District Government Counsel.
The District Judge shall before recording such opinion obtain a report about the work and: conduct of the District Government Counsel from the presiding officers of the courts, where they are generally required to practise.
Similarly, the District Officer shall before recording such opinion obtain a report from the Superintendent of Police regarding the counsel 's capacity for prosecution of cases and assistance rendered to the investigating agency.
The record, which shall be confidential, shall be maintained by the District Officer.
Every adverse entry shall be communi cated to the District Government Counsel concerned by the District Officer, with the prior approval of the Government.
(2) The character roll of every District Government Counsel shall also be maintained by the Government in Judi cial (Legal Advice) Section.
For this purpose, the District Officer shall forward to the Legal Remembrancer a copy of all the confidential reports, recorded by him and the Dis trict Judge on the work and conduct of the District Govern ment Counsel by the first week of May every year 640 for being incorporated in the character roll, maintained by the Government.
(3) The District Officer shall forward a copy of all the confidential reports, referred to in para 7.09(2) in respect of District Government Counsel (Criminal) to Home (Police) Section of Secretariat also for information.
(4) Any shortcomings on the part of the District Government Counsel shall at once be brought to the notice of the Legal Remembrancer.
" These provisions show that the initial appointment is for a period of one year during which the work and conduct of the appointee is watched to adjudge his suitability and a report is required to be submitted at the end thereof by the District Officer after consulting the District Judge and on the same being found satisfactory, his engagement is made for a term not exceeding three years.
Before expiry of the term of three years, the case of the incumbent is to be considered on the basis of his work, conduct and age for renewal and the Government is required to decide the ques tion of his reappointment for a period not exceeding three years on the basis of the report of the District Officer and the opinion of the District Judge.
If the Government agrees with their recommendations, the term of the existing incum bent is renewed for a period not exceeding three years.
It is only if the Government decides not to reappoint a Govern ment Counsel ' that the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03.
this procedure is to be followed on the expiry of every successive period of renewed appointment of District Government Counsel.
The age factor mentioned in para 7.08 has to be read with the footnote to it, which says that `the renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the counsel '.
Para 7.09 provides for maintenance of the character roll in which the District Officer and the District Judge are required to record their opinion on the capacity and work of the District Government Counsel.
Clause 3 of para 7.06, regarding termination of the appointment, would be considered later while dealing with an other argument of the learned Additional Advocate General.
Part B of Chapter VII lays down `Duties ' of D.G.Cs.
The above provisions in the L.R. Manual clearly show that the Government Counsel in the districts are treated as Law Officers of the 641 State who are holders of an `office ' or `post '.
The afore said provisions in Chapter VII relating to appointment and conditions of engagement of District Government Counsel show that the appointments are to be made and ordinarily renewed on objective assessment of suitability of the person based on the opinion of the District Officer and the District Judge; and character roll is maintained for keeping a record of the suitability of the appointee to enable an objective assessment for the purpose of his continuance as a Law Officer in the district.
There arc provisions to bar private practice and participation in political activity by D.G.Cs.
Apart from clause 3 of para 7.06 to which we shall advert a little later, these provisions clearly indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of ap pointment.
Suitability of the appointee being the prime criterion for any such appointment, it is obvious that appointment of the best amongst those available, is the object sought to be achieved by these provisions, which, even otherwise, should be the paramount consideration in discharge of this governmental function aimed at promoting public interest.
All Govt.
Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '.
The learned Additional Advocate General contended that clause 3 of para 7.06 says that the appointment of a Dis trict Government Counsel is only professional engagement terminable at will on either side and not appointment to a post under the Government; and the Government has the power to terminate the appointment at any time `without assigning any cause '.
He contended that this power to terminate the appointment at any time without assigning any cause and the clear statement that the appointment is only professional engagement terminable at will on either side is sufficient to indicate that the relationship is the same as that of a private client and his counsel.
In our opinion, this provi sion has to be read not in isolation, but in the context in which it appears and along with the connected provisions, already referred.
The expression `professional engagement ' is used therein to distinguish it from `appointment to a post under the Government ' in the strict sense.
This, howev er, does not necessarily mean that a person who is not a Government servant holding a post under the Government does not hold any public office and the engagement is purely private with no public element attaching to it.
This part of 642 clause 3 of para 7.06 means only this and no more.
The other part of clause 3 which enables the Government to terminate the appointment `at any time without assigning any cause ' can also not be considered in the manner, suggested by the learned Additional Advocate General.
The expression `at any time ' merely means that the termination may be made even during the subsistence of the term of appointment and `wit hout assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated.
However, `without assigning any cause ' is not to be equated with `without existence of any cause '.
It merely means that the reason for which the termination is made need not to be assigned or communicated to the appointee.
It was held in Liberty Oil Mills and Others vs Union of India and Others, ; that the expression `without assigning any reason ' implies that the decision has to be communicated, but reasons for the decision have not to be stated; but the reasons must exist, otherwise, the decision would be arbi trary.
The non assigning of reasons or the non communication thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy.
Clause 3 of para 7.06 must, therefore, be understood to mean that the appointment of a District Government Counsel is not to be equated with appointment to a post under the Government in the strict sense, which does not necessarily mean that it results in denuding the office of its public character; and that the appointment may be terminated even during currency of the term by only communicating the decision of termina tion without communicating the reasons which led to the termination.
It does not mean that the appointment is at the sweet will of the Government which can be terminated at any time, even without the existence of any cogent reason during the subsistence of the term.
The construction, suggested on behalf of the State of U.P. of this provision, if accepted, would amount to conceding arbitrary power of termination to the Government, which by itself is sufficient to reject the contention and thereby save it from any attack to its valid ity.
We may now refer to some provisions of the Code of Criminal Procedure, 1973, relating to Public Prosecutors.
Section 24 provides for appointment of Public Prosecutors in the High Courts and the districts by the Central Government or the State Government.
We are here concerned only with the appointment of Public Prosecutors by the State Government in the districts.
Sub section 3 of Section 24 says that for every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecu 643 tors for the district.
Sub section 4 requires the District Magistrate to prepare a panel of names of persons considered fit for such appointments, in consultation with the Session Judge.
Sub section 5 contains an embargo against appointment of any person as the Public Prosecutor or Additional Public Prosecutor for the district by the State Government unless his name appears in the panel prepared under sub section 4.
Sub section 6 provides for such appointments, where in a State there exists a regular Cadre of Prosecuting Officers but if no suitable person is available in such cadre, then the appointment has to be made from the panel prepared under sub section 4.
Sub section 7 says that a person shall be eligible for such appointment only after he has been in practice as an advocate for not less than seven years.
Section 25 deals with the appointment of Assistant Public Prosecutors in the district for conducting prosecution in the Courts of Magistrate.
In the case of Public Prosecutors also known as District Government Counsel (Criminal), there can be no doubt about the statutory element attaching to such appointments by virtue of these provisions in the Code of Criminal Procedure, 1973.
In this context, Section 321 of the Code of Criminal Procedure, 1973. is also significant.
Section 321 permits withdrawal from prosecution by the Public Prosecutor or Assistant Public Prosecutor in charge of a case, with the consent of the Court, at any time before the judgment is pronounced.
This power of the Public Prose cutor in charge of the case is derived from statute and the guiding consideration for it, must be the interest of admin istration of justice.
There can be no doubt that this func tion of the Public Prosecutor relates to a public purpose entrusting him with the responsibility of so acting only in the interest of administration of justice.
In the case of Public Prosecutors, this additional public element flowing from statutory provisions in the Code of Criminal Procedure, undoubtedly.
invest the Public Prosecutors with the at tribute of holder of a public office which cannot be whit tled down by the assertion that their engagement is purely professional between a client and his lawyer with no public element attaching to it.
A brief reference to some decisions of this Court, in which the character of engagement of a Government Counsel was considered.
may be made.
In Mahadeo vs Shantibhai and Ors., it was held that a lawyer engaged by the Railway Administration during the continuance of the engagement was holding an `office of profit '.
The engagement of the Railway Counsel was similar to that of the Government Counsel in the present case.
It was pointed out that by `office ' is meant the right and duty to exercise an employ ment or a position of authority and trust to which certain duties are attached; 644 and such an engagement satisfied that test.
Even though the decision was rendered in the context of disqualification under the Election Law by holding an `office of profit ', yet it is useful for appreciating the nature of such an engage ment or appointment of a counsel by the Government.
In Mundrika Prasad Sinha vs State of Bihar, [1980] 1 SCR 759.
the nature of appointment of Government Pleaders came up for consideration and it was said that the office of a Govern ment Pleader.
as defined in Section 2(7) of the Code of Civil Procedure.1908 is a public office.
Krishna Iyer.
J. in that decision, also pointed out that the `Government under our Constitution shall not play with law offices on political or other impertinent consideration as it may affect the legality of the action and subvert the rule of law itself '.
In that decision.
an earlier Madras decision was quoted with approval.
wherein.
it was clearly held that the duties of the Government Pleader are of a public nature and that the office of a Government Pleader is a public office.
The relevant extract is as under: .
A Government pleader is more than an advocate for a litigant.
He holds a public office.
We recall with approval the observations a Division Bench of the Madras High Court made in Ramachandran vs Alagiriswami, AIR 1961 Madras 460 and regard the view there.
expressed about a Government Pleader 's office.
as broadly correct even in the Bihar set up. ". the duties of the Government Pleader.
Madras are duties of a public nature.
Besides.
as already explained the public are genuinely concerned with the manner in which Government Pleader discharges his duties because.
if he handles his cases badly.
they have ultimately to foot the bill .
XXXXX XXXXX XXXXX consider that the most useful test to be applied to determine the question is that laid down by Erie, J. in ; The three criteria are.
source of the office, the tenure and the duties.
I have applied that test and I am of opinion that the conclusion that the office is a public office is irresistible." Similarly.
in Mukul Dalai and Others vs Union of India and Others. ; it was held that the `office of the Public Prosecutor is 645 a public one ' and `the primacy given to the Public Prosecu tor under the Scheme of the Code (Cr.P.C.) has a social purpose '.
It is useful in this context to refer to the decision in Malloch vs Aberdeen Corporation.
That was d case of dismissal of an employee of a public authority whose appointment during the authority 's pleasure.
Examining the scope of judicial review.
Lord Wilberforce said: "The appellant 's challenge to the action taken by the re spondents raises a question in my opinion.
of administrative law.
The respondents are a public authority.
the appellant holds a public position fortified by statute.
The considera tions which determine whether he has been validly removed from that position go beyond the mere contract of employ ment, though no doubt including it.
They are.
in my opinion.
to be tested broadly on arguments of public policy and not to be resolved on narrow verbal distinctions The appellant is entitled to complain if.
whether in procedure or in substance, essential requirements, appropriate to his situa tion in the public service under the respondents, have not been observed and.
in case of non observance.
to come to the courts for redress.
XXXXX XXXXX XXXXX . . So.
while the courts will necessarily respect the right.
for good reasons of public policy.
to dismiss without assigned reasons.
this should not.
in my opinion, prevent them from examining the framework and context of the employment to see whether elementary rights are conferred on him expressly or by necessary implication.
and how tar these extend . are.
therefore.
unable to accept the argument of the learned Additional Advocate General that the appointment of District Government Counsel by the State Government is only a professional engagement like that between a private client and his lawyer, or that it is purely contractual with no public element attaching to it.
which may be terminated at an), time at the sweet will of the Government excluding judicial review.
We have already indicated the presence of public element attached to the `office ' or `post ' of Dis trict Government Counsel of every category covered by the impugned circular.
This is 646 sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review.
The scope of judicial review permissible in the present case, does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irrationali ty, once Article 14 is attracted, is sufficient to invali date the impugned circular as indicated later.
We need not, therefore, deal at length with the scope of judicial review permissible in such cases since several nuances of that ticklish question do not arise for consideration in the present case.
Even otherwise and sans the public element so obvious in these appointments, the appointment and its concomitants viewed as purely contractual matters after the appointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action.
This aspect is dealt with hereafter.
Even apart from the premise that the `office ' or `post ' of D.G.Cs. has a public element which alone is sufficient to attract the power of judicial review for testing validity of the impugned circular on the anvil of Article 14, we are also clearly of the view that this power is available even without that element on the premise that after the initial appointment.
the matter is purely contractual.
Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exer cise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applica ble to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by re quirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition.
It is not as if the requirements of Article 14 and contractual obligations are alien concepts.
which cannot co exist.
The Preamble of the Constitution of India resolves to secure to all its citizens Justice, social.
economic and political; and Equality of status and opportunity.
Every State action must be aimed at achieving 647 this goal.
Part IV of the Constitution contains `Directives Principles of State Policy which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action to realise the vision in the Preamble.
This being the philoso phy of the Constitution, can it be said that it contemplates exclusion of Article 14 non arbitrariness which is basic to rule of law from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble.
In our opinion.
it would be alien to the Constitutional Scheme to accept the argument of exclusion of Article 14 in contractual matters.
The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion.
This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.
There is an obvious difference in the contracts between private parties and contracts to which the State is a party, Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest.
The impact of every State action is also on public interest.
This factor alone is sufficient to import at least the minimal require ments of public law obligations and impress with this char acter the contracts made by the State or its instrumentali ty.
It is a different matter that the scope of judicial review in respect of disputes failing within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes.
However, to the extent, chal lenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic require ments of Article 14.
To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition there to.
An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 648 of non arbitrariness at the hands of the State in any of its actions.
Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved per sons.
The State cannot be attributed the sprit personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the con tract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it.
It is really the nature of its personality as State which is significant and must characterize all its actions, in what ever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act.
The re quirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters.
There is a basic difference between the acts of the State which must invariably be in public inter est and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest.
Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regu lating the conduct of the State activity.
In Wade 's Administrative Law, 6th Ed., after indicating that `the powers of public authorities are essentially different from those of private persons ', it has been suc cinctly stated at p. 400 401 as under: .
The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good.
There is nothing paradoxical in the imposition of such legal limits.
It would indeed be paradoxical if they were not imposed.
Not is this principle an oddity of British or 649 American law: it is equally prominent in French law.
Nor is it a special restriction which fetters only local authori ties: it applies no less to ministers of the Crown.
Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial.
It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute.
Plainly this can have no application in public law.
For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion.
The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal.
It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere.
(emphasis supplied) The view, we are taking is, therefore, in consonance with the current thought in this field.
We have no doubt that the scope of judicial review may vary with reference to the type of matter involved, but the fact that the action is reviewa ble, irrespective of the sphere in which it is exercised, cannot be doubted.
A useful treatment of the subject is to be found in (1990) 106 L.Q.R. at pages 277 to 292 in an article `Judi cial Review and Contractual Powers of Public Authorities '.
The conclusion drawn in the article on the basis of recent English decisions is that `public law principles designed to protect the citizens should apply because of the public nature of the body, and they may have some role in protect ing the public interest '.
The trend now is towards judicial re,dew of contractual powers and the other activities of the Government.
Reference is made also to the recent decision of the Court of Appeal in Jones vs Swansea City Council, [1990] 1 W.L.R. 54, where the Court 's clear inclination to the view that contractual powers should generally be reviewable is indicated, even though the Court of Appeal faltered at the last step and refrained from saying so.
It is significant to note that emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body 650 exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '.
The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy.
This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mele private activity to be excluded from public view or scrutiny.
Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest.
Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests.
As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest.
This is equally true of all actions even in the field of contract.
Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good.
With the diversification of State activity in a Wel fare State requiring the State to discharge its wide ranging functions even through its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions re quired to be non arbitrary and justified on the touchstone of Article 14.
Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters.
We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.
It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in 651 contractual matters, fails to satisfy the test of reasona bleness, it would be unconstitutional.
See Ramana Dayaram Shetty vs The International Airport Authority of India and Ors., ; and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir & Anr., ; In Col. A.S. Sangwan vs Union of India and Ors., [1980] Supp.
SCC 559, while the discretion to change the policy in exer cise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria.
The wide sweep of Article 14 and the requirement of every State action qualifying for its validi ty on this touch stone, irrespective of the field of activi ty of the State, has long been settled.
Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose.
In M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay,[1989] 3 SCC 293, the matter was re examined in relation to an instrumentality of the State for applicability of Article 14 to all its actions.
Referring to the earlier decisions of this Court and examining the argu ment for applicability of Article 14, even in contractual matters, Sabyasachi Mukharji, J. (as the learned Chief Justice then was), speaking for himself and Kania, J., reiterated that `every action of the State or an instrumen tality of the State must be informed by reason . actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Con stitution. ' Ranganathan, J. did not express `any opinion on this point but agreed with the conclusion of the other learned Judges on the facts of the case.
It is obvious that the conclusion on the facts of the case could not be reached by Ranganathan, J. without examining them and this could be done only on the basis that it was permissible to make the judicial review.
Thus, Ranganathan, J. also applied that, principle without saying so.
In view of the wide ranging and, in essence, all pervading sphere of State activity in discharge of its, welfare functions, the question assumes considerable importance and cannot be shelved.
The basic requirement of Article 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule.
of law.
Non arbitrariness, in substance, is only fair play in action.
We have no doubt that this obvious requirement must be satis fied by every action of the State or its instrumentality in order to 652 satisfy the test Of validity.
it is this aspect which has been considered at length by Sabyasachi Mukharji, j. (as the learned Chief justice then was) in M/s Dwarkadas Marfatia 's case (supra) even though, that was a case of statutory exemption granted under the Rent Act to an instrumentality of the State and it was in that context that the exercise of power to terminate the contractual tenancy was examined.
All the same, without going into the question whether the obligation of the in strumentality to act in pursuance of public purpose, was a public law purpose or private law purpose, it was held that the obligation to act in pursuance of public purpose was alone sufficient to attract Article 14.
It was held that there was an implied obligation in respect of the dealings with the tenants/occupants of the authority to act in public interest/purpose.
It was emphasised that every state action has to be for a public purpose and must promote public benefit.
Referring to some earlier decisions, it was reiter ated that all State actions `whatever their mien ' are amena ble to constitutional limitations, the alternative being to permit them `to flourish as an imperium in imperio '.
It was pointed out that `governmental policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards ', if it suffers from this vice.
It was stated that every State action must be reasonable and in public interest and an infraction of that duty is amenable to judicial review.
The extent of permissible judicial review was indicated by saying that `actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose '.
It is sufficient to quote from the judg ment of Mukharji, 3.
(as the learned Chief Justice then was) the following extract: " . .
Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down.
Every action of the executive authority must be subject to rule of law and must be informed by reason.
So, whatever be the activity of the public authority, it should meet the test of Article 14 . (emphasis supplied) This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenan cy which alone applied by virtue of the exemption granted under the Rent Act excluding the applicability of the provi sions thereof.
653 In another recent decision in Mahabir Auto Stores & Ors.
vs Indian Oil Corporation & Ors., J.T. , it was held that Article 14 was attracted even where the ag grieved person did not have the benefit of either a contrac tual or a statutory right.
The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct.
it was held by the learned Chief justice that the impugned act of the Indian Oil Corpo ration was an administrative decision and could be impeached on the ground that it was arbitrary or violative of Article 14 of the Constitution.
It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that `fairness in such actions should be perceptible, if not transparent '.
If Article 14 was applied even without the benefit of a contract of deal ership, the position cannot be worse with the added benefit of a contract.
With respect, we concur with the view about the impact of Article 14 of the Constitution on every State action as indicated by the learned Chief Justice in these two recent decisions.
No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion.
However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable.
If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged.
The scope of judicial review is limited as indicated in Dwarkadas Marfatia 's case (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more.
The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases.
it is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case.
As indicated by Di plock, L.J., in Council of Civil Service Unions vs Minister for the Civil Service, ; , the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety.
In the case of arbitrariness, the defect of irrationality is obvious.
654 In our opinion, the wide sweep of Article 14 undoubtedly takes within its fold the impugned circular issued by the State of U.P. in exercise of its executive power, irrespec tive of the precise nature of appointment of the Government Counsel in the districts and the other rights, contractual or statutory, which the appointees may have.
It is for this reason that we base our decision on the ground that inde pendent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Article 14 of the Constitution and if it is shown to be arbitrary, it must be struck down.
However, we have referred to certain provisions relating to initial appointment, termination or renewal of tenure to indicate that the action is controlled at least by settled guide lines, followed by the State of U.P., for a long time.
This too is relevant for deciding the question of arbitrariness alleged in the present case.
It is now too well settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Consti tution and basic to the rule of law, the system which gov erns us.
Arbitrariness is the very negation of the rule of law.
Satisfaction of this basic test in every State action is sine qua lion tO its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract.
This distinction between the State and a private individual in the field of contract has to be borne in the mind.
The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined.
The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circum stances of a given case.
An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasona bleness.
Where a mode is prescribed for doing an act and there is no impediment in following that procedure, perform ance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness.
Every State action must be informed by reason and it follows that an act unin formed by reason, is arbitrary.
Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being.
It is trite that be you ever so high, the laws are above you '.
This is what men in power must remember, always.
655 Almost a quarter century back, this Court in S.G. Jais inghani vs Union of India and Ors., ; , at p. 7 18 19, indicated the test of arbitrariness and the pit falls to be avoided in all State actions to prevent that vice, in a passage as under: "In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
(See Dicey "Law of the Constitution" Tenth Edn.
, Introduction cx).
"Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick, (*), "when it has freed man from the unlimited discretion of some ruler .
Where discretion is absolute, man has always suffered".
It is in this sense that the rule of law may be said to be the sworn enemy of caprice.
Discre tion, as Lord Mansfield stated it in classic terms in the case of John Wilker (*), "means sound discretion guided by law.
It must be governed by rule, not humour: it must not be arbitrary, vague and fanciful." After Jaisinghani 's case (supra), long strides have been taken in several well known decisions of this Court expand ing the scope of judicial review in such matters.
It has been emphasized time and again that arbitrariness is anathe ma to State action in every sphere and wherever the vice percolates, this Court would not be impeded by technicali ties to trace it and strike it down.
This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India.
It is, therefore, obvious that irre spective of the nature of appointment of the Government Counsel in the districts in the State of U.P. and the secu rity of tenure being even minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable.
656 No doubt, it is for the person alleging arbitrariness who has to prove it.
This can be done by showing in the first instance that the impugned State action is uninformed by reason inasmuch as there is no discernible principle on which it is based or it is Contrary to the prescribed mode of exercise of the power or is unreasonable.
If this is shown, then the burden is shifted to the State to repel the attack by disclosing the material and reasons which led to the action being taken in order to show that it was an informed decision Which was reasonable.
If after a prima facie case of arbitrarineSs is made out, the State is unable to show that the decision is an informed action which is reasonable, the State action must perish as arbitrary.
In the present case.
the initial burden on the petition ers/appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State, even those whose tenure in office had not expired.
Such a drastic action could be justified only on the basis of some extraordinary ground equally applicable to all Government Counsel in the dis tricts throughout the State which is reasonable.
No such reason appears in the circular.
The impugned circular itself does not indicate the compelling reason, if any, for the drastic step of replacing all the Government Counsel in every branch at the district level throughout the State of U.P., irrespective of the fact whether the tenure of the incumbent had expired or not.
The learned Additional Advocate General stated that the circular was issued because the existing panels were made in 1985, 1986 and 1987 and were considered to be not too proximate in point of time in the year 1990 for being continued.
The reason, if any, for considering such en bloc change neces sary has not been disclosed either in the circular or at the hearing in addition to what is said in para 29 of the coun ter affidavit of A.K. Singh, which is referred later.
On behalf of the petitiOners/appellants, it was alleged that the en masse change at the district level throughout the State of U.P. was made only for political reasons on account of the recent change in the State Government.
We deem it unnecessary to go into this question for want of any specif ic material either way.
Moreover, the arbitrariness, if any, of such an act, would be equally applicable irrespective of the change in the Government, which, if at all, would only strengthen the argument in case arbitrariness is proved otherwise.
The only reason given 657 in the counter affidavit of A.K. Singh, Joint Secretary & Joint Legal Rememberancer, Government of U.P., is in para 29 thereof which reads as under: "That the contents of para 38 of the writ petition are not admitted.
It is denied that the government took the present decision with a political motive and in an arbitrary manner.
It is also submitted that the decision to terminate the prOfessional engagement has been taken in order to stream line the conduct of the government cases and effective prosecution thereof.
" It is difficult to appreciate this as a reasonable basis for the drastic and sweeping action throughout the State, particularly when the provisions in the Legal Remembrancer 's Manual referred earlier provide ordinarily for renewal of the tenure Of the appointees.
To say the least.
the contents of para 29 of this counter affidavit Which alone are relied on to disclose the reasons for the circular are beautifully vague and convey nothing of substance and cannot furnish any tangible support to the impugned circular.
It was stated by the learned Additional Advocate General that many of the old incumbents were to be re appointed even after this exercise and, therefore, a wholesale change was not to be made.
If at all.
this submission discloses a further infirmity in the impugned circular.
If it be true that many of the existing appointees were to be continued by giving them fresh ap pointments.
the action of first terminating their appoint ment and then giving them fresh appointment is.
to say the least, Uninformed by reason and does not even fail within the scope of the disclosed reason `to streamline the conduct of government cases and effective prosecution thereof '.
It is obvious that at least in respect of all such appointees who are to be continued by giving them fresh appointments, the act of terminating their appointment in one stroke, was without application of mind by anyone to the question wheth er a change was at all needed in their case.
It would be too much to assume that every Government Counsel in all the districts of the State of U.P. was required to be replaced in order to streamline the conduct of government cases and indeed.
that is not even the case of the State which itself says that many of them were to be re appointed.
Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State of U.P. is itself eloquent of the arbitrariness writ large on the face of the circular.
It is obvious that issuance of the impugned circular 658 was not governed by any rule but by the whim or fancy of someone totally unaware of the requirements of rule of law, neatly spelled out in the case of John Wilkes, more than two centuries back and quoted with approval by this Court almost a quarter century earlier in Jaisinghani 's case (supra).
We have considered it necessary to re emphasize this aspect and reiterate what has been said so often by this Court only because we find that some per sons entrusted with the task of governance appear to be unaware of the fact that the exercise of discretion they have must be governed by rule, not by humour, whim, caprice or fancy or personal predilections.
It also disturbs us to find that the Legal Remembrancer 's Department of the State of U .P. which has the duty to correctly advise the State Government in such matters.
overlooked the obvious and failed to discharge its bounden duty of correctly advising the State Government in matters of law.
We would like to believe that the impugned circular was issued for want of proper legal advice in this behalf instead of any ulterior motive suggested by the petitioners/appellants.
Conferment of the power together with the discretion which goes with it to enable proper exercise of the power is coupled with the duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred, which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual.
All persons entrusted with any such power have to bear in mind its necessary concomitant which alone justified con ferment of power under the rule of law.
This was apparently lost sight of in the present case while issuing the impugned circular.
Arbitrariness is writ large in the impugned circular dated 6.2.
1990 issued by the State of Uttar Pradesh.
It gives the impression that this action was taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs.
as bounty to be distributed by the appoint ing authority at its sweet will.
Such a change even by a private party is made keeping in view his own interest when he finds that the existing lawyer is not suitable for the assignment and.
therefore.
without making the change he incurs the risk of some loss.
In the case of the State it is the public interest which should be the prime guiding con sideration to judge the suitability of the appointee but it appears that the impugned State action was taken in the present case with only one object in view, that is, to terminate all existing appointments irrespective of the subsistance or expiry of the tenure or suitability of the existing incumbents.
659 Viewed in any manner, the impugned circular dated 6.2.90 is arbitrary.
It terminates all the appointments of Govern ment Counsel in the districts of the State of Uttar Pradesh by an omnibus order, even though these appointments were all individual.
No common reason applicable to all of them justifying their termination in one stroke on a reasonable ground has been shown.
The submission on behalf of the State of Uttar Pradesh at the hearing that many of them were likely to be re appointed is by itself ample proof of the fact that there was total non application of mind to the individual cases before issuing the general order terminat ing all the appointments.
This was done in spite of the clear provisions in the L.R. Manual laying down detailed procedure for appointment, termination and renewal of tenure and the requirement to first consider the existing incumbent for renewal of his tenure and to take steps for a fresh appointment in his place only if the existing incumbent is not found suitable in comparison to more suitable persons available for appointment at the time of renewal.
In the case of existing appointees.
a decision has to be first reached about their non suitability for renewal before deciding to take steps for making fresh appointments to replace them.
None of these steps were taken and no material has been produced to show that any existing incumbent was found unsuitable for the office on objective assessment before the decision to replace all by fresh appointees was taken.
The prescribed procedure laid down in the L.R. Manual which has to regulate exercise of this power was totally ignored.
In short, nothing worthwhile has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary.
The impugned circular must, therefore, perish on the ground of arbitrariness which is an available ground for judicial review in such a situation.
In view of the above conclusion, all the existing ap pointees to the posts of Government Counsel in the districts throughout the State of U.P., by whatever name called, governed by the impugned circular dated 6.2.
1990, who were in position at the time of issuance of the circular, must continue in office and be dealt with in accordance with the procedure laid down in the L.R. Manual.
Those Government Counsel, whose term had then expired or was to expire there after, would be considered for renewal of their tenure in the manner prescribed and steps for preparation of a fresh panel to replace them would be taken only if they are found unsuitable for renewal of their term as a result of an informed decision in the manner prescribed.
The power of termination of any appointment during the subsistence of the term available to the State Government shall also be avail able for exercise only in the manner indicated, wherever considered necessary.
660 In short, the status quo ante as on 28.2.
1990, on which date the impugned circular dated 6.2.
1990 was made effec tive, will be restored and be maintained till change in any appointment is found necessary and is made in the manner prescribed.
The fresh appointments, if any, made by the State Government in implementation of the impugned circular dated 6.2. 1990, being subject to the validity of the circu lar and the result of these matters, would stand superseded in this manner.
The State Government will implement this direction within two weeks of the date of this order.
In our view, bringing the State activity in contractual matters also within the purview of judicial review is inevi table and is a logical corollary to the stage already reached in the decisions of this Court so far.
Having fortu nately reached this point, we should not now turn back or take a turn in a different direction or merely stop there.
In our opinion, two recent decisions in M/s Dwarkadas Marfa tia and Sons, (supra) and Mahabir Auto Stores & Ors., (supra) also lead in the same direction without saying so in clear terms.
This appears to be also the trend of the recent English decisions.
It is in consonance with our commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power.
We would much rather be wrong in saying so rather than be wrong in not saying so.
Non arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reason and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power.
In view of the conclusion reached by us and the above direction restoring status quo ante as on 28.2.1990, we have not gone into individual matters brought before us.
Some argument was advanced from both sides in W.P. No. 706 of 1990 (Km.
Shrilekha Vidyarthi vs State of U.P. & Ors.), wherein the fact of renewal of petitioner 's tenure is dis puted.
It is unnecessary for us to go into that question also since the order, we are making, governs the case of all Government Counsel in the districts throughout the State of U.P. including that of the petitioner in this writ petition.
The subsequent rights of this petitioner also would be governed in the manner indicated above.
If and when such a situation arises, it would be open to the parties to have the dispute, if any, adjudicated wherein the question of renewal of tenure, claimed by the petitioner, can also be gone into.
661 Consequently, these appeals and writ petitions are allowed.
The impugned circular G.O. No. D 284 Seven Law ministry dated 6.2.
1990, issued by the Government of State of U.P., is quashed resulting in resto ration of status quo ante as on 28.2.
1990, the date from which this circular was made effective.
No costs.
R.S.S. Petitions and appeals allowed.
|
The writ petitioners/appellants had been appointed as Government Counsel (Civil, Criminal, Revenue) by the State of U.P.
By its circular dated 6.2.1990 the State terminated the appointment of all Government Counsel with effect from 28.2.
1990 irrespective of the fact whether the term of the incumbent had expired or was subsisting.
At the same time the Government directed preparation of fresh panels to make appointments in place of existing incumbents.
The appellants challenged the validity of this State action, which was rejected by the High Court.
Before this Court it was contended inter alia on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government was not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel could not be equated with the termination by a private litigant of his Counsel 's engagement, which was purely contractual.
without any public element attaching to it.
On behalf of the State it was urged that: (i) the rela tionship of the appointees to these offices of Government Counsel in the districts was purely contractual depending on the terms of the contract and was in the nature of an en gagement of a Counsel by a private party who could be changed at any time at the will of the litigant, with there being no right in the counsel to insist on continuance of the engagement; (ii) there was no element of public employ ment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure were merely to provide for making a suitable choice; (iii) the appointment of a District Government Counsel was only professional engagement terminable at will on either side and not appointment to a post under the Government, and the Government had 626 the power to terminate the appointment at any time `without assigning any cause ' and hence this circular did not suffer from the vice of arbitrariness.
Allowing the writ petitions and the appeals, this Court, HELD: (1) The provisions in the Legal Remembrancer 's Manual clearly show that the Government Counsel in the districts are treated as law Officers of the State who are holders of an `office ' or `post '.
These provisions further indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of appointment.
(2) All Government Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '.
(3) Clause 3 of para 7.06 of the L.R. Manual which enables the Government to terminate the appointment `at any time without assigning any cause ' merely means that the termination may be made even during the subsistence of the term of appointment, and the expression `without assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated.
(4) The non assigning of reasons or the non communica tion thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy.
Liberty Oil Mills vs Union of India, ; , referred to.
(5) In the case of Public Prosecutors, the public ele ment flowing from statutory provisions in the Code of Crimi nal Procedure, undoubtedly, invest the Public Prosecutors with the attribute of holder of a public office `which cannot be whittled down by the assertion that their ' engage ment is purely professional between a client and his lawyer with no public element attaching to it.
627 Mahadeo vs Shantibhai, ; Mundrika Prasad Sinha vs State of Bihar, [1980] 1 S.C.R. 759; Mukul Dalaiand Others vs Union of India and Others, ; and Malloch vs Aberdeen Corporation, , referred to.
(6) The presence of public element attached to the `office ' or `post ' of District Government Counsel of every category covered by the impugned circular is sufficient to attract Article 14 of the Constitution and bring the ques tion of validity of the impugned circular within the scope of judicial review.
(7) The scope of judicial review permissible in the present case does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irration ality once Article 14 is attracted, is sufficient to invali date the impugned circular.
(8) Even otherwise and sans the public element so obvi ous in these appointments, the appointment and its concomi tants viewed as purely contractual matters after the ap pointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action.
(9) The personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition.
It is not as if the require ments of Article 14 and contractual obligations are alien concepts, which cannot co exist.
(10) The scope and permissible grounds of judicial review in such matters, and the relief which may be avail able are different matters but that does not justify the view of its total exclusion.
This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form con tracts between unequals.
(11) To the extent challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14.
628 (12) It is significant to note that emphasis now is on review ability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '.
Jones vs Swansea City Counsel, [1990] 1 W.L.R. 54, referred to.
(13) It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconsti tutional.
Ramana Dayaram Shetty vs The International Airport Authority of India, ; ; Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir, ; and Col. A.S. Sangwan vs Union of India, [1980] Supp.
SCC 559, referred to.
(14) The basic requirement of Article 14 is fairness in action by the State and it is difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule of law.
Non arbitrariness, in substance, is only fair play in ac tion.
This obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity.
M/s Dwarkadas Marlaria and Sons vs Board of Trustees of the Port of Bombay, ; and Mahabir Auto Stores (15) There is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion.
However, where no plausible reason or principle is indicated nor is it dis cernible and the State action, therefore, appears to be exfacie arbitrary, the initial burden to prove the arbi trariness is discharged shifting onus on the State to justi fy its action as fair and reasonable.
(16) The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases.
It is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is success fully repelled by 629 showing that the act which was done was fair and reasonable in the facts and circumstances of the case.
Council of Civil Service Union vs Minister for the Civil Service, ; (17) Arbitrariness is the very negation of the rule of law.
Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect.
the State cannot claim comparison with a private individual even in the field of contract.
(18) Every State action must be informed by reason and it follows, that an act uninformed by reason, is arbitrary.
Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being.
(19) Irrespective of the nature of appointment of the Government Counsel in the districts in the State of U.P and the security of tenure being minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable.
S.G. Jaisinghani vs Union of India, ; (20) In the present case.
the initial burden on the petitioners appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State.
even those whose tenure in office had not expired.
(21) Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State is itself eloquent of the arbitrariness writ large on the face of the circular.
John Wilkes 's case (22) Arbitrariness is writ large in the impugned circu lar issued by the State of Uttar Pradesh.
It gives the impression that this action was 630 taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs.
as bounty to be distributed by the appointing authority at its sweet will.
Nothing worth while has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary.
|
: Criminal Appeal Nos.
259 64 of 1987.
From the Judgment and Order dated 20.4.
1987 of the Designated Court, Ahmedabad in Terrorist Criminal Case No. 3 of 1985 with Terrorist Criminal Case Nos. 13 of 1985 and 6 of 1986.
T.U. Mehta, A.S, Quereshi, Salman Khurshid, S.H. Kureshi, Mrs. Vimla Sinha, Ifshad Ahmed, Imtiaz Ahmed, Gopal Singh and S.M. Qureshi for the Appellants.
P.S. Poti, M.N. Shroff, Anip Sachthey, Bimal Roy, Kai lash Vasdev, Ms. A. Subhashini, Chava Badri Nath Babu, Girish Chandra, Biman Jad and Ashish Verma for the Respond ents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Tragic trauma of ghastly, in human and beastly behaviour of one community against another depicted for weeks and weeks, in this criminal appeal, forcefully, at times, emotionally still hangs heavily.
What a tragedy? Eight human lives roasted alive.
Five in waiting for gal lows.
Neighbours residing peacefully for generations sharing common happiness and sorrow even playing cricket together suddenly went mad.
Blood thirsty for each other.
Burning, looting and killing became order of the day.
Even ladies attempted to prevent fire brigade from extinguishing fire.
How pathetic and sad.
Still sadder was the manner in which the machinery of law moved.
From accusation in the charge sheet that accused were part of unlawful assembly of 1500 to 2(100 the number came down to 150 to 200 in evidence and the charge was framed against sixty three under Terrorist and Disruptive Activities (Prevention) Act, 1985 (in brief TADA Act) and various offences including Section 302 under Indian Penal Code.
Even from that fifty six were acquitted either because there was no evidence, and if there was evidence against some it was not sufficient to warrant their conviction.
What an affront to fundamental rights and human dignity.
Liberty and freedom of these persons was in chains for more than a year.
For no reason.
One even died in confinement.
All this generated a little emotion during submissions.
But sentiments or emotions, howsoever, strong are neither relevant nor have any place in a court of law.
Acquittal or conviction depends on proof 111 or otherwise of the criminological chain which invariably comprises of why, where, when, how and who.
Each knot of the chain has to be proved, beyond shadow of doubt to bring home the guilt.
Any crack or loosening in it weakens the prosecu tion.
Each link, must be so consistent that the, only con clusion which must follow is that the accused is guilty.
Although guilty should not escape.
But on reliable evidence truthful witnesses and honest and fair investigation.
No free man should be amerced by framing or to assuage feelings as it is fatal to human dignity and destructive of social, ethical and legal norm.
Heniousness of crime or cruelty in its execution howsoever abhorring and hateful cannot reflect in deciding the guilt.
Misgiving, also, prevailed about appreciation of evi dence.
Without adverting to submissions suffice it to men tion that credibility of witnesses has to be measured with same yardstick, whether, it is an ordinary crime or a crime emanating due to communal frenzy.
Law does not make any distinction either in leading of evidence or in its assess ment.
Rule is one and only one namely, if depositions are honest and true: Whether the witnesses, who claim to have seen the incident in this case, withstand this test is the issue? But before that some legal and general questions touching upon veracity of prosecution version may be dis posed of.
Trial under TADA Act was assailed, both, because of the Act being ultra vires of the fundamental right guaranteed under Constitution and absence of circumstances justifying its extension to the State of Gujarat.
For the latter no foundation was laid therefore it was not permitted to be raised.
And the former is awaiting adjudication before Constitution Bench from where this appeal was got delinked.
Invoking of provisions of TADA Act, in communal riot, was attacked and it was submitted that a combined reading of Sections 3 and 4 with explanation indicated that the Legis lative intention was to confine the applicability of the Act to secessionist or insurgency activities against the State and not to ordinary crimes for which provisions exist in the Penal Code.
Since the Constitution Bench is already ceased of the matter we are of the opinion that these aspects too can, well be raised there.
From acquittal of thirty seven accused for lack of evidence even though they were arrested in rounding off operation by the military, after cordoning off the area immediately after the incident, it was vehemently argued that it demonstrated that prosecution was not fair and there was deliberated attempt to rope in appellants who were well to do persons of the community not because they had any hand in 112 the crime but for extraneous reasons.
It was emphasised that if persons arrested on the spot residing in the same locali ty could not be identified nor any evidence could be pro duced against them then it was clear that the case against the appellants was also not trustworthy and they were impli cated either because of enemity or for oblique motive.
Although the argument did appear to be attractive on the first flush but it was dispelled soon by the learned counsel appearing for the State who submitted that the mistake in charge sheeting those accused along with appellant was bloated out of proportion.
According to him the incident for which the appellants have been convicted and sentenced was part of a different transaction, although it took place on the same day, than the incident in which thirty seven per sons were rounded off.
The learned counsel explained with help of Colonel Sudhakar PW 21 's statement and, in our opinion, rightly, that these arrests were made in conse quence of action taken by the military, on a different mob, as it included many ladies who did not form part of earlier mob, while attempting to bring situation under control after the incident.
Therefore, it is not possible to draw any adverse inference against prosecution on this score.
Time, place, background and manner in which dastardly crime was committed on 9th June, 1985 in broad daylight at 2.30 p.m. was by and large not in dispute.
What started as agitation in February 1985 against government policy of reservation, in the State of Ahmedabad, turned into communal riots between Hindus and Muslims in March, 1985 which went on, continuously, for long spell resulting in enormous loss of life and property of both the communities.
Situation deteriorated so much that military had to be called and stationed in sensitive areas, in April, 1985, including Dhabgarwad, a large area with Hindus and Muslims residing at places side by side and others exclusively.
In March 1985 riot of shocking magnitude had taken place in this area resulting in mass exodus of Dabgars, a Hindu community, who earned their livelihood by manufacturing musical instruments such as drums and also umbrellas and kites.
When calm was partially restored, due to the military being stationed, some of them returned and some used to visit their houses in day time to look after their property or business.
Maniben, a dabgar, whose one of the daughters had married a muslim but was having strained relations with him, continued to live in her house either because she had no other place to go or she was confident that she shall not be harmed.
Howev er despite stationing of military incidents went on whenever or wherever least opportunity was available with the result that curfew was clamped, continuously, in the area from 7th June, 1985.
As ill luck would have it the military stationed in 113 the area left for some other place at about 1.30 p.m. on 9th June, 1985.
Taking advantage of the vulnerability, due to absence of military.
members of minority community converged from two sides and when they intermingled in the corner somewhere near the house of Maniben or electric power sub station they indulged in most cowardly and shameful act of pushing open the door of her house setting fire to it and then chaining it from outside resulting in death of the lady, her two daughters.
four grand children and son of a neighbour.
Next house set ablaze was of Navin and then many others.
Prosecution version can thus be divided in three parts one, entry of mob from two sides one from Magadom Pole and other kalupur Panchpatti shouting 'kill ' 'cut ' pelting stones, throwing acid bulbs and flambeaus on houses of Hindus while approaching towards Nani Ali Pole.
The second was meeting of the two groups on the corner of Nani Ali Pole and then pushing open the door of Maniben 's house by five appellants armed with burning flambeau, iron pipe, stick, kerosene and bottle of petrol sprinkling of kerosene or petrol inside the house setting it ablaze then coming out of the house closing and shutting the door and chaining it from outside.
The third was entry of appellants thereafter in the house of Navin setting it on fire and then entering in Nani Ali Pole with other members of mob and attacking houses of Kantilal, Kalidas and others.
To prove it the prosecution examined twenty two witness es which were grouped by the trial judge in seven '.
One and the main group consisted of Navin PW 1, Ambalal PW 8, Rati lal PW 9, and Kalidas PW 13.
These were the witnesses who were 'said to have collected at the house of Ambalal from where they witnessed the occurrence and the participation of the appellants in it.
The second group consisted of Kalidas PW 7, Ramanlal PW 10, Manchharam PW 12, who were said to have witnessed the incident from the house of Kalidas Chha ganlal.
The third group consisted of Arun Kumar PW I 1, Jaswantlal PW 14, Dilip Kumar PW 17 and Sanmukhbhai PW 20, who were witnesses who are said to have arrived on hearing the shouts and commotion and witnessed the occurrence from near Dabgarwad Police gate.
The other groups comprised of official witnesses.
No witness was examined from any of the house situated on either side of road from where the two mobs entered or from any of the houses ,situated on the route through which the.
mob passed before it reached/the comer of Nani Ali Pole to establish identity of accused.
Mod which entered from Magadom Pole side was admitted by 114 Ambalal to have passed from,the front of his house.
But he stated that he could not recognise anyone out of them.
Appellants according to prosecution were in the mob which came from Kalupur Panchpatti.
From the place from where the mob entered and to the corner of Nani Ali Pole the mob had to pass from a long route which is inhabited by houses on both sides but not one witness was produced from any of these house nor it was clearly brought out that inmates of all these houses were of minority community only.
For the second group of witnesses who according to prosecution, saw the occurrence from the house top of Kanti Lal the Judge himself found that they were not in a position to see the road in front of house of Navin nor they were in a position to see the road in front of house of Maniben.
He, therefore, observed that so far evidence of these witnesses in respect of attack by the mob on house of Maniben and Navin was concerned it could be relevant only generally that they set fire to the house.
That is they could not be taken to be witnesses to prove that appellants broke open the door of Maniben 's house or set fire to it or chained it from outside.
Nor is the evidence of third group of witnesses helpful as they had collected near the gate of police outpost.
Distance between the gate and place of incident appears to be not less than 200 to 250 feet.
Moreover they collected after the house of Maniben was set on fire.
And it was admitted by PW 1, 8, 9 and 13 that the house of Navin, Kantilal, Ambalal could not be seen from police outpost.
Their testimony thus cannot be taken into account for prov ing second part of the incident which resulted in death of inmates of Maniben 's house.
Fate of the appellants, therefore, hangs on credibility of first group of witnesses.
For its better appreciation it is necessary to set out topography of the place of the incident.
From the map it is clear that the house of Maniben alongwith cluster of six other houses in surrounded on all sides by lanes and roads.
Immediately above her house is house of Navin in North.
Then there are two houses, parallel to each other, in south of her house.
There are three more houses one after the other, in south.
On west side of these is lane.
So is a lane in north side after which there is electric sub station.
On the left of substation there is gap and then there is one house and in its north is the house of Kantilal.
On the east of Maniben 's house is the Dabgarwad road which runs somewhat in semi circle running from Kalupur Panchpatti situated in extreme south east towards west, taking turn from near Dabgarwad Police outpost in the South moving up towards 115 north east in angle tilting slightly from somewhere near cluster of houses round Maniben 's house and then proceeding towards Daryapur.
House of Ambalal from where first set of witnesses had seen the occurrence is on this road from where the road tilts.
It was admitted by PW 1 that house of Amba lal was obliquely situated.
That is clear from the map as well.
If from the two ends of the house, south and north facing the road straight lines are drawn towards west they shall pass through the lane in front of Navin 's house and power station respectively.
Navin PW 1 whose house is situ ated in north of Maniben 's house admitted that electric sub station was in front of Ambalal 's house.
Rati Lal PW 9 stated that on one side of the road was his house and on other of Ambalal.
The house of Ambalal was thus above Mani ben 's house towards north east.
To bring home the guilt the prosecution was required to prove the presence of witnesses, possibility of seeing the incident by them and identification of the appellants.
Importance of first arose as due to riots in March 1985 there was mass exodus of Hindus from Dabgatwad.
Therefore presence of these witnesses was attempted to be challenged as curfew having been imposed from 7th June and Col. Sudha kar, PW 21, incharge of Military stationed, in the area, having stated that no passes were issued to anyone it was not probable that any of the witnesses who claim to have seen the occurrence could have been present.
But it appears to be devoid of any merit in view of unimpeachable testimony of the witnesses that they were present in their houses either because they had come earlier after restoration of partial calm or they had come on the day of occurrence to see their business and they were not prevented by the police even if they did not have any pass.
The Judge had examined this aspect in detail and found from various circumstances, namely, restoration of partial calm due to presence of military personnel, death of eight persons in Maniben 's house including children, rescuing of many persons trapped in the house of Kalidas Chhagan which too was set on fire, admission by accused in their statements under section 313 Criminal Procedure Code etc.
that presence of these witness es could not be doubted.
Further if the Dabgads had not returned and the area was deserted then where was the occa sion for the mob to indulge in this vendetta.
But mere presence of witnesses was not sufficient.
More important was if they saw the incident.
It assumed impor tance due to two reasons one because entire set of witnesses saw the incident from house of Ambalal which was situated upwards on the road towards north east as compared to the house of Maniben, and second that each 116 of the witnesses including Ambalal admitted that the exteri or of Maniben 's or even Navin 's house could not be seen from interior of the house.
From the location of Ambalal 's house it is clear that one could see front of Maniben 's house only if he stood in front of it with face towards west south.
But that is not the prosecution case.
In fact prosecution is silent on this aspect.
There is no whisper of the place from where the incident was seen by the witnesses.
Was it front of house of Ambalal or inside or roof.
Prosecution did not make any effort to remove this defect, obviously, because the investigation itself suffered from this flaw.
Although the defence, also, did not make any attempt to get it clari fied, may be as a part of clever design as to from where these witnesses saw the occurrence but the disadvantage, if any is of prosecution.
As stated earlier, this was very relevant as every witness admitted that from interior of Ambalal 's house the front of neither Maniben 's nor Navin 's house could be seen.
Evidence thus regarding possibility of seeing the appellant from house of Ambalal is very shaky.
The prosecution left an important lacuna.
Unfortunately, each witness ' not only stated that he saw the appellants but they went on to describe with remarkable similarity in detail the article which each accused had in his hand: What is surprising is that accused had come from Kalupur side therefore they could not have been seen prior to their arrival near electric sub station before which everyone had entered house of Ambalal yet it is they and they alone who could be identified from the entire mob.
PW 1 admitted that when he rushed from his house in fear the mob of Kalupur side was 40 or 50 feet away.
He also admitted that he saw these accused for the first time from the house of Ambalal from a distance of 20 feet.
No subsequent witness tried to explain it.
Others had reached admittedly prior to Navin.
Therefore, they could not have had occassion to see the Kalupur mob and if they saw then it must have been at a longer distance.
Statement of PW 9, therefore, that the appellants were leading the mob is very difficult to be accepted.
And if they saw for the first time from house of Ambalal, as stated by Navin and not improved upon by others, then it is very difficult to accept that they could have identified these appellants.
PW 1 further admitted that if anyone stood with his face towards house of Maniben his then his back only could be visible from Ambalal 's house.
That is clear from map as well.
Therefore identification of accused from out of the mob even if they were known from before becomes highly doubtful.
Out of persons who had collected at house of Ambalal only four were examined.
It was admitted by every witness that the last to enter 117 the house were Navin and his father.
Time of entry as given by witnesses was before mixing of the mob at the corner except Ambalal who stated that he came after the mob had collected.
But that appears to be improbable as he was so scared that he ran with his father without even closing door of his house.
And if he would have come out when mob had collected then it is difficult to believe that he would have been spared when his house too was burnt.
Navin was the first witness to be examined.
He stated, categorically, that when he entered the house of Ambalal it was closed from inside.
It was attempted to be improved upon by Ambalal who stated that he kept the door ajar.
But apart from normal human behaviour to close the door, for protection in the background of incident of March and fear generated by shout of 'kill ', and 'cut ', the other witnesses PW 9 and PW 13 too stated that the door was closed after entry of Navin.
In any case the incident having taken place after entry of Navin and the door having been closed thereafter or even ajar or half closed it was necessary for prosecution to establish how did the witnesses see the occurrence when they admitted that the exterior of Maniben 's house or even of Navin could not be seen from inside of Ambalal 's house.
The deficiency in prosecution version was attempted to be explained by the judge by adverting to evidence of PW 13 that Ambalal was opening and closing the door every now and then, therefore there was nothing improbable in witnesses having seen the occurrence.
But the approach was, both, faulty and illegal.
The conclusion by picking up isolated sentence without adverting to other parts of his statement where he admitted that after entry, of all, the doors of the house were closed, and, he was able to identify the appellants when they were effecting entry in house of Maniben and that he did not identify anyone out of the mob till he entered the house of Ambalal was contrary to rule of appreciation of evidence.
Reading the whole statement together makes it consistent with evidence of other witnesses and leaves no room for doubt that opening and closing the door was resort ed to let in the persons who were reaching house of Ambalal due to fear of mob.
And the exercise of opening and closing being over after entry of Navin seeing the mob or identify ing the accused in process of opening and closing was out of question.
The finding of the judge, thus, that 'it is not as if that once the door of the house of Ambalal was closed it was never opened again at any time before these persons escaped from the house of Ambalal . .
Therefore, even though the house of Ambalal is slightly obliquely situated as compared to the house of Maniben, it would not at all be difficult for these witnesses who had hid themselves in the house of Ambalal to have correctly identified the accused ', is not based on appreciation of evidence but on imagination.
118 Thus prosecution version suffered from serious infirmi ty.
Its failure to bring on record evidence which could establish the possibility or even probability of the witness seeing the occurrence demolishes the whole structure.
Since it was admitted to all the P.W.s that the exterior of Mani ben 's house could not be seen from interior of Ambalal 's house the prosecution could succeed in establishing its case only if it could prove that witnesses even then could have seen the occurrence.
The only possibility of seeing the occurrence could be either from the road or standing in front of Ambalal 's shop or if there was any source from inside house of Ambalal.
Evidence is lacking for either.
Possibility of the first two alternative from where incident could have been seen is out of question.
Witnesses were so terrified due to incident of March 1985 that they could not remain outside.
PW 1 was so afraid that he rushed with his father without even closing door of his house.
And if he would have come out when mob had reached house of Maniben was stated by Ambalal then there would have been every possibility of his being attacked.
PW 9 and 13 too were afraid and rushed to Ambalal 's house.
Every time these witnesses reached the door was opened and after entry it was closed.
Last man to enter was Navin Chandra.
No witness has stated that it was opened thereafter even once to look outside.
How did then these witnesses see pushing open of Maniben 's door by appellants, setting fire to her house and chaining from outside.
It was for prosecution to explain.
It could not be taken for granted merely because each witness repeated that they knew the appellant from childhood and each of them was armed with articles mentioned in their hand.
Ambala1 did state that the door of his shop had seven planks joined by hinges.
But the prosecution stopped there.
It did not dare to come out with the case that the witnesses saw from the crevices.
Therefore the prosecution version suffered from a lacuna which was fatal.
The doubt thus created if the witnesses saw the occurrence at a11 is strengthened by subsequent conduct and behaviour of these witnesses.
The prosecution version was that the moment the mob moved from house of Maniben to house of Navin Chandra towards Nani Ali Pole side the witness came out of Ambalal 's house and dashed towards police gate where large number of persons had collected.
But strangely not one of them told it to anyone present there or even to police personnel that Maniben 's house was burnt by appellants.
It was against normal human behaviour as all the appellants were known from before.
The incident had taken place due to communal frenzy.
It is, therefore, difficult to believe that once these witnesses reached Dabgarwad Police gate they would not have shouted at top of their voice that the appellants known as Lallewallas had killed Maniben.
What is further surprising is that they did not disclose the 119 names even to Manchharam whose son had been burnt alive in house of Maniben, nor to anyone in the hospital and kept their mouth sealed till 11th June 1985 and opened it for the first time in the Police Station when their statement was recorded giving graphic description step by step.
Not only that the PW 9 and 13 broke down in cross examination and admitted that they had not seen the appellants setting fire to the house of either Maniben or Navin.
They were saying so by inference as they had seen smoke coming from the houses.
Thus witnesses and circumstances both are against prosecu tion version.
Although there are contradiction on material aspects in statement of these witnesses and arguments were addressed on late recording of evidence, failure to produce the Chief Fire Officer, to establish if house was chained 'from outside, delay in preparation of panchnama of Mani ben 's house etc.
but we consider it unnecessary to discuss them as the prosecution, in our opinion, failed to prove beyond shadow of doubt that the dreadful crime was committed by appellants.
There is thus no option but to acquit these accused.
We, however, hope that our order shall bring good sense to members of both the communities residing in Dabgar wad and make them realise the disaster which such senseless riots result in and they shall in future take steps to avoid recurrence of such incidents and try to resort to the atmos phere that prevailed before March 1985.
For the reasons stated above all these appeals succeed and are allowed.
Reference No. 1 of 1987 for confirmation of death sentence is discharged.
The conviction and sentences of appellants herein under section 3(2)(i) of Terrorist and Disruptive Activities (Prevention) Act, 1985 read with section 34 of the Indian Penal Code, 302 Indian Penal Code read with sections 34,436/149, 449, 143 and 148 of Indian Penal Code are set aside.
The conviction and sentence of Haroon S/o Kalubhai Laliwala, under section 3(2)(ii) of the TADA Act 1985 is also set aside.
The appellants shall be set at liberty forthwith unless they are required in any other connection.
R.S.S. Appeals allowed.
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The agitation that started in February 1985 against government policy of reservation in the State of Gujarat turned into communal riots of shocking magnitude between Hindus and Muslims in March 1985, and resulted in mass exodus of Dabgars, a Hindu community, from their houses in the affected locality.
When calm was partially restored, some of them returned.
Maniben one of the deceased however continued to live in her house with other members of her family.
On 9th June, 1985, due to absence of military which had been stationed there, members of minority community con verged from two sides and indulged in most cowardly and shameful act of pushing open the door of Maniben 's house, setting fire to it, and then chaining it from outside re sulting in death of the lady, her two daughters, four grand children and son of a neighbour.
Next house set ablaze was of Navin and then many others.
Charge was framed against sixty three under Terrorist and Disruptive Activities (Prevention) Act, 1985 and various offences including section 302, Indian Penal Code.
Fifty six were acquitted by the Trial Judge.
Those convicted have come up in appeal.
At the same time, a reference has been made for confirmation of death sentence.
Allowing the appeals and acquitting the accused and discharging reference.
this Court, HELD: (1) Sentiments or emotions, howsoever strong, are neither 109 relevant nor have any place in a court of law.
Acquittal or conviction depends on proof or otherwise of the criminologi cal chain which invariably comprises of why, where, when, how and who.
Each knot of the chain has to be proved, beyond shadow of doubt to bring home the guilt.
Any crack or loos ening in it weakens the prosecution.
Each link must be so consistent that the only conclusion which must follow is that the accused is guilty.
Heinousness of crime or cruelty in its execution howsoever abhorring and hateful cannot reflect in deciding the guilt.
[110H; 111A B] (2) Credibility of witnesses has to be measured with same yardstick, whether it is an ordinary crime or a crime emanating due to communal frenzy.
Law does not make any distinction either in leading of evidence or in its assess ment.
[111C] (3) To bring home the guilt the prosecution was required to prove the presence of witnesses, possibility of seeing the incident by them and identification of the appellants.
[115C] (4) From the location of Ambalal 's house it is clear that one could see front of Maniben 's house only if he stood in front of it with face towards west south.
But that is not the prosecution case.
In fact prosecution is silent on this aspect.
There is no whisper of the place from where the incident was seen by the witnesses.
Was it front of house of Ambalal or inside or roof? This was very relevant as every witness admitted that from interior of Ambalal 's house the front of neither Maniben 's nor Navin 's house could be seen.
Evidence thus regarding possibility of seeing the appellants from house of Ambalal is very shaky.
The prosecution left an important lacuna.
[116A C] (5) Indentification of accused from out of the mob even if they were known from before becomes highly doubtful.
[116G] (6) The finding of the Judge that even though the house of Ambalal is slightly obliquely situated as compared to the house of Maniben, it would not at all be difficult for the witnesses who had hid themselves in the house of Ambalal to have correctly identified the accused, is not based on appreciation of evidence but on imagination.
[117G H] (7) The prosecution version suffered from serious in firmity.
Its failure to bring on record evidence which could establish the possibility or even probability of the witness seeing the occurrence demolishes the whole structure.
[118A] 110
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uld be open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, hacked by supporting reasons, before the State Government in the form of representations within four weeks from the date of this order; that the State Government would dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the Central Government; that in arriving at its decisions, it will be open to the State Government to take into account the dis cussions and findings of the Rao Report in the light of this judgment; that the State Government should also keep in mind that no leases to any of the parties (other than OMC and IDCOL) could be granted unless either the areas so proposed to be leased out are deserved and thrown open to appellants from the public or unless the Central Government, after considering the recommendations of the State Government, for reasons to be recorded in writing considers a relaxation in favour of any of the parties necessary and justified.
[96B E] & CIVIL APPELLATE JURISDICTION: Civil Miscellaneous Peti tion Nos.
16435 37 of 1987.
IN Writ Petition No. 14116 of 1984.
(Under Article 32 of the Constitution of India).
WITH Special Leave Petition (C) Nos.
5163/88 with 8574 of 1989 read with I.A. No. 1/89.
K. Parsaran, Dr. L.M. Singhvi, G. Ramaswamy, V.C. Maha jan, Harish N. Salve, Rajan Mahapatra, Ms. Lira Goswami, section Sukumaran, C. Mukhopadhyay, A. Subba Rao, A.D.N. Rao, P.K. Mehta, Ms. Mona Mehta, Girish Chandra, S.C. Patel, T. Sriku mar, p. 36 Parmeshwaran, Bishamber Lal Khanna and M.C. Bhandare for the appearing parties.
S.C. Roy, Advocate General and A.K. Panda for the State of Orissa.
The Judgment of the Court was delivered by RANGANATHAN, J.
THE "DRAMATIS PERSONAE" All these matters are in the nature of off shoots of a basic controversy raised in W.P. No. 14116/84 which was "disposed of" by the orders of this Court dated 30.4.87 and 6.10.87.
The parties are now seeking certain clarifications and directions in relation to the orders passed by this Court in the above writ petition.
There have been several subsequent developments having an impact on the issue origi nally brought to this Court in the Writ Petition (W.P.) and, at present, the matter has become very complicated and involves the interests of a large number of parties.
To give a cogent narration of the necessary facts, it is best to start with an enumeration of the various parties with whom we are concerned in the matters which are being disposed of by this judgment.
The writ petition as well as the connected matters arise out of applications for grant of rights for the mining of chrome ore or Chromite in the State of Orissa.
Chrome ore is one of the minerals specified in the First and Second Sched ules to, and not a "minor mineral" within the meaning of section 3(f) of, the Mines and Minerals (Development and Regulation) Act, 1957.
The right to grant mining rights in respect of this mineral is vested in the State Government, subject, as we shall see later, on control by the Union of India.
The State of Orissa (S.G.) and the Union of India (C.G.) are, therefore, the primary respondents in this litigation.
On the other side are ranged a number o[ applicants for the mining rights we have referred to above.
These are: (1) Indian Metals and Ferro Alloys Limited (IMFA); (2) Ferro Alloys Corporation Limited (FACOR); (3) Orissa Cements Limited (OCL); (4) Orissa Industries Limited (ORIND); 37 (5) Orissa Mining Corporation (OMC); (6) Industrial Development Corporation of Orissa Ltd. (IDCOL); and (7) Shri Mantosh Aikath.
Of the above, the first four are companies in the private sector, the next two are public sector corporations owned substantially by the State of Orissa and the last, a private individual.
THE PRESENT CONTROVERSY The principal question for decision before us is as to whether all or any of the various parties referred to above are entitled to obtain leases for the mining of chrome ore (hereinafter referred to as MLs) and, if so, to what extent.
In particular, we are concerned with an area consisting of five blocks referred to in para 8 of the W.P. to which reference will be made later.
The controversy primarily turns round applications made in respect of these blocks by IMFA, FACOR, AIKAT and OCL.
ORIND also lays claim to mining rights in respect of a portion of these blocks.
It has filed a special leave petition which is separately numbered as S.L.P. No. 8574 of 1989 and is directed against an order dated 7.4.89 passed by the Orissa Government rejecting an application made by the company on 5th July, 1971.
FACOR has also preferred S.L.P. No. 5163 of 1988 from an order of the High Court of Orissa dated 11.11.1987 dismissing a writ petition filed against an order of rejection by the S.G. of an application made by it on 18.7.1977 for grant of a ML which was confirmed by the C.G.
As already mentioned, this Court 'disposed ' of W.P. No. 14116/ 1984 by its order of 30.4.87.
We shall have to con sider this and several other orders passed by this Court in the course of the hearing more closely but a brief reference may be made here to the resultant effect thereof.
When this Court found that there were a large number of applications for MLs over varying extents of land in the areas in ques tion, this Court decided that the respective merits of the applications ' could not be gone into by this Court but that they should be considered by a responsible officer of the C.G.
Accordingly, by the orders above referred to, this Court referred the entire controversy to the Secretary to the Government of India in the Ministry of Mines (Shri B.K. Rao, "Rao", for short) for a detailed consideration of the claims of the various parties.
When the matter went to Rao, OMC and IDCOL also 38 put forward claims that the public sector units in the State of Orissa were entitled to the grant of mining rights in the State to the exclusion of all private parties inasmuch as there was a reservation in their favour by an appropriate notification issued by the State Government.
The other parties objected to the intervention of the OMC and IDCOL at, what they alleged was, a belated stage of the proceed ings.
However, on applications made by OMC and IDCOL, this Court directed that the claims of these two public sector undertakings would also be examined by Rao.
Eventually Rao, after considering the claims of all parties, reduced his conclusions in the form of a report dated 1st February, 1988.
in his report, Rao accepted the claim of reservation made on behalf of the OMC and the IDCOL.
Nevertheless it appears that, bearing in mind certain interim orders passed by this Court in the various applications made to it during the pendency of the writ petitions, Rao came to the conclu sion that only three of the parties other than the two public sector undertakings should be granted leases to the extent mentioned by him.
Broadly speaking, Rao accepted partially the claims of IMFA, FACOR and AIKATH.
He rejected the claims made by ORIND and OCL.
He accepted the claim of the public sector undertakings but he recommended for them leases in respect of only the balance of the lands left, after fulfilling the claims of the others which he had accepted.
Applications have now been filed before us which, inter alia, seek directions on Rao 's report.
There has been a good deal of contest before us as to the precise legal character of the report submitted by Rao.
One suggestion is that Rao was nothing more than a commissioner appointed by the Court to examine the claims of the various parties and to submit a detailed report thereon.
It is submitted that this report having been received we should pass such orders thereon as we may consider appropriate.
A second approach suggested is that the Rao report should be taken to be the decision of the Central Government, which it is now for the State Gov ernment to implement, leaving it open to any aggrieved party to take such appropriate proceedings as may be available to them in law for successfully challenging the findings reached by Rao.
A third line of argument which has been addressed before us, particularly by the State of Orissa, the OMC and the IDCOL, is that Dr. Rao 's report suffers from a fundamental defect in that he has completely ignored the reservation made by the State Government in favour of the public sector.
According to them, Rao was not right in suggesting the grant of leases to any of the other parties and should have simply left it to the State to exploit the mines in public sector, including inter alia, the OMC and IDCOL.
A fourth 39 stance taken up by the State Government may also be men tioned here, The learned Advocate General for the State made a statement before us that, without prejudice to a conten tion that the Rao report suffered from the fundamental defect referred to above, the State Government was prepared to abide by the findings of Rao provided this Court decides to accept the same in toto without any modifications.
He clarified that this is not because they think the Rao report is ' correct.
On the other hand they have got several objec tions to the validity and correctness of Dr. Rao 's report.
However, having regard to the interim orders passed by this Court and having regard to the fact that what Rao has done is virtually to implement various orders passed by this Court during the pendency of the writ petition, the State Government, without prejudice to its contentions in relation to the Rao report, is prepared to abide by it.
However, the learned Advocate General said, the State Government wish to make it clear that if, for some reason, this Court does not accept the Rao Report in toto, then the State Government would like to put forward their contentions against the report of Dr. Rao.
In that event the State Government should be given the liberty to attack Dr. Rao 's report and urge all contentions that are open to it in respect of the grant of mining leases relating to chrome ore in the State of Orissa.
The above stance understandably, is not acceptable to OCL and ORIND or, indeed, even to OMC and IDCOL who have got nothing at the hands of Rao.
IMFA and FACOR are substantial ly satisfied with the report given by Dr. Rao (except for certain minor contentions which they are prepared to give up for the present, with liberty to make representations to the State Government) but they also wish to make it clear that, in case the Rao report is not to be accepted by this Court, they would also like to put forward all their contentions so that their case may not go by default.
In that event, in particular, they would like to attack the reservation plea urged by the S.G., OMC and IDCOL both as belated as well as on merits.
AIKATH 's submission is that he is a small opera tor who discovered the mines and that Rao 's recommendation for the grant of a ML in his favour in respect of a small extent of land should not be disturbed by us.
We have only broadly set out here the attitudes of the various parties to the Rao report and shall discuss their contentions later in detail.
In the light of these various contentions, we have to determine the legal character of the Rao report and decide whether the findings of Rao are to be given effect to in toro or are to be modified and, if so, in what respects.
Before dealing with these questions and even setting out the details of the claims of the various parties and the material they placed 40 before Rao to substantiate their claims, it will be useful to survey the relevant statutory provisions relating to the grant of mineral concessions of the nature we are concerned with here.
This we shall at once proceed to do.
THE RELEVANT STATUTORY PROVISIONS (a) Constitution: Article 297 of the Constitution of India unequivocally declares that 'all lands, minerals and other things of value underlying the ocean . . shall vest in the Union and be held for the purposes of the Union '.
Arti cle 298 defines the extent of the executive power of the Union and of each State thus: "298.
Power to carry on trade, etc.
The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament." The Union and the States have both been vested with powers to legislate in respect of mining rights under the Seventh Schedule to the Constitution.
The respective rights of the Union and the States in this regard are contained in the following entries in the said Schedule: List 1, Entry 54 Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in public interest.
41 List H, Entry 23 Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and develop ment under the control of the Union.
(b) Act: In exercise of the above powers, the Union legisla ture has enacted the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as 'the Act ').
The Act has been substantially amended and several drastic changes introduced in 1986 with a view, inter alia, to prevent unscientific mining, remove bottle necks and promote speedy development of mineral based industries.
We are concerned only with the provisions relating to the grant of mining leases and we may proceed to consider the same.
section 2 of the Act contains the declaration referred to in Entry 54 referred to above.
It reads: "2.
Declaration as to expediency of Union control It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided.
" With this declaration, the Act proceeds to circumscribe the extent to which the regulation of mining rights in the States should be subject to the control of the Union.
We may now proceed to refer to the relevant provisions of the Act in relation to minerals like "chrome ore", which may be described, for convenience, as "major minerals".
section 4 of the Act provides as follows: "No person shall undertake any prospecting or mining opera tion in any area except under and in accordance with the terms and conditions of a prospecting licence or as the case may be, a mining lease granted under this Act and the rules made thereunder.
(2) No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder.
" Sections 10 and 11 outline the procedure for obtaining a prospecting 42 licence (PL) or a mining lease (ML).
They read thus: "10.
Application for prospecting licences or mining leases: (1) An application for a prospecting licence or a mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government con cerned in the prescribed form and shall be accompanied by the prescribed fee.
(2) Where an application is received under sub section 1 there shall be sent to applicant an acknowledgement of its form.
(3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the licence or lease.
Preferential right of certain person: (1)Where a pros pecting licence has been granted in respect of any land, the licensee shall have a preferential right for obtaining the mining lease in respect of the said land over any other per son: XXX XXX XXX (2) Subject to the provisions of sub section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a prefer ential right for the grant of the licence or lease as the case may be over an applicant whose application was received later: Provided that where any such applications are received on the same day, the State Government, after taking into consideration the matters specified in subsection (3), may grant the prospecting licence or mining lease, as the case may be, to such one of the applicants as it may deem fit.
(3) The matters referred to in sub section (2) are the following: 43 (a) any special knowledge of, on experience in, prospecting operations or mining operations as the case may be possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; (d) such other matters as may be prescribed.
(4) Notwithstanding anything contained in sub section (2) but subject to the provisions of sub section (1), the State Government may for any special reasons to be recorded and with the previous approval of the Central Government.
grant a prospecting licence or a mining lease to an applicant whose application was received later in preference to an applicant whose application was received earlier.
" We may next to refer to section 17A which has been inserted in the Act by the 1986 amendment.
It reads thus: section 17 A: Reservation of area for purposes of conservation (1) The Central Government, with a view to conserving any mineral and after consultation with the State Government may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the Official Gazette.
specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.
(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government compa ny or corporation owned or controlled by it or by the Cen tral Government and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.
(3) Where in exercise of the powers conferred by subsection (2) the State Government undertakes prospecting 44 or mining operations in any area in which the minerals vest in a private person, it shall be liable to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease.
section 19 of the Act declares that any prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect.
section 30 confers revisional powers on the C.G.
It reads: "The Central Government may, of its own motion or on appli cation made within the prescribed time by an aggrieved party, revise any order made by the State Government or other authority in exercise of the powers conferred on it by or under this Act.
" These are the provisions of the Act relevant for our pur poses.
(c) Rules: Turning now to the rules framed under the Act which also have a material bearing on the present issues, they are contained in Chapter IV of the Mineral Concessions Rules, 1960 which deals with the grant of mining leases in respect of land the minerals in which vest the Government.
Rule 22 outlines the procedure in respect of applications for MLs.
It requires the application to be made in a pre scribed form and accompanied by a fee of Rs.500 and certain documents and particulars.
Rules 24 and 26 ' prescribe the procedure for disposal of such applications.
Sub rules (1) and (3) of rule 24 are relevant for our present purposes and are extracted below: "24.
Disposal of application for mining lease: (1) An appli cation for the grant of a mining lease shall be disposed within twelve months from the date of its receipt.
XXX XXX XXX (3) If any application is not disposed of within the period specified in sub rule (1), it shall be deemed to have been refused.
XXX XXX XXX 45 Under rule 26, the S.G. may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for.
Rule 31 prescribes that where an order for grant of a lease is made, a lease deed has to be executed within a period of six months of the order or such further period as the S.G. may allow in this behalf.
Failure to do this, if attributable to any default on the part of the appellant, could entail the revocation of the lease.
The lease shall commence from the date of the lease deed.
We next turn to rule 54 which deals with applications for revision to the C.G.
It reads, in so far as is relevant for our purposes: "54.
Application for revision: (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within three months of the date of communication of the order to him, apply to the Central Government in triplicate in Form N, for revision of the order.
The appli cation should be accompanied by a treasury receipt showing that a fee or ' Rs.500 has been paid into a Government treas ury or in any branch of the State Bank of India doing the treasury business to the credit of Central Government under the head of account '128 Mines and Minerals Mines Depart ment Minerals Concession Fees and Royalty ': Provided that any such application may be entertained after the said period of three months, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time.
xxx xxx xxx (4) On receipt of the application and the copies thereof, the Central Government shall send a copy of the application to each of the parties impleaded under sub rule (2), speci fying a date on or before ' which he may make his representa tions, if any, against the revision application.
Explanation: For the purposes of this rule, where a State 46 Government has failed to dispose of an application for the grant of renewal of a prospecting licence or a mining lease within the period specified in respect thereof in these rules, the State Government shall be deemed to have made an order refusing the grant or renewal of such licence or lease on the date on which such period expires.
Rule 55 provides that the C.G., after getting the comments of the S.G. and other parties on the application and after giving each of them an opportunity to put forward their comments on the stand taken by the others, "may confirm, modify or set aside the order (of the S.G.) or pass such other order in relation thereto" as it "may deem just and proper".
Three more rules need to be set out which deal with the topic of reservation.
Rules 58, 59 and 60, before 1980, were in the following terms: "58.
Availability of areas for regrant to be notified (1) No area which was previously held or which is being held under prospecting licence or a mining lease so the case may be or in respect of which the order granting licence or lease has been revoked under sub rule (1) of the rule 15 or sub rule (1) of rule 31, shall be available for grant un less (a) an entry to the effect is made in the register referred to in sub rule (2) of rule 21 or sub rule (2) of rule 40, as the case may be, in ink; and (b) the date from which the area shall be available for grant is notified in the Official Gazette at least thirty days in advance.
(2) The Central Government may, for reasons to be recorded in writing, relax the provision of sub rule (1) in any special case.
Availability of certain areas for grant to be notified In the case of any land which is otherwise avail able for the grant of a prospecting licencor a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose, the State Government, shall, as soon as such land becomes again avail able for the grant of prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in rule 58.
47 60.
Premature applications Applications for the grant of a prospecting licence or a mining lease in respect of the areas in which (a) no notification has been issued under rule58 or rule59; or (b) if any such notification has been issued the period specified in the notification has not expired.
Shall be deemed to be premature and shall not be entertained and the fee, if any, paid in respect of any such application shall be refunded." G.S.R. 146 dated 16th January, 1980 substantially amended these rules.
After this amendment, Rule 58 reads: "58.
Reservation of areas for exploitation in the public sector, etc.
: The State Government may, by notification in the Official Gazette, reserve any area for exploitation by the Government, a Corporation established by any Central, State or Provincial Act or a Government company within the meaning of Section 6 17 of the ( 1 of 1956)".
Rule 59 is relevant only in part.
It reads: "59.
Availability of area for regrant to be notified: (1) No area XXX XXX XXX (e) which has been [reserved by the State Government] Sub stituted for the words "reserved by the Government" by G.S.R. 86(E) w.e.f. 10.2.87 under Rule 58, [or u/s 17A) These words were inserted by G.S.R. 146(E) dated 16.1.80 w.e.f. 2.2.80 shall be available for grant unless (i) an entry to the effect that the area is available for grant is made in the register referred to in sub rule (2) of Rule 21 or sub rule (2) of Rule 40 as the case may be, in ink; and (ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not 48 earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant: XXX XXX XXX (2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub rule (1) in any special case.
Rule 60 deals with "premature applications".
It reads: 60.
Premature applications: Applications for the grant of a prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under Rule 59 shall if, (a) no notification has been issued under that rule: or (b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained, and the application fee thereon, if any paid, shall be refunded.
The above are the relevant rules governing application for, and grant of, leases, revision petitions and reservation of areas in the light of which the issues in the present case have to be considered.
We shall now proceed to give the details of the various applications for MLs preferred by the parties before us.
ML APPLICATIONS OF THE PARTIES Though it was the IMFA which came to this Court with a writ petition, there were a number of other applications for grant of MLs pending before the State Government.
The broad details of these applications are set out below: 1.
IMFA (a) Previous Histor),: IMFA made five applications for grant of mining lease in respect of five blocks of land as per the following details (which are hereinafter referred to as items 1 to 5 respectively): 49 Area Date of Area Village & District No. Applica applied for tion 1.
1.7.1981 634.359 Ghotarangia and other villages 8.7.1981 hects.
(Dhankanal Distt.
) 2. 23.6.1981 142.000 Ostapal Village, SukhindaTehsil hects.
(Cuttack Distt. ) 3.
6.7.1981 108.860 Kamarada and padar villages hects.
(Cuttack Distt. ) 4.
9.9.1981 37.008 Ostapal and Gurjang villages, Sukhinda 10.9.1981 hects.
Tehsil (Cuttack Distt.) 5. 24.11.
1981 147.693 Ostapal and Gurjang villages, Sukhinda hects.
Tehsil (Cuttack Distt. ) The S.G. did not dispose of these applications within the prescribed period of twelve months.
They were, there fore, deemed to have been rejected under rule 24(3).
IMFA applied to the C.G. for the revision of these deemed rejec tion orders of the S.G.
The C.G. set aside the deemed rejec tion orders and directed the S.G. to dispose of the matter on merits within a period of 200 days.
However, the S.G. did not take any action on the applications of the IMFA within the period of 200 days.
IMFA made a representation to the Central Government but the Central Government gave no relief on the ground that it had become functus officio and had no jurisdiction to issue further directions to the State Gov ernment.
Thereupon IMFA filed Writ Petition No.14116 of 1984 in this Court.
IMFA alleged, that while its applications were kept pending, the S.G. had granted leases in favour of FACOR and thus discriminated against IMFA.
It prayed for the issue of a writ of mandamus to the S.G. to grant leases to IMFA also.
(b) Subsequent developments: This Court, on 27.9.84 passed an order (extracted later) directing the S.G. to consider IMFA 's applications by 23.10.84 and restraining it from granting MLS to any one else in the meanwhile.
FACOR moved for a recall of this order.
The Court passed an inter im order on 18.10.84 holding over the implementation of the earlier order in regard to grant of lease to IMFA and call ing for the records.
However, it appears, on 21.11.84, the S.G. had agreed to grant a ML in favour of AIKATH in respect of 140 acres out of 147.69 hectares covered by item No. 5 above.
On 26.12.84, the S.G. filed a counter affidavit pointing out: (a) that there was a reservation of the 50 areas for the public sector and (b) that except item 1, the areas covered by the other applications overlapped areas covered by earlier applications of OMC IDCOL and others.
Nevertheless, it was stated, on due consideration in the light of the observations of this Court, the S.G. had tenta tively decided to grant a ML to IMFA in respect of 634.359 hectares in item 1.
On 27.11.84, IMFA stated that it was not interested in item 1 which, according to it contained only low grade ore and was not commercially viable unless IMFA was given, at the same time, areas bearing high quality ore which could be blended with the low grade ore.
It stated that it was willing to accept M.L. in respect of items 2, 3 and either item 4 or half of item 5.
On 2.1.85.
the S.G. passed formal orders rejecting IMFA 's application in respect of items 2 to 5 of the list.
This was on the ground, so far as item 2 was concerned, that the area fell within the reserved areas, that there were prior applications of OMC & FACOR in respect of the areas and that the S.G. had already agreed to lease out item 1 to IMFA.
On 15.2.85, the S.G. informed IMFA that, on reconsideration it had recommended grant of MLs to it in respect of 139.37 hectares (out of 142 hectares of item 2) and the entire area of item 3.
On 18.2.85, the S.G. submitted in court that it had already agreed to grant 140 acres in item 5 to AIKATH and the rest to FACOR as per compromises in the writ proceedings pending in the Orissa High Court.
The compromise with AIKATH had been placed before.
and accepted by the Orissa High Court on 4.12.84 but the final terms and conditions were proposed on 18.2.85 and, accepted on 19.2.85.
In respect of FACOR also, the compromise agreeing to lease to it 596 acres (out of which 180 acres were covered by item 5 of IMFA 's applica tion) had been filed in the Orissa High Court only on 18.2.85.
The validity of these allotments was challenged by IMFA before this Court.
Without going into the merits or ' this controversy, this Court on 28.2.85. passed an order directing the S.G. to grant a lease to IMFA in respect of item 3 in full and 26.62 hectares in item 4.
(This order was objected to by FACOR and on 8.5.85 the Court passed an order directing the grant of a lease to FACOR over 180 acres in item 5).
IMFA says that it has not been given physical possession of the areas granted to it except to an extent of a small area of 2 hectares.
The net result is that out of the five items applied for by IMFA: (i) item 1 has been given but surrendered, (ii) the S.G. is agreeable to give 139.37 acres out of 142 acres of item 2; (iii) this Court has directed the grant to IMFA of item 3; (iv) in item 4, this Court has directed the grant to IMFA of 26.62 out of 37.008 hectares of item 4: and (v) In item 5, the S.G. has agreed to lease our 140 acres to AIKATH and 180 acres to FACOR.
FACOR (a)Earlier History: FACOR 'S applications for mining leases for chrome ore were made on various dates between 1974 and 1978.
Relevant particulars in respect of the said applications are set out in the following table: Sl.
Village Extent Date of Date of final Particulars No. appli final order of of the pro cation disposal of ceedings in revision app High Court 1.
Ostapal 142,000 8.7.74 29/76 12.3.76 OJC 67 of 79 Distt.
hects.
315/78 3.7.78 12.1.79 Cuttack or 359 acres 2.
Chingudi 749.32 8.7.74 21/76 21.4.76 OJC 66 of 79 pal Distt.
hects.
278/78 30.5.78 12.1.79 3.
Samole 248.447 6.8.74 182/77 29.8.77 OJC 72 of 79 Distt.
hects.
15.1.79 Dhankanal (618 acres) 4.
Bangur 40.47 22.6.77 432/78 17.8.78 OJC 1309 of Distt.
hects.
80 21.1.80 Keonjhar (100 acres) 5.
Ostapal & 312.42 7.6.78 528/79 21.9.79 OJC 2036 of Gurjang hects.
579/80 26.9.80 31.8.81 Distt.
Cuttack 6.
Kamarda 108 6.10.78 17/80 1.1.80 OJC 1028 of Distt.
hects.
513/82 29.10.82 11.5.83 All the six applications made by FACOR were rejected by the S.G.
Against the revision orders of the C.G. affirming the orders of the S.G. FACOR filed writ petitions in the High Court of Orissa and these writ petitions are pending dispos al there [except the one re: item 4 which was dismissed by the High Court on 11.11.87 and is the subject matter of S.L.P. (C) 5163 of 1988 before us.
In this sense, the appli cations of FACOR were alive and awaiting disposal when IMFA filed W. P. 14 116 of 1984 in this Court.
52 (b) Subsequent developments: As we shall mention later.
FACOR had obtained leases over 486 acres at Barua in Keonjhar district and 280 acres at Kathpal over Dhankanal district in 1971 72.
The above applications were rejected and the writ petitions filed against the rejections were pending in the Orissa High Court when the writ petition was filed.
It has been stated that the S.G. had entered into a compromise with FACOR on 18.2.85 agreeing to grant a mining lease in its favour in respect of 596 acres out of 772 acres applied under item No. 5 above on condition that FACOR gave up its claim in respect of the balance of the area of 702 acres as well as the claim made in the other five applica tions.
It may be added that on 18.5.85 this Court passed an interim order directing that FACOR be given a lease in respect of 180 acres out of the 596 acres covered by the compromise dated 18.2.85.
A lease was accordingly executed by the S.G. in favour of FACOR on 16.8.85 after obtaining the approval of the C.G. to the lease under section 5(2) of the Act (before its amendment in 1986) as well as to the relaxa tion under rule 59(1) of the Rules.
The net result, there fore.
is that, though FACOR made six applications, it had agreed to give up all of them in lieu of a ML for 596 acres out of item 5 out of which a lease in respect of 180 acres has already been obtained and is being exploited by FACOR.
MANTOSH AIKATH (a) Previous History: This gentleman had obtained a lease from the Raja Sri Pitamber Bhupati Harichandan Mohapa tra, the proprietor of Sukhinda Estate on 17.10.52 (regis tered on 28.10.52) for a period of 20 years in respect of 640 acres situated in village Gurjang in Cuttack District.
On 12.1.53 the State Government (in whom the estate of the former Zamindar had come to vest w.e.f.
27.11.52 under the Orissa Estates Abolition Act) issued a notice terminating the lease.
Mr. AIKATH made representations against the termination.
It is said that, ultimately, a compromise was reached between him and the S.G. whereunder it was agreed that a lease in respect of half of the area covered by the original lease deed on the southern side could be retained by him.
Thereupon, it is said, he filed a formal application on 25.5.54 for a mining lease in respect of 320 acres.
But this was rejected on the ground that the S.G. preferred to exploit the area in public sector.
A revision petition to the C.G. was rejected on 9.2.72.
Mr. AIKATH filed a writ petition in the High Court of Orissa impleading the C.G. and the S.G. as parties.
The Orissa High Court on 18.4.1984 set aside the order of the C.G. and directed the C.G. to dispose of Mr. 53 AIKATH 'S application afresh.
The C.G., in turn, set aside the order of the S.G. on 3.8.78 and directed the S.G. to decide the application of the party afresh, after taking into account the plea of the party that the area could not be reserved for exploitation in the public sector.
However, no orders were passed by the S.G.
The petitioner, therefore.
again filed a revision application before the C.G. which passed orders on 12.12.79 directing the State Government to pass a speaking order and dispose of the application on merits.
The S.G. by an order dated 17.1.80, rejected the application.
Mr. AIKATH filed a writ petition in the High Court and this was pending when W.P. 14116/84 was filed here by IMFA.
(b) Subsequent Development: On 21.11.84, AIKATH and 'the S.G. entered into a compromise under which the former was to be granted a lease in respect of 140 acres situated on the eastern side of the 320 acres referred to earlier.
This compromise was accepted by the High Court of Orissa on 4.12.84.
Thereafter the S.G. offered a lease of 140 acres on certain terms and conditions and these were accepted by AIKATH on 19.2.85.
This was reported by the S.G. to this Court but no orders were passed by this Court, and no ML has been executed, in favour of AIKATH.
It may be mentioned that one of the areas applied for by IMFA on 24.11.81 covered the area which.
according to AIKATH, had been in his possession all along.
ORISSA INDUSTRIES LIMITED (ORIND) (a) Previous History. ' ORIND made an application for mining lease on 5.7.71.
It applied for mining leases over an area of 1129.25 hectares in the villages of Telangi, Patna.
Ostapal, and Gurjang in District Cuttack.
This application was rejected by the S.G. on 23.10.73 on the ground that the area was reserved for exploitation in the public sector.
It is stated that subsequently on a representation made by ORIND on 15.12.73, the S.G. recommended to the C.G. that a lease in favour of ORIND may be granted in respect of 749.82 out of 1129.25 hectares applied for.
However.
this recommen dation was withdrawn (as will be discussed later).
The C.G., by an order dated 23.2.77, directed the S.G. to pass a speaking order on the application but the S.G. did not comply with this direction.
The company, therefore, filed writ petition.
O.J.C. 1585/198 1 in the High Court of Oris sa.
This writ petition was pending when W.P. 14116/84 was filed here.
It may be here mentioned that one of the contentions of ORIND 54 before us is that it had also applied on 5.7.71 lot a lease of mining rights in respect of 446.38 hectares in village Sukrangi in Distt.
Cuttack.
That had been rejected but a revision petition had been filed before the C.G. against the said rejection.
The S.G. it is said.
while Lending its comments on 26.2.74 to the C.G. on the ORIND 's revision petition.
had reiterated that their revision petition may be rejected as S.G. had already decided to grant ORIND a lease of 749.82 out of the area of 1129.25 hectares applied for by it.
(b) Subsequent developments: It is stated that the S.G. has subsequently withdrawn its recommendations for the area of hectares.
The S.G. rejected ORIND 's application for 1129.25 hectares by an order dated 7.4.89.
The contents of the order are discussed later It concludes: In view of the above facts and pendency of Writ Petition No. 14116 of 1984 before the Hon 'ble Supreme Court of India.
it is not possible for the S.G. at this stage to pass any order on the mining lease application dated 5.7.
1971 of ORIND and.
accordingly the said application is disposed of.
ORIND has preferred S.L.P. No. 8574/89 from this order of the S.G. So far as the other application of ORIND is con cerned.
no information has been given to us as to what orders.
if any.
the C.G. has passed on ORIND 'S revision or as to what steps the applicant has taken subsequently.
ORISSA CEMENT LIMITED (OCL) (a) Previous History: The company 's grievance is that it has been filing applications for mining rights in respect of chrome ore right from the year 1961 but none of the applications have been considered by the State Government on the plea that the areas applied for had been reserved for exploitation in the public sector.
Further applications were made by OCL in respect of following areas: 55 SI.
Date Area Date of Orders Orders Remarks No. of and Revis passed passed Appeal Village sion of by the by the appli State Central cation, Govt.
, if any.
if any.
1. 2. 3.
11.5.70 354,505 3.5.71 5.2.71 3.6.72 This area Hectare, The area was free, Gurjang is reser previously & Telan ved by held by gi, P.S. the State Aikath for Sukinda Govt.
for 320 Acrs.
Distt. exploita The State Cuttack tion in Govt.
has public now gran sector.
ted i.e. in the year 1985 as per compromise petition filed be fore High Court Ori ssa.
M/s. Aikath 140 Acs.
Factor 180 Acs.
Same application filed again 2. 8.5.74 354,505 Deemed 23,277 Rejected Although Hectares Rejec M/s.
Facor 's Gurjang tion application & on 7.6.78 Ostapal was much Distt.
after our Cuttack application they were granted M/L by S.G.vide No.6844 dated 24.5.85 In fairness S/G should have given us this area.
As per deci sion taken by them earlier, 50% of the area should be released to us keep 56 ing in view the principles of natural justice, as recommended by State Govt.
vide in their letter No17410 dated 26.2.74, to centre for 142 Acrs.
to Orissa Cement.
15.5.70 226.22 1.5.72 10.2.71 1.6.72 Although Ferro Hecta on the Alloys Corpo res same ration have no Boula plea, unit in Orissa & Soso reser but have a Distt.
ved manufacturing Keonjher for state unitin Andhra exploita the Central tion Govt.
passed orders as un der in 1971 72 over an area of 187.03 hects.
against strong opposi tion by State Govt.
: "Whereas the Central Govt.
in exercise of the powers conferred by Rule 58(2) of the N.C. Rules 1960 relaxed the provision of rule 58(1) as a special case for the reason that the appli cants having establis 57 hed a big fac tory for manu facturing Fer ro Chrome ore, provision has to be made for procurement of raw materials for the proper running of the factory".
Based on the said decision a fresh revi sion petition was filed on 6.4.73 but the C.G. it rejec ted on30.11.74 although the S.G.recommen ded: vide letter No.17410 NG dated26.2.1974 for approval for grant of 142 Acrs.
to O.C.L. Same application filed again 4.
10.4.74 226.22 No 6.6.75 29.8.75 The Please see re Hectares Orders Central marks in Sl(3) Boula were Govt.
set 142 Ac.
could Keonjhar passed aside the have been gra as re the deemed nted.
This quired rejection application by sta and reman was filed pur tute.
ded the suant to the matter back Notification to the S.G. issued by the for consi S.G. throwing deration.
open for re grant 58 The State vide No.38/73 Govt.
on dated 5.3.74.
25.9.1975 The State Govt rejected latter changed the appln.
their decision on the plea for working in that the public sector, area over contrary to laps other the decision lease area.
pronounced by Our earlier Supreme Court appln.
as referred to 15.3.70 in AIR.
1976 was rejec Delhi.
ted but was granted to Keeping in some other view principle party i.e. of justice, FerroAlloys 50% of this Corporation area should be for a redu released to ced area.
Orissa Cement.
11.5.70 388.498 22.10.70 23.10.70 7.4.72 C.G. rejected Hectares as above the applica Shrhranqi tion on the & plea they did Tailangi, not like to P.S. interfere with Sukinda.
the decision District taken by the Cuttack.
S.G. for keep ing the area reserved for exploitation in public sector.
Same application filed again 6.
8.5.74 388.498 Deemed 23.2.77 3.6.77 The M/s Sirajudin Hectares rej delay was was holding Sukrangi ection explained the area of & but rejec 100 Ac.
under Tailangi ted becau M.L. for 20 Distt.
se of delay years from cuttack.
8.8.85 which expired in 1975.
59 Renewal has been refused, Sirajudin being a trader (However M/s Sirajudin & Co., has gone in writ to Orissa High Court, which is still pen ding) OMC has been granted lease over 382.709 Hects.
8.5.74 7 Sq.
Deemed 6.6.75 8.6.76 The This could miles rejec Central Govt.have been Kala tion set aside granted to us ran the deemed but M/s.
OMS is gista rejection working which & Ka and reman can be taken liapani ded to S.G. out from them Distt.
The S.G. to grant the Cuttack.
rejected our property to us appln.
but OMC was just granted a permitted to free area work on ad hoc of 3 sq.km.
basis.
to OMC, who are holding a lease from more than 70 sq Kms.
approx.
and hardly working 15/20 sq.
in different ML areas granted to M/s. OMC.
23.10.82 20.072 Dee 14.11.83 The C.G. set hec med aside the tares re order of area jec tion 60 Bangura deemed rejec etc.
tion on Distt.
23.12.83.
No Keonjhar final order has been passed by the S.G. 9.
23.10.82 549,1098 Dee 14.11.83 29.12.83 as This has Hectares med above been gran Kalia rej ted to M/s. pani & ec OMC.
Gurjang tion etc.
23.10.82 365.467 Dee 14.11.82 19.12.83 This area Hecta med as above pertains res re to Sl.1&2 Ostopal jec therefore & Gur tion the jang, remarks etc.
stated Distt.
therein Cuttack.
stand.
23.10.82 16.087 Dee 14.11.83 19.12.83 As The S.G. Hecta med above.
rejected res rej it on Bangu ec 27 6 1985 ra, tion.
on the P.S. ground Soso that the Distt.
area over Keonjhar laps in full with the area previously held by Sirajudin & Co. Re newal was refused by StateGovt.
21.1.83 29.477 Deemed 28.3.84 Against Hectares rejec The C.G. this rejec of 72.64 tion remanded tion we Acs.
the mat filed re Sajana ter back vision on garh P.S. to 2.9.85 before C.G 61 Nilgiri S.G. Therefore it Distt.
is free.
It Balascre.
No should be orders granted to us have On similar been grounds the passed.
S.G. has granted.
28.6.85 558.74 No orders acres or passed by 226.14 S.G. des hectares pite C.G. 's Asurbandha orders on Distt.
revision kanal 14.
27.1.86 356.70 No orders hectares passed by in Namla S.G. Revi bhanga sion peti in Karma tion filed khya nagar before C.G. Distt.
on 18.3.87 Dhankanal The previous history as well as the latter developments are indicated in the above columns.
It will be seen, there from that the first seven and the eleventh applications of OCL were duly disposed of before the present litigation started and the party 's grievance is that, in respect of some of them, leases have been granted to others like IMFA, FACOR, AIKATH & OMC.
The others are pending before the S.G. after a remand by the C.G. or, in revision, before the C.G.
The thirteenth and fourteenth applications are pending before the S.G. and C.G. respectively.
ORISSA MINING CORPORATION LIMITED (OMC) OMC is a State Government undertaking.
It submitted an application for an area of 725.21 hectares in village Chin gripal on 30.6.82.
62 Though this area was within the area of 1460 sq.
re served for exploitation of chromium ore in public sector as per the State Government notification dated 3.8.77, its application remained un disposed of and was deemed to be rejected on the expiry of the statutory period of one year.
The C.G., by an order dated 10.10.83, on a revision filed by OMC, directed the S.G. to dispose of the application within 200 days.
The S.G., however, did not grant OMC any lease but, instead, granted ML to IMFA on 14.3.85 in respect of 26.62 hectares which was well within the area applied for by OMC.
OMC has also made an application for mining rights regarding 108.86 hectares in Kamrarda Balipada villages and 220.15 hectares in Gurjang village which has not been grant ed.
In the result, the OMC has not been granted by mining lease despite its claim that the area in question has been reserved for exploitation in public sector though IMFA has been given ML in respect of 26.62 acres out of the area covered by these applications.
However.
from the details given earlier pertaining to OCL, it will be seen that OMC has been permitted to exploit about 382.709 Hectares in one area on an ad hoc basis and has leases over about 70 sq.
and 3 sq.
in other areas.
INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LIMITED (IDCOL) This company submitted two applications on 11.1.83 before the S.G. for grant of mining leases for chromium ore over an area of 740.67 hectares in village Patna Chingiripal and 171.73 hectares in village Gurjang.
The applications were not disposed of by the S.G. within the specified time.
The C.G. set aside the deemed refusal and directed the application to be disposed of but no decision has been taken by the S.G., apparently on the ground that the entire dis pute regarding grant of mining rights for chromium ore is pending in this Court in W.P. 14116/84.
ORDERS PASSED BY THIS COURT It is now necessary to refer to the various interim orders passed by this Court in this matter because some of the parties have made a grievance that, though their claims for leases were pending at various levels, IMFA and FACOR have been able to obtain from this Court orders directing the grant of leases to them and that this procedure was wholly unjustified.
To start with, it must be mentioned, the C.G., the S.G. and certain officers of the C.G. and S.G. were impleaded as respondents 1 to 6 in the Writ Petition with FACOR as the 7th respon 63 dent.
In the writ petition IMFA referred to its applications in respect of five blocks of land detailed in para 8 of the writ petition and alleged that, while the petitioner 's application for a lease in respect of the five blocks re ferred to earlier remained pending for more than a year for consideration in pursuance of the C.G. 's directions for its disposal, the S.G. had granted mining leases for chrome ore in favour of FACOR which, according to the petitioner, was similarly placed.
In view of this allegation, this Court passed a detailed and stiff interim order on 27.9.84 in the following words after hearing the counsel for the petition ers and the standing counsel to the S.G.: "Mr. R.K. Mehta, learned counsel appears on behalf of Respondents Nos.
4 to 6 pursuant to the notice served upon him as Standing Counsel for those respondents, and he asks for time in order to enable him to obtain instructions from those respondents and to file a counter affidavit for these respondents.
We would, therefore, adjourn the Writ Petition to 30.10.84.
But in the meanwhile we would direct respondents Nos. 4 to 6 not to grant to anyone else other than the petitioners mining lease for chromite ore in re spect of the areas applied for by the petitioners and form ing the subject matter of applications made by them as set out in paragraph 8 of the Writ Petition.
Since the project which is being set up by the petitioners is a very important export oriented project for which the necessary permission has already been granted by the Govt.
of India and the Consortium of Foreign Banks has already agreed to finance the Project and it is a project which will earn considerable foreign exchange for the country and provide employment to a large number of workmen, we would direct the 4th respondent to consider and decide the application of the petitioners set out in paragraph 8 of the Writ Petition on or before 23. 10.84 after giving an opportunity to the petitioners of being heard in the matter.
We have no doubt that the 4th respondent will keep in view the nature and importance of the project and its foreign exchange earning capacity, as also its potential for providing job employment to a large number of workmen in the State of Orissa while considering and deciding the applications of the petitioners.
The 4th respondent will also take into account the fact that similar mining leases have been given to the 7th respondent and prima facie there does not appear to be any reason for denying the same facility to the petitioners, for 64 otherwise the action of the 4th respondent may be liable to be condemned as discriminatory and arbitrary and moreover the 4th respondent cannot over look the fact that if mining lease as applied for are not granted, the petitioners will have to import chromite and that will be a drain on the foreign exchange resources of the country.
There are matters where national interest alone must count.
It is indeed surprising that though the Central Govt.
directed the 4th respondent to dispose of the application of the petitioners more than a year ago, the 4th respondent has not yet chosen to dispose of the applications.
We would direct the 4th respondent to carry out the direction given by us and dis pose of the applications of I.the.
,petitioners in the light of the observations contained in this order on or before 23.10.84.
The decision taken by the State Govt.
on the application shall contain the reasons and will be communi cated to the petitioners and also placed before this Court along with the Counter affidavit.
The previous order made by us in regard to the production of files will stand and the files shall be produced at the next hearing of the Writ Petition.
The Writ Petition stands adjourned to 30/10/84.
On coming to know of this order, FACOR had the matter men tioned and, after hearing the arguments of its counsel, the Court passed an order on 18.10.84, the material portion of which reads as under: "On the application of Mr. Kapil Sibbal, learned counsel appearing on behalf of the 7th respondent, we direct that no decision shall be taken on the applications of the petitioner until 30.10.84 unless a decision has already been taken.
In the event the decision has already been taken it shall not be implemented until then.
The files relating to the applications of the petitioner and the 7th respondent for mining leases in respect of chromite ore shall be sent to the Registry of this Court forthwith in a sealed cover along with a responsible officer of the State Government so as to reach the Registry of this Court by 2 p.m. on Satur day, 20th October, 1984.
" A little later, Mr. Aikath was impleaded as respondent No. 8 and, pending the filing of a counter affidavit by him, the Court passed the following order on 28.2.
1985: 65 " . .
We would direct the State Government to give to the petitioners within 15 days from today the leases in respect of the areas of item No. 3 and 26.62 hectares area out of item No. 4 set out in para 8 of the writ petition . so far as the remaining controversy is concerned, we shall dispose it of on 2.4.85 after hearing the parties.
" The State Government will make an application to the Union of India within 5 days from today for the approval of the leases and the Union of India shall grant approval to them within 10 days".
By the next date of hearing viz. 8/5/85, ORIND entered into the fray and was ordered to be made respondent No. 9 in the writ petition.
Pending further affidavits by the parties, the Court gave another direction in the following terms: " . . the State Government will give to respondent No. 7 within 3 weeks from today lease in respect of 180 acres in item No. 5set out in paragraph 8 of the writ peti tion excluding the area which the State Government propose to give to respondent No. 8.
This order. is without preju dice to the rights and contentions of the parties . .
The State will make an application to the Union of India within a week from today for the approval of the lease and the Union of India will grant its approval within a period of 2 weeks from that date".
Then comes the order dated 30.4.87 by which the writ peti tion was disposed of.
It needs to be set out in full: "After hearing counsel appearing for the parties we consider that the proper order to be passed is to direct the parties who have applied for grant of mining leases to file representations before the Secretary Ministry of Mines and Steel, Department of Mines, Government of India within ten days from today setting out their claims in respect of the areas covered by their respective applications.
We direct that the Secretary; Department of Mines shall consider the claims of the various parties in respect of the areas cov ered by their application in the light of the observations contained in the orders already passed by the Court; namely; the Order dated 27th September, 1984 and 66 8th May 1985 after duly taking into consideration the re quirements of the manufacturing industries concerned and decide about the question of grant of mining leases after giving an opportunity of being heard to the parties con cerned.
Final orders in the matters should be passed by the Secretary within a period of six weeks from today.
It is made clear that the memoranda of compromise said to have been filed in the High.
Court of Orissa will be treated as not binding either on the parties or on the State Government and the whole question will be treated as being fully open for fresh consideration and determination by the Secretary Department of Mines, Government of India.
The status quo as obtaining at present with regard to the carting out of the mining operations over the areas will continue until the representations are disposed of by the Secretary pursuant to this order within six weeks from today.
As already indicated the entire matter will be fully open for consideration by the Secretary and the orders passed by this Court should not be treated as final in regard to the allocation of the areas to the different claimants.
The fact that certain writ petitions are pending before the High Court of Orissa will not in any way hamper the effective carrying out of this order.
It is needless to add that the disposal of the matter by the Secretary should be by a reasoned order.
The writ petition is disposed of on the above terms.
" Sometime later, IMFA moved an application for clarification of the Court 's order dated 30.4.87.
On this the following order was passed on 6.10. 1987: "There are several claimants for the grant of mining leases in different parts of Orissa.
This question has come up from time to time before this Court.
The first relevant order was the one dated the 28th February, 1985.
Therein a bench consisting of P.N. Bhagwati, J. (as he then was) and V. Balakrishna Eradi, J. directed the State Govern ment to give to the petitioners M/S Indian Metal & Ferro Alloys Ltd. within 15 days from today the leases in respect of the full areas of Item No. 3 and 26.62 hectares area out or ' Item No. 4 as set out in paragraph 8 of the Writ Peti tion.
This Court further directed so far as the remaining controversy was concerned that the same shall be disposed of later on 67 by giving certain other consequential directions as the petitioners might seek which it is not necessary to refer ' here.
It was directed that the State Government was to make an application to the Union of India within 5 days from the date of the order for the approval of the leases by the Union of India and which should grant approval within ten days therefrom.
Thereafter it appears that on 8.5.85 another order was passed by the same bench of this Court wherein it was di rected that the Orissa Industries Ltd. should be joined as respondent No. 9 in the Writ Petition and respondent No. 9 would file counter affidavit and directions were also given for filing rejoinder, if any.
It was directed that "pending hearing and final disposal of the writ petition the State Government would give to the respondent No. 7 within three weeks from today, lease in respect of 180 acres in Item No. 5, set out in paragraph 8 of the writ petition the State excluding the area which the State Government proposed to give to respondent No. 8.
" It was stated that this order was made without prejudice to the rights and contentions of the parties directions were given for hearing of the writ peti tions.
Finally the order with which we are directly concerned with is the order dated the 30th April, 1987 which was passed by a bench consisting of Hon 'ble V. Balakrishna Eradi, J. and one of us G.L. Oza, J. The said order is set out in paragraph 2 of the C.M.P. Nos. 16435 37/87.
It is not necessary to set out in detail the order.
It may be noted that the Court directed that the proper order to be passed was to direct the parties who had applied for grant of mining |eases to file representations before the Secretary, Ministry of Mines and Steel, Department of Mines; Government of India within ten days from that date setting out their claims in respect of the areas covered by their respective applications.
This Court directed the Secretary Department of Mines to consider the claim of the various parties in respect of the areas covered by their applications in the light of the observations contained in the orders already passed by this Court, namely, the orders dated the 22nd September, 1984 and the 8th May, 1985 after duly taking into consideration the requirements of the manufacturing Indus tries concer 68 ned and decide about the question of grant of Mining Leases after giving an opportunity of being heard to the parties concerned.
Thereafter, the present applications have been made by different claimants seeking for directions for being added for consideration by the Secretary subject to their existing rights under the existing leases and grant of future leases.
Mr. Kapil Sibbal, counsel appearing for the respondent No. 7 and Dr. Gauri Shankar counsel appearing for the applicant submitted that there are existing leases in their favour which cannot be entertained (sic) by any order passed by the Secretary and they are entitled to work out their full rights.
On the other hand the Orissa Mining Corporation as well as Industrial Development Corporation Orissa are also claiming for grant of Mining leases includ ing respondent No. 8 who is alleged to have found out the mines.
In our opinion the proper order would be to pass order in terms of the order passed by this Court on 30.4.87.
The claims of the.different claimants including Mr. Sibal 's clients as well as Dr. Gauri Shankar 's should be considered in accordance with law by the Secretary in making his con siderations.
The Secretary should bear in mind the previous orders made in their favour and the previous leases and the rights, if any, granted therefrom and their consequences.
Similarly the public benefit and public interest involved and proper exploitation of the mines should be borne in mind.
Bearing these facts it is directed that the Secretary should arrive at a just, equitable and objective decision and send a report to this Court within three months on receipt of the copy of the order within a fortnight from today.
The Secretary should only consider the applications of those who had existing leases applications at the time when the order of 30.4.87 was made and not of those who had no existing leases applications on 30.4.87.
The copy of the report to be made shall be supplied to the parties.
" It is in pursuance of this order Rao has heard the parties and submitted the report which has now been placed before us for further directions.
OTHER PENDING APPLICATIONS It is necessary, to clear the ground, to refer to a number of applications made by the various parties subse quent to the order of this Court dated 30.5.87: 69 (i) By C.M.P. No. 13347/87, FACOR pointed out that a lease in respect of 180 acres (being part of item 5) had been granted to it by the S.G. on 13.8.85 in pursuance of this Court 's order dated 8/5/85.
It claimed that it had made substantial investments, engaged a huge labour force and started mining in this area.
It was disturbed by the fact that OMC and IDCOL had suddenly entered into the picture and claimed before Rao that they were entitled to leases on the basis of reservations.
According to the applicant, only the parties to the writ petition could be heard by Rao and OMC and IDCOL should not be permitted to join the proceedings before Rao and allowed to disturb the leases directed to the given to it and IMFA by the orders dated 28.2.85 and 8.5.85.
A second point taken in the application was this: "13.
That it is submitted that the order dated 30.4.87 does not make it clear as to under what statutory authority the Secretary to the,Government of India shall dispose of the representations made by the various parties to the writ petition.
This matter requires to be clarified by this Hon 'ble Court".
This application was opposed by the OMC and the IDCOL.
The Court, by its order dated 6.10.87, rejected the first re quest and allowed OMC and IDCOL to participate in the pro ceedings before Rao; it was directed that the claims of all parties whose applications for lease were subsisting on 30.4.87 should be heard by Rao.
It was, however, clarified that in arriving at his conclusions, the Secretary should bear in mind the previous orders made in favour of IMFA and FACOR, the previous leases and rights granted to them and their consequences.
The second aspect to which the applica tion referred was, however, not clarified.
(ii) A second application of FACOR (C.M.P. 22588/77) was directed primarily at the IMFA.
It was submitted here that the order dated 28/2/85 needed to be recalled and FACOR allowed to put forward claims in respect of the areas di rected to be leased out to IMFA as IMFA had not at all been operating its export oriented unit (EOU) since 1984 and was attempting to divert the ore to its domestic units whereas FACOR was the one that was operating an EOU and needed all the ore it could get.
No notice was issued on this applica tion apparently as all the claims had already been referred to Rao.
(iii) In August 1987, IMFA moved C.M.P. 21578/1987.
This was in the nature of a counter to C.M.P. 13347/87 moved by FACOR.
This 70 application also prayed that the consideration before the Rao Committee should be confined to the parties to the writ petition.
IMFA also took this occasion to request that the area of 180 hectares leased out to FACOR by the order dated 3/5/85 should be treated as provisional and taken into account in the allotment to be decided on by Rao.
FACOR tiled a reply.
No orders have, however, been passed on the petition.
again.
apparently since all the claims were before Rao.
(iv)C.MP.
9284/88 was filed by OCL to quash the "order" of 1.2.88 passed by Rao which has totally rejected the claims of OCL.
No orders on this petition have been passed so far but this will now have to be disposed of in the light of the conclusions we may reach in regard to OCL 's claims on the merits and no separate orders need to be passed thereon.
(v) I.A. 1/89 was filed by ORIND challenging the cor rectness of Rao 's findings and praying that, pending dispos al of W.P. 14116/84 which according to it stands undisposed of despite the orders dated 30/4/87 and 6/10/87 the S.G., OMC, Tisco.
Sirajuddin & Co. and Mysore Minerals (the re spondents to the application) should be directed to supply to ORIND 3000 M/T of chrome ore per month.
No orders have been passed on this application so far but, since the writ petition itself is now being disposed of, no interim orders as prayed for in this application are at all called for.
STATUTORY INADEQUACIES 1) Delay and Ineffectiveness: Now the first thing that strikes one on perusing the course of the proceedings in the case is the extremely unsatisfactory and impractical proce dure followed under the Act in regard to the grant of mining leases for important minerals like chrome ore.
The statute envisages that the application should be made to the S.G. and disposed of by it within a prescribed period.
But the course of events in the case and other reported cases show that this time limit is observed more in breach than in observance.
Anticipating this possibility, the rules provide that, if an application is not disposed of within the statu tory period, it shall be deemed to have been refused.
So far so good, as at least, the applicant can, on the expiry of the period, have recourse to a higher authority.
The remedy provided to the aggrieved applicant is to file a revision application before the C.G. under section 30 of the Act for revision of the order within three months thereafter.
Rule 55 enables the C.G., after hearing all necessary parties, to "confirm, modify or set aside the order or pass such other order in relation to 71 thereto as the Central Government may deem just and proper".
A note under rule 55 also says that "during the pendency of a revision application the State Government should not take any action in respect of the area, which is the subject matter of the revision petition as the matter becomes sub judice".
Having regard to the wide powers thus conferred.
one would except the C.G. to dispose of the application on merits, either granting the lease in whole or in part or rejecting it.
But, curiously, in most of the cases which come up before Courts as also in this case, the C.G. seems reluctant to pass any order except to set aside the "deemed refusal" and direct the S.G. to dispose of the application afresh within a specified period.
That was the order passed, for example, in IMFA 's case the time given being 200 days.
But the S.G. does not seem to pay any heed to this direction and no order is passed within a reasonable period.
Well, one would think a second approach to the C.G. may be helpful.
IMFA tried it but got back a reply to say that the C.G. was helpless in the matter.
The original order in revision has stated: "should the State Government fail to pass order on the petitioner 's application he may seek redress in an appropriate Court of Law, if so advised" and the subsequent application was rejected by the C.G. on the ground that the C.G. becomes functus officio when it passes the order in revision and has no jurisdiction to revise it.
So all that the applicant can do is to wait for some time and then file a writ petition.
Even if the writ petition were to be heard quickly all that the Court can do is to direct the S.G. to dispose of the application expeditiously.
This is an ex tremely cumbrous and ineffective procedure in which several years pass but the application stands still.
Thus, for e.g., ORIND made an application in 1971 and is yet to know what the fate of its application would be.
It puzzles 'us why the C.S., even in the first instance, could not dispose of the application on merits in the light of the report received from the S.G. and after hearing concerned parties.
(2) Proliferation of applications: Another problem created by the passage of time is the entry of new parties in the fray.
We shall later point out that, though section 11 tries to enunciate a simple general principle of "first come; first served" in practice, priority of an application in point of time does not conclude the issue.
In this case itself.
for instance: during the period ORIND 's application of 1971 has been under consideration before various authorities and in the writ petition filed in Orissa High Court, several other competitors have come into the picture.
The statutory provi sion is not clear as to which of the applications in respect of any particular area, are to be considered together.
If ORIND 's application of 1971 for example: were to be 72 considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand: if all the applications pending for disposal at the time ORIND 's appli cation is to be granted or rejected are to be considered.
the result would be totally different.
Since the interests of the nation require that no lease for mining rights should be granted without all applications therefore at any point of time being considered and the best among them chosen or the areas distributed among such of them as are most effi cient and capable; the latter is the only reasonable and practical procedure.
That is why this Court, in its order dated 30.4.87: laid down we think rightly that all appli cations pending for consideration as on 30.4.87 should be considered by Rao.
(3) Procedure for consideration of applications: A further confusion created in this case is due to the fact that leases of different areas in different villages and dis tricts have been applied for.
No attempt has been made to locate, with reference to any compact block of land; who exactly are the competitors and whether there are areas in respect of which there is no competition at all.
It will be seen later how this has caused difficulty in the present case.
But what we wish to point out here is that the statute must lay down clearer guidelines and procedure.
Having regard to the new avenues for vast industrial development in the country, the more workable procedure would be for the S.G. to call for applications in respect of specified blocks by a particular date and deal with them together: other later entrants not being permitted in the field.
Otherwise only confusion will result, as here.
There was a time when the S.G. looked to private enterprises for mineral develop ment in its territory.
Even now, it has been stated that 87% of the State territory containing chromite is under lease to one industrial house.
Of late, however, competition has crept in.
The S.G. has its own public sector corporations and various entrepreneurs are interested in having mining leases for their purposes.
It is, therefore: vital that there should be a better and detailed analysis, district wise and area wise and that a schedule for consideration of applications in respect of definite areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applica tions.
These are aspects which call for careful considera tion and appropriate statutory amendments.
IS section 11(2) CONCLUSIVE? Now, to turn to the contentions urged before us: Dr. Singhvi, who 73 appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in section 11 (2); that, subject only to the provision contained in section 11(1) which had no application here, the earliest applicant was entitled to have a prefer ential right for the grant of a lease; and that a considera tion of the comparative merits of other applicants can arise only in a case where applications have been received on the same day.
It is no doubt true that section 11(2) of the Act read in isolation gives such an impression which, in reality, is a misleading one.
We think that the sooner such an impres sion is corrected by a statutory amendment the better it would be for all concerned.
On a reading of section 11 as a whole one will realise that the provisions of sub section(4) completely override those of sub section (2).
This sub section preserves to the S.G. a right to grant a lease to an applicant out of turn subject to two conditions: (a) record ing of special reasons and (b) previous approval of the C.G.
It is manifest, therefore, that the S.G. is not bound to dispose of applications only on a "first come, first served" basis.
It will be easily appreciated that this should indeed be so for the interests of national mineral development clearly require in the case of major minerals.
that the mining lease should be given to that applicant who can exploit it most efficiently.
A grant of ML in order of time will not achieve this result.
In the context of his submission pleading for priority on the basis of the time sequence Dr. Singhvi referred to certain observations in the decisions reported as Ferro Alloys Corporation of India vs Union, I.L.R. 1977 Delhi 189 at p. 196 and as Mysore Cements Ltd. vs Union, A.I.R. at p. 15 1.
we do not think these decisions help him.
In the former case; an application by FACOR for a lease was rejected on the ground that an earlier application was being accepted.
FACOR contended this was wrong that the S.G. could not have refused to look into its application merely because another applicant had a preferential right under section 11(2) and that its application as well as that of the earlier applicant should have been considered together.
It is in the situation that the Court observed that rule 11 primarily embodies the general principle of "fist come first served" and an out ofturn consideration under section 11(4.) was an exception for which a strong case had to be made out.
The petitioner could not have a grievance if the general principle was followed.
So also, in the latter case an earlier application having been accepted and a lease granted, the consideration of a later application was held to be uncalled for.
These decisions cannot be treated as authorities for the proposition that the S.G. is bound to grant an earlier application as soon as it is received 74 and cannot wait for other applications and consider them all together and grant a later one 'if the circumstances set out in rule 11(4) are fulfilled.
That apart it has to be remem bered that the S.G. did reject ORIND 's application by an order dated 23.10.
This order was set aside in the C.G. on 20.2.
1977 and the S.G. directed to consider it afresh.
The S.G. did not comply with this order and so a writ petition was filed by ORIND which was pending when this writ petition was" filed.
Subsequently the High Court on 9.2.89 directed the S.G. to consider and ,dispose of ORIND 's application on merits.
The S.G. on ' 7.4.89 dismissed ORIND 's application on the ground that the issue is before us and hence the S.L.P. against the order of rejection of the S.G.
Even assuming that we accept the S.L.P. filed by ORIND that will only entitle ORIND to have its application reconsidered for grant along with such other applications as may be pending as on the date of such reconsideration.
In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them it would not be correct to say that as the S.G. 's order of 29.10.1973 has been set aside ORIND 's application should be restored for reconsideration on the basis of the situation that prevailed as on 29.10.
1973 and that therefore it has to be straight away granted as there was no other application pending on that date before the S.G.
In matters like this subsequent applications cannot be ignored and a rule of thumb applied.
We are unable to accept the submission of Dr. Singhvi that the application of ORIND being the earliest in point of time should have been accepted and that we should direct accord ingly.
As to how far the requirements of section 11(4) are ful filled in the present case that is an aspect which will be considered later.
PROMISSORY ESTOPPEL It will be convenient here also to deal with another argument raised by Dr. Singhvi based on grounds of promisso ry estoppel.
Dr. Singhvi points out that when ORIND applied to the C.G. for revision of the order of rejection of its application on 23.10.73 the S.G. on 26.2.74 wrote to the C.G. as follows: M/s Orissa Industries Limited made 'representation to the State Government on ' 15.12.
1973 for reconsidering grant of lease to serve the captive requirements of their refractory plant.
They also brought to the notice of the State Government an export order of refractories of sizeable value of about Rs.2 crores received from National 75 Iranian Steel Mills.
Teheran Chromite, being essential raw material for manufacture of refractories they pressed for grant of Mining Lease.
After careful consideration of the representation, the State Government have revised the policy of reserving the chromite area only for exploitation in public sector and have decided for grant of chromite to serve the captive requirements of industry within the State should be given first priority.
Accordingly, it is proposed to grant the mining lease for chromite over the available areas subject to revision of the previous order of the State Government by Government of India u/s 30 of the Mines & Minerals (Regulation & Development) Act, 1957 and u/s 5(2) of the said Act.
Steps are being separately taken to exclude this area from the operation of reservation notification for exploitation of chromite in the public sector.
In the interest of the local industries.
the State Govt.
do not intend to throw open the area after releasing from reservation.
Approval of Government of India would also be necessary for not throwing open the area in the relaxa tion of the rule 58 of the Mineral Concession Rules 1960.
Out of 1129.25 hectares applied for, an area of 379.93 hectares is covered by overlapping of applied leases or applications including an area of 142 hectares which is being separately recommended to Government of India for grant of Mining lease in favour of M/s Orissa Cement Limit ed.
As such the net area available for grant of mining lease is therefore.
749.32 hectares.
The State Government having rejected the application of the party in Government Proceeding No. 1043 dated 23.10.
1973 are got obtain to revise their own order by granting Mineral Concession as instructed in your department letter No. MV I(445)/61 dated 5.1.72.
The case is therefore.
recom mended to Government of India for grant of Mining Lease over an area of 749.32 hects.
in favour of M/s Orissa Industries Limited revising the above order of the State Government u/s 30 of the .
As chromite ore is specified mineral under the first schedule of the Act approval of Government of India is also requested u/s 5(2) of the Act.
I would therefore, request you to kindly obtain and communicate orders of Government of India on revision u/s 30 of Mines & Minerals (Regulation & Development) Act, 1957 and approval u/s 5(2) of the said Act and in relaxation of Rule 58 of the Mineral Concession Rules.
1960 for grant of Mining Lease for chromite over an area of 749.32 hectares in Cuttack District in favour of Orissa Industries Limited.
" Simultaneously, it is pointed out, the S.G., while sending its comments to the C.G. on the contents of another revision application filed by ORIND against the rejection of its application (also dated 5.7.71) for a lease of 446.38 hec tares in village Sukrangi of Cuttack District, had this to say: "Recently in State Government letter No. 1747MG dated 26.2.74 chromite bearing area to the extent of 749.32 hectares in Cuttack district has been recommended to Govern ment of India for grant in favour of M/s Orissa Industries Ltd. The need of M/s Orissa Industries Ltd. will be met from this.
It is the responsibility of the party to obtain raw materials for its factory and the State Government cannot take such responsibility as contended by the petitioner.
The party is at liberty to purchase the chrome ore from Orissa Mining Corporation.
XXX XXX XXX The State Government have already recommended an area in favour of M/s Orissa Industries Ltd. to the Govt.
of India to meet the requirements of their industry.
The State Government have already decided to grant the area applied for by M/s Orissa Industries Ltd. in their M.L. application under revision to M/s Orissa Mining Corporation Ltd. who are now working the area as an agent of the State Government.
Hence the question of granting this area to M/s Orissa Industries Ltd. does not arise.
" Also, on 5.3.74 the S.G. published a notification dereserv ing the said 749.32 hectares (said to have been earlier reserved for exploitation in the public sector by a notifi cation of 3.7.
1962).
Dr. Singhvi submitted on the strength of this correspondence and notification that the S.G. having sought to justify its rejection of ORIND 's application for 77 446.38 acres on the ground that the company 's application for 749.32 hectares was being recommended after dereserva tion, it was not open to the S.G. now to take up a different stand and that ORIND 's application for 1229.25 hectares now under consideration should have been granted at least to the extent of 744.32 hectares the dereservation and lease in favour of ORIND, of which had been recommended by the S.G. itself as early as 1974.
In support of this contention, learned counsel relied on the observations made in a series of decisions of this Court: Kanai Lal Sur vs Paramnidhi Sadhukhan, ; M/s Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh and Ors.
, ; ; Gujarat State Financial Corporation vs M/s Lotus Hotels Pvt. Ltd., ; Surya Narain Yadav & Ors.
vs Bihar State Electricity Board & Ors., [1985] Suppl.
1 S.C.R. 605; Union of India & Ors.
vs Godfrey Phi lips India Ltd., [1985] Suppl.
3 SCR 123 and Mahabir Auto Stores & Ors.
vs Indian Oil Corporation & Ors., [1990] J.T. 1 S.C. 363.
This argument is interesting but overlooks certain very important relevant circumstances.
As mentioned earlier, ORIND 's revision petition was disposed of by the C.G. on 23.2.
This order contains no reference to the S.G. 's letter of 26.2.74; on the contrary, it proceeds on the footing that no comments had been received from the S.G.
Possibly this is because the letter of 26.2.74 was not in the form of comments on the ORIND 's revision application but was in the form of the S.G. 's recommendations on ORIND 's representation to it dated 15.12.73, although it does sug gest that the C.G. could set aside the order of 23.10.73 and direct the grant of a lease to ORIND in respect of 749.32 hectares.
Be that as it may, the C.G. did not accept the recommendation of the S.G.
Indeed, we find on record that, having regard to a letter of the C.G. dated 15.5.74, the S.G. sent a letter dated 17.7.74 withdrawing the earlier recommendation made by it on 26.2.74 for the allotment of 749.32 acres to ORIND.
In view of this letter, the C.G. simply set aside the order of 23.10.73 on the ground that it was not a speaking order and directed the S.G. to dispose of ORIND 's application within 100 days in the light of the letter of the C.G. dated 15.5.74.
Interestingly, this letter had been written in reply to a proposal from the S.G. that the exploitation of chromite had to be entrusted to the public sector.
Accepting this suggestion, the letter pro ceeded to lay down certain broad priorities on the basis of which leases could be granted and certain other directions in respect of research and development.
The position, there fore, is that the C.G. did not accept the S.G. 's recommenda tions regarding the grant of a lease to ORIND in respect of 749.32 hectares out of the 1129.25 78 hectares applied for.
There was, however, delay in the disposal of the application by the S.G.
When the S.G. took up consideration of the matter once again it took note of three circumstances to reject the application of ORIND.
These were: (i) One of the directions in the C.G. 's letter of 15.5.74 was that "no lease of lumpy ore for metallurgical and re fractory grade be granted to private sector unless mining undertakings of the State or Central Government are not interested in the exploitation of ore in these leaseholds" and the requirement of ORIND was for lumpy chromite ore; (ii) Two notifications had been issued on 28.4.77 and 3.8.77 reserving certain areas for exploitation by the public sector.
The former dealt specifically with the 749.32 hec tares which had been proposed for allocation to ORIND in the letter of the S.G. dated 26.2.74.
The latter covered a huge area of 1460 sq. km.
in various districts of the State; (iii) The claims of all applicants had been considered by Rao and Rao had come to the conclusion that no mining leases need be given to ORIND.
We shall consider later the claim of ORIND on merits.
But, for the present, we only wish to point out that no grounds have been made out which could support a plea of promissory estoppel.
The grant of a lease to ORIND had to be approved by the C.G.
The C.G. never approved of it.
The mere fact that the S.G., at one stage, recommended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the C.G. 's directives.
Perhaps, the highest that ORIND can claim is that, since this lease of 749.32 acres has not come through, the SG 's order rejecting its application in respect of 446.38 hectares deserves to be considered.
But that area is not the subject matter of the present S.L.P. by ORIND.
Moreover, ORIND has not placed before us any information as to what happened to the revi sion petition filed by it against the rejection of the application in respect of 446.38 hectares of the further proceedings, if any, in relation thereto.
We express no opinion as to ORIND 's entitlement to a lease on that appli cation in case it does not succeed in its claim here in respect of 749.32 hectares.
It will be open to ORIND to pursue such remedies in respect thereof as it may be advised and as may be available to it in law.
79 THE RESERVATION POLICY The principal obstacle in the way of ORIND as well as the other private parties getting any leases was put up by the S.G., OMC and IDCOL.
They claimed that none of the private applications could at all be considered because the entire area in all the districts under consideration is reserved for exploitation in the public sector by the noti fication dated 3.8.77 earlier referred to.
All the private parties have therefore joined hands to fight the case of reservation claimed by the S.G., OMC and IDCOL.
We have indicated earlier that the S.G. expressed its preparedness to accept the Rao report and to this extent waive the claim of reservation.
Interestingly, the OMC and IDCOL have en tered caveat here and claimed that as public sector corpora tions they could claim, independently of the S.G. 's stand, that the leases should be given only to them and that the Rao report recommending leases to IMFA, FACOR and AIKATH should not be accepted by us.
The relevant provisions of the Act and the rules have been extracted by us earlier.
Previously, rule 58 did not enable the S.G. to reserve any area in the State for exploi tation in the public sector.
The existence and validity of such a power of reservation was upheld in Kotiah Naidu vs State of A.P., A.I.R. 1959 A.P. 185 and Amritlal Nathubhai Shah vs Union, A.I.R. 1973 Guj. 117, the latter of which was approved by this Court in ; pointed out earlier, rule 58 has been amended in 1980 to confer such a power on the S.G.).
It is also not in dispute that a notification of reservation was made on 3.8.77.
The S.G., OMC and IDCOL are, therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the S.G. or a public sector corpora tion [rule 59(1), proviso] unless the availability for grant is renotified in accordance with law [rule 59(1)(e)] or the C.G. decides to relax the provisions of rule 59(1) [rule 59(2) ].
None of those contingencies have occurred since except as is indicated later in this judgment.
There is, therefore, no answer to the plea of reservation put forward by the S.G., OMC and IDCOL.
The private applicants seek to get over this difficulty in several ways.
In the first place, they all vociferously urge that this plea has been taken by the S.G. belatedly, that the OMC and IDCOL have come into the picture very late and that this plea should not be allowed to be raised at this stage.
The learned Advocate General for the State of Orissa has pointed out, we think rightly, that there is no substance 80 this grievance.
The objection regarding reservation was raised by the S.G. at the very first opportunity it had, in a preliminary counter affidavit filed by it in the writ petition dated 29.10.1984.
The counteraffidavit mentioned about the reservation in no uncertain terms and a copy of the relevant page of the Orissa Gazette dated 12.8.77 which contained the reservation notification dated 3.8.77 was also annexed to the counter affidavit.
Reference was also made to the statutory provisions and judicial decisions.
The claim was reiterated, when ORIND joined the proceedings, in a reply filed by the State to the counter affidavit filed by ORIND on 22.8.85; this reply affidavit refers to the letter of the C.G. dated 15.5.74 and the notification of reserva tion dated 28.4.77 pertaining to the 749.32 acres in respect of which ORIND had made an application.
In a further coun ter affidavit dated 24.11.89 filed "in reply to the addi tional submissions dated 17.10.89 filed on behalf of ORIND", the notification of 3.8.
1977 has also been referred to.
OMC and IDCOL had submitted their applications for lease but no orders had been passed thereon.
When they came to know that the applications of IMFA and FACOR were considered by this Court and certain interim orders passed, they approached Rao to consider their applications as well.
This request was opposed by the other parties whereon OMC and IDCOL sought and obtained the directions of this Court that their appli cations should also be considered by Rao.
Before Rao, they supported the S.G. plea of reservation.
In the circumstances Set out above, it is difficult to accept the contention of the various private applicants that the plea as to reserva tion should not be entertained at all on the ground of delay and 1aches.
It is then argued that though the S.G. may have formally notified a reservation, it has not been very serious about this and has always been willing to consider private appli cations for leases.
In support of this contention, reliance is placed on the following circumstances: (a) On 26.2.74, the S.G. has clearly expressed its willingness to dereserve the area of 749.32 acres and, indeed, followed it up on 5.3.74 with a notification of dereservation.
(b) Though the S.G. claims that reservation is neces sary to meet the S.G. 's requirements because 81% of chromite ore rich lands already stand leased out to a private party (TISCO), the S.G. proceeded to renew the grant in favour of that party.
(c) The S.G. has been willing enough to lease out lands to private parties: (i) The S.G. has granted leases to FACOR on 81 9.2.72, 7.10.72 and 12.11.76 in respect of 157.05 hects. 133.31 hects.
and 72.84 hects.
respectively in Bokhla, Kathpal and Ostapal villages.
(ii) it has entered into an agreement with AIKATH to grant a lease in respect of a part of the land applied for by him in item 8; (iii) it has agreed to lease out item 3 and 26.62 hectares out of item 4 in favour of IMFA; (iv) it agreed to lease out 180 acres in item 5 in favour of I FACOR.
(d) Even at this final stage of hearing of the writ petition.
the Advocate General of the State has conceded that the S.G. is prepared to abide by the Rao report i.e. the S.G. is willing to grant leases to IMFA, FACOR and AIKATH but not to OCC or ORIND.
This is patently discrimina tory.
We do not, however, think that these circumstances establish that the State is not serious about its plea of reservation.
So far as item (a) is concerned.
we have al ready pointed out that this was the initial attitude of the Government but this policy was changed in pursuance of the C.G. 's letter dated 15.5.74 and its order on ORIND 's revi sion application.
The S.G. itself had, in fact, withdrawn the recommendations made on 26.2.74 by its letter of 17.7.74.
The thought of dereservation had therefore been given up by the S.G. in July '74 itself though the notifica tion of dereservation was superseded only in 1977.
In regard to items (b) & (c), the position is that the lease of 1976 was after the dereservation of 5.3.74.
The leases to FACOR in 1972 (the details of which are not available before us) are stated to have been granted after obtaining C.G. 's order for relaxation.
The full circumstances in which the lease in favour of TISCO was renewed are not before us but perhaps such renewal was dictated by the nature of the industry run by TISCO and its importance for the economy of the State and the country.
These apart, the Court approved of the grant of leases to IMFA and FACOR.
So far as (d) is concerned, the learned Advocate General of Orissa has made it clear that the S.G. does not accept the Rao report in so far as it ignores its claim of reservation.
The concession made only is that since the Rao Committee, in recommending grant of leases to IMFA and FACOR is only giving effect to a fait accompli in pursuance of the interim directions of this Court, they are willing to abide by it.
It will therefore be clear that, except for two or three instances, where leases have been granted by the S.G. on its own, the S.G. has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector.
The rules permit the C.G. to relax the rigid requirements of reservation in individual cases after re cording special reasons.
We are 82 not here called upon to decide whether the relaxations made in the above eases were in accordance with the rules or not.
It is sufficient to say here that these exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties before us that the policy of reser vation is merely being raised as a formal defence and has never been seriously implemented by the S.G. Dr. Singhvi also raised a plea of arbitrariness and mala fide to challenge the reservation policy.
He urges on the first count that it was not open to the S.G. to go on shift ing its reservation policy from time to time without ade quate reasons, Such conduct was also vitiated, he said, as amounting to malice in law and referred in this context to the observations of this Court in Venkataraman vs Union, ; We do not think this contention has any substance.
Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country 's development cannot be gainsaid.
The S.G. rightly decided upon a policy of reservation in 1967 and this was kept up till 1974.
In February 1974 the S.G. was in favour of freer issue of mining leases but gave up this policy in pursuance of the C.G. 's letter of 15.5.74.
Reser vation was, therefore, clamped in 1977 again.
Applications could still be considered to see how far a relaxation was permissible having regard to the nature of the applicant 's needs, the purpose for which the lease was asked for, the nature of the ore sought to be exploited, the relative needs of the State, the availability of a public sector undertak ings to carry out the mining more efficiently and other relevant considerations.
There is no material on record to substantiate a plea that the S.G. has been acting arbitrari ly or mala fide in its policy formulations in this regard.
Our conclusion that the areas in question before us were all duly reserved for public sector exploitation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the C.G. to relax the reservation for recorded reasons.
Nor does this mean, as contended for by OMC and IDCOL, that they should get the leases asked for by them.
This is so for two reasons.
In the first place, the reservation is of a general nature and does not directly confer any rights on OMC or IDCOL.
This reservation is of two types.
Under section 17A(1), inserted in 1986, the C.G. may after consulting the S.G. just reserve any area not covered by a PL or a ML with a view to conserving any mineral.
Apparently, the idea of such reservation is that the miner als in this area will not be exploited at all, neither by private parties nor in the public sector.
It is not neces sary to consider whether any area so 83 reserved can be exploited in the public sector as we are not here concerned with the scope of such reservation, there having been no notification under section 17A(1) after 1986 and after consultation with the S.G.
The second type of reserva tion was provided for in rule 58 of the rules which have already been extracted earlier in this judgment.
This reser vation could have been made by the S.G. (without any neces sity for approval by the C.G. ) and was intended to reserve areas for exploitation, broadly speaking, in the public sector.
The notification itself might specify the Govern ment, Corporation or Company that was to exploit the areas or may be just general, on the lines of the rule itself.
Under rule 59(1), once a notification under rule 58 is made, the area so reserved shall not be available for grant unless the two requirements of sub rule (e) are satisfied: viz. an entry in a register and a Gazette notification that the area is available for grant.
It is not quite clear whether the notification of 5.3.74 complied with these requirements but it is perhaps unnecessary to go into this question because the reservation of the areas was again notified in 1977.
These notifications are general.
They only say that the areas are reserved for exploitation in the public sector.
Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the Government itself is for the Government to determine de hors the statute and the rules.
There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector.
If, there fore the claim of reservation in 1977 in favour of the public sector is upheld absolutely, and if we do not agree with the findings of Rao that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it to the S.G. to consider whether any portion of the land thus reserved should be given by it to these two corporations.
Here; of course, there are no competitive applications from organisa tions in the public sector controlled either by the S.G. or the C.G., but even if there were, it would be open to the S.G. to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the C.G. or S.G. Both the Corporations are admittedly instrumen talities of the S.G. and the decision of the S.G. is binding on them.
We are of the view that, if the S.G. decides not to grant a lease in respect of the reserved area to an instru mentality of the S.G., that instrumentality has no right to insist that a ML should be granted to it.
It is open to the S.G. to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule.
It is true that if, eventually, the S.G. decides to grant a lease to one or other of them in respect of such land, the instru mentality whose application is rejected may be aggrieved .by the 84 choice of another for the lease.
In particular, where there is competition between an instrumentality of the C.G. and one of the S.G. or between instrumentalities of the C.G. inter se or between the instrumentalities of the S.G. inter se, a question may well arise how far an unsuccessful in strumentality can challenge the choice made by the S.G.
But we need not enter into these controversies here.
The ques tion we are concerned with here is whether OMC or IDCOL car, object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector.
We think the answer must be in the negative in view of the statutory provisions.
For the S.G. could always denotify the reservation and make the area available for grant to private parties.
Or, short of actually dere serving a notified area, persuade the C.G. to relax the restrictions of rule 59(1) in any particular case.
It is.
therefore.
open to the S.G. to grant private leases even in respect of areas covered by a notification of the S.G. and this cannot be challenged by any instrumentality in the public sector.
Before leaving this point, we may only refer to the position after 1986.
Central Act 37 of 1986 inserted sub section (2) which empowers the State Government to reserve ureas for exploitation in the public sector.
This provision differs from that in rule 5, ', in some important respects (i) the reservation requires the approval of the C.G.; (ii) the reservation can only be of areas not actually held under a PL or ML; (iii) the reservation can only be for exploitation by a Government company or a public sector corporation (owned or controlled by the S.G. or C.G. ) but not for exploitation by the Government as such.
Obviously, section 17A(2) and rules 58 could not stand together as section 17A empowers the S.G. to reserve only with the approv al of the C.G. while rule 58 contained no such restriction.
There was also a slight difference in their wording.
Perhaps because of this rule 58 has been omitted by an amendment of 1988 (G.S.R. 449E of 1988) made effective from 13.4.88.
Rule 59, however, contemplates a relaxation of the reservation only by the C.G.
By an amendment of 1987 effective on 10.2.
1987, (G.S.R. 86 E of 87) the words "reserved by the State Government" were substituted for the words "reserved by the 85 Government" in rule 59(1(e).
Later, rule 59(1) has been amended the insertion of the words "or under section 17 A of the Act" after the words "under rule 58" in clause (e) as well as in the second proviso.
The result appears to be this ' (i) After 13.4.88, certainly, the S.G. cannot notify any reservations without the approval of the C.G., as rule 58 has been deleted.
Presumably, the position is the same even before this date and as soon as Act 37 of 1986 came into force.
(ii) However, it is open to the S.G. to denotify a reservation made by it under rule 58 or section 17A. Presumably, dereservation of an area reserved by the S.G. after the 1986 amendment can be done only with the approval of ,the C.G. for it would be anomalous to hold that a reservation by the S.G. needs the C.G. 's approval but not the dereservation.
Anyhow, it is clear that relaxation in respect of reserved areas can be permitted only by the C.G. (iii) It is only the C.G. that can make a reservation with a view to conserve minerals generally but this has to be done with the concurrence of the S.G.
We are concerned in this case with reservations made by the S.G. under rule 58 before 1986 which, there is no reason to doubt, continue in force even after the introduction of section 17A.
These, as pointed out above, can be dereserved by th S.G. but a relaxation can be done by the C.G. only.
We shall consider later whether this power of the C.G. can be or has been or should be exercised in this case.
It is sufficient to observe here that the reservations notified in 1977 do not necessarily vitiate the grant of leases to private parties.
STATUS OF RAO REPORT We now come to the question regarding the status of, and the weight to be attached to, the Rao report.
The writ petition and other proceedings before us were directed against the S.G. 's failure to pass favourable orders on the applications of various parties.
Normally, in such a case, this Court would either have directed the S.G. to consider the applications afresh and pass appropriate orders or left it to the parties to file revision petitions before the C.G. against the S.G. 's orders.
Here, as described earlier, the various parties came up before 86 this Court one after the other and some of them had their writ petitions pending in the Orissa High Court.
This Court, therefore, decided that the best course would be to consoli date all the applications that were pending on 30.4.87 for the consideration of the C.G. so that a satisfactory deci sion could be arrived at after an examination of the rela tive merits of the various applicants.
This Court did not specify the statutory provision under which this was to be done but it is apparent that it was intended to be an exer cise of the power of the C.G. under section 30, though this aspect was not clarified when FACOR draw attention to it in C.M.P. 13347/87.
We have no difficulty in construing the Rao report as a decision on the claims of the various parties before it, though, having regard to the terms of the order of this Court dated 6.10.87, it has been styled as a report.
The objections to this conclusion are three fold and they are dealt with below: First, it is pointed out that revisions to the C.G. under section 30 can be validly dealt with only by a "tribunal" and not by a single officer.
We find that the procedure indicated is not dictated by the statute or the rules.
It is only a forum outlined in an office order more as a matter of internal regulation than as a rigid rule of procedure.
We have seen one of these orders dated 10.7.
It consti tutes three Single Bench Tribunals each consisting of a designated Joint Secretary in the Department of Mines and three Divisional Bench Tribunals each comprising of a desig nated Joint Secretary in the Department of Mines and a designated Joint Secretary in the Department of Legal Af fairs in the Ministry of Law and Justice.
The instructions are: "To the extent possible, cases in which parties have not asked for personal hearing should be disposed of by Single Bench Tribunals unless the member feels that some complicated legal issue is involved requiring advice of the member from the Law Ministry.
The cases where personal hearing has been requested by parties, the Single Member Tribunals will decide whether to dispose of the cases after grant of hearing by himself or whether the hearing should be held by Division Bench Tribu nal.
" It will thus be seen that even regular revision petitions under section 30 can be validly disposed of solely by a Joint Secretary in the Department of Mines unless he considers it necessary, either because a personal hearing is asked for or because some complicated legal issue is involved, to 87 invoke the aid of a Joint Secretary in the Law Ministry.
Here, there is no regular revision petition except perhaps in one case; the disposal is by the Secretary to the Depart ment of Mines; he has been specially authorised to deal with the matter by this Court; and no legal issued at all are involved.
We, therefore, see nO irregularity or defect in the procedure forged by this Court for a speedy and effec tive disposal of the claims before the Court.
Secondly, it is said that though the order of 30.4.1987 directs the secretary to dispose of the representations by a reasoned final order, the subsequent order of 6.10.87 asks him to sent a report to this Court.
We do not think there is any inconsistency between the two orders.
Even the order of 6.10.87 requires the Secretary to arrive at a just, equita ble and objective decision.
He has been asked to send a report of his decision to the Court, with copies to the parties, only in order that, if any of the parties are aggrieved by his decision, their grievances may be consid ered by this Court in this W.P. itself, instead of driving the parties to a fresh course of litigation.
Thirdly, it is submitted that Rao 's hands were more or less tied by the various observations and directions of this Court thus preventing him from coming to independant conclu sions of his own.
This criticism is unfounded and also belied by the contents of the report.
This Court had made it clear that Rao should not consider himself bound by the memoranda of compromise filed in the High Court of Orissa (with AIKATH and FACOR) or the orders passed by this Court in regard to the allocation of areas (to IMFA and FACOR) though necessarily he had to "bear in mind the previous orders made in their [IMFA and FACOR] favour and the previ ous leases and the rights, if any, granted therefrom and their consequences".
He was also asked to bear in mind the public benefit and public interest involved and also the need for the proper exploitation of the mines.
In fact also we find that although Rao has approved the grants made in favour of IMFA and FACOR by the S.G. (which, he remarks, were perhaps based on the observations made by this Court).
he has clearly reached his conclusions on these independent ly.
In fact, he has set out a basis for justifying the grants to IMFA and FACOR.
It is also clear that there were no Court orders that could have influenced his decisions on the claims of the other parties.
This objection is, there fore, not at all tenable.
OMC, IDCOL, OCL and ORIND complain, indeed, that Rao has been completely overwhelmed by the weight of the observa tions and the leases granted by the S.G. pursuant to interim orders of this 88 Court.
They have gone to the length of criticising, and, indeed, challenging, the validity of these interim orders which had been passed without notice to any of them.
They have invoked, in support, several passages from the decision of this Court in Antulay vs Nayak, ; We think these criticisms are unfounded.
This Court had only directed the grant of two leases pending disposal of the writ petition.
At the time these directions were made, only IMFA, FACOR and AIKATH were before the Court.
IMFA had pointed out that FACOR had been given certain leases al though its earlier applications were pending before the C.G.
The S.G. submitted to the Court that a lease in respect of item 1 had been granted to FACOR, that item 5 had already been agreed to be leased in favour of AIKATH and FACOR and that it was willing to grant a ML in respect of item 3 and 26.62 acres out of item 4 to IMFA.
It was in view of this that the Court passed the order.
Similarly, the ML directed to be granted to FACOR was also in consequence of the S.G. 's acquiescence therein.
It is, therefore, incorrect to characterise these orders as erroneous or unjustified.
They were fully within the scope of the writ petition and were passed after hearing the parties before the Court.
No doubt, OCC, ORIND, OMC and IDCOL were not there then.
After they put in their appearance, this Court made it clear that while the earlier orders, the observations therein and the leases granted in pursuance thereof should be kept in mind, Rao would not be bound by them but would be free to arrive at his conclusion.
We, therefore, do not see any grounds for the criticisms put forward by these parties in regard to the interim orders passed by the Court.
For the above reasons, we are of opinion that, though styled a report, the findings given by Rao are in the nature of a decision of the C.G. on the claims of the various parties.
We, therefore, proceed to consider the Rao report on its merits.
MERITS OF THE RAO REPORT This takes us then to the merits of the various claims put forward before Rao and his decision thereon.
For our present purposes, we think we can consider the Rao report in two parts: (a) his endorsement of the S.G. 's decision to grant ML to IMFA, FACOR and AIKATH: (b) the rejection by him of the claims put forward by the above three parties for leases in respect or areas over the above what 89 has been allotted to them as well as the rejection of the claims of the other parties.
So far as the first aspect is concerned, we think that Rao 's decision, that the leases that have been granted already in favour of IMFA, FACOR be confirmed, should be upheld.
In our view, these should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 59(2).
It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affidavits filed herein.
We are also of opinion that the Rao 's decision regarding the grant of a lease to AIKATH (not yet implemented) should also be upheld.
In these three cases, we think, the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the MLs actually granted.
We shall just summarise these reasons which have also been taken note of by Rao.
(a) ML to AIKATH, IMFA, FACOR 1.
AIKATH is admittedly an individual who discovered chromite ore in the State.
He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over.
Again, as against a lease of 640 acres which he had once obtained and started operating upon, the S.G. has finally approved of a lease in respect of only 140 acres.
AIKATH had been actually working some mines from 1.5.53.
His original grant had been approved before the area was reserved on 3.7.62.
If the S.G. considers these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the Orissa High Court, there are no grounds to interfere with the decision of the S.G. 2.
So far as FACOR is concerned, the requirements for their plant in Andhra Pradesh were met by the ML granted to them in 1971 72 at Kathpal and Boula, thus recognising their claim for a ML to meet part of their requirements of ore.
Their present needs were in connection with their plant at Randia in Balasore District which required about 1,20,000 tons per annum of ore.
The compromise entered into with FACOR agreeing to grant a ML for an area 72.84 hectares having a potential of about 2.4 million tons would cater to 50% of its needs on a 20 year time frame making allowances for wastage in recovery.
IMFA needs 50,000 tons per annum for their plant at Therbauli and 120,000 tons in respect of a plant at Chandwar run by a subsidiary.
While the reserve potential of 26.62 hectares allotted to IMFA out of item 4 is roughly 0.8 million tons the reserve potentials of 108.86 acres given out of area 3 and of another 17.02 hectares in Balasor District given for the plant of the subsidiary were yet to be assessed.
Nevertheless.
it was expected that they would cater to the needs of IMFA more or less to the same extent that the ML in favour of FACOR catered to its needs.
It is true that a relaxation under rule 59(2) has to be made by the C.G.
The orders of grant do recite the approval of the C.G. in this regard.
An objection has been taken that the C.G. granted the approval not after applying its mind to the matter but merely because this Court had directed it to do so.
We do not think this contention can be accepted.
Apparently, when the S.G. agreed to lease out the areas to IMFA and FACOR it was pointed out that this could not be given effect to without the C.G. 's approval.
This Court thereupon directed that the S.G. should seek such approval.
The direction to the C.G. is only that its approval should be given within the particular time limit set out therein.
It cannot be construed, reasonably, as a direction compel ling the C.G. to grant approval whether it agreed with the S.G .
's decision or not.
We would.
therefore, reject this contention and treat the grants to IMFA anti FACOR as made in exercise of the power of relaxation u/s 59(2 ).
Once again, we would like to observe that, though there is no specific recording of reasons by the S.G. or C.G. inasmuch as these leases came to be granted by way of com promise, it is a fair inference that the compromise propos als were prompted by the, at least partial, acceptance of the claims put forward by these parties.
Since the grant of leases to these three parties can be attributed to the relaxation of the reservation rule in particular cases, the finding of Rao that these leases may be confirmed deserves acceptance.
We have to add a few words in respect of AIKATH.
Though the S.G. and AIKATH had entered into a compromise as early as 4.12.
1984, no lease has yet been granted in his favour perhaps as the C.G. has had no occasion to consider the matter earlier.
We do not think that any useful purpose will be served by remitting the matter and asking the S.G. to seek the formal approval of the C.G. therefore.
The decision of Rao itself can be taken as containing the approval of the C.G. in this regard.
We would, therefore, uphold Rao 's decision 91 and direct the S.G. to execute, at as early as possible,a ML in favour of AIKATH in respect of the 140 acs.
agreed to be leased to him under the compromise dated 4.12.84.
(b) OTHER CLAIMS It is asserted on behalf of OCL and ORIND that, if there are factors justifying the relaxation of reservation in favour of IMFA and FACOR there are equally valid factors justifying a like relaxation in favour of these two compa nies as well.
The operative part of the Rao report in regard to the claims of these two parties reads thus: "For the requirement of the other parties viz.
M/s Orissa Industries Ltd., M/s Orissa Cements Ltd., manufactur ing refractories, their requirements of chrome ore are relatively less and that too, consisting mostly of hard lumpy ore.
The potential for hard lumpy ore in the areas under consideration is relatively less, since most of it is located in the areas which have already been leased out to TISCO who are also one of the larger producers of hard lumpy ore and are capable of meeting the needs of other industries also.
The occurrence of chrome ore is such.
that hard lumpy ore, lumpy friable ore and fine ore occur together and in varying proportion.
The refractory manufacturers require ments are such that if they want to get hard lumpy ore from the areas under consideration, they will have to necessarily become traders of the other grades which will be in higher proportion.
They have been carrying on their business for the past several years without any captive mines.
Hence.
it is felt that their requirements can be adequately met by the other producers of chrome ore, including hard lumpy ore.
Hard lumpy ore will be available from other producers of chrome ore to meet their requirements, including the Orissa Mining Corporation and no captive mining leases need be given to them, in the areas under consideration." XXX XXX XXX The Refractory industries viz. the Orissa Industries Ltd. and M/s Orissa Cements Ltd. for their level of production 92 and their need for hard lumpy ore, captive mines in the areas under consideration do not optimally meet their re quirements and there is enough lumpy ore in the State from other sources.
" Rao 's line of reasoning is criticised by OCL and ORIND.
Sri Bhandare, on behalf of OCL, urges, inter alia: (a) The company 's refractory plant is in need of at least 35,000 to 40,000 MT of ore per annum (not 15000 MT as worked out by Rao) and for securing a regular uninterrupted supply, it needs a captive mine badly; instead it is thrown at the mercy of traders like TISCO or Sirajuddin & Co. or the OMC who are unable to supply the quantities of ore needed by OCL.
(b) The company which has a vital mineral based industry has not been granted even a single ML for which it had been applying from 1961 to 1986 whereas traders like Mohanty and Sirajuddin have been granted leases.
(c) Besides supply of refractories for domestic consumption OCL has also a vast export market and has earned huge foreign exchange by exports to countries like Pakistan, Bangladesh, Korea, Kenya, etc.
(d) The company has also employed about 3000 workers who are adivasis or who belong to the Scheduled Castes and Scheduled Tribes.
(e) The industrial licence granted to OCL by the C.G. envisages that the OCL should secure PL and ML from the S.G. for its needs of ore.
(f) The S.G. had made on 25.1.72 a grant of a ML to OCL over an area of 187.02 hectares with the approval of the C.G.
The S.G. had indeed recommended the grant of ML to OCL.
(g) It is also stated that in certain informal meet ings held recently, the S.G. has expressed itself in favour of granting ML in favour of the OCL.
Likewise, on behalf of ORIND, it has been urged that Rao has erred in thinking that the need of the company was of lumpy ore which 93 could be adequately met by procuring the ore from private parties and that it would not be necessary to grant a mining lease for meeting its requirements.
It is submitted, in particular, that (i) ORIND 's requirements are not small as suggested by the SG but come to a minimum of 25,000 MT per annum and would indeed go up to 65,000 MT with the setting up of a ferroalloys plant for which steps are being taken; (ii) the reasoning that ORIND has been functioning without a captive source all along and hence could continue to do so is bad logic and also a misleading argument which overlooks that ORIND has been put to great difficulty in obtaining even 8,000 to 10,000 MT (about one half of its needs) in driblets from various sources being at their mercy in regard to quantity, price and other vagaries.
Even OMC has been capricious in its supplies of ore in that it has agreed to supply 25,000 MT to OCL against their needs of 15,000 MT only whereas it is willing to supply only 9,000 MT only to ORIND against its present requirements of 20,000 MT.
(iii) the assumption that ORIND needs only lumpy ore is not correct.
Actually more than 60 to 65% of the ore used by ORIND is friable ore.
(iv) ORIND also/deserves grant of ML on other grounds of national and public significance.
It supplies basic refrac tories not only to core and strategic domestic industries but also exports them outside India and the exports made by it, being value added and involving proportionately less consumption of ore, earn much more foreign exchange than the exports of IMFA & FACOR.
The want of a captive source of supply has gravely prejudiced the commissioning of ORIND 's first benefaction plant for refractories.
It also employs a strong labour force and thus provides opportunities for large scale employment.
(v) if MLs can be granted to AIKATH, IMFA, FACOR, ORIND also deserves one.
OMC has been allotted huge areas which remain idle and unexploited and a predominant portion of its ore is supplied to the metallurgical industry not leaving much for the refractory industry.
(vi) atleast the area marked as Area No. 7 in the plan filed 94 by ORIND should be allotted to it.
We have briefly summarised the claims of ORIND & OCL.
It is unnecessary to discuss these contentions at length as we cannot but help feeling that the claims of OCL and ORIND have been rejected summarily by Rao without an advertence to the various considerations urged by them.
In our opinion, this part of Rao 's decision has to be set aside as being too cryptic and unsustainable.
Pursuant to this conclusion, it is open to us to direct these claims to be considered afresh by the C.G. We, however, think it more expedient that the claims of the OCL and ORIND should be restored, for detailed consideration in all their several aspects, before the S.G., as the 'S.G. has had no opportunity to consider the various aspects pointed out and as this course will also provide one opportunity to the claimants to approach the C.G. again, if dissatisfied with the S.G. 's decision to consider whether, despite the reservation, some relaxation can be made also in favour of these two companies.
The learned Advocate General for Orissa criticised the conclusion of Rao conceding the right of industries set up in the State, even of FACOR and IMFA, to captive mines for meeting their requirements.
We are inclined to think he is right in saying that merely because an industry is allowed to be set up in the State by grant of an industrial licence and/or certain other conces sions, it does not follow that it becomes entitled to a captive mine to cater to its needs.
We, however, express no concluded opinion on this issue ' which does not arise for our consideration.
The SG has to take into account various factors and aspects (some of which have also been referred to in the interim order of this Court dated 27.9.84) before granting a ML to an individual concern carving out an excep tion to its reservation policy.
This it has done in respect of IMFA and FACOR for certain special reasons which have been elaborated upon earlier.
Whether it would do so also in favour of OCL and ORIND is for the State to consider.
We express no opinion on these claims and leave it for the consideration of the SG and C.G.
It would have been noticed that the applications of these two companies have not been considered in this light earlier.
We, therefore, restore the applications of OCL and ORIND for the consideration of the S.G.
The learned Advocate General of Orissa also submitted that Special Leave Petition No. 8574/89 filed by ORIND from the order of the S.G. is not maintainable.
He urged that the S.G., in disposing of applications for ML, is not function ing as "tribunal" and he cited the decisions in Shivji vs Union; , and Indo China Steam Navigation Co. vs Jasjit Singh; , in support.
We do not 95 consider it necessary to go into this issue.
The S.G. has, by the impugned order, rejected ORIND 's application, inter alia, on the ground that, in view of the pendency of W.P. 14116/84 before this Court, it could not at that stage pass any order on the application.
It would, therefore, be open to ORIND to ask the S.G. to reconsider the application in the light of our present order.
We see no necessity f6r insisting on such a formal request and would, therefore, direct the S.G. to consider ORIND 's application afresh in the light of this judgment.
So far as OMC & IDCOL are concerned, Rao has "recommend ed" that the areas of items I & 2, left after the grants to IMFA and FACOR.
be given on lease to OMC.
We have seen that there are huge areas of mineral bearing lands which have been reserved for the public sector.
Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the SG is willing to relax the rule of reservation.
We do not think the OMC or IDCOL have any voice in requiring that the SG should keep certain extents of land reserved and should not grant any ML at all in favour of an), private party.
The interests of these corporations are safe in the hands 01 ' the S.G. and the allocation of MLs to these organisations is a matter of discretion with the S.G. Strictly speaking,, therefore.
no question of any application by them for ML need arise at all.
But, when made, their applications arc considered by the S.G. and, on revision by the C.G. as a matter of form.
To this extent, they have a statutory remedy but, beyond this.
we think they cannot go.
We are of opinion that their interests are safe with the S.G. and need no directions from us.
Even IMFA and FACOR urge that their claims to further leases deserve consideration.
Rao has already adjudicated upon their claims and "recommended" leases to them to the extent indicated.
If they apply to the S.G. for more leases.
it is open to the S.G. to consider whether they deserve any further leases and if so, to what extent.
more reserved areas could be released in their favour.
The learned Advocate General for the State emphasised that the State is also interested in its industrial develop ment and the national economy and that, while reserving substantial areas for public sector exploitation, the State has a well formulated policy in respect of grant of private leases which has been placed before Rao.
He also submits that, even if grant of a ML in favour of a particular party is not found feasible, the State will do its best to ensure that the ore mined in the 96 State is equitably distributed so as to meet the legitimate needs of all industries operating in the State.
We have no doubt that the S.G. will keep.
all relevant aspects urged by the parties in reaching their decision on the matters re manded to it by us.
In the circumstances, we accept and confirm Rao 's recom mendation for grant of MLs to IMFA, FACOR and AIKATH, to the extent indicated by him.
We set aside his rejection of the claims of OCL and ORIND.
We leave it open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, backed by supporting reasons, before the S.G. in the form of representations within four weeks from the date of this order.
The S.G., we hope, will dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the C.G.
In arriving at its decisions, it will be open to the S.G. to take into account the discussions and findings of the Rao report in the light of this judgment.
The S.G. should also keep in mind that no leases to any of the parties (other than OMC & IDCOL) can be granted unless either the areas so proposed to be leased out are dereserved and thrown open to applications from the public or unless the C.G., after considering the recommendations of the S.G., for reasons to be recorded in writing, considers a relaxa tion in favour of any of the parties necessary and justi fied.
Before we conclude, we should like to place on record our appreciation of the detailed and excellent report given by Dr. Rao.
He has brought together all the relevant data and analysed the various claims put forward before him; a detailed note on chromite deposits in the State of Orissa prepared by the Chief Mining Geologist of the Indian Bureau of Mines has also been made an Annexure to the report.
The report and its annexures are bound to be of immense help and value to the S.G. and C.G. in arriving at their decisions not only on the various applications but also in regard to their future policy in the matter of grant of chromite leases and of the supply of chromite to the needy applicants in an equitable manner.
W.P. No. 14116/87 and the other applications are dis posed of in the above terms.
There will be no order as to costs.
G.N. Petitions disposed of.
|
In these matters, the petitioners viz., four companies in the private sector, two public sector corporations owned substantially by a State Government, and a private individu al sought clarifications and directions in relation to the orders passed by this Hon 'ble Court on 30.4.87 and 6.10.87 on the Writ Petition.
All these petitions arose out of applications for grant of right for the mining of chrome ore or chromite in the State of Orissa.
Since chrome ore is one of the minerals specified in the first and second schedules to, and not a 'minor mineral ' within the meaning of Section 3(f) of the Mines and Minerals (Development and Regulation) Act, 1957, the right to grant the mining right in respect of this mineral is vested in the State Government subject to the control by Union of India, and as such they are respond ents in these matters.
While disposing of the matters, this Court referred the entire controversy to the Secretary to Government of India in the Ministry of Mines, viz., Mr. Rao, for a detailed consideration of the claims made by the parties.
Before Mr. Rao, the two public sector undertakings also put forward their claims that the public sector units in the State were entitled to the grant of mining rights in the State to the exclusion of all private parties in as much as there was a reservation in their favour by an appropriate notification issued by the State Government.
The other parties raised objection on the ground that the claims were made at a belated stage of the proceedings.
On applications made by the Public Sector Undertakings, this Court directed that their claims would also be examined by Rao. 28 In his report dated 1.2.1988 Rao accepted the claim of reservation made by the two Public Sector Undertakings, viz., Orissa Mining Corporation (OMC) and Industrial Devel opment Corporation of Orissa Ltd. (IDCOL).
He also partially accepted the claims of the three private parties.
viz., Indian Metals and Ferro Alloys Limited (IMFA); Ferro Alloys Corporation Limited (FACOR); and Aikath and rejected the claims of the other two private parties viz., Orissa Cements Ltd. (OCL) and Orissa Industries Ltd. (ORIND).
Though he accepted the claim of the two public sector undertakings, he recommended for them leases in respect of only the balance of the lands left, after fulfilling the claim of the others which he had accepted.
The present petitions biter alia sought directions on the report of Rao.
It was contended that Rao was nothing more than a Commissioner appointed by this Court to examine the various parties and hence this Court should pass appro priate orders on his report.
Various contentions were ad vanced by the petitioners as well as respondents as regards the legal character of the Rao Report and of giving effect to it either in toto or with modifications in certain re spects.
Reservation in favour of Public Sector Undertakings was challenged by the private parties.
Plea of Promissory Estoppel was also raised on behalf of some of the petition ers.
Disposing of the matters, this Court, HELD: 1.
The statute must lay down clearer guidelines and procedure.
Having regard to the new avenues for vast industrial development in the country, a more workable procedure would be for the State Government to call for applications in respect of specified blocks by a particular date and deal with them together, other later entrants not being permitted in the field.
Otherwise only confusion will result, as here.
There was a time when the State Government looked to private enterprises for mineral development in its territory.
Of late, however, competition has crept in.
The State Government has its own public sector corporations and various enterpreneurs are interested in having mining leases for their purposes.
It is, therefore, vital that there should be a better and detailed analysis, district wise and area wise and that a schedule for consideration of applica tions in respect of define areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applications.
These are aspects which call for careful consideration and appropriate amendments to the Mines and Minerals (Development and Regu lation) Act, 1957 and the Rules made thereunder.
[72D G] 29 2.
Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country 's development cannot be gainsaid.
The State Government rightly decided upon a policy of reservation in 1967 and this was kept up till 1974.
In February 1974 the State Government was in favour of free issue of mining leases but gave up this policy in pursuance of the Central Government 's letter of 15.5.74.
Reservation was, therefore, clamped in 1977 again.
Applications could still be consid ered to see how far a relaxation was permissible having regard to the nature of the applicant 's needs, the purpose for which the lease was asked for, the nature of the ore sought to be exploited, the relative needs of the State, the availability of a public undertaking to carry out the mining more efficiently and other relevant considerations.
There is no material on record to substantiate the plea that the State Government has been acting arbitrarily or mala fide in its policy formulations in this regard.
[82C E] Venkataraman vs Union, ; , referred to.
Rao 's decision, that the leases that have been grant ed already in favour of IMFA, FACOR be confirmed, should be upheld.
These should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 59(2).
It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affi davits filed herein.
Rao 's decision regarding the grant of a lease to AIKATH (not yet implemented) should also be upheld.
In these three cases, the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the mining leases actually granted. ]89B D] 4.
The claims of OCL and ORIND have been rejected sum marily by Rao without an advertence to the various consider ation urged by them.
This part of Rao 's decision has to be set aside as being too cryptic and unsustainable.
Pursuant to this conclusion, it is directed that these claims be considered afresh by the Central Government.
It would be more expedient if the claims of OCL and ORIND are restored, for detailed consideration in all their several aspects, before the State Government, as the State Government has had no opportunity to consider the various aspects pointed out and as this course will also provide an opportunity to the claimants to approach the Central Government again, if dissatisfied with the State Government 's decision to consid er whether, despite the reservation, some relaxation can be made also in 30 Favour of these two companies The State Government has to take into account various factors and aspects before grant ing a mining lease to an individual concern carving out an exception to its reservation policy.
It has done this in respect of IMFA and FACOR for certain special reasons re corded by it.
Whether it would do so also in favour of OCL and ORIND is for the State to consider.
It would be noticed that the applications of these two companies have not been considered in this light earlier The applications of OCL and ORIND are restored for the consideration of the State Government.
[94B G] 5.
The State Government has rejected ORIND 's applica tion, inter alia, on the ground that, in view of the penden cy of the Writ Petition before this Court, it could not at that stage pass any order on the application.
It would, therefore, be open to ORIND to ask the State Government to reconsider the application in the light of the present order.
There is no necessity for insisting on such a formal request and therefore, the State Government is directed to consider ORIND 's application afresh in the light of this judgment.
[95A B] 6.
So far as OMC and IDCOL are concerned, Rao has recomamended that the areas left after the grants to IMFA and FACOR, be given on lease to OMC.
There were huge areas of mineral bearing lands which have been reserved for the public sector.
Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the State Government is willing to relax the rule of reservation.
This Court does not think OMC or IDCOL have any voice in requiring that the State Government should keep certain extent of land reserved and should not grant any mining lease at all in favour of any private party.
The interests of these corporations are safe in the hands of the State Government and the allocation of mining leases to these organisations is a matter of discre tion with the State Government strictly speaking, therefore, no question of any application by them for mining lease need arise at all.
But, when made, their applications are consid ered by the State Government and, on revision by the Central Government as a matter of form.
To this extent, they have a statutory remedy.
[95C El 7.
When the State Government agreed to lease out the areas to MFA and FACOR it was pointed out that this could not be given effect to without the Central Government 's approval.
This Court thereupon directed that the State Government should seek such approval.
The direction to the Central Government is only that its approval should be given within the particular time limit set out therein It cannot be 31 construed, reasonably, as a direction compelling the Central Government to grant approval whether it agreed with the State Government 's decision or not.
Thus the grant of mining leases to IMFA and FACOR are to be treated as having been made in exercise of the power of relaxation under Rule 59(2).
Though there is no specific recording of reasons by the State Government or Central Government inasmuch as these leases came to be granted by way of compromise, it is a fair inference that the compromise proposals were prompted by the, at least partial, acceptance of the claim put forward by these parties.
Since the grant of leases to these parties can be attributed to the relaxation of the reservation rule in particular cases, the finding of Rao that these leases may be confirmed deserves acceptance.
[90C F] 8.1 AIKATH is admittedly an individual who discovered chromite ore in the State.
He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over.
Again, as against a lease of 640 acres which he had once obtained and started operating upon, the State Government has finally approved of a lease in respect of only 140 acres.
AIKATH had been actually working some mines from 1.5.53.
His original grant had been approved before the areas was reserved on 3.7.62.
If the State Government con siders these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the High Court, these are no grounds to interfere with that decision of the State Government.
[89D F] 8.2 Though the State Government and AIKATH had entered into a compromise as early as 4.12.1984, no lease has yet been granted in his favour perhaps as the Central Government has had no occasion to consider the matter earlier.
However, no useful purpose would be served by remitting the matter and asking the State Government to seek the formal approval of the Central Government therefore.
The decision of Rao itself can be taken as containing the approval of the Cen tral Government in this regard and is thus upheld.
The State Government is ' directed to execute, at as early a date as possible, a mining lease in Favour of AIKATH in respect of the 140 acres agreed to be leased to him under the compro mise dated 4.12.1984.
[90G H; 91A] 9.
Although Rao has approved the grants made in favour of IMFA and FACOR by the State Government (which, he re marks, were perhaps based on the observations made by this Court), he has clearly reached his conclusions on these independently.
In fact, he has set out a basis for justify ing the grants of IMFA and FACOR.
It is also clear that 32 there were no Court orders that could have influenced his decisions on the claims of the other parties.
[87F G] 10.1 In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them, it would not be correct to say that, as the State Government 's order of 29.10.1973 has been set aside, ORIND 's application should be restored for reconsideration on the basis of the situation that prevailed as on 29.10.1973 and that, therefore, it has to be straightaway granted as there was no other application pending on that date before the State Government.
In matters ,like this, subsequent applica tions cannot be ignored and a rule of thumb applied.
[74C E] 10.2 Though section 11 tries to enunciate a simple general principle of "first come, first served", in practice, prior ity of an application in point of time does not conclude the issue.
In this case itself, for instance, during the period ORIND 's application of 1971 has been under consideration before various authorities and in the writ petition filed in the High Court, several other competitors have come into the picture.
The statutory provision is not clear as to which of the applications in respect of any particular area, are to be considered together.
If ORIND 's application of 1971 were to be considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand, all the applications pending for disposal at the time ORIND 's application is to be granted or rejected are to be consid ered, the result would be totally different.
Since the interest of the nation require that no lease for mining rights should be granted without all applicants therefore at any point of time being considered and the best among them chosen or the area distributed among such of them as are most efficient and capable, the latter is the only reasona ble and practical procedure.
That is why this Court, in its order dated 30.4.87, laid down that all applications pending for consideration as on 30.4.87 should be considered by Rao.
[71G H; 72A B] Ferro Alloys Corporation of India vs Union, ILR 1977 Delhi 189 and Mysore Cements Ltd. vs Union, AIR , distinguished.
11.1 Previously, rule 58 did not enable the State Gov ernment to reserve any area in the State for exploitation in the public sector.
The existence and validity of such a power of reservation was upheld by this Court.
Rule 58 has been amended in 1980 to confer such a power on the State Government.
It is also not in dispute that a notification of reservation was made on 3.8.77.
The State Government, OMC and IDCOL are, 33 therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the State Government or a public sector corporation unless the availability for grant is renotified in accord ance with law (rule 59(1)(e) or the Central Government decides to relax the provisions of rule 59(1).
[79D F] Amritlal Nathubhai Shah and Ors.
vs Union of India and Anr.
; , relied on.
Kotiah Naidu vs State of A.P., AIR 1959 AP 185 and Amritlal Nathubhai Shah vs Union, AIR 1973 Gujarat 117, referred to. 11.2 In the present matters, except for two or three instances.
where leases have been granted by the State Government on its own, the State Government has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector.
The rules permit the Central Government to relax the rigid requirements of reservation in individual cases after recording special reasons.
Such exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties that the policy of reservation is merely being raised as a formal defence and has never been seriously implemented by the State Government.
[81G H; 82A B] 11.3 The conclusion that the areas in question before this Court were all duly reserved for public sector exploi tation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the Central Government to relax the reservation for recorded reasons.
Nor does this mean that the public sector undertakings should get the leases asked for by them.
This is so for two reasons.
In the first place, the reservation is of a general nature and does not directly confer any rights on the Public Sector Under takings.
This reservation is of two types.
Under section 17A(1), inserted in 1986, the Central Government may after consult ing the State Government just reserve any area not covered by a Private Lease or a Mining Lease with a view to conserv ing any mineral.
Apparently, the idea of such reservations is that the minerals in this area will not be exploited at all, neither by private parties nor in the public sector.
The second type of reservation was provided for in rule 58 and such reservation could have been made by the State Government (without any necessity for approval by the Cen tral Government) and was intended to reserve areas for exploitation, broadly speaking, in the public sector.
The notification itself might specify the Government Corporation or Company that was to exploit the areas or may be just general, on the 34 lines of the rule itself.
Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the government itself is for the Government to determine de hors the statute and the rules.
There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector.
There are no competitive applica tions from organisations in the public sector controlled either by the State Government or the Central Government, but even if there were, it would be open to the State Gov ernment to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the Central Government or State Government.
, Both the Corpora tions are admittedly instrumentalities of the State Govern ment and the decision of the State Government is binding on them.
If the State Government decides not to grant a lease in respect of the reserved area to an instrumentality of the State Government, that instrumentality has no right to insist that a Mining Lease should be granted to it.
It is open to the State Government to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule.
It is true that if, eventually, the State Government decides to grant a lease to one or other of them in respect of such land, the instrumentality whose application is rejected may be aggrieved by the choice of another for the lease.
The question whether OMC or IDCOL can object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector, has to be answered in the negative in view of the statutory provisions.
For the State Government could always denotify the reservation and make the areas available for grant to private parties.
Or, short of actually deserv ing a notified area, persuade the Central government to relax the restrictions of rule 59(1) in any particular case.
It is, therefore, open to the State Government to grant private leases even in respect of areas covered by a notifi cation of the State Government and this cannot be challenged by any instrumentality in the public sector.
[82F H; 83A H; 84A C] 12.
In these matters, no grounds have been made out which could support a plea of promissory estoppel.
The grant of a lease to ORIND had to be approved by the Central Gov ernment.
The Central Government never approved of it.
The mere fact that the State Government, at one stage, recom mended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the Central Government 's directives.
[78E F] Kanai Lal Sur vs Paramnidhi Sadhukhan, ; M/s 35 Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh and Ors., ; ; Gujarat State Financial Corporation vs M/s Lotus Hotels Pvt. Ltd., ; Surya Narain Yadav & Or,5.
vs Bihar State Electricity Board Godfrey Philips India Ltd., [1985] Suppl.
3 SCR 123 and Mahabir Auto Stores & Ors.
vs Indian Oil Corporation Ors., [1990] JT I SC 363, referred to.
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