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ivil Appeal No. 1561 of 1988.
From the Judgment and Order dated 4.3.1987 of the Karna taka High Court in W.P. No. 10292 of 1980.
N.D.B. Raju and N. Ganpathy for the Appellant.
Mohan Katarki, Rajeshwar Thakur, Ms. C.K. Sucharita and P.R. Ramasesh 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 High Court of Karnataka dated 4.3.1987 in W.P. No. 10292 of 1980 filed by the respondent No. 3, HubIi Dharwar Municipal Corporation, setting aside an award made under the Land Acquisition Act, 1897 in respect of the compensation payable to the present appellants and directing to re open the proceeding before the civil court on a reference under section 18 of the Act, for fresh disposal in accordance with law.
The appellants were the owners of the land in question.
In a proceeding under the Urban Land (Ceiling and Regulation) Act, 1976, the appellants were held to be having surplus land, which by virtue of the provisions of the Act vested in the State Government.
However, before the publication of the aforesaid declaration in the official gazette, steps for acquisition were taken for meeting the requirements of the respondent Corporation.
The appellants thus escaped the consequences of the declaration made under the Ceiling Act, and became entitled to the compensation payable in accordance with the provisions of the Land Acqui sition Act.
Steps were accordingly taken for determination of the compensation, and on an application by the appellants under section 18 of the Land Acquisition Act, reference was made to the civil court.
It is common ground that after the case was received by the 22 civil court on reference, no notice was issued to the respondent Corporation.
The court did not, however, proceed to take evidence and record its own finding on the valuation, as it was conceded on behalf of the State Government that the market value of the land could be calculated at the rate of Rs.3,800 per guntha.
The court answered the reference on the basis of the consent of the land owners and the State.
The State, however, was not satisfied with the award and filed an appeal which was dismissed on ground of being not maintainable as the impugned Judgment was held to be a compromise decree.
An attempt by the respondent Corporation to intervene also failed.
The Corporation thereafter moved the High Court with a writ petition under Article '226 of the Constitution, inter alia, challenging the validity of the civil court.
's judgment directing higher compensation to be paid.
Admittedly the land was acquired for the purpose of the respondent Corporation and the burden of payment of the compensation is on the Corporation.
In this background the High Court has held that it was mandatory for the court of reference to have caused a notice served on the respondent Corporation before proceeding to determine the compensation claim.
Since no notice was given to the respondent Corporation and it was thus deprived of an opportunity to place its case before the court, the judgment rendered in the reference case was illegal and not binding on the Corporation.
We are in agreement with this view.
Section 20 of the Land Acquisition Act as applicable to the State of Karnataka reads as follows: "20.
Service of notice.
The Court shall thereupon cause a notice, specifying the day on which the Court will proceed to determine the reference, and directing their appearance before the Court on that day, to be served on the following persons, namely: (a) the Deputy Commissioner; (b) all persons interested in the reference; and (c) if the acquisition is not made for Government, the person or authority for whom it is made.
" In view of the clear language used in clause (c) of section 20, mentioned above, there cannot be any doubt that the respond ent Corporation was entitled to be heard before the refer ence could be determined.
23 The High Court has also relied upon the decision in Himalay an Tiles and Marbles (P) Ltd. vs Francis Victor Coutinho (dead) by Lrs.
and others; , , wherein the expression "person interested" was interpreted liberally so as to include an authority like the Corporation in the present case, but in view of the further provision specifi cally mentioning in clause (c) the authority for whom the acquisition is made it is not necessary to interpret clause (b) of section 20 in the present appeal.
We accordingly confirm the direction of the High Court as contained in the impugned judgment that the Principal Civil Judge, Hubli, should re open the proceedings in the L.A. Case No. 64 of 1979 and decide the matter afresh after giving the Corporation a chance to lead its evidence on the question of valuation.
Since the matter is an old one, the respondent Corporation is hereby directed to appear in the said case within 3 weeks from today without waiting for any further notice.
The appeal is dismissed with costs.
T.N.A. Appeal dis missed.
| IN-Abs | Consequent to the acquisition of the appellant 's land for meeting the requirements of the respondent Corporation, a reference was made to the Civil Court, under section 18 of the Land Acquisition Act, 1894, when was determined without notice to the respondent Corporation.
and by allowing higher compensation to the appellants.
The State preferred an appeal against the decision of the Civil Court which was dismissed and the respondent Corporation 's intervention in the appeal was not allowed.
Thereafter the respondent Corporation filed a writ petition challenging the validity of the Civil Court 's judgment.
The High Court set aside the award of compensation and directed the Civil Court to re open the proceedings.
Dismissing the appellant 's appeal, this Court, HELD: 1.
In view of the clear language used in clause (c) of section 20 of the Land Acquisition Act, 1894 there cannot be any doubt that the respondent Corporation was entitled to be heard before the reference could be deter mined.
[22H] Himalayan Tiles and Marbles (P) Ltd. vs Francis Victor Coutinho, ; , referred to.
The land was acquired for the purpose of the respondent Corporation, and the burden of payment of compensation is on the Corporation.
Therefore, the High Court 's view that it was mandatory for the Court of reference to have caused a notice to be served on the respondent Corporation is correct.
Non service of notice deprived the 21 Corporation of an opportunity to place its case before the Court, and the judgment so rendered in the reference case was illegal and not binding on the respondent Corporation.
[22D E] 3.
The High Court 's direction to the Civil Judge to re open the proceedings and decide the matter afresh after giving the Corporation a chance to lead its evidence on the question of valuation is confirmed.
|
vil Appeal No 10 (N) of 1981.
From the Judgment and Order dated 22nd March, 1978 of the Karnataka High Court in Writ Appeal No. 520 of 1975.
R.B. Datar, K.R. Nagaraja and R.S. Hegde for the Appellant.
M. Veerappa for the Respondent.
The Judgment of the Court was delivered by RAY, J.
This appeal by special leave is against the judgment and order dated 22nd March, 1978 made in Writ Appeal No. 520 of 1975 dismissing the appeal and confirming the judgment and order made in Writ Petition No. 3073 of 1974 on 18.7.1985.
The appellant who was a chartered accountant was ap pointed as a non official member of the Sales Tax Appellate Tribunal, in the State of Karnataka by an order (No. RD 80 SXE 1958) dated 16th July, 1958 for a period of two years from 17th July 1958 under subsection (2) of Section 4 of the Mysore Sales Tax Act, 1957 (Mysore Act No. 25 of 1957).
By an order No. RD 17 SXT 58 dated 12th December, 1958 issued by the Government it has been mentioned that the appellant as member of Sales Tax Tribunal shall be eligible for Tra vells Allowance under the Mysore Civil Service (Classifica tion, Control and Appeals) Rules 1958 as a government serv ant in respect of tours undertaken by him in connection with his official duty on the basis of his salary Rs. 1,000 per month.
Thereafter the appointment was continued from time to time, the last of the period during which the appointment was continued, was by a notification No. FD dated 8th November 1971 by which his period of service was extend ed for a period of two months with effect from 9.12.1971.
This notification was issued in exercise of powers conferred by clause (b) of sub rule 1 of Rule 64 of the Mysore Sales Tax Rule, 1957.
The respondent by a letter dated 8.2.1972 intimated him that he had been granted 52 days earned leave as terminal leave from 9th February, 1972.
The appellant made representations to the respondent that he was entitled to superannuation pension, and same be granted to him.
The Government turned down his request on the ground that he was not eligible for such pension.
The appellant, then, moved a writ petition No. 3073 210 of 1974 before the High Court, Karnataka stating that he was granted leave on several occasions in accordance with the Mysore Civil Service Rules and the Accountant General had treated him as a gazetted officer in the service of the State Government and as such as a Government servant he may be granted superannuation pension under the Mysore Civil Service Rules.
The learned Single Judge held that Rule 64 of the Karnataka Sales Tax Rules, 1957 was applicable to this case and under the said Rules he was not eligible to claim superannuation pension.
It was further held that even under the Mysore Civil Service Rules he would not be entitled to claim such a pension.
The writ petition was dismissed.
The learned Judge, of course, held that the appellant would be entitled to gratuity in terms of Rule 64 and so directed the Government to examine the case of the appellant for grant of gratuity under the rule and pass appropriate orders in that regard expeditiously.
The appellant feeling aggrieved preferred Writ Appeal No. 520 of 1975 which was dismissed by the High Court and the judgment pronounced in the writ petition was upheld.
It is against this judgment and order, this appeal on special leave has been filed.
The main plank of the argument of the counsel for the appellant is that the appellant as a member of the Sales Tax Tribunal was a government servant and as such like other government servants he is entitled to the grant of superan nuation pension in accordance with Mysore Civil Service Rules.
Several Rules have been referred to in support of his submission that he was retired from service after reaching the age of superannuation.
He further submitted that the appointment of appellant was not a contract appointment and so the Mysore Civil Service Rules are applicable to the appellant for payment of superannuation pension.
It is not disputed that the appellant was appointed as a nonofficial member of the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of the Mysore Sales ' Tax Act, 1957.
This is evident from the notification dated 16.7.1958 issued by the Government appointing the appellant as a member of Sales Tax Tribunal as well as from Order No. RD 17 SXT 58 dated 12th December 1958.
The ap pointment was continued from time to time and the last extension was given by Order No. FD dated 8th November, 1971 made under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax 211 Rules, 1957.
It is relevant to notice in this connection that Rules 63 and 64 were introduced by a notification No. FD dated 10/13th January, 1964.
Sub rule (6) of Rule 64 is quoted below: "The non official member shall not be eligible for any pension, gratuity or other remuneration.
" By further notification No. FD 614 dated 7th April, 1971, a new Sub rule (6) was substituted which was to the following effect: "(6) The non official member shall be eligible for gratuity equivalent to one month 's pay for each completed year of service including interruption or interruptions, if any, the total duration of which does not exceed 180 days but shall not be eligible for any pension or other remuneration .
" Thus the appellant was appointed as a non official member in the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of Karnataka Sales Tax Act, 1957 and the last extension of the period of his service was given by Government under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957.
The terms and condi tions of his service will be governed by the Mysore Sales Tax Rules and not by the provisions of Mysore Civil Services Rules and it cannot be contended by the appellant that Rule 64(6) of.the said Mysore Sales Tax Rule, 1957 was not ap plicable to him.
So the appellant is not eligible for super annuation pension after his relinquishment of the post of non official member of Sales Tax Tribunal on expiry of the period of his service.
It has been further urged that Rule 64(6) of Mysore Sales Tax Rules was inserted in 1964 and sub rule (6) of Rule 64 was substituted on 7th April, 1971.
This rule not being in existence at the time the appellant was appointed as a member of the said Tribunal, the same cannot be made applicable to the appellant and thereby he could not be deprived of the benefit of superannuation pension as provid ed in Mysore Civil Service Rules.
This contention is per se without any substance in as much as before the retirement of the appellant from service due to expiry of his period of service the said provisions of sub rule (6) of rule 64 of Mysore Sales Tax Rules was substituted in place of original sub rule 6 of Rule 64 and as such this rule applies to the appellant and he is not entitled to get any superannuation pension.
The High Court has tightly held that according to Rule 64(6) the appellant could not claim pensionary benefit.
212 The appellant next submitted that he became a Government servant on being appointed as a non official member of the Sales Tax Appellate Tribunal and he was paid traveling allowance according to Mysore Civil Service Rules, 1957 and so he is entitled to pension as provided in the said Rules.
As stated hereinbefore that the appellant was appointed as a Member of the said Tribunal by the respondent State under Section 4(2) of the Sales Tax Act and though initially appointed for a period of two years in 1958, his service was extended periodically till February, 1972 under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957 by the Government of Mysore.
Therefore, the foremost question is whether in such circumstances the Mysore Civil Service Rules apply to him.
It is apropos to refer in this connection sub rule (2) of Rule 2 of Mysore Civil Service Rules, which specially provided that the said Rules shall not apply to persons for whose appointment and other mat ters, special provisions are made by or under any law for the time being in force or in any contract in regard to the matters covered by such law or such contract.
This Rule clearly says that in cases where special provisions have been made by or under any law for the time being in force, the Mysore Service Rules will not apply.
In the instant case, Rule 64(6) of the Mysore Sales Tax Rules, 1957 clearly says that the non official member of the Sales Tax Tribunal will become ineligible for any pension, and as such provi sions relating to pension as provided in Mysore Civil Serv ice Rules, 1957 will not apply.
Furthermore, Rule 283 of the said Rues states that a superannuation pension is granted to a Government Servant who is compelled by Rule to retire at a particular age.
Rule 95 provides that the date of compulsory retirement of a Government servant is the date on which he attains the age of 55 years.
It further provides that the Government servant may be retained upto 60 years of age with the sanction of Government.
He must not be retained after the age of 60 years.
There is no rule under which a non official member is to retire on attaining a particular age.
The appellant was appointed as a member of the Tribunal for a period of two years initially and thereafter his tenure was extended periodically and he left the service as non official member of the Tribunal after he crossed the age of 61 years.
There was no specific order that the appellant was due to retire at the age of 55 years.
There is no rule for a non official member to retire at a particular age.
Moreover by order No FD dated January 28, 1970 the Govern ment sanctioned certain terms and conditions of his appoint ment.
the condition Nos. 2 and 5 are as hereunder: "(2) The terms of appointment shall be one year with effect from 9th December, 1969.
213 . . . . . (5) He is permitted to take up the audit of accounts of any person, institution, firm or body of persons without preju dice to his official duties as a Member of the Tribunal and the person, institution, firm or body of persons concerned is not and is not likely to be liable to Sales Tax, Agricul tural Income Tax or Entertainment Tax.
" The appointment of the appellant is periodical and not upto a maximum age nor it is a whole time service but a part time one and the appellant was permitted to take up audit of any person, firm, institution etc.
on certain restrictions.
A Government servant has to render whole time service.
Therefore, considering all these aspects it has been found by the High Court that the Mysore Civil Service Rules, 1957 do not apply to the appellant and as such he is not eligible for superannuation pension.
We do not find any infirmity in the judgment of the High Court which is unex ceptionable We, therefore, uphold the judgment of the High Court, dismiss the appeal without any order as to costs.
N.P.V. Appeal dismissed.
| IN-Abs | The appellant was appointed as a non official member of the State Sales Tax Appellate Tribunal for a period of two years from 17.7.1958, under sub section(2) of Section 4 of the Mysore Sales Tax Act, 1957.
The appointment was extended from time to time and continued upto 8.2.1972.
By a letter dated 8.2.1972, the respondent intimated the appellant that he had been granted 52 days Earned Leave as terminal leave from 9th February, 1972.
The appellant represented for grant of superannuation pension.
This was rejected by the Govern ment on the ground that he was not eligible for pension.
The appellant 's writ petition was dismissed by a single Judge of the High Court who held that rule 64 of the Karna taka Sales Tax Rules, 1957 was applicable to him, and that he was not eligible to claim superannuation pension.
This was upheld by the Division Bench.
In the appeal before this Court, on behalf of the appellant it was contended that as a non official member of the Tribunal, he was a government servant, and as such, like other Government servants, he was entitled to grant of pension in accordance with Mysore Civil Service Rules, that he was retired from service after reaching the age of super annuation, that his appointment was not a contract appoint ment, that he was paid traveling allowance under the Mysore Civil Service Rules, and that Rule 64(6) of Mysore Sales Tax Rules inserted in 1964, and substituted in 1971, not being in existence at the time of his appointment, could not be made applicable to him as to deprive him of the benefit of superannuation pension as provided in the Mysore Civil Service Rules.
208 Dismissing the appeal, this Court, HELD: 1.
The terms and conditions of service of the appellant who was appointed as a non official member in the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of Karnataka Sales Tax Act, 1957 and was given last extension of the period of service under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957, will be governed by the Mysore Sales Tax Rules and not by the provisions of Mysore Civil Services Rules.
Since sub rule (6) of rule 64 of Mysore Sales Tax Rules was substitut ed in place of original subrule (6) before the appellant retired from service on expiry of his period of service, this rule applies to him, and he is not entitled to get any superannuation pension.
[211D E; G] 2.1 Sub rule (2) of Rule 2 of Mysore Civil Service Rules 1957, clearly says that in cases where special provisions have been made by or under any law for the time being in force, the Mysore Service Rules do not apply.
Furthermore, Rule 283 of the said Rules states that a superannuation pension is granted to a Government Servant who is compelled by Rule to retire at a particular age.
Rule 95 provides that the date of compulsory retirement of a Government servant is the date on which he attains the age of 55 years, and the Government servant may be retained upto 60 years of age with the sanction of Government, but not after the age of 60 years.
[212C; E F] 2.2 Rule 64(6).of the Mysore Sales Tax Rules, 1957 clearly says that the non official member of the Sales Tax Tribunal will become ineligible for any pension.
Hence,provisions relating to pension as provided in Mysore Civil Service Rules, 1957 will not apply to a non official member.
[212D E] 2.3 In the instant case, the appellant was appointed as a member of the Tribunal for a period of two years initial ly, and thereafter his tenure was extended periodically and he left the service as non official member of the Tribunal after he crossed the age of 61 years.
There was no specific order that the appellant was due to retire at the age of 55 years.
There is no rule for a non official member to retire at a particular age.
Moreover, the Government sanctioned certain terms and conditions of his appointment.
It is periodical and not upto a maximum age, nor it is a whole time service but a part time one and the appellant was permitted to take up audit of any person, firm, institution etc.
on certain restrictions.
A Government servant has to render whole time service.
Therefore, the Mysore Civil Service Rules, 1957 do not apply to the 209 appellant, and he is not eligible for superannuation pen sion.
[212F G; 213C D]
|
ivil Appeal No. 2581 of 1986.
Appeal by Certificate from the Judgment and Order dated 15.10.1985 of the Bombay High Court in Appeal No. 547 of 1984.
WITH Civil Appeal No. 855 of 1987.
220 From the Judgment and Order dated 8.12.1986 of the Industrial Court, Maharashtra, Bombay in Complaint (ULP) No. 1202 of 1984.
Ashok Desai, Attorney General, G.B. Pai, J. Ramamurthy, Jitendra Sharma, B.N. Dutt, H.S. Parihar, Vipin Chandra, R.F. Nariman, P.H. Parekh, N.K. Sahu, Mrs. Urmila Sirur and Raj Birbal for the appearing parties.
The Judgment of the Court was delivered by SAWANT, J.
These are two appeals involving a common question of law, viz., whether an employer has a right to deduct wages unilaterally and without holding an enquiry for the period the employees go on strike or resort to go slow.
In CA No. 2581 of 1986 we are concerned with the case of a strike while in the other appeal, it is a,case of a go slow.
By their very nature, the facts in the two appeals differ, though the principles of law involved and many of the au thorities to be considered in both cases may be the same.
For the sake of convenience, however, we propose to deal with each case separately to the extent of the distinction.
Civil Appeal No. 2581 of 1986 2.
The appellant in this case is a nationalised bank, and respondents 1 and 2 are its employees whereas respond ents 3 and 4 are the Unions representing the employees of the Bank.
It appears that some demands for wage revision made by the employees of all the banks were pending at the relevant time, and in support of the said demands the All India Bank Employees ' Association had given a call for a countrywide strike.
The appellant Bank issued a circular on September 23, 1977 to all its managers and agents to deduct wages of the employees who would participate in the strike for the days they go on strike.
Respondents 3 and 4, i.e., the employees ' Unions gave a call for a four hours strike on December 29, 1977.
Hence, the Bank on December 27, 1977 issued an Administrative Circular warning the employees that they would be committing a breach of their contract of service if they participated in the strike and that they would not be entitled to draw the salary for the full day if they did so, and consequently, they need not report for work for the rest of the working hours on that day.
Notwithstand ing it, the employees went on a four hours strike from the beginning of the working hours on 29th December 1977.
There is no dispute that the banking hours for the public covered the said four hours.
The employees, however, resumed 221 work on that day after the strike hours, and the Bank did not prevent them from doing so.
On January 16, 1978, the Bank issued a Circular directing its managers and agents to deduct the full day 's salary of those of the employees who had participated in the strike.
The respondents filed a writ petition in the High Court for quashing the circular.
The petition was allowed.
The Bank preferred a Letters Patent Appeal in the High Court which also came to be dismissed.
Hence, the present appeal.
The High Court has taken the view, firstly, that neither regulations nor awards nor settlements empowered the Bank to make the deductions, and secondly, in justice, equity and good conscience the Bank could not by the dictate of the impugned circular attempt to stifle the legitimate weapon given by the law to the workers to ventilate their griev ances by resorting to strike.
The High Court further took the view that since strikes and demonstrations were not banned in the country and despite the inconvenience that they may cause, they were recognised as a legitimate form of protest for the workers, the circular acted as a deterrent to the employees from resorting to a legally recognised mode of protest.
According to the High Court, the circular even acted as an expedient to stifle the legitimate mode of protest allowed and recognised by law.
The deduction of the wages for the day according to the Court amounted to unilat erally changing the service conditions depriving the workers of their fixed monthly wages under the contract of service.
The Court also reasoned that under the conditions of serv ice, wages were paid not from day to day or hour to hour but as a fixed sum on a monthly basis.
The contract between the Bank and the workers being not a divisible one, in the absence of a specific term in the regulations, awards and settlements, the Bank could not unilaterally reduce the monthly wage and thus give the employees lesser monthly wages than the one contracted.
The non observance by the employees of the terms of the contract may give the employer a cause of action and a right to take appropriate remedy for the breach, but the employer was not entitled to deduct any part of the wages either on a pro rata basis or otherwise.
The High Court further opined that the Bank was not without a remedy and the employees cannot hold the bank to ransom.
The Bank could get the four hours strike declared illegal by recourse to the machinery provided by law or put the erring workers under suspension for minor misconduct under Regula tion 19.7, hold an enquiry and if found guilty, impose punishment of warning, censure, adverse remarks or stoppage of increment for not more than six months as prescribed by Regulation 19.8.
The High Court also rejected the contention of the Bank that the Bank was entitled to make 222 deductions under Section 7(2) of the by holding that the provision enabled the employer to deduct wages only if the Bank had power under the contract of employment.
The principal question involved in the case, accord ing to us, is, notwithstanding the absence of a term in the contract of employment or of a provision in the service rules or regulations, whether an employer is entitled to deduct wages for the period that the employees refuse to work although the work is offered to them.
The deliberate refusal to work may be the result of various actions on their part such as a sit in or stay in strike at the work place or a strike whether legal or illegal, or a go slow tactics.
The deliberate refusal to work further may be legal or illegal as when the employees go on a legal or illegal strike.
The legality of strike does not always exempt the employees from the deduction of their salaries for the period of strike.
It only saves them from a disciplinary action since a legal strike is recognised as a legitimate weapon in the hands of the workers to redress their griev ances.
It appears to us that this confusion between the strike as a legitimate weapon in the hands of the workmen and the liability of deduction of wages incurred on account of it, whether the strike is legal or illegal, has been responsible for the approach the High Court has taken in the matter.
It is necessary to clear yet another misconception.
There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employ er can take a disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages.
However, when misconduct is not disputed but is, on the other hand, admitted and is resorted to on a mass scale such as when the employees go on strike, legal or illegal, there is no need to hold an inquiry.
To insist on an inquiry even in such cases is to pervert the very object of the inquiry.
In a mass action such as a strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was prevented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it.
That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either.
Hence, in cases such as the present one, the only question that has to be considered is whether, when admittedly the employees refuse to work by going on strike, the employer is entitled to deduct wages for the relevant period or not.
We 223 thought that the answer to this question was apparent enough and did not require much discussion.
However, the question has assumed a different dimension in the present case be cause on the facts, it is contended that although the em ployees went on strike only for four hours and thereafter resumed their duties, the Bank has deducted wages for the whole day.
It is contended that in any case this was imper missible and the Bank could at the most deduct only pro rata wages.
Normally, this contention on the part of the workers would be valid.
But in a case such as the present one, where the employees go on strike during the crucial working hours which generate work for the rest of the day, to accept this argument is in effect to negate the purpose and efficacy of the remedy, and to permit its circumvention effectively.
It is true that in the present case when the employees came back to work after their four hours strike, they were not prevented from entering the Bank premises.
But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours.
It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatended, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter.
Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all in its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank.
In fact, the direction was to the contrary.
Hence, the later resumption of work by the employees was not in fulfilment of the con tract of service or any obligation under it.
The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours of work that the employees remained in the Bank premises without doing any work.
It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employ ment and for which they are entitled to be paid.
It is also necessary to state that though, before the High Court, reliance was placed by the Bank on the provi sions of Section 7(2)(b) read with Section 9 of the for a right to deduct the wages for absence from duty, there is nothing on record to show that the provisions of the said Act have been made applicable to the Bank.
However, assuming that Act was applicable to the Bank, we are of the opinion that the relevant discussion of the 224 High Court has missed the contentions urged by the Bank on the basis of the said provisions.
What was urged by the Bank was that the said provisions enabled it to deduct wages for absence from duty.
Hence, even if the Service rules/regula tions were silent on the point, the Bank could legally deduct the wages under the said provisions.
The High Court has reasoned that the power given by the said provisions come into play only when the employer has power to do so, probably meaning thereby, the power under the Service rules/regulations.
We are unable to appreciate this reason ing, which to say the least, begs the question.
It is, therefore, necessary to point out that if the Act was ap plicable, the Bank would certainly have had the power to deduct the wages under the said provisions in the absence of any service rule regulation to govern the situation.
Since the admitted position is that the service rules do not provide for such a situation, the question as stated earlier which requires to be answered in the present case, is whether there exists an implied right in the employer Bank to take action as it has done.
There is no dispute that although the service regulations do not provide for a situa tion where employees on a mass scale resort to absence from duty for whole day or a part of the day whether during crucial hours or otherwise, they do provide for treating an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence.
Since the High Court has indicated a disciplinary action under the said provision even in the present circum stances, we will also have to deal with that aspect.
But before we do so, we may examine the relevant authorities cited at the Bar. 8.
In Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; the facts were that on 1st November, 1948 the night shift operatives of the carding and spinning department of the appellant Mills stopped work, some at 4 p.m., some at 4.30 p.m. and some at 5 p.m. and the stoppage ended at 8 p.m. in both the departments, and at 10 p.m. the strike ended completely.
The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948 as a holiday for solar eclipse.
On 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act and that the management had decided that the workers who had partici pated in the said strike would not be entitled to holidays with pay as provided by the Act.
The disputes having thus arisen, 225 the State Government referred the matter to Industrial Tribunal.
The Tribunal held that the workers had resorted to an illegal strike and upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and as a result the ' workers were not entitled to annual holidays with pay under Section 49 B(1) of the Factories Act.
The Tribunal, however, held that the total deprivation of leave with pay was a severe punishment and reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay.
In the appeal before the then Labour Appellate Tribunal, the Tribunal held, among other things, that what happened on the night of the 1st November did not amount to a strike and did not cause any interrup tion in the workers ' service.
The Tribunal observed that "It would be absurd to hold that non permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section (i.e., Section 49 B(1) of the Factories Act).
We are inclined to hold that the stoppage of work for the period for about 2 to 4 hours in the circumstances of the ease is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned".
In the result, the Tribu nal allowed the Union 's appeal and ordered that holidays at full rates as provided for in Section 49 A of the Factories Act will have to be calculated on the footing that there was no break in the continuity of service.
This Court set aside the finding of the Appellate Tribunal by holding that it could not be disputed that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted, and the necessary ingredients of the defini tion of "strike" in Section 2 (q) of the Industrial Disputes Act existed and it was not a ease of an individual worker 's failure to turn up for work.
Hence, it was an illegal strike because no notice had been given to the management, the Mills being a public utility industry.
In Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors.
(No. 2), , Lord Denning MR observed: ".
It is equally the case when he is employed as one of many 's to work in an undertaking which needs the service of all.
If he, with the others, takes steps wilfully to disrupt the undertaking to produce chaos so that it will not run as it should.
then each one who is a party to those steps is guilty 226 of a breach of his contract.
It is no answer for any one of them to say 'I am only obeying the rule book ', or 'I am not bound to do more than a 40 hour week '.
That would be all very well if done in good faith without any wilful disrup tion of services; but what makes it wrong is the object with which it is done.
There are many branches of our law when an act which would otherwise be lawful is rendered unlawful by the motive or object with which it is done.
So here it is the wilful disruption which is the breach.
It means that the work of each man goes for naught.
It is made of no effect.
I ask: is a man to be entitled to wages for his work when he, with others, is doing his best to make it useless? Surely not.
Wages are to be paid for services rendered, not for producing deliberate chaos.
The breach goes to the whole of the consideration, as was put by Lord Campbell CJ in Cuckson vs Stones, [1858] 1 E & E 248 at 255, (1983 60) All ER Rep 390 at 392 and with other cases quoted in Smith 's Leading Cases (13th Edn., Vol. 2, p. 48), the notes to Cutter vs Power, [1795] 6 Term Rep 320, (1775 1802)All ER Rep 159)".
In Miles vs Wakefield Metropolitan District Council, [ 1989] I LLJ 335 the facts were that the plaintiff, Miles was the Superintendent Registrar in the Wakefield Metropolitan District Council.
His duties included performing marriages.
As part of trade union action, he declined to perform mar riages on Saturdays which day was very popular with marrying couples.
However, on that day he performed his other duties.
The Council, not wanting to terminate his services, imposed a cut in his remuneration.
He sued the Council for payment but failed.
He appealed to the Court of Appeal and was successful.
The appellate court held that he was a statutory official and there was no contractual relation and the only action against him was dismissal.
Aggrieved by this appel late decision, the Council went before the House of Lords in appeal.
The House of Lords held that the salary payable to the plaintiff was not an honorarium for the mere tenure of office but had the character of remuneration for work done.
If an employee refused to perform the full duties which could be required of him under his contract of service, the employer is entitled to refuse to accept any partial per formance.
In an action by an employee to recover his pay, it must be proved or admitted that the employee worked or was willing to work in accordance with the contract of employ ment or that such service as was given by the employee, if falling short of.
his contractual obligations was accepted by the 227 employer as sufficient performance of the contract.
In a contract of employment wages and work go together.
The employer pays for the work and the worker works for his wages.
If the employer declines to pay, the worker need not work.
If the worker declines to work, the employer need not pay In an action by a worker to recover his pay, he must allege and prove that he worked or was willing to work.
In the instant case, the plaintiff disentitled himself to salary for Saturday morning because he declined to work on Saturday morning in accordance with his duty.
Since the employee had offered only partial performance of his con tract, the employer was entitled, without terminating the contract of employment, to decline partial performance, and in that case the employee would not be entitled to sue for his unwanted service.
In this connection, Lord Templeman stated as follows: "The consequences of counsel 's submissions demonstrate that his analysis of a contract of employment is deficient.
It cannot be right that an employer should be compelled to pay something for nothing whether he dismisses or retains a worker.
In a contract of employment wages and work go together.
The employer pays for work and the worker works for his wages.
If the employer declines to pay, the worker need not work.
If the worker declines to work, the employer need not pay.
In an action by a worker to recover his pay he must allege and be ready to prove that he worked or was willing to work . . " It may be mentioned here that on the question whether the employee engaged in some kind of industrial action can claim wages on the basis of quantum meruit, only two of the Law Lords expressed themselves in favour, while the other three did not want to express any definite opinion on the question.
Among the decisions of the various High Courts relied upon by the parties in support of the respective cass, we find that except for the decision in V. Ganesan vs The State Bank of India & Ors., given by the learned Single Judge of the Madras High Court and the deci sion of the Division Bench of the same Court in that matter and other matters decided together in State Bank of India, Canara Bank, Central Bank etc.
& Ors.
vs Ganesan, Jambuna than, Venkataraman, B.V. Kamath, V.K. Krishnamurthy, etc.
& Ors., , all other decisions, namely, (i) Sukumar Bandyo 228 padhyyay & Ors.
vs State of West Bengal & Ors., [1976] IXLIC 1689; (ii) Algemene Bank Nederland, N.V. vs Central Govern ment Labour Court, Calcutta & Ors., [1978] II LLJ, 117; (iii) V. Ramachandran vs Indian Bank, ; (iv) Dharam Singh Rajput & Ors.
vs Bank of India, Bombay & Ors., [1979]12 LIC 1079; (v) R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; (vi) R.N. Shenoy & Anr. etc.
vs Central Bank of India & Ors.
, [1984] XVII LIC 1493 and (vii) Prakash Chandra Johari vs Indian Overseas Bank & Anr.
[1986] II LI J 496, have variously taken the view that it is not only permissi ble for the employer to deduct wages for the hours or the days for which the employees are absent from duty but in cases such as the present, it is permissible to deduct wages for the whole day even if the absence is for a few hours.
It is also held that the contract is not indivisible.
Some of the decisions have also held that the deduction of wages can also be made under the provisions of the and similar statutes where they are applicable.
It is further held that deduction of wages in such cases is not a penalty but is in enforcement of the contract of employment and hence no disciplinary proceedings need precede it.
Even in V. Ganesan vs The State Bank of India & Ors., (supra), it was not disputed on behalf of the employees that the employer, namely, the Bank had no fight to deduct pro rata the salary of the officers for the period of absence from duty.
What was contended there was that the Bank was not entitled to deduct the salary for the whole three days on which the employees had staged a demonstration for a duration of 30 minutes during working hours on two days and for an hour, on the third day.
The learned Judge held that by permitting the employees to perform their work during the rest of the day and by accepting such performance the bank must be deemed to have acquiesced in the breach of contract by the employees.
It is on this fact that the learned Judge held that the right to deduct salary (obviously for the whole day) on the principle of "no work no pay" could be exercised only when there was a term in the contract or when there was a statutory provision to that effect.
The Division Bench of the said Court in appeal against the said decision and similar other matters (supra) confirmed the reasoning of the learned Judge and held that in the absence of either a term in the contract of service stipulating that if an employee abstains from doing a particular work on a particu lar day, he would not be entitled to emoluments for the whole day or in the absence of a statutory provision laying down such a rule, it was impermissible for the employer to deduct or withhold the emoluments 229 of the employees even for the hours during which they worked.
Having accepted the performance of work from the employees for the rest of the day, the Banks are bound to compensate the employees for the work performed by them.
In that very case, the Court also held, on the facts arising from the other matters before it, that the refusal to per form the clearing house work can only be the subject matter of a disciplinary action and it cannot straightaway result in the withholding of the wages for the whole day.
Non signing of the attendance register and doing work is also work for which the employees should be compensated by pay ment of remuneration.
On the specific question whether the management can take action in situations, where either the contract, Stand ing Order or rules and regulations are silent, both parties relied on further authorities.
In Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Limited vs Firestone Tyre & Rubber Co., ; on which reliance was placed on behalf of the workmen it was held that under the general law of master and servant, an employer may discharge an employee either temporarily or permanently but that cannot be without adequate notice.
Mere refusal or inability to give employment to the workmen when he reports for duty, on one or more grounds mentioned in clause (kkk) of Section 2 of the Industrial Disputes Act is not a temporary discharge of the workmen.
Such a power, therefore, must be found out from the terms of the contract of service or the Standing Orders governing the establish ment Hence, even for lay off of the workmen there must be a power in the management either in the contract of service or the standing orders governing the establishment.
Ordinarily, the workmen, therefore, would be entitled to their full wages when the workmen are laid off without there being any such power.
There was no common law right to lay off the workmen, and, therefore, no right to deny the workmen their full wages.
In Krishnatosh Das Gupta vs Union of India & Ors., , it was a case of the employees of the National Test House, Calcutta who had staged demonstration after signing the attendance register to register their protest against suspension of some of their colleagues.
Though the employees signed the attendance register and attended the office, they did no work on the relevant day.
As such, a circular was issued by the Joint Director inform ing the employees that they would be considered as "not on duty".
By a subsequent circular the same Joint Director notified to all departments concerned the decision of the Cabinet that there shall not be pay for no work.
Relying on the said 230 circular the Management of the National Test House effected on a mass scale pay cut from the pay and allowances of the concerned employees.
The circular was challenged by the employees by a writ petition before the High Court.
The High Court held that in order to deduct any amount from salary, there must be specific rules relating to the contract of service of the person concerned.
On behalf of the employers, reliance was placed on a decision of this Court in Sant Ram Sharma vs State of Rajas than & Anr.; , for the proposition laid down there.that in the absence of any statutory rules or a spe cific provision in the rules, the Government can act by administrative instructions.
The Court has held there that though it is true that the Government cannot amend or super sede statutory rules by administrative instructions, if the rules are silent on any particular point, Government can fill up the gaps and supplement the rules and issue instruc tions not inconsistent with the rules already framed.
In Roshan Lal Tandon vs Union of India, ; , this Court has stated that although the origin of Government service is contractual in the sense that there is an offer and acceptance in every case, once appointed to his 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 which may be flamed or altered unilaterally by the Govern ment.
In other words, the legal position of the Government servant is more of status than of contract.
The hallmark of status is the attachment to legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties.
The relationship between the Government and the servant is not like an ordinary contract of service between a master and servant.
The legal relationship is something entirely different, something in the nature of status.
In V.T. Khanzode & Ors.
vs Reserve Bank of India & Anr.
, ; , this Court has reiterated that so long as Staff Regulations are not flamed, it is open to issue admin istrative circulars regulating the service conditions in the exercise of power conferred by Section 7(2) of the so long as they do not impinge on any regulations made under Section 58 of the Act.
The same view with regard to power to issue administra tive instructions when rules are silent on a subject has been reiterated by the Court in Paluru Ramkrishnaiah & Ors.
vs Union of India & 231 Anr.
; , and in Senior Superintendent of Post Office & Ors.
vs Izhar Hussain, ; 11.
The principles which emerge from the aforesaid authorities may now by stated.
Where the contract, Standing Orders or the service rules/regulations are silent on the subject, the management has the power to deduct wages for absence from duty when the absence is a concerted action on the part of the employees and the absence is not disputed.
Whether the deduction from wages will be pro rata for the period of absence only or will be for a longer period will depend upon the facts of each case such as whether where was any work to be done in the said period, whether the work was in fact done and whether it was accepted and acquiesced in, etc.
It is not enough that the employees attend the place of work.
They must put in the work allotted to them.
It is for the work and not for their mere attendance that the wages/salaries are paid.
For the same reason, if the employ ees put in the allotted work but do not, for some reason may be even as a protest comply with the formali ties such as signing the attendance register, no deduction can be effected from their wages When there is a dispute as to whether the employees attended the place of work or put in the allotted work or not, and if they have not, the reasons therefore etc., the dispute has to be investigated by holding an inquiry into the matter.
In such cases, no deduction from the wages can be made without establishing the omission and/or commission on the part of the employees concerned.
When the contract, Standing Orders, or the service rules/regulations are silent, but enactment such as the providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment.
Apart from the aforesaid ratio of the decisions and the provisions of the and similar statutes on the subject, according to us, the relevant provisions of the major legislation governing the industrial disputes, viz., the also lend their support to the view that the wages are payable pro rata for the work done and hence deductible for the work not done.
Section 2 (rr) of the said Act defines "wages" to mean "all remuneration . which would, if terms of employ ment, expressed or implied, were fulfilled, be payable to workman in respect of his employment or work done in such employment . " while Section 232 2(q) defines "strike" to mean "cessation of work" or "refus al to continue to work or accept employment by workman".
Reading the two definitions together, it is clear that wages are payable only if the contract of employment is fulfilled and not otherwise.
Hence, when the workers do not put in the allotted work or refuse to do it, they would not be entitled to the wages proportionately.
The decisions including the one impugned in this appeal which have taken the view which is either contrary to or inconsistent with the above conclusions, have done so because they have proceeded on certain wrong presumptions.
The first error, as we have pointed out at the outset, is to confuse the question of the legitimacy of the strike as a weapon in the workers ' hands with that of the liability to lose wages for the period of strike.
The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right.
However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal.
Whereas, therefore, a legal strike may not invite disciplinary proceedings, an illegal strike may do so, it being a misconduct.
However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike.
The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it.
When workers resort to it, they do so knowing full well its consequences.
During the period of strike the contract of employment continues but the workers withhold their labour.
Consequently, they cannot expect to be paid.
The second fallacy from which the said decisions suffer is to view the contract of employment as an indivisible one in terms of the wageperiod.
When it is argued that the wages cannot be deducted pro rata for the hours or for the day or days for which the workers are on strike because the con tract, which in this case is monthly, cannot be subdivided into days and hours, what is forgotten is that, in that case if the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month he served.
This was the iniquitous and harsh conse quence of the rule of indivisibility of contract laid down in an English case, Cutter vs Powell, [1795] 6 TR 320 which was rightly vehemently criticised and later, fortunately not followed.
If the employment contract is held indivisible, it will be so for both the parties.
We are also unable to see any difficulty, inequity or impracticability in construing the contract as divisible into different 233 periods such as days and hours for proportionate reimburse ment or deduction of wages, which is normally done in prac tice.
The third fallacy was to equate disputed individual conduct with admitted mass conduct.
A disciplinary proceed ing is neither necessary nor feasible in the latter case.
The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed.
As things stand today; they do not provide a remedy for mass misconduct which is admitted or cannot be disputed.
Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper.
The service conditions are not expect ed to visualise and provide for all situations.
Hence, when they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so.
The pro rata deduction of wages is not an unreasonable exercise of power on such occasions.
Whether on such occasions the wages are deductible at all and to what extent will, howev er, depend on the facts of each case.
Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for tile whole day.
On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiesce in it.
In that case the employer may not be entitled to deduct wages at all or be entitled to deduct them only for the hours of strike.
If further statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer may be justified in deducting wages under their provisions.
Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is relent on the subject.
It is, however, necessary to reiterate that even in cases such as the present one where action is resorted to on a mass scale, some employees may not be a party to the action and may have genuinely desired to discharge their duties but could not do so for failure of the management to give the necessary assistance or protection or on account of other circumstances.
The management will not be justified in deducting wages of such employees without holding an in quiry.
That, however, was not the grievance of any of the employees in the present case, as pointed out earlier.
234 15.
Hence, we are unable to sustain the impugned deci sion which is untenable in law.
The decision is accordingly set aside with no order as to costs.
Civil Appeal No. 855 of 1987 16.
The facts in this case are different from those in the earlier appeal.
In this case, the allegation of the employer Company is that the workers had indulged in "go slow" and as a result there was negligible production in the month of July 1984.
The workers did not attend to their duty and only loitered in the premises and indulged in go slow tactics only with a view to pressurise the Company to con cede demands.
The Company was, therefore, compelled to suspend its operation by giving a notice of lock out.
Ac cording to the Company, therefore, since the workers had not worked during all the working hours, they had not earned their wages.
Hence, the Company did not pay the workers their wages for the entire month of July 1984.
The workers ' Union, therefore, filed a complaint before the Industrial Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act, for short) complaining that the Company had indulged in unfair labour practice mentioned in Item 9 of Schedule 4, from 7th August, 1984 which was the date for payment of salary for the month of July 1984, and under Item 6 of Schedule 2 of the Act with effect from 14th August, 1984 since the Company had declared a lock out from that day.
It was also alleged that since no specific date of the com mencement of the alleged lock out had been specified, it was an illegal one.
It appears that the Company had declared the lock out by notice dated July 30, 1984 and the lock out was effected from August 14, 1984.
Subsequently, there were negotiations between the Union and the Company, and a set tlement was reached on October 15, 1984 as a result of which the lock out was lifted with effect from October 16, 1984.
The terms of the settlement were formally reduced to writing on November 30, 1984.
In this appeal, we are not concerned with the lock out and the subsequent settlement.
The question that falls for consideration before us is whether the Company was justified in denying to the workers the full monthly wages for the month of July 1984.
On this question, the Industrial Court accepted the oral testimony of the Company 's witnesses that the workmen had not at all worked for full eight hours on any day in July 1984 and that they were working intermit 235 tently only for some time and sitting idle during the rest of the day.
On an average the workers had not worked for more than one hour and 15 to 20 minutes per day, during that month.
The Industrial Court did not accept the evidence of the Union 's witness that the witness and the other workmen had worked on all the days during the entire month of July 1984 because he admitted that after the Company told the workers that it could not concede to the demands, the work ers had started staging demonstration.
Although the witness denied that from July 3, 1984, the workers started indulging in go slow, he admitted that the Company was displaying notices from time to time with effect from July 4, 1984 alleging that the workers were not giving production and that they were loitering here and there.
According to the Industrial Court in the circumstances, it did not see any good reason to disbelieve the Company 's witnesses.
The Court further held that normally in view of this evidence on record, it would have held that the pro rata deduction of wages made by the Company for the month of July 1984 would not amount to an act of unfair labour practice falling under Item 9 of Schedule IV of the MRTU and PULP Act.
However, in view of the two judgments of the Bombay High Court in T.S. Kelwala & Ors.
vs Bank of India & Ors., i.e. the one impugned in the earlier appeal and Apar (Pvt) Limited vs
S.R. Samant & Ors., [1980] II LLJ 344, the Court had to hold that the non payment of full wages to the work men for the month of July 1984 was an act of unfair labour practice falling under the said provision of the Act.
The Court further held that admittedly the workers were not piece rated and there was no agreement or settlement allow ing the Company to deduct wages on the ground that they were indulging in "go slow" or that they had not given normal production.
According to the Court, the remedy of the Compa ny against the workmen may lie elsewhere.
Thus, the Court taking sustenance from the Bombay High Court Judgments referred to above held that the deduction of wages during the month of July, 1984 on account of the go slow was not justified, and declared that the Company had committed an unfair labour practice by not paying full monthly wages to the workmen, and directed the Company to pay the said wages for the month of July 1984.
It is this order of the Indus trial Court which is challenged directly in this Court by the present appeal.
Since one of the two decisions of the Bombay High Court on which the Industrial Court relied was rendered in another context and it has already been discussed in the other appeal, we may refer here only to the other decision, viz., Apar (Pvt) Ltd. vs S.R. Samant & Ors.
, (supra) which is pressed in service before us on behalf of the workmen.
The facts in that case were that by a settlement dated Au 236 gust 3, 1974 the workmen were allowed increase in the basis wages, dearness allowance, house rent, etc.
in addition to the production bonus in terms of a scheme.
That settlement was binding on the parties upto the end of April 1977.
The matters ran a smooth course till August 1975.
However, from September 1975, the Company refused to pay the production bonus and with effect from 15th October, 1975 it refused to pay the wages, dearness allowances etc.
as per the settle ment.
On August 21, 1975, a notice was put up by the Company starting that because of the attitude of indiscipline on the part of the workers and deliberate go slow tactics resulting in low production, the management was relieved of its com mitments and obligation imposed upon it by the settlement.
A notice in terms of Section 9A of the was also put up indicating a certain scale of wages to which only the workers would be entitled.
These wages were not more than the wages under the Minimum Wages Act and were even less than what was agreed to in the earli er agreement of January 23, 1971.
A complaint was, there fore, filed under the MRTU & PULP Act before the Industrial Court, and the Industrial Court recorded a finding that the figures of production produced by the Company before it related only to few departments.
Out of total of 700 employ ees who were working earlier, 116 were retrenched at the relevant time.
The Company 's allotment of material, viz., aluminium was also reduced from 7390 metric tones to 2038 and there was no supply of even that allotted quantity.
The Court further referred to certain inconsistent statements made by the factory manager and held that the management had failed to discharge the burden of proof of justifying the drastic reduction of the wages and other emoluments.
The Court therefore recorded a finding that the Company had engaged in an unfair labour practice.
Against the said decision, the Company preferred a writ petition before the High Court.
The High Court on these facts held that the wages could be deducted only in terms of a statutory provi sion or of a settlement.
A reduction of wages on the allega tion that the workers in general had resorted to go slow was wholly impermissible in law specially when the workmen were not piece rated employees.
The High Court referred to the cases where reduction of wages for absence from duty for striking work was held as valid such as Major Kanti Bose & Ors.
vs Bank of India & Ors., (supra); V. Ramachandran vs Indian Bank, (supra) and Algemene Bank, Nederland vs Central Government Labour Court, Calcutta, (supra) and held that those cases were distinguishable because they related to absence from duty and not go slow.
In M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., [1962] 3 237 SCR 684 the facts were that certain workmen of the appel lant Mills resorted to "go slow".
The appellant Mills held a domestic inquiry and as a result thereof decided to dismiss 21 workmen, and apply to the Industrial Tribunal under Section 33 of the for permission to dismiss the workmen.
Evidence was laid before the Tribunal to prove the charge against the workmen.
The Tribunal held that the domestic enquiry was not proper, that the appellant was guilty of mala fide conduct and victimisation, that except in the case of one workman, the others were guilty of deliberate go slow and accordingly granted permission in respect of the one workman only.
It is against the said decision that the appellant Mills had approached this Court.
This Court held that the evidence produced before the Tribu nal clearly established that 13 out of the 20 workmen were guilty of deliberate go slow and in that connection observed as follows: "Go slow which a picturesque description of deliberate delaying of production by workmen pretending to be engaged in the factory is one of the most pernicious practices that discontended or disgruntled workmen sometime resort to.
It would not be far wrong to call this dishonest.
For, while thus delaying production and thereby reducing the output the workmen claim to have remained employed and thus to be entitled to full wages.
Apart from this also, "go slow" is likely to be much more harmful than total cessation of work by strike.
For, while during a strike much of the machinery can be fully turned off, during the "go slow" the machinery is kept going on a reduced speed which is often extremely damaging to machinery parts.
For all these reasons "go slow" has always been considered a serious type of misconduct." This Court, therefore, set aside the order of the Tribunal refusing permission to dismiss 13 of the workmen.
There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment.
It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work.
It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances.
In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for a disciplinary action for it.
Hence, once it is 238 proved, those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service.
But by its very nature, the proof of go slow, particu larly when it is disputed, involves investigation into various aspects such as the nature of the process of produc tion, the stages of production and their relative impor tance, the role of the workers engaged at each stage of production, the pre production activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors bear ing on the average production etc.
The go slow further may be indulged in by an individual workman or only some workmen either in one section or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the productive process.
Even where it is admitted, go slow may in some case present difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate.
The deduction of wages for go slow may, there fore, present difficulties which may not be easily resolu ble.
When, therefore, wages are sought to be deducted for breach of con tract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to be adjudicated by an independent machinery statutory or other wise as the parties may resort to.
It is necessary to empha size this because unlike in this case of a strike where a simple measure of a pro rata deduction from wages may pro vide a just and fair remedy, the extent of deduction of wages on account of a go slow action may in some case raise a complex question.
The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable.
It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should be a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account.
The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case.
In the present case, the Industrial Court, as point ed out earlier, has accepted the evidence of the witness of the Company that the workmen had not worked for full eight hours on any day in the month concerned, namely, July 1984, and that they were working intermittently only for sometime and were sitting idle during the rest 239 Of the time.
According to him, the workers had worked hardly for an hour and 15 to 20 minutes on an average during the said month.
The witness had also produced notices put up by the Company from time to time showing the daily fall in the production and calling upon the workmen to resume normalcy.
There is further no dispute that the copies of these notices were sent to the Union of the workmen as well as to the Government Labour Officer.
The Industrial Court did not accept the evidence of the workmen that there was no go slow as alleged by the Company.
Accordingly, the Industrial Court has recorded a finding that the pro rata deduction of wages made by the Company for the month of July 1984 did not amount to an act of unfair labour practice within the mean ing of the said Act.
It does not further appear from the record of the proceedings before the Industrial Court that any attempt was made on behalf of the workmen to challenge the figures of production produced by the Company.
These figures show that during the entire month of July 1984, the production varied from 7.06 per cent of 13.9 per cent of the normal production.
The Company has deducted wages on the basis of each day 's production.
In view of the fact that there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen and the production was as alleged by the Company during the said period, which finding is not challenged before us, it is not possible for us to interfere with it in this appeal.
As stated above, all that was challenged was the right of the employer to deduct wages even when admittedly there is a go slow which question we have answered in favour of the employer earlier.
The question with regard to the quantum of deduction from the wages, therefore, does not arise before us for consideration.
It is, however, likely that the work men did not question the figures of production before the Industrial Court because they were armed with the two deci sions of the High Curt (supra) which according to them, had negatived the right of the employer to deduct wages even in such circumstances.
While, therefore, allowing the appeal, we direct that the appellant will not deduct more than 5 per cent of the wages of the workmen for the month of July 1984.
The appeal is allowed accordingly with no order as to costs.
G.N. Appeals allowed.
| IN-Abs | In the former appeal, the appellant is a nationalised Bank.
In 1977, some demands for wage revision made by the employees of all Banks were pending and in support of their demands, a call for a country wide strike was given.
The appellant Bank issued a Circular on September 23, 1977 to its managers and agents directing them to deduct wages of the employees for the days they go on strike.
The respondent Unions gave a car for a four hour strike on December 29, 1977.
Two days before the strike, the appellant Bank issued an Administrative Circular warning the employees that if they participate in the strike, they would be committing a breach of their contract of service and they would not be entitled to salary for the full day and they need not report for work for the rest of the working hours on that day.
However, the employees went on strike as scheduled, for four hours which included banking hours of the public, and re sumed duty thereafter.
The appellant Bank did not prevent them from doing so.
The appellant Bank by its circular di rected the managers and agents to deduct the full day 's salary of those employees who participated in the strike.
On a writ petition filed by the respondents, the High Court quashed the said Circular.
The Letters Patent Appeal filed by the appellant was dismissed.
Hence, the appeal by the Bank.
In the latter appeal, the appellant is a company whose workers had indulged in "go slow" in July 1984, thereby bringing down production.
The workers did not attend to their work and were loitering in the premises and were indulging in go slow tactics to pressurise the 215 company to concede their demands.
The company suspended its operation by giving a notice of lock out.
It did not pay wages to the workers for July , 1984 on the ground that they did not work during all the working hours and had not their wags.
The workers ' union filed a complaint before the Indus trial Court complaining that the appellant company had indulged in unfair labour practice and that the lock out declared was illegal The Industrial Court held that the deduction of wages for July, 1984 on account of the go slow was not justified It also declared that the company had committed an unfair labour practice by not paying full monthly wages to the workers and directed the company to pay the said wages for the month of July, 1984.
Aggrieved, the appellant company has preferred the appeal.
Allowing the appeals, this Court, HELD: 1.1 There is no doubt that whenever a worker indulges in a misconduct such as a deliberate refusal to work, the employer can take disciplinary action against him and impose on him the penalty prescribed for it which may include some deduction from his wages.
However, when miscon duct is not disputed but is, on the other band, ' admitted and is resorted to on a mass scale such as when the employ ees go on strike, legal or illegal, there is no need to hold an inquiry.
To insist on an inquiry even in such cases is to pervert the very object of the inquiry.
In a mass action such as strike it is not possible to hold an inquiry against every employee nor is it necessary to do so unless, of course, an employee contends that although he did not want to go on strike and wanted to resume his duty, he was pre vented from doing so by the other employees or that the employer did not give him proper assistance to resume his duty though he had asked for it.
That was certainly not the situation in the present case in respect of any of the employees and that is not the contention of the employees either.
It is true that in the present case when the employ ees came back to work after their four hours strike, they were not prevented from entering the Bank premises.
But admittedly, their attendance after the four hours strike was useless because there was no work to do during the rest of the hours.
It is for this reason that the Bank had made it clear, in advance, that if they went on strike for the four hours as threatened, they would not be entitled to the wages for the whole day and hence they need not report for work thereafter Short of physically preventing the employ ees from resuming the work which it was unnecessary to do, the Bank had done all hi its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter the Bank 's premises where they had no work to do, and in fact did not 216 do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank.
In fact, the direction was to the contrary.
Hence, the later resumption of work by the employees was not in fulfil ment of the contract of service or any obligation under it.
The Bank was therefore not liable to pay either full day 's salary or even the pro rata salary for the hours or work that the employees remained in the Bank premises without doing any work.
It is not a mere presence of the workmen at the place of work but the work that they do according to the terms of the contract which constitutes the fulfilment of the contract of employment and for which they were entitled to be paid.
[222E H; 223A F] 1.2 Although the service regulations do not provide for a situation where employees on a mass scale resort to ab sence from duty for whole day or a part of the day whether during crucial hours or otherwise they do provide for treat ing an absence from duty of an individual employee as a misconduct and for taking appropriate action against him for such absence.
[224D E] 2.1.
When the contract, Standing Orders, or the service rules/ regulations are silent, but enactment such as the payment of Wages Act providing for wage cuts for the absence from duty is applicable to the establishment concerned, the wages can be deducted even under the provisions of such enactment.
[231F] 2.2.
The working class has indisputably earned the right to strike as an industrial action after a long struggle, so much so that the relevant industrial legislation recognises it as their implied right.
However, the legislation also circumscribes this right by prescribing conditions under which alone its exercise may become legal.
Whereas, there fore, a legal strike may not invite disciplinary proceed ings, an illegal strike may do so, it being a misconduct.
However, whether the strike is legal or illegal, the workers are liable to lose wages for the period of strike.
The liability to lose wages does not either make the strike illegal as a weapon or deprive the workers of it.
When workers resort to it, they do so knowing full well its consequences.
During the period of strike the contract of employment continues but the workers withhold their labour.
Consequently, they cannot expect to be paid.
[232C E] 2.3.
The contract, which is this case is monthly, cannot be subdivided into days and hours.
If the contract comes to an end amidst a month by death, resignation or retirement of the employee, he would not be entitled to the proportionate payment for the part of the month 217 he served.
If the employment contract is held indivisible, it will be so for both the parties.
There is no difficulty, inequity or impracticability in construing the contract as divisible into different periods such as days and hours for proportionate reimbursement or deduction of wages, which is normally done in practice.
[232G H; 233A] 2.4.
The contract of employment, Standing Orders or the service rules provide for disciplinary proceedings for the lapse on the part of a particular individual or individuals when the misconduct is disputed.
As things stand today, they do not provide a remedy for mass misconduct which is admit ted or cannot be disputed.
Hence, to drive the management to hold disciplinary proceedings even in such cases is neither necessary nor proper.
The service conditions are not expect ed to visualise and provide for all situations.
When they are silent on unexpected eventualities, the management should be deemed to have the requisite power to deal with them consistent with law and the other service conditions and to the extent it is reasonably necessary to do so.
The pro rata deduction of wages is not an unreasonable exercise of power on such occasions.
Whether on such occasions, the wages are deductable at all and to what extent will, howev er, depend on the facts of each case.
Although the employees may strike only for some hours but there is no work for the rest of the day as in the present case, the employer may be justified in deducting salary for the whole day.
On the other hand, the employees may put in work after the strike hours and the employer may accept it or acquiense in it.
In that case the employer may not be entitled to deduct wages at all or be entitled to deduct only for the hours of strike.
If statutes such as the or the State enactments like the Shops and Establishments Act apply, the employer ,may be justified in deducting wages under their provisions.
Even if they do not apply, nothing prevents the employer from taking guidance from the legisla tive wisdom contained in it to adopt measures on the lines outlined therein, when the contract of employment is silent on the subject.
[233B F] V.T. Khanzode & Ors.
vs Reserve Bank of India & Anr., ; ; Paluru Ramkrishnaiah & Ors. etc.
vs Union of India & Anr.
; , and Senior Superin tendent of Post Office & Ors.
vs lzhar Hussain; , , relied on.
Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd., ; ; V. Ganesan vs The State Bank of India & Ors., ; State Bank of India, Canara Bank, Central Bank etc.
& Ors.
vs Ganesan, Jambunathan, Venkatara 218 man, B.V. Kamath, V.K. Krishnamurthy, etc.
& Ors.
, ; Sukumar Bandyopadhyyay & Ors.
vs State of West Bengal & Ors., [1976] IX LIC 1689; Algemene Bank Nederland, N.V. vs Central Government Labour Court, Calcutta & Ors., [1978] II LLJ, 117; V. Ramachandran vs Indian Bank, [1979] I LLJ 122; Dharam Singh Rajput & Ors.
vs Bank of India, Bombay & Ors.
, ; R. Rajamanickam, for himself and on behalf of other Award Staff vs Indian Bank, [1981] II LLJ 367; R.N. Shenoy & Anr. etc.
vs Central Bank of India & Ors.
, [1984] XVII LIC 1493; Prakash Chandra Johari vs Indian Overseas Bank & Anr., [1986] II LLJ 496; Workmen of M/s. Firestone Tyre & Rubber Co. of India (P) Ltd. vs Firestone Tyre & Rubber Co., ; ; Krishnatosh Das Gupta vs Union of India & Ors., ; Sant Ram Sharma vs State of Rajasthan & Anr., ; ; Roshan Lal Tandon vs Union of India, ; ; Secretary of State for Employment vs Associated Society of Locomotive Engineers and Firemen and Ors.
(No. 2), ; Miles vs Wakefield Metropolitan District Council, [1989] I LLJ 335 and Cutter vs Pwell, [1795] 6 TR 320, referred to.
There cannot be two opinions that go slow is a serious misconduct being a covert and a more damaging breach of the contract of employment.
It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work.
It has been roundly condemned as an industrial action and has not been recognised as a legit imate weapon of the workmen to redress their grievances.
In fact the model standing orders as well as the certified standing orders of most of the industrial establishments define it as a misconduct and provide for disciplinary action for it.
Hence, once it is proved.
those guilty of it have to face the consequences which may include deduction of wages and even dismissal from service.
[237G H; 238A] 3.2.
The proof of go slow, particularly when it is disputed, involves investigation into various aspects such as the nature of the process of production, the stages of production and their relative importance, the role of the workers engaged at each stage of production, the pre produc tion activities and the facilities for production and the activities of the workmen connected therewith and their effect on production, the factors hearing on the average production etc.
The go slow further may be indulged in by an individual workman or only some workmen either in one sec tion or different sections or in one shift or both shifts affecting the output in varying degrees and to different extent depending upon the nature of product and the produc tive process.
Even where it is admitted, go slow may in some case present 219 difficulties in determining the actual or approximate loss, for it may have repercussions on production after the go slow ceases which may be difficult to estimate.
The deduc tion of wages for go slow may, therefore, present difficul ties which may not be easily resoluble.
When, therefore, wages are sought to be deducted for breach of contract on account of go slow, the quantum of deduction may become a bone of contention in most of the cases inevitably leading to an industrial dispute to he adjudicated by an independent machinery statutory or otherwise as the parties may resort to.
The simplistic method of deducting uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fail in production compared to the normal or average production may not always be equitable.
It is, therefore, necessary that in all cases where the factum of go slow and/or the extent of the loss of production on account of it, is disputed, there should he a proper inquiry on charges which furnish particulars of the go slow and the loss of production on that account.
The rules of natural justice require it, and whether they have been followed or not will depend on the facts of each case.
[238B G] 3.3.
In the instant case, there is a finding recorded by the Industrial Court that there was a go slow resorted to by the workmen resulting in loss of production during the said period.
Since the said finding is not challenged, it is not possible to interfere with it in this appeal.
Though the appellant is justified in deducting wages for the said period, in the facts and circumstances of the case it is directed that it will not deduct more than 5 per cent of the wages of the workmen for the month of July, 1984 when they indulged in go slow tactics.
[239D F] M/s. Bharat Sugar Mills Ltd. vs Shri Jai Singh & Ors., ; T.S. Kelwala & Ors.
vs Bank of India & Ors., and Apar (Pvt) Ltd. vs
S.R. Samant & Ors., [1980] II LLJ 344, referred to.
|
Appeal No. 117 of 1955.
Appeal by special leave from the judgment and order dated the 25th March, 1953, of the Madras High Court, in Civil Misc.
Petition No. 6577 of 1952.
R. Ganapathy Iyer, for the appellant.
Sardar Bahadur, for the respondent.
October 31.
The Judgment of the Court was ,delivered by S.K. DAS, J.
In this appeal, pursuant to special leave against the judgment and order of the High Court of Madras, the question for decision is whether the appellant who claims to be an agriculturist debtor is entitled to apply for scaling down of his decretal debt under the provisions of the Madras Agriculturists ' Relief Act (Mad. IV of 1938), hereinafter called the Act, as amended by the Madras Agriculturists ' Relief (Amendment) Act (Mad. XXIII of 1948), hereinafter called the amending Act.
The facts which have led to this appeal are that a partnership firm, briefly described as M.A.R. Firm, whose partners were Arunachalam Chetty, his two sisters and Subramaniam Chetty, was carrying on the business of money lending.
On the death of Arunachalam Chetty on July 6, 1916, Subramaniam Chetty, one of the surviving partners, took over the assets of the dissolved partnership firm at a valuation of Rs. 25,000 and carried on the business under the name and style 240 of P.L. section Firm of which the partners were Subramaniam Chetty, Vellachi Achi, and his two daughters, and in 1919 Palaniappa Chetty, father of the appellant, joined the partnership.
The amount of Rs. 25,000 was credited in the accounts of the new partnership.
On April 19, 1919, the accounts showed a balance of Rs. 16,369 12 as being due to the share of the deceased Arunachalam Chetty which by the year 1935 swelled up to a figure of Rs. 55,933 15.
Subramaniam Chetty died in 1924 and the business was carried on after his death by his widow Lakshmi Achi and her daughter and Palaniappa Chetty.
In 1930 Palaniappa Chetty died and his sons joined the business in his place.
Disputes arose between the partners in 1935 which were referred to arbitration and under an award given on July 31, 1935, Arunachalam Chetty and his sister were directed to pay to the estate of M.A.R. Rs. 34,958 11 6 and the defendants, now appellant and his brother, a sum of Rs. 20,975 3 and corresponding entries were made in the account books of P.L.S. Firm.
In 1944 the plaintiff, now respondent, as the adopted son of Arunacbalam Chetty filed a suit for recovery of the amount which the award had directed the defendants to pay.
The defendants were the two sons of Palaniappa Chetty.
They denied the adoption of the respondent to Arunachalam Chetty and also pleaded the bar of limitation.
The trial Court held the adoption to be invalid and upheld the plea of limitation.
The plaintiff took an appeal to the High Court which held the adoption to be valid and also held the suit to be within limitation.
It remitted the case to the trial Court for determining certain issues and after the findings were received, the suit was decreed on March 9, 1951, for a sum of Rs. 26,839 15 9.
The appellant applied to the High Court for leave to appeal to this Court and also applied for stay.
Leave was granted but stay was refused as, no security was furnished under the rules, the High Court later revoked the certificate granting leave.
During the pendency of the appeal in the High Court, the Act of 1938 was amended by the amending Act by which new reliefs were given to agriculturist,, debtors.
On October 5, 1951, the appellant made an 241 application to the Trial Court for scaling down the decretal debt under section 19 (2) of the Act which was added by the amending Act.
The trial Court held that the decree could be scaled down under section 19 (2) of the Act, but it had no jurisdiction to grant that relief as, the decree sought to be scaled down had been passed by the High Court.
Against this order the appellant took an appeal to the High Court on July 4, 1952, and also made a separate application in the High Court for scaling down the decretal debt under section 19 (2) of the Act.
The High Court dismissed the application on March 25, 1953.
The appellant then applied for leave to appeal under article 133 of the Constitution but this was refused on October 6, 1953, and this Court granted special leave on April 19, 1954.
The ground on which the High Court refused relief under section 19 (2) of the Act was that "the retrospective operation of section 19 (2) was controlled by section 16 of the Act XXIII of 1948 " and that cl.
(ii) of section 16 applied and as the appellant whose appeal was pending at the commencement of the amending Act did not apply for scaling down before the decree was passed although he had the opportunity to do so, his application subsequent to the decree was barred by the principle of res Judicata.
The provisions of section 19 (2) of the Act which gave the right to obtain relief of scaling down notwithstanding the provisions of the Code of Civil Procedure to the contrary were held inapplicable, because a. 19(2) of the Act was itself " limited by the provisions of section 16 of Act XXIII of 1948 ".
The High Court observed that although the appellant had filed an additional written statement claiming relief under the Burma Debt Laws, no prayer was made for any relief under the Act.
The High Court said : " A party who had an opportunity to raise a plea but did not raise the Plea is precluded by principles of res judicata from 'raising the plea over again at a subsequent stage.
But it is said that the principle of res judicata has no application to the present case as section 19 (1) which is incorporated by reference in section 19 (2) says that a petitioner would be entitled to the relief given to him under that section 244 order has been passed, or in which the decree or order has not become final, before such commencement; (iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in ,full before the commencement of this Act: Provided that no creditor shall be required to refund any sum which has been paid to or realised by him before the commencement of this Act Unfortunately, the language of section 16 is not very clear and lends itself to difficulties of interpretation.
We agree with the High Court that section 16 of the amending Act controls the amendments made by that Act in the sense that those amendments apply to the suits and proceedings described in the three clauses of section 16.
Sub section (2) of section 19 was one of the amendments which was inserted by the ammending Act and therefore the appellant debtor must establish that he is entitled to relief under sub section (2) of section 19, because his case comes under one of the three clauses of section 16.
The High Court held that cl.
(ii) of section 16 applied in the present case; but the appellant debtor could and should have raised the plea for relief under the Act when the appeal was pending in the High Court and as he did not do so, he was barred from claiming relief under section 19(2) on the principle of res judicata.
We do not think that this view is correct and our reasons are the following.
The three clauses of section 16 are independent of each other and el.
(i) refers to suits and proceedings instituted after the commencement of the amending Act, the relevant date being January 25, 1949.
Clause (1) has no application in the present case and need not be further considered.
Clause (iii), it seems clear to us, applies to suits and proceedings in which the decree or order passed had become final, but had not been executed or satisfied in full before January 25, 1949: this means that though a final decree or order for repayment of the debt had been passed before January 25, 1949, yet an agriculturist debtor can claim relief under the Act provided the decree has not been executed or satisfied in full before the aforesaid date.
It should be remembered in this connection 241 application to the Trial Court for scaling down the decretal debt under section 19 (2) of the Act which was added by the amending Act.
The trial Court held that the decree could be scaled down under section 19 (2) of the Act, but it had no jurisdiction to grant that relief as,, the decree sought to be scaled down had been passed by the High Court.
Against this order the appellant took an appeal to the High Court on July 4, 1952, and also made a separate application in the High Court for scaling down the decretal debt under section 19 (2) of the Act.
The High Court dismissed the application on March 25, 1953.
The appellant then applied for leave to appeal under article 133 of the Constitution but this was refused on October 6, 1953, and this Court granted special leave on April 19, 1954.
The ground on which the High Court refused relief under section 19 (2) of the Act was that "the retrospective operation of section 19 (2) was controlled by section 16 of the Act XXIII of 1948 " and that cl.
(ii) of section 16 applied and as the appellant whose appeal was pending at the commencement of the amending Act did not apply for scaling down before the decree was passed although he had the opportunity to do so, his application subsequent to the decree was barred by the principle of res judicata.
The provisions of section 19 (2) of the Act which gave the right to obtain relief of scaling down notwithstanding the provisions of the Code of Civil Procedure to the contrary were held inapplicable, because section 19 (2) of the Act was itself " limited by the provisions of section 16 of Act XXIII of 1948 ".
The High Court observed that although the appellant had filed an additional written statement claiming relief under the Burma Debt Laws, no prayer was made for any relief under the Act.
The High Court said : " A party who had an opportunity to raise a plea but did not raise the Plea is precluded by principles of res judicata from raising the plea over again at a subsequent stage.
But it is said that the principle of res judicata has no application to the present case as section 19 (1) which is incorporated by reference in section 19 (2) says that a petitioner would be entitled to the relief given to him under that section 244 ,order has been passed, or in which the decree or order has not become final, before such commencement; (iii) all suits and proceedings in which the decree or order passed has not been executed or satisfied in ,,full before the commencement of this Act: Provided that no creditor shall be required to refund any sum which has been paid to or realised by him before the commencement of this Act ".
Unfortunately, the language of section 16 is not very clear and lends itself to difficulties of interpretation.
We agree with the High Court that section 16 of the amending Act controls the amendments made by that Act in the sense that those amendments apply to the suits and proceedings described in the three clauses of section 16.
Sub section (2) of section 19 was one of the amendments which was inserted by the ammending Act and therefore the appellant debtor must establish that be is entitled to relief under sub section
(2) of section 19, because his case comes under one of the three clauses of section 16.
The High Court held that cl.
(ii) of section 16 applied in the present case; but the appellant debtor could and should have raised the plea for relief under the Act when the appeal was pending in the High Court and as he did not do so, he was barred from claiming relief under section 19(2) on the principle of res judicata.
We do not think that this view is correct and our reasons are the following.
The three clauses of section 16 are independent of each other and cl.
(1) refers to suits and proceedings instituted after the commencement of the amending Act, the relevant date being January 25, 1949.
Clause (1) has no application in the present case and need not be further considered.
Clause (iii), it seems clear to us, applies to suits and proceedings in which the decree or order passed had become final, but had not been executed or satisfied in full before January 25, 1949: this means that though a final decree or order for repayment of the debt, had been passed before January 25, 1949, yet an agriculturist debtor can claim relief under the Act provided the decree has not been executed or satisfied in full before the aforesaid date.
It should be remembered in this connection 245 that the word I debt ' in the Act has a very comprehensive connotation.
It means any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise etc.
It is, therefore, clear that the word I debt ' includes a decretal debt.
On the view that cl.
(iii) applies in those cases only where a final decree or order for repayment of the debt had been made before January 25, 1949, it has no application.
in the present case; because the decree for repayment of the debt was passed on March 9, 1951 which was after January 25, 1949.
We then go to el.
This clause is in two parts and talks of two different situations; one is when no decree or order has been passed and the other is when the decree or order passed has not become final.
There is, however, a common element, and the common element is that el.
(ii) refers to suits and proceedings instituted before January 25, 1949.
Now, the argument which learned counsel for the appellant has presented is this.
He says that the common element referred to above is satisfied in the present case, because the suit was instituted long before January 25, 1949.
He then says that no decree or order for repayment of the debt having been passed before March 9, 1951, the first situation envisaged by el.
(ii) arose in the present case and the appellant debtor was entitled to avail himself of all or any of the amendments made by the amending Act, including the amendment made in section 19 by the insertion of sub section
(2) thereof.
In the alternative, he says that if, the word 'decree or 'order ' means any decree or any order, even then cl.
(ii) applies, because the decree of dismissal passed in the suit had not become final on January 25, 1949, for an appeal was then pending.
We do not think it necessary to consider the alternative argument of learnd counsel for the appellant; because we are of the view that having regard to the other provisions of the Act, the words " decree or order occurring in el.
(ii) must mean decree or order for repayment of a debt.
What then is the position before 248 passed, but did not do so.
The legislature may not have realised that this would be so; but as the amendments stand, it is clear that in cases covered by cl.
(ii) of section 16 of the amending Act, a party is entitled to ask for relief under the Act at two stages, before a decree for repayment of the debt has been passed and also after such a decree has been passed.
Different considerations will, however, arise if a party asks for relief under the Act at the pre decree stage and that relief is refused on the ground that the Act does not entitle him to any relief under it.
If a party, even after such refusal, makes a second application, then the principle laid down in Narayanan Chettiar vs Rathinaswami Padayachi (1), will apply and the second application must fail on the ground that it has already been decided in his presence that he is not entitled to any relief under the Act.
One other point has to be referred to in this connection.
On behalf of the respondent creditor it has been pointed out to as that on the date the application for relief under section 19(2) was made in the High Court, no suit or proceeding was actually pending, the High Court having passed a decree much earlier, namely, on March 9, 1951.
Asa matter of fact, the application for relief under section 19(2) for scaling down the decree was made in the High Court sometime in 1952.
We are of the view that cl.
(ii) of section 16 describes the nature of suits or proceedings in which the amendments shall apply and the pendency of a suit or proceeding on a particular date after January 25, 1949, is not the true test.
The true test is whether the suit or proceeding was instituted before January 25, 1949, and whether in that suit or proceeding no decree or order for repayment of a debt had been passed before that date.
That test having been fulfilled in the present case, el.
(ii) of section 16 of the amending Act did not stand in the way of the appellant when he asked for relief under section 19(2) of the Act.
We now turn to such authorities as have been placed before us.
The authorities are not all consistent, and the language of cls.
(ii) and (iii) of section 16 of the amending (1) A.I.R. 1953 Mad.
421. 245 that the word I debt ' in the Act has a very comprehensive connotation.
It means any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue court or otherwise etc.
It is, A, therefore, clear that the word I debt ' includes a decretal debt.
On the view that cl.
(iii) applies in those cases only where a final decree or order for repayment of the debt had been made before January 25, 1949, it has no application in the present case; because the decree for repayment of the debt was passed on March 9, 1951, which was after January 25, 1949.
We then go to cl.
This clause is in two parts and talks of two different situations; one is when no decree or order has been passed and the other is when the decree or order passed has not become final.
There is, however, a common element, and the common element is that cl.
(ii) refers to suits and proceedings instituted before January 25, 1949.
Now, the argument which learned counsel for the appellant has presented is this.
He says that the common element referred to above is satisfied in the present case, because the suit was instituted long before January 25, 1949.
He then says that no decree or order for repayment of the debt having been passed before March 9, 1951, the first situation envisaged by cl.
(ii) arose in the present case and the appellant debtor was entitled to avail himself of all or any of the amendments made by the amending Act, including the amendment made in section 19 by the insertion of sub section
(2) thereof.
In the alternative, he says that if the word 'decree ' or 'order ' means any decree or any order, even then cl.
(ii) applies, because the decree of dismissal passed in the suit had not become final on January 25, 1949, for an appeal was then pending.
We do not think it necessary to consider the alternative argument of learned counsel for the appellant; because we are of the view that having regard to the other provisions of the Act, the words " decree or order occurring in cl.
(ii) must I mean decree or order for repayment of a debt.
What then is the position before 248 passed, but did not do So.
The legislature 'may not have realized that this would be so; but as the amendments stand, it.
is clear that in cases covered by cl.
(ii) of a. 16 of the amending Act, a party is entitled to ask ,,for relief under the Act at two stages, before a decree for repayment of the debt has been passed and also after such a decree has been passed.
Different considerations will, however, arise if a party asks for relief under the Act at the pre decree stage and that relief is refused on the ground that the Act does not entitle him to any relief under it.
If a party, even after such refusal, makes a second application, then the principle laid down in Narayanan Chettiar vs Rathinaswami Padayachi (1), *ill apply and the second application must fail on the ground that it has already been decided in his presence that he is not entitled to any relief under the Act.
One other point has to be referred to in this connection.
On behalf of the respondent creditor it has been pointed out to.
as that on the date the application for relief under section 19(2) was made in the High Court, no suit or proceeding was actually pending, the High Court having passed a decree much earlier, namely, on March 9, 1951.
As a matter of fact, the application for relief under section 19(2) for scaling down the decree was made in the High Court some time in 1952.
We are of the view that el.
(ii) of section 16 describes the nature of suits or proceedings in which the amendments shall apply and the pendency of a suit or proceeding on a particular date after January 25, 1949, is not the true test.
The true test is whether the suit or proceeding was instituted before January 25, 1949, and whether in that ,suit or proceeding no decree or order for repayment of a debt had been passed before that date.
That test having been fulfilled in tile present case, cl.
(ii) of section 16 of the amending Act did not stand in the way of the appellant when he asked for relief under section 19(2) of the Act.
We now turn to such authorities as have been placed before us.
The authorities are not all consistent, and the language of cls.
(ii) and (iii) of section 16 of the amending (1) A.I.R. 1953 Mad.
249 Act has perhaps led to some of the difficulties of inter pretation referred to therein.
The earliest decision brought to our notice is the decision in Velagala Sriramareddi and others vs Karri Sriramareddi (1).
This is a full bench decision of the Madras High Court.
to which we have already referred in an earlier part of this judgment.
The next decision is that of Venkataratnam vs Sesharma (2), which is also a Full Bench decision of the Madras High Court.
It deals with the construction of clauses (ii) and (iii) of section 16 of the amending Act with particular reference to the view expressed in certain earlier cases of the same High Court with regard to cl.
(iii) of section 16.
The view expressed in the earlier cases, to which the learned Judges who decided the case out of which the present appeal has arisen were parties, was that el.
(iii) of section 16 had no application to proceedings in which the decrees and orders had become final before January 25, 1949.
The Full Bench did not accept that view as correct.
Satyanarayana Rao, J., who delivered the judgment of the Court said: ,It cannot be doubted that the two clauses (ii) and (iii) are entirely independent and are intended to provide for different situations. . "The view taken by the learned Judges in the Civil Miscellaneous Appeals, already referred to, was that, while the two clauses are independent, clause (iii) has no application to proceedings in which the decrees and orders have become final before the commencement of the Act.
It is this view which is also pressed now before us by the learned Advocate for the respondent.
While we agree with the learned Judges in holding that the two clauses are independent, we are unable, with great respect, to accept the view that clause (iii) applied only to cases in which the decrees and orders have not become final.
If the decree or order has not become final before the commencement of this Act, clause (iii), in our opinion, seems to be un necessary and as such the case would be covered by clause (ii).
Further, it would be difficult to imagine (1) I.L R. [1042] Mad.
32 (2) I.L.R. , 498.
499. 250 that a decree or order which has not become final can ,be finally executed or can be finally satisfied.
No doubt it is true that, even when an appeal is pending, a decree may be executed and satisfaction may be entered.
But all that is only subject to the result of the appeal.
If the appeal succeeds or the amount due by the defendant to the plaintiff is increased by the Appellate Court, fresh execution has to be started, the satisfaction must be reopened and the execution must proceed.
The Legislature, in our opinion, when it enacted these two provisions, must have intended that, even in the case of decrees or orders which have become final, having regard_ to the provisions of the new Act, relief should be had by the judgment debtor so long as the decree or order was not executed or was not satisfied in full before the commencement of the Act.
If, however, a decree was executed in part and, before it was fully satisfied, the debt was scaled down under the provisions of the Act, as a result of which the creditor was found to have received more than what he was entitled to, the proviso enacts that, in such a situation, the creditor should not be required to refund any sum which has been paid to or realised by him before the commencement of this Act.
The question is asked, and legitimately, as to which are the kinds of decrees or orders which have become final and which are sought to be excluded by implication in clause (ii) of section 16.
It is of course not easy to grive an exhaustive list of such decrees and orders.
It may be that the legislature contemplated that decrees and orders of a declaratory nature, and which are not executable and which have become final before the commencement of the Act, need not be reopened.
A reading of the two clauses together would suggest that clause (iii) would apply exclusively to executable decrees or orders which, though they have become final before the commencement of the Act, are still in the stage of unfinished execution and at the stage at which satisfaction was not fully received.
The view which we take, in our opinion, reconciles both the clauses and does not make any of the clauses unnecessary.
We concur in the view expressed above that cl.
(iii) of 251 section 16 applies to decrees or orders which, though they had become final before January 25, 1949, are still in the stage of unfinished execution and at the stage at which satisfaction has not been fully received, and cl.
(ii) applies to suits and proceedings which were instituted before January 25, 1949, but in which no decree or order had been passed or the decree or order passed had not become final before that date.
We consider it unnecessary in the present case to go into the further question whether cl.
(ii) refers to decrees and orders of a declaratory nature, which are not executable but which have become final before January 25, 1949.
That is a question which does not fall for decision in the present case and we express no opinion thereon.
In Kanakammal vs Muhammad Kathija Beevi (1) it was observed: " The mere fact that the judgment debtor raised an objection to the executability of the whole decree on the ground that it has to be scaled down is no ground for scaling down the decree and the court will not be justified in so scaling down without a separate application.
This is also another ground for holding that the judgment debtor is not barred from filing the application to scale down the decree even though he had not raised the question at an earlier stage of the execution proceedings.
We are therefore definitely of opinion that an application under section 19 of the Act is not one which comes under section 47, Civil Procedure Code, and therefore the principle of res judicata in execution cannot apply to the facts of the present case.
" The decision in Narayanan Chettiar vs Rathinasami Padayachi (2), related to a different point altogether, namely, successive applications under section 19 or section 20 of the Act.
In that case the question was whether the judgment debtor not having filed an application under section 19 within the prescribed time from the date of the stay order under section 20 passed on his prior application was precluded from again filing another application under section 20 followed by an appli cation under section 19.
It was held that he was not so entitled.
In Jagannatham Chetty vs Parthasarathy (1) A.I.R. 1953 Mad. 188, 189.
(2) A.I.R. 1953 Mad.
421. 252 Iyengar(1) the question as to the meaning of the word proceedings ' in section 16 ",as considered and it was observed that the word I proceedings ' ins.
16 must relate to proceedings instituted for repayment of a debt and not to execution proceedings which are for enforcement of a decree or order.
We greatly doubt whether that is the correct view to take, particularly when the expression 'debt ' includes a decretal debt; but as the question does Dot arise in the present case we refrain from making any final pronouncement.
In Hemavathi vs Padmavathi (2) it was held that the amending Act was retrospective so as even to apply to a debt which had already been scaled down once by the application of the Act and even where the rights of the parties had been finally adjudicated by decree or order of a court, provided that the decree or order had not been executed or fully satisfied.
That was held to be the effect of el.
(iii) of section 16 of the amending Act.
In Lingappa Chettiar vs Chinnaswami Naidu (3), the view taken by Subba Rao and Somasundaram, JJ.
(the same Judges who decided the present case) in an earlier decision that a party who had an opportunity of getting the beneficent provisions of the Act applied to him before the amendment, but did not avail him self of the same, is disentitled to invoke the provisions of sub section
(2) of section 19, ",as dissented from and Govinda Menon, J., who gave the judgment of the Court, said: " We do not find any difficulty in holding that sub section
(2) of section 19 is applicable to cases like the present, and the retrospective nature of that sub section as contemplated by clause (iii) of section 16 of Act XXIII of 1948 cannot be restricted or circumscribed by any other clause in that section.
" In T. N. Krishna Iyer vs Nallathambi Mudaliar and others (4) Krishnaswami Nayudu, J., said that the object of section 16 of the amending Act was to render the application of the amendments to a wide range of suits, both to suits instituted before and after the commencement of the amending Act and to such suits in which the decrees have not only become final but have (1) A.I.R. 1953 Mad.
(3) (1955) i M.L.J. i, 5.
(2) I.L.R. (4) (1955) i M.L.J. 215.
253 not been executed or satisfied and so loin(, as something remains to be done out of the decree, the Act could be made applicable.
It seems to us that both on authority and principle, the correct view is that the appeallant was entitled to the benefit of section 19(2) of the Act,, read with section 16, cl.
(ii) of the amending Act.
These are our reasons for holding that the view taken by the High Court is not correct and the appeal must, therefore, be allowed and the case sent back to the High Court for consideration on merits in accordance with law.
The appellant will get his costs of this Court ; costs incurred in the High Court before and hereafter will be dealt with by the High Court at the time of the final decision.
There were two applications filed by the appellant debtor for the relief which be claimed.
One AN as filed in the trial court and the other in the High Court.
The trial court dismissed the application on the ground that the High Court alone had jurisdiction to give such relief The appellant preferred an appeal to the High Court and also filed an application there.
The question which is the proper court to give relief to the appellant is a matter on which we are making no pronouncement.
That is a matter which will be dealt with by the High Court.
Appeal allowed.
Case remanded.
| IN-Abs | In 1944 the respondent instituted a suit for the recovery of money due under an award dated July 31, 1935, whereby the appellant and his brother were directed to pay a certain amount to the respondent.
The suit was dismissed by the trial Court 238 but on appeal the High Court passed a decree on March 9, 1951.
During the pendency of the appeal in the High Court the Madras Agriculturists Relief Act, 1938, was amended by Act XXIII of 1948, which inter alia by adding sub section (2) to section 19 of the main Act enabled decrees passed after the commencement of the Act to be scaled down under the provisions of the Act.
By cl.
(ii) to section 16 of the amending Act, which came into force on January 25, 1949, it was provided that " that the amendments made by this Act shall apply to. . all suits and proceedings instituted before the commencement of the Act, in which no decree or order has been passed before such commencement ".
On October 5, 1951, the appellant made an application to the trial court for scaling down the decremental debt under section 19(2) Of the Madras Agriculturists Relief Act, 1938, as amended, but the application was dismissed on the ground that the trial court had no jurisdiction to act under that sub section as the decree sought to be scaled down had been passed by the High Court.
The appellant preferred an appeal to the High Court and also made a separate application for scaling down the decretal debt under section 19(2) Of the Act.
The High Court took the view that section 19(2) was controlled by section 16 of the amending Act and that cl.
(ii) of section 16 was applicable to the case, but that as the appellant whose appeal was pending at the commencement of the amending Act did not apply for scaling down before the decree was passed although he had the opportunity to do so, his application subsequent to the decree was barred by the principle of Yes judicature.
Held, that the High Court erred in its view that in order to get relief under section 19(2) Of the Act, read with cl.
(ii) of section 16 of the amending Act, the appellant must have made the application when the appeal was pending and before a decree had been passed.
For the application of cl.
(ii) of section 16 of the amending Act, the true test is whether the suit or proceeding was instituted before January 25, 1949, and whether no decree or order for repayment of a debt had been passed before that date, and it is not necessary that the suit or proceeding should be pending on the date of the application under section 19(2) Of the Act.
In cases covered by that clause a party can ask for relief under the Act at two stages before a decree for repayment of the debt bad been passed, and also after such a decree had been passed, and since section 19(2) of the Act in express terms enables a debtor to claim a relief under the provisions of the Act after a decree had been passed, the appellant is entitled to the benefit of section 19(2) of the Act read with section i6, cl.
(ii), of the amending Act.
While cl.
(ii) of section i6 applies to suits and proceedings which were instituted before January 25, 1949, but in which no decree or order had been passed, or the decree or final order passed had not become final, before that date, cl.
(iii) applies to decrees or orders, which, though they had become final before January 25, 239 1949, were still in the state of unfinished execution and at the stage at which satisfaction had not been fully received.
Venkataratnam vs Seshatnma, 1.
L. R. , approved.
The question whether cl.
(ii) refers to decrees and orders of a declaratory nature, which are not executable but which have become final before January 25, 1949, left open.
The opinion expressed in jagannatham Chetty vs Parthasarathy Iyengar, A.I.R. 1953 Mad. 777, that the word 'proceedings ' in section i6 of the amending Act must relate to proceedings instituted for repayment of a debt and not to execution proceedings which are for enforcement of a decree or order, doubted and the question left open.
|
vil Appeal Nos.
8530 40 of 1983.
Appeals by Certificate from the Judgment and Decree dated 30.7.1983 of the Gujarat High Court in Special Civil Application Nos. 883 of 1979, 913 of 1979, 1897 of 1981, 2316 of 1982, 2384of 1982, 2445 of 1982, 2470 of 1982, 2977 of 1982, 4194 of 1982, 4520 of 1982 and 2542 of 1982.
K. Parasaran, Attorney General, B. Sen, A.K. Ganguli, Dr. Y.S. Chitley, T.S. Krishnamurthy Iyer, N. Nettar, G.S. Narayana, p. Parameshwaran, T.V.S.N. Chaff and N.N. Sharma for the Appellants.
Anil B. Diwan, K.J. Kazi, Dr. L.M. Singhvi, Ms. M. Arora, Mrs. B. Chib, M. Singhvi, D.A. Dave, Mrs. M. Karanja wala, R.N. Karanjawala, Mr. P.H. Parekh, Mr. C.A. Cazi and Mrs. H.S. Anand for the Respondents D.N. Misra for the Intervenor.
The Judgment of the Court was delivered by RANGANATHAN, J.
These are eleven appeals preferred by the Oil and Natural Gas Commission (ONGC, for short) from a judgment and order, dated 30th July, 1983, of a Division Bench of the High Court of Gujarat at Ahmedabad in a batch of writ petitions, since reported in 1983 24(2) Gujarat Law Reporter 1437.
The appeals are pursuant to a certificate of fitness granted by the High Court.
The ONGC was initially a Department of the Government of India but, in view of its expanding activities in the search for strategic and vital materials like oil, petroleum and its products it was set up as a body corporate.
It is now a statutory corporation constituted by and under the , (Central Act 43 of 1959, hereinafter referred to as 'the Act ').
The Act provides for the establishment of a Commission "for the development of petroleum and petroleum products produced by it and for matters connected therewith".
Section 2(f) of the Act de fines 'petroleum ' as having the same meaning as in the (Act 30 of 1934) and as including 'natural gas '.
The Commission established under the Act took over the previously existing organisation with effect from 18.9.59.
Some of the provisions of the Act which are relevant for our 164 present purposes may be set out here.
Chapter III which deals with the powers and functions of the Commission con sists of Sections 14 and 15.
section 14 reads thus: "14.
Functions of the Commission (1) Subject to the provisions of this Act, the functions of the Commission shall generally be to plan, promote, organise and implement programmes for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it and to perform such func tions as the Central Government may, from time to time, assign to the Commission.
(2) In particular and without prejudice to the generality of the foregoing provision, the Commission may take such steps as it thinks fit (a) for the carrying out of geological and geophysical surveys for exploration of petroleum; (e) for the transport and disposal of natural gas and refin ery gases produced by the Commission: Provided that no industry, which will use any of these gases as a raw material, shall be set up by the Com mission without the previous approval of the Central Govern ment.
(h) to perform any other function which is supplemental, incidental or consequential to any of the functions afore said or which may be prescribed.
" Section 15 empowers the Commission to exercise all such powers as may be necessary or expedient for the purpose of carrying out its functions under the Act.
Such powers in clude the disposal of any property, right or privilege, the original or book value of which exceeds such amount as may be prescribed, or where no such amount has been prescribed, exceeds ten lakhs of rupees and this power could be exer cised after obtaining the previous approval of the Central Government 165 [Clause (c)I. Chapter IV of the,Act deals with finance, accounts, audit and reports.
Sections 16 and 17 deal with the capital of the Commission and the vesting, in the Com mission, of the previous set up in this regard.
Section 23 of the Act requires the Commission to furnish to the Central Government such returns and statements and such particulars in regard to any proposed or existing programme for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by the Commission as the Central Government may, from time to time, require.
Section 24 in Chapter V (Miscellaneous) enacts that any land required by the Commission for carrying out its function under the Act shah be deemed to be needed for a public purpose and such land can be acquired by the Commis sion under the provisions of the Land Acquisition Act, 1894.
section 31 confers rule making powers on the Central Government, in pursuance of which have been framed the Oil and Natural Gas Commission Rules, 1960.
The only rule relevant for our present purposes is rule 25, dealing with contracts.
It reads as follows: "25.
Contracts: (1) The Commission may enter into contracts for the purpose of performing its functions under this Act; Provided that provision therefore exists in the budget ap proved by the Government.
(2) Contracts made on behalf of the Commission shah not be binding on it unless they are executed by a person duly authorised by it.
(3) A person authorised by the Commission to enter into any contract on its behalf shall not be personally liable for any assurance or contract made on its behalf and any liabil ity arising out of such assurance or contract shall be discharged from the Fund.
" The statute, it may be observed, neither imposes a specific duty on the O.N.G.C. to supply its products to consumers at large nor contains any provisions regarding the fixation of prices for the commodities made available by the O.N.G.C. for sale.
In the course of its drilling and exploration of oil, the ONGC discovered oil bearing fields in Cambay and Ankles war region in 1969 166 and 1961 respectively.
In most of the oil fields situated in Gujarat, gas comes out along with crude oil and is commonly known as "associated gas".
In Cambay area, gas is unaccompa nied by crude oil and is known as "free gas".
This is easily combustible and can be used as domestic as well as industri al fuel.
We are concerned here with both these commodities which are generally known as 'natural gas ' and we shall refer to them compendiously as 'gas '.
In October, 1961 ONGC first thought of the idea of using natural gas in addition to fuel oil in industries.
It had detailed discussions with the Gujarat State Electricity Board (GSEB) and it was agreed between them that gas should be supplied to the GSEB at a price related to fuel oil price on the basis of thermal value equivalence.
On this basis, an agreement was entered into between them in March, 1963 whereunder the price of fuel oil was fixed at Rs.77.26 per tonne including rail frieght; and, based on this price and thermal value equivalence, the price of Cambay gas was fixed at Rs.80.14 per 1000 cubic metres (hereinafter referred to as 'the Unit ') and of Ankleshwar gas at Rs. 106.66 per unit, rounded off to Rs.80 and Rs. 100 per unit respectively.
The ONGC began to supply gas from Cambay region of Dhruvan Power Station in 1964 and from Ankleshwar to Uttaran Power Station in 1965.
The ONGC also entered into discussions with the Gujarat State Fertilizer Corporation (GSFC) and ultimately it was agreed, on the footing of the price of Rs.76 per tonne in respect of Koyali Naphtha, that associated gas should be supplied to the GSFC at between Rs.88 and Rs.90 per unit on the principle of thermal equivalence.
This was in 1966.
It may be mentioned here that the three parties concerned viz. the ONGC, GSEB and GSFC, had more or less agreed to the principle of determining the price of gas on the basis of thermal equivalence with an alternative fuel or feedstock emanating from the processing of crude oil.
There was no reference to the cost of production of gas as such.
Despite the above agreements, however, the concerned parties were not all very happy.
The GSFC resented the fact that discount was not given to them as bulk purchasers and that the prices charged for the Trombay fertiliser factory and power house at Bombay were substantially lower than the prices that the ONGC charged them.
Eventually, public dis content was expressed over the alleged high price that was being charged for gas by the ONGC to these organisations.
It was felt that the ONGC was denying to them the advantage they should have obtained by the discovery of gas in the region of their operation.
It was also felt that this treat ment resulted in discrimination against 167 them in comparison with advantages enjoyed by other States due to the availability of fuel resources such as coal or hydro power within their areas.
In view of these expressions of public feeling, the question of fixing a proper price for the gas was taken up by the Government of Gujarat with the Government of India.
Eventually, as no agreement could be arrived at, the disputes was referred to the sole arbitra tion of Dr. V.K.R.V. Rao who gave his award (hereinafter referred to as 'the award ') on 23.9.1967.
He determined the price of natural gas at Rs.50 per unit ex well head, to which were added royalty, sales tax, depreciation and the transport charges.
This award was to be enforced for a period of five years i.e. upto 31.3.1971.
Between April 1971 and December 1975, the well head price was increased and fixed at Rs.66 per unit, we are all told, on the interven tion of the then Gujarat Governor.
These prices were revised subsequently.
The supply to GSEB was revised to Rs. 155 and the rate of supply to GSFC was revised to Rs.320 per unit.
At that time, there were very few industries set up in and around Vadodara and these depended, besides electricity, on other forms of energy generated through coal or furnance oil.
In July 1967, the supply of gas to some of these indus tries in and around Vadodara city was started, initially as a temporary measure pending the effective materialisation of the Gujarat Fertilizer Corporation demand, after which the industries were to go over to fuel oil if gas could no longer be supplied.
After a series of discussions, the Federation of Gujarat Mills and Industries agreed to a price of Rs. 100 per unit of Ankleswar gas for this supply.
The charging of ten rupees less per unit supplied to the Ferti liser Corporation was justified on the ground that such differentiation was consistent with general practice where a petroleum feed stock is used for chemical industry.
Among the industries that thus received gas supply were the ten respondents (respondents 2 to 10 in these appeals) who have formed themselves, in September, 1978, into an association called "The Association of Natural Gas Consuming Industries of Gujarat", which is respondent No. 1.
The supply to these industries extended later to a few more was based on individual contracts entered into with each one of the concerns.
Initially, the ONGC entered into contracts valid for a period of five years at a time but, subsequently it is said, due to a fear of possible shortage in the avail ability of enough gas this was changed and the contracts were, generally, made annual, except in regard to certain public sector undertakings and, it is said, a few companies.
The rates of supply were also slowly stepped up as can be seen from the following table: 168 Period Price of supply 1.1.1976 to 31.03.1976 Rs.322.63.
1.4.1976 to 31.12.1976 Rs.341.45 1.1.1977 to 31.03.1977 Rs.351.00 1.4.1977 to 31.12.1977 Rs.371.16 1.1.1978 to 31.03.1978 Rs.382.15 1.4.1978 to 31.03.1979 Rs.504.00 According to the ONGC, the price demanded from these industries and initially been based on alternative fuel cost i.e., the cost which these industries would have had to pay for fuel oil if no supply of gas had been available.
Later, upto December 1975, the price was based on the cost of production, as determined by the award.
After the expiry of the period of operation of the award, the basis for calcula tion of price was revised on the basis of the thermal equiv alence of coal price.
The rates of supply from 1.4.78 as fixed above from time to time were also made subject to an automatic annual escalation at 5%.
The contracts, as already mentioned, were annual and contained no term for renewal.
On the expiry of each contract, a fresh contract had to be entered into and, naturally, the new contract stipulated prices for supply that were prevalent at the time of the respective contracts.
It may be mentioned that the existing contracts with the various consumers had lapsed by efflux of time on 31.3.79 in some cases, 30.1.80 in some other cases and in 1982 in respect of others.
Aggrieved by the steady rise in the prices, writ peti tion No. 883 of 1979 was filed by the respondents in the Bombay High Court in March 1979.
In this writ petition it was prayed that the ONGC should be directed (a) to continue to supply the gas to them despite the contracts in their favour having lapsed; (b) to supply the break up and the data on the basis of which the price structure was arrived at and to fix the price after giving reasonable opportunity to the concerned industries or their associations; (c) to discuss and negotiate a fair, reasonable and just price for supply of gas; (d) to restrict the minimum guaranteed quan tity of offtake to 75 per cent of the contracted quantity (this was because the ONGC had been insisting on raising the said guarantee to 90 per cent) and; (e) to stop charging discriminatory prices for the supply to the respondents in comparison with the price charged to public sector undertak ings.
Pending the hearing and final disposal of the peti tion, an interim order was sought restraining the ONGC from discontinuing the supply of gas to the petitioners on such terms as the Court may think fit and proper. 169 On 30.3.1979, the Court passed an interim order permit ting the petitioners to continue to pay "on the same terms as at present" ie.
at Rs.504 in some cases and a slightly different figure in other cases.
Subsequently, however, with the passage of time the price of gas was stepped up by the ONGC in the following manner: Period Amount 1.4.1981 to 31.12.1981 Rs. 741.00 01.1.1982 to 31.12.1982 Rs.2095.70 01.1.1983 Rs.2403.03 15.2.1983 Rs.2503.03 17.3.1985 Rs.2878.00 We are told that the sudden jump in prices w.e.f.
1.1.1982 was consequent on the decision of the ONGC to change the basis of fixation of price, once again, to furnace oil equivalence.
In view of this increase in the prices demanded by it from other parties, who according to the ONGC were willing to pay the price asked for, an application was made to vacate or modify the interim order dated 30.3.1979.
On 5.11.1982, the Division Bench of the High Court, after pointing out the various difficulties and questions raised by the case thought it would be fit and proper to direct the ONGC not to discontinue the supply of gas but to continue to supply it at the rate of Rs. 1,000 per unit till November 30, 1983 (unless the petition was disposed of in the mean while), subject to adjustment being made in case this Court or the machinery evolved at the time of final disposal of the petition determined the price of gas at a different rate.
In other words, if, ultimately, the price of gas should be determined at a higher rate, the writ petitioners would be obliged to make good the difference.
In case a lower rate should be determined, the ONGC would be obliged to refund the excess amount collected or adjust it against future supplies, as the Court may direct at the time of disposing of the matter finally.
A similar order was passed on 29.12.1982 in another batch of cases.
When these appeals were filed a Bench of this Court, on 6.10.1983, continued the interim price of Rs. 1,000 per unit without prejudice to the rights and contentions of the parties and directed the appeals to be expedited.
It has taken six years since then for these petitions to come up for heating and till now the respondents have continued to pay at the rate of Rs. 1,000 per unit.
It has been stated before us that some of the respondents have failed to pay even at the rate of Rs. 1,000 as directed 170 by this Court and that this Court had to direct, by its orders dated 15.4.87 and 30.10.87, that the respondents "will not charge, encumber or alienate, except with the leave of this Court, any of their immovable assets included in the respective undertakings and that they will make their immovable assets available for discharging the respective liabilities on account of the difference in the price of (all) the gas supplied to them (and) further during the pendency of the appeals as determined by the orders made by the Court while disposing of the appeals.
" In order to complete the narration of relevant facts, it may be mentioned here that, though natural gas, being a "petroleum product" falls within the scope of the Essential Commodities Act and though control orders have been issued under the said Act regulating the supply and distribution of several petroleum products, it is only by an order dated 30.1.1987 that the price of gas has been fixed by the Gov ernment at Rs. 1400 per unit which, together with taxes, comes to about Rs. 1848 per unit.
It may also be mentioned that, while on the one hand the said fixation of price has been challenged by the petitioners and certain other indus tries before the Gujarat High Court, the Government, on the other hand, is in the process of revising the prices, per haps to a higher figure, in consultation with the Bureau of Industrial Costs and Prices.
In the petitions which are pending before the Gujarat High Court an interim price of Rs. 1,000 has been fixed following the orders in the matters now before us.
The result is that, ever since January 1983 and till today, most of the petitioners have been paying for the gas supplied only at the rate of Rs. 1,000 per unit and some of the industries have defaulted even in doing this.
A prayer was made by the Union of India to transfer to this Court the writ petition subsequently filed challenging the price fixation of 30.1.87 but this request was declined on 4th August, 1988.
This court observed that, after these appeals are disposed of, the High Court can proceed to dispose of the said writ petitions in accordance with the judgment.
The position, therefore, is that we are not con cerned in these appeals with the period beyond 30.1.1987 when the jurisdiction to fix prices came to be vested in the Central Government.
We are concerned in these matters only with the period from the date of expiry of the contracts in favour of each of the respondents to 30.1.1987 and with the following questions: (a) whether the O.N.G.C. is at liberty to fix its own price for the gas or should be directed to fix the price in any particular manner; (b) whether the O.N.G.C. can be directed to supply data and the break up for the price charged and to negotiate the price with the par ties concerned; (c) whether the 171 O.N.G.C. can be compelled to continue to supply gas to the various petitioners at the interim prices fixed by the court subject to adjustment on fixation of prices determined in accordance with the directions of the court; and (d) whether the minimum guarantee of off take could be raised by the O.N.G.C. to 90 per cent instead of 75 per cent.
It is unnecessary at this stage to set out the various contentions raised by the parties before the High Court as they will have to be discussed in some detail later.
Here it may be sufficient to summarise the effect of the High Court 's judgment in disposing of these writ petitions.
The High Court held: (i) The O.N.G.C. is a public utility undertaking and has a duty to supply gas to anyone who requires it so long as there is enough supply available; (ii) Price fixation is generally a legislative func tion.
But the O.N.G.C., being a State instrumentality, is bound to act reasonably in the matter of fixation of price; such price is bound to be determined by following any one of the modalities suggested in the judgment of the High Court; (iii) There was no discrimination by the O.N.G.C. between the public sector undertakings on the one hand and the respondents ' undertakings on the other in charging differential prices; (iv) The clause regarding minimum guarantee was valid and enforceable.
However, in view of its finding that the ONGC is a public utility undertaking, the Court took the view that it should supply gas to the respondents subject to the availability of gas supply and also that such supply should be made at a price which was to be determined in one of the four differ ent methods set out in paragraph 36 of the judgment.
It was also observed by the Court that, the respondents were agree able to price fixation by anyone of three of the said meth ods.
The concluding portion of the judgment, reads thus: "36.
Now we come to the last part of this judgment.
It is regarding what relief should be granted in this group of petitions.
We have already said above that the action of the ONGC in charging the rate in the respective cases is 172 ex facie unreasonable and to that extent their demand for the said price is set.
aside.
The ONGC however, shall be at liberty to get the price for that period and subsequent period fixed according to the reasonable and rational norms and for that purpose it is open to the ONGC to follow any one of the following three courses: (i) They may request the Central Government to appoint a Commission for the purpose of deciding the prices of gas from time to time, including the time for which we have set aside their demand of price, invoking the provisions of the Commission of Inquiry Act or any other law; (ii) They may invoke the arbitration of some eminent econo mist in consultation with the petitioners; or (iii) They may themselves decide the price, after bringing to their consideration all relevant factors and for that purpose they may hear fully and effectively the petitioners and other persons likely to be affected thereby: If the last of the above three courses is adopted by the ONGC for deciding the price structure afresh, it would be in their interest to give hearing to the persons likely to be affected so that the possibility of a new round of litiga tion is avoided.
We reiterate that as far as the petitioners are concerned, they are amenable to any of the three modes which the ONGC may choose to adopt.
We accordingly set aside the prices demanded by the ONGC from these petitioners in this group of petitions, leaving it open to the ONGC to deal with the question of price fixation in any one of the three modes suggested by us.
The petitions are accordingly partly allowed.
Rule is accordingly made absolute in all these petitions with costs.
The civil applications, in view of the final decision, do not survive and stand disposed of and till the new price fixation is had, the price charged last from these petition ers under the respective contracts with them shall continue to operate between the parties, subject to adjustments in future after prices are fixed as stated above." 173 Shri B. Sen, who appeared for the ONGC, made R clear at the outset that he was not disputing the propositions (a) that the ONGC is 'State ' within the meaning of Article 12 of the Constitution; and (b) that it has a duty to act reasona bly and fairly so as not to infringe the provisions of Articles 14 and 19 and also in consonance with the directive principles of State policy set out, inter alia, in Articles 38 and 39 (b) of the Constitution.
His challenge is, pri marily, to the finding of the High Court that the ONGC is a 'public utility undertaking ' which was bound to supply gas at the request of any member of the public at large and to its direction that it should continue to supply gas to the respondents at an uncertain price till the price is fixed in accordance with the procedure outlined by it, notwithstand ing that the contracts under which the respondents procured such supplies have expired long ago.
He also contests the correctness of the High Court 's conclusion that the price of gas must be determined on the basis of cost of production plus a reasonable return for the investments made, (herinaf ter referred to broadly as the "cost plus" basis).
He sub mits that the prices under the contracts entered into with the respondents have been determined on the basis of a well known principle viz. the ruling prices for an alternate fuel and this cannot be said to be either arbitrary or unreasonable particularly when a large number of industries are even today willing to take the supply of gas at the prices fixed on that basis.
He also complains that the High Court overlooked that the respondents are not domestic but industrial consumers.
If the ONGC were to be treated as a public utility bound to supply an essential commodity of this nature to any one for the asking subject to availabili ty, it may be that the price for such supply should be fixed on a cost plus basis.
But where the supply is limited to certain industries and other similarly placed industries have to produce similar goods by consuming furnance oil or other equivalent alternate fuel, it is quite reasonable for the O.N.G.C. to stipulate indeed, it would be discriminato ry, were it not to stipulate that its prices would be based on the cost of alternate fuel which would have to be in curred by these industries otherwise and which is in fact being incurred by other industries engaged in the production of similar goods to which the O.N.G.C. is not making any supplies at all.
Sri Sen urges that while public sector units and State instrumentalities should not be allowed to exploit the consumers, it is equally necessary to ensure that such units and instrumentalities are enabled to make reasonable profits and made good as commercial enterprises by charging prices which the "traffic can bear" so that they can also contribute substantially to national development.
It is submitted that, as against the respondents who are receiving supplies at the rate of Rs. 1,000 per unit, there are 29 industries paying the Govern 174 ment fixed price of Rs. 1840 (since 1987), 12 other parties who have earlier signed contracts at the furnace oil equiva lent rate and 65 industries which are willing to sign con tracts at the aforesaid Government rates.
It should not also be overlooked that, even if the cost plus basis were to be contemplated, the prices would require substantial revision considering the huge expenditure incurred by the Government of India in recent years in prospecting for oil and the need for heavy capital investment for meeting which the Govern ment has had to obtain huge loans from the World Bank and other organisations.
In the context of this integrated activity, it is almost impossible to work out the costs in respect of any particular area or of the particular bye product with which we are here concerned.
The cost plus basis was fixed by the award several years ago and that too in the context of supply to certain State undertakings which, in turn, supplied essential commodities like elec tricity and fertilisers.
Subsequent enquiry commissions (such as the Damle award) do not price commodities on the basis of cost.
The ONGC, if it is to function effectively and make reasonable profit on the supply of this commodity, should be allowed the latitude atleast to fix its own prin ciple of pricing.
So long as such principle is a recognised one and is not per se unfair or unreasonable the court should not interfere.
Else, Sri Sen submits, a controversy regarding fixation of price will be raging eternally as the industries would raise some objection or other to the price fixation, whatever it be, and the interests of the public will suffer if the ONGC is constrained to stick to the throw away prices fixed in outdated contracts until prices can be fixed on a basis agreeable to the consumer indus tries, as has indeed happened in this case during the past ten years.
Sri Sen concluded by urging that the onus of showing that the price charged was unreasonable or arbitrary was on the respondents and they had done nothing to dis charge this onus, except saying that the prices have been stepped up from time to time and that the increase in prices has been steep.
Rather they have, in their pleadings, sought to throw the onus on the ONGC to prove that the prices charged by it are fair and reasonable.
Even this, says Sri Sen, the ONGC has done.
The discussions in the judgment of the High Court and, to some extent, the discussions before us have touched several aspects of the principles to be kept in mind for price fixation of essential commodities basic to public need and, in doing so, have, in our opinion, travelled beyond the framework and scope of the questions that arises for consid eration in this case.
It is necessary to remember that the writ petitioners are a few industrial houses which had entered into con 175 tracts with the ONGC for supply of natural or associated gas.
These were ordinary commercial contracts entered into by private treaty between the ONGC and these respondents to sell and buy certain goods produced by the ONGC at the prices stipulated in the contracts.
Looked at purely from the contractual angle, the ONGC was perfectly at liberty to stop the supply on the expiry of the relevant contract and refuse to supply further unless a fresh contract could be entered into agreeing upon a price for such supply.
Assuming that the ONGC is a State instrumentality and the price demanded by it is susceptible to judicial review, the court may, where a contract has been entered into, consider the sustainability of the price agreed upon or where no contract has been entered into, injunct the ONGC from demanding a price for supply which is found unreasonable.
But we doubt whether it is open to the Court to direct the ONGC to con tinue the supply indefinitely without a contract and without any price fixation.
It is clear that, in giving directions as above, the Court was considerably weighed by its conclusion that the ONGC is a public utility undertaking which is bound to supply gas to all who demand such supply subject only to the availability of enough gas.
Dr. Chitale, for the respond ents, strongly supported this viewpoint.
He urged that it is well settled law that a public utility cannot arbitrarily discontinue its supply or services merely because the cus tomer is unwilling to pay the price asked for as unconscion able and unreasonable.
He submitted that this, indeed, is not a modern rule of constitutional law but an ancient rule of public law.
He referred in this context to the early decisions of the King 's Bench Division in Bolt vs Stennett, CI E.R.
Revised p. 1572 followed in Allnutt vs Inglis, CIV E.R. Revised p. 206 as laying down the basic principle in this regard.
This principle, he said, has also been applied by the American Courts in Ira Y. Munn vs People, 24 L.Ed. 77; United Fuel Gas Co. vs Railroad Commission, 73 L.Ed. 390; Los Angeles Gas & Electric Corporation vs Railroad Commission, ; ; Leo Nebbia vs People, 78 L.Ed. 940; Harold E. West vs Chesapeake & Potomac Telephone Co., ; and Federal Power Commission vs Hope Natural Gas Co., ; These decisions clearly lay down, according to him, that the price fixed must be reasonable and fair, that the price should be so fixed as to give the undertaking a reasonable return on the capital employed and that there cannot be any discrimination against industrial consumers.
These principles, he argued, are applicable with greater force in the context of the Constitutional disci pline over State Instrumentalities under Articles 38 and 39 of the Constitution which mandate the State to direct their policy towards securing "that the 176 ownership and control of material resources of the community are so distributed as to subserve the common good.
" As already stated, the ONGC does not dispute the propo sition that it is a State instrumentality and that its actions are subject to review under Articles 14 and 19 of the Constitution; it only refutes the suggestion that it has become a public utility undertaking with an obligation to supply gas to any consumer on reasonable conditions as to price etc.
It is contended by Sri K. Parasaran and Sri B. Sen that the ONGC is not a 'public utility ' under a duty to supply gas to members of the public.
It is argued that in English common law, the expression has a specific connota tion; it refers to an entity dealing in a commodity which is commonly used by the members of the public and under a duty, in terms of a statute, licence or franchise obliging it to supply the commodity to the public at large.
Thus, for example, in England the Public Health Act, 1936, the Elec tricity Act, 1947 and the Gas Act, 1948 provide examples of a duty cast on suppliers of water, electricity or gas.
So also, in India, the Indian Electricity Act spells out a duty on the part of the licensee to supply electricity to members of the public.
There are also other public utility undertak ings providing for water, sewage connections, transport and the like which are under a statutory obligation to supply goods and services to members of the society at large, subject to the fulfilment of reasonable conditions pre scribed therefore.
The supply of gas by the ONGC, it is urged, has not attained this "status" yet.
As far as we have been able to see, there is no statuto ry definition of 'public utility ' in the context of any Indian enactment that may be relevant for our present pro pose.
There is a definition of "public utility service" in section 2(n) of the which, inter alia, covers "any industry which supplies power, light or water to the public" and certain notified industries.
It is arguable whether supply of natural gas is included in this definition for, though 'power ' connotes generally any form of energy available for doing work, it is normally related to such energy made available by mechanical or electrical means (vide, Webster Comprehensive, Vol. 2, p. 990).
It is also a moot question whether that definition can be appro priate in the context with which we are concerned.
Dr. Chitale cited profusely from American Jurisprudence (2nd Edition, Vol. 64) on the subject of public utilities.
Some of these passages may be usefully quoted.
At page 549, it discusses the definition and nature of a public utility.
The passage runs thus: 177 1.
Definition and nature A "public utility" is a business or service which is engaged in regularly supplying the public with some commodi ty or service of public consequence, such as electricity, gas, water, transportation, or telephone or telegraph serv ice.
Publicly owned utilities are those owned by public corporations such as municipal public utility districts and public utility districts.
Apart from statutes which define the public utilities which are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case, but there are certain considerations that are of aid in deter mining whether a specific organization or business is a public utility.
As its name indicates, the term "public utility" implies a public use and service to the public, and indeed, the principal determinative characteristic of a public utility is that of service to, or readiness to serve, an indefinite public (or portion of the public as such) which has a legal right to demand and receive its services or commodities.
" There must be a dedication or holding out, either express or implied, of produce or services to the public as a class.
The term precludes the idea of service which is private in its nature and is not to be obtained by the public, although a public utility may perform acts in its private, as distinguished from the public, capacity, in which case it is subject to the same rules as any other private person so acting.
Some courts, however, reject the notion that in order to be a public utility subject to governmental regulation the nature of the service must be such that all members of the public have an enforceable right to demand it, and declare that business to be a public utility which in fact serves such a substantial part of the public as to make its operations a matter of public concern.
This view is in close accord with what has been termed the historic basis of classification of some businesses as public callings, that is, economic conditions, or the impor tance of the business to the public.
While the terms "public service corporation" and "quasipublic corporation" are used to describe public utility corporations, and the term "public service commission" to describe the body regulating such utilities, some courts distinguish between a public sector corporation and a public utility on the basis that the latter is required to serve the 178 public generally, whereas the former may be required to serve members only.
The mere fact that a corporation declares itself to be a public utility does not make it such.
In determining whether or not a company is a public utility, the law looks at what is being done, not what it asserts it is doing.
Nor will the legislative declaration that a certain business shall be deemed a public utility make it such if, in fact, the business as conducted is not impressed with a public use or carried on for the public benefit, since it is beyond the power of the state by legislative edict to make that a public utility which in fact is not, and to take private property for public use by its fiat that the property is being devoted to public use.
Furthermore, a dedication of private property to public utility service will not be presumed from the fact that the product and service of the use of such property is the usual subject matter of utility service; neither does such presumption arise from the sale by private contract of such product and service to utility corporations for purposes of resale.
Such dedication is never presumed without evidence of unequivocal intention.
A business affected with a public interest is not necessarily a public utility or public service commission.
The fact that a business is affected with a public interest means that it may be regulated for the public good but does not imply that is under a duty to service the public.
" Black 's Law Dictionary (Fifth Edition) defines a "public utility" thus at p. 1108: "Public Utility: A privately owned and operated business whose services are so essential to the general public as to justify the grant of special franchises for the use of public property or of the right of eminent domain, in con sideration of which the owners must serve all persons who apply, without discrimination.
It is always a virtual monop oly.
A business or service which is engaged in regularly supply ing the public with some commodity or service which is of public consequence and need, such as electricity, gas, water, transportation or telephone or telegraph service.
179 Gulf States Utilities Co. vs State, Tex.
App., 46 S.W. 2d 1018, 1021.
Any agency, instrumentality, business, indus try or service which is used or conducted in such manner as to affect the community at large, that is, which is not limited or restricted to any particular class of the commu nity.
The test for determining if a concern is a public utility is whether it has held itself out as ready, able and willing to serve the public.
A term implies a public use of an article, product, or service, carrying with it the duty of the producer or manufacturer, or one attempting to fur nish the service, to serve the public and treat all persons alike, without discrimination.
It is synonymous with "public use", and refers to persons or corporations charged with the duty to supply the public with the use of property or facil ities owned or furnished by them.
Euder vs First Nat.
Bank in St. Louis, C.C.A. Mo., , 992.
To constitute a true "public utility", the devotion to public use must be of such character that the public generally, or that part of it which has been served and which has accepted the service, has the legal right to demand that that service shall be conducted, so long as it is continued, with reasonable efficiency under reasonable charges.
The devotion to public use must be of such character that the product and service is available to the public generally and indiscriminately, or there must be the acceptance by the utility of public franchises or calling to its aid the police power of the State ' ' The Corpus Juris Secundum (Vol.
73, p 990) also carries like definitions.
Once a concern is found to be a public utility, at least two consequences follow.
One is a general duty to serve which is described in American Jurisprudence thus: "16.
General duty to serve The primary duty of a public utility is to serve on reasona ble terms all those who desire the service it renders, and it may not choose to serve only the portion of the territory covered by its franchise which is presently profitable for it to serve.
Upon the dedication of a public utility to a public use and in return for the grant to it of a public franchise, 180 the public utility is under a legal obligation to render adequate and reasonably efficient service impartially, without unjust discrimination, and at reasonable rates, to all members of the public to whom its public use and scope of operation extend who apply for such service and comply with the reasonable rules and regulations of the public utility.
This obligation is one implied at common law and need not be expressed by statute or contract, or in the charter of the public utility.
The fact that the franchises granted to the company do not expressly impose upon it the obligation to serve all persons in the locality does not relieve the company, nor does the fact that the person applying for gas is already supplied with gas by another company.
The fact that a pipe laid by a water company along a street in the exercise of its franchise was laid under an agreement, with certain persons who paid the expenses, that they should have the exclusive use of water, and that the company should not tap the pipe without their consent unless it first repaid them for the pipe, does not relieve the company from its obligation to supply water, on reasonable terms, to all persons living on such street who may apply for it.
A provision in an ordinance granting a franchise to an electric light company, that the city should not require the company to make "extensions" except upon certain condi tions does not affect the right of a resident in an estab lished service zone to invoke the aid of the courts to compel the company to connect his premises with its line.
This duty to serve all applicants without discrimination cannot be evaded by a natural gas company on the ground that the gas pressure has fallen so low that existing customers cannot be adequately supplied, new applicants are entitled to share equally in such supply as can be furnished.
Fur thermore, the obligation of a public utility, such as a gas, water, or electric company, to supply a given district is inclusive of the duty, under reasonable limitations, to carry the mains or lines of the utility to a point on the consumer 's premises where use can be made of the service.
However, neither by common law nor by statute is a public utility required to serve all; the conduct prohibited on the part of a public utility is unjust discrimination, unfair rates or practices, or unreasonable rules.
" The second constraint is in regard to the rates that can be charged by such an undertaking: 181 A public utility may, in the absence of a legislative pre scription or limitation of rates, fix and exact reasonable rates for services furnished, in which respect the reasona bleness of the rate is to be considered in relation to the value of the property used by the utility in the public service.
Thus, in the absence of legislation, carriers are ordinarily entitled to establish such rates and to adopt such policy of ratemaking as they may deem best.
They may voluntarily render service for less than they could be compelled to accept.
The right of a public utility or carrier to set its own rates is subject to the limitation that such rates must be nondiscriminatory and reasonable.
xxx xxx xxx This obligation to furnish service at a reasonable price is implied by law and is incurred by acceptance of the fran chise and privilege to serve the public.
Furthermore, there is authority to the effect that a public utility must give a consumer the benefit of the most favourable rate which he is entitled to receive.
" We do not think that ONGC satisfies the primary condi tions enunciated above for being a public utility undertak ing as it has not so far held itself out or undertaken or been obliged by any law to provide gas supply to the public in general or to any particular cross section of the public.
The proviso to sec.
14(1)(e) of the Act which lays down that the setting up of industries to be run with the aid of gas was not to be undertaken by the ONGC without the Central Government 's approval also gives an indication that the supply of gas to various industries on a general basis was not in the immediate contemplation of the Act but was envis aged as a further expansion to be initiated with Central Government 's approval.
Perhaps a stage in the developmental activities of the ONGC will soon come when such an obliga tion can be inferred but, at present, the O.N.G.C. supplies gas only to certain selected contractees.
It does not supply gas to the public either in the sense that any individual member of the public or any identifiable cross section of the public is entitled to demand and receive such supply due to various limitations we shah now touch upon.
The main activity of the ONGC is that of exploration and 182 prospecting for petroleum and petroleum products.
So tar as gas, which is a bye product, is concerned the ONGC has not so far been able voluntarily or constrained statutorily to harness and utilise its production for consumption by the public.
Even as per the information placed on record by the respondents about 3,000 million cubic metres of gas were burnt in 1985 86 due to the inability of the ONGC to harness it for industrial or domestic use.
Such large scale utilisa tion will involve capital outlay to a considerable extent particularly for the laying of pipe lines to convey the gas to sites of its user.
The quantity of gas which is put to such use at present is an insignificant part of the gas that is being produced and so far the Government does not appear to have called upon the ONGC to draw up or submit to the Government under section 23 of the Act any programme of sale of natural gas to the public generally or even to some catego ries of public consumers.
There is no doubt that the expan sion of the oil sector in recent years, including the recent construction of the HBJ pipeline, will eventually require the ONGC to set up and devise a rational and equitable scheme of distribution and supply of gas to various types of consumers situate over various parts of India.
But, as yet, the ONGC has not embarked on any such scheme.
It has been supplying gas to certain consumers on the basis of individu al contracts and it is in regard to these consumers alone that the question of price has been raised before us.
We do not, however, think that it is at all necessary for us to delve further into the above concept or express any final opinion as to whether the ONGC is a public utility or not because the claim of the respondents is for a contin uance of the present system followed by the ONGC of supply ing gas to select customers on the basis of contracts en tered into with them.
They only want the price to be regu lated by the court; they do not challenge, for obvious reasons, the system of distribution thus far adopted by the ONGC.
If the argument that the ONGC is a public utility is accepted, then the first consequence to follow will be that gas should be made available by it to all persons who need it for use.
It cannot be supplied by the ONGC to only a few public sector undertakings like the GSEB and GSFC or only to a few industries like those of the respondents or only to a few municipalities like the Vadodara Municipality for domes tic supply, at its sweet will and pleasure.
It would then be open to all undertakings, industries and domestic consumers in Bombay, Gujarat and perhaps elsewhere in the country to demand that steps should be taken for the supply of gas to them also.
We are unable to agree with the observation of the High Court that, even if the ONGC is treated as a public utility, the respon 183 dents, merely because they had entered into temporary con tracts for supply of gas with the ONGC, could still insist on continued supply to themselves on "the first come, first served" basis, to the exclusion of later arrivals on the scene.
If, as suggested by the respondents, the ONGC is to be treated as a public utility and the price of gas is bound to be on cost plus basis, it may be that quite a few other industries would like to avail themselves of such supply.
They have perhaps kept out so far only because the supply price based on alternative fuel price is not acceptable to them.
They are keeping out only because they are under the impression that the ONGC is entitled to supply gas to per sons with whom it has entered into commercial contracts and on the terms of supply envisaged in those contracts.
The treatment of the ONGC as a public utility undertaking for the supply of gas will raise innumerable basic questions totally inconsistent with the present system of selective supply which the respondents want to be continued.
It will transpose the area of controversy to a totally different and wider plane.
We cannot say that the ONGC is a public utility undertaking and yet direct that it should supply gas to the respondents and a few other industries with which it has entered into contracts.
The court would then be constrained to hold that the present system of supply is inconsistent with public law and the constitutional requirements of a public utility undertaking and direct the ONGC to completely overhaul its system of public distribution on sound lines qua types of consumers to be catered to, areas of supply to be covered, price for supply and all other matters.
That is not the relief sought by the respondents.
All that they want is a declaration that they are entitled to the supply of gas at a reasonable price.
It is sufficient, for disposing of this claim, to deal with this aspect of the matter and the larger aspect of ONGC being a public utility undertaking should be left out of account.
We, therefore, do not express any final opinion on the issue except to say, prima facie, that it cannot be placed on par with a public utility under taking.
In this context, we should like to point out once again that the ONGC does not dispute that the price to be charged by it for gas supply should have some basis and not be arbitrary or unconscionable.
Their stand before the High Court (vide para 29 of the judgment) and before us has been that the prices are fixed by them from time to time on a well recognised principle viz. on the basis of the alterna tive fuel cost which the consumers may have to incur had they not been in receipt of gas supply.
Assuming this to be correct, is there any illegality in the procedure adopted by them? that is the question.
The respondents contend, and the High Court has held, that there is. 184 According to them, a public sector undertaking must supply its goods at a price which will cover their cost and leave them a reasonable margin of profit and no more.
Dr. Chitale says that this is the only reasonable way of price fixation and refers to the award in support of this proposition.
He points out that this is the basis incorporated in several statutory instruments, such as the Sugarcane Price Control order or the Drug Prices Control order or other orders passed under the Essential Commodities Act.
He cites the following decisions of this Court in.
relation to the fixation of such prices: Premier Automobiles vs Union, ; ; Panipat Cooperative Sugar Mills vs Union, [1973] 2 SCR 860; Shree Meenakshi Mills vs Union, ; Saraswati Industrial Syndicate vs Union, ; ; Prag Ice and Oil Mills vs Union, [1978] 3 S.C.R. 293 and Union of India vs Cynamide India Ltd., [1987] 2 S.C.C. 720.
He urges that, to allow the ONGC to sell gas at a higher price than this merely because, otherwise, but for the availability of gas, the consumers would nave to spend more for their sources of energy, will really amount to introducing an irrelevant element i the process of price fixation and result in allowing the ONGC to make unreasona ble profits at the expense of unhappy consumers.
The ques tion for consideration is whether this argument is correct.
Is the ONGC bound to adopt only the cost plus basis in fixing its prices or can it also invoke any other well known and reasonable, if commercial, formula in fixing its prices? We shall first consider the findings in the award.
Dr. V.K.R.V. Rao was arbitrating on a dispute between the ONGC and the Gujarat State Government as to the price at which gas was to be supplied by the ONGC.
Though the dispute arose as a result of the dissatisfaction of the GSEB and the GSFC with the prices charged by the ONGC, the terms of reference to Dr. Rao were very much wider.
They read: "The point at issue is the price that should be charged by the ONGC for gas that may be supplied after taking into consideration the volume and pressure of gas supplied to any particular party and the distance to which it has to be carried.
You may also indicate if ONGC should offer any differential rates in respect of gas supplied to: (a) Undertakings for the generation of power (b) Fertiliser plants (c) State projects 185 (d) Private sector industries (e) Domestic fuel" The contentions urged by the two parties arrayed before the arbitrator and set out in sections IV and V of the award also covered a very wide ground.
The award starts with a discussion of certain general considerations and while doing so, dealing with a contention comparing the price fixation in Assam and Gujarat, the award says: "The Gujarat contention that in fixing the price of gas in Gujarat, note should be taken of the price fixed by Oil India for the sale of Assam gas to the Assam Electricity Board at 25 paise per cubic foot cannot be dismissed as lightly as the O.N.G.C. seem to have done.
Nor can it be contended by Gujarat that if a mistake has been made once in one area, that therefore it should be extended to other areas.
It must be added also that the price of gas in Assam and in Gujarat is not on all fours for the reasons that I shall mention later.
All the same, one cannot ignore the relevance of the Assam gas price, even though the remedical action required is perhaps more on the Assam side than on the ONGC attitude in Gujarat.
I shall have something to say on the question later on in this report, though it is not strictly within the terms of reference given to the arbitra tor.
I am not prepared to accept the ONGC contention that because they are All India agency expected to function as a commercial undertaking in the public sector, they are entitled to take no account of the fact that the cost of power generation is high in Gujarat, that this has hampered the possible development of some industries for which Guja rat has natural resources and that public opinion in Gujarat has a natural expectation of a reduction in the cost of power production on account of the discovery of gas in their area.
After all the ONGC is an enterprise in the public sector and is expected to take public interest into account and not be exclusively concerned with commercial considera tions that would be more appropriate to a private enter prise.
Moreover, there, as in the United States, the gas industry is in the private sector, there is also governmen tal regulation through the Federal Power Authority in the public interest.
I believe that Gujarat has a valid point in 186 urging that advantages that accrue to the coal bearing provinces by way of low cost in fuel or power generation should also apply to Gujarat because of the discovery of gas in its area and its protected use for power generation.
I propose therefore to take into account the pit head price of Bengal coal and its thermal equivalence with Gujarat gas in determining my award on the price of gas.
I must add that this will not be the primary basis for my award, though it will certainly be treated as a relevant consideration.
At p. 16 the report deals with the contention that the price of gas should be based on the price of substitute products in the following words: "As regards the ONGC contention that the price of gas should be based on the price of substitute products and that this is the practice generally followed in the oil industry, I am not prepared to accept the ONGC constention.
While the price of substitutes undoubtedly would determine the demand price for gas, the position becomes different when prices are sought to be fixed and not left to market forces; and prices have to be fixed because the ONGC is virtually a monopoly at least as far as Gujarat is concerned; there is no market price in the normally understood sense of the term as emerg ing from sales by competing sellers; the ONGC is a public sector enterprise, and considerations of public policy cannot be considered irrelevant in the fixation of prices.
Above all it has always been the practice in India, when prices are fixed.
to base it on the cost of production plus a reasonable profit and this has been what the Tariff Com mission has been doing all these yeas in regard to other commodities.
Under the circumstances, while the price of substitutes is undoubtedly a relevant (factor?) in the fixation of the price of gas, I have no doubt that it cannot be treated as the primary factor under the Indian circum stances referred to earlier." Again, at p. 18, the basic formula is expounded as follows: "I have already indicated my thinking on the question of . . prices of substitute materials on the basis of thermal equivalence in the concluding para of the previous section.
Gas pricing in relation to the prices of substitute materials 187 understandable in foreign countries, where gas has been deliberately pushed into the fuel market by pipe line compa nies which have constructed long and expensive pipe lines and sold gas at a price lower than that of alternative fuels in order to capture and retain the market.
In fact, the price of gas in the initial stage was much less than that of competing alternative fuels and not on par with their prices.
With the growing recognition of the special advan tages obtained by the use of gas in manufacturing operation where close control of heat and cleanliness of operation are essential and worth paying for or in commercial and residen tial cooking, water heating and space heating, gas prices have been steadily rising over the last few years.
Thus while crude oil wholesale prices have moved downward since 1957, gas prices have recorded a steady rise throughout the post war period.
At the same time, drilling of gas wells is increasing and so is the place of gas in world energy con sumption.
It is therefore not correct to suggest that the oil companies were selling gas on the basis of the price and thermal equivalence of alternative fuels.
Gas was sold at the price which it could fetch and not on the basis of either cost of production or parity with substitute fuels.
As regard the price of gas in the field, Prof. Adleman has pointed out that it is not correct to expect any particular ceiling for this price.
He adds "if the special advantage uses could generate enough effective demand, the field price of gas in the United States or elsewhere could conceivably equal or surpass the thermal equivalent of the crude oil; otherwise it will not".
In actualfact, the principal use of gas is till not (now?) in its field of special advantages.
There is validity therefore for his view that "Since gas costs roughly three times to deliver, per BTU as oil the price of gas in the producing area could not possibly equal the price of oil.
Scarce resources are best used of this fuel expensive to transport, is used to the maximum, nearest its source of supply, whiles the transport cheap oil moves greater distances".
Thermal equivalence with substitute fuels and a price based thereon could therefore only be a ceiling on the price of gas rather than a parity basis for its price fixation.
Moreover, in the case of Gujarat, the substitute fuel comes from long distance and bears heavy frieght charges, while the gas is found within the State.
It must also be remembered that unlike in the case of foreign oil companies, cost 188 data are more readily available in the case of ONGC, as it is a public sector enterprise and subject to the control of Parliament and the scrutiny of its Public Accounts Commit tee.
All cost data have been made available to the Arbitra tor by the ONGC.
Under the circumstances, it is my consid ered judgment that formula of fixing the price of gas on the basis of the thermal equivalence and price of substitute fuel or feedstock should not be accepted, though the price resulting from such a formula certainly is a relevant con sideration as indicating the ceiling below which the price of gas should be fixed by the Arbitrator.
I would therefore reject the ONGC proposal that "the formula to be used for the price of gas should be based on the price of the avail able alternative fuels or feedstock.
" The only other basic formula is the one advanced by the Gujarat Government, namely, "that the only rational approach to the pricing of gas is via the cost plus profits formula".
And it is the cost plus profit formula that I propose to adopt as the primary base for determining my award on the price of gas in Gujarat.
Having said this, I must hasten to add that this does not mean my acceptance either of the connotation that the Gujarat Government gives to this formula in terms of the content postulated for the cost of production and profit or the figures they have put forward for the price of gas on the basis of their interpre tation of the content of cost of production and profit.
What I accept is the principle of cost of production plus reason able profit and not the interpretation that is sought to be given to this principle by the Gujarat Government".
The second part of the issue referred to the arbitration was disposed of summarily by the award, in a few words: "Finally, on the question whether there should be any dif ferentiation between the prices to be charged for power generation, fertilisers, and other industries, I am not in favour of any such differentiation, as it would only intro duce an unnecessary complication in the pricing machinery and my award is primarily based on estimated cost of produc tion plus reasonable profit.
If, however, in order to regu late supplies in adjustment to different intensities of demand from the different users of gas, some premium or 189 discount becomes necessary on the price suggested by me, this would not be inconsistent with my award provided the total receipts do not exceed the amount that would accrue from the application of my award on the price of gas.
Dr. Chitale naturally placed considerable reliance on this award.
He contended that the reasoning of the award is impeccable and that the considerations that impelled Dr. Rao to adopt the cost plus basis are more weighty in today 's context and in the background of the State 's duties under Articles 38 and 39(b) of the Constitution.
There is no doubt that Dr. Rao made the cost plus method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (which we shall refer to as thermal equivalence basis).
But at least two important aspects have to be kept in mind in assessing the applicabil ity of the same principle in the present context.
In the first place, as explained earlier, Dr. Rao was concerned primarily with an issue raised by the public of Gujarat as against the ONGC.
He was really adjudicating upon the price which the ONGC should charge to public sector undertaking catering to the essential needs of the State.
In the con text, his objective was, understandably, to fix the price as low as possible.
The consumers under consideration by him represented the public need of the State of Gujarat and, as against such public interest, the ONGC 's profit requirements paled into insignificance.
He proceeded, more or less, on the footing that the ONGC was obliged to supply gas for meeting those essential purposes.
Secondly, Dr. Rao also agrees that the thermal equivalence basis is a recognised method for fixation of price, that it has a relevance and that it has to be taken into account in determining the price for gas supply.
We also wonder whether, in the present set up of the ONGC with a vast expansion of its exploratory activities, enough data are available to work out a price on the cost plus basis.
Any such computation will have to provide adequately for future explorations, infructuous expenditure, expenditure on modern uptodate machinery and research and above all expenditure that will be necessary to reach the gas to the consumers.
In these circumstances, the cost plus basis fixed by Shri Rao in the background of the real nature of the dispute before him three decades ago cannot be taken as conclusive in the present situation.
Here we are dealing with a price to be fixed under a contract between the ONGC and one set of industries in the State who wish to make a change over from the furnace oil system to that of gas supply with a view to increase their own prof itability and gain an advantage, if possible, over other industries in the State.
In this context, we think, ONGC is entitled to a 190 larger latitude and charge a price which the market can bear.
The only restrictions is that, being a State instru mentality, it should not be a whimsical or capricious price but should be one based on relevant considerations and on some recognised basis.
While the cost plus basis is a recognised basis for fixation of prices of essential commodities or for the services rendered by a public utility undertaking, it would not, in our view, be correct to treat it as the only permis sible basis in all situations.
On behalf of the ONGC it has been pointed out that even in the fixation of prices of essential commodities like levy sugar, the concept of cost plus is not necessarily the only method of fixing the price for the commodity.
In considering the question whether the price fixation in that case was based on proper principles and by following correct methods in accordance with section 3(3C) of the Essential Commodities Act, this Court observed in the Anakapallee case; , at p. 899: "While examining question No. 3 learned Solicitor General has reminded us that 'cost plus ' cannot always be the proper basis for price fixation.
Even if there is no price control each unit will have to compete in the market and those units which are uneconomic and whose cost is unduly high will have to compete with others which are more efficient and the cost of which is much lower.
It may be that uneconomic units may suffer losses but what they cannot achieve in the open market they cannot insist on where price has to be fixed by the government.
The Sugar Enquiry Commission in its 1965 report expressed the view that 'cost plus ' basis for price fixation perpetuates inefficiency in the industry and is, therefore, against the longterm interest of the country.
The Court quoted from a study prepared in collaboration with the Institute of Chartered Accountants of India. "Costs alone do not determine the prices.
Cost is only one of the many complex factors which together determine prices.
The only general principle that can be stated is that in the end there must be some margin in prices over total costs, if capital is to be unimpaired and production maximised by the utilisation of internal surpluses . . while the cost plus pricing method is the most common, it may be argued that it is not the best available method 191 because it ignores 'demand or fails to adequately reflect competition or is based upon a concept of cost which is not solely relevant for pricing decision in all cases.
What is essential is not so much of current of past costs but fore cast of future cost with accuracy . .
Generally pricing should be such as to increase production and sales and secure an adequate return on capital employed.
" Again, in a somewhat different context in relation K, a State transport undertaking, this Court observed, in Venka tachalam vs Deputy Transport Commissioner; , " . . the special status of a Government owned transport undertaking is obvious . .
Its functional motto is not more profits at any cost but service to citizens first and, in a far larger measure than private companies and individu als, although profitability is also a factor even in public utilities.
(emphasis added) These passages indicate that cost plus is not a satis factory basis in all situations.
The basis may need to be made more stringent in some situations and more broad based in others.
May be the cost plus is an ideal basis where the commodity supplied is the product of a monopoly vital ' to human needs.
In that context the price fixed should be minimum possible as the customer or consumer must have the commodity for his survival and cannot afford more than the minimum.
The producer should not, therefore, be allowed to get back more than a minimum profit.
Indeed, in certain situations, it may even be inequitable to fix varying prices on the basis of the cost of each individual manufacturer and thus encourage inefficiency; it may be necessary to base it uniformly for a whole industry on the cost of the most efficient manufacturer as has been done in the case of drugs (vide: Cynamide case, [1987] 2 S.C.C. 720.
It was so vital that the goods should be available to the common man that the prices were statutorily fixed so low as to drive away inefficient producers and so as to make it possible only for the most efficient manufacturers to survive.
Per contra, there can be situations where the need of the consumer is not so vital and the requirements of the economic scene are such that the needs of the producer should be given greater consideration.
In such situations, the "plus" element in the cost plus basis (namely, the allowable profit margin, should not be confined to "a reasonable return on the capital" but should be allowed to have a much larger content depending on the circumstances.
192 The notion that the cost plus basis can be the only criterion for fixation of prices in the case of public enterprises stems basically from a concept that such enter prises should function either on a no profit no loss basis or on a minimum profit basis.
This is not a correct ap proach.
In the case of vital commodities or services, while private concerns must be allowed a minimial return on capi tal invested, public undertakings or utilities may even have to run at losses, if need be and even a minimal return may not be assured.
In the case of less vital, but still basic, commodities, they may be required to cater to needs with a minimal profit margin for themselves.
But given a favourable area of operation, "commercial profits" need not be either anathema or forbidden fruit even to public sector enter prises.
A publication on "Public Enterprises" by the Indian Institute of Public Administration, produced before us elaborates on the above aspects.
It also gives an interest ing analysis of pricing policies adopted in respect of various commodities.
It is unnecessary to touch upon all the details.
It is sufficient, for our present purposes, to say that the monograph points out, a propos such pricing policy, that several state undertakings are already earning profits and the general policy has been accepted that the maximum economic returns should be secured from all public enter prises, whether these are operated by the Central or State Governments directly or through corporation or companies and that the surplus of public enterprises will have to play an increasing part in financing economic development under the various National Plans.
It proceeds to say (at p. 173): "A growing source of governmental revenue in many countries is the profits of public undertaking.
In under developed countries public enterprises fostered on public revenues are expected to play a more positive role in financing the countries ' development than similar enterprises do in de veloped economies.
In determining the price policies of these undertakings considerations of maximising revenue will not play as important a part as profits do in private enter prises, but within the limits set by the necessity to foster economic development, their price policies are designed to bring in some profits to the countries ' general revenues.
Public enterprises in the under developed areas are to break ground in projects which are the core of development.
If such projects are to be financed on an increasing scale, the price policies have to be so designed that significant surpluses are left with the projects 193 to be employed either for their own expansion or for financing the expansion of other projects.
In other words, there should be an element of profit in the prices of their products or in the cost of their services to the public." The Krishna Menon Committee on State undertakings (November 1959), the booklet proceeds.
to point out, enunci ated the following pricing policy for public enterprises: "We have stressed in these pages the importance of incentive and healthy competition and emphasised that concerns must be able to stand on their own legs for efficient and proper conduct of business . .
The considerations that should govern prices appear to be the following.
Consumer prices nave to be based upon general market prices and other fac tors as well.
The decision as to what economy in cost has to be passed on to the consumer on the one hand or should benefit the taxpayer on the other and the likelihood of non availabilities and, therefore, of scarcities in the near future has also to be considered.
The principle of 'what the traffic can bear ' has also to be taken into account. ' ' Dr. V.K.R.V. Rao has been quoted again as saying: "As regards profits, it should be pointed out that contrary to some popular notions on the subject, profits have an important place in a socialist society, the difference between the economic price and the social price would be what may be called the planned profit and this would largely correspond to the excise duties and sales tax and other indirect taxes that are imposed in a capitalist society.
These planned profits being no more than a way of mobilising resources and making them available to the community for purposes both of investment and maintenance expenditure.
Profits also have another important role to play in so far as they relate to the economic price itself.
The economic price fixed at any particular moment of time is obviously based on the capital, technique and productivity of the given base period when this price is fixed; any improvement in productivity is bound to lead to a decrease in the cost production and in turn this would lead to the emergence of a surplus within the economic price itself and that would be a 194 surplus which will represent a measure of the nation 's increase in productivity this surplus would not be the result of the policies laid down at national level as in the case of difference between the economic price and the social price.
On the contrary, it would represent the result of the motivations and efforts of a larger number of persons en gaged in productive activity.
Hence the importance of ar ranging for proper incentive to stimulate the creation of this kind of surplus.
That is the reason why in socialist societies now adays, individual enterprises are permitted to retain a larger share of such surpluses as they may create by an increase in productivity, this larger share to be used by them partly for increasing individual incomes of those engaged in the enterprises and partly for giving an opportu nity to the enterprises in question to build up the finan cial resources needed to following their own independent investment policies.
Public enterprise must be carried on a profitmaking basis, not only in the sense that public enter prise must yield an economic price in the terms described in a previous section but must also get for the community sufficient resources for financing a part of the investment and maintenance expenditure of government.
Increasingly, the share of the profits of public enterprises in financing the investment and maintenance expenditure of government must keep on increasing.
It is not only the expenditure on the public sector as such that will indicate the march of the economy towards its socialist goal.
Even more important is the increasing role that the public sector must play for finding the resources needed for meeting both the mainte nance and investment expenditure of government.
This in volves a price and profit policy in regard to public enter prise which goes against accepted opinion so far in regard to public enterprise.
The theory 'no profit, no loss ' in public enterprise is particularly inconsistent with a so cialist economy, and if pursued in a mixed economy it will hamper the evolution of the mixed economy into a socialist society.
The sooner, therefore, this theory of 'no profit no loss ' in public enterprise is given up and the policy ac cepted of having a price and profit policy for public enter prise such as will make the State increasingly reliant on its own resources (as distinguished from taxing the personal incomes of its citizens), the quicker will be the evolution of a socialist society".
195 In another article on "The Public sector in India", quoted in "Issues in Public Enterprise" by Sri K.R. Gupta, Dr. Rao is quoted as saying (at p. 84): " . . the pricing policy should be such as to promote the growth of national income and the rate of this growth . .public enterprises must make profits and the larger the share of public enterprises in all enterprises, the greater is their need for making profits.
Profits con stitute the surplus available for savings and investment on the one hand and contribution to national social welfare programme on the other; and if public enterprises do not make profits the national surplus available for stepping up the rate of investment and the increase of social welfare will suffer a corresponding reduction; .
Hence the need for giving up the irrational belief that public enterprise should, by definition, be run on a no profit basis.
" In the light of the foregoing discussion, we are of opinion that it would not be right to insist that the ONGC should fix oil prices only on cost plus basis.
Indeed, its policy of pricing should be based on the several factors peculiar to the industry and its current situation and so long as such a policy is not irrational or whimsical, the court may not interfere.
The question of fixation of a fair and reasonable price for goods placed on the market has come up for consideration of Parliament and Courts in different contexts.
Price fixa tion, it is common ground, is generally a legislative func tion.
But Parliament generally provides for interference only at a stage where in pursuance of social and economic objectives or to discharge duties under the Directive Prin ciples of State Policy, control has to be exercised over the distribution and consumption of the material resources of the community.
Thus while Parliament has enacted the Essen tial Commodities Act, it has left it to the discretion of the Executive to take concrete steps for fixing the prices of essential commodities as and when necessity arises, by promulgating Control Orders in exercise of the powers vested in the Act.
Various types of foodgrains, sugarcane and drugs have come under the purview of such control orders and the modalities of fixation of fair prices thereunder have also come up for consideration of the Courts.
There has also been such fixation of price under the Industries (Development & Regulation) Act, 1951, vide: Premier Automobiles vs Union, In all these cases, the primary concern of 196 Government and Parliament has been that the articles in question should be available to the members of the consumer public at the minimum prices possible and, in that context, these legislations no doubt adopt the "cost plus reasonable return on investment" test in the fixation of prices.
That, even in respect of such commodities, the "cost plus" method is not the only reasonable method has been recognised in judicial decisions.
The cases on this topic have been re viewed and the limitations on judicial review of price fixations fully discussed recently by a Constitution Bench of this Court in M/s Shri Sitaram Sugar Company Ltd. & Another vs Union, JT 19901 SC 462.
It is, however, not necessary here to enter into a discussion of this and the earlier cases because those cases were primarily concerned with the question whether the price fixation had been made in consonance with the requirements of the relevant legisla tion fixing prices of essential commodities in the interests of the general public and also because ONGC does not deny that, as a State instrumentality, its price fixation should be based on relevant material and should be fair and reason able.
None of these decisions hold that the cost plus method is the only relevant method for fixation of prices.
On the contrary, there are indications in some judgments to indi cate that not a minimum but a reasonable profit margin is permissible.
Even in relation to a public utility undertak ing like the State Electricity Boards where the duty not to make undue profits by abusing its monopoly position is clear (vide: Jagadamba Paper Industries vs Haryana State Electric ity Board; , , this Court said, in Kerala State Electricity Board etc.
vs M/s. S.N. Govinda Prabhu & Bros. and Ors. etc, "Now, a State Electricity Board created under the provisions of the Electricity Supply Act is an instrumentality of the State subject to the same constitutional and public law limitations as are applicable to the government including the principle of law which inhibits arbitrary action by the government (See Rohtas Industries vs Bihar State Electricity Board, ; It is a public utility monopoly undertaking which may not be driven by pure profit motive not that profit is to be shunned but that service and not profit should inform its actions.
It is not the function of the Board to so manage its affairs as to earn the maximum profit; even as a private corporate body may be inspired to earn huge profits with a view to paying large dividends to its shareholders.
But it does not follow that the Board may not and need not earn profits for the 197 purpose of performing its duties and discharging its obliga tions under the statute.
It stands to common sense that the Board must manage its affairs on sound economic principles.
Having ventured into the field of commerce, no public serv ice undertaking can afford to say it will ignore business principles which are an essential to public service under takings as to commercial ventures.
(See Lord Scarman in Bromely vs Greater London Council, ; If the Board borrows sums either from the government or from other sources or by the issue of debentures and bonds, surely the Board must of necessity make provision year after year for the payment of interest on the loans taken by it and for the repayment of the capital amounts of the loans.
If the Board is unable to pay interest in any year for want of sufficient revenue receipts, the Board must make provi sion for payment of such arrears of interest in succeeding years.
The Board is not expected to run on a bare year to year survival basis.
It must have its feet firmly planted on the earth.
It must be able to pay the interest on the loans taken by it must be able to discharge its debts; it must be able to give efficient and economic service; it must be able to continue the due performance of its services by providing for depreciation etc.; it must provide for the expansion of its services, for no one can pretend the country is already well supplied with electricity.
Sufficient surplus has to be generated for this purpose.
That we take it is what the Board would necessarily do if it was an ordinary commercial undertaking properly and prudently managed on sound commer cial lines.
Is the position any different because the Board is a public utility undertakings or because of the provi sions of the Electricity Supply Act? We do not think that either the character of Electricity Board as a Public Utili ty Undertaking or the provisions of the Electricity Supply Act preclude the Board from managing its affairs on sound commercial lines though not with a profit thirst.
A plain reading of Section 59 (as amended in 1978) plain ly indicates that it is the mandate of Parliament that the Board should adjust its tariffs so that after meeting the various expenses properly required to be met a surplus is 198 left.
The original negative approach of functioning so as not to suffer a loss is replaced by the positive approach of requiring a surplus to be created.
Under the above provision, the Board is under a statutory obligation to carry on its operations and adjust its tariffs in such a way to ensure that the total revenues earned in any year of account shall, after meeting all expenses chargeable to revenue leave such surplus as the State Government may, from time to time, specify.
The tariff fixation has, therefore, to be so made as to raise suffi cient revenue which will not merely avoid any net loss being incurred during the financial year but will ensure a profit being earned, the rate of minimum profit to be earned being such as may be specified by the State Government.
Shri Potti, learned counsel for the consumers placed great reliance on the observations of this Court in Kerala State Electricity Board vs Indian Aluminium Co., [1976] 1 SCR 552; Bihar State Electricity Board vs Workmen, ; and P. Nalla Thampy Thera vs Union of India to con tend that the Electricity Board was barred from conducting its operations on commercial lines so as to earn a profit.
We do not think that any of these observations is in con flict with what we have said.
Pure profit motive, unjusti fiable according to us even in the case of a private trading concern, can never be the sole guiding factor in the case of a public enterprise.
If profit is made not for profit 's sake but for the purpose of fulfilling, better and more exten sively, the obligation of the services expected of it cannot be said that the public enterprise acted beyond its authority.
The observations in the first case which were refined to us merely emphasised the fact that the Electrici ty Board is not an ordinary trading corporation and that as a public utility 199 undertaking its emphasis should be on service and not prof it.
In the second case, for example, the Court said that it is not expected to make any profit and proceeded to explain why it is not expected to make a profit by saying that it is expected to extend the supply of electricity to unserved areas without reference to considerations of loss.
It is of interest that in the second case, dealing with the question whether interest cannot be taken into account in working out profits, the Court observed, (SCC p. 235, para 5): 'The facile assumption by the Tribunal that the interest should not be taken into account in working out the profits is not borne out by the provisions of the statute '.
In the third case, the court appeared to take the view that the railway rate and fares should cover operational ex penses, interest on investment, depreciation and payment of public obligations.
It was stated more than once that the total operational cost would include the interest on the capital outlay out of the national exchequer.
While the court expressed the view that there was no justification to run a public utility monopoly service undertaking merely as a commercial venture with a view to make profits, the court did not rule out but refrained from expressing any opinion on the question whether a public utility monopoly service undertaking should ever be geared to earn profits to support the general revenue of the State.
We are of the view that the failure of the government to specify the surplus which may be generated by the Board cannot prevent the Board from generating a surplus after meeting the expenses required to be met.
Perhaps, the quan tum of surplus may not exceed what a prudent public service undertaking may be expected to generate without sacrificing the interests it is expected to serve and without being obsessed by the pure profit motive of the private enterpre neur.
The Board may not allow its character as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house.
Neither the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion that the Bard has shed its public utility character.
When that happens the court may strike down the revision of tariffs as plainly 200 arbitrary.
But not until then.
Not merely because a surplus has been generated, a surplus which can by no means be said to be extravagant.
The court will then refrain from touching the tariffs.
After all, as has been said by this Court often enough "price fixation" is neither the forte nor the func tion of the court.
" We are not called upon here, in the view we take, to decide whether the cost plus basis or the thermal equiva lence basis is more appropriate.
All that we wish to say is that, having regard to the basis on which the claims of the respondents have proceeded thus far, our task is a very limited one.
We cannot say, for reasons set out below, that the ONGC has acted arbitrarily in fixing the prices on the thermal equivalence basis; the fact that it has not done it on cost plus basis does not vitiate the price fixation.
The only question we have to address ourselves to is as to whether the O.N.G.C. has fixed a price based on relevant materials and on some known principle.
At the outset, one must notice that the price is not directly and specifically related to or based on any unreasonable margin of profit.
There is nothing to indicate that the ONGC was prompted, in fixing its prices, on the one and only consideration of deriving maximum profits for itself.
On the other hand, it appears to have been guided by the needs of the situation and the nature of the distribution system that is in opera tion.
As we said earlier, the manufacture, distribution and consumption of gas has yet not attained the status of an essential commodity till recently.
It is still at a stage where the goods are being distributed under private con tracts.
Whether this is any longer justified and whether there should not be a greater amount of control over the modes of, as well as price for such, distribution is a larger question with which we are not now concerned.
At present, we are in the penumbral region where the commodity is free to be distributed at the manufacturer 's choice, but yet where such manufacturer being a State instrumentality, has to conform to Articles 14 and 19 of the Constitution.
At this stage of development of the industry, we think a much wider latitude is permissible in the fixation of prices than the imposition of a "no profit, no loss" basis or a "cost plus" basis on the producer.
In fixing the prices, it is legitimate for the O.N.G.C. to take into account the fact that its supplies are restricted only to a few industries that have entered into contracts with it.
Like industries, producing the same or similar commodities, are carrying on business with other sources of energy such as coal or fur nace oil and the supply of gas is intended to supplement that source of energy.
The supply of 201 gas to a few chosen industries at a much lower rate than what the companies may have to pay for an alternative fuel may indeed lead to cries of discrimination as the O.N.G.C. is scarcely in a position to supply gas to all industries and replace furnace oil as a source of energy altogether.
Also, it must be kept in mind that exploration of oil is capital intensive and money consuming and the ONGC would be well justified in supplying gas to voluntary contractors at a price which several parties are willing to accept and which will enable the ONGC to build up a surplus to meet its manifold requirements The surpluses, it should be remem bered, are not to fatten the coffers of a private individual but only to strengthen the backbone of the public enter prise.
To fix its prices on the basis of alternative fuel cannot, therefore, be described, in the present situation, as irrational or arbitrary.
Our attention has been drawn to a passage from Joan Mitchell on "Price Determination and Price Policy" where, dealing with the basis of fixation of gas price by negotiation between the British Gas Commission and companies producing North Sea gas, it is pointed out hat the price is set by the nearest alternative fuel, usually fuel oil.
This was also the basis, it will be remembered, on which initially the GSEB and GSFC had agreed to receive supplies from the ONGC.
Thus this is a basis of fixation of price that is recognised in this field.
Fixation of price on this basis is, therefore, a logical and appropriate one in the circumstances We should once again like to emphasise that different considerations may perhaps have to prevail if the treatment of ONGC as a public utility is taken to its logical conclu sion but that is not the basis on which the present writ petitions can be decided.
Even at present the ONGC is sup plying to public sector undertakings at a much lower price.
That has not been challenged by those organisations and the differentiation has also been upheld, in principle, by the High Court, rightly in our opinion.
Fortunately, with the discovery of more and more oil wells in various parts of the country the economy of the country is booming and gas supply may also become more plentifully available in course of time.
The time will perhaps soon come for the evolution of proper schemes of distribution and price control.
We are now concerned, however, with the price fixation regarding supply to a few parties who considered it all right to enter into contractual agreements for supply of gas to them on the basis of the price fixed by the ONGC.
So far as the scheme of supply is concerned; the respondents also stand by the existing contract scheme as they want the supply to contin ue It is certainly not their prayer that the existing supply of gas, such as it is, should be considered a public utility and rationed to meet the needs of all industries and consumers in Bombay or Vadodara or 202 elsewhere.
Nor is there any complaint today from any indus try not receiving gas supply that they are being discrimi nated against and that the supply to selective industries should stop.
There is, therefore, no justification to strike down the scheme of supply on the basis of contracts.
The only objection that survives, therefore, is that the price for the supply should be reasonable and fair.
It should be based on principle, not caprice.
We have pointed out that, though the ONGC has stepped up the prices considerably, it has claimed to have done so on a principle and the correct ness of this has not been challenged.
The claim of the respondents only is that prices should not be fixed on that basis but should, instead, be fixed on the basis of "cost plus".
For reasons indicated earlier, we do not think that the respondents are justified in challenging this basis of fixation.
The basis on which the ONGC has fixed the prices is a known basis and, as pointed out by us, also a basis permissible at this stage of the industry where a certain amount of freedom is permitted to the organisation in sup plying the gas produced by it.
The situation really is one where the choice is between making the limited supply of gas available to a few chosen individuals at rock bottom prices so that they can make huge profits and making the price higher but competitive so that it subserves the common good and does not benefit only a chosen few.
The ONGC has rightly chosen the second alternative.
We would, therefore, hold that the respondents can insist on a supply only if they agree to pay the prices fixed by the ONGC.
They are also not entitled to demand supply as of right, without contracts.
But, as they have in fact had the benefit of the supplies under interim orders of the Court, this question does not survive and all that we can declare is that the prices demanded by the ONGC are not unreasonable or capricious and are binding on the respondents.
Having dealt with the principal issue, we may now refer to certain subsidiary matters touched upon in the course of arguments: (i) A point was made about the ONGC 's right to insist on a minimum offtake guarantee to the extent of 90%.
This has been upheld by the High Court and there is no appeal (the crossappeals having been dismissed as time barred) by the respondents.
There can, however, be no doubt that the High Court was right in its conclusion on this issue.
If any authority regarding the rationale of such a clause is needed, it is to be found in the decision of this Court in Amalgamated Electricity Co. Ltd. vs Jalgaon Borough Munici pality; , 203 (ii) A statement was filed before us to show that if the prices had been determined on the basis of the thermal equivalence of coal, they would have been much smaller.
This statement has been filed before us for the first time and its correctness would need verification.
It is, however, unnecessary to go into this question.
The acceptability of this argument may depend, inter alia on how far the coal basis is relevant for the industries located in Vadodara where the principal alternate fuel is fuel oil.
It is possi ble that this is one alternative that may be available and it was open to the petitioners to have had discuss and mediations with the ONGC for alteration of the prices on that footing.
The ONGC has fixed prices on the basis of the thermal equivalence of furnance oil which, by an large, was the source of energy tapped by the local industries.
There being no irrationality in adopting this basis, it is not open to us to say that the basis of thermal equivalence of coal should be adopted rather than that of furnance oil, particularly in the absence of fuller material and discus sion.
(iii) A point was made that the ONGC is charging differ ent prices to different industries.
The answer of the ONGC is that, save in the case of certain public sector enter prises, their prices are fixed on the basis of the prices prevalent on the thermal equivalence of fuel oil basis as on the date the relevant contract is entered into.
This has not been shown to be wrong.
The only discrimination urged at the stage of the High Court was in regard to the disparities in prices between supply to public sector undertakings and private industries.
Though the award, towards the end, suggested that there should be no such differentiation, it is now well settled that a favourable treatment of public sector organisations, particularly ones dealing in essential commodities or services, would not be discriminatory.
Also, this differentiation, as already pointed out, has been upheld by the High Court, we think rightly.
No tangible material has been brought to our notice which would support the plea of unfair discrimination.
(iv) A point has been made that the ONGC had entered into a contract for a ten year period with the Amul dairy for supply of gas at Rs.741 per unit which demonstrates the unreasonableness of the prices charged to the respondents.
We do not agree.
We have already pointed out that the ONGC is supplying gas, to certain public sector undertakings at much lower rates and that this differentiation has been upheld.
Though the Amul Dairy is a cooperative society it deals with a basic need of society and 204 stands on no different footing from Electricity Boards or Fertiliser Corporations or Municipal Corporations.
The instance of the Amul Dairy cannot, therefore, be treated as an index of the unreasonableness of the price charged from the respondents, particularly when the basis of fixation has been explained and is an intelligible and rational one.
(v) Reference has been made to the price of gas in Assam and U.S.A.
So far as the former is concerned, the High Court has, rightly in our view, discarded the comparison.
So far as the latter is concerned, the point made by the ONGC was that Dr. Rao had fixed the price of gas in India in 1967 at 15% below the then U.S. price and that on the same basis the price of Rs.2000 per unit today could not be said to be unreasonable as prices in U.S.A. have also shot up about thirty fold in the meantime.
We find no effective reply to this argument.
The High Court has just brushed it aside by reiterating that the well head prices alone would be the reasonable basis for fixation of price.
(vi) The High Court in its judgment has observed: "if the ONGC were acting fairly and reasonably, there was nothing to prevent them from placing all their cards on the table of the court.
They did not put the price structure that possibly be worked out on the lines similar or akin to those suggested by Dr. V.K.R.V. Rao in his award.
Nor did they put forward any other reasonable criteria for price fixation.
All throughout they harped on the thermal equiva lence and furnace oil equivalance and the prices in U.S.A. and the prices of crude, but did not allow the Court to have the bare glimpse of what could possibly be the well head price of gas, by making allowances for amortisation and all other conceivable factors, having their sway in the ultimate price fixation.
This also is indicative of the unreasonable ness on their part and we would say that Mr. Singhvi was justified in complaining that the return filed by the ONGC in this group of petitions was far from being satisfactory and, therefore, was liable to be brandished as no real return at all" We think this criticism is not justified.
The stand of the ONGC was that it had fixed the prices on the thermal equiva lence basis and this has not been controverted or found against.
It was the 205 respondents ' case that the cost plus price would work out much cheaper and the onus was on them to prove it.
We fail to see how the blame for not allowing the court to have a glimpse of what could possibly be the well head price of gas can be put at the doors of the ONGC.
However, this aspect is irrelevant as the case throughout has proceeded on the assumption that the cost plus basis would yield lower fig ures and the question debated was whether the ONGC could discard this and adopt the thermal equivalence basis.
(vii) Turning now to para 36 of the judgment of the High Court, we may observe that these directions do not survive in view of the conclusion we have reached that the prices demanded by ONGC are based on proper and relevant criteria.
However, we may observe that directions (i) and (ii) in this paragraph virtually throw open the entire issue for fresh discussion.
It may have been helpful if such a direction had been given before the hearing of the writ petitions but the exercises would not be futile.
Having reached the conclusion that the cost plus was the only proper basis of fixation of price, the High Court should perhaps have directed the ONGC to charge prices on that basis and given a reasonable time to work out the said price and implement the direction.
Instead, the High Court appears to have, by its directions in para 36, left the matter at large for it asks the ONGC to get the price fixed "according to the reasonable and ration al norms".
We do not also see any justification for provid ing that the price fixation should be done in consultation with, or after giving an opportunity to the respondents.
It is for the ONGC to fix the prices and there can be no re quirement of a prior consultation with the present respond ents or with prospective customers.
In such cases of price fixation, as in the case of price fixations by Government (see Cynamide case, [1987] 2 SCC 720), the only remedy of aggrieved consumers can perhaps be to have some sort of post decisional reconsideration by the ONGC after heating the view points of those affected.
But this question does not arise now in the view we have taken to the ONGC 's obli gations in this regard.
We should also like to add that, now that the prices have been fixed by the Government since 30.1.1987 and gas has already been supplied to the respond ents till then on the basis of interim prices, the implemen tation of the directions contained in this paragraph would be a prolonged and unmeaningful exercise and it would have been much better to fix some ad hoc price, for this period, after heating both parties.
In fact, Sri B. 206 Sen who appeared for the ONGC very fairly stated before us that, so far as this period was concerned, the ONGC was prepared to leave it to this Court to fix the price of supply at any figure that the Court might consider reasona ble.
We also suggested to the respondents, keeping the price fixed by the order dated 30.3.1987 in mind, a figure which we thought was reasonable but the respondents were not agreeable to the course suggested.
They put forward certain alternative proposals which were not acceptable to the ONGC.
In these circumstances, we have been constrained to hear the appeals on merits.
(viii) On behalf of the ONGC, it has been pointed out that a sum of Rs. 14.35 crores is outstanding for the period from December 1982 to August 1989 from eighteen concerns, even on the basis of the interim prices at which the ONGC has been supplying them gas under the orders of this Court, primarily due to shortfalls in the guaranteed off take and that four concerns, who have stopped taking supply of gas, are in arrears to the tune of about Rs. 12 lakhs.
We need hardly say that the ONGC will be at liberty to take immediate steps to recover the charges due from the respondents in the light of this judgment.
(ix) We wish to add that we are not called upon to, and do not, express any opinion regarding the notification dated 30.1.87 of the Government issued subsequently fixing the price at Rs. 1,400 plus.
We do not know the circumstances or the statutory authority or the basis on which the said price fixation was made and that is totally outside the purview of these appeals.
This concludes a discussion of all the points urged before us.
For the reasons detailed above, we allow these appeals and uphold the prices charged by the ONGC for supply of gas to the various respondents.
We, however, make no order regarding costs.
R.S.S. Appeals allowed.
| IN-Abs | The appellant, Oil & Natural Gas Commission.
is a statu tory corporation constituted by and under the Oil and Natu ral Gas Commission Act, 1959.
In most of its oil fields situated in Gujarat, gas comes out along with crude oil as "free gas".
The appellant had agreed to supply this gas to the Gujarat State Electricity Board (GSEB) and the Gujarat State Fertiliser Corporation (GSFC) at a price related to fuel oil price on the basis of thermal value equivalence, without any reference to the cost of production of gas as such.
Public discontent over the alleged high price charged was expressed and eventually the dispute was referred to the sole arbitra tion of Dr. V.K.R.V. Rao who gave his award.
Dr. Rao made the "cost plus" method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (thermal equivalence basis).
In July 1967, the supply of gas to some of the indus tries in and around Vadodara city was started, on the basis of individual annual contracts.
Aggrieved by the steady rise in the prices, the respondents Association of Natural Gas Consuming Industries and Others moved the Bombay High Court in March 1979 by way of a writ petition In the petition it was, inter alia, prayed that the ONGC be directed (i) to 158 continue to supply the gas to the respondents despite the contracts in their favour having lapsed; (ii) to discuss and negotiate a fair, reasonable and just price for supply of gas; (iii) to stop charging discriminatory prices for the supply of gas to the respondents in comparison with the price charged to public sector undertakings; and (iv) to restrict the minimum guaranteed quantity of offtake.
The High Court passed an interim order directing the ONGC to continue the supply of gas to the respondents, at the existing rate of Rs.504 per unit which was later raised by the Court to Rs. 1000 per unit.
The High Court held; (i) The Oil and Natural Gas Commission is a public Utility Undertaking and has a duty to supply gas to anyone who requires it so long as there is enough supply available; (ii) Price fixation is generally a legislative function.
But the Oil and Natural Gas Commission being a State instrumentality, is bound to act reasonably in the matter of fixation of price; such price is bound to be determined by following any one of the modalities suggested in the judgment of the High Court; (iii) There was no dis crimination by the Oil and Natural Gas Commission between the public sector undertakings on the one hand and the respondents ' undertakings on the other in charging differen tial prices; and (iv) The clause regarding minimum guaran teed offtake was valid and enforceable.
Before this Court.
the appellant primarily challenged the finding of the High Court that the ONGC was a 'public utility undertaking ' which was bound to supply gas at the request of any member of the public at large.
The appellant also contested the correctness of the High Court 's conclu sion that the price of gas must be determined on the basis of cost of production plus a reasonable return for the investment made.
The appellant submitted that (i) the prices under the contracts entered into with the respondents had been determined on the basis of a wellknown principle.
viz. the ruling prices for an alternate fuel and this could not be said to be either arbitrary or unreasonable particularly when a large number of industries were willing to take the supply of gas at the prices fixed on that basis; (ii) while public sector units and State instrumentalities ought not to be allowed to exploit the consumers.
it was equally neces sary to ensure that such units and instrumentalities were enabled to make reasonable profits; (iii) in the context of the integrated activity of production of crude oil and gas.
it was almost impossible to work out the cost in respect of any particular area or of a particular bye product; (iv) the cost plus basis was fixed by the Award several years ago and that too in the context of supply to certain State 159 undertakings which, in turn, supplied essential commodities like electricity and fertilizers; and (v) the onus of show ing that the prices charged were unreasonable or arbitrary was on the respondents and they had done nothing to dis charge this onus.
On behalf of the respondents it was contended that a public utility undertaking could not arbitrarily discontinue its supply or services merely because the customer was unwilling to pay the price asked for as unconscionable and unreasonable.
It was further contended that the price fixed must be reasonable and fair so as to give the undertaking a reasonable return on the capital employed and that there could not be any discrimination against industrial consum ers.
According to the respondents.
this was the only reason able way of price fixation and referred to the Award in support of this proposition The respondents further urged that to allow Oil and Natural Gas Commission to sell gas at a higher price than this merely because.
otherwise.
but for the availability of gas, the consumers would have to spend more for their sources of energy.
will really amount to introduction an irrelevant element in the process of price fixation and result in allowing the Oil and Natural Gas Commission to make unreasonable profits at the expense of unhappy consumers.
It was argued that these principles were applicable with greater force in the context of the consti tutional discipline over state instrumentalities under Article 38 & 39 of the Constitution.
Bolt vs Stennett CJ E.R.__Revised p.
1572; Allnutt vs Inglis CIV E.R. Revised p. 206; Ira Y. Munn vs People, ; United Fuel Gas Co. vs Railroad Commission, 73L. Ed. 390; Los Angeles Gas & Electric Corporation vs Railroad Commission. ; ; Leo Nabbia vs People.
78 L.Ed. 940; Harold E. West vs Chesapeake & Potomac Telephone Com., ; ; Federal Power Commission vs Hope Natural Gas Co., ; ; premier Automobiles vs Union, ; ; Panipat Cooperative Sugar Mills vs Union, [1973] 2 S.C.R. 860; Shree Meenakshi Mills vs Union, ; Saraswati Industrial Syndicate vs Union, ; ; Prag Ice and Oil Mills vs Union, ; ; Union of India vs Cynamide India Ltd., [1987] 2 S.C.C. 720, relied upon.
Allowing the appeals and upholding the prices charged by the Oil and Natural Gas Commission, this Court, HELD: (1) The Oil and Natural Gas Commission does not satisfy the primary conditions for being a public utility undertaking as it has not so far held itself out or under taken or been obliged by any law to 160 provide gas supply to the public in general or to any par ticular crosssection of the public.
The proviso to Section 14(1)(e) of the Act which lays down that the setting up of industries to be run with the aid of gas was not to be undertaken by the Oil and Natural Gas Commission without the Central Government 's approval also gives an indication that the supply of gas to various industries on a general basis was not in the immediate contemplation of the Act but was envisaged as a future expansion to be initiated with Central Government 's approval.
Perhaps a stage in the developmental activities of the Oil and Natural Gas Commission will soon come when such an obligation could be inferred but, at present, the Oil and Natural Gas Commission supplies gas only to certain selected contractees.
[181E G] (2) It is however not necessary in this case to express any final opinion on the issue whether the ONGC was a public utility undertaking except to say, prima facie, that it could not be placed on par with a public utility undertak ing.
All that the respondents wanted was a declaration that they were entitled to the supply of gas at a reasonable price.
It was sufficient, for disposing of this claim, to deal with this aspect of the matter and the larger aspect of Oil and Natural Gas Commission being a public utility under taking could be left out of account.
[183E F] (3) The treatment of the Oil and Natural Gas Commission as a public utility undertaking for the supply of gas will raise innumerable basic questions totally inconsistent with the present system of selective supply which the respondents want to be continued.
It will transpose the area of contro versy to a totally different and wider plane.
The Court would then be constrained to hold that the present system of supply was inconsistent with public law and the constitu tional requirements of a public utility undertaking.
[183C D] (4) The main activity of the Oil and Natural Gas Commis sion is that of exploration and prospecting for petroleum and petroleum products.
So far as gas, which is a bye product, is concerned, the Oil and Natural Gas Commission has not so far been able to voluntarily or constrained statutorily to harness and utilise its production for con sumption by the public.
[181H; 182A] (5) There is no doubt that Dr. Rao made the cost plus method the basis of his award in preference to the basis of thermal equivalence of alternate fuel (thermal equivalence basis).
But, the cost plus basis fixed by Dr. Rao in the background of the real nature of the dispute before him three decades ago could not be taken as conclusive in the present 161 situation.
Dr. Rao was concerned primarily with an issue raised by the public of Gujarat as against the Oil and Natural Gas Commission.
He was really adjudicating upon the price which the Oil and Natural Gas Commission should charge to public sector undertakings catering to the essential needs of the State.
In that context, his objective was, understandably, to fix the price as low as possible.
The consumer under consideration by him represented the public need of the State of Gujarat and, as against such public interest, the Oil and Natural Gas Commission 's profit re quirements paled into insignificance.
[189C; G; D E] (6) Here, the Court is dealing with a price to be fixed under a contract between the Oil and Natural Gas Commission and one set of industries in the State who wish to make a change over from the furnance oil system to that of gas supply with a view to increase their own profitability and gain an advantage, if possible, over other industries in the State.
In this context, Oil and Natural Gas Commission is entitled to a larger latitude and charge a price which the market can bear.
The only restriction is that, being a State instrumentality, it should not be a whimsical or capricious price but should be one based on relevant considerations and on some recognised basis.
[189H; 190A] (7) Cost plus is not a satisfactory basis in all situa tions.
May be the cost plus is an ideal basis where the commodity supplied is the product of a monopoly vital to human needs.
In that context the price fixed should be minimum possible as the customer or consumer must have the commodity for his survival and cannot afford more than the minimum.
Per Contra, there can be situations where the need of the consumer is not so vital and the requirements of the economic scene are such that the needs of the producer should be given greater consideration.
In such situations, the "plus" element in the cost plus basis (namely, the allowable profit margin) should not be confined to "a rea sonable return on the capital" but should be allowed to have a much larger content depending on the circumstances.
Given a favourable area of operation, commercial profits need not be either anathema or forbidden fruit even to public sector enterprises [191D E; G H] Anakapallee Case; , ; Venkatachalam vs Deputy Transport Commissioner; , , referred to.
(8) It would not be right to insist that the Oil and Natural Gas Commission should fix oil prices only on cost plus basis.
Indeed, its policy of pricing should be based on the several factors peculiar to the industries and its current situation.
and so long as such a policy is not 162 irrational or whimsical, the court may not interfere.
[195D] (9) Price fixation is generally a legislative function.
But Parliament generally provides for interference only at a stage where in pursuance of social and economic objectives or to discharge duties under the Directive Principles of State Policy, control has to be exercised over the distribu tion and consumption of the material resources of the commu nity.
[195F] M/s. Shri Sitaram Sugar Company Ltd. & Anr.
vs Union, J.T. ; Jagadamba Paper Industries vs Har yana State Electricity Board; , ; Kerala State Electricity Board etc.
vs M/s. S.N. Govinda Prabhu & Bros. & Ors.
, , referred to.
(10) It cannot be said that the Oil and Natural Gas Commission has acted arbitrarily in fixing the prices on the thermal equivalence basis; the fact that it has not done it on cost plus basis does not vitiate the price fixation.
The only question to be considered is as to whether the Oil and Natural Gas Commission has fixed a price based on relevant materials and on some known principle.
[200C] (11) The manufacture, distribution and consumption of gas has yet not attained the status of an essential commodi ty till recently.
At present, the industry is in the penum bral region where the commodity is free to be distributed at the manufacturer 's choice, but yet where such manufacturer being a State instrumentality, has to conform to Articles 14 and 19 of the Constitution.
At this stage of development of the industry a much wider latitude is permissible in the fixation of prices than the imposition of a "no profit, no loss" basis or a "cost plus" basis on the producer.
[200E G] (12) It is now well settled that a favourable treatment of public sector organisations, particularly ones dealing in essential commodities or service, would not be discriminato ry.
No tangible material has been brought to the Court 's notice which would support the plea of unfair discrimina tion.
[203E F] (13) The High Court rightly upheld the Oil and Natural Gas Commission 's right to insist on a munimum off take guar antee.
[202G] Amalgamated Electricity Co. Ltd. vs Jalgaon Borough Municipality, ; 163
|
Civil Appeal Nos. 33763382 of 1988.
From the Judgment and Order dated 26.11.1987 of the Central Administrative Tribunal.
Delhi in T. Nos. 950, 961, 972, 986, 1049, 94 1198 of 1985 and T. No. 383 of 1986.
B.B. Barua, Aruneshwar Gupta and Ms. A. Subhashini for the Appellants.
Juse P. Verghese, K.N. Rai and N.N Sharma for the Re spondents.
These appeals arose out of the judgment and order dated November 26, 1987 passed by the Central Adminis trative Tribunal, Principal Bench, Delhi directing that the petitioners (respondents in these appeals) will be entitled to the same relief as was granted to the petitioners by Anand, J. in the writ petitions CWP Nos.
278 of 1978 and 937 of 1978.
The matrix of the case, in short, is that the services of the respondents who were appointed as constables in Delhi Police in the years 1964 66 were terminated because of their participation in the agitation along with other police constables in April 1967.
In view of the public controversy and in deference to the views expressed in Parliament, a large number of agitating constables were taken back in service as fresh entrants.
Later, in view of the assurance given in the Parliament by the then Home Minister, prosecu tions were withdrawn and the dismissed constables were reinducted into service.
Some of the dismissed constables filed Civil Writ Petition Nos. 26/69 and 106/70 in the High Court of Delhi and the High Court by its judgment dated October 1, 1975 quashed the order of termination and the petitioners in that case were declared to be throughout in service.
The Police Administration preferred separate ap peals being LPA Nos. 24 and 25 of 1976.
Both these appeals were dismissed as barred by time and the judgment of the High Court dated October 1, 1975 became final.
Subsequently, some other constables whose services were similarly terminated but were not reinstated in service even as fresh entrants, filed writ petitions in the High Court of Delhi being CWP Nos. 270 and 937 of 1978.
These writ peti tions were heard by Anand, J. who rejected the contention raised by the respondents in the writ petitions regarding the delay and latches in moving the writ petitions, allowed the writ petitions quashing the impugned order of termina tion declaring that the petitioners will be deemed to have been in service and would be treated as such subject to certain conditions.
The Police 95 Administration filed LPA against this judgment which was dismissed on August 29, 1983.
Thereafter the respondents herein filed the writ petitions in the High Court against the order of termination of their services praying for quashing of the orders of termination and for reinstating them in service with effect from the respective dates of their termination of services and to treat them as being in service throughout and to award them all consequential benefits.
These writ petitions were subsequently transferred to the Central Administrative Tribunal, Delhi.
The Tribunal while rejecting the plea of the respondents that the peti tioners should be denied any relief because of delay and latches held that the claims of the petitioners (respondents in these appeals) was identical to the claim of the peti tioners in CWP Nos. 270 and 937 of 1978 whose petitions were allowed by the High Court of Delhi.
The Tribunal further held that the petitioners were entitled to the same relief as was granted to the petitioners by Anand, J. in C W P Nos.
270 and 937 of 1978.
Against this judgment and order the instant appeals on leave have been filed before this Court.
We have heard learned counsel for the parties.
Consider ing facts and circumstances as well as the judgment rendered by Anand J. in CWP Nos. 270 and 937 of 1978, we dismiss the appeals and confirm the judgment and order dated November 26, 1987 of the Tribunal with the modification that the respondents, excepting respondent No. 24, Kanwal Singh who is dead, will file affidavits stating whether they had been gainfully employed or not during the period of the termina tion of service and if so employed, they will state further in the affidavits the period of such employment.
The appel lants may verify the same and will be at liberty to deduct the pay and allowances during the period such gainful em ployment while determining the arrears of salary and allow ances for the period of termination.
We, however, make it clear that for the purposes of seniority, promotion and retiral benefits, the entire period between termination and reinstatement shall be taken into account.
It has been stated by the learned counsel for the appel lants that all the respondents have already been reinstated in service and they are now working.
The respondent No. 24, however, has expired and the back wages have already been paid to his widow.
In the facts circumstances of the case there will be no order as to costs.
N.P.V. Appeals dis missed.
| IN-Abs | The respondents, who were working as Constables in Delhi Police and whose services were terminated for participating in an agitation, filed writ petitions before the High Court, praying for quashing the order of termination, and for reinstatement, deeming them to have been in service through out, and awarding consequential benefits.
Relying on the decision of the High Court, as affirmed by the Supreme Court, in the case of some Constables, whose services were similarly terminated, the Central Administrative Tribunal, to whom the cases were transferred, held that the respond ents were entitled to be deemed to have been in service.
Dismissing the appeals, by the Administration, this Court, HELD: All the respondents should be deemed to be in service.
All of them, except respondent No. 24 who has expired and whose widow has already been paid back wages, should file affidavits, stating whether they had been gain fully employed or not during the period of the termination of service and if so employed, they will state further in the affidavits the period of such employment.
The appellants may verify the same and will be at liberty to deduct the pay and allowances during the period of such gainful employment while determining the arrears of salary and allowances for the period of termination.
However, for the purposes of seniority, promotion and retiral benefits, the entire period between termination and reinstatement shall be taken into account.
[95E F]
|
N: Writ Petition (Crl.) No. 247 of 1990.
(Under Article 32 of the Constitution of India).
S.S. Ray, Vijay Bahuguna, S.K. Gambhir, Sunil Kr.
Jain and Vijay Hansaria for the Petitioner.
Ashok Desai, Solicitor General, P parmeshwaran and A. Subba Rao for the Respondents.
The order of detention was issued by Nisha Sahai Achuthan, Joint Secretary to the Government of India who was specially empowered under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs & Psychotropic Substances Act and it recited that with a view to preventing the peti tioner from engaging in abetting and transportation of narcotic drugs, the said Sayyed Farook Mohd. @ Farooq @ Sayyed Farooq Isamuddin @ Anand be detained and kept in custody in the Yervada Central Prison, Pune.
The grounds of detention were also served on the same day i.e. February 15, 1990 immediately after his arrest by the Customs Authori ties.
On July 19, 1989 the staff of the Preventive Collector ate Customs, Bombay impounded two fiat cars bearing Nos.
GJV 5440 and MHY 2625.
The drivers of the said cars namely Aslam Mohammad Nazir and Mohammad Yakub Sheikh were apprehended.
On search of the two cars, 100 packets of brown coloured powder purporting to be narcotic drug of Pakistan origin was found out of the dickies of the cars.
The narcotic drug recovered from the dickies of the said cars weighed 100 kgs.
and its value in the market is about 2.34 crores.
Car No. GJV 5440 belonged to the petitioner detenu, Syed Farooq Mohammad and the other car No. MHY 2625 belonged to one C.P. Reddy, an Officer of international airport who was also apprehended and his statement u/s 108 of the was recorded.
It was revealed from his statement that this car was also used for transporting heroin along with petition er 's car.
The statements of Aslam Mohammad Nazir and Moham mad Yakub Sheikh who were apprehended as well as the state ment of other person i.e. Mohd. Azam Khan @ Wali Mohd. Khan @ Hameed Khan were also recorded u/s 108 of the by the Customs Officials.
From these statements it appeared that these persons were known to the detenu and they used to visit often the hotel 'Fisherman ' at Worli for disco.
The detenu i.e. Farooq Mohammad also used to go for disco in the said hotel 'Fisherman ' at Worli.
It has been stated by Aslam Mohammad Nazir that on July 19, 1989 he was sitting in room No. 106, 2nd Floor, Kali Building near Burtan apartment, Bombay Central (residence of the detenu) along with his friend, Mohd. Yakub Sheikh, driver of the other car.
Hameed also came there to meet Farooq Mohammad.
Hameed asked him and Mohd. Yakub Sheikh to go along with him to Kalina.
He told them that a truck had come to Kalina with some packets of contraband goods and that they were to take those packets near Jaslok hospital Thereafter, he took two fiat cars beating registration Nos.
GJV 5440 and MHY 2625 from Farooq.
He gave the keys of car No. GJV 5440 to him and car No. MID/2625 to Mohd. Yakub.
245 Thereafter, they drove those two cars to Kalina as per Hameed 's instructions and Hameed led them in a red maruti car bearing No. BLB 7445 where Hameed showed them one truck wherefrom four gunny bags were unloaded and kept in the dickies of the above said two cars.
It further appears from his statement that as per Hameed 's instructions after the cars were parked near Jaslok Hospital, they handed over the keys of both the cars to Hameed and he told them to contact him again in the evening on telephone No. 367373 of R.K. Hotel From Farooq 's place they contacted him over the telephone.
Hameed told them to wait there and he was coming there.
Thereafter Hameed took them in the Maruti Car to a place near Tejpal Road, Gowalia Tank.
There he showed them the same two fiat cars bearing Nos.
GJV 5440 and MHY 2625.
Hameed gave the keys of the car No. GJV 5440 to him and car No. MHY 2625 to Mohd. Yakub Sheikh and asked them to drive the said two cars following his car.
Similar statement was made by Mohd Yakub Sheikh which was recorded by the Customs Officials.
It has also been stated by them that they were told by Hameed that each of them will get Rs.5,000 as monetary consideration.
Yakub also stated that similar jobs have been done by him on 4 5 occa sions and he received Rs.5,000 each time from Hameed.
From the statement of Hameed recorded by the Customs Officials, it appears that on July 19, 1989 afternoon he collected two drivers namely Aslam Mohd Nazir and Mohd. Yakub Sheikh and two fiat cars from Farooq of Bombay Central.
This Farooq was introduced to him by Mohd. Nasir, a narcotic drug dealer who is now detained m ' Rajasthan in connection with a drug case.
The detaining authority searched the residence of the detenu on July 20, 1989 but nothing incriminating could be found therefrom.
After recording the statements of these persons and examining and considering the test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 which mentioned that the brown powder contained in those 100 packets is narcotic drug coming within the Narcotic Drugs and Psychotropic Substances Act, the impugned order of detention was made on December 20, 1989 and the petitioner was arrested and detained on service of the order of deten tion on February 15, 1990.
The challenge to the detention order had been made in the instant writ petition principally on four grounds which are as under: ( 1 ) The impugned order of detention has been passed rely ing on 246 the incident which is absolutely stale as the incident is dated July 19, 1989 whereas the impugned order has been passed on December 20, 1989.
(2) The statements of the three persons as recorded in the form of statement under section 108 of the came to the respondents on July 20, 1989.
The order should have been passed immediately on 20th July, 1989 but the order has been passed on December 20, 1989 i.e. after five months.
The impugned order, it is therefore contended, is illegal and has been passed on stale ground.
(3) Since no order of preventive detention has been passed against C.P. Reddy on the same evidence, no order should have been passed against the petitioner as his involvement is of the same nature and to the same extent as that of C.P. Reddy.
(4) Assuming that the order rejecting bail application has been considered though not evident from the grounds of detention supplied, yet the same has not been supplied to the petitioner.
This indicates that a relevant document has not been supplied to the petitioner which affected his right of effective representation guaranteed under Article 22(5) of the Constitution.
The petitioner after grant of bail by an order of this Court appeared before the respondents and applied for making statement u/s 108 of the .
He was arrested and the order of detention was served on him.
This material aspect should have been considered before serving the impugned order.
As regards the first ground, the counsel for the peti tioner has vehemently urged before this Court that the statements of the two persons i.e. Aslam Mohd. Nazir and Mohd. Yakub Sheikh the drivers of the said two cars handed over by the petitioner for carrying narcotic drugs and also the statement of Hameed, did not implicate the petitioner in the transportation and smuggling of the drugs and as such there was non application of mind on the part of the detain ing authority in clamping the order of detention on the petitioner.
The impugned order of detention is, therefore, vitiated by non application of mind.
The learned counsel referred to certain portions of the statements recorded by the Customs Officials u/s 108 of the and con tended with great emphasis that there was nothing to say that the petitioner was implicated in the smuggling or transportation of the heroin which has been seized from the dickies of the two cars.
247 This contention of the learned counsel is totally devoid of merit in as much as the statements of these three persons as recorded by the Customs Officials u/s 108 of the clearly implicate the petitioner who knowing fully that these two cars will be used for the purpose of transporta tion of prohibited drugs i.e. heroin and for selling of the same, handed over the keys of the two cars to the said two drivers who were sitting at his residence with Hameed on the asking of Hameed for carrying the contraband goods.
In these circumstances, it is meaningless to argue that the state ments of these three persons did not implicate the petition er.
All the aforesaid three persons were well known to the petitioner and were sitting at the petitioner 's residence, they were given the keys of the petitioner 's car as well as the keys of the car of C.P. Reddy which was brought to his garrage for repairs by one Ravi Poojari through whom C.P. Reddy sent his car for repairs.
The petitioner knowing fully well that these two cars will be used for the purpose of transporting contraband goods i.e. heroin from the truck stationed at Kalina from which four gunny bags containing the said heroin were unloaded and placed in the dickies of these two cars, handed over the keys of the cars.
It is also evident from these statements recorded by the Customs Offi cials that the petitioner along with those three persons used to visit hotel 'Fisherman ' for disco regularly and they were well known to the petitioner In these circumstances, it is beyond pale of any doubt that the petitioner knowing fully well that these two cars will be used for transporting contraband goods, i.e. heroin, handed over the keys of the cars for the said purpose.
Therefore, this challenge is wholly without any basis.
The next ground of challenge is that the cars were impounded and the contraband goods were seized on July 19, 1989 and the statements of these three persons were recorded by the Customs Officials on July 20, 1989 and the residen tial premises of the detenu were searched on July 20, 1989 but no incriminatory articles ' were found.
The detaining authority made inordinate delay in passing the impugned.order of detention against the detenu as late as on December 20, 1989 under section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988 to be hereinafter referred to as the 'said Act '.
It has been submitted that if there was any urgent necessity to prevent the petitioner, the order should have been passed immediately on 20th July, 1989 but it has been passed on December 20, 1989 i.e. after five months.
The impugned order is, therefore, illegal being passed on stale ground.
This contention is, in our considered opinion, devoid of any 248 substance as we have stated hereinbefore that the two cars were impounded on July 19, 1989 and brown sugar weighing 100 kgs.
was recovered from the dickies of these two cars on that day.
The said three persons i.e. Aslam Mohd. Nazir, Mohammad Yakub Sheikh and Hameed were examined and their statements were recorded by the Customs Officials on the next day i.e. July 20, 1989.
It is also evident that samples of the said contraband drugs were taken from each of the 100 packets and the same were sent for chemical examination.
The test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 were received by the Customs Department and the Customs Officials screened all these things and the detaining authority after considering all these, passed the order of detention on December 20, 1989.
In these circum stances, it cannot be said that the delay of five months in making the impugned order of detention rendered the deten tion illegal and bad as it was made on stale ground.
The detention order has been made with promptitude considering the relevant and vital facts proximate to the passing of the impugned order of detention.
This ground of challenge is, therefore, totally unsustainable.
The third ground of challenge is that the relevant document i.e. bail application of the petitioner and order made there on which might have been considered by the de taining authority were not supplied to the petitioner and as such his right of making effective representation guaranteed under Article 22(5) of the Constitution of India has been seriously prejudiced.
This ground is without any substance because firstly there is nothing to show from the grounds of detention that the rejection of this bail application by the Sessions Judge, Greater Bombay on January 5, 1990 was con sidered by the detaining authority before passing the im pugned order of detention and as such this being not re ferred to in the grounds of detention, the documents had not been supplied to the petitioner, and it, therefore, cannot be urged that non supply of this document prejudiced the petitioner in making effective representation against the order of detention.
Article 22(5) of the Constitution, undoubtedly, mandates that all the relevant documents re ferred to in the grounds of detention and which are consid ered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu.
The said document was not considered by the detaining authority in coming to his subjective satisfaction and in making the impugned order of detention.
The non furnishing to the detenu of the said document i.e. the bail application and the order passed thereon, does not affect in any manner whatsoever the detenu 's right to make an effective representation in compliance with the provi sions of Article 22(5) of 249 the Constitution of India.
This ground, therefore, is wholly untenable.
It has been contented in this connection by referring to the order made by this Court on January 22, 1990 in the Special Leave Petition filed by the petitioner before this Court against the rejection of his application of anticipa tory bail whereon this Court made an interim order while issuing show cause notice on the Special Leave Petition and directing that in the meantime the petitioner shall not be arrested, that the impugned order of detention is illegal.
This order was made in the Special Leave Petition which did not challenge the impugned order of detention but questioned the rejection of the application for anticipatory bail.
The order of detention was made on December 20, 1989 i.e. prior to the passing of the said order dated January 22, 1990.
The said order of this Court has, therefore, nothing to do with the subjective satisfaction arrived at by the detaining authority in passing the order of detention in question.
It has been urged in this connection that the facts in between the passing of the detention order and implementing the detention order have to be taken into account for consider ing whether the detention order should be served on the detenu even after passing of the order by this Court dated January 22, 1990 stating that the petitioner shall not be arrested in the meantime.
The counsel for the petitioner referred the case of Binod Singh vs District Magistrate, Dhanbad, Bihar and Ors., Wherein the detenu was served with the order of detention u/s 3(2) of the National Scurity Act while he was in jail custody in connection with the criminal charge u/s 302 I.P.C.
The question arose whether in such cases where the detention order which was passed before the detenu surrendered before the Court and was taken into custody in a criminal case, should be served on the detenu after he has surrendered in the criminal case and was in jail as an under trial prison er.
It has been held by this Court that: " . . the power of directing preventive detention given to the appropriate ,authorities must be exercised in excep tional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection.
There must be awareness of the facts necessitating preventive custody of a person for social defence.
If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised . . " 250 This ruling as well as the ruling in Suraj Pal Sahu vs State of Maharashtra and Ors., ; relied upon by the counsel for the petitioner have no application to the instant case in as much as in the instant case the detenu was not arrested and imprisoned in jail till February 15, 1990 when the order of detention was served on him and he was arrested by the Customs Authorities.
Considering all these, this ground of challenge is also wholly untenable.
The next ground of challenge is that the detenu appeared before the respondents and applied to them to record his statement u/s 108 of the .
He was then arrested and the order of detention was served on him.
It is relevant to mention in this connection the averments made in para 10 of the counter affidavit filed on behalf of the respondents which is to the effect that in fact, when the petitioner presented himself, his statement was recorded on February 15, 1990 and it was only after the recording of the state ment that the petitioner was detained in pursuance of the detention order.
It has also been stated in para 11 of the said affidavit that there existed sufficient grounds which impelled the detaining authority to pass the detention order against the petitioner.
It has also been stated in para 12 of the said affidavit that a detention order under the Prevention of Illicit Traffic in Narcotic Drugs and Psycho tropic Substances Act, 1988 can be legally issued even if there is a single and solitary case against a person.
It has also been stated that the detaining authority carefully scrutinised all the relevant documents and facts of the case and arrived at his subjective satisfaction that preventive order of detention of the petitioner is necessary to prevent him from smuggling and transporting contraband goods and as such the impugned order of detention is not at all illegal or bad and the same is not vitiated by non application of mind or non consideration of relevant materials.
This ground, therefore, is not sustainable.
The last ground of challenge is that there has been inordinate delay in arresting the detenu and in serving the detention order i.e. on February 15, 1990 after a lapse of 1 month and 25 days and no serious attempt was made to arrest the petitioner and to serve the order of detention on him in accordance with the provisions of Section 8 of the said Act which specially provides for enforcing the provisions of Section 82, 83, 84 and 85 of the Code of Criminal Procedure.
It has been urged in this connection that this unusual delay in arresting the petitioner shows that there was no real and genuine apprehension in the mind of the detaining authority regarding the necessity of detention of the petitioner and as such continued detention of the petitioner is 251 illegal and contrary to law.
It is apropos to refer in this connection to the averments made on behalf of the respond ents in para 7 of the counter affidavit.
It has been stated therein that the Department served two notices, one of which was accepted by his mother and the second by his brother, Nizamuddin for handing over the same to the petitioner, as the petitioner was not available in the house.
It has been submitted that the petitioner deliberately avoided making himself available to the Department and thus delayed comple tion of investigation of the case.
Instead of appearing before the Department, the petitioner applied to the Ses sions Judge for anticipatory bail which was rejected on 5.1.1990.
Thereafter, the petitioner approached this Court for anticipatory bail, which was granted on 22.1.1990.
It is, therefore, evident that the petitioner absconded and tried to evade arrest pursuant to the order of detention even though he knew the passing of such an order by the detaining authority.
It is relevant to mention here the observations of this Court in Shafiq Ahmad vs District Magistrate, Meerut and Ors., [1989] 4 SCC 556 to the follow ing effect: " . .
We are, however, unable to accept this contention.
If in a situation the person concerned is not available or cannot be served then the mere fact that the action under Section 7 of the Act has not been taken, would not be a ground to say that the detention order was bad." In Bhawarlal Ganeshmalji vs State of Tamil Nadu & Anr., ; an order of detention was made against the appellant u/s 3(1) of COFEPOSA Act in December, 1974.
It could not be executed because the detenu was absconding and could not be apprehended despite a proclamation made under Section 7 of the Act.
More than three years after the order was passed, the appellant surrendered in February, 1978.
It was held that there must be a 'live and proximate link ' between the grounds of detention and the avowed purpose of detention.
But in appropriate cases the Court can assume that the link is 'snapped ' if there is a long and unex plained delay between the date of the order of detention and the arrest of the detenu.
Where the delay is not only ade quately explained but is found to be the result of the detenu 's recalcitrant or retractory conduct in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened.
It was, therefore, held that the delay in serving the order of detention on the detenu does not viti ate the order.
In the instant case, it has been clearly averred in the affidavit that two notices were served, one on the petition er 's mother and another 252 on the petitioner 's brother directing the petitioner to appear before the detaining authority.
The petitioner, it has been stated, has intentionally absconded and thereby evaded arrest.
These averments have not been denied by the petitioner.
In these circumstances it cannot be said that the delay was not explained and the rink between the grounds of detention and the avowed purpose of detention has been snapped.
Reference may also be made in this connection to the decision in T.A. Abdul Rahman vs State of Kerala and Ors., ; This ground of challenge is, there fore, devoid of any merit.
It has also been submitted on behalf of the petitioner that the representation made by the detenu on February 28, 1990 both to the Chairman, Advisory Board as well as to the Central Government were not disposed of till March 29, 1990 when the said representation was rejected by the Central Government.
It has been submitted that this long delay of one month made the continued detention of the petitioner invalid and illegal.
The counsel for the respondents has produced before this Court the relevant papers from which it is evident that after receipt of the representation of the petitioner, it was sent to the detaining authority for his comments and immediately after the comments of the detaining authority were received the same were processed and put up before the Minister concerned who rejected the representa tion after considering the comments of the detaining author ity and the State Government.
It has been urged on behalf of the petitioner that the comments were not duly considered.
This submission is not at all tenable in as much as it is evident from the relevant papers produced before this court that the Central Government passed the order after consider ing the comments of the detaining authority.
So this submis sion is without any substance and the same is rejected.
It has been further submitted that the counter affidavit was sworn not by the detaining authority but by one Shri A.K. Roy, Under Secretary in the Ministry of Finance, De partment of Revenue, New Delhi and as such this affidavit cannot be taken into consideration and the averments made therein are not relevant to explain the unusual delay in serving the order of detention as well as in rejecting the representation.
In this connection some rulings of this Court have been cited at the bar.
In Madan LaI Anand vs Union of India and Ors.
, ; the counter affidavit filed on behalf of the respondents had been af firmed by Kuldip Singh, Under Secretary to the Government and not by the detaining authority himself.
It was urged that the counter affidavit being not sworn by the detaining authority, the averments made therein should not be taken notice of.
It was held 253 that there being no personal allegation of mala fide or bias made by the detenu against the detaining authority in per son, the omission to file affidavit in reply by itself is no ground to sustain the allegation of mala fides or non appli cation of mind.
Similar observation has been made by this Court in Mohinuddin vs District Magistrate, Beed and Ors.
, ; which is to the following effect: " . .
In return to a rule nisi issued by this Court or the High Court in a habeas corpus petition, the proper person to file the same is the District Magistrate who had passed the impugned order of detention and he must explain his subjective satisfaction and the grounds therefore; and if for some good reason the District Magistrate is not available, the affidavit must be sworn by some responsible officer like the Secretary or the Deputy Secretary to the Government in the Home Department who personally dealt with or processed the case in the Secretariat or submitted it to the Minister or other officer duly authorised under the Rules of Business framed by the Government under Article 166 of the Constitution to pass orders on behalf of the govern ment in such matters.
" Reference has also been made therein to the cases of Niran jan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar, ; and Mohd. Alam vs State of West Bengal, ; In the instant case, the counter affidavit has been filed by Shri A.K. Roy, Under Secretary to the Government, Ministry of Finance, Department of Revenue, New Delhi al though the order of detention was made by Nisha Sahai Achu than, Joint Secretary to the Government of India, Ministry of Finance.
It is evident that the said Under Secretary was dealing with the papers relating to the particular order of detention and he placed those papers before the Minister concerned.
In these circumstances, the counter affidavit filed on behalf of the respondents cannot but be considered and there is no allegation of mala fide or malice or extra neous consideration personally against the detaining author ity in making the impugned order of detention.
This conten tion is, therefore, not tenable.
254 In the premises aforesaid we dismiss the writ petition and hold that the impugned order of detention is quite in accordance with law and the same is valid.
The observations made herein are confined to this application.
T.N.A. Petition dismissed.
| IN-Abs | On July 19, 1989, the Customs Department seized narcotic drugs from two cars one belonging to the petitioner detenu and the other to his associate.
The statements of the driv ers were recorded under Section 108 of the on the very next day.
Reports of the chemical examination of the seized drugs confirmed that they were narcoting drugs under the prevention of Illicit Traffic in Narcotic Drugs & Psychotropic Substances Act, 1988.
Accordingly, with a view to preventing the petitioner from engaging in abetting and transportation of narcotic drugs the detaining authority passed a detention order under Section 3(1) of the Act on 20th December, 1989 i.e. after about 5 months of seizure of the narcotic drugs.
But the petitioner was arrested and detained on service of the order of detention on 15th Febru ary, 1990.
The petitioner filed a writ petition in this Court challenging the validity of the detention order contending; (1) that it was illegal because 241 (a) there was inordinate delay in serving the detention order and arresting the detenu; (b) it was passed on stale ground i.e. after five months of the seizure of narcotic drugs; and (c) there was long delay in disposing the dete nu 's representation; (2) the non supply of relevant docu ments i.e. bail application and the order made thereon to the detenu seriously prejudiced his right to make effective representation under Article 22(5) of the Constitution; (3) the averments made in the counter affidavit cannot be taken into consideration because it was not sworn by the detaining authority himself and (4) the detention order was vitiated for non application of mind.
Dismissing the writ petition, this Court, HELD: 1.
There must be a 'live and proximate link ' between the grounds of detention and the avowed purpose of detention.
But In appropriate cases the Court can assume that the link is 'snapped ' if there is a long and unex plained delay between the date of the order of detention and the arrest of the detenu.
Where the delay is not only ade quately explained but is found to be the result of the detenu 's recalcitrant or refractory conduct in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened [25 IF G] 2.1 In the instant case, the averments that the Depart ment served two notices one on the petitioner 's mother and another on his brother directing him to appear before the detaining authority have not been denied by the petitioner.
Instead he intentionally absconded and thereby evaded ar rest.
Therefore, it cannot be said that the delay was not explained and the link between the grounds of detention and the avowed purpose of detention has been snapped.
[251H; 252A B] Shafiq Ahmad vs District Magistrate Meerut and Ors., [1989] 4 SCC 556; Bhanwarlal Ganeshmalji vs State of Tamil Nadu & Anr., ; and T.A. Abdul Rahman vs State of Kerala and Ors., ; , relied on.
In the instant case the cars containing brown sugar were impounded on July 19, 1989 and statements of the driv ers were recorded next day.
Reports of the chemical examIna tion of contraband drugs were received on 29th September, 1989, 13th October, 1989 and 16th November, 1989.
The cus toms officials screened all these thIngs and the detaInIng authority after considering all these things passed the order of detention on December 20, 1989.
There fore, it cannot be held that the delay of five months in making the impugned order of detention 242 rendered the detention illegal and bad as it was made on stale ground.
The detention order has been made with promp titude considering the relevant and vital facts proximate to the passing of the impugned order of detention.
[248A C] 3.
It is evident from the record that after receipt of the representation of the petitioner, it was sent to the detaining authority for his comments and immediately after the comments of the detaining authority were received the same were processed and put up before the Minister concerned who rejected the representation after considering the com ments of the detaining authority and the State Government.
It is also evident that the Central Government passed the order after considering the comments of the detaining au thority.
Therefore, the contention that the detention order was passed by the Central Government without considering the comments of the detaining authority and there was long delay in disposing the detenu 's representation affecting the validity of detention is without any substance.
[252C D; E F] 4.
Article 22(5) of the Constitution mandates that all the relevant documents referred to in the grounds of deten tion and which are considered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu.
[248F] 4.1 In the instant case the relevant document i.e. the bail application and the order made thereon was not consid ered by the detaining authority in coming to his subjective satisfaction and in making the impugned order of detention.
Therefore, the non furnishing to the detenu of the said document does not affect in any manner whatsoever the dete nu 's right to make an effective representation in compliance with the provisions of Article 22(5) of the Constitution of India.
[248U; 249A] Binod Singh vs District Magistrate, Dhanbad, Bihar & Ors., and Suraj Pal Sahu vs State of Maha rashtra & Ors.
; , , held inapplicable.
In the absence of personal allegation of mala fide or bias made by the detenu against the detaining authority in person, the omission to file affidavit in reply by itself is no ground to sustain the allegation of mala fides or non application of mind.
In the absence of detaining authority, the affidavit must be sworn by some responsible officer who personally dealt with or processed the case in the Secre tariat or submitted it to the Minister.
[253A; D] 243 5.1 In the instant case, the counter affidavit has been filed by the officer who was dealing with the papers relat ing to the particular order of detention and he placed those papers before the Minister concerned.
Therefore, the counter affidavit filed on behalf of the respondents cannot but be considered and there is no allegation of mala fide or malice or extraneous consideration personally against the detaining authority in making the impugned order of detention.
[253G H] Madan Lal Anand vs Union of India & Ors.
, ; ; Mohinuddin vs District Magistrate, Beed and Ors., ; ; Niranjan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar, ; and Mohd. Alam vs State off West Bengal; , , relied on 6.
The persons examined under section 108 of the were well known to the petitioner.
The statements of these persons clearly implicate the petitioner who know ing fully that the two cars will be used for the purpose of transportation of prohibited drugs i.e. heroin and for soiling of the same, handed over the keys of the two cars to the driven Therefore, the contention of the petitioner that the detention order was vitiated by non application of mind is devoid of merit.
[247A B; 246F] 7.
Accordingly, the impunged order of detention is quite in accordance with law and the same is valid.
[254A]
|
Civil Appeal No 5014 of 1984.
From the Judgment and Order dated 3.9.84 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. 1604 of 1981 C in Order No. 674 of 1984 C. 101 A. Subba Rao for the Appellant.
Soli J. Sorabjee, Attorney General, Ms. Indu Malhotra and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by SAWANT, J.
The appellant imported Top Line Tube Winder Enddless Belts of the value of Rs.31,101 from the United Kingdom under the Bill of Entry dated 6.8.1979.
The goods were assessed to duty under heading 40.05/16(3) at 40% plus countervailing duty at the rate of 25% under Item 16 A(4) of the .
The appellant thereafter made an application for refund of the excess of duty so charged contending that the goods were in fact liable to be classi fied under heading 59.16/17 and without countervailing duty.
The Assistant Collector rejected the claim by his order of 12.10.1979.
Against it, the appellants preferred an appeal under Section 128 of the (hereinafter referred to as the 'Act ') to the Appellate Collector of Customs.
On May 2, 1981, the Appellate Collector allowed the appeal holding that the goods were classifiable under head ing 59.16/17. 2.
On November 21, 1981, the Government issued a notice to the appellant under Section 13 1(3) of the Act asking him to show cause as to why the goods should not be classified under heading 39.07 which attracted duty at 100% ad valorem and also to show cause as to why the order of 2nd May, 1981 passed by the Appellate Collector should not be annulled.
Against the said show cause notice, the appellant preferred an appeal to CEGAT.
The contention with regard to limitation was that the show cause notice was barred by limitation as laid down by sub section (5) of Section 131 read with Sec tion 28 of the Act, which was six months from the date of short levy and in any case six months from the date of the Appellate Order.
The Tribunal dismissed the appeal holding that the notice was in time and also further that the as sessment proposed to be made under heading 39.07 was proper.
It is against this decision of September 3, 1984 of the Tribunal that the present appeal is preferred.
Before us the only contention raised is that the show cause notice was barred by limitation and hence, the Govern ment had no power to annul the Appellate Collector 's Order under Section 131(3) of the Act.
The argument is that the limitation for initiating action under sub section (3) of Section 131 is laid down in sub section (5) 102 thereof.
For, the cases in which the Central Government would initiate action under sub section (3) can only be the cases either of the absence of levy or of the short levy or of refund.
In any of the said case,the limitation laid down under sub section (1) read with subsection (3) of Section 28 is six months.
In the present case, the levy of duty was on 6.8.1979 and the order of the Appellate Collector was of May 2, 1981, while the show cause notice was issued on November 21, 1981.
In any case, therefore, the notice was beyond six months and hence barred by limitation.
According to us, this contention is not available to the appellant in view of the decision of this Court in Geep Flashlight Industries Ltd. vs Union of India & Ors., ; in which it is held that the provisions of Section 13 1(5) and therefore the limitation laid down in Section 28 of the Act do not apply to the action taken by the Govern ment under Section 131(3).
The relevant observations are as follows: "Once the provisions contained in section 131(3) are at tracted, the Central Government may of its own motion annul or modify any order passed under Section 128 or Section 130.
This provision is the power of Central Government to annul or modify any order.
This power is exercised by the Central Government suo motu.
Of course the power is to be exercised on giving notice to the person concerned.
The provisions contained in section 131(5) of the Act speaks of limitation only with regard to non levy or short levy.
It is significant that section 131(5) does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify any order of erroneous refund of duty.
The provisions contained in section 13 1(5) with regard to non levy or shortlevy cannot be equated with erroneous refund inasmuch as the three categories of errors in the levy are dealt with separately.
Further, even if it was held that the limitation as laid down in Section 28 would apply to the initiation of action under Section 131(3), since the appellate order has only allowed the appeal of the appellant declaring him as being entitled to the refund, and no refund has yet been made, the action of the Government under Section 131(3) is 103 clearly not barred by limitation.
Section 28 of the Act states that when any duty has been erroneously refunded, the proper Officer may, within six months from the relevant date, serve notice on the persons chargeable with the duty to whom the refund has erroneously been made, requiring them to show cause why they should not pay the amount specified in the notice.
Sub section (3) of Section 28 then defines the expression "relevant date" for the purposes of sub section (1).
Clause (c) of the said sub section (3) states that the "relevant date" in a case where duty has been erroneously refunded means the date of refund.
The decision in Geep Flashlight Industries Ltd. case (supra) has while dealing with this very aspect pointed out that in the case of erroneous refund, the notice under Section 28 of the Act has to be given within six months from the date of "actual" refund.
If no refund has in fact been made, limitation cannot be said to arise inasmuch as the "relevant date" under Section 28 in the case of erroneous refund speaks of the date of refund.
The Order granting refund is not actual refund.
Admittedly, in the present case no refund has been made to the appellant under the Appellate Customs Order dated May 2, 1981.
Hence, even if it is held that the provi sions of sub section (3) of Section 131 are governed by sub section (5) thereof and, therefore, the limitation laid down under Section 28 of the Act applies to the action of the Government under Section 131(3), the present show cause notice is not barred by limitation.
Even otherwise we are also of the view that the orders which are contemplated under sub Section (3) of Section 131 are orders passed under Section 128 or Section 130 only, namely, the order passed in appeal by the Appel late Collector or in revision by the Board respectively.
Sub section (3) does not speak of any other order.
That is clear from the language of the said sub section which reads as follows: "(3) The Central Government may of its own motion annul or modify any order passed under Section 128 or Section 130".
It is, therefore, clear from the provisions of the said sub section that it does not give power to the Central Government to act suo motu to annul or modify an order passed by the original assessing authority.
On the other hand, the provisions of sub section (5) of Section 131 contemplate proceedings against actions of the original assessing authority which have resulted in either not levy ing or short levying the goods.
That sub section by implica tion also covers cases of refunds.
when goods are cleared initially under a provisional assessment, and 104 the final assessment shows that the assessee is entitled to a refund of duty charged in excess earlier.
But all the cases whether of non levy, short levy or of refund which are contemplated in sub section (5) are cases arising out of the acts of omissions and commissions of the original assessing authority, and it is when such orders passed by the original assessing authority which are sought to be annulled or modified, that the provision of limitation contained in Section 28 applies.
Thus the situations contemplated by sub section (3) and by sub section (5) are mutually exclusive in that whereas sub section (3) speaks of the annulment or modification of the appellate or revisional orders, sub section(5) speaks of the orders passed by the original assessing authority.
Hence, the limitation applies when Government seeks to annul or modify orders of the original assessing authority under sub section (5) and not when the Government takes action to annul or modify the appellate or revisional orders under sub section (3).
This interpretation is also consistent with the provisions of sub sections (1) and (4) of Section 13 1.
Sub section (1) speaks only of appellate and revisional orders passed under Sections 128 and 130 respectively and of no other order.
Similarly, clauses (a) and (b) of the sub section (4) make a distinction between the appellate and revisional orders passed under Sections 128 and 130 respec tively.
Where an appellate or revisional order has already been passed enhancing any penalty or fine in lieu of confis cation or confiscating goods of greater value, it does not permit Government to pass any order again enhancing the penalty or fine.
It, however, permits passing of such order in any other case, but within a period of one year from the date of the order sought to be annulled or modified.
Hence the legislature has in Section 131 all along maintained the distinction between the orders passed under Sections 128 and 130, and other orders.
Viewed from this angle also, it is necessary to read the provisions of sub section (3) of Section 131 as being applicable only to orders passed under Sections 128 and 130 and the provisions of sub section (5) as being confined to orders other than those passed under Sections 128 and 130.
Hence, the conclusion is inescapable that the limita tion prescribed by Section 28 is applicable when under sub section (5) of Section 131 the Government seeks to annul or modify orders other than those passed under Sections 128 and 130.
It is not applicable to the action taken under sub section (3) for annulling or modifying orders passed under Sections 128 and 130.
Since in the present case the 105 impugned show cause notice is issued to annul/modify the order passed by the Appellate Customs under Section 128, it will have to be held that it is not barred by limitation.
In this view of the matter the appeal fails and is dis missed with costs.
PUNCHHI.
J. Has the Central Government violated the bar of limitation while exercising suo motu revisional powers under section 131 of the is the limited question which crops up for consideration in the instant appeal against the judgment and order of the Customs, Excise & Gold (Control) Appellate Tribunal.
New Delhi dated Septem ber 3, 1984 passed in Appeal No. CD(SB)(T) 1604/8 I C.
The appellant imported a consignment of top line tube winder endless belts valued at Rs.31,101.
The consignment came from the United Kingdom and was covered under a Bill of Entry dated 6.8.1979.
The goods were assessed to duty under heading 40.05/16(3) at 40% plus counter vailing duty at the rate of 25% under Item 16 A(4) of the .
The appellant lodged a refund claim with the Assistant Collector on grounds which are factual in nature, asserting that the goods had not correctly been assessed to duty and that they should have been assessed under a different head ing 59.16/17 of the .
On 12.10.1979 the claim for refund was rejected by the Assistant Collector by an order.
On appeal by the appellant the Appellate Col lector of Customs took a different view as to the nature of the consignment imported and assessed it to duty under heading 59.16/17 allowing the appeal with consequential relief.
On the report of the Collector of Customs the Gov ernment issued a suo motu show cause notice dated 21.11.1981 prima facie being of the view that the Appellate Collector was not correct in classifying the goods under heading 59.16/17 of the , as also that the original classification under heading 40.05/16(3) done by the Assistant Collector was also not in order.
The matter thus was sent to the Customs, Excise & Gold (Control) Appel late Tribunal, New Delhi where the plea of limitation was raised by the appellant besides raising factual pleas with regard to the nature of the consignment and its liability to be classified under an appropriate head.
The Tribunal, 106 instead, on facts classified the consignment as articles of plastic under heading 39.07 of the and not under heading 59.16/17 as done by the Appellate Collector and thus set aside the order of the Appellate Collector allowing the revision.
The plea of time bar raised by the appellant was re pelled by the Tribunal in the following words: "On the question of time bar we find that the Appellate Collector issued the orders on 4.7.1981, the show cause notice was issued on 21.11.1981 and served on the party on 24.11.1981.
The show cause notice has therefore been issued within the period of six months.
Section 13 1(5) of the refers to a case of non levy and short levy.
For those cases the time limit of section 128 would be applicable.
Section 131(3) provides for the Central Gov ernment to annul or modify any order passed under section 128 or 130.
The Supreme Court in 1983 ELT 1596 held as follows : 'The provisions contained in section 13 1(5) of the Act speak of limitation only with regard to non levy or short levy.
It is significant that section 131(5) does not speak of any limitation in regard to revision by the Central Government of its own motion to annul or modify any order or erroneous refund of duty.
The provisions contained in sec tion 13 1(5) with regard to non levy or short levy cannot be equated with erroneous refund inasmuch as the three catego ries of errors in the levy are dealt with separately. ' That was a case of refund.
In 1984 ( 16) ELT 332 (Collector of Customs, Bombay vs Nav Bharat Enterprises, New Delhi, ) it was held that section 13 1(3) of the empower the Central Government to annul or modify any order passed under that Act and that the time limit provided in section 131(5) would not be applicable to the notice issued under 131(3).
Further 'relevant date ' as provided under the third proviso to section 36(2) will be computed from the date of passing of the Appellate Order and not from the date of passing the order by the original assessing authority.
The show cause notice is therefore in time." 107 Learned counsel for the appellant has confined this appeal to the question of limitation.
The fact that the consignment was classifiable under head 39.07 of the Customs Tariff Act, 1979 remains in these circumstances unques tioned.
Section 131 of the is as follows: "131: REVISION BY CENTRAL GOVERNMENT (1) The Central Government may, on the application of any person aggrieved by (a) any order passed under section 128, or (b) any order passed under section 130 otherwise than on the application of any aggrieved person, or (c) any order passed on the application of any aggrieved person under section 130 where the order is of the nature referred to in either of the provisions to sub section (1) of that section, annul or modify such order.
(2) An application under sub section (1) shall be made within six months from the date of the communication to the applicant of the order against which the application is being made: Provided that the Central Government may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the aforesaid period of six months, allow it to be presented within a further period of six months.
(3) The Central Government may of its own motion annul or modify any order passed under section 128 or section 130.
(4) No order enhancing any penalty or fine in lieu of con fiscation or confiscating goods of greater value shall be passed under this Section (a) in any case in which an order passed under 108 section 128 or section 130 has enhanced any penalty or fine in lieu of confiscation or has confiscated goods of greater value; and (b) in any other case, unless the person affected by the proposed order has been given notice to show cause against it, within one year from the date of the order sought to be annulled or modified.
(5) Where the Central Government is of opinion that any duty of customs has not been levied or has been shortlevied, no order levying or enhancing the duty shall be made under this section, unless the person affected by the proposed order is given notice to show cause against it within the time limit specified in section 28." The Tribunal seems to take the view that sub section (3) of section 131, if employed, eclipses sub section (5) of sec tion 131.
In other words, the Tribunal seemingly is of the view that when the Central Government on its own motion proposes to annul or modify any order passed under section 128 or section 130 then it is not lettered by the time limit specified in section 28 even though it entertains the opin ion that any duty of customs has either not been levied or has been shortlevied.
This approach appears to us to be wholly erroneous.
There is nothing in the language of sub section (3) to suggest that it over powers or renders otiose sub section (5).
Both the sub sections need not militate against each other, components as they are of the singular power conferred by the legislature on the Central Government for revision.
The harmonious way to read these sub sections would be that the Central Government is empowered on its own motion to annul or modify any order passed under section 128 or section 130 but if it is an order whereby any duty of customs has either not been levied or has been short levied, the Central Government can levy or enhance the duty by giving the person affected by the proposed order a notice to show cause against it but within the time limit specified in section 28, which is six months from the date of the order.
Section 28 envisages three kinds of errors in regard to custom duties.
One is non levy.
This means that the goods were not classified to duty whereas they could be.
The second is short levy.
In this could be included a case in which the goods could be classified in one Entry but were erroneously classified under another Entry resulting in shortlevy of customs duty, or the like.
The third is the case of erroneous refund.
This category springs up in the process of assessment only where two kinds of errors.
i.e., non levy or short levy, may occur and lead to an erroneous refund.
Since levy is linked to assessment, a case 109 for refund may arise which may be erroneous.
These are the three categories of known errors in regard to duties.
In Geep Flashlight Industries Ltd. vs Union of India and Others, ; , this Court had occasion to deal with a case of erroneous refund and while examining the scope of section 28 of the Act ruled as follows: "The provisions contained in section 28 of the Act speak of non levy, short levy and erroneous refund.
The provisions state that notice of non levy, short levy or erroneous refund should be given within six months from the relevant date.
Section 28(3) states what the 'relevant date ' means.
In the case of duty not levied, the 'relevant date ' is the date on which the proper officer makes an order for the clearance of the goods.
In a case where duty is provisional ly assessed under section 18 of the Act, the relevant date is the date of adjustment of duty after the final assess ment.
In a case where duty has been erroneously refunded, the relevant date is the date of refund.
In any other case, the relevant date is the date of payment of duty.
" It can thus be clearly gathered that in cases of duty not levied or short levied the "relevant date" is the date on which the concerned officer makes some orders for the clear ance of the goods on payment of no duty or the date of adjustment of duty on framing the final assessment, as the case may be.
Now reverting to the facts of the instant case it is evident that the goods were classified and assessed to duty under one heading, say A, on 6.8.1979 whereafter claim for refund was made by the appellant which was rejected by the Assistant Collector on 12.10.1979.
The exercise of the Assistant Collector in levying duty under heading A, when it should have been levied under another heading, say C, de spite the appellant 's claim that it should be still under another heading, say B, was a case of short levy in so far as the goods were classified as attracting lesser duty under heading A whereas higher duty should have been attracted on classifying it under heading C.
So the orders of levy of duty had two facets.
The duty from the point of view of the appellant had been excessively levied necessitating him to challenge the same and seek refund.
On the other hand, from the point of view of the revenue the duty had been short levied giving rise cause to have it levied under proper heading.
If these two facets are understood in the right perspective, it was incumbent on the Central Government to exercise its suo motu power under sub section (3) read with sub section (5) of section 131 within six months from 6.8.1979, the date when 110 the duty was short levied and undeniably the Central Govern ment did not take such timely step even though it had a cause to do so.
The appellant, however, made claim for the refund of the excess duty levied taking shelter under anoth er heading and on its refusal by the Assistant Collector on 12.10.1979 had its appeal accepted on 2.5.1981 from the Appellate Collector who ordered refund.
The Central Govern ment then got a cause to take suo motu action under section 13 1(3) of the to annual or modify the order of the Appellate Collector, or the actual refund itself under that order, in accordance with Geep Flashlight Industries case (supra).
It being a case of erroneous refund sub section (3) of section 131 was attracted and not sub section (5) of section 131 as at that point of time it was not a case of non levy or short levy, and these two catego ries of errors could not be equated with the error of erro neous refund inasmuch as these three categories of errors are treated separately in the scheme of things.
Merely because the Central Government had the power to suo motu revise the orders of refund passed by Appellate Collector it does not follow a fortiori that it had the vower to revise the orders of short levy at that stage.
The ultimate analy sis is that if there was an error of short levy in the order of the Assistant Collector in classifying goods at A instead of C as claimed by the revenue and not classifying them at B as claimed by the importer, then on the grant of relief by the Appellate Collector classifying them under heading B, can at best give occasion to the Central Government to annul or modify the classification brought under head B, and so as to leave it classified at heading A, but could not have it re classified under heading C unless the exercise was under taken within the period of limitation prescribed under section 28 as required under sub section (5) of section 131 of the .
The error committed by the Tribu nal, for the view afore expressed,, is so patent that it cannot be allowed to go uncorrected as a tolerable error.
Inevitably this appeal is to be, and is, hereby allowed.
modifying the orders of the Tribunal passed in Appeal No. CD(SB)(T) 1604/81 C so as to revive the order of the origi nal assessment dated 6.8.1979 and the order of the Assistant Collector of Customs, Madras dated 12.10.1979, keeping upset the orders dated 2.5.1981 of the Appellate Collector of Customs, Madras passed in Appeal No C, 3,,2 12/80.
The appellant shall have their costs.
ORDER According to the decision of the majority.
the appeal stands dismissed with costs.
| IN-Abs | The appellant imported Top Line Tube Winder Endless Belts which were assessed to duty under heading 40.05/16(3) at 40% plus countervailing duty at the rate of 25% under Item 16 A(4) of the .
Thereafter, the appellant made an application for refund of the excess of duty so charged contending that the goods were in fact liable to be classified under heading 59.16/17, and without countervailing duty.
The Assistant Collector rejected the claim by his order dated October 12, 1979 and against it the appellant pre ferred an appeal under Section 128 of the to the Appellate Collector who allowed the appeal holding that the goods were classifiable under heading 59.16/17.
The Government, however, issued a suo motu show cause notice dated November 21, 1981 to the appellant under Sec tion 131(3), asking the appellant to show cause as to why the goods should not be classified under heading 39.07 which attracted duty at 100% ad valorem, and also as to why the order dated May 2, 1981 passed by the Appellate Collector should not be annulled.
Against the aforesaid show cause, the appellant pre ferred an appeal to the Customs Excise and Gold Control (Appellate) Tribunal, contending that the show cause notice was barred by limitation under sub section (5) of Section 131 read with Section 28 of the Act, which was six months from the date of short levy, and in any case six months from the date of the Appellate order.
97 The Tribunal dismissed the appeal holding that the notice was in time, and that the assessment proposed to be made under heading 39.07 was proper and set aside the order of the Appellate Collector allowing the revision.
In the appeal to this Court, the question for considera tion was: whether the Central Government violated the bar of limitation while exercising suo motu revisional powers under Section 13: of the .
Dismissing the appeal by a 2:1 Majority, this Court, HELD: (Sabyasachi Mukharji, CJ.
and P.B. Sawant, J. Per Sawant, J.) 1.
The provisions of Section 131(5) and therefore the limitation laid down in section 28 of the Act do not apply to the action taken by the government under section 131(3).
[103D] Geep Flashlight Industries Ltd. vs Union of India, ; , followed.
Even if it was held that the limitation as laid down in Section 28 would apply to the initiation of action under Section 131(3), since the appellate order in the instant case, has only allowed the appeal of the appellant declaring him as being entitled to the refund, and no refund has yet been made the action of the Government under section 131(3) is clearly not barred by limitation [102G H] 3.
In the case of erroneous refund, the notice under section 28 of the Act has to be given within six months from the date of 'actual ' refund.
If no refund has in fact been made, limitation cannot be said to arise inasmuch as the 'relevant date ' under section 28 in the case of erroneous refund speaks of the date of refund The Order granting refund is not actual refund.
Admittedly, in the instant case no refund has been made to the appellant under the appellate customs order dated May 2, 1981.
Hence even if it is held that the provisions of subsection (3) of Section 131 are governed by sub section (5) thereof and, therefore, the limitation laid down under section 28 of the Act applied to the action of the Government under section 131(3), the present show cause notice is not barred by limitation [103C D] 4.
It is clear from the provisions of sub section (3) of Section 131 that it does not give power to the Central Government to act suo motu 98 to annul or modify an order passed by the original assessing authority.
On the other hand, the provisions of sub section (5) of Section 131 contemplate proceedings against actions of the original assessing authority which have resulted in either not levying or short levying the goods.
That sub section by implication also covers cases of refunds, when goods are cleared initially under a provisional assessment, and the final assessment shows that the assessee is entitled to a refund of duty charged in excess earlier.
But all the cases whether of non levy, short levy or of refund which are contemplated in sub section (5) are cases arising out of the acts of omissions and commissions of the original assessing authority, and it is when such orders passed by the original assessing authority which are sought to be annulled or modified, that the provision of limitation contained in Section 28 applies.
[103G H; 104A B] 5.
Thus, the situations contemplated by sub section (3) and by sub section (5) of Section 131 are mutually exclusive in that whereas sub section(3) speaks of the annulment or modification of the appellate or revisional orders, sub section (5) speaks of the orders passed by the original assessing authority.
[104B] 6.
Hence, the limitation applies when the Government seeks to annul or modify orders of the original assessing authority under subsection (5) and not when the Government takes action to annul or modify the appellate or revisional orders under sub section (3) [104C] 7.
The above interpretation is also consistent with the provisions of sub sections (1) and (4) of Section 131.
[104D] 8.
The conclusion is inescapable that the limitation prescribed by Section 28 is applicable when under sub sec tion (5) of Section 131 the Government seeks to annul or modify orders other than those passed under Sections 128 and 130.
It is not applicable to the action taken under sub section (3) for annulling or modifying orders passed under Sections 128 and 130.
[104G H] 9.
In the instant case, since the impugned show cause notice is issued to annul/modify the order passed by the Appellate Collector of Customs under Section 128, it is not barred by limitation.
[105A] (Per M.M. Punchhi, J. dissenting) 1(a) Section 28 envisages three kinds of errors in regard to custom duties.
One is non levy.
This means that the goods were not 99 classified to duty whereas they could be.
The second is short levy.
In this could be included a case in which the goods could be classified in one Entry but were erroneously classified under another Entry resulting in short levy of custom duty, or the like.
The third is the case of erroneous refund.
This category springs up in the process of assess ment only where two kinds of error, i.e. non levy or short levy may occur and lead to an erroneous refund.
[108H; 109A] (b) It is clear from section 28 that in case of duty not levied or short levied, the 'relevant date ' is the date on which the concerned officer makes some orders for the clear ance of the goods on payment of duty on framing the final assessment as the case may be.
[109E] Geep Flashlight Industries Ltd. vs Union of India & Ors., ; , referred to.
Since levy is linked to assessment, a case for refund may arise which may be erroneous.
[109A] In the instant case, the Tribunal seems to take the view that sub section (3) of Section 131, if employed, eclipses sub section (5) of Section 131.
It was of the view that when the Central Government on its own motion proposes to annul or modify any order passed under Section 128 or Section 130 then it is not lettered by the time limit specified in Section 28 even though it entertains the opinion that any duty of customs has either not been levied or has been short levied.
This approach appears to wholly erroneous.
[108D E] 3.
There is nothing in the language of sub section (3) to suggest that it over powers or renders otiose sub section (5).
Both the sub sections need not militate against each other, components as they are of the singular power con ferred by the legislature on the Central Government for revision.
[108E] 4.
The harmonious way is, therefore, to read these sub sections would be that the Central Government is empow ered on its own motion to annul or modify any order passed under Section 128 or Section 130, but if it is an order whereby any duty of customs has either not been levied or has been short levied, the Central Government can levy or enhance the duty by giving the person affected by the pro posed order a notice to show cause against it but within the time limit specified in Section 28, which is six months from the date of the order.
[100F G] 100 5.
Merely because the Central Government had the power to suo motu revise the orders of refund passed by the Appel late Collector it does not follow a fortiori that it had the power to revise the orders of short levy at that stage.
[110D] 6.
The orders of levy of duty in the instant case, had two facets.
The duty from the point of view of the appellant had been excessively levied necessitating him to challenge the same and seek refund.
On the other hand, from the point of view of the Revenue, the duty had been short levied giving rise cause to have it levied under proper heading.
It was incumbent on the Central Government to exercise its suo motu power under sub section (3) read with sub section (5) of Section 131 within six months from 6.8.79, the date when the duty was short levied and undeniably the Central Govern ment did not take such timely step even though it had a cause to do so.
The appellant, however, made claim for the refund of the excess duty levied taking shelter under anoth er heading and on its refusal by the Assistant Collector on 12.10.79 had its appeal accepted on 2.5.81 from the Appel late Collector who ordered refund.
The Central Government then got a cause to take suo motu action under Section 131(3) of the to annul or modify the order of the Appellate Collector or the actual refund itself under that order.
It being a case of erroneous refund sub section (3) of Section 131 was attracted and not sub section (5) of Section 131 as at that point of time it was not a case of non levy or short levy, and these two categories of errors could not be equated with the error of erroneous refund inasmuch as these three categories of errors are treated separately in the scheme of things.
[109H; 100A B] 7.
The error committed by the Tribunal, in the instant case, is so patent that it cannot be allowed to go uncor rected as a tolerable error.
The appeal has, therefore, to be allowed The orders of the Tribunal passed in appeal have to be modified so as to revive the order of the original assessment dated 6.8.79 and the order of the Assistant Collector of Customs dated 12.10.79, keeping upset the orders dated 2.5.81 of the Appellate Collector of Customs.
[ 110G H]
|
vil Appeal Nos.
3241 48 of 1981 Etc.
From the Judgment and Order dated 20.7.1983 of the Punjab & Haryana High Court in C.W.P. Nos.
469,748,750,751,752 and 753 of 1981 B.N. Shinghvi, V.A. Bobde, M.K. Ramamurthy, N.B. Shetty K.K. Venugopal, Dr. Anand Prakash, S.S. JavaIi, H.S. Gill, Brij Bhushan, M.G. Ramachandran, M.C. Dhingra, A.K. Sanghi, U.A. Rana, B.R. Agarwala, R.C. Pathak, Naresh Mathur, S.K. Sajwan.
Baby Lal, Praveen Kumar, B.B. Singh, Vineet Kumar, B.D. Ahmed.
R.S. Hegde, Parijat Singh, Mrs. Jayshree Wad, section Balakrishnan, Ms. Janani, Mrs. Urmila Kapoor, T.T. Kunhikan nan, H.K. Puri, section Srinivasan, Mrs. M. Karanjawala, Vijay Kumar Verma.
Ashok Grover, V.N. Ganpule, M.A. Gagrat, Mrs. P.S. Shroff, Anil Gupta, R.A. Gupta, A.K. Ghosh, section Mandal, Ranjit Kumar, M. Veerappa, Girish Chandra, Dr. Meera Aggar wal, A.K. Srivastava, K.R. Nambiar, A.G. Ratnaparkhi, R. Satish, P.H. Parekh, S.A. Shroff and K.V. Sree Kumar for the appearing parties.
This analogous cluster of seventeen appeals by special leave, and a special leave petition involves a common question of law though they arise out of the following respective facts: c.A. Nos.
324 z 3248 of 1981 These eight appeals by the Land Development and Reclama tion Corporation, Chandigarh are from the Judgment and Order of the Punjab and Haryana High Court dismissing its writ petitions challenging the Award dated 2.8.1980 of the Labour Court, Chandigarh holding that the respondents were entitled to reinstatement with back wages except Yaspal (C.A. No. 3242 of 1981) who was to get wages up to 10.10.1979, with benefits of continuity of service.
The respondents were workmen under the management of the Corporation and their services were terminated on the ground that the Chairman had no power to appoint them.
The Labour Court in its Award held that their services were terminated illegally without pay ment of retrenchment compensation under the , hereinafter referred to as the Act ', and that they were entitled to reinstatement.
117 C.A. No. 686 (NL) of 1982 This appeal is from the Judgment dated 9.11.1981 of the High Court of Bombay (Nagpur Bench).
The first respondent was an employee of the appellant 's corporation since 1972.
He was taken on probation in 1975 for one year which was extended from time to time, lastly from 1.9.1977 to 31.10.
1977, whereafter his services being not found satisfactory were terminated with effect from 1.11.1977 under Regulation 44(b) of the State Transport Employees Service Regulations of the Corporation.
The Labour Court took the view that it amounted to retrenchment and the provisions of section 25F of the Act having not been complied with the termination was ille gal.
The appellant 's writ petition therefrom was dismissed.
C.A. No. 1817 of 1982 The respondent workman was employed by the appellant Bank on 3.10.1962 as a clerk and he was put on probation for six months.
As allegedly there was total lack of confidence of the bank in the employee it terminated his service on 27.7.1974 on payment of three month 's salary.
The industrial tribunal by its award dated 3.12.1981 directed reinstatement of the workman with full back wages on the ground of non compliance with the provisions of section 25F of the .
The employer Bank now appeals from that Award.
C.A. No. 1898 of 1982 Respondent Nos. 2 6 were employed on probation by the appellant a partnership firm on 12.6.1975.
Respondent Nos.
2 5 assaulted a supervisor and being afraid of police re mained absent from 29.3.1976 and abandoned their jobs and their services were terminated.
Respondent No. 6 stopped attending duties from 9.8.1975 and he left the service of his own accord.
The Labour Court by its Award dated 16.9.
1980 held that their termination amounted to retrenchment and was illegal for non compliance with the provisions of section 25F of the Act and they were entitled to reinstatement with full back wages.
The Management 's writ petition challenging the Award having been unsuccessful, it has appealed.
C.A. No. 3261 of 1982 Respondent Namdeo was a clerk under the appellant Maha rashtra State Road Transport Corporation.
Pursuant to a disciplinary 118 proceeding his service was terminated with effect from 23.4.1963 by giving him one month 's salary in lieu of no tice.
Moved by the respondent, the Assistant Commissioner under section 16 of the C.P. & Berar Industrial Disputes Settle ment Act, 1947 held the Inquiry Proceeding to be an empty paper formality and the termination amounted to dismissal and accordingly he set aside the order and directed the corporation to reinstate and pay him his back wages amount ing to Rs. 15,97 1.66 within one month.
The Corporation having moved the State Industrial Court at Nagpur under section 16(5) of the Settlement Act, that Court by its order dated 29.9.1973 allowed the application and set aside the Assist ant Labour Commissioner 's judgment and dismissed the work man 's application holding that the acts of misconduct fairly stood proved and he deserved to be dismissed from service.
The High Court on being moved by the workman set aside the Labour Court 's order and restored that of the Assistant Labour Commissioner.
Hence this appeal.
CIVIL APPEAL NO.
3025 . .
OF 1990 The services of the workman Sri Pratap Singh, driver respondent No. 3 were terminated with effect from 18.10.1974 under clause 9(a)(i) of the DRTA (Conditions of Appointment and Service) Regulations 1952.
As the conciliation efforts failed, the order was placed before the Labour Court, Delhi, who set aside the order on the ground of noncompliance with the provisions of section 25F of the Act and ordered reinstate ment with full back wages and continuity of service.
The High Court having dismissed the writ petition therefrom, the appellant seeks special leave.
We grant special leave and hear the appeal.
C.A. No. 885 of 1980 The workmen appellants Nos. 2 and 3 were discharged on I 1.11.1972 for their trade union activities.
The Labour Court, Bombay by its Award dated 25.8.1977 refused to inter fere.
Challenge to the Award in the High Court having failed, the workmen appealed to this Court.
C.A. No. 1866 of 1982 The workman respondent No. 2 reported for artisan train ing on 25.9.1963 and was absorbed as artisan trainee on 16.3.1964.
He was made a skilled machine operator, under the appellant company and was discharged with effect from 23.7.1970.
The Labour Court by its 119 Award dated 1.8.1980 held the termination to be illegal on ground of non compliance of section 25F of the Act, though the order of discharge was issued under Standing Order 18(1).
The Company has appealed against the said order.
C.A. No. 1868 of 1984 The respondent was an employee in the appellant 's facto ry as welder and his services were terminated with effect from 21.11.1972 under Standing Order No. 28.
The Labour Court by its Award dated 30.12.1980 held the order of termi nation amounted to retrenchment and bad for non compliance with section 25F and hence set it aside and ordered reinstatement with full back wages.
Hence this appeal.
C.A. No. 8456 of 1983 The respondent was dismissed by the appellant Corpora tion after disciplinary inquiry by order dated 28.5.1971 paying one month 's wages in advance.
The workman having raised an industrial dispute, the Labour Court, Aurangabad by its Award dated 9.11.1979 held the order of termination to be legal and proper.
The respondent 's writ petition therefrom was allowed and the Award was quashed and the workman was declared entitled t0 reinstatement.
Hence this appeal.
C.A. No. 10828 of 1983.
The respondent was a store keeper of Rungta Colliery.
His name was struck off the rolls of the Colliery with effect from 8.7.1975.
He having raised an industrial dis pute, the Industrial Tribunal, Jabalpur by its Award dated 22.8.1977 held the striking off t0 be unjustified and that the termination amounted to retrenchment and bad for non payment of retrenchment compensation.
In the workman 's Letters Patent Appeal the Division Bench of the High Court also held that the termination amounted to retrenchment.
Hence this Management 's appeal.
The respective cases were argued with some dexterity by the learned counsel Mr. B.N. Singhvi, Mr. N.B. Shetye, Mr. S.S. Javali, Mr. K.K. Venugopal, Mr. V.A. Bobde, Mr. M.K. Ramamurthy, Mr. M.G. Ramachandran & Mr. R.S. Hegde.
On the above diverse facts two rival contentions are raised by the parties.
The learned counsel for the employers contend that the word 'retrenchment ' as defined in section 2(00) of the Act means termination of 120 service of a workman only by way of surplus labour for any reason whatsoever.
The learned counsel representing the workmen counted that 'retrenchment ' means termination of the service of a workman for any reason whatsoever, other than those expressly excluded by the definition in section 2(00) of the Act.
The precise question to be decided, therefore, is whether on a proper construction of the definition of "retrenchment" in section 2(00) of the Act, it means termination by the employer of the service of a workman as surplus labour for any reason whatsoever, or it means termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and those expressly excluded by the definition.
In other words, the question to be decided is whether the word "retrenchment" in the definition has to be understood in its narrow, natural and contextual meaning or in its wider literal meaning.
Mr. N.B. Shetye, Mr. K.K. Venugopal, and the learned counsel adopting their arguments refer to the introduction of the provision of "retrenchment" in the Act.
Retrenchment was not defined either in the repealed Trade Disputes Act, 1929, or in the , as originally enacted.
Owing to a crisis in the textile industry in Bom bay, apprehending large scale termination of services of workmen, the Government of India issued an Ordinance which later became the Industrial Disputes (Amendment) Act, 1953 (Act 43 of 1953) which was deemed to have come into force on the 24th day of October, 1953.
Besides introducing the definitions of "lay off" [Clause 2 (kkk)] and "Retrenchment" [Clause 2(oo)] this Amendment Act of 1953 also inserted Chapter VII in the Act which dealt with "lay off" and "Retrenchment".
That Chapter contained sections 25A to 25J. Section 25A provided that sections 25C to 25E inclusive shall not apply to certain categories of industrial estab lishments.
Section 25C dealt with right of workmen laid off compensation.
Section 25D provided for maintenance of muster rolls of workmen by employers and section 25E stated the cases in which the workmen were not entitled to lay off compensation.
Section 25F dealt with conditions precedent to retrenchment of workmen.
Section 25G dealt with procedure for retrenchment and section 25H dealt with re employment of retrenched workmen; and section 25J dealing with the effect of laws inconsistent with this Chapter said that the provi sions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law (including standing orders made under the Industrial Employ ment (Standing Orders) Act, 1946 (XX of 1946); 121 provided that nothing contained in this Act shall have effect to derogate from any fight which a workman has under any award for the time being in operation or any contract with the employer.
The Statement of Objects and Reasons of the Amendment Act, 1953 was as under: "The Industrial Disputes (Amendment) Bill, 1953 seeks to provide for payment of compensation to workmen in the event of their lay off or retrenchment.
The provisions included in the Bill are not new and were discussed at various tripar tite meetings.
Those relating to lay off are based on an agreement entered into between the representatives of em ployers and workers who attended the 13th session of the Standing Labour Committee.
In regard to retrenchment, the Bill provides that a workman who has been in continuous employment for not less than one year under an employer shall not be retrenched until he has been given one month 's notice in writing or one month 's wages in lieu of such notice and also a gratuity calculated at 15 days ' average pay for every completed year of service or any part thereof in excess of six months.
A similar provision was included in the Labour Relations Bill, 1950, which has since lapsed.
Though compensation on the lines provided for in the Bill is given by all progressive employers, it is felt that a common standard should be set for all employers" Clause 2(00) as inserted read as under: " 'Retrenchment ' means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary ac tion, but does not include (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of super annuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill health.
" 122 We are referred to contemporaneous interpretation of the word "retrenchment.
In Employees of Messrs India Reconstruc tion Corporation Ltd., Calcutta vs Messers.
India Recon struction Corporation Ltd., reported in it was observed by the Calcutta High Court: "Ordinarily retrenchment means discharge from service of only the surplus part of the labour force but in the case of closure the whole labour force is dispensed with.
In sub stance the difference between closure and normal retrench ment is one of degree only.
As in the case of retrenchment so in the case of closure the workmen are not responsible for closing their jobs.
In both the cases, what is called compensation by way of retrenchment relief should be admis sible.
" In Messrs Benett Coleman and Company Ltd. vs Their Employees, reported in it was observed by Cal cutta High Court: "Thus whether the closure was justified or not, the workmen who have lost their jobs would in any event get compensa tion.
If it was not bona fide or not justified, it may be that the measure of compensation would be larger than if it was otherwise.
" The above almost contemporaneous exposition is worth consideration, Contemporanea expositio est optima et fortio sima in lege, Contemporaneous exposition is the best and strongest in the law.
A statute is best ex plained by following the construction put upon it by judges who lived at the time it was made.
In Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, , the appellant company could not work its mills to full capacity owing to short supply of sugar cane and got the permission of the Government to sell its machinery but continued crushing cane under a lease from the purchaser.
The workmen 's union in order to frustrate the transaction resolved to go on strike and serving a strike notice did not cooperate with the management with the result that it lost heavily.
On the expiry of the lease and closure of the industry, the services of the workmen were duly terminated by the company.
The workmen claimed the share of profits on the basis of the offer earlier made by the compa ny and accepted by the workers.
The company having declined to pay and the dispute having been referred, 123 the Industrial Tribunal held that the company was bound to pay and accordingly awarded a sum of Rs.45,000 representing their share of the profits and the award was affirmed by the Labour Appellate Tribunal.
Question before this Court in appeal was whether the termination of the workmen on the closure of the industry amounted to retrenchment.
It was held that the award was not one for compensation for termi nation of the services of the workmen on closure of the industry, as such discharge was different from the discharge on retrenchment, which implied the continuance of the indus try and discharge only of the surplusage, and the workmen were not entitled either under the law as it stood on the day of their discharge or even on merits to any compensa tion.
The contention of the workmen was that even before the enactment of Industrial Disputes (Amendment) Act, 1953, the tribunal had acted on the view that the retrenchment includ ed discharge on closure of business and had awarded compen sation on that footing and that the award of the tribunal in Pipraich 's case could be supported in that view and should not be disturbed.
This was based on the decision in Employ ees of Messrs India Reconstruction Corporation Ltd. Calcutta vs Messrs India Reconstruction Corporation Ltd., (supra); and Messrs Benett Coleman and Company Ltd. vs Their Employ ees, (supra).
But their Lordship did not agree.
Venkatarama Ayyar, J. speaking for the four Judge Bench said: "Though there is discharge of workmen both when there is retrenchment and closure of business, the compensation is to be awarded under the law, not for discharge as such but for discharge on retrenchment, and if, as is conceded, retrench ment means in ordinary parlance, discharge of the surplus, it cannot include discharge on closure of business." As a result it was held that the Award in Pipraich was against the agreement and could not be supported as one of compensation to the workmen.
Thus this Court in Pipraich (supra) was dealing with the question whether the discharge of the workmen on closure of the undertaking would constitute retrenchment and whether the workmen were entitled on that account to retrenchment compensation; and it was observed that retrenchment connoted in its ordinary acceptation that the business itself was being continued but that a portion of the staff or 124 the labour force was discharged as surplusage and the termi nation of services of all the workmen as a result of the closure of the business could not, therefore, be properly described as retrenchment, which in the ordinary parlance meant discharge from the service and did not include dis charge on closure of business.
The same view was expressed in Hariprasad Shivshankar Shukla vs A.D. Divikar, [1957] SCR 121; also reported sub nomine Barsi Light Railway Co. vs K.N. Joglekar, , wherein the Constitution Bench heard two appeals; namely, Civil Appeal Nos. 103 and 105 of 1956.
In Civil Appeal No. 105 of 1956 the main appellant was the Barsi Light Railway Company Ltd., and the principal respond ent was the President of the Barsi Light Railwaymen 's Union.
Under an agreement dated August 1, 1895 between the Secre tary of State for India in Council and the Railway Company, the Secretary of State could purchase and take over the undertaking after giving Railway Company a notice.
On Decem ber 19, 1952 a notice was given to the Railway Company for and on behalf of the President of India that the undertaking of the Railway Company would be purchased and taken over as from January 1, 1954.
On November 11, 1953, the Railway Company served a notice on its workmen intimating that as a result of the talking over, the services of all the workmen of the Railway Company would be terminated with effect from December 31, 1953.
The notice further stated that the Gov ernment of India intended to employ such of the staff of the company as would be willing to serve on the railway on terms and conditions which were to be notified later.
About 77 per cent of the staff of the Railway Company were reemployed on the same scales of pay, about 23 per cent were reemployed on somewhat lower scales of pay and only about 24 per cent of the former employees of the Railway Company declined service under the Government.
Applications for compensation having been filed on behalf of the erstwhile workmen of the Railway Company under section 15 of the , for payment of retrenchment compensation to the said workmen under clause (b) of section 25F of the Act, the question was whether the erstwhile workmen were entitled to claim compen sation under clause (b) of section 25F of the Act; and whether they had been retrenched by their former employer within the meaning of the expression 'retrenchment ' in the Act.
In Civil Appeal No. 103 of 1956, the main appellant was Sri Dinesh Mills Ltd. Baroda and the principal respondent was District Labour Officer and Inspector under the .
The appellant company was running a woollen mill at Baroda and had abut 450 workmen and 20 clerks who worked in shifts day and night.
On or about October 31, 125 1953, the appellant put up a notice declaring its intention to close down the entire mill.
As a result of the closure, the services of all 450 workmen and 20 clerks were terminat ed and the appellant company claimed that the closure was bona fide being due to heavy losses sustained by the compa ny.
The principal respondent claimed retrenchment compensa tion for the workmen of the appellant under clause (b) of section 25F of the Act.
Section 25F at the relevant time stood as follows: "25F. Conditions precedent to retrenchment of workmen.
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 appro priate Government.
" In both the appeals the question before the Constitu tion Bench was whether the claim of the erstwhile workmen both of the Railway Company and of Shri Dinesh Mills Ltd., to the compensation under clause(b) of section 25F of the Act was a valid claim in law.
Observing that the Act had a 'plexus of amendments ', and some of the recent amendments had been quite extensive in nature and that section 25F occurred in Ch.
VA of the Act which dealt with 'lay off and retrenchment ' in the Amending Act, and analysing section 25F as it then stood, S.K. Das, J. speaking for the Constitution Bench observed that in the first part of the section both the words 're trenched ' and 'retrenchment ' were used and obviously they had the same meaning except that one was verb 126 and the other was a noun and that to appreciate the true scope and effect of section 25F one must first understand what was meant by the expression 'retrenched ' or 'retrenchment ' Analysing the definition of 'retrenchment ' in section 2(00) the Court found in it the following four essential require ments: (a) termination of the service of a workman;, (b) by the employer; (c) for any reason whatsoever; and (d) other wise than as a punishment inflicted by way of disciplinary action.
The Court then said: "It must be conceded that the definition is in very wide terms.
The question, however, before us is does this defini tion merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the em ployer?" The Court further said: "There is no doubt that when the act itself provides a dictionary for the words used, we must look into that dic tionary first for an interpretation of the words used in the statute.
We are not concerned with any presumed intention of the legislature; our task is to get the intention as ex pressed in the statute.
Therefore, we propose first to examine the language of the definition and see if the ordi nary, accepted notion of retrenchment fits in, squarely and fairly, with the language used.
" The Court reiterated the following observations in Pipraich (supra): "But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff of the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment.
" 127 This was the ordinary accepted notion of 'retrenchment ' in an industry before addition of section 2(oo) to the Act, as retrenchment in that case took place in 1951.
Replying to the argument that by excluding the bona fide closure of business as one of the reasons for termination of the serv ice of workmen by the employer, one would be cutting down the amplitude of the expression 'for any reason whatsoever ' and reading into the definition the words which did not occur there, the Court agreed that the adoption of the ordinary meaning would give to the expression 'for any reason whatsoever ' a somewhat narrower scope; one might say that it would get a colour in the context in which expres sion occurred; but the Court did not agree that it amounted to importing new words in the definition and said that the legislature in using that expression said in effect: "It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment".
In the absence of any compelling words to indicate that the intention was to include bona fide closure of the whole business, it would be divorcing the expression altogether from its context to give it such a wide meaning as was contended.
About the nature of the definition it was said: "It is true that an artificial definition may include a meaning different from or in excess of the ordinary accepta tion of the word which is the subject of definition; but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended.
Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined.
" The Court in Hariprasad dealt with two other conten tions; one was that before the amending Act of 1953 the retrenchment had acquired a special meaning which included the payment of compensation on a closure of business and the legislature gave effect to that meaning in the definition clause and by inserting section 25F.
The second was that section 25FF inserted in 1956 by Act 41 of 1956 was 'Parlia mentary exposition ' of the meaning of the definition clause and of section 25F.
Rejecting the contentions the Court held that retrenchment meant the discharge of surplus workmen in an existing or continuing business; it had acquired no special meaning so as to include discharge of workmen on bona fide closure of business, though a number of Labour Appellate Tribunals awarded compensation to 128 workmen on closure of business as an equitable relief for variety of reasons.
The Court accordingly held: ". that retrenchment as defined in section 2(00) and as used in section 25 has no wider meaning than the ordinary, accepted connotation of the word; it means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of discipli nary action, and it has no application where the services of all workmen have been terminated by the employer on real and bona fide closure of business as in the ' case of Shri Dinesh Mills Ld. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company.
" It is interesting to note that the Amending Act No. 41 of 1956 inserted original section 25FF on September 4, 1956.
The objects and reasons were stated thus: "Doubt has been raised whether retrenchment compensation under the becomes payable by reason merely of the fact that there has been a change of employers, even if the service of the workman is continued without interruption and the terms and conditions of his service remain unaltered.
This has created difficulty in the transfer, re constitution and amalgamation of companies and it is proposed to make the intention clear by amending section 25F of the Act.
" Hariprasad 's case (supra) was decided on November 27, 1956.
The Industrial Disputes (Amendment) Ordinance, 1957 (4 of 1957) was promulgated immediately thereafter with effect from December 1, 1956 and that Ordinance was replaced by the Industrial Disputes (Amendment) Act 1957 (XVIII of 1957).
The following was the Statement of Objects and Reasons: "In a judgment delivered on the 27th November, 1956, the Supreme Court held that no retrenchment compensation was payable under section 25F of the , to workmen whose services were terminated by an em ployer on a real and bona fide closure of business, or when termination occurred as a result of transfer of owner 129 ship from one employer to another (see AIR 1957 SC 12 1).
This has led and is likely to lead to a large number of workmen being rendered unemployed without any compensa tion.
In order to meet this situation which was causing hardship to workmen, it was considered necessary to take immediate action and the Industrial Disputes (Amendment) Ordinance, 1957 (4 of 1957), was promulgated with retrospec tive effect from 1st December, 1956." "This Ordinance was replaced by an Act of Parliament enact ing the provisions contained in sections 25FF and 25FFF.
These sections provide that 'compensation would be payable to workmen whose services are terminated on account of the transfer or closure of undertakings. ' In the case of trans fer of undertakings, however, if the workman is re employed on terms and conditions which are not less favourable to him, he will not be entitled to any compensation.
This was the position which existed prior to the decision of the Supreme Court.
In the case of closure of business on account of the circumstances beyond the control of the employer, the maximum compensation payable to workmen has been limited to his average pay for three months.
If the undertaking is engaged in any construction work and it is closed down within two years on account of the completion of its work, no compensation would be payable to workmen employed there in.
" Hariprasad (supra) having accepted the ordinary contex tual meaning of retrenchment, namely, termination of surplus labour as the major premise it was surely open to the Par liament to have amended the definition of retrenchment in section 2(00) of the Act.
Instead of doing that the Parliament added section 25FF and 25FFF which said: "25FF.
Compensation to workmen in case of transfer of under takings Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer, in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compen sation in accordance with the provisions of section 25F, as if the workman had been retrenched: 130 Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if (a) the service of the workman has not been interrupted by such transfer; (b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favour able to the workman than those applicable to him immediately before the transfer; and (c) the new employer is under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer." "25FFF.
Compensation to workmen in case of closing down of undertakings (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in contin uous service for not less than one year in that undertaking immediately before such closure shall, subject to the provi sions of sub section (2), be entitled to notice and compen sation in accordance with the provisions of section 25 F, as if the workman had been retrenched; Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workmen under clause (b) of section 25 F shall not exceed his aver age pay for three months.
" Thus, by this Amendment Act the Parliament clearly provided that though such termination may not have been retrenchment technically so called, as decided by this Court, neverthe less the employees in question whose services were terminat ed by the transfer or closure of the undertaking would be entitled to compensation, as if the said termination was retrenchment.
As it has been observed, the words "as if" brought out the legal distinction between retrenchment defined by section 2(00) as it was interpreted by this Court and termination of services consequent upon transfer of the undertaking.
In other words, the provision was that though termination of services on transfer or closure of 131 the undertaking may not be retrenchment, the workmen con cerned were entitled to compensation as if the said termina tion was retrenchment.
Thus we find that till then the accepted meaning of retrenchment was ordinary, contextual and narrower meaning of termination of surplus labour for any reason whatsoever.
In Anakapalla Co operative Agricultural and Industrial Society Ltd. vs Workmen, [1963] Suppl.
1 SCR 730, a company running a sugar mill was suffering losses every year due to insufficient supply of sugarcane and wanted to shift the mill.
The cane growers formed a co operative society and purchased the mill.
As agreed between the company and the society, the company terminated the services of the employ ees and paid retrenchment compensation to them under section 25FF of the Act.
This society employed some of the old employees and refused to absorb some of them who raised an industrial dispute.
The Industrial Tribunal having directed the purchaser society by its award to re employ them, the society contended that it was not a successor in interest of the company and hence the claim of re employment was not sustainable and the services of the employees having been terminated upon payment of compensation by the company under section 25FF no claim could be made against the transferee socie ty.
This Court held that the society was the successor in interest of the company as it carried on the same or similar business as was carried by the vendor company at the same place and without substantial break in continuity.
It was further held that the employees were not entitled to both compensation for termination of service and immediate re employment at the hands of the transferee and section 25H was not applicable to the case as the termination of service upon transfer or closure was not retrenchment properly so called and that termination of service dealt with in section 25FF could not be equated with retrenchment covered by section 25F.
It was observed that the words 'as if ' in section 25FF clearly distinguished retrenchment under section 2(00) and termination under section 25FF.
Gajendragadkar, J., as he then was, speaking for the five Judges Bench said that in Hariprasad this Court was called upon to consider the true scope and effect of the concept of retrenchment as defined in section 2(00) and it held that the said definition had to be read in the light of the accepted connotation of the words, and as such, it could have no wider meaning than the ordinary connotation of the word and according to this connotation retrenchment meant the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise ' then as a punishment inflicted by way of disciplinary action, and did 132 not include termination of services of all workmen on the bona fide closure of industry or on change of ownership or management thereof.
It was observed: " . . the effect of this decision was that though the definition of the word 'retrenchment ' may perhaps have included the termination of services caused by the closure of the concern or by its transfer, these two latter cases could not be held to fall under the definition because of the ordinary accepted connotation of the said word.
This decision necessarily meant that the word 'retrenchment ' in section 25FF had to bear a corresponding interpretation." In Workmen of Subong Tea Estate vs The outgoing Manage ment of Subong Tea Estate and Anr., reported in ; , it was similarly observed at page 613 of the report: "In dealing with the question of retrenchment in the light of the relevant provisions to which we have just referred, it is, however, necessary to bear in mind that the manage ment can retrench its employees only for proper reasons.
It is undoubtedly true that it is for the 'management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work involved in the industrial undertaking of any employer must always be left to be determined by the management in its discretion, and so, occasions may arise when the number of employees may exceed the reasonable and legitimate needs of the undertak ing.
In such a case, if any workman become surplus, it would be open to the management to retrench them.
Workmen may become surplus on the ground of rationalisation or on the ground of economy reasonably and bona fide adopted by the management, or of other industrial or trade reasons.
In all these cases, the management would be justified in effecting retrenchment in its labour force.
Thus, though the right of the management to effect retrenchment can not normally be questioned, when a dispute arises before an Industrial Court in regard to the validity of any retrenchment, it would be necessary for industrial adjudication to consider whether the impugned retrenchment was justified for proper reasons.
It would not be open to the management either capriciously or without any reason at all to say that it proposes to reduce its labour 133 force for no rhyme or reason.
This position can not be seriously disputed" In Delhi Cloth and General Mills Ltd. vs Shambhu Nath Mukherjee and Ors., reported in ; where the post of motion setter was abolished and the respondent was given a job of a trainee on probation for the post of As sistant Line Fixer and the management found him unsuitable for the job even after extending his probation period upto nine months and offered him the post of fitter on the same pay and the respondent instead of accepting the offer wanted to be given another chance to show his efficiency in his job and the management struck off his name from the rolls with out complying with the provisions of section 25F(a) and (b) of the Act and the Labour Court having given award in the respondent 's favour and the appellant 's writ petition was rejected by the High Court, Goswami, J. speaking for three Judges Bench said: "Striking off the name of the workman from the rolls by the management is termination of his service.
Such termination of service is retrenchment within the meaning of section 2(00) of the Act.
There is nothing to show that the provisions of section 25F (a) and (b) were complied with by the management in this case.
The provisions of section 25F(a), the proviso apart, and (b) are mandatory and any order of retrenchment in violation of these two peremptory conditions precedent is invalid.
" The appeal was accordingly dismissed.
The earlier decisions were not referred to.
Next comes the decision in State Bank of India vs Shri N. Sundara Money, reported ; Chandra chud, V.R. Krishna lyer and A.C. Gupta, JJ.).
In an applica tion under Article 226, the respondent on automatic extin guishment of his service consequent to the pre emptive provision as to the temporariness of the period of his employment in his appointment letter claiming to have been deemed to have had continuous service for one year within the meaning of section 25(B)(2) of the Act, the Single Bench of the High Court having allowed his writ petition and the writ appeal of the appellant having also failed, this Court in appeal found as fact that the appointment was purely tempo rary one for a period of 9 days but might be terminated earlier, without assigning any reason therefor at the peti tioner 's discretion; and the employment unless terminated earlier, would automatically cease at the expiry of the period i.e. 18.11.1972.
This 9 days ' employment added on to what had gone before ripened to a continuous service for a year "on the antecedent arithmetic of 240 days of broken bits of service" and considering the meaning of 'retrench ment ' it was held that the expression for any reason whatso ever 134 was very wide and almost admitting of no exception.
The contention of the employer was that when the order of ap pointment carried an automatic cessatioin of service, the period of employment worked itself out by efflux of time, not by act of employer and such cases were outside the concept of retrenchment.
This Court observed that to re trench is to cut down and one could not retrench without trenching or cutting, but "dictionaries are not dictators of statutory construction where the benignant moo&of a law and, more emphatically, the definition clause furnish a different denotation.
" Accepting the literal meaning, Krishna Iyer, J. observed: "A break down of section 2(00) unmistakably expands the semantics of retrenchment. 'Termination . . for any reason whatso ever ' are the key words.
Whatever the reason, every termina tion spells retrenchment.
So the sole question is, has the employee 's service been terminated? Verbal apparel apart, the substance is decisive.
A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term.
To protect the weak against the strong this policy of comprehensive definition has been effectuated.
Termination embraces not merely the act of termination by the employer, but the fact of termina tion howsoever produced.
May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the amount of section 25F and section 2(00).
Without speculating on possibilities, we may agree that 'retrenchment ' is no longer terra incognita but area covered by an expansive definition.
It means 'to end, con clude, cease. ' In the present case the employment ceased, concluded, ended on the expiration of 9 days automatically may be, but cessation all the same.
That to write into the order of appointment the date of termination confers no mokshas from section 25F (b) is inferable from the proviso to section 25F(1).
True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract section 25F and a omatic extinguishment of service by effluxion of time cannot be sufficient.
" It was further observed: "Words of multiple import have to be winnowed judicially 135 to suit the social philosophy of the statute.
So screened we hold that the transitive and intransitive senses are covered in the current context.
Moreover, an employer terminates employment not merely by passing an order as the service runs.
He can do so by writing a composite order, one giving employment and the other ending or limiting it.
A separate, subsequent determination is not the sole magnetic pull of the provision.
A pre emptive provision to terminate is struck by the same vice as the post appointment termination.
Dexterity of diction cannot defeat the articulated con science of the provision.
" The precedents including Hariprasad do not appear to have been brought to the notice of their Lordship in this case.
It may be noted that since Delhi Cloth and General Mills (supra) a change in interpretation of retrenchment in section 2(00) of the Act is clearly discernible.
Mr. Venugopal would submit that the Judgment in Sundara Money 's case and for that matter the subsequent decisions in the line are per incuriam for two reasons: (i) that they failed t0 apply the law laid down by the Constitution Bench of this Hon 'ble Court in Hariprasad Shukla 's case (supra) and (ii) for the reason that they have ignored the impact of two of the provisions introduced by the Amendment Act of 1953 along with the definition of "retrenchment" in section 2(00) and section 25F namely, sections 25G and 25H.
We agree with the learned counsel that the question of the subsequent deci sions being per incuriam could arise only if the ratio of Sundara Money 's case and the subsequent Judgments in the line was in conflict with the ratio in the Hariprasad Shuk la 's case (supra) and Anakapalla 's case (supra).
The issue, it is urged, was, whether it was necessary for the Court to interpret section 2(00) as being restricted to termination of services of workmen rendered surplus for arriving at a decision in the case and if it was unnecessary to so inter pret section 2(00) for the purpose of arriving at a decision in that case, the interpretation of section 2(00) would necessarily by rendered obiter.
According to counsel, the long discus sion on interpretation of section 2(00) could not be brushed aside as either obiter or mere casual observations of the Constitution Bench.
It is urged that for the.purpose of ratio decidendi, the question is not whether a subsequent Bench of the Su preme Court thinks that it was necessary or unnecessary for the Constitution Bench, of the earlier Bench to have dealt with the issue, but whether the Constitution Bench itself thought it necessary to interpret Section 2(00) for 136 arriving at its final decision.
If the smaller Bench of the Supreme Court could ignore the earlier decision of a larger Bench of the Supreme Court by holding that in its opinion, it was not necessary for the earlier Bench to have gone into the issue, equally it would be open to a High Court to adopt the same approach and ignore binding Judgments of the Su preme Court; giving rise to judicial indiscipline.
According to counsel the Constitution Bench, in its unanimous verdict, undoubtedly found it necessary to go into the interpretation of section 2(00) and did so with elaborate reasoning supporting its findings, because if the contention of the Management in that case was accepted, namely, that "retrenchment" would cover only termination of surplus labour for any reason whatsoever, the logical result of this finding, would be twofold: (i) that the termination of the entirety of workmen by reason of closure, would not be a termination of workmen rendered surplus and, therefore, a case of closure would be outside section 2(00), and (ii) secondly, such termination of workmen rendered surplus, could arise only if the industry continued to be a running industry.
The question whether the positive content of section 2(00) restricting the definition of workmen rendered surplus, for any reason, whatsoever, is part of the ratio or not, submits Mr. Venugopal, is wholly an academic question in view of the fact that as many as 9 High Courts have restricted the applicability of section 25F, 25G and 25H to only cases of termi nation of services of surplus labour for any reason whatso ever and not to other types of termination, whatever may be the reason for such termination.
Even if a Judgment was to be based on two alternative reasons or conclusions, each one of these alternative reasons or basis, would form the ratio of the Judgment.
It is also urged that the argument would equally apply to the ratio of Anakapalla 's case rendering the Judgments in Sundra Money 's case and the later decisions per incuriam, for not having noticed or followed a binding precedent of the Supreme Court itself, as the Judgment of the Constitution Bench binds smaller Divisions of the Court.
We now deal with the question of per incuriam by reason of allegedly not following the Constitution Bench decisions.
The Latin expression per incuriam means through inadvert ence.
A decision can be said generally t0 be given per incuriam when this Court has acted in ignorance of a previ ous decision of its own or when a High Court has acted in ignorance of a decision of this Court.
It can not be doubted that article 141 embodies, as a rule of law, the doctrine of precedents on which our judicial system is based.
In Bengal Immunity Company Ltd. vs State of Bihar, , it was held that the words of article 137 14 1, "binding on all courts within the territory of India", though wide enough to include the Supreme Court, do not include the Supreme Court itself, and it is not bound by its own judgments but is free to reconsider them in appropriate cases.
This is necessary for proper development of law and justice.
May be for the same reasons before judgments were given in the House of Lords in Re Dawson 's Settlement Lloyds Bank Ltd. vs Dawson and Ors., [1966] 1 WLR 1234, on July 26, 1966 Lord Gardiner, L.C. made the following statement on behalf of himself and the Lords of Appeal in Ordinary: "Their Lordships regard the use of precedent as an indis pensable foundation upon which to decide what is the law and its application to individual cases.
It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.
Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law.
They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for cer tainty as to the criminal law.
" Though the above announcement was not made in the course of judicial proceeding it shows that it is open to House of Lords to depart from the doctrine of precedent when consid ered justified.
Section 2 12 of the Government of India Act, 1935 and article 141 of the Constitution of India were enacted to make the law declared by the Supreme Court binding on all courts in the country excluding, as is now being interpret ed, the Supreme Court itself.
The doctrine of ratio deciden di has also to be interpreted in the same line.
In England a decision is said to be given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of co ordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords.
In the former case it must decide which decision to follow, and in the latter it is bound by the decision of the House of Lords.
It has been said that the decision of the House of 138 Lords mentioned above, refers to a decision subsequent to that of the Court of Appeal.
However, "a prior decision of the House of Lords inconsistent with the decision of the Court of Appeal, but which was not cited to the Court of Appeal will make the later decision of the Court of Appeal of no value as given per incuriam.
" But if the prior deci sion had been cited to the Court of Appeal and that court had misinterpreted a previous decision of the House of Lords, the Court of Appeal must follow its previous decision and leave the House to rectify the mistake.
In Halsbury 's Laws of England 4th Ed.
10 para 745 it has been said: "While former decisions of the House are normally binding upon it, the House will depart from one of its own previous decisions when it appears right in the interests of justice and of the proper development of the law to do so.
Cases where the House may reconsider its own previous decisions are those involving broad issues of justice or public policy and questions of legal principle.
Only in rare cases will the House reconsider questions of construction of statutes or other documents.
The House is not bound to follow a previous case merely because it is indistinguishable on the facts. ' ' The position and experience in this Court could not be much different, keeping in view the need for proper develop ment of law and justice.
As regards the judgments of the Supreme Court allegedly rendered in ignorance of a relevant constitutional provision or other statutory provisions on the subjects covered by them, it is true that the Supreme Court may not be said to "declare the law" on those subjects if the relevant provi sions were not really present to its mind.
But in this case sections 25G and 25H were not directly attracted and even if they could be said to have been attracted in laying down the major premise, they were to be interpreted consistently with the subject or context.
The problem of judgment per incuriam when actually arises, should present no difficulty as this Court can lay down the law afresh, if two or more of its earlier judgments cannot stand together.
The question howev er is whether in this case there is in fact a Judgment per incuriarn.
This raises the question of ratio decidendi in Hariprasad and Anakapalla 's cases on the one hand and the subsequent decisions taking the contrary view on the other.
139 An analysis of judicial precedent, ratio decidendi and the ambit of earlier and later decisions is to be found in the House of Lords ' decision in F.A. & A.B. Ltd. vs Lupton (Inspector of Taxes), [19722] AC 634, Lord Simon concerned with the decisions in Griffiths vs J.P. Harrison (Watford) Ltd., , and Finsbury Securities Ltd. vs Inland Revenue Commissioners, , with their inter relationship and with the question whether Lupton 's case fell within the precedent established by the one or the other case, said: "What constitutes binding precedent is the ratio decidendi of a case and this is almost always to be ascertained by an analysis of the material facts of the case that is, general ly, those facts which the tribunal whose decision is in question itself holds, expressly or implicitly, to be mate rial.
" It has also been analysed: "A judicial decision will often be reached by a process of reasoning which can be reduced into a sort of complex syllo gism, with the major premise consisting of a pre existing rule of law (either statutory or judge made) and with the minor premise consisting of the material facts of the case under immediate consideration.
The conclusion is the deci sion of the case, which may or may not establish new law in the vast majority of cases it will be merely the application of existing law to the facts judicially ascertained.
Where the decision does consititute new law, this may or may not be expressly stated as a proposition of law: frequently the new law will appear only from subsequent comparison of, on the one hand, the material facts inherent in the major premise with, on the other, the material facts which consti tute the minor premise.
As a result of this comparison it will often be apparent that a rule has been extended by an analogy expressed or implied.
" To consider the ratio decidendi of a case we have, therefore, to ascertain the principle on which the case was decided.
Sir George Jessel in Osborne vs Rowlett, , remarked that 'the only thing in a judge 's decision binding as an authority upon a subsequent judge is the principle upon which the case was decided '.
The ratio decidendi of a decision may be narrowed or widened by the judges before whom it is cited as a prece dent.
In the process the 140 ratio decidendi which the judges who decided the case would themselves have chosen may be even different from the one which has been approved by subsequent judges.
This is be cause Judges, while deciding a case will give their own reasons but may not distinguish their remarks in a rigid way between what they thought to be the ratio decidendi and what were their obiter dicta, that is, things said in passing having no binding force, though of some persuasive power.
It is said that "a judicial decision is the abstraction of the principle from the facts and arguments of the case." "A subsequent judge may extend it to a broader principle of wider application or narrow it down for a narrower applica tion.
" The submissions of Mr. Venugopal that for the purpose of ratio decidendi, the question is not whether a subsequent Bench of this Court thinks that it was necessary or unneces sary for the Constitution Bench, or the earlier Bench to have dealt with the issue, but whether the Constitution Bench itself thought it necessary to interpret section 2 (00) for arriving at the final decision has to be held to be untena ble in this wide and rigid form.
Analysing the compled syllogism of Hariprasad 's case we find that its major premise was that retrenchment meant termination of surplus labour of an existing industry and the minor premise was, that the termination in that case was of all the workmen on closure of business on change of ownership.
The decision was that there was no retrenchment.
In this context it is important to note what subsequent benches of this Court thought to be the ratio decidendi of Hariprasad, and for that matter of Anakapalla.
In Santosh Gupta vs State Bank Of Patiala, reported in ; , O. Chinnappa Reddy, J. sitting with Krish na Iyer, J. deduced the ratio decidendi of Hariprasad thus: "In Hariprasad Shivshankar Shukla vs A.D. Divikar, the Su preme Court took the view that the word 'retrenchment ' as defined in section 2(00) did not include termination of services of all workmen on a bona fide closure of an industry or on change of ownership or management of the industry.
In order to provide for the situations which the Supreme Court held were not covered by the definition of the expression 're trenchment ', the Parliament added section 25FF and section 25FFF providing for the payment of compensation to the workmen in case of transfer of undertakings and in case of closure of undertakings respectively.
" 141 In Hariprasad (supra) the learned Judges themselves formulated the question before them as follows: "The question, however, before us is does this definition merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases t0 exist on a bona fide closure or discontinuance of his business by the em ployer.
" The question was answered by the learned Judges in the following words: "In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expres sion altogether from the context to give it such a wide meaning as is contended for by learned counsel for the respondents . . it would be against the entire scheme of the Act to give the definition clause relating to retrench ment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist." Rejecting the submission of Dr. Anand Prakash that "termina tion of service for any reason whatsoever" meant no more and no less than discharge of a labour force which was a sur plusage, it was observed in Santosh Gupta (supra) that the misunderstanding of the observations and the resulting confusion stem from not appreciating the lead question which was posed and answered by the learned Judges and ' that the reference to 'discharge on account of surplusage ' was illus trative and not exhaustive on account of transfer or closure of business.
Mr. V.A. Bobde submits, and we think rightly, that the sole reason for the decision in Hariprasad was that the Act postulated the existence and continuance of an industry and where the industry i.e. the undertaking, itself was closed down or transferred, the very substratum disappeared and the Act could not regulate industrial employment in the absence of an industry.
The true position in that case was that section 2(00) and 25F could not be invoked since the undertaking itself 142 ceased to exist.
The ratio of Hariprasad, according to the learned counsel, is discernible from the discussion at pp.
13 1 132 of the report about the ordinary accepted notion of retrenchment 'in an industry ' and Pipraich 's case was re ferred to for the proposition that continuance of the busi ness was essential; the emphasis was not on the discharge of surplus labour but on the fact that "retrenchment connotes in its ordinary acceptation that the business itself is being continued . . the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment.
" At page 134 in the last four lines also it was said: "But the fundamental question at issue is, does the definition clause cover cases of closure of business when the closure is real and bona fide?" The reasons for arriving at the conclusion are given as "it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such a meaning as would include within the definition termi nation of service of all workmen by the employer when the business itself ceases to exist and that the industrial dispute to which the provisions of the Act applies is only one which arises out of an existing industry".
Thus, the Court was neither called upon to decide nor did it decide whether in a continuing business, retrenchment was confined only to discharge of surplus staff and the reference to discharge of surplusage was for the purpose of contrasting the situation in that case, i.e. workmen were being re trenched because of cessation of business and those observa tions did not constitute reasons for the decision.
What was decided was that if there was no continuing industry the provision could not apply.
In fact the question whether retrenchment did or did not include other terminations was never required to be decided in Hariprasad and could not, therefore have been, or be taken to have been decided by this Court.
Lord Halsbury 's dicta in Quinn vs Leathem, ; at page 506 is: " . . every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but gov erned and qualified by the particular facts of the case in which such expressions are to be found.
The other is that a case is only on authority for what it actually decides.
" This Court held in State of Orissa vs Sudhansu Misra, ; , that a decision is only an authority for what it actually decides.
143 What is of the essence in a decision is its ratio and not other observation found therein nor what logically follows from the various observations made in it.
We agree with Mr. Bobde when he submits that Hariprasad 's case is not an authority for the proposition that section 2(00) only covers cases of discharge of surplus labour and staff.
The Judg ments in Sundara Money (supra) and the subsequent decisions in the line could not be held to be per incuriam inasmuch as in Hindustan Steel and Santhosh Gupta 's cases, the Division Benches of this Court had referred to Hariprasad 's case and rightly held that its ratio did not extend beyond a case of termination on the ground of closure and as such it would not be correct to say that the subsequent decisions ignored a binding precedent.
In Hindustan Steel Ltd. vs The Presiding Officer, Labour Court, ; the question was whether termination of service by efflux of time was termination of service within the definition of retrenchment in section 2(oo) of the Act.
Both the earlier decisions of the Court in Haripra sad (supra) and Sundara Money (supra) were considered and it was held that there was nothing in Hariprasad which was inconsistent with the decision in Sundara Money 's case.
It was observed that the decision in Hariprasad was only that the words "for any reason whatsoever" used in the definition of retrenchment would not include a bona fide closure of the whole business because it would affect the entire scheme of the Act.
The decisions in L. Robert D 'Souza vs Executive Engineer, Southern Railway and Anr., ; The Managing Director, National Garages vs
J. Gonsalves, ; Goodlas Nerolac Paints vs Chief Commis sioner, Delhi, and Rajasthan State Electricity Board vs Labour Court, , in which contrary view was taken, were overruled in Santosh Gupta holding that the discharge of the workman on the ground that she did not pass the test which would have enabled her to be confirmed was 'retrenchment ' within the meaning of section 2(oo) and therefore, the requirement of section 25F had to be complied with.
The workman was em ployed in the State Bank of Patiala from July 13, 1973 till August, 1974 when her services were terminated.
According to the workman she.
had worked for 240 days in the year preced ing August 21, 1974 and the termination of her services was retrenchment as it did not fall within any of the three accepted cases.
The management 's contention was that termi nation was not due to discharge of surplus labour but due to failure of the workman to pass the test which could have enabled her to be confirmed in the service and as such it was not retrenchment.
This contention was repelled.
144 Both Mr. Shetye and Mr. Venugopal submit that judicial discipline required the smaller benches to follow the deci sions in the larger benches.
This reminds us of the words of Lord Mailsham of Marylebone, the Lord Chancellor, "in the hierarchical system of courts which exists in this country, it is necessary for each lower tier . . to accept loyal ly the decisions of the higher tiers".
However, in view of the ratio decidendi of Hariprasad, as we have seen, there is no room for such a criticism.
In Management of Karnataka State Road Transport Corpora tion, Bangalore vs M. Boraiah, reported in ; , a Division Bench of A.N. Sen and Ranganath Misra, JJ.
fol lowing the decisions in State Bank of India vs N. Sundara Money, (supra); Hindustan Steel Ltd. vs Presiding Officer, Labour Court, Orissa, (supra); Santosh Gupta vs State Bank of Patiala, (supra); Indian Hume Pipe Co. Ltd. vs Workmen, [ ; Mohan Lal vs Management of M/s. Bharat Electronics Ltd., ; and Surendra Kumar Verma vs Central Government Industrial Tribunal cum Labour Court, New Delhi, ; , held that in the above series of cases that have come later, the Constitution Bench deci sion in Hariprasad (supra) has been examined and the ratio indicated therein has been confined to its own facts and the view indicated by the Court in that case did not meet with the approval of Parliament and, therefore, the law had been subsequently amended.
Speaking for the Court, R.N. Misra, J. significantly said: "We are now inclined to hold that the stage has come when the view indicated in Money case (supra) has been 'absorbed into the consensus ' and there is no scope for putting the clock back or for an anti clockwise operation." More than a month thereafter in Gammon India Ltd. vs Niranjan Dass; , , a three Judges Bench (D.A. Desai, R.B. Misra and Ranganath Misra, JJ.) construing the one month 's notice of termination in that case due to reduc tion of volume of business of the company said: "On a true construction of the notice, it would appeal that the respondent had become surplus on account of reduction in volume of work and that constitutes retrenchment even in the traditional sense of the term as interpreted in Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor 145 Union, though that view does not hold the field in view of the recent decisions of this Court in State Bank of India vs N. Sundara Money; Hindustan Steel Ltd. vs Presiding Officer, Labour Court, Orissa; Santosh Gupta vs State Bank of Patia la; Delhi Cloth and General Mills Ltd. vs Shambhu Nath Mukherjee; Mohan Lal vs Management of M/s. Bharat Electron ics Ltd. and L. Robert D 'Souza vs Executive Engineer, South ern Railway.
The recitals and averments in the notice leave no room for doubt that the service of the respondent was terminated for the reason that on account of recession and reduction in the volume of work of the company, respondent has become surplus.
Even apart from this, the termination of service for the reasons mentioned in the notice is not covered by any of the clauses (a), (b) and (c) of section 2(00) which defines retrenchment and it is by now well settled that where the termination of service does not fall within any of the excluded categories, the termination would be ipso facto retrenchment.
It was not even attempted to be urged that the case of the respondent would fall in any of the excluded categories.
It is therefore indisputably a case of retrenchment." (Emphasis supplied) In a fast developing branch of Industrial and Labour law it may not always be of particular importance to rigidly adhere to a precedent, and a precedent may need be departed from if the basis of legislation changes.
It was in realisa tion of the idea of a living law that in Reg vs Home Secre tary, exhibit P. Khawaja, reported in [1984] AC 74 (H.L.) it was said at p. 84: The House will depart from a previous decision where it is right to do so and where adherence to a previous decision may lead to injustice in a particular case.
Constitutional and administrative law are not fields where it is of partic ular importance to adhere to precedent.
A recent precedent may be more readily departed from than one which is of long standing.
A precedent may be departed from where the issue is one of statutory construction " We now take up the question of interpretation of section 2(00) of the Act dealing with the rival contentions, namely, ordinary or contextual as against literal meaning.
146 When we analyse the mental process in drafting the definition of "retrenchment" in section 2(00) of the Act we find that firstly it is to mean the termination by the employer of the service of a workman for any reason whatsoever.
Having said so the Parliament proceeded to limit it by excluding certain types of termination, namely, termination as a punishment inflicted by way of disciplinary action.
The other types of termination excluded were (a) voluntary retrenchment; or (b) retrenchment of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation on that behalf; or (c) termination of service of a workman on the ground of continued ill health.
Had the Parliament envisaged only the question of termination of surplus labour alone in mind, there would arise no question of excluding (a), (b) and (c) above.
The same mental process was evident when section 2(00) was amended inserting another exclusion clause (bb) by the Amending Act 49 of 1984, with effect from 18.8.1984, "termination of the service of work man as a result of the non renewal of the contract of em ployment between the employer and the workman concerned on its expiry of such contract being terminated under a stipu lation in that behalf contained therein.
" This is literal interpretation as distinguished from contex tual interpretation. "The only rule of construction of Acts of Parliament", says Tindal, C.J. in Sussex Peerage case, [1844] 11 C1 & Fin 85 (143), "is that they should be construed according to the intent of the Parliament which passed the Act.
If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense.
The words themselves alone do, in such case, best declare the intention of the lawgiv er.
" In Mutto vs T.K. Nandi, reported in ; (418) it was similarly said: "The Court has to determine the intention as expressed by the words used.
If the words of a statute are themselves precise and unambiguous then no more can be necessary then to expound those words in their ordi nary and natural sense.
The words themselves alone do in such a case best declare the intention of the lawgiver.
" As was stated in Thompson vs Gould, reported in ; (420) "it is a wrong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do 147 so." "The cardinal rule of construction of statute is to read statutes literally, that is, by giving to the words their ordinary, natural and grammatical meaning." [Jugalki shore vs Ram Cotton Co. Ltd.; , To interpret an Act of Parliament is to give effect to its intention.
Lord Simon in Ealing L.B.C. vs Race Relations Board, ; (360) said: "The Court sometimes asks itself what the draftsman must have intended.
This is reasonable enough: the draftsman knows what is the intention of the legislative initiator (nowadays almost always an organ of the executive); he know what canons of construction the courts will apply; and he will express himself in such a way as accordingly to give effect to the legislative intention.
Parliament, of course, in enacting legislation assumes responsibility for the language of the draftsman.
But the reality is that only a minority of legislators will attend the debates on the legislation.
Failing special interest in the subject matter of the legislation, what will demand their attention will be something on the face of proposed legislation which alerts them to a questionable matter.
Accordingly, such canons of construction as that words in a non technical statute will primarily be interpreted according to their ordinary meaning . . " According to Lord Simon looking into the legislative history or ' the preparatory works may sometimes be useful but may often lead to abuse and waste, as "an individual legislator may indicate his assent on an assumption that the legislation means so and so and the courts may have no way of knowing how far his assumption is shared by his col leagues, even those present." "In the absence of such mate rial it is said, the courts have five principal avenues of approach to the ascertainment of the legislative intention: (1) examination of the social background, as specifically proved if not within common knowledge, in order to identify the social or juristic defect which is likely subject of remedy; (2) a conspectus of the entire relevant body of the law for the same purpose; (3) particular regard to the long title of the statute to be interpreted (and where available, the preamble), in which the general legislative objectives will be stated; (4) scrutiny of the actual words to be interpreted, in the light of the established canons of interpretation; and (5) examination of the other provisions of the statute in question (or of other statutes in pari materia) for the illumination which they 148 throw on the particular words which are the subject of interpretation.
The Heydon 's Rule requires that the court will look at the Act to see what was its purpose and what mischief in the earlier law it was designed to prevent.
Four things are to be considered: (i) What was the law before the making of the Act? (ii) What was the mischief and defect for which the earlier law did not provide? (iii) What remedy the Parlia ment had resolved to cure? (iv) What is the true reason for the remedy? The Court shall make such construction as shall suppress the mischief and advance the remedy.
Where the statute has been passed to remedy a weakness in the law, it is to be interpreted in such a way as well to bring about that remedy.
The literal rules of construction require the wording of the Act to be construed according to its literal and gram matical meaning whatever the result may be.
Unless otherwise provided, the same word must normally be construed through out the Act in the same sense, and in the case of old stat utes regard must be had to its contemporary meaning if there has been no change with the passage of time.
However, the Law Commission 21 of England has struck a note of caution that "to place undue emphasis on the literal meaning of the words of a provision is to assume an unattainable perfection in draftsmanship".
In Whiteley vs Chappelf, , a statute concerned with electoral mal practices made it an offence to personate 'any person enti tle to vote ' at an election.
The defendant was accused of personating a deceased voter and the court, using the liter al rule, found that there was no offence as the personation was not of person entitled to vote.
A dead person was not entitled to vote.
A deceased person did not exist and had no right to vote and as a result the decision arrived at was contrary to the intention of Parliament.
As it was pointed out in Prince of Hanover vs Attorney General [1956] Ch.
188, the Golden Rule in the form of modified literal Rule, according to which the words of statute will as far as possible be construed according to their ordinary and plain and natural meaning, unless this leads to an absurd result.
Where the conclusion reached by applying the literal rule is contrary to the intention of Parliament, the Golden rule is helpful.
A tested rule is that of Noscitur a sociis.
The meaning of a word can be gathered from its context.
Under this rule words of doubtful meaning may be better understood from the nature of the words and phrases with which they are associated [Muir vs Keay, [1875] L.R 10 Q.B. 594].
But this will not apply when the word itself has been defined.
149 In the case before us the difficulty was created by defining 'retrenchment ' to mean something wider than what it naturally and ordinarily meant.
While naturally and ordi narily it meant discharge of surplus labour, the defined meaning was termination of service of a workman for any reason whatsoever except those excluded in the definition itself.
Such a definition creates complexity as the drafts man himself in drafting the other sections using the defined word may slip into the ordinary meaning instead of the defined meaning.
Way back in the Queen vs The Commissioners under the Boiler Explosions Act, 1882, [1891] 1 Q.B. Division 703, a boiler for generating steam was situate above ground at a colliery, and a pipe conducted the steam down the shaft and along the working to a pumping engine in the mine.
A valve in this pipe, in the mine and near the pumping engine blew off.
The question was whether the pipe in which the explo sion occurred was a 'boiler ' within the interpretation clause of the Boiler Explosions Act, 1882.
Lord M.R. Esher said; "If the Act had dealt with the explosion of a boiler and in some other ' section with an explosion in pipes or in any other specified thing, the matter would be easy; but the draftsman has gone upon that which to my mind is a dangerous method of drawing Acts of Parliament.
He has put in a sec tion which says that a boiler shall mean something which is in reality not a boiler.
This third section of the Act of 1882 that is the Boiler Explosions Act 1882 is a 'peculiarly bad specimen ' of the method of drafting, which enacts that a word shall mean something which in fact it does not mean." However, a judge facing such a problem of interpretation can not simply fold his hands and blame the draftsman.
Lord Denning in his Discipline of Law says at p. 12: "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 is not an instru ment of mathematical precision.
Our literature would be much the poorer if it were.
This is where the draftsman of Acts of Parliament have often been unfairly criticised.
A judge, believing himself to be lettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity.
It would cer 150 tainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity.
In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman.
He must set to work on the constructive task of finding the intention of Parlia ment, and he must do this not only from the language of the statute, but also from a consideration of the social condi tions which gave rise to it, and of the mischief which it was passed to remedy, and then he must supplement the writ ten word so as to give 'force and life ' to the intention of the legislature.
" Analysing the definition of retrenchment in section 2(00) we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in (a) and (b), namely, voluntary retirement and retirement on reaching the stipulated age of retirement.
There would be no volitional element of the employer.
Their express exclu sion implies that those would otherwise have been included.
Again if those cases were to be included, termination on abandonment of service, or on efflux of time, and on failure to qualify, although only consequential or resultant, would be included as those have not been excluded.
Thus, there appears to be a gap between the first part and the exclusion part.
Mr. Venugopal, on this basis, points out that cases of voluntary retirement, superannuation and tenure appointment are not cases of termination 'by the employer ' and would, therefore, in any event, be outside the scope of the main provisions and are not really provisos.
The definition has used the word 'means '.
When a statute says that a word or phrase shall "mean" not merely that it shall "include" certain things or acts, "the definition is a hard and fast definition, and no other meaning can be assigned to the expression than is put down in definition" (per Esher, M.R., Gough vs Gough, A defi nition is an explicit statement of the full connotation of a term.
Mr. Venugopal submits that the definition clause cannot be interpreted in isolation and the scope of the exception to the main provision would also have to be looked into and when so interpreted, it is obvious that a restrictive mean ing has to be given to section 2(00).
It is also pointed out that section 25G deals with the prin ciple of 'last come, first go ', a principle which existed prior to the Amendment Act 151 of 1953 only in relation to termination of workmen rendered surplus for any reasons whatsoever and that was followed in Vishwamitra Press, Kanpur vs Workers of Vishwamitra Press, at p.33/41; Presidency Jute Mills Co. Ltd. vs Presidency Jute Mills Co.
Employees Union, [1952] L.A.C. 62; Iron and Steel Mazdoor Union,Kanpur vs J.K. Iron and Steel Co. Ltd., ; Halar Sali and Chemical Works, Jamnagar vs Workmen, ;Prakriti Bhushan Gupta vs Chief Mining Engineer Railway Board, ; Sudarshan Banerjee vs Mcleod and Co. Ltd., (7 11).
Besides, it is submitted, by its very nature the wide definition of retrenchment would be wholly inapplicable to termination simpliciter.
The question of picking out a junior in the same category for being sent out in place of a person whose services are being terminated simpliciter or otherwise on the ground that the management does not want to continue his contract of employment would not arise.
Similarly it is pointed out that starting from Sundara Money where termination simpliciter of a workman for not having passed a test, or for not having satisfactorily completed his probation would not attract section 25G, as the very question of picking out a junior in the same category for being sent out instead of the person who failed to pass a test or failed to satisfactorily complete his probation could never arise.
If, however, section 25G were to be followed in such cases, the section would itself be rendered uncon stitutional and violative of fundamental rights of the workmen under Articles 14, 19(1)(g) and 21 of the Constitu tion.
It would be no defence to this argument to say that the management could record reasons as to why it is not sending out the juniormost in such cases.
Since in no single case of termination simpliciter would section 25G be applicable and in every such case of termination simpliciter, without exception, reasons would have to be recorded Similarly, it is submitted, section 25H which deals with re employment of re trenched workmen, can also have no application whatsoever, to a case of termination simipliciter because of the fact that the employee whose services have been terminated, would have been holding a post which 'eo instanti ' would become vacant as a result of the termination of his services and under section 25H he would have a right to be reinstated against the very post from which his services have been terminated, rendering the provision itself an absurdity.
It is urged that section 25F is only procedural in character along with sections 25G and 25H and do not prohibit the substantive right of termination but on the other hand requires that in effecting termination of employment,notice would be given and payment of money would be made and theater procedure under sections 25G and 25H would follow.
152 Mr. Bobde refutes the above argument saying that sections 25F, 25G and 25H relate to retrenchment but their contents are different.
Whereas section 25F provides for the conditions precedent for effecting a valid retrenchment, section 25G only provides the procedure for doing so.
Section 25H operates after a valid retrenchment and provides for re employment in the circumstances stated therein.
According to counsel, the argument is misconceived firstly for the reasons that section 2 itself says that retrenchment will be understood as defined in section 2(00) unless there is anything repugnant in the sub ject or context; secondly section 25F clearly applies to re trenchment as plainly defined by section 2(00); thirdly section 25G does not incorporate in absolute terms the principle of 'last come, first go ' and provides that ordinarily last employee is to be retrenched, and fourthly sections 25H upon its true construction should be held to be applicable when the retrenchment has occurred on the ground of the workman becoming surplus to the establishment and he has been re trenched under sections 25F and 25G on the principle 'last come, first go '.
Only then should he be given an opportunity to offer himself for re employment In substance it is submit ted that there is no conflict between the definition of section 2(00) and the provisions of sections 25F, 25G and 25H.
We find that though there are apparent incongruities in the provi sions, there is room for harmonious construction in this regard.
For the purpose of harmonious construction, it can be seen that the definitions contained in section 2 are subject to their being anything repugnant in the subject or context.
In view of this, it is clear that the extended meaning given to the term 'retrenchment ' under clause (00) of section 2 is also subject to the context and the subject matter.
Section 25 F prescribed the conditions precedent to a valid re trenchment of workers as discussed earlier.
Very briefly, the conditions prescribed are the giving of one month 's notice indicating the reasons for retrenchment and payment of wages for the period of the notice.
Section 25 FF pro vides for compensation to workmen in case of transfer of undertakings.
Very briefly, it provides that every workman who has been in continuous service for not less than one year in an undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F "as if the workman had been retrenched".
(Emphasis supplied).
Section 25 FFA pro vides that sixty days ' notice must be given of intention to close down any undertaking and section 25 FFF provides for compensation to workmen in case of closing down of undertak ings.
Very briefly stated section 25 FFF which has been already discussed lays down that "where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for 153 not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub section (2), be entitled to notice and compensation in accordance with the provisions of section 25 F, as if the workman had been retrenched".
(Emphasised supplied).
Section 25 H provides for re employment of retrenched workmen.
In brief, it provides that where any workmen are retrenched, and the employer proposes to take toto his employment any person, he shall, give an opportunity to the retrenched workmen to offer themselves for re employment as provided in the section subject to the conditions as set out in the section.
In our view, the principle of harmonious construc tion implies that in a case where there is a genuine trans fer of an undertaking or genuine closure of an undertaking as contemplated in the aforesaid sections, it would be inconsistent to read into the provisions a right given to workman "deemed. to be retrenched" a right to claim re employment as provided in section 25 H.
In such cases, as specifically provided in the relevant sections the workmen concerned would only be entitled to notice and compensation in accordance with section 25 F.
It is significant that in a case of transfer of an undertaking or closure of an under taking in accordance with the aforesaid provisions, the benefit specifically given to the workmen is "as if the workmen had been retrenched" and this benefit is restricted to notice and compensation in accordance with the provisions of section 25 F.
The last submission is that if retrenchment is under stood in its wider sense what would happen to the rights of the employer under the Standing Orders and under the con tracts of employment in respect of the workmen whose service has been terminated.
There may be two answers to this ques tion.
Firstly, those rights may have been affected by intro duction of sections 2(00), 25F and the other relevant sections.
Secondly, it may be said, the rights as such are not affect ed or taken away, but only an additional social obligation has been imposed on the employer so as to give the retrench ment benefit to the affected workmen, perhaps for immediate tiding over of the financial difficulty.
Looked at from this angle, there is implicit a social policy.
As the maxim goes Stat pro ratione voluntas populi; the will of the people stands in place of a reason.
Regarding the seeming gaps in the definition one would aptly remember what Lord Simonds said against the view that the court having discovered the intention of Parliament must proceed to fill in the gaps and what the legislature had not written the court must write.
"It appears to me to be a naked usurpation of the legisla 154 tive function under the thin disguise of interpretation.
And it is the less justifiable when it is guess work with what material the legislature would, if it had discovered the gap, have filled it in.
If a gap is disclosed, the remedy lies in an amending Act.
" The Court has to interpret a statute and apply it to the facts.
Hans Kelsen in his Pure Theory of Law (P. 355) makes a distinction between interpretation by the science of law or jurisprudence on the one hand and interpretation by a law applying organ (especially the court) on the other.
According to him "jurisprudential interpretation i., purely cognitive ascertainment of the meaning of legal norms.
In contradistinction to the interpretation by legal organs, jurisprudential interpretation does not create law".
"The purely cognitive interpretation by jurisprudence is there fore unable to fill alleged gaps in the law.
The filling of a so called gap in the law is a law creating function that can only be performed by a law applying organ; and the function of creating law is not performed by jurisprudence interpreting law.
Jurisprudential interpretation can do no more than exhibit all possible meanings of a legal norm.
Jurisprudence as cognition of law cannot decide between the possibilities exhibited by it, but must leave the decision to the legal organ who, according to the legal order, is authorised to apply the law.
" According to the author if law is to be applied by a legal organ, he must determine the meaning of the norms to be applied; he must 'interpret ' those norms (P. 348).
Interpretation therefore is an intel lectual activity which accompanies the process of law appli cation in its advance from a higher level to a lower level.
According to him, the law to be applied is a frame.
"There are cases of intended or unintended indefiniteness at the lower level and several possibilities are open to the appli cation of law.
" The traditional theory believes that the statute, applied to a concrete case, can always supply only one correct decision and that the positive legal 'correct ness ' of this decision is based on the statute itself.
This theory describes the interpretive procedure as if it con sisted merely in an intellectual act of clarifying or under standing; as if the law applying organ had to use only his reason but not his will, and as if by a purely intellectual activity, among the various existing possibilities only one correct choice could be made in accordance with positive law.
According to the author: "The legal act applying a legal norm may be performed in such a way that it conforms (a) with the one or the other of the different meanings of the legal norm, (b) with the will of the norm creating authority that is to be determined somehow ', (c) with the expression which the norm creating authority has chosen, (d) with the one or the other of the contradictory norms; or (e) the concrete case to 155 which the two contradictory norms refer may be decided under the assumption that the two contradictory norms annul each other.
In all these cases, the law to be applied constitutes only a frame within which several applications are possible, whereby every act is legal that stays within the frame.
" The definitions is section 2 of the Act are to be taken 'unless there is anything repugnant in the subject or con text '.
The contextual interpretation has not been ruled out.
In R.B.I. vs Peerless General Finance, reported in ; , O. Chinnappa Reddy, J. said: "Interpretation must depend on the text and the context.
They are the bases of interpretation.
One may well say if the text is the texture, context is what gives the colour.
Neither can be ignored.
Both are important.
That interpreta tion is best which makes the textual interpretation match the contextual.
A statute is best interpreted when we know why it was enacted.
With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word.
If a statute is looked at, in the context of its enactment, with the glasses of the statutemaker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context.
With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act.
No part of a statute and no word of a statute can be construed in isolation.
Statutes have to be construed so that every word has a place and everything is in its place.
It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court con strued the expression 'Prize Chit ' in Srinivasa and we find no reason to depart from the Court 's construction.
" As we have mentioned, industrial and labour legislation involves social and labour policy.
Often they are passed in conformity with the resolutions of the International Labour Organisation.
In Duport Steels vs Sirs, the House of Lords observed that there was a difference between applying the law and making it, and that judges ought to avoid becoming involved in controversial social issues, since this might affect their reputation in imparti ality.
Lord Diplock said: 156 "A statute passed to remedy what is perceived by Parliament to be a defect in the existing law may in actual operation turn out t0 have injurious consequences that Parliament did not anticipate at the time the statute was passed; if it had, it would have made some provision in the Act in order to prevent them . .
But if this be the case it is for Parliament.
not for the judiciary, to decide whether any changes should be made to the law as stated in the Acts Applying the above reasonings; principles and prece dents, t0 the definition in section 2(00) of the Act, we hold that "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section.
The result is that C.A. Nos.
3241 48 of 1981, 686(NL) of 1982, 18 17 of 1982, 1898 of 1982, 3261 of 1982, 1866 of 1982, 1868 of 1982, 8456 of 1983, 10828 of 1983 and the appeal arising out of S.L.P. (C) No. 3149 of 1983 are dis missed with costs quantified at Rs.3,000 in each appeal.
It is stated that in C.A. No. 686 of 1982 the respondent has already been reinstated pursuant to the order dated 24.10.1983 passed by this Court, having regard to the fact that he has served since 1983, he shall be considered for confirmation with effect from his due date according to Rules, if he is not already confirmed by the Corporation.
In view of the facts and circumstances of the case, we dispose of C.A. No. 885 of 1980 with the direction that the two workmen involved in this appeal be paid compensation of Rs. 1,25,000 (Rupees one lakh twenty five thousand) each in full and final settlement of all claims including that of reinstatement.
The payment shall be spread over a period from 11.11.1972 till date for the purpose of Income tax.
C.A. No. 4116 (NL) of 1984 was on the board, but the paper book is not available.
Hence it is delinked from the series.
C.A. Nos.
512 513 of 1984 and C.A No. 783 of 1984 were wrongly placed on the board.
Their subject matters are different and hence are delinked from this cluster to be heard separately by an appropriate bench.
R.N.J. Appeals disposed of.
| IN-Abs | This batch of eighteen appeals by special leave involves a common question of law, regarding the scope and ambit of the word 'retrenchment ' as defined in Section 2(oo) of the Industrial Dispute Act, 1947.
112 One of the appeals is by the workmen against the order of the High Court affirming the award of the Labour Court refusing to interfere with the order of termination of their services by the employer for their trade union activities, while the rest are by the employers/ managements against the orders of High Courts/Industrial Tribunal/ Labour Court setting aside the orders of termination of the services of the illegal for non compliance of the provisions of Section 25F of the Act.
While the employers ' contention is that the word "re trenchment" as defined in Section 2(oo) of the Act means termination of service of a workman only by way of surplus labour for any reason whatsoever, the workmen contend that "retrenchment" means termination of the service of a workman for any reason whatsoever, other than those expressly ex cluded by the definition in Section 2(oo) of the Act.
Disposing of the appeals, this Court, HELD: (1) Definition of 'retrenchment ' in Section 2(oo) means termination by the employer of the service of a work man for any reason whatsoever, otherwise than as a punish ment inflicted by way of disciplinary action and those expressly excluded by the definition.
This is the wider literal interpretation as distinguished from the narrow, natural and contextual interpretation of the word to mean termination by the employer of the service of a workman as surplus labour for any reason whatsoever.
[156C; 131B] B.N. Mutto vs T.K. Nandi, ; ; Jugal Ki shore Saraf vs Raw Cotton Co. Ltd., ; ; Sussex Peerage Case, [1844] II CI & Fin 85:8 ER 1034 (HL); Thompson vs Goold & Co., ; Ealsing L.B.C. vs Race Relations Board, ; Whiteley vs Chappell, [1868] LR 4; Prince Ernest of Hanover vs Attorney General, and Muir vs Keay, 44 MJMC 143, referred to.
(2) Difficulty was created by defining 'retrenchment ' to mean something wider than what it naturally and ordinarily meant.
Such a definition created complexity as the draftsman himself in drafting the other sections using the definition may slip into the ordinary meaning instead of the defined meaning.
However, a judge facing such a problem of interpre tation cannot simply fold his hands and blame the draftsman.
[149A B; F] 113 (3) The definition has used the word 'means '.
When a statute says that a word or phrase shall 'mean ' not merely that it shall 'include ' certain things or acts, "the defini tion is a hard and fast definition, and no other meaning can be assigned to the expression than is put down in defini tion." [150F G] Queen vs Commissioners under the Boiler Explosions Act, 1882, [1891] I QBD 703 and Gough vs Gough, LT II; relied on.
(4) There are apparent incongruities when the definition Clause Section 2(oo) is considered in the context of the main provisions viz. Sections 25F, 25G and 25H but there is room for harmonious construction.
The definitions contained in Section 2 are subject to there being anything repugnant in the subject or context.
[152C D] Vishwamitra Press vs Workers, ; ; Presidency Jute Mills Co. Ltd. vs Presidency Juite Mills Co. Employees Union, [1952] I LLJ 796 (LAT) (Cal); Iron & Steel Mazdoor Union, Kanpur vs J.K. Iron and Steel Co. Ltd., ; Halar Salt and Chemical Works, Jamnagar vs Workmen, ; Prakriti Bhushan Gupta vs Chief Mining Engineer, Railway Board, ; Sudarshan Banerjee vs Mcleod and C. Ltd., ; Srinivasa Enterprises vs Union of India, ; ; Reserve Bank of India vs Peerless Central Finance and Investment Co. Ltd., [1987] 2 SCR I, referred to.
(5) The express exclusion of volitional element in cl.
(a) and (b) of Section 2(oo) namely, voluntary retirement, and retirement on superannuation age implies that those would otherwise have been included.
If such cases were to be included, termination on abandonment of service, on efflux of time and on failure to qualify, though only consequential or resultant would be included as those have not been ex cluded.
Then there appears to be a gap between the first part and the exclusion part.
When such a gap is disclosed, the remedy lies in an amending Act.
The Court has to inter pret a statute and apply it to the facts.
[150C E] Duport Steels vs Sirs, , referred to.
(6) Construing retrenchment in its wider sense, the rights of the employer under the standing orders and under contracts of employment may have been affected by Sections 2(00) and 25F and other relevant sections.
Secondly, it may be said that the rights as such are not affected or taken away but only additional social obligation has been 114 placed on the employer so as to give retrenchment benefit to affected.
workmen perhaps for tiding over immediate finan cial distress.
Seen from this angle, there is implicit a social policy.
So goes the maxim Stat Pro ratione voluntes populi the will of the people stands in place of a reason.
[153E G] (7) In Sundara Money and subsequent cases the Supreme Court has adopted wider liberal meaning rejecting the narrow natural and contextual meaning.
The question of subsequent decisions of the Supreme Court being per incuriam on grounds of failure to apply the earlier law laid down by the Consti tution Bench in Hariprasad Shukla case could arise only if ratio in Sunclara Money and subsequent decisions was in conflict with the ratio in Hariprasad and Anakapalli.
Hari prasad case is not an authority for the proposition that Section 2(oo) only covers cases of discharge of surplus labour and staff.
Sundara Money and subsequent decisions in the line could not be held to be per incuriam in as much as in Hindustan Steel and Santosh Gupta cases the Division Benches of the Supreme Court had referred to Hariprasad case, and rightly held that its ratio did not extend beyond the case of termination on the ground of closure and as such it would not be correct to say that subsequent decision overlooked a binding precedent.
In a fast developing branch of Industrial and Labour Law it may not be always of partic ular importance to rigidly stick to a precedent and a prece dent may need to be departed from if the basis of legisla tion changes.
[143B C; 145E] L. Robert D 'Souza vs Executive Engineer, Southern Rail way and Anr., ; Rajasthan State Electricity Board vs Labour Court, ; Goodlas Nerolac Paints vs Chief Commissioner, Delhi, and The Managing Director, National Garages vs J. Gonsalves, , overruled.
Delhi Cloth and General Mills Ltd. vs Shambhu Nath Mukherjee and Ors.
, ; ; Hindustan Steel Ltd. vs The Presiding Officer, Labour Court; , ; Santosh Gupta vs State Bank of Patiala, ; ; Gammon India Ltd. vs Niranjan Das, ; and Reg vs Home Secretary, Ex P. Khawaja, [1984] AC 74 (HL), relied on.
Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Maz door Union, ; Sub Nomine Barsi Light Railway Co. vs K.N. Joglekar, ; Hariprasad Shivshankar Shukla vs A.D. Divikar, [1957] SCR 121; Anaka palla Co operative Agricultural 115 and Industrial Society Ltd. vs Workmen.
[1963] Supp. 1 SCR 730 and Workmen of Subong Tea Estate vs The Outgoing Manage ment of Subong Tea Estate and Anr., ; , dis tinguished.
Employees vs India Reconstitution Corporation Ltd., ; Indian Hume Pipe Co. Ltd. vs Workmen, ; Benett Coleman and Company Ltd. vs Employees, ; Mahan Lal vs Bharat Electronic Ltd., ; and Surendra Kumar Verma vs Central Govern ment Industrial Tribunal cum Labour Court, New Delhi; , , referred to.
(8) Article 141 embodies, a rule of law, the doctrine of precedents on which our judicial system is based.
[136H] (9) Per Incuriam means through inadvertance.
A decision can be said generally to be given per incuriam when the Supreme Court has acted in ignorance of its own previous decision or when a High Court has acted in ignorance of a decision of the Supreme Court.
The problem of judgment per incuriam when actually arises, should present no difficulty as the Supreme Court can lay down the law afresh if two or more of its earlier judgments cannot stand together.
Article 141, which embodies as a rule of law, the doctrine of prece dents, was enacted to make the law declared by the Supreme Court itself.
[136G; 138G; 137F] Re Dawson 's Settlement Lloyds Bank Ltd. vs Dawson, and Bengal Immunity Company Ltd. vs State of Bihar, , relied upon (10) The doctrine of ratio decidendi has also to be interpreted in the same line.
To consider the ratio deciden di Court has to ascertain the principle on which the case was decided.
The ratio decidendi of a decision may be nar rowed or widened by the judges before whom it is cited as a precedent.
[139G H] State of Orissa vs Sudhansu Shikhar Misra, ; ; F.A. & AB Ltd. vs Lupton (Inspector of taxes), ; Osborne vs Rowlett.
and Quinn vs Leathem. ; , relied on Griffiths vs J.P. Harrison (Watford) Ltd., ; Finsbury Securities Ltd. vs Inland Revenue Commissioners, , referred to. 116
|
ivil Appeal No. 679 of 1978.
From the Judgment and Order dated 30.9.
1976 of the Madhya Pradesh High Court in Misc.
Petition No. 63 of 1976.
S.K. Agnihotri for the Appellants.
Nemo for the Respondent.
The Judgment of the Court was delivered by 265 SABYASACHI MUKHARJI, CJ.
This is an appeal by special leave from the judgment and order of the High Court of Madhya Pradesh, dated 30th September, 1976 in Miscellaneous Petition No. 63 of 1976.
The respondent was the owner of a truck which was seized by the Police Sorwa on 10th December, 1974 for alleged con travention of the provisions of the (hereinafter called 'the Act ') in connection with Crime No. 42 of 1972.
The respondent made applications under Articles 226 and 227 of the Constitution of India, to the High Court to quash the orders of the Judicial Magistrate First Class, Alirajpur and the Sessions Judge, Jhabua re spectively rejecting.
his request for the return of the vehicle on furnishing security and to quash the order of the District Collector and restrain him from proceeding further in pursuance of the notice issued by him under Section 68 of the Act for confiscation of the vehicle and ask for return of the vehicle, or in the alternative to direct the District Judicial Magistrate to dispose of the application in accord ance with law The High Court after setting out the facts addressed itself to three questions, namely, (1) whether Section 6A of the as amended by the Amendment Act No. 30 of 1974 was prospective or retrospective? (2) whether in the facts and circumstances, the criminal Court had jurisdiction to entertain an application under section 523 read with section 516A of the Criminal Procedure Code for the return of the vehicle seized by the Police pending final decision of the criminal case? and (3) whether the respondent was entitled on the merits for the return of the vehicle as prayed for? On the first question, the High Court was of the view that it was a fundamental rule of law that no Statute should be construed to have a retrospective operation unless such a construction appeared very clearly in the terms of the Act, or arose by necessary implication, direct or indirect.
The High Court referred to several decisions which it is not necessary for us to refer to.
It is well settled that the normal rule of construction is that a provision in a statute is prospective but not retrospective, however, in the case of statutes which are merely declaratory or which relate to only matters of procedure or of evidence, it may have retro spective effect if there are indications to that effect or the manifest purpose compels one to construe the Act as such.
On an examination of the statute and the provisions referred to herein, the High Court found that there was no retroactivity.
We are 266 of the opinion that for the reasons given by the High Court, it is difficult to accept the position that there was no retroactivity.
Indeed, Mr Deshpande appearing for the appel lant did not seriously challenge this finding of the High Court.
There is no dispute in this case that the contraven tion of the provisions of the Act is alleged to have taken place in the instant case on the night of 15th March, 1972.
The vehicle was seized on 10th December, 1974.
The High Court examined Section 4 of the Amendment Act, along with Section 6A of the Principal Act and came to the conclusion that there was no retrospective effect.
We are of the opin ion that the High Court was right in holding that Section 4 of the Amendment Act, 1974 was only prospective and not retrospective.
Not only that there were no specific words to indicate the provisions of retrospective effect, but the positive provisions of sub section (2) of section 1 were to the effect that the amendment must be deemed to have come in effect on a particular date, is a pointer and that puts the matter beyond doubt.
The provisions of section 6A as it stood on 15th March, 1972 only were applicable to the present case and section 4 of the Amendment Act, 1974 could not, therefore, be applied as the Act was not in force on the date of offence.
The challenge to the High Court order on this aspect cannot, therefore, be entertained.
It was next contended by the respondent before the High Court that the Criminal Court was empowered under section 7 of the Act to confiscate the vehicle after due and proper inquiry and therefore the proceedings by the District Col lector under section 6A and Section 6B of the Act should be quashed.
Reliance was placed on several decisions and au thorities.
Our attention was drawn to the decision of the Mysore High Court in the case of The State vs Abdul Rasheed, AIR ; Sri Bharat Mahey & Ors.
vs The State of U. P. & Ors., as well as the decision of the learned Single Judge in State of M.P. vs Basant Kumar, [1972] JLJ Short Note No. 99.
On a consideration of the relevant authorities, the High Court came to the conclu sion that the criminal Court had jurisdiction to deal with the matter.
Mr. Deshpande sought to argue that in view of the enactment of the provisions of Section 6A as well as section 7 of the Act, it cannot be held that the criminal Court continued to retain jurisdiction.
He submitted that in view of the enactment of these provisions, it would be useless to hold that the criminal Court continued to retain jurisdiction, otherwise the very purpose of enacting section 6A read with section 7 would be defeated.
We are, however, unable to accept this contention because normally under the Criminal Procedure Code, the Criminal Courts of the country have the jurisdiction and the ouster of 267 the ordinary criminal Court in respect of a crime can only be inferred if that is the irresistible conclusion flowing from necessary implication of the new Act., In view of the language used and in the context in which this language has been used, we are of the opinion that the High Court was right in coming to the conclusion that the Criminal Court retained jurisdiction and was not completely ousted of the jurisdiction.
In that view of the matter, the High Court was therefore right in passing the order under consideration and in the facts and circumstances of the case to return the vehicle to the respondent on furnishing the security In the premise the appeal must fail and is dismissed.
There win, however, be no order as to costs.
N.P.V. Appeal dismissed.
| IN-Abs | The respondent 's truck was seized by the police on 10th December, 1974 for alleged contravention of the provisions of the on the night of 15th March, 1972.
The respondent fried applications before the High Court for quashing the orders of the Judicial Magis trate First Class and the Sessions Judge rejecting his request for the return of the vehicle on furnishing security and also for quashing the order of the Collector and re straining him from proceeding further in pursuance of notice issued by him under Section 6B of the Act for confiscation of the vehicle or directing the District Judicial Magistrate to dispose of his application in accordance with law.
Allowing the applications and directing the return of the vehicle, the High Court held that Section 6A of the Act, as amended by Section 4 of the Amendment Act, 1974 was only prospective and that the Criminal Court had jurisdiction to entertain applications under Section 523 read with 516A of the Criminal Procedure Code, for the return of the vehicle seized by the police pending final decision of the criminal case.
Dismissing the appeal by the State, this Court, HELD: 1.1 The normal rule of construction is that a provision in a statute is prospective but not retrospective.
However, in the case of statutes which are merely declarato ry or which relate to only matters of 264 procedure or of evidence, it may have retrospective effect if there are indications to that effect or the manifest purpose compels one to construe the Act as such.
[265G H] 1.2 The High Court examined Section 4 of the Essential Commodities (Amendment) Act, 1974 alongwith Section 6A of the Principal Act and came to the conclusion that there was no retrospective effect.
Not only that there were no specif ic words to indicate the provisions of retrospective effect, but the positive provisions of sub section (2) of Section 1 were to the effect that the amendment must he deemed to have come into effect on a particular date.
The High Court was, therefore, right in holding that Section 4 of the Amendment Act, 1974 was only prospective and not retrospective.
[266B C] In the instant case, the contravention of the provisions of the Act is alleged to have occured on 15th March, 1972, whereas the vehicle was seized on th December, 1974.
There fore, the provisions of Section 6A of the Essential Commodi ties Act, 1955 as it stood on 15th March, 1972 only were applicable to the present case and Section 4 of the Amend ment Act, 1974 could not he applied as the Act was not in force on the date of offence.
[266D] 2.
Normally, under the Criminal Procedure Code, the Criminal Courts of the country have the jurisdiction and the ouster of the ordinary criminal court in respect of a crime can only he inferred if that is the irresistible conclusion flowing from necessary implication of the new Act.
In view of the language used and in the context in which this lan guage has been used, the High Court was right in coming to the conclusion that the Criminal Court retained jurisdiction and was not completely ousted of the jurisdiction.
[266H; 267A B]
|
ivil Appeal No. 1899 of 1989.
From the Judgment and Order dated 20.2.87 of the Central Administrative Tribunal, Principal Bench, New Delhi in T.A. No. T 322/ 85 (CW 293/77).
Shankar Vaidyalingam and Ms. Seita Vaidyalingam for the Appellant.
B. Dutta, Govind Das, Mrs. Sushma Suri and Ms. Indra Sawhney for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The question for our consideration in this appeal is whether the appellant is governed by Funda mental Rule 56(c)(i) and as such entitled to superannuation at the age of 60 years.
Fundamental Rule 56(c)(i) is reproduced as under: "(c) A ministerial Government servant who entered Government service on or before the 31st March, 1958 and held on that date: (i) a lien or a suspended lien on a permanent post, or . shall retire from service on the afternoon of the 1st day of the month in which he attains the age of sixty years.
" The appellant joined service as paid apprentice in the Collectorate of Etawah, Government of Uttar Pradesh on 1st July, 1937.
On the same day he was asked to officiate in the post of Arranger.
He was sent back to the post of paid apprentice on 24th December, 1937 but was again appointed as Arranger in officiating capacity on 3rd of January 1938.
While holding the post of paid apprentice he had been ap pointed in various posts on officiating basis.
He was final ly promoted and appointed to a permanent post of Copyist in a substantive capacity on 1st of August, 1941.
He came to the Government of India on deputa 412 tion in March 1943 and thereafter retired from service on attaining the age of 58 years in February 1976.
The appellant claimed that having entered Government service on permanent basis before 31st March, 1938 he was entitled to continue in service till the age of 60 years under Fundamental Rule 56 (c)(i) and his retirement on attaining the age of 58 years was illegal.
The Central Administrative Tribunal, Principal Bench, New Delhi dis missed the application of the appellant holding that the appellant was only an apprentice under training prior to 1st of August, 1941 and as such was not holding any employment under the State on permanent basis.
According to the Tribu nal the appellant was appointed to the Government service on permanent basis to the post of Copyist on 1st of August, 1941 and as such he did not come within the purview of Fundamental Rule 56(c)(i).
We have examined the admitted entries in the service book of the appellant which are on the record.
These entries show that the appellant joined service as paid apprentice on substantive permanent basis on 1st of July, 1937.
It is correct that from 1st of July, 1937 upto 1st of August, 1941 he has been shown in the service book to be appointed in officiating capacity to various posts but the fact remains that his basic appointment as paid apprentice was permanent.
The finding of the Tribunal that the appellant was made permanent for the first time as Copyist on 1st August, 1941 cannot be accepted in the face of clear entries in the service book showing that he joined as paid apprentice on permanent basis on 1st of July, 1937.
Joining as paid ap prentice on permanent basis cannot be anything else but entering Government service on permanent basis and since the entry was before 31st March, 1938 Fundamental Rule 56(c)(i) is attracted and the appellant is entitled to remain in Government service till the age of 60 years.
In the reply affidavit on behalf of the respondents in the court below it is stated as under: "The petitioner joined Government Service under the provincial Government of Uttar Pradesh on 1.7. 1937 against a post of paid apprentice.
It appears there were a few permanent posts of paid apprentice under the State Government.
Petitioner was appointed against one of them in Collectorate, Etawah.
" 413 The respondents repeated their stand in the counter filed by them in this Court in the following terms: "It is submitted that the petitioner joined Govern ment service under the Provincial Government of Uttar Pra desh on 1.7.1937 against a post of "Paid Apprentice".
It appear that there were a few permanent posts of paid appren tice under the State Government.
The petitioner was appoint ed against one of them in the Collectorate, Etawah.
" We are, therefore, of the view that the Tribunal erred in denying the benefit of Fundamental Rule 56 (c)(i) to the appellant.
We allow the appeal with costs and set aside the judgment of the Central Administrative Tribunal under appeal and we hold that the appellant was entitled to continue in Government service till he attained the age of 60 years.
The appellant has already completed 60 years and as such he be paid two years emoluments with all consequential benefits including any enhancement in the fixation of pension and other post retirement benefits.
We quantify the costs as Rs.3,000.
G.N. Appeal allowed.
| IN-Abs | Appellant joined State Government service, as paid apprentice on 1.7.1937.
He held various posts and was pro moted to the permanent post of Copyist on 1.8.1941.
In March, 1943 he came to Government of india service on depu tation, and retired in 1976 on attaining the age of 58 years.
Thereafter he moved the Central Administrative Tribu nal claiming that since he entered Government service on permanent basis before 31.3.1938, he was entitled to contin ue in service till the age of 60 years, as per Fundamental Rule 56(c)(i).
Dismissing the application, the Central Administrative Tribunal held that since the appellant was appointed on permanent basis to the post of Copyist on 1.8.41, he did not come within the purview of Fundamental Right 56(c)(i).
Aggrieved, the appellant has preferred this appeal.
Allowing the appeal, this Court, HELD: It is correct that from 1st of July, 1937 upto 1st of August, 1941 the appellant has been shown in the service book to be appointed in officiating capacity to various posts but the fact remains that his basic appointment as paid apprentice was permanent.
The finding of the Tribunal that the appellant was made permanent for the first time as Copyist on 1st August, 1941 cannot be accepted in the face of clear entries in the service book showing that he joined as paid apprentice on permanent basis on 1st of July, 1937.
Joining as paid apprentice on permanent basis cannot be anything else but entering Government service on permanent basis and since the entry was before 31st March, 1938, Fundamental Rule 56(c)(i) is attracted and the appellant is entitled to remain in Government service fill the age of 60 years.
[412D F] 411 [ This court observed that since the appellant has already completed 60 years, he be paid two years emoluments with all consequential benefits including any enhancement in the fixation of pension and other post retirement benefits.] [413D]
|
ivil Appeal No. 1248 of 1978.
From the Judgment and Order dated 9.3.1977 of the Madras High Court in T.C. Petition No. 362 of 1975.
B.B. Ahuja and Ms. A. Subhashini for the Appellant.
A.T.M. Sampath and P.N. Ramalingam for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an appeal by special leave from the judgment and order of the Madras High Court dated 9th March, 1977.
The appeal involves the assessment of income tax under the Income Tax Act, 1961 (hereinafter referred to as 'the Act ') for the assessment year 1966 67.
The assessee is an individual who carried on business in distribution of films for the assessment year 1966 67.
The assessee filed a return of income on 12th July, 1968 declar ing "No loss".
Subsequently, the assessee filed a revised return on 4th January, 1969 declaring a net loss of Rs.9,490.
The Income Tax Officer called for wealth state ments from the assessee The wealth statements did not reveal that the assessee had invested any amount in the plot of land in T. Nagar.
However, a raid made in the premises of E.V. Saroja and K.R. Sadayappan revealed the information that the assessee along with Smt.
P.S.S. Ekammai Achi and A.L.N. Perianna Chettiar had purchased a plot of land in T. Nagar on 13.4.1965 from Smt.
K.V. Saroja.
The plot was purchased in the name of the assessee 's son Sri Ramakrish nan.
In the assessment, it was stated that the total consid eration was Rs.80,000 out of which Rs.25,000 was the payment in respect of the portion purchased in the name of Sri Ramakrishnan.
The examination of all the materials including the document revealed that the total 258 consideration was Rs. 1,40,000.
The on money payment made by the assessee on behalf of his son was Rs. 18,750 for which the assessee could not adduce evidence to prove the nature and source of investment.
This sum of Rs. 18,750 was treated by the Income Tax Officer as the undisclosed income of the assessee and he initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income and referred the case to the I.A.C. for disposal as the minimum penalty leviable exceeded Rs. 1,000.
The I.A.C. imposed a penalty of Rs. 18,750 being equal to the income concealed holding that the assessee had not discharged the burden cast upon him by the Explanation to section 271(1)(c) of the Act in not adducing any evidence that the plot was purchased by the assessee 's son out of his own funds and against the asses see 's own.
statement recorded on 9.10.1972 that the on money payment was made by him.
The assessee filed an appeal to the Tribunal and contended that in case of rejection of asses see 's explanation for the source, the addition could not be held to be the concealed income of the assessee, and relied on certain principles laid down by the courts.
The Tribunal allowed the appeal.
It is necessary to refer to relevant portions of the Tribunal 's order in respect of which certain contentions were urged before us.
The Tribunal in its order observed, inter alia, as follows: "We have considered the rival submissions.
At first we were impressed by the argument of the Departmental Representative that it is a fit case for the levy of penalty.
However, when we find that the assessee had at no time given any false or different particulars about this property in his return of income or at any time during the assessment proceedings, there cannot be any question of his having filed any incor rect particulars and more so of the income.
The Departmental Representative was unable to point out any occasion when the assessee has stated before the Income Tax Officer during the assessment proceedings that he had purchased the property only for Rs.80,000.
On the other hand, when he was asked to state the consideration of the property during the examina tion, he accepted that there were two agreements but the real consideration was Rs. 1,40,000.
That being so, we are unable to accept that the assessee had been wilfully negli gent or fraudulent in this regard.
Then the question arises as to any concealment in the addition made by the Department as income from undisclosed sources.
Here, the assessee 's case was that he had prepared a sort of cash statements to show that there 259 was some cash available for this purpose.
The Department 's case was that this was only a cash statement and this state ment sufferred from certain defects, viz., the absence of drawings for personal expenses and even the so called sur plus followed by utilisation for other expenses.
No doubt, the Income Tax Officer may be justified to say that not only the explanation is not convincing but false, because there was no cash available to the assessee for payment towards the extra money paid.
However, rejection of explanation even on the ground of falsity will not mean that the addition represented the assessee 's income and more so of the con cealed income of the assessee.
In fact, the assessee has not accepted the addition before the Income Tax Officer though he has not gone on appeal for reasons best known to him.
Whatever it is, there was no acceptance that the addition represented the concealed income.
Having regard to all these, we are of the view that the assessee 's case falls within the ratio of the decisions in C.I.T. vs Anwar Ali, and C.I.T. vs Khoday Ramarao & Sons, In view of what we have expressed above, we find no reasons to sustain the penalty.
Accordingly, we cancel the penalty.
" The penalty was set aside.
Aggrieved by the said order the revenue moved the Tribunal under section 256(1) of the Act to refer the following questions of law to the High Court: "(i) Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in canceling the penalty levied u/s 271(i)(c) in the assessee 's case? (ii) Whether having regard to the provisions of Explanation to Section 27 1(1)(c) the Appellate Tribunal 's cancellation of penalty is sustainable in law and on the materials on record? (iii) Whether the Appellate Tribunal 's view that the addi tion of Rs. 18,750 did not represent the concealed income of the assessee is based on valid and relevant consideration and is reasonable view to take on the facts of this case?" The Tribunal refused to refer the questions stated hereinbefore.
The respondent moved the High Court u/s 256(2) of the Act.
The High 260 Court was of the opinion that no question of law arose and ob served, inter alia, as follows: "It appears that the consideration mentioned in the said deed was Rs.80,000.
Finally, as a result of a search con ducted in the premises of R.V. Saroja as well as the asses see himself certain documents were seized, which showed that the actual consideration was Rs.1,40,000 and not Rs.80,000.
In this regard, it was explained that even if it was consid ered that the purchase consideration admitted by the asses see was not adequate, surplus cash balance and the addition al payment, if any, should be deemed to have been come out of such surplus fund and not out of any undisclosed fund.
The Income Tax Officer found himself unable to accept the said explanation for the reason that the statements of receipts and payment filed by the assessee only enabled him to reasonably connect some of the payments, but the said statement could not serve the purpose of a regular cash book disclosing such cash balance, under the assessee 's personal expenses were not shown in the statement.
If these were taken note of, the surplus, if any, would be wiped off.
In the end, he came to the conclusion that the assessee had not accounted for the full consideration for the plot purchased by him in the name of his son and that the balance of the consideration should have been met out of income from undis closed sources." According to the High Court, no question of law arose.
Aggrieved thereby, the revenue moved this Court and obtained leave under Article 136 of the Constitution.
The short point is: In the facts and circumstances of this case and in the light of law as it stood at the relevant time, has the assessee been able to discharge his onus to prove the question which arose in view of the Explanation intro duced by the Finance Act, 1964, section 271 of the Act.
The said Explanation provides as follows: "Explanation where the total income returned by any person is less than 80% of the total income (hereinafter in this Explanation referred to as the correct income) as assessed u/s 143 or 144 or section 147 '(reduced by the expenditure in curred bona fide by him for the purpose of making or 261 earning any income included in the total income but which has been disallowed as a deduction), such person shaH, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the partic ulars of his income or furnished inaccurate particulars of such income for the purposes of cl.
(c) of this subsection .
" It was explained by this Court in CIT vs Mussadilal Ram Bharose, that under the law as it stood prior to the amendment of 1964, the onus was on the revenue to prove that the assessee had furnished inaccurate particulars or had concealed the income.
Mr. Ahuja, appearing for the revenue, urged before us that difficulties were found in proving the positive element required for concealment under the law prior to the amendment and this had to be estab lished by the revenue.
He drew our attention to the observa tion of this Court at p. 20 of the report where this Court reiterated that the effect of the Explanation was that where the total income returned by any person was less than 30% of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he did so he should be deemed to have con cealed the particulars of his income or furnished inaccurate particulars for the purpose of section 271(1) of the Act.
The position, therefore, is that the moment the stipulated difference was there, the onus to prove that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted to the assessee, but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable.
This Court has explained the position at page 22 of the report as follows: "The position, therefore, in law is clear.
If the returned income is less than 80% of the assessed income, the presump tion is raised against the assessee that the assessee is guilty of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted.
The rebuttal must be on materials relevant and cogent.
It is for the fact finding body to judge the rele vancy and sufficiency of the materials If such a fact finding body, bearing the aforesaid principles in mind, comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact.
" 262 Mr. Ahuja and Mr. Sampath both relied on this decision to contend what was the position in law.
Relying on this decision, Mr. Sampath appearing for the assessee sought to urge that in the instant case, the Tribunal had found that there was explanation for the excess and that was the end of the matter.
No question of law arose thereafter, according to him.
It is true that the presumption that arose was rebuttable presumption that there was concealment of income and if there was cogent material to rebut the evidence that was acceptable then presumption would not stand.
In the instant case, the falsity of the explanation given by the assessee has been accepted by the Tribunal.
The Tribunal stated that in the instant case no doubt the Income Tax Officer was justified to say that not only the explanation was not convincing, but false because there was no cash available to the assessee for payment of the extra money paid.
Therefore, no explanation was forwarded as to where from the extra money came.
If that was the position and the presumption was further that the assessee was guilty of fraud, then the subsequent presumption followed that the assessee concealed the income and that can be only rebutted by cogent and reliable evidence.
No such attempt in this case was made.
In that view of the matter, in our opinion, it cannot be said that in this case the Tribunal was justi fied in rejecting the claim and penalty may be imposed.
The presumption raised as aforesaid, that is to say that the assessee was guilty of fraud or wilful neglect as a result of which the assessee has concealed the income, would be there.
This presumption could have been rebutted by cogent, reliable and relevant materials.
There was none, at least neither the tribunal nor the High Court has indicated any.
If that is the position, the High Court, in our opinion, was in error in not correctly applying the principles laid down by this Court in C.I.T. vs Mussadilal Ram Bharose, (supra) and the principles of law applicable in a situation of this type to the facts of this case and, therefore, the decision is not sustainable.
In the instant case there was no contro versy that the amount was not the income of the year in question.
In the aforesaid view of the matter, we set aside the judgment and order of the High Court and direct reference on the aforesaid question of law to the High Court.
Let a statement of the case on the aforesaid question be forwarded by the Tribunal within four months from this date, and the High Court dispose of the reference as quickly as possible.
The appeal is allowed and is disposed of in those terms.
The cost of this appeal will be the cost in the reference.
P.S.S. Appeal allowed.
| IN-Abs | Under the Explanation added to section 271(1)(c) of the Income Tax Act 1961 by the Finance Act, 1964, the assessee, in a case where the total income returned was less than 80 per cent of the total income assessed, was to he deemed to have concealed the particulars of his income unless he proved that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part.
In his return of income for the assessment year 1966 67 the assessee respondent declared certain loss.
The wealth statements called for did not disclose investment in lands.
Later it was found that he had purchased a plot in his son 's name.
In the assessment it was stated that the total consid eration was Rs.80,000 out of which Rs.25,000 was the payment in respect of the portion purchased for his son.
The exami nation of the material and the document revealed that the total consideration was Rs. 1,40,000.
The on money payment made by him on behalf of his son was Rs. 18,750.
Since the assessee could not adduce evidence to prove the nature and source of investment the ITO treated the sum as the undisclosed income and initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income and referred the case to IAC.
The IAC imposed a penalty equal to the income concealed holding that the assessee had not discharged the burden cast upon him by the Explanation.
In appeal, the Tribunal set aside the penalty on the ground that the assessee had at no time given any false or different particulars about this property in his return of income or at any time during the assessment proceedings and, therefore, there could not he any question of his having filed any incorrect particulars; that since the assessee had not stated in the assessment proceedings that he had pur chased the pro 256 perty only for Rs.80,000, and during the examination and accepted that though there were two agreements but the real consideration was Rs. 1,40,000, it could not be said that he had been wilfully negligent or fraudulent in this regard; that as regards concealment, his explanation was that there was some cash available for purchase of the plot, and that no doubt the Income Tax Officer might be justified to say that not only this explanation was not convincing but false the rejection of explanation even on the ground of falsity would not mean that the addition represented the assessee 's income and more so of the concealed income.
It also refused to refer to the High Court the questions of law preferred by the revenue.
In the appeal by the Revenue under section 256(2) of the Act the High Court found that there was no proof to show that the said sum of Rs. 18,750 represented the income of the relevant year and accordingly held that no question of law arose.
Allowing the appeal by special leave, the Court, HELD: 1.
The High Court was in error in not correctly applying the principles of law laid down by this Court in C.I.T. vs Mussadilal Ram Bharose, to the facts of the case.
The decision, therefore, was not sustainable.
[262F] 2.1.
The presumption that could be raised against the assessee under section 271(1)(c) of the Act, as it stood at the relevant time, that he was guilty of fraud or gross or wilful neglect resulting in concealment of income was a rebuttable presumption and if there was cogent material to rebut the evidence that was acceptable, the said presumption would not stand.
1261E; 262B] 2.2.
In the instant case, the falsity of the explanation given by the assessee had been accepted by the Tribunal in as much as it had stated that the Income Tax Officer was justified to say that not only the explanation was not convincing but false because there was no cash available to the assessee for payment of the extra money paid.
Therefore, no explanation was forwarded as to where from the extra money came.
If that was the position and the presumption was further that the assessee was guilty of fraud, then the subsequent presumption followed that he had concealed the income.
[262B D] 2.3.
The presumption thus raised against the assessee that he was guilty of fraud or wilful neglect as a result of which he had concealed the 257 income, would be there.
This presumption could have been rebutted By cogent, reliable and relevant materials.
No such attempt was made in the case.
It could not, therefore, be said that the Tribunal was justified in rejecting the claim.
[262E F] [Statement of the case to be forwarded by the Tribunal within four months and the High Court to dispose of the reference as quickly as possible.] [262G]
|
vil Appeal Nos.
93031 of 1990.
From the Judgment and Order dated 15.9.1989 of the Delhi High Court in C.W.P. No. 1770 of 1987.
Hardev Singh, Ms. Madhu Moolchandani and Jitender Sharma for the Appellant.
V.N. Koura and Ashok Grover for the Respondents.
285 The Judgment of the Court was delivered by AHMADI, J.
These two appeals by two different Trade Unions of Barauni Refinery are directed against the decision of the High Court of Delhi which set aside the modification of Clause 20 of the Standing Orders certified under Section 5 of the (hereinafter called 'the Standing Orders Act ').
The brief facts giving rise to these two appeals are as under: Two companies, namely, the Indian Refinery, Limited and Indian Oil Company, Limited amalgamated in 1964 and a new Company known as Indian Oil Corporation, Limited (IOCL) was incorporated.
This newly formed company comprised essential ly of two divisions, namely, (1) Marketing Division, repre senting the staff, assets and business of Indian Oil Compa ny, Limited and (2) Refinery and Pipe Lines Division, repre senting the staff, assets and oil refinery manufacturing of petroleum products of Indian Refinery, Limited.
The age of superannuation of the staff in the Marketing Division was 60 years whereas the age of superannuation for the Refinery and Pipe Lines Division was fixed at 58 years under Clause 20 of the Standing Orders concerning Barauni Refinery.
The IOCL has refineries in different parts of the country including one at Barauni.
The Standing Orders concerning the Barauni Refinery came into force on 5th December, 1964 as provided by Section 7 of the Standing Orders Act and apply to all workmen employed in the said industrial establishment.
Clause 20 of the Standing Orders reads as under: "Every employee shall retire from service on completing the age of 58 years.
Extension for a maximum period of 5 years but not for more than one year at a time may be given at the discretion of the company provided the employee is certified to be fit by the Company 's Medical Officer and provided further that the employee concerned also consents to such extension.
" By a Joint letter dated 15th December, 1981, 14 recognised Unions representing the employees of the IOCL working in different refineries and pipe lines divisions submitted a charter of demands in terms of clause 2.1.3 of the long term settlement dated 3rd December, 1979.
By clause 18 of this charter of demands the superannuation age was sought to be enhanced to 60 years.
A similar charter of demands was ' forwarded by the Barauni Telshodhak Mazdoor Union to the General 286 Manager, IOCL, Barauni Refinery, on 23rd December, 1981.
Pursuant to the presentation of this charter of demands, meetings were held between the Management of IOCL (R & P Division) and the recognised Unions of the said Division from time to time.
As a result of discussions held at the said meetings as settlement was mutually arrived at by and between the parties on May 24, 1983.
Clauses 19 and 21 of this general settlement concerning all the Refineries and Pipe Lines Divisions, inter alia provided as under: "19.
The Corporation agrees that such terms and conditions of service as well as amenities and allowances as are not changed under this settlement shall remain unchanged and operative during the period of the settlement." "21.
The Unions agree that during the period of operation of this settlement, they shall not raise any demand having financial burden on the Corporation other than bonus provid ed that this Clause shall not affect the rights and obliga tions of the parties in regard to matters covered under Section 9A of the .
" This general settlement was to remain in force from 1st May, 1982 to 30th April, 1986.
After this general settlement was signed by the Management and the Union representatives a separate Memorandum of Settlement dated 4th August, 1983 was signed between the IOCL (R & P Division), Barauni Refinery, and their workmen represented by Barauni Telshodhak Mazdoor Union, Barauni Refinery, under sections 12(3) and 18(3) of the , in conciliation proceed ings initiated by the Assistant Labour Commissioner and Conciliation Officer, Begusarai.
This settlement too was to remain in force from 1st May, 1982 to 30th April, 1986.
Clauses 19 and 21 of this settlement were verbatim reproduc tion of those in the general settlement dated 24th May, 1983 extracted hereinabove.
It may here be mentioned that despite the specific demand made in the charter of demands for the upward revision of the age of superannuation, no specific provision was made in that behalf either in the general settlement or in the special settlement concerning Barauni Refinery.
On the contrary clause 19 of both the settlements provides that the terms and conditions of service which are not changed under the Settlement shall remain unchanged and operative during the period of settlement.
The Petroleum and Chemical Mazdoor Union through its General Secretary, Ram Vinod Singh, served notice on the Regional 287 Labour Commissioner (Central) under Section 10(2) of the Standing Orders Act for modification of clause 20 of the certified Standing Orders of Barauni Refinery for raising the age of superannuation from 58 years to 60 years mainly on the ground that the staff members working in the Market ing Division superannuated on completing the age of 60 years.
It was also contended by the said Union that the demand for the upward revision of the age of superannuation could not be pressed at the time of the settlement arrived at pursuant to the charter of demands because the age of retirement was fixed at 58 years under the relevant certi fied Standing Orders.
It was, therefore, felt necessary that clause 20 of the certified Standing Orders applicable to Barauni Refinery of the IOCL should be got suitably modified to raise the age of retirement to 60 years.
This demand was based on the averment that the nature of work performed by the workmen in the Refinery and Pipe Lines Division was identical to that performed by the staff members of the Marketing Division.
The pay scales of the employees of the Refinery Division and Marketing Division were also identi cal.
It was, therefore, contended that there was no valid reason for fixing different ages for retirement for the staff members working in the said two Divisions of IOCL.
The Regional Labour Commissioner after heating the rival parties allowed the application for modification of clause 20 of the certified Standing Orders.
By his order he direct ed that clause 20 should be modified as under: "Normally the age of retirement of workman of the Corpora tion is fixed at 60 years.
No notice is required to be given by a workman of his intention to retire on superannuation or by the Management to the workman that he is due to reach the age of superannuation on certain date.
The workman should not, however, leave his place of duty without being re lieved.
" Against this order of 11th October, 1984, the IOCL preferred an appeal to the Appellate Authority under Section 6 read with Section 10(3) of the Standing Orders Act.
The Appellate Authority while dismissing the appeal directed a slight modification in clause 20 of the Standing Orders.
Clause 20 as modified by the Appellate Authority was worded as under: "Every workman shall generally retire on attaining the age of 58 years.
Between the 57th and 58th year Company 's 288 Medical Officer would conduct the medical test and if the workman is found to be medically fit he shall be retained in service for a period of two more years beyond the age of 58 years i.e. upto 60 years.
" Feeling aggrieved by this order of the Appellate Authority the IOCL preferred a writ petition No. CWP No. 1717/87 in the High Court at Delhi for quashing the impugned order of the Certifying Officer dated 11th October, 1984 and the impugned order of the Appellate Authority dated 4th May, 1987.
The Union which had initiated the proceedings for modification of Clause 20 of the certified Standing Orders also felt aggrieved by the said order of the Appellate Authority and preferred a writ petition No. CWP 3417/87 in the High Court of Delhi.
Both these writ petitions were heard by a Division Bench and were disposed of by a common Judgment.
The writ petition filed by the IOCL was allowed while the other writ petition was dismissed.
While hearing these two writ petitions the High Court formulated two points for consideration, namely, (i) "Wheth er the Certifying Authority under the Standing Orders Act has the jurisdiction to entertain an application for amend ment of a Standing Order which fixes the age of retirement of the workmen as 58 years which is in consonance with the model Standing Order and enhances the age of retirement to 60 years without first giving any finding whether it is practicable to give effect to the model Standing Order" and (ii) "Whether the settlement arrived at under Section 18(3) and Section 19(2) of the , between the petitioner and the workmen represented by their recognised majority union and which settlement was in force when impugned orders were made, had put any bar on the rights of the workmen to approach the authorities under the said Act for seeking modification of the Standing Orders with regard to the fixation of the age of superannuation of the workmen".
The High Court answered the first question in the affirmative holding that it was open to the Certifying Authority to entertain an application for modification of the clause fixing the date of superannuation, the provisions in the model Standing Orders, notwithstanding.
On the second point the High Court came to the conclusion that the settle ment arrived at in conciliation proceedings was binding on the workmen and as clause 19 of the settlement kept the service conditions which were not changed in tact and clause 21 of the settlement did not permit raising of any demand throwing an additional financial burden.
on the IOCL, it was not permissible to modify the certified Standing Orders by an amendment as that would alter the service condition and 289 increase the financial burden on the Management.
In this view that the High Court took it quashed the orders passed by the two authorities below and made the rule in CWP No. 1717/87 absolute while dismissing CWP No. 3417/87 with no order as to costs.
It is against this order that the Trade Unions have approached this Court.
The Standing Orders Act was enacted to define with sufficient precision the conditions of employment for work ers employed in industrial establishments and to make the same known to them.
The object of the Act was to have uni form Standing Orders in respect of the matters enumerated in the schedule to the Act regardless of the time of their appointment.
With this in view the Act was enacted to apply to all industrial establishments wherein 100 or more workmen were employed on any date of the preceding 12 months.
Within six months from the date on which this enactment becomes applicable to an industrial establishment, the employer is obliged by Section 3 to submit to the Certifying Officer draft Standing Orders proposed by him for adoption in his industrial establishment.
Sub section (2) of Section 3 lays down that in such draft Standing Orders provision shall be made for every matter set out in the schedule which may be applicable to the industrial establishment and where model Standing Orders have been prescribed shall be, so far as practicable, in conformity with such model.
Section 4 pro vides that the Standing Orders shall be certifiable if (a) provision is made therein for every matter set out in the schedule which is applicable to the industrial establishment and (b) the Standing Orders are otherwise in conformity with the provisions of the Act.
It further casts a duty on the Certifying Officer or Appellate Authority to adjudicate upon the fairness and reasonableness of the provisions of any Standing Orders.
On receipt of the draft Standing Orders, section 5 requires the Certifying Officer to forward a copy thereof to the trade union, if any, of the workmen, or where there is no such trade union, to the workmen in such manner as may be prescribed, together with a notice in the pre scribed form requiring objections, if any, which the workmen desire to make to the draft Standing Orders.
Thereafter the Certifying Officer must hear the concerned authorities and decide whether or not any modification of or addition to the draft submitted by the employers is necessary to render the draft Standing Orders certifiable under the Act.
He is then expected to certify the draft Standing Orders with modifica tions, if any, and send authenticated copies thereof in the prescribed manner to the employer, to the trade union or other prescribed representatives of the workmen within 7 days.
Section 6 provides for an appeal against the order of the Certifying Officer.
The Appellate Authority has to com 290 municate its decision to the Certifying Officer, to the employer and the trade union or other prescribed representa tive of the workmen within 7 days from the date of its order.
Section 7 provides that the Standing Orders shall, unless an appeal is preferred, come into operation on the expiry of 30 days from the date on which authenticated copies thereof are sent under section 5(3) or where an appeal is preferred, on the expiry of 7 days from the date on which copies of the orders of the Appellate Authority are sent under section 6(2).
Standing Orders duly certified as above for the Barauni Refinery came into operation on 5th December, 1964 as provided by section 7.
We then come to Section 10 which provides for modification of certified Standing Orders.
Subsection (1) thereof states that the Standing Orders finally certified shall not, except on agreement between the employer and the workmen or a trade union or other representative body of the workmen be liable to modification until the expiry of six months from the date on which the Standing Orders or the last modification there of came into operation.
Sub section (2) of Section 10 reads as under: "Subject to the provisions of sub section (1), an employer or workman or a trade union or other representative body of the workman may apply to the Certifying Officer to have the standing orders modified, and such application shall be accompanied by five copies of the modifications proposed to be made, and where such modifications are proposed to be made by agreement between the employer and the workmen or a trade union or other representative body of the workmen, a certified copy of that agreement shall be filed along with the application.
" It was under this provision that clause 20 of the certified Standing Orders was sought to be modified.
Since the High Court has answered the first point in the affirmative i.e. in favour of the workmen, we do not consid er it necessary to deal with that aspect of the matter and would confine ourselves to the second aspect which concerns the binding character of the settlement.
Section 2(p) of the defines a settlement as a settlement arrived at in the course of conciliation proceed ings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the officer authorised in this behalf by the appropriate 291 Government and the Conciliation Officer.
Section 4 provides for the appointment of Conciliation Officers by the appro priate Government.
Section 12(1) says that where any indus trial dispute exists or is apprehended the Conciliation Officer may, or where the dispute relates to a public utili ty service and a notice under Section 22 has been given, shall, hold conciliation proceedings in the prescribed manner.
Sub section (2) of Section 12 casts a duty on the Conciliation Officer to investigate the dispute and all matters connected therewith with a view to inducing the parties to arrive at a fair and amicable settlement of the dispute.
If such a settlement is arrived at in the course of conciliation proceedings, sub section (3) requires the Conciliation Officer to send a report thereof to the appro priate Government together with the memorandum of settlement signed by the parties to the dispute.
Section 18(1) says that a settlement arrived at by agreement between the em ployer and the workmen otherwise than in the course of the conciliation proceedings shall be binding on the parties to the agreement.
Sub section (3) of Section 18 next provides as under: "A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub section (3 A) of Section 10 A or award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on (a) all parties to the industrial dispute: (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause: (c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates: (d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.
" 292 It may be seen on a plain reading of sub sections (1) and (3) of section 18 that settlements are divided into two categories, namely, (i) those arrived at outside the concil iation proceedings and (ii) those arrived at in the course or ' conciliation proceedings.
A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement be longing to the second category has extended application since it is binding on all parties to the industrial dis pute, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter.
Therefore, a settlement arrived at in the course of concili ation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same.
To that extent it departs from the ordinary law of contract.
The object obviously is to uphold the sanctity of settle ments reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minor ity union from scuttling the settlement.
There is an under lying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the Union signing the settlement but also on others.
That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an adjudicatory authority.
The High Court was, therefore, right in coming to the conclusion that the set tlement dated 4th August, 1983 was binding on all the work men of the Barauni Refinery including the members of Petro leum and Chemical Mazdoor Union.
The settlement does not make any specific mention about the age of retirement.
Clause 19 of the settlement, however, provides that such terms and conditions of service as are not changed under this settlement shall remain unchanged and operative for the period of the settlement.
The age of retirement prescribed by clause 20 of the certified Standing Orders was undoubtedly a condition of service which was kept intact by clause 19 of the settlement.
The provisions of the Standing Orders Act to which we have adverted earlier clear ly show that the purpose of the certified Standing Orders is to define with sufficient precision the conditions of em ployment of workman and to acquaint them with the same.
The charter of demands contained several matters touching the conditions of service including the one concerning the upward revision of the age of retirement.
After deli 293 beration certain conditions were altered while in respect of others no change was considered necessary.
In the case of the latter clause 19 was introduced making it clear that the conditions of service which have not changed shall remain unchanged i.e. they will continue as they are.
That means that the demand in respect of revision of the age of retire ment was not acceded to.
By clause 21 of the settlement extracted earlier the Union agreed that during the period of the operation of the settlement they shall not raise any demand which would throw an additional financial burden on the management, other than bonus.
Of course the proviso to that clause exempted matters covered under section 9A of the from the application of the said clause.
However, section 9A is not attracted in the present case.
The High Court was, therefore, right,in observing: "when the settlement had been arrived at between the workmen and the company and which is still in force, the parties are to remain bound by the terms of the said settlement.
It is only after the settlement is terminated that the parties can raise any dispute for fresh adjudication".
The argument that the upward revision of the age of superannuation will not entail any financial burden cannot be accepted.
The High Court rightly points out: "workmen who remain in service for a longer period have to be paid a larger amount by way of salary, bonus and gratuity than workmen who may newly join in place of retiring men".
The High Court was, therefore, right in concluding that the upward revision of the age of superannuation would throw an additional financial burden on the management in violation of clause 21 of the settlement.
Therefore, during the opera tion of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannua tion would come in conflict with clause 19 and 21 of the settlement.
We are, therefore, of the opinion that the conclusion reached by the High Court is unassailable.
In view of the above we see no merit in these appeals and dismiss them with no order as to costs.
Interim orders in each appeal will stand dissolved.
R.S.S. Appeals dismissed.
| IN-Abs | The appellants are two different trade unions of Barauni Refinery of the respondent, Indian Oil Corporation Limited (IOCL).
The IOCL is comprised essentially of two divisions: (1) Marketing Division, and (2) Refinery and Pipe Lines Division.
The age of superannuation of the staff in the Marketing Division was 60 years whereas for the Refinery and Pipe Lines Division it was fixed at 58 years under Clause 20 of the Standing Orders concerning Barauni Refinery.
In December 1981, 14 recognised Unions representing the employees of the IOCL working in different refineries and pipe lines divisions submitted a charter of demands.
By clause 18 of this charter the superannuation age was sought to be enhanced to 60 years.
A similar charter of demands was separately submitted by the Barauni Telshodhak Mazdoor Union.
As a result of discussions a general settlement was mutually arrived at by and between the parties on May 24, 1983.
Subsequently, a separate Memorandum of Settlement dated 4th August, 1983 concerning Barauni Refinery was signed by the parties under sections 12(3) and 18(3) of the in conciliation proceedings.
Both the general settlement and the special settlement concerning Barauni Refinery were to remain in force till 30th April, 1986.
Despite the specific demand made in the two charters of demand for the upward revision of the age of superannuation, no specific provision was made in that behalf either in the general settlement or in the special settlement.
On the contrary, clause 19 of both the settle ments provided that the 283 terms and conditions of service which were not changed under the settlements shah remain unchanged and operative during the period of settlement, further, clause 21 did not permit raising of any demand throwing an additional burden on the corporation during that period.
Later, the Petroleum and Chemical Mazdoor Union served notice on the Regional Labour Commissioner (Central) under section 10(2) of the Industrial Employment (Standing Orders) Act, 1948 for modification of clause 20 of the Certified Standing Orders of Barauni Refinery for raising the age of superannuation from 58 years to 60 years.
This demand was based on the averment that the nature of work performed by the workmen in the Refinery and Pipe Lines Division and their payscales were identical to the staff members of the Marketing Division.
The Regional Labour Commissioner allowed the application for modification of clause 20 of the Certified Standing Orders.
The Appellate Authority dismissed the appeal of the Corporation, but at the same time directed a slight modifi cation in clause 20 of the Standing Orders.
The IOCL preferred a writ petition in the High Court for quashing the orders of the Regional Labour Commissioner as well as the Appellate Authority.
On the other hand, the Union, feeling aggrieved by the order of the Appellate Authority, preferred a writ petition against that order.
The High Court inter alia held that the settlement arrived at in the conciliation proceedings was binding on the workmen, and as clause 19 of the settlement kept the service conditions which were not changed in tact and clause 21 of the settlement did not permit raising of any demand throwing an additional burden on the Corporation, it was not permissible to modify the certified Standing Orders by an amendment, as that would alter the service conditions and increase the financial burden on the management.
Dismissing the appeals by the two trade unions this Court, HELD: (1) The Industrial Employment (Standing Orders) Act, 1948 was enacted to define with sufficient precision the conditions of employment for workers employed in indus trial establishments and to make the same known to them.
[289B] (2) According to sub sections (1) and (3) of section 18 of the , settlements are divided into two categories, namely, (i) those arrived at outside the conciliation proceedings and (ii) 284 those arrived at in the course of conciliation proceedings.
A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second catego ry has extended application since it is binding on all parties to the industrial dispute.
[292A B] (3) A settlement arrived in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same.
To that extent it departs from the ordinary law of contract.
[292C] (4) The object is to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minor ity union from scuttling the settlement.
There is an under lying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others.
The High Court was, therefore, right in coming to the conclusion that the settlement dated 4th August, 1983 was binding on all the workmen of the Barauni Refinery including the members of Petroleum and Chemical Mazdoor Union.
[292D E] (5) The age of retirement prescribed by clause 20 of the Certified Standing Orders was undoubtedly a condition of service which was kept in tact by clause 19 of the settle ment.
[292G] (6) During the operation of the settlement it was not open to the workmen to demand a change in clause 20 of the certified Standing Orders because any upward revision of the age of superannuation would come in conflict with clauses 19 and 21 of the settlement.
[293E F]
|
tion (Civil) No. 426 of 1989 etc.
(Under Article 32 of the Constitution of India).
P. Chidambaram, K.K. Venugopal, Dushyant Dave, R. Karan jawala, Ms. Meenakshi Arora, Mrs. Manik Karanjawala (N.P.), C.S. Vaidyanathan and S.R. Setia for the Petitioners.
Yogeshwar Prasad, R.S. Rana and Ashok Srivastava for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
The challenge in these writ petitions and special leave petitions is basically to the order dated 18th January, 1989, passed by the District Excise Officer, Gaziabad, seeking to recover duties of excise on Homeodent under the Medicinal & Toilet Prepara tions (Excise Duties) Act, 1955 (hereinafter called 'the 1955 Act '), even though the product was classifiable under the Central Excises & Salt Act, 1944 (hereinafter called 'the 1944 Act ') and was, in 299 fact, assessed to duty under the said.
Act between 1985 and 1988.
Necessarily, the question arises as to whether, in the facts and circumstances of the case, the 1944 Act would apply or the 1955 Act would apply.
The factual dispute is whether in the facts, as enumerated hereinafter, alcohol was present in Homeodent and further whether Homeodent was Homeopathic medicine or toilet preparation and further whether the same was dutiable under the 1944 Act.
We must recapitulate the basic facts in the several matters involved herein.
M/s. Dabur India Limited which is the petitioner in special leave petition No. 1610/89 arising out of judgment and order dated 20th December, 1988 in civil miscellaneous writ petition No. Nil of 1988 connected with civil miscella neous writ petition No. Nil of 1988 of the High Court of Allahabad, and also the petitioner in writ petition No. 426/89, is a public limited company engaged in manufacture of Ayurvedic medicaments and Allopathic medicaments along with cosmetics.
It had agreed to manufacture for and on behalf of M/s. Sharda Boiron Laboratories Ltd. (hereinafter called 'the company ') being the petitioner in special leave petition Nos. 135 36/89, used to manufacture and/or produce a Homeopathic tooth paste called 'Homeodent ' out of the raw materials supplied by the company on job work basis.
The petitioner states that it accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeo dent under the 1944 Act at appropriate leviable rates and recovered the same from the company.
According to the peti tioner, Homeodent did not contain alcohol but contained ingredients "mother tinctures" containing alcohol.
It is stated that alcohol, due to various reasons, has a tendency to evaporate during the process of manufacture of Homeodent.
It is further the case of the petitioner company that during the period from 1979 to 1988 it also manufactured certain other medicinal products containing alcohol which were classifiable under the 1955 Act.
The petitioner company held at all material times licence as required under the 1955 Act to manufacture these products.
The State Excise authorities enforcing the provisions of the Act had perma nently posted an Inspector as also a peon in the factory of the petitioner where these dutiable products were manufac tured.
The bonded manufactory in which these products were manufactured was under lock and key of the said officers, according to the petitioner.
The activities of the petition er, the petitioner asserts, were clearly within the knowl edge of the State excise authorities for over a considerably long period.
During the period from 1985 1988, the company supplied 300 to the petitioner amongst other ingredients, "mother tinc tures" under BM 9 forms, stating clearly that such mother tinctures were intended to be used in manufacture of Homeo dent in the factory of the petitioner.
These BM 9 forms, according to the petitioner, were filed with the State excise authorities regularly.
Therefore, the petitioner asserts that the State excise authorities were aware of the manufacture of Homeodent by the petitioner and the activity of the company in getting the same manufactured in the factory of the petitioner out of mother tinctures.
However, the State excise authorities did not object to the same nor did they call upon either the petitioner or the company to pay duty under the 1955 Act.
On 1st January, 1985, the petitioner states, the peti tioner filed classification list classifying Homeodent under the Act of 1944, declaring therein the ingredients of Homeo dent.
On 17th January, 1985, the classification list filed by the petitioner on 1.1.
1985 was approved finally and Homeodent was held to be classifiable under the Act of 1944.
On 31st August, 1987 the Assistant Collector of Central Excise passed an order which was an appealable one classify ing Homeodent under the Act of 1944.
The petitioner asserts that this order had subsequently been upheld by the Collec tor of Central Excise (Appeals), New Delhi, on an appeal filed by the company.
However, on 18th January, 1989 the Superintendent of State Excise, Bulandshahr visited the factory of the petitioner and after inspecting the same, enquired about Homeodent.
It is the case of the petitioner that it had explained that Homeodent was classified under the Act of 1944 in view of the orders passed by the Central Excise authorities.
However, it is stated that the Superin tendent of State Excise, Bulandshahr called upon the peti tioner to furnish details in respect of Homeodent including its ingredients and total value of clearances etc.
On 20th January, 1988 the petitioner addressed a detailed letter to the Superintendent of State Excise, Bulandshahr, explaining its stand, and that duty had been paid thereon.
State Excise authorities, thereafter, did not take any action against the petitioner nor did they take out samples of Homeodent tooth paste to get appropriate results as required under the Act of 1955 and the rules framed thereunder.
However, on 17th March, 1988 the Superintendent of State Excise, Bulandshahr passed a demand order directing the petitioner to deposit a sum of Rs.68,13,334.20 being the alleged duty payable on 'Homeodent ' manufactured and cleared between January, 1985 and January, 1988.
This order was passed without issuing any notice to show cause and, according to the petitioner, without affording the petitioner any opportunity of hearing.
The petitioner on the same day sent a rep 301 resentation requesting for compliance with the principles of natural justice and disputing the claim for duty.
On 18th March, 1988 the Superintendent of State Excise, Bulandshahr, modified his earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs on provisional basis.
Once again the petitioner was neither served with a show cause notice nor was afforded an opportunity of personal hearing, accord ing to the petitioner.
While passing either of the orders, no test result, it is asserted, was obtained to establish whether Homeodent contained alcohol or not.
However, on 18th March, 1988 the petitioner deposited a sum of Rs.11.66 lakhs.
The petitioners also executed a bank guarantee in favour of the District Magistrate, Ghaziabad, for a sum of Rs.35 lakhs.
On 6th April, 1988 the petitioners filed an appeal before the Excise Commissioner, U.P. against the illegal orders of the District Excise Officer.
The petitioners also appeared for personal hearing before the Excise Commissioner through their advocate on 23rd April, 1988.
On 5th May, 1988 the Excise Commissioner, U.P., passed an order dismissing the appeal of the petitioners.
However, petitioner No. 1 states that copy of the order was not served upon it.
The petitioner No. 1 further asserts that without serving a copy of the order on it and without intimating whether the order had been passed or not, the District Excise Officer ap proached M/s. Grindlays Bank for encashment of the bank guarantee of Rs.35 lakhs and coerced, according to the petitioners, the bankers to encash the same forthwith.
Thereafter, the petitioner moved the High Court of Allahabad against the illegal actions of the respondents.
The High Court directed the authorities to serve a copy of the order and restrained the respondents from encashing the bank guarantee.
It is stated that while the High Court of Allaha bad was considering the writ petition of the petitioner and had granted stay as aforesaid, the respondent District Excise officer encashed the bank guarantee of Rs.35 lakhs without even calling upon the petitioner first to pay the amount.
On 13th May, 1988 the High Court of Allahabad di rected the petitioner to file a revision petition with the Central Government.
A revision petition was filed along with stay application on 28th May, 1988.
Thereafter, the Central Government granted stay against recovery of the balance amount of Rs.21.46 lakhs.
On 22nd September, 1988 the Addi tional Secretary to the Government of India in exercise of his revisional powers allowed the revision of the petition ers and declared the orders of the District Excise Officer dated 17th and 18th March, 1988 as upheld in appeal by the Excise Commissioner as null and void having been passed in violation of principles of natural justice.
Thereupon it, the petitioners state, 302 called upon the District Excise Officer and the District Magistrate to refund the amount of Rs.46.67 lakhs recovered from it by way of cash payment and encashment of bank guar antee in view of the revision order.
The case of the peti tioner is that the State Excise authorities failed to grant the petitioner refund as prayed for despite the order of the revisional authorities.
On 2nd November, 1988 the District Excise Officer issued a show cause notice requiring the petitioner to show cause as to why an amount of Rs.68.13 lakhs be not recovered from it in respect of Homeodent manufactured and cleared during January, 1985 to January, 1988.
In December, 1988 the petitioner moved the High Court of Allahabad under Article 226 of the Constitution of India, inter alia, praying for a writ of mandamus for quashing and setting aside the show cause notice dated 2.11.1988 and for refund of duty amounting to Rs.46.67 lakhs.
On 20th Decem ber, 1988 the High Court of Allahabad dismissed the writ petition filed by the petitioner.
It is stated that on 10th January, 1989 this Court upon special leave petitions Nos.
135 36/89 filed by the company was pleased to issue notice and directed stay of operation of the notice of demand.
Thereafter, on 20th January, 1988 the District Excise Offi cer directed the petitioner to appear for personal hearing in response to the show cause notice.
The petitioner ap peared before the District Excise Officer without prejudice and submitted a detailed reply to the show cause notice and also contended during personal hearing that the notice was required to be withdrawn.
In its reply the petitioner cate gorically stated that the reply was being submitted without prejudice to petitioner 's right to move this Court by way of a special leave petition.
Thereafter, the petitioner moved this Court on 21st January, 1989.
It is, therefore, neces sary to refer to the judgment and order dated 20th December, 1988 in civil writ petition No. Nil/88 connected with civil miscellaneous writ petition No. Nil/88 in the High Court of Allahabad.
It appears that M/s. Dabur India Limited had filed the said writ petition in the High Court challenging the show cause notice dated 2nd November, 1988 by the District Excise Officer.
Ghaziabad.
Another writ petition being writ peti tion No. 1160/88 which is the subject matter of special leave petition Nos.
135 36/89 was filed by M/s. Sharda (the company) for quashing the order of the Central Government dated 3.6.1988 which was annexure 1 to the writ petition.
These two were disposed of by the said judgment.
The ques tion that was mainly involved therein was that the conten tion of the petitioner that the Homeodent did not contain alcohol, though one of the ingredients of such preparation was mother tincture containing alcohol and the same was assessable under Item 14FF of the 1944 Act.
The Asstt.
303 Collector of Central Excise, Ghaziabad, had taken the view that the Homeodent was classifiable Under sub heading No. 3306 02 of the Chapter 33 of the and on that duty @ 15% ad valorem was leviable.
This duty computed at the said rate by the Central Excise author ities was paid, according to the petitioner, on the goods manufactured from 1.1.1986.
On 18th January, 1988 the Dis trict Excise Officer made a surprise inspection of the units of the petitioner and when it was revealed that the Homeo dent tooth paste manufactured by M/s. Dabur was toilet preparation containing alcohol within the meaning of Section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, and was therefore assessable to duty @ 100% ad valorem.
The District Excise Officer, Ghazia bad, therefore had caused a common notice dated 17.3.1988 to be served on the petitioner requiring it to pay duty aggre gating to Rs.68,13,334.20 under the provisions of the 1955 Act on such goods manufactured from 1st January, 1985 till the date of notice.
As mentioned hereinbefore, against this notice some representation was made by the petitioner to the District Excise Officer and thereupon the petitioner was directed to deposit provisionally the excise duty to the tune of Rs.46,55,45 1.45 under the 1955 Act and the same was deposited by the petitioner.
Such demand wad.
challenged by M/s. Dabur in appeal before the Excise Commissioner.
The Excise Commissioner affirmed the order of the District Excise Officer and dismissed the appeal.
No appeal was filed by M/s. Sharda against the demand notice of excise duty under the 1955 Act.
However, both the petitioners approached the Central Govt.
in revision under Rule 128 of the 1956 Rules.
The revision of M/s. Dabur was disposed of by the Central Govt.
and the result was communicated by the Addi tional Secretary to the Govt.
of India by the order dated 22.9.1988.
The contention of M/s. Dabur that the demand was raised on it without any opportunity of being heard and in violation of principles of natural justice, was accepted and a direction was given that the case be adjudicated upon de nove after giving a show cause notice and proper opportunity of being heard to the party.
The revision filed by M/s. Sharda was also not entertained by the Central Government on the ground that a right of appeal was vested in M/s. Sharda which could have been exercised upto 17.6.1988, which was not done.
However, pursuant to the order of the Central Govern ment, the District Excise Officer issued the impugned show cause notice dated 2.11.1988 to the petitioners jointly, validity of which was challenged by them in the writ peti tion and the other writ petition I. as been filed by M/s. Sharda only to challenge the order of the Central Govt.
refusing 304 to entertain its revision.
The learned Judges in the judg ment under appeal noted that the petitioner did not advance any argument on the merits of the question; whether Homeo dent tooth paste is assessable to duty under the 1944 Act or under the 1955 Act and rightly so because that involved a factual scrutiny which could hardly be gone into by the High Court.
The High Court was of the opinion that the question, whether Homeodent tooth paste is sans alcohol, cannot be adjudicated upon under the extra ordinary writ jurisdiction.
On behalf of the petitioners before the High Court two contentions were raised.
Firstly that the Central Govt.
having set aside the order of District Excise Officer, Ghaziabad, whereunder excise duty to the tune of Rs.46,66,451.45 was paid, there was no justification for the respondents to retain that amount thereafter and a writ of mandamus be issued against the respondents directing them to refund this amount; and secondly, that under Rule 11 of the 1956 Rules when duties are short levied, a written demand by the proper officer being made within six months from the date on which the duty was paid, the short fall could be recovered.
The submission was that no duty can be recovered for the period anterior to six months to be reckoned from the date of payment of duty.
It was, therefore, urged that the show cause notice was invalid, inasmuch as the District Excise Officer, Ghaziabad, had exceeded the jurisdiction in having recovered the duty beyond limitation.
The High Court addressed itself to the question whether Article 226 of the Constitution of India was a proper reme dy.
We are not really concerned with this question.
The High Court, however, came to the conclusion that both the 1944 & 1955 Acts operate in different fields and there is no over lapping between the two.
If the Homeodent tooth paste is found to be assessable to duty under the 1955 Act then it will not amount to review of the order of the Central Excise authorities.
It was emphasised before the High Court that adjudication by the Central Excise authorities does not stop the State Excise authorities from considering the case under the provisions of the 1955 Act.
Both the Acts are mutually exclusive and the authorities thereunder are fully empowered to consider the assessability separately, according to the High Court.
The High Court came to the conclusion that where the parties fully acquiesced with the matter and subjected themselves to the statutory procedure, no action should be allowed to be taken under Article 226 of the Constitution unless the case is patently without jurisdiction.
The orders having been made under the statutory provisions, the Court should be loath to interfere under Article 226 of the Con stitution of India.
It was emphasised by the High 305 Court that once the parties choose the statutory procedure they must to the logical end.
The Central Govt.
had directed the State Excise authorities to adjudicate the case de novo and, therefore, the District Excise Officer, Ghaziabad, had no option but to issue show cause notice.
So the show cause notice dated 22nd November, 1988 was jointly given to the petitioner pursuant to the direction of the Central Govern ment much after the orders had been passed initially or in appeal.
Therefore, the common show cause notice to the parties cannot, according to the High Court, be characte rised as a sparking point and from the backdrop of the case stated above, it is amply clear that the Excise authorities had not assumed jurisdiction to proceed against the peti tioner for the first time by way of a show cause notice dated 2nd November, 1988 rather it had been issued at much subsequent stage pursuant to the direction of the Central Government.
The High Court came to the conclusion that the show cause notice having been issued in accordance with the directions of the Central Govt.
in the revisional jurisdic tion which the petitioner itself subjected to, cannot be assailed under Article 226 of the Constitution.
So this show cause notice dated 2nd November, 1988 cannot be equated with the showcause notice given at the initial stage to assume jurisdiction in the matter.
The High Court also came to the conclusion that no writ can be issued in favour of the parties who remain sitting on the fence and took a chance of the proceedings taken up under the statutory provisions going in their favour.
The High Court held the petitioner who had resorted to statutory remedies on its own could not be permitted to take recourse under Article 226 of the Constitution of India, in the event of their having become successful under the former.
Coming to writ petition No. 1160/88 wherein the order of the Central Government refusing to entertain the revision had been challenged.
The Central Government had refused to entertain the revision on the sole ground that the right of appeal that vested in M/s. Sharda could not be exercised thereby.
The High Court, however, came to the conclusion that the case of M/s. Dabur was that it is manufacturing Homeodent tooth paste on job basis under the loan licence of M/s. Sharda as per the specifications and control and the raw material of the latter but factually both the petition ers are different entities under the law and therefore each petitioner had to pursue its own remedy.
Therefore, on an analysis of the material, the High Court found that there was nothing to interfere with the order of the Central Government.
Therefore, the questions that fall for determination are firstly, 306 whether the High Court was justified in dismissing the writ petition of the petitioner on the ground of alternative remedy particularly when the writ petition challenged the actions of the respondents in seeking to levy and recover duties of excise under the 1955 Act as being without juris diction and/or without authority of law.
The next question that arises is whether the High Court was justified in dismissing the writ petition challenging particularly in two sets as has already been subjected to duty of excise under the 1944 Act.
The next question that fails for consideration is whether the High Court was justified in dismissing the writ petition of the petitioner which had prayed for refund of duties of excise amounting to Rs.46.67 lakhs illegally recovered from the petitioner on Homeodent tooth paste under the 1955 Act in pursuance of the order which was declared null and void in revision by the Central Government.
It is also necessary to consider whether the High Court was justi fied in dismissing the writ petition of the petitioner particularly when it challenged levy and recovery of duty under 12 of the 1956 Rules framed under the 1955 Act when the said rules have already been declared to be invalid and without jurisdiction by a Division Bench of the Madras High Court in the case of Citadel Fine Pharmaceuticals Pvt. Ltd. vs D.R.O., [1973] Madras Law Journal p. 99.
The next main question requiring consideration is wheth er the respondents were acting within their jurisdiction while levying duty of excise on Homeodent under the 1955 Act when in the manufacture of Hemeodent alcohol had not been used as a raw material but mother tinctures containing alcohol had been used and particularly when at the final stage of manufacture Homeodent did not contain any trace of alcohol.
The question that has really to be determined in this case is, whether firstly Homeodent was classifiable under the 1944 Act or 1955 Act and who will determine that; and secondly, which Act will prevail in the facts and circum stances of the case.
In this connection, it may be mentioned that M/s. Sharda had applied for a licence and was granted a loan licence to manufacture tooth paste as per the provisions of Drugs & Cosmetics Act, 1944 and the Rules framed thereunder.
The said licence was granted under rule 139B and was in Form 31A for manufacture of cosmetics.
Subsequently, Homeodent was envisaged by the Drug authorities as a homeopathic medica ment and licence had been granted accordingly.
It is the case of the petitioner that tooth pastes were manufactured by the petitioner company for and on behalf of the loan licensee from the 307 following chemicals and ingredients: "Potassium Chlorate BPC 73 Sodium Benxoate IP Sodium Flou ride BP Plantago Offionle Mt HP 1 Cochloric Armorocie MT NP 1 Cochloric Officincie MT HP 1 Phytolecca Decandra NT Methyl Parehudron Benxoate IP Prophyle Paraphydroxy Benxoate IP Calcium Carbonate IP Sodium Alginete USP NF 1980 Titenium Oxide BP Precipitate Silico USP NF Liquid Sodium Socicylate 15 381: 1972 Sodium Leuryle Sulphate (High Purity) Saccharine IP" It is further to be noted that the final product i.e. the tooth paste is a homeopathic semi solid compound in which mother tincture was completely absent or present in fractionally negligible quantity, depending upon the manu facturing conditions, vacuum and the temperature.
It is the case of the petitioner that at the time the tooth paste is manufactured, packed and is ready for delivery, the alcohol would diminish completely and would not be left at all.
Nor can it be so traced upon any chemical testing.
In this connection, the petitioner sought to crave leave to several documents and some test examination reports.
According to the Laboratory test which the petitioner produced, the alcohol content was absent in the nine samples sent by the loan licensee.
It was further stated that the Govt.
of India had issued instructions vide letter dated 19th December, 1957 requiring for determination of alcohol content of any product the samples must be sent to specified laboratories.
Despite the said position, it is the case of the petitioner that the Excise authorities acting under the 1955 Act, had never withdrawn any sample of tooth paste manufactured by the petitioner within their knowledge between 1985 and 1988 a sufficiently long period during which their inspector in charge was physically present in the factory of M/s. Sharda and had not only access but knowledge of the activities including the manufacture of the said tooth paste.
The Superintendent of Excise, Bulandshahr, visited the factory of the petitioner company on 18th January, 1988 and after inspecting the same enquired about the exciseability of Homeodent tooth paste.
The petitioner 's officers explained that Homeodent was classified under the 1944 Act and the duty had been paid accordingly.
Subsequently, the Superin tendent (Excise) called upon the petitioner to furnish details about the quantity and value of Homeodent manufac tured and cleared between 1985 and 1988.
In pursuance there of, tile petitioner replied vide his letter dated 20th January, 1988 and in 308 details explained the reasons by Homeodent was not liable to duty under the 1955 Act.
In pursuance of the reply of the petitioner no action was taken and the petitioner assumed that the matter had been closed.
The petitioner has given detailed episodes of harassment.
The main point that the petitioner seeks to emphasis in this case is that the High Court ought to have appreciated that the petitioner 's product Homeodent tooth paste having been subjected to duty under the provisions of the 1944 Act, the question of levying and recovering duty under the 1955 Act did not and cannot arise.
Therefore, the impugned ac tions of the respondents were required to be set aside by issuing appropriate writ of mandamus.
The High Court was, therefore, in error, according to the petitioner, in dis missing the writ petition without appreciating this conten tion.
The High Court ought to have appreciated that the petitioner was not seeking to circumvent the alternative remedy provided under the Act but in view of the conflicting claims of the Central and State Excise authorities seeking to classify Homeodent tooth paste under the respective Acts of 1944 and 1955, the petitioner was left with no other alternative but to challenge the actions by way of writ petition under Article 226 of the Constitution.
It is con tended that the High Court ought to have appreciated the actions of the State authorities were ex facie and without authority in law in so far as they sought to levy and recov er duty on Homeodent tooth paste under the 1955 Act.
There fore, the petitioner was justified in challenging such actions by way of a writ petition before the High Court.
It was further urged that the High Court had committed an error on the ground of alternative remedy before the High Court as also the demand raised against it could not be justified under Rule 12 beyond a period of six months as prescribed under Rule 11 particularly in view of the fact that Rule 12 as had been declared to be invalid and without jurisdiction as per the judgment of the Madras High Court.
It is further contended that the High Court committed an error in dismiss ing the writ petition of the petitioner challenging the demand of duty made by the State Excise authorities amount ing to Rs.68 lakhs particularly in view of the fact that as per S.4 of the 1944 Act which is made the basis of valuation even under the Act of 1955 as per the Explanation II to the Schedule as interpreted by this Court in the cases of Union of India & Ors.
vs Bombay Tyre International Ltd. etc.
; , and Asstt.
Collector of Central Excise & Ors.
vs Madras Rubber Factory Ltd etc.
, 1 the duty liability could not exceed the sum of Rs.26 lakhs.
It was further emphasised that the High Court commit ted error in not directing the State Excise authorities to refund the amount of Rs.46.67 lakhs which was recovered from 309 the petitioner under Orders dated 17/18.3.
1988 which were declared to be null and void having been passed without giving any opportunity of hearing.
The Sahibabad factory of M/s. Dabur India Ltd. was set up in the year 1979.
From the very beginning the petitioner had undertaken the job of manufacturing various products covered under the 1955 Act.
The petitioner had obtained the necessary licence and fell under the purview of the 1955 Act.
Section 6 of the 1955 Act stipulates that the Central Govt.
may, by notification in the Official Gazette, provide that from such date as may be specified in the notification, no person shall engage in the production or manufacture of any dutiable goods or of any specified component parts or ingredients of such goods or of specified containers of such goods or of labels of such containers except under the authority and in accordance with the terms and conditions of a licence granted under this Act.
Dutiable goods have been defined in the Act vide Clause (c) of section 2 i.e. meaning thereby the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under the Act.
It is stated that the State Excise authorities had posted an officer in the factory of the petitioners at Sahibabad for physical control on a part time basis.
In the year 1985, an officer in the rank of an Inspector was posted at the said factory on full time basis for physical supervi sion and control.
Hence, all the activities of the petition er were within the knowledge of the respondent Excise au thorities.
The version of the petitioner is that on an inquiry from M/s. Sharda Bairon Laboratories Ltd. for manu facturing of Homeodent tooth paste on job work basis out of the raw material and packing materials to be supplied by the said loan licensee, M/s. Sharda, petitioner No. 1 undertook the job.
The petitioner company had filed a list classifying the said Homeodent tooth paste under Tariff item 14FF of the 1944 Act as the said tooth paste did not contain any alcohol directly.
The classification list was filed in the pre scribed Form and with all the particulars.
It was further checked up by the Inspector Range Inspector and it was subsequently approved by the Assistant Collector, Central Excise, according to the petitioner.
On 31st August, 1987 there is indeed an order of the Asstt Collector of Central Excise, Division II, Ghaziabad, stating that the tooth paste in question was classifiable under the 1944 Act and not under the 1955 Act.
It has to be understood that under the 1955 Act the duties go to the State Govt.
while under the 1944 Act the duties go 310 to the Central Govt.
, though both these Acts are central legislations.
The authorities charged with the duties under the 1944 Act are Central Govt.
employees and Central Govt.
authorities are different and distinct from the authorities of the State Govt.
under the 1955 Act.
The basic question that has to be decided is whether in such a situation who or which authority will decide if the product in question would be leviable to duty under the 1944 Act and go to the coffers of the Central Government or whether it will be leviable under the 1955 Act and the realisations go to the State Govt.
In the facts and circumstances of this case, that will depend on the question whether alcohol was used as any of the ingredients in production of the product or manufacture thereof.
That there was production and/or manufacture and as such excise was leviable, there is no dispute.
The question is, whether in the process any ingredient was used contain ing alcohol in respect of a product which is medicinal in nature and as such would be dutiable under the 1955 Act.
(Homeodent is a homeopathic preparation but it is also a tooth paste.
Therefore, it is a toilet preparation.
Whether or not such Homeodent would be dutiable under the 1955 Act, would depend upon whether it contained 'alcohol ' or not.
The authorities charged with the duties of enforcing a particu lar Act are enjoined with the task of determining the ques tion whether alcohol is contained therein or not.
It is the case of the petitioner that they had paid duties of excise on Homeodent tooth paste manufactured by it on behalf of loan licensees under the 1944 Act.
The total amount of duty claimed to have been paid for the said period amounted to Rs.6,26,570.47.
The petitioners rely heavily on the test certificates issued by the Homeopathic Pharmacopia Laborato ries of the Ministry of Health & Family Welfare, Govt.
of India, which state that they had failed to detect any alco hol in the 9 batches of the tooth paste given to them for testing.
The petitioner asserts that tooth paste is a homeo pathic semi solid compound in which mother tincture is completely absent or is present in negligible quantity with any alcohol that may be present in pheropest completely and that there are no traces of the same in the final product upon chemical testing.
In January, 1988 there was an inquiry about the exciseability of Homeodent tooth paste by the Superintendent of Central Excise, under the 1955 Act.
The gravamen of the charge is the order issued by the Distt.
Excise Officer, Ghaziabad, on 17th March, 1988 which was issued without notice to the petitioner and without giving it any opportunity.
The Distt.
Excise Officer, however, on demand from the petitioner had modified the earlier order of 17th March, 1988 and had issued on 18th March, 1988 a demand notice for 311 RS.46,66,451 45 It is the grievance of the petitioner that as it was carrying on the manufacture under the 1955 Act, it had applied for licence and the respondent authorities without assigning any reason, refused to renew the licence of the petitioner company.
The implication of such absence of renewal is that the petitioner was being called to pay an illegal demand It, therefore, was forced to close down 'its manufacturing operations.
The petitioner avers that in the meeting which took place between the Excise Commissioner and the Managing Director of the petitioner company on 14th March, 1988 the petitioner was orally informed that the licence would be renewed upon payment of dues under the orders dated 17th and 18th March, 1988, as aforesaid.
The petitioner further states that it was told by the Excise Commissioner to deposit 1/3rd of the amount forthwith and execute a bank guarantee for the remaining amount.
According to the petitioner, it had deposited the sum of Rs. 11,66,000 and consequently the L I licence was renewed for a period from 25.3.1988 to 31.3.1988.
Then on 1st April, 1988 the petitioner was once again forced to close down its manufac turing activity in the absence of further renewal of licence for the period from 1.4.1988 to 7.4.1988.
It is stated that the petitioner company had filed an appeal before the Commissioner under rule 127 of the 1956 Rules and upon compliance with the conditions of the State authorities, the licence was renewed from 7.4.1988 on ad hoc basis for a period of 3 months upto 30th June, 1988.
The case of the petitioner is that the hearing of the appeal before the Excise Commissioner was over on 23.4.1988.
Howev er, no order thereupon was passed.
On 7th March, 1988 M/s. Grindlays Bank, who are the bankers of the petitioner, issued a bank guarantee inquiring whether any orders had been passed by the Excise Commissioner and whether the sum covered under the bank guarantee had become due.
The peti tioner was informed by the bankers that the District Excise Officers and other officers present in the bank had served an order requiring the Bank to clear the bank guarantees.
The petitioner states that at that time it had no informa tion as to the order of the Excise Commissioner but later on it came to learn that the Excise Commissioner had passed an order on 5th May, 1988 but the same was not communicated to it; and the bank guarantees were enforced without giving the petitioner any opportunity of filing any revision petition.
The petitioner thereafter moved a writ petition before the Allahabad High Court which directed that the said bank guarantee should not be encashed until 13th May, 1988.
According to the petitioner, the bankers under coercion were compelled to encash the bank guarantee on 9th May, 1988 and issue a draft for an amount of Rs.35 lakhs.
The 312 writ petition of the petitioner came up for hearing before the Allahabad High Court and it was directed to file a revision petition within two weeks from 13.5.
1988 and the same should be considered on merits.
The High Court had stayed the recovery of an amount of Rs.21,46,134.20 till the disposal of the stay application.
On 22nd September, 1988 the Additional Secretary to the Govt.
of India allowed the revision petition of the peti tioner and set aside the orders of the District Excise Officer, dated 17 18th March.
Thereupon the petitioner called upon the District Excise Officer, to refund the amount of Rs.46,47,000 but the respondents failed to refund and neglected it.
The respondents had issued a show cause notice calling upon the petitioner as to why an amount of Rs.68.13 lakhs be not recovered on Homeodent tooth paste manufactured and cleared between 1985 and 1988.
The High Court had dismissed the writ petition which is the subject matter of another special leave petition.
Respondent No. 3 i.e. the District Excise Officer.
Ghaziabad.
vide his order dated 19.1.
1989 had confirmed the show cause notice issued by him on 2nd November, 1988 and also confirmed the demand for Rs.68,50,745.20.
The said order dated 19th January, 1989 is the subject matter of challenge in writ petition No. 426/89.
Therefore, the basic question now is, whether the au thorities under the 1955 Act were entitled and authorised to levy duties under the Act.
In the orders dated 18 19th January, 1989 passed by the District Excise Officer which is in vernacular and a translation of which is given in Annex ure XIV to the writ petition, states that in reference to a confidential letter dated 13th January, 1988 of the Deputy Excise Commissioner, Meerut Division, during the surprise inspection of the premises of M/s. Dabur India Ltd. and M/s. Sharda, Ghaziabad on 18th January, 1988 by Sri Lal Ji Rai, the then Distt.
Excise Officer & Excise Superintendent, Bulandshahr, it was found that M/s. Dabur India Ltd. had been manufacturing a toilet preparation i.e. Homeodent tooth paste containing, according to the said order, alcohol for M/s. Sharda Boiron.
The question is, did they do so.
How does one find it out? As stated in the order, there is no dispute but if it was, then calculating the duty u/s 3 of the 1955 Act a sum of Rs.68, 13,334.28 would be found due.
The Officer found that there was a conspiracy and without knowledge of the officer in charge in a clandestine manner this production was carried on.
This is an answer, according to the impugned order, u/s 7 of the 1955 Act.
Section 7 deals with the offences and penalties under the Act and provides that if any person contravenes any of the provi sions of a notification issued u/s 6 313 or evades the payment of any duty of excise or fails to supply any information which he is required to supply, he shall for every such offence be punishable to the punishment mentioned in the section.
The officer has further found that as against an outstanding sum of Rs.68, 13,334.28.
Rs. 11,67,000 had been deposited.
After narrating the incident and the presence of the counsel and lawyers the officer was of the opinion that nothing has been brought to his notice which required revision of the previous order.
So, there fore, a break up was given and out of Rs.68,50,745.20, the actual duty payable Rs.46,67,000 has already been realised and, therefore, the balance duty is Rs.21,83,745.28 and they have failed to realise the same.
In view of this Court 's order dated 10th January, 1989, whereby this Court had directed that the proceedings might go on but the demands will not be enforced, inasmuch as orders dated 18 19th January, 1989 reiterate the order of 17th March, 1988 it is necessary to refer to the order dated 17th February, 1988 passed by the District Excise Officer, Ghaziabad.
Therein it stated that both the units were joint ly and severally inspected on surprise visits i.e. the units bonded laboratories, and on the basis of the information collected it was revealed that Dabur India Ltd. was manufac turing a suitable toilet preparation containing alcohol named Homeodent without obtaining necessary licence.
Accord ing to the said order the product had been manufactured outside the bonded premises approved under the L I licence and the duty payable on this product had not been paid.
The order further states that on the basis of the information and the stock a sum of Rs.68,13,334.20 was payable and a challan to that effect was issued.
In the first letter dated 13th March, 1988, Dabur India Ltd. wrote to the Distt.
Excise Officer, that the classification of Homeodent tooth paste made by the Excise Officer as toilet preparation was erroneous, as this preparation, according to Dabur India Ltd., should be classified under Item 2 of the Schedule to the 1955 Act as a Homeodent preparation and not under Item 4.
Item 3 to the Schedule of 1955 Act contains the follow ing: "Homeopathic preparations containing alcohol".
Item No. 4 is "Toilet preparations containing alcohol or narcotic drugs or narcotic".
So the question raised here is whether the tooth paste is primarily a toilet preparation or a homeopathic preparation.
Such a question really, in our opinion, must be justiciable by the authorities enjoined to enforce the provisions.
On the basis that the product was a homeopathic item, a sum of Rs.6245.29 was paid.
The peti tioner further stated as follows: "Assuming and not admitting that your classification is 314 correct, even then your calculation of duty of the product is erroneous on the following points: a.
The total wholesale value of the goods manufactured as on 18.1.88 is Rs.65,93,91.63.
b. A trade discount @ 20% has to be deducted from this wholesale price Rs. 13,26,373.27.
The balance amount comes to Rs.52,67,542.36.
The excise duty element in this amount comes to Rs .26,33,77 1.18.
The assessable value comes to Rs.26.33.77 1.18.
The calculation chart showing these calculations is attached as Annexure 'B '.
Kindly note that for central Excise purpose the excise able value declared to the CE Deptt.
on the total goods manufactured upto 18.1.88 is only Rs.46,66,45 1.45 and the wholesale price of these goods is Rs.66,31,866.35 only.
This too is evident from Annexure 'B '.
We would, therefore, request you to kindly amend your demand notice accordingly.
Please note that the foregoing is without any prejudice whatsoever to any arguments that may be raised by us at the time of hearing with the Commissioner UP, Excise, Allahabad or during any legal proceedings arising out of your afore mentioned demand notice or adjudicatory order of the Commis sioner.
We also reserve the right to adduce further grounds in our defence and support at any/all future occasions in this connections.
" On 18th March, 1988 there was further amendment by the Distt.
Excise Officer, Ghaziabad, he stated as follows: "With reference to this office 's notice No. 185/1 2 dated 18.3.88 both the units are jointly and severally informed that in the application letters dated 17.3.88 received separately from both the units, the total wholesale price of the total Homeodent tooth paste manufactured has been de clared as Rs.65,739, 15.63.1t has also been informed that 315 for the purpose of Central Excise Duty, the total assessable value of the total quantity of Homeodent tooth paste manu factured until 19.1.88 is Rs.46,66,45 1.45 and that the total wholesale price on this quantity has been declared as Rs.66,31,866.35 to the Central Excise Deptt.
Based on your declaration and clarification given in your above application and.
on the basis of statistics and decla rations that exciseable value on a provisional basis for the total quantities of the cosmetics homeodent tooth paste containing alcohol, which has been sold until 18.1.88 and which in stock on 18.1.88 has accepted as Rs.46,66,45 1.45 instead of Rs.6,81,334.20.
This does not mean that this value has been finally accepted.
One to the fore mentioned, the amount of Rs.68, 13,33 1.20 is amended to Rs.46,66,451.45 in the office 's notice No. 185/1 2 dated 18.1.88.
On this partial amendment, both the units are jointly and severally ordered to provisionally deposit Rs.46,66,45 1.45 instead of Rs.68, 13,324.20 as duty in the State Treasury, Ghaziabad immediately on receipt of this notice, under the appropriate account head and to produce a copy of the receipted Treasury Challan as proof of deposit in this office.
" In view of the facts alleged and found by the District Excise Officer, Ghaziabad, as mentioned hereinbefore, it appears to us that the Homeodent was a medicinal and toilet preparations and liable to excise duty.
This Court in M/s `Baidyanath Ayurved Bhawan (Pvt.) Ltd., Jhansi vs The Excise Commissioner, U.P. & Ors., has held that in order to attract duty under the 1955 Act, all that is re quired is that a medicinal preparation should contain alco hol.
Alcohol may be part of the preparation either because it is directly added to the solution or it came to be in cluded in it because one of the components of that prepara tion contained alcohol.
It is undisputed that mother tinc ture was one of the components that was used in the prepara tion of Homeodent and it has been found that alcohol was there and mother tincture was added in the medicinal prepa ration as its component.
That was not the case before any authorities in this case but being present it was found in liquid form which incidentally again was disputed because test reports were not accepted by the petitioner but accord ing to the respondent authorities, indicated the presence of alcohol.
Section 3(1) of the 1955 Act was attracted.
This Court in the 316 aforesaid decision further reiterated that even if the imposition of excise duty under section 3(1) of the said Act on preparations in which alcohol was indirectly introduced attracts multipoint taxation that by itself would not render the duty illegal.
The provisions for rebate of duty on alcohol contained in Section 4 of the said Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation of the legislature otherwise there was no purpose in incorporating section 4 into the Act.
In this connection, section 4 of the 1955 Act may be referred to which is as follows: "4.
Rebate of duty on alcohol, etc., supplied for manufac ture of dutiable goods Where alcohol, narcotic drug or narcotic had been supplied to a manufacturer of any dutiable goods for use as an ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on the goods so supplied had already been recovered by such Government under any law for the time being in force, the collecting Government shall, on an application being made to it in this behalf, grant in respect of the duty of excise, leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act.
" In this case, however, the case of the petitioner is that duty has been recovered under the 1944 Act; if any refund has to be made, it must be made in accordance with law.
There is a question of limitation for claiming refund of this duty.
The provisions are not clear.
In such a situa tion, it appears to us that the justice requires that provi sions should be made more clear and in the 'view of the facts and the circumstances that have happened, we would direct that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be enter tained and considered in accordance with law.
We are con scious in giving this direction, we are not strictly follow ing the letter and the provisions of the Act.
But in a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just and proper and in consonance with justice in fiscal administration that the Central Government should consider in the light of the facts found, if an application is made under section 11B of the 1944 Act and pass appropriate order.
Such application should be made within four months from the date of the judgment.
In the facts 317 and the circumstances 01 ' this case, the limitation period under section 1 lB of the 1944 Act should not apply.
This direction, in our opinion, must be confined in the facts and the circumstances of this case only.
Our attention was drawn to the observations of this Court in Union of India & Ors.
vs Bombay Tyre International Ltd. etc.
, (supra) in respect of the valuation.
But the point not having been taken at any stage before the authorities, it is not proper for us at this stage to go into this question.
We will proceed in view of the facts and the circumstances of this case and to do justice between the parties on the basis that the duty has been correctly imposed.
We have looked into the order of the District Excise Officer, Ghaziabad and we find that all relevant facts have been considered and no facts were brought before us contrary to the findings nor any conten tions of substance raised which can induce us to hold to the contrary.
Reference may also be made to the observations of this Court in Mohanlal Maganlal Bhavsar & Ors.
vs Union of India & Ors., for the test to determine whether an item of medicinal preparation falls under Item 1 of the Schedule to the 1955 Act.
It has been determined by the authorities enjoined to enforce that Act and such finding has not been assailed on any cogent or reliable ground in any proper manner.
If that is the position, then that order must be upheld but it must be upheld that Homeodent was dutiable and as such the impugned order was correctly passed by the District Excise Officer.
Our attention was drawn to the observations of this Court in N.B. Sanjana, Assistant Collector of Central Ex cise, Bombay & Ors.
vs The Elphinstone Spinning and Weaving Mills Co. Ltd., ; But in view of the facts on which the parties rested their case before the authori ties, it is not necessary at this stage to go into this controversy.
In the aforesaid view of the matter, we are of the opinion that the impugned order dated 18th January, 1989 passed by the District Excise Officer, Ghaziabad, must be given effect to and thereafter the petitioner 's application for refund, if any, made before the authorities under sec tion 4 of the 1944 Act within the time indicated as before should be disposed of in the manner indicated above, if made.
Before we part with this case, two aspects have to be adverted to one was regarding the allegation of the peti tioner that in order to compel the petitioners to pay the duties which the petitioners con 318 tended that they were not liable to pay, the licence was not being renewed for a period and the petitioners were con stantly kept under threat of closing down of their business in order to coerce them to make the payment.
This is unfor tunate.
We would not like to hear from a litigant in this country that the Government is coercing citizens of this Country to make payment of duties which the litigant is contending not to be leviable.
Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the Government, Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make.
If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeuvre.
Therefore, we direct that the right of renewal of the petitioner of licence must be judged and attended to in accordance with law and the occa sion not utilised to coerce the petitioners to a course of action not warranted by law and procedure.
Secondly, in a situation of this nature, we are of the opinion that the Government should consider feasibility of setting up of a machinery under a Council to be formed under Article 263 of the Constitution to adjudicate and adjust the dues of the respective Governments.
In these peculiar facts, it appears that the dispute is under two different central legislations and under one the State authorities will realise and impose the taxes on finding on certain basis and under the other the same transaction may be open to imposition by Central Government authorities on a particular view of the matter.
In such a situation, how and wherein the refund should be made of any duty paid in respect of part of a transaction to one of the authorities, the State or the Centre, to be adjusted should be the subject matter of a settlement by the Council to be set up under Article 263 of the Constitution.
This is a matter on which we draw the attention of the concerned authorities for examination because section 3 of the 1955 Act and section 3 of the 1944 Act may overlap similar transaction in certain cases.
Writ petitions are disposed of with the aforesaid direc tions.
Special leave granted in SLP (Civil) No. 1610 of 1989 (M/s. Dabur India vs State of U.P. & Ors., ) and SLP (Civil) Nos.
135 36 of 1989 (Sharde Bairon Laboratories vs State of U.P. & Ors.).
Appeals are disposed of in the light of the directions given hereinbefore.
Save as aforesaid all interim orders are vacated.
In the facts and the circumstances of the case, the parties will pay and bear their own costs.
R.S.S. Petitions disposed of.
| IN-Abs | M/s Dabur India Limited, petitioner in one set of peti tions, is a public limited company engaged in the manufac ture of Ayurvedic as well as Allopathic medicaments, along with cosmetics.
It used to manufacture for and on behalf of M/s Sharda Boiren Laboratories The petitioner in the second set of petitions a Homeopathic tooth paste called 'Homeo dent ' out of the raw materials supplied by M/s Sharda, on job basis.
It accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeodent under the Central Excises & Salt Act, 1944.
The Superintendent of State Excise visited the factory of M/s Dabur on 18th January, 1988 and enquired about the excisability of Homeodent under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955.
He was told that Homeodent had been classified under the 1944 Act in view of the orders passed by the Central Excise authorities.
Howev er, when it was revealed that the Homeodent tooth paste was toilet preparation containing alcohol, within the meaning of section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, the District Excise Officer caused a common notice dated 17.3.1988 to be served on M/s Dabur requiring it to pay duty aggregating to Rs.68,13,334.20 under the provisions of the 1955 Act on such 295 goods manufactured and cleared between January 1985 and January 1988.
This order was passed without issuing any notice to show cause, and without affording any opportunity of hearing, to the petitioner.
The Petitioner sent a representation requesting for compliance with the principles of natural justice and also disputing the amount claimed as duty.
On 18th March, 1988 the Superintendent of State Excise modified the earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs, on provisional basis.
On that day the petitioner deposited a sum of Rs. 11.66 lakhs and further executed a bank guarantee for the balance.
Simultaneously, the peti tioner appealed against the order dated 18th March, 1988.
The Excise Commissioner dismissed the appeal.
No appeal was filed by M/s Sharda against the demand notice of excise duty under the 1955 Act.
The petitioner moved the High Court.
On 13th May, 1988 the High Court directed the petitioner to file a revision petition with the Central Government.
Both the petitioners then approached the Central Government in revision.
On 22nd September, 1988 the Additional Secretary to the Government of India in exercise of his revisional powers allowed the revision filed by M/s Dabur and declared the orders of the District Excise Officer and the Excise Commissioner as null and void having been passed in violation of the principles of natural justice.
The revision filed by M/s Sharda was not entertained by the Central Government on the ground that a right of appeal was vested in Sharda, which was not availed of.
The High Court dismissed Sharda 's petition challenging the order of the Central Government declining to entertain its review.
Against the order of the High Court M/s Sharda have filed the special leave petition in this Court.
On the basis of the revision order, the petitioners called upon the District Excise Officer to refund the amount of Rs.46.67 lakhs recovered from it by way of cash payment and encashment of bank guarantee.
The State Excise authori ties however failed to grant the refund, and instead issued a fresh show cause notice to the petitioners jointly on 2nd November, 1988.
In December 1988, M/s Dabur moved the High Court under Article 226 of the Constitution for quashing and setting aside the showcase notice dated 2.11.1988 and for refund of duty amounting to Rs.46.67.
The High Court dismissed the writ petition.
The High Court was 296 of the opinion that the question whether Homeodent tooth paste was sans alcohol could not be adjudicated upon under the extraordinary writ jurisdiction.
The High Court however came to the conclusion that both the 1944 and 1955 Acts operated in different fields and there was no overlapping between the two.
The High Court further observed that where the parties fully acquiesced with the matter and subjected themselves to the statutory procedure, no action should be allowed to be taken under Article 226 of the Constitution unless the case was patently without jurisdiction.
In this connection, it was emphasised by the High Court that once the parties chose the statutory procedure they must go to the logical end.
It was inter alia urged before this Court on behalf of the petitioner that it was not seeking to circumvent the alternative remedy provided under the Act but in view of the conflicting claims of the Central and State Excise authori ties seeking to classify Homeodent tooth paste under the respective Acts of 1944 and 1955, the petitioner was left with no other alternative but to challenge the actions by way of writ petition under Article 226 of the Constitution.
It was further contended that Homeodent did not contain alcohol but contained ingredient "mother tincture" contain ing alcohol, which had a tendency to evaporate during the process of manufacture of Homeodent; that no test result as required under the 1955 Act was obtained to establish wheth er Homeodent contained alcohol or not; and that on 31st August, 1987 the Assistant Collector of Central Excise had already passed an order classifying Homeodent under the Act of 1944 which order had been upheld by the Collector of Central Excise (Appeals).
The main point that the petitioner sought to emphasis was that the High Court ought to have appreciated that Homeodent tooth paste having been subjected to duty under the provisions of the 1944 Act, the question of levying and recovering duty under the 1955 Act did not and could not arise.
Dismissing the petitions, this Court, HELD: (1) Homeodent is a homeopathic preparation but it is also a tooth paste.
Therefore, it is a toilet prepara tion.
Whether or not such Homeodent would not be dutiable under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955 would depend upon whether it contained alcohol or not.
[315E] (2) It is undisputed that mother tincture was one of the components that was used in the preparation of Homeodent and it has been found that alcohol was there and mother tincture was added in the 297 medicinal preparation as its component.
[315G] M/s Baidyanath Aryurved Bhawan (Pvt.) Ltd. Jhansi vs The Excise Commissioner U.P., , referred to.
(3) The authorities charged with the duties of enforcing a particular Act are enjoined with the task of determining the question whether alcohol is contained therein or not.
[310D] (4) It has been determined by the authorities enjoined to enforce the 1955 Act that Homeodent was a medicinal and toilet preparation and liable to excise duty, and such finding has not been assailed on any cogent ground in any proper manner.
If that is the position, then it must be upheld that Homeodent was dutiable.
[317D] Union of India vs Bombay Tyre International Ltd., ; ; Mohanlal Magan Lal Bhavsar vs Union of India, and N.B. Sanjana, Assistant Collector of Central Excise, Bombay vs The Elphinston Spinning and Weav ing Mills Co. Ltd.; , , referred to.
(5) Provisions for rebate of duty on alcohol contained in section 4 of the 1955 Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation, otherwise there was no purpose in incorporat ing section 4 into the Act.
[316B] (6) Justice requires that provisions for claiming refund of this duty should be made more clear.
However, in the view of the facts and the circumstances that have happened, it is directed that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be entertained and considered in accordance with law.
[316E F] (7) In a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just and proper and in consonance with justice infiscal administration that the Central Gov ernment should consider in the light of the facts found, if an application is made under section 11B of the 1944 Act, and circumstances of this case, the limitation period under section 11B of the 1944 Act should not apply.
This direction must be confined in the facts and the circumstances of this case only.
[316G H; 317A] 298 Citadel Fine Pharmaceuticals Pvt. Ltd. vs D.R.O., [1973] Mad.
Law Journal 99; Union of India vs Bombay Tyre Interna tional Ltd.; , and Assistant Collector of Central Excise vs Madras Rubber Factory Ltd., [1986] supp.
SCC 751, referred to.
(8) Government should consider feasibility of a machin ery under a Council to be formed under Article 263 of the Constitution to adjudicate and adjust the dues of the re spective Governments.
[318D] (9) This Court would not like to hear from a litigant in this country that the Government is coercing citizens of this country to make payment which the litigant is contend ing not leviable.
Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the Government, Central or State, cannot be permitted to play dirty games with the citizens to coerce them in making payments which the citizens were not legally obliged to make.
If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeu vre.
Therefore, the right of renewal of the petitioner of licence must be judged and attended to in accordance with law and the occasion not utilised to coerce the petitioners to a course of action not warranted by law and procedure.
[318A C]
|
Appeal No. 122 of 1957.
Appeal from the order dated November 4, 1954, of the Punjab High Court (Circuit Bench) at Delhi in Civil Reference No. 15 of 1953.
R. Ganapathy Iyer, R. H. Dhebar and D. Gupta, for the appellant.
P. M. Mukhi, Gopal Singh for Udhai Bhan Choudhry, for the respondent.
P. M. Mukhi and Ganpat Rai, for Dalmia Jain Aviation Ltd. (now Asia Udyog Ltd.) (Intervener).
November 5.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the judgment of the High Court of Punjab in a reference under section 66(1) of the Indian Income tax Act, 1922, hereinafter referred to as the Act.
The facts are that the respondent, had not been assessed to income tax prior to the assessment year 1948 49.
On July 4, 1949, he made suo motu returns showing an income of Rs. 4,494 for the accounting year 1947 48 being the previous year for the assessment year 1948 49 and an income of Rs. 31,646 for 396 the accounting year 1948 49 being the previous year for the assessment year 1949 50.
By orders dated August 25, 1949, the Income tax Officer assessed the income for the assessment year 1948 49 at Rs. 6,277 and for the assessment year 1949 50 at Rs. 36,281.
The correctness of these orders is not in question before us.
We are concerned in these proceedings with the vires of an order, which the Income tax Officer made on October 9, 1950, under section 28 read with sections 18A(3) and 18A(9) of the Act.
It will be convenient to set out these provisions, so far as they are material for the purpose of this appeal.
Section 18A(3) provides that : " Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which would be the previous year for an assessment for the financial year next following is likely to exceed six thousand rupees, send to the Income tax Officer an estimate of the tax payable by him on that part of his income to which the provisions of section 18 do not apply of the said previous year calculated in the manner laid down in sub section (1), and shall pay the amount, on such of the dates specified in that sub section as have not expired, by instalments which may be revised according to the proviso to sub section (2)." Section 18A(9) is as follows: " If the Income tax Officer, in the course of any proceedings in connection with the regular assessment, is satisfied that any assessee (a) has furnished under sub section (2) or sub section(3) estimates of the tax payable by him which he knew or had reason to believe to be untrue, or (b) has without reasonable cause failed to comply with the provisions of subsection (3), the assessee shall be deemed, in the case referred to in clause (a), to have deliberately furnished inaccurate particulars of his income, and in the case referred to in clause (b), to have failed to furnish the return of his total income; and the provisions of section 28, so far ' as may be, shall apply accordingly:".
397 Then, there is a proviso which imposes a limit on the amount of penalty, which can be levied.
Section 28 of the Act runs as follows: (1) " If the Income tax Officer. . in the course of any proceedings under this Act, is satisfied that any person (a)has without reasonable cause failed to furnish the return of his total income which he was required to furnish by notice given under sub section (1) or subsection (2) of section 22 or section 34 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by such notice, or (b)has without reasonable cause failed to comply with a notice under subsection (4) of section 22 or subsection (2) of section 23, or (c)has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, he. . may direct that such person shall pay by way of penalty, in the case referred to in clause (a), in addition to the amount of the income tax and supertax, if any, payable by him a sum not exceeding one and a half times that amount, and in the cases referred to in clauses (b) and (c), in addition to any tax payable by him, a sum not exceeding one and a half times the amount of the income tax and super tax, if any, which would have been avoided if the income as returned by such person had been accepted as the correct income:".
The Income tax Officer held that as the respondent had failed to send an estimate of the tax on his income as provided in section 18A(3) he became liable to be proceeded against under section 28, and accordingly imposed a penalty of Rs. 40 for the year 1948 49 and Rs. 1,000 for the year 1949 50.
On appeal, the Appellate Assistant Commissioner confirmed the order in so far as it imposed a penalty for the year 1948 49 but set it aside as regards the year 1949 50 on the ground that by reason of the assessment for the year 1948 49 the respondent ceased to be a new assessee for 1949 50, and that, in consequence, section 18A(3) had no application.
Against the order cancelling the penalty for 1949 50, 398 the Income tax Officer preferred an appeal to the Appellate Tribunal, which disagreed with the view of the Appellate Assistant Commissioner that the respondent was no longer a new assessee within section 18A(3) of the Act, but held that the order of the lncome tax Officer imposing a penalty under section 28 was ultra vires, because that section would, in terms, apply only when a person failed to furnish the return when he was required so to do by notice under section 22 or section 34 of the Act, and that there could be Do such notices with reference to estimates of tax on income to be sent under section 18A(3).
In the result, the appeal was dismissed.
On the application of the appellant, the Tribunal referred the following question for the opinion of the High Court: " Whether on a true construction of Section 18A(9) (b) read with section 28 of the Indian Income tax Act,1922, a penalty may be imposed for a total failure to comply with the provisions of Section 18A(3) of the said Act ?" The reference was heard by Bhandari, C. J., and Falshaw, J., who agreed with the Tribunal that the conditions as to notice laid down in section 22(1) or section 22(2) must be satisfied even when action was sought to be taken under section 28 in respect of a failure to comply with section 18A(3), and that as those conditions had not been satisfied, the order imposing penalty was bad.
The appellant applied for a certificate under section 66A(2) of the Act, and the same was granted, and that is how the appeal comes before us.
The sole question that arises for our determination in this appeal is whether under section 28(1) read with section 18A(9) of the Act, it is competent to the Income tax authorities to impose a penalty on a person who has failed to comply with section 18A(3) of the Act.
In answering it in the negative, the learned Judges in the court below were influenced almost exclusively by the terms of section 28 which they held did not cover failure to comply with section 18A(3).
Now, section 28(1) provides for penalty being imposed in three classes of cases which are mentioned respectively in cls.
(a), (b).
and (c).
Clause (b) deals with cases where there has been failure 399 to produce documents or accounts or other evidence which the assessee had been required to produce under section 22(4) or section 23(2) of the Act, and that is not relevant for the purpose of the present discussion.
Then, there are cls.
(a) and (c), and they have reference, stating it in plain language, cl.
(a) to failure to make a return and cl.
(c) to making false return.
Now, the learned Judges observe that if an estimate of the tax is furnished under section 18A(3) and that is deliberately inaccurate, that will fall under section 28(1)(c) read with section 18A (9)(a) and penalty could be imposed under that section, but that that could not be done when there is failure to furnish an estimate as required by section 18A(3), be cause sub section
(1) of section 28 would apply only when a person failed to furnish the return when he had been required to do so by notice under section 22(1) or section 22(2) or section 34, or had failed to furnish it within the time allowed and in the manner required by the notice, and that there could be no such notice with reference to section 18A(3).
Say the learned Judges: " In the first place, a person who fails to send an estimate under section 18A(3) cannot be said to have failed to furnish the return of his total income which he was required to furnish in response to a notice issued under section 22 or section 34; secondly, the said person cannot be said to have failed to furnish it.
within the time allowed and in the manner required by such notice, for, estimates under section 18A(3) must be furnished before the 15th March in the financial year immediately preceding the year of assessment whereas the returns required by the notices under sections 22 and 34 can be furnished at later dates." With respect, the error in this reasoning lies in this that it fails to give due effect to the fiction contained in section 18A(9)(b) of the Act.
Under that provision, when an assessee has failed to comply with section 18A(3) he " shall be deemed to have failed to furnish the return of his total income and the provisions of section 28, so far as may be, shall 'apply accordingly." In other words ' by a legal fiction the failure to send an estimate of the tax under section 18A(3) is treated as a 400 failure to furnish return of income under section 22.
It is a necessary implication of this fiction that the estimate of tax on the income to be submitted under section 18A(3) is, in fact, different from the return to be furnished under section 22, and to appreciate the full significance of this fiction, it is necessary to examine what the distinction is.
Under section 3 of the Act, the tax is payable on the income of the previous year.
A statement of that income can be furnished only after that year ends, and section 22 enacts provisions as to when it is to be furnished in the assessment year.
Sub sections (1) and (2) provide for notices being given and the assessee is required to file his statement of income within the period provided therein, and it is this statement that is termed " return ".
Section 18A(3), however, relates to the sending of a statement of tax on the income of the accounting year before the 15th day of March of that year itself, and that statement is termed not a return but an estimate, and quite rightly, because in the very nature of it, it can only be that.
A person who sends an estimate under section 18A(3) has also to send a return of his income for the accounting year under section 22, and sub sections
(4) and (5) of section 18A provide for adjustment of advance tax paid under section 18A(3) towards the tax as finally computed under section 23.
Thus, there is a clear distinction between a return of income under section 22, which can only be during the year of assessment and an estimate of tax on income under section 18A(3), which can only be in the year of account.
It is in the light of this distinction that the effect of the legal fiction enacted ins.
18A(9) (b) that when a person fails to send an estimate of tax on his income under section 18A(3) he shall be deemed to have failed to furnish return of his income, will have to be judged.
The respondent contends that its effect is only to place the estimate to be sent under section 18A(3) on the same footing as the return under section 22 for purposes of section 28, and that that does not abrogate the other conditions laid down in that section on which alone action could be taken thereunder and penalty imposed, and one of those conditions is the issue of notice under section 22(1) or section 22(2).
But it must be noted that section 18A(9) (b) does 401 not merely say that an estimate under section 18A(3) shall be deemed to be a return.
It enacts that the failure to send an estimate in accordance with section 18A(3) is to be deemed to be a failure to make a return.
Now, there can be no failure to make a return, unless notice had been issued under section 22(1) or section 22(2) and there has been a default in complying with that notice.
Therefore, the fiction that the failure to send an estimate is to be deemed to be a failure to send a return necessarily involves the fiction that notice had been issued under section 22, and that had not been complied with.
It is a rule of interpretation well settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate.
The following off quoted observations of Lord Asquith in East End Dwellings Co. Ltd. vs Finsbury Borough Council (1) may appropriately be referred to: " If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.
One of these in this case is emancipation from the 1939 level of rents.
The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
" The fiction under section 18A(9) (b) therefore that failure to send an estimate under section 18A(3) is to be deemed to be a failure to send a return must mean that all those facts on which alone there could be a failure to send the return must be deemed to exist, and it must accordingly be taken that by reason of this fiction, the notices required to be given under section 22 must be deemed to have been given, and in that view, section 28 would apply on its own terms.
Some argument was addressed to us based on the use of the definite article "the" qualifying the word (1) , 132.
51 402 "return" in section 18 A(9)(b).
It was said that that expression meant the return which is to be furnished under of section 22, and that that requires that there must have been a notice issued under section 22(1) or section 22(2), before action could be taken under section 28.
In the view expressed above that the fiction enacted in section 18 A(9)(b) involves the fiction that notices had been issued under section 22(1) or section 22(2), this contention does not call for further consideration.
It was finally argued that a fiscal statute and especially one imposing a penalty, should be strictly construed and that if the words of the enactment be not sufficiently explicit to reach the subject, the Revenue must fail, and the following observations in Vestey 's (Lord) Executors vs Inland Revenue Commissioners (1) were relied on in support of this position : "Parliament in its attempts to keep pace with the ingenuity devoted to tax avoidance may fall short of its purpose.
That is a misfortune for the taxpayers who do not try to avoid their share of the burden and it is disappointing to the Inland Revenue.
But the court.
will not stretch the terms of taxing Acts in order to: improve on the efforts of Parliament and to stop gaps which are left open by the statutes.
Tax avoidance is an evil, but it would be the beginning of much greater evils if the courts were to overstretch the language of the statute in order to subject to taxation people of whom they disapproved.
" These observations would be in, point if the language of the enactment left us in any doubt as to what the legislature meant.
But can that be said of section 18 A(9)(b)? Its object avowedly is to assimilate the position of a person who has failed to send the estimate under section 18 A 3) to that of a person who has failed to furnish the return. under section 22, and that object is sought to.
be achieved by enacting the fiction which is contained in section 18 A(9)(b).
And 'if, on the principles laid down in East End Dwellings Co. Ltd. vs Finsbury Boorough Council (2), the true effect of that fiction is that it imports that notice had been issued under section 22, then the conditions prescribed in section 28 of the Act are satisfied and (1) [1949] 1 All E.R. 1108, 1120.
(2) , 132.
403 penalty could be imposed under that section for failure to comply with section 18 A(3), on the clear language of that enactment itself without straining or overstretching it.
We must now refer to an aspect of the question, which strongly reinforces the conclusion stated above.
On the construction contended for by the respondent, section 18 A(9)(b) would become wholly nugatory, as sections 22(1) and 22(2) can have no application to advance estimates to be furnished under section 18 A(3), and if we accede to this contention, we must hold that though the legislature enacted section 18 A(9)(b) with the very object of bringing the failure to send estimates under section 18 A(3) within the operation of section 28, it signally failed to achieve its object.
A construction which leads to such a result must, if that is possible, be avoided,, on the principle expressed in the maxim, "ut res magis valeat quam pereat".
Vide Curtis vs Stovin (1) and in particular the following observations of Fry, L. J., at page 519 : I "The only alternative construction offered to us would lead to this result, that the plain intention of the legislature has entirely failed by reason of a slight inexactitude in the language of the section.
If we were to adopt this construction, we should be construing the Act in order to defeat its object rather than with a view to carry its object into effect".
Vide also Craies on Statute Law, p. 90 and Maxwell on The Interpretation of Statutes, Tenth Edn., pp. 236 237.
"A statute is designed", observed Lord Dunedin in Whitney vs Commissioners of Inland Revenue (2), "to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable".
We are accordingly of opinion that it was competent to the Income tax authorities to impose a penalty under section 28 read with section 18 A(9)(b) where there has been a failure to comply with section 18 A(3).
in the result.
, we set aside the order of the court below and answer the reference in the affirmative.
(1) (2) , 110.
404 The appellant will have his costs here and in the court If below.
Appeal allowed.
| IN-Abs | The respondent who bad not been assessed to income tax prior to the assessment year 1948 49 made suo motu returns on July 4, 1949, showing an income of Rs. 4,494 and Rs. 31,646 respectively, for the assessment years 1948 49 and 1949 5o, but failed to send an estimate of the tax on his income as provided in section 18A(3) of the Indian Income tax Act, 1922.
The Incometax Officer took action under section 28 read with section 18A(9) of the Act and imposed a penalty on him for the years 1948 49 and 1949 50. 395 The Appellate Tribunal held that the order imposing the penalty was ultra vires on the ground that section 28 would, in terms, apply only when a person failed to furnish the return when he was required so to do by notice under section 22 or section 34 of the Act, and that there could be no such notices with reference to estimates of tax on income to be sent under section 18A(3).
The High Court, on reference, agreed with the view of the Tribunal.
Held, that in view of the legal fiction contained in section 18A(9) of the Act that when an assessee has failed to comply with section 18A(3) he "shall be deemed to have failed to furnish the return of his total income and the provisions of section 28, so far as may be, shall apply accordingly ", the failure to send an estimate of the tax under section 18A(3) should be treated as failure to furnish return of income under section 22.
Accordingly, it was competent to the Income tax authorities to impose a penalty under section 28 read with section 18A(9)(b) where there has been a failure to comply with section 18A(3).
The relevant provisions of the Indian Income tax Act, 1922, are set out in the judgment.
|
ivil Appeal No. 1101 of 1981.
On appeal by Certificate from the Judgment and Order dated 8.10.80 of the Kerala High Court in O.P. No. 1026/79E. WITH Writ Petition (Civil) No. 346 of 1988.
(Under Article 32 of the Constitution of India).
M.K. Ramamurthi, G. Vishwanathan Iyer, Shiv Pujan Singh, N. Sudhakaran and K. Prasantha for the Appellants.
Anil Dev Singh, P.S. Poti, Ms. Mukta Sharma, Mrs. section Dikshit, K.R. Nambiar for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
As identical questions of law are involved in both the above cases, they are disposed of by one single order.
Civil Appeal No. 1101 of 1981 is directed against the Judgment of High Court of Kerala at Ernakulam dated October 8, 1980.
The High Court has granted a certificate under Article 133(1) of the Constitution of India certifying that the case involved a substantial question of law of general importance consisting the interpretation of Sub section (6) of Section 24 of the Code of Criminal Procedure, 1973.
The Writ Petition under Article 32 of the Constitution has been 322 filed by the Uttar Pradesh Public Prosecutors ' Association consisting the membership of Assistant Public Prosecutors, including Prosecuting Officers, Senior Prosecuting Officers, Deputy Director of Prosecution serving under the Government of Uttar Pradesh.
Petitioner No. 2 is the President of the Association.
In both the cases the controversy raised is that there exists a regular cadre of Prosecuting Officers and as such the State Government is bound to appoint Public Prosecutors and Additional Public Prosecutors only from among the persons constituting such cadre in view of Section 24(6) of the Code of Criminal Procedure, 1973.
In order to appreciate the controversy, it would be necessary to give the background of the law and rules relat ing to the appointment of public prosecutors.
Sections 24 and 25 of the Code of Criminal Procedure, 1973 correspond to Section 492 of the Old Code and deal with the appointment of Public Prosecutors, Additional Public Prosecutors, Special Public Prosecutors and Assistant Public Prosecutors.
Under the Old Code there could be any number of Public Prosecutors appointed by the Central Government or by the State Govern ment or by the District Magistrate or by the Sub Divisional Magistrate subject to the control of the District Magis trate.
Under Section 495 of the Old Code any Magistrate enquiring into or trying a case could permit the prosecution to be conducted by any person who may do so personally or by a pleader.
In the courts of Magistrates the prosecution was conducted generally by Police Officers or by persons re cruited from the Bard styled as Police Prosecutors or As sistant Public Prosecutors all of whom worked under the directions of the Police Department.
Moreover, no qualifica tion was laid down in the old Code for the Advocates being appointed as Public Prosecutors.
In Section 24 of the new Code for the first time such detailed provisions have been made.
In Section 24 as originally framed there were only two categories of public prosecutor (1) those appointed by the Central or State Government under this Section, and (2) those engaged by the Public Prosecutor to act under his own direction, vide Section 2(U).
Provision was also for the first time made for appointment of Public Prosecutor in the High Court for conducting any prosecution in the said court on behalf of the Central Government or the State Government by the concerned Government after consultation with the High Court.
The appointment of Public Prosecutor or Additional Public Prosecutor of the State Government in every District could be made only from the panel of names of the persons prepared by the ,District Magistrate in consultation with the Sessions Judge.
It was for the first time provided that in the case of Public Prosecutor and the Additional Public Pro 323 secutor he should be an Advocate of not less than seven years standing at the Bar and in the case of Special Public Prosecutor the standing at the Bar should not be less than 10 years.
The original Section 24 has been amended by the Criminal Procedure Code (Amendment) Act of 1978 (hereinafter referred to as the Amending Act of 1978) w.e.f.
18th December, 1978 and a new Section 24 has been substituted for the original Section 24.
It would be necessary to reproduce Section 24 as it stood in the original Code of Criminal Procedure, 1973 as well as Section 24 which stood after the Criminal Procedure Code (Amendment) Act, 1978.
Section 24 of the Code as it stood prior to the amend ment introduced by the Code of Criminal Procedure (Amend ment) Act, 1978, reads as under: "24.
Public Prosecutors (1) For every High Court, the Central Government or the State Government shall, after consultation with the High Court, appoint a Public Prosecu tor for conducting, in such court, any prosecution, appeal or other proceeding on behalf of the Central or State Gov ernment, as the case may be.
(2) For every district the State Government shall appoint a Public Prosecutor and may also appoint one or more Addition al Public Prosecutors for the district.
(3) The District Magistrate shall, in consultation with the Sessions Judge, prepare a panel of names of persons who are, in his opinion, fit to be appointed as the public prosecutor or Additional Public Prosecutor for the District.
(4) No person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district unless his name appears on the panel of names prepared by the District Magistrate under subsection (3).
(5) A person shall only be eligible to be appointed as a Public Prosecutor or an Additional Public Prosecutor under sub section
(1) or sub section (2), if he has been in practice as an advocate for not less than seven years.
324 (6) The Central Government or the State Government may appoint, for the purposes of any case or class of cases, an advocate who has been in practice for not less than ten years, as a Special Public Prosecutor" The Section as amended by the Amendment Act, 1978 reads as under: "24.
Public Prosecutors (1) For every High Court the Cen tral Government or the State Government shall, after consul tation with the High Court, appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors, for conducting in such court, any prosecution, appeal or other proceeding on behalf of the Central Government or State Government, as the case may be.
(2) The Central Government may appoint one or more Public Prosecutors, for the purpose of conducting any case or class of cases in any district, or local area.
(3) For every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Addition al Public Prosecutors for the district.
Provided that the Public Prosecutor or Additional Public Prosecutor appointed for one district may be appointed also to be a Public Prosecutor or an Additional Public Prosecu tor, as the case may be for another district.
(4) The District Magistrate shall, in consultation with the Sessions Judge, prepare a panel of names of persons, who are, in his opinion, fit to be appointed as Public Prosecu tors or Additional Public Prosecutors for the district.
(5) No person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district unless his name appears in the panel or names prepared by the District Magistrate under subsection (4).
(6) Notwithstanding anything contained sub section (5), where in a State there exists a regular cadre of Prosecuting Officers, the State Government shall appoint a Public Prose cutor or an Additional Public Prosecutor only from 325 among the persons constituting such cadre: Provided that where, in the opinion of the State Government, no suitable person is available in such cadre for such appointment that Government may appoint a person as Public Prosecutor or Additional Public Prosecutor, as the case may be, from the panel of names prepared by the Dis trict Magistrate under sub section
(7) A person shall be eligible to be appointed as a Public Prosecutor or an Additional Public Prosecutor under subsec tion (1) or sub section (2) or sub section (3) or subsection (6), only if he has been in practice as an advocate for not less than seven years.
(8) The Central Government or the State Government may appoint, for the purposes of any case or class of cases, a person who has been in practice as an advocate for not less than ten years as a Special Public Prosecutor.
(9) For the purposes of sub section (7) and sub section (8), the period during which a person has been in practice as a pleader, or has rendered (whether before or after the com mencement of this code) service as a Public prosecutor or as an Additional Public Prosecutor or Assistant Public Prosecu tor or other Prosecuting Officer, by whatever name called, shall be deemed to be the period during which such person has been in practice as an advocate".
A perusal of the above provisions would show that the changes that have been introduced in Section 24 by the Amending Act of 1978 are the addition of the new provisions now contained in sub section (2), proviso to sub section (3), sub section (6) and sub section (9).
The main contro versy put forward hinges on the new provision now contained in sub section
(6) of Section 24.
The contention raised on behalf of the petitioners is that sub section (6) of Section 24 introduced by amendment clearly lays down that notwithstand ing anything contained in sub section (5) where in a State there exists a regular cadre of Prosecuting Officers (empha sis added), appointment to the post of Public Prosecutor or Additional Public Prosecutor shall be made by the State Government only from among the persons constituting such cadre.
So far as the State of Kerala is concerned, it has been contended 326 on behalf of the appellant that the appointment of Assistant Public Prosecutors was governed by the Statutory Rules framed under Article 309 of the Constitution.
These Rules were published on 7th September, 1962 and dealt with the posts of Legal Advisor to the vigilance division.
Additional Legal Advisor to the Vigilance division and Assistant Public Prosecutors Grade I & II.
As regards Assistant Public Prose cutors Grade I, the appointment was to be made by promotion from Assistant Public Prosecutor Grade II.
So far as the Assistant Public Prosecutor Grade II is concerned, the appointment was to be made by direct recruitment.
It was pointed out that under the above rules for appointment as Assistant Public Prosecutor Grade II a candidate was re quired to be a member of the Bar having not less than two years active practice in criminal courts.
After selection he was to be kept on probation for two years and was also required to undergo a training for a period of six months.
It was also pointed out that District was considered as unit for the appointment of Assistant Public Prosecutors Grade II and so far as Assistant Public Prosecutors Grade I are concerned they belonged to the State Cadre.
It was thus urged on behalf of the appellant that a regular cadre of Prosecuting Officers in the State of Kerala was existing and in this view of the matter the appointment of a Public Prosecutor or Additional Public Prosecutor could only be made from amongst the persons constituting such cadre as envisaged under sub section (6) of Section 24 of the Crimi nal Procedure Code after amendment.
It may be pointed out at this stage that Sh.
K.J. John, Assistant Public Prosecutor Grade I filed a writ petition in the High Court of Kerala and a Division Bench by Judgment dated 5th October, 1980 dismissed the writ petition.
The High Court considered the meaning and scope of the expres sion "regular cadre of Prosecuting Officers" occuring in sub section (6) of Section 24 of the Code.
According to the High Court sub section (9) of Section 24 provided a clue to the intention of the Parliament in using the said expres sion.
It held that from sub section (9) it would be clear that the expression "Prosecuting Officers" has been used in sub section (6) as meaning any persons holding the post of Public Prosecutor, Additional Public Prosecutor, Assistant Public Prosecutor or any other Prosecuting Officer by what ever name called.
Thus in the opinion of the High Court, sub section (6) contemplated a prerequisite condition for its applicability the existence of a regular cadre consist ing of officers holding all the aforementioned posts with a regular framework of service consisting of a hierarchy of such officers.
The provisions of sub section (6) of Section 24 can, therefore, have application in respect of States where there is a 327 regular cadre consisting of a hierarchy of Prosecuting Officers with the Assistant Public Prosecutor at the lowest rung and having at the top level Additional Prosecutors and Prosecutors.
According to the High Court admittedly no such cadre of such officers existed in the State of Kerala and as such there was no question of applying the provisions of sub section (6) of Section 24.
It may also be pointed out that the High Court also noticed the provisions of Kerala Government Law Officers (Appointment and Conditions of Service) and Conduct of Cases Rules, 1978 which dealt with the method of appointment of Government Law Officers at District Court level and the duration of their appointment.
These Rules specifically laid down that Government Law Officers at District Court Centres, Additional District Court Centres, inclusive of Public Prosecutors and Additional Public Prosecutors were to be appointed by the Government from a panel of advocates fur nished by the District Collector who was to prepare such panel in consultation with the District and Sessions Judge.
The appointment of a person as Public Prosecutor or Addi tional Public Prosecutor shall only be for a term of three years.
The High Court considered that the posts of Public Prosecutors and Additional Public Prosecutors under the above Rules were tenure posts and as such the Assistant Public Prosecutors who were regular hands cannot be appoint ed to the tenure posts.
The High Court ultimately, held that there was no regular cadre of Prosecuting Officers in the State of Kerala comprising therein Public Prosecutors and Additional Public Prosecutors.
Learned counsel appearing on behalf of the appellant K.J. John in Civil Appeal No. 1101 of 1981 contended that under the Old Code the qualification and method of appoint ment for Public Prosecutors did not require any condition for a candidate to be an advocate.
In order to remove such unsatisfactory state of affairs the Legislature provided the qualification and the method of appointment of Public Prose cutors and Additional Public Prosecutors by making elaborate provisions in Section 24 of the Criminal Procedure Code, 1973.
Under Section 24, as it stood before the 1978 amend ment, provision was made for appointment of Public Prosecu tors and Additional Public Prosecutors from a panel of names of advocates to be submitted by the District Magistrate inconsultation with the Sessions Judge to the State Govern ment.
A provision was made for the first time that a period Of seven years of practice at the Bar was necessary for appointment of Public Prosecutors and Additional Public Prosecutors.
328 It was further contended that this scheme of appointment of Public Prosecutors and Additional public Prosecutors was again found to be unsatisfactory because the selection of persons for for appointment as Public Prosecutors from the Bar was not found to be satisfactory.
Further the Assistant Public Prosecutors with required experience and ability and who were amenable to the disciplinary jurisdiction of the Government and had no avenues of promotion, were denied promotion as Public Prosecutors.
The Legislature wanted to rectify this defect and, therefore, amended Section 24 suitably to promote Assistant Public Prosecutors as Public Prosecutors and Additional Public Prosecutors at the Dis trict level.
The amendment in Section 24 by Amending Act of 1978 was thus made with the above purpose and intention.
It was thus contended that under sub section (6) of Section 24 introduced by the amendment, it was never intended to in clude the posts of Public Prosecutors and Additional Public Prosecutors within the expression "exists regular cadre of Prosecuting Officers".
It was urged that the regular cadre of Prosecuting Officers as mentioned in sub section (6) of Section 24 is dehors the cadre of Public Prosecutors/ Addi tional Public Prosecutors otherwise sub section (6) becomes meaningless.
It was thus submitted that the High Court com mitted an error in construing the expression "regular cadre of Prosecuting Officers" to comprise a service with Assist ant Public Prosecutor at the lowest level and Public Prose cutor at the top.
If Public Prosecutors and Additional Public Prosecutors are necessary in the existing cadre as interpreted by the High Court then there was no question of granting any benefit by the Legislature by introducing sub section (6) in Section 24 by way of amendment.
It was next contended that the High Court misunderstood the scope of sub section (9).
A combined reading of sub sections
(6), (7) & (9) is necessary to understand the intention of the Legislature.
According to the learned counsel sub sec tion (6) provided for appointment of Public Prosecutors from a regular cadre of Prosecuting Officers, subsection (7) provided that a person to be eligible for appointment as Public Prosecutor must have been in ' practice as an advocate for not less than seven years and therefore sub section (9) was necessary to create the fiction that the period of service as a Public Prosecutor or as an Additional Public Prosecutor or Assistant Public Prosecutor or other Prosecut ing Officer, by whatever name called, shall be deemed to be the period during which such person has been in practice as an advocate.
As regards the reason given by the High Court that the post of ' Public Prosecutor and Additional Public Prosecutor were tenure post.s for three years, it was sub mitted by learned counsel for appellant 329 that the Kerala Government Law Officers (Appointment and Conditions of Service) and Conduct of Cases Rules, 1978 as notified in the Kerala Gazette No. 25 dated 20th June, 1978 was made before the coming into force of the Criminal Proce dure Code (Amendment) Act, 1978 on December 18, 1978.
It was thus contended that the above Kerala Rules making the posts of Public Prosecutors and Additional Public Prosecutors as tenure posts cannot stand in the face of Section 24 of Criminal Procedure Code after Amendment Act of 1978.
In the alternative it was also contended that even if the posts of Public Prosecutors and Additional Public Prosecutors in Kerala may be allowed to continue as tenure posts, there is no bar for appointment of Assistant Public Prosecutors on such posts.
The Assistant Public Prosecutors will be in the same position as officers on deputation and will come back to their parent posts after the period of such tenure posts is over.
It is contended that this cannot be considered as a circumstance or a ground to construe sub section (6) of Section 24 to mean that the expression "regular cadre of Prosecuting Officers" does not enable the Assistant Public Prosecutors to claim appointment as Public Prosecutor.
Learned counsel appearing on behalf of the petitioners in the Writ Petition have also made identical arguments as made in the Kerala case.
The State of U.P. in its counter affidavit has pointed out that the cadre of Prosecuting Officers working in lower district courts in criminal side is wholly different and it cannot include Public Prosecutors who work exclusively on contract basis in the Sessions Courts.
Assistant Prosecuting Officers are appointed under Section 25 of the Code of Criminal Procedure.
After 1980, the Assistant Prosecuting Officers have been appointed by the State Government through the Public Service Commission, on the basis of competitive written examination and inter view of Law Graduates.
On the other hand Public Prosecutors are appointed in terms of professional contracts under Section 24(4) and 24(5) of the Code of Criminal Procedure.
A panel of names of advocates with seven years working experi ence is prepared by the District Magistrate in consultation with the District & Sessions Judge and sent to Law Depart ment of the State Government for approval.
Public Prosecu tors are thus appointed by the Law Department of State Government, whereas Assistant Prosecuting Officers are appointed by the Home Department of the State Government as regular Government servants.
It has been further submitted in the reply that Assistant Prosecuting Officers are regular Government servants and they get monthly salary and other allowances as admissible to other regular Government serv ants.
The services of Assistant Prosecuting Officers are pensionable, while Public Prosecutors are 330 appointed purely on the basis of contract, on a fixed fees.
Assistant Public Prosecuting Officers work under the admin istrative control of Home Department and Director General (Prosecution) is Head of the Prosecution Department.
The work and performance Of Public Prosecutors is assessed by the District Magistrate at the District level and they are controlled by the Law Department of the State Government.
It has been further submitted in the reply that the Assistant Prosecuting Officers main work is to prosecutre criminal cases in the lower District Courts i.e. courts of Judicial Magistrates, Chief Judicial Magistrate, Metropolitan Magis trates, Chief Metropolitan Magistrates, Munsif Magistrates, Executive Magistrates, District Magistrates and special Courts under the Terrorist Act and the Gangster Act.
The Assistant Prosecuting Officers also help the Executive Magistrate to conduct the identification of accused in criminal cases and also report on bail applications of the accused.
Assistant Prosecuting Officers also check the records of Sessions cases before their committal to Sessions Court and they also deal with the finger print branch and Malkhana of case properties.
They are Legal Advisors of the Superintendents of Police in matters pertaining to investi gation.
The Public Prosecutor 's main work is to prosecute the criminal cases in the Sessions Courts.
The State Government in its counter affidavit has fur ther given the following chart showing the hierarchy pay scales and strength of cadre: Name of Post Pay scale Permanent Temporary.
Total No. of Posts Joint Director Rs. 1840 2400 1 1 Legal Joint Director Rs. 1840 2400 1 1 (Admn.) Dy.
Director Rs. 1250 2050 5 6 11 Sr.
Prosecuting Rs. 1250 2050 17 17 Officer (Gr.
I) Sr.
Prosecuting Rs. 850.1720 13 70 83 Officer (Gr. II) Prosecuting Rs. 770 1600 84 114 198 Officer 331 Asstt.
Prosecuting Rs. 625 1240 704 174 878 Officer As against the aforesaid cadre and pay scales the Public Prosecutors are retained on monthly fees/daily fees as the case may be.
They are paid library allowances also.
The rates in their cases have been indicated as under: Monthly Library Fees Allowance (1) Public Prosecutor/District Rs.2700 Rs.300 Govt.
Counsel (Gr.) (2) Additional Public Prosecutor Rs.2550 Rs.250 Gr.
I/Addl.
District Govt.
Counsel (Gr.) (3) Addl.
Public Prosecutor Rs. 1800 Rs.200 Gr.
II/Asstt.
Distt.
Counsel (Gr.) (4) Addl.
Public Prosecutor Rs. 50 as daily fees.
III It has been further submitted in the reply that the petitioners have several promotional avenues in their own cadre and cannot claim any post outside their cadre.
In Uttar Pradesh there is no regular cadre of Prosecuting Officers within the meaning of Section 24(6) of the Code of Criminal Procedure and as such the petitioners are not entitled to appointment as Public Prosecutors or Additional Public Prosecutors in Sessions Courts.
It has also been pointed out that at present the total strength and posts of Assistant Prosecuting Officers is 878 out of which 66 1 have been filled and the rest are vacant.
The total number of posts of Prosecuting Officers is 198 out of which 191 have been filled up and the rest are vacant.
At present the posts of Senior Prosecuting Officer Gr.
II & I are 83 and 17 respectively.
Thus there is ample opportunity of promotion open to the petitioners.
The main controversy hinges on the scope of sub section (6) of Section 24 and specially the words "regular cadre of Prosecuting Officers" existing in this provision.
Prior to coming into force of the Code of Criminal Procedure, 1973, the Prosecuting Officers were under the 332 control of Police Department.
It was not necessary at that time that the Public Prosecutor or Additional Public Prose cutor should have any experience as an advocate.
In order to remove such unsatisfactory state of affairs, the Legislature made an elaborate provision under Section 24 for the ap pointment of Public Prosecutors and Additional Public Prose cutors in the Criminal Procedure Code, 1973.
Under this provision it was laid down that practice as an advocate for not less than seven years was necessary for appointment of Public Prosecutor and Additional Public Prosecutor.
After sometime, it was considered by the Legislature that the above provision does not take into consideration the working experience of Prosecuting Officers and pleaders for eligi bility for appointment as Public Prosecutor and Additional Public Prosecutor.
The Legislature as such substituted a new Section 24 by the Criminal Procedure Code (Amendment) Act, 1978 brought into force w.e.f.
18th December, 1978.
Under sub section (9) of this new Section 24 it was provided that the period during which a person has been in practice as a pleader, or has rendered service as a Public Prosecutor or as an Additional Public Prosecutor or Assistant Public Prosecutor or other Prosecuting Officer, by whatever name called, shall be deemed to be the period during which such person has been in practice as an advocate.
This provision thus granted benefit of the period of service to the persons mentioned in the above provision and by a deeming fiction such period of service was considered as the period in practice as an advocate.
Thus the above provision made the Prosecuting Officers such as Public Prosecutor, Additional Public Prosecutor, Assistant Public Prosecutor or other Prosecuting Officer, by whatever name called, also eligible for being included in the panel to be prepared by the Dis trict Magistrate in consultation with the Sessions Judge fit to be appointed as Public Prosecutors or Additional Public Prosecutors for the district.
In this background we have to understand the scope of subsection (6) of Section 24 which gives a clear mandate to appoint a Public Prosecutor or an Additional Public Prosecu tor only from amongst the persons constituting a regular cadre of Prosecuting Officers.
According to this provision any person from the advocates or from any other source cannot be appointed as a Public Prosecutor or an Additional Public Prosecutor if there already exists a regular cadre of Prosecuting Officers in a State.
So far as the proviso to sub section (6) of Section 24 is concerned it would not apply in the normal circumstances and would only be attract ed where in the opinion of the State Government no suitable person is available in such regular cadre of Prosecuting Officers for appointment as Public Prosecutor or Addi 333 tional Public Prosecutor.
Admittedly the regular cadre of Prosecuting Officers in the State of Kerala as well as in the State of U .P. does not include Public Prosecutors or Additional Public Prosecutors.
The case of the appellants is that Assistant Public Prosecutors Gr.
I and Gr.
II together constitute a cadre of Prosecuting Officers so as to attract the applicability of sub section (6) of Section 24 of the Code.
It has been contended on their behalf that unless the Government formed the requisite opinion that no suitable person is available in the said cadre for appointment as Public Prosecutor or Additional Public Prosecutor, the appointments to the posts of Public Prosecutor, and Addi tional Public Prosecutor can be made only from amongst persons holding the posts of Assistant Public Prosecutors Gr.
I & Gr.
A combined reading of sub section (6) and sub section (9) of Section 24 gives a clue to the intention of the Legislature in determining the scope of the expression "regular cadre of Prosecuting Officers" occurring in sub section (6).
The intention of introducing sub section (6) and the deeming fiction in sub section (9) was in order to safeguard the promotional rights of Prosecuting Officers in such of the States where there is already in existence regular cadre consisting of a hierarchy of Prosecuting Officers going to the top level of Additional Public Prose cutors and Public Prosecutors.
In Sub sectiOn (9) the ex pression "Prosecuting Officers" has been used as taking in any persons holding the post of Public Prosecutor, Assistant Public Prosecutor or any other Prosecuting Officer by what ever name called.
Sub section (6) independently can grant no benefit to the Prosecuting Officers unless the clause of deeming fiction contained in sub section (9) makes them eligible for appointment1 as a Public Prosecutor or Addi tional Public Prosecutor.
Sub section (9) clearly speaks with regard to the service rendered as a Public Prosecutor or as Additional Public Prosecutor, or Assistant Public Prosecutor or other Prosecuting Officer, by whatever name called to be counted as the period as if such person had been in practice as an advocate for the purposes of subsec tion (7) & sub section (8).
Thus we are clearly of the view that the expression "regular cadre of Prosecuting Officers" contained in subsection (6) of Section 24 must comprise a regular cadre of Prosecuting Officers going up to the level of Additional Public Prosecutor and Public Prosecutor.
It may be important to note that so far as the State of Kerala is concerned under Rule (5) of the Kerala Government Law Officer (Appointment & Conditions of Service) and Conduct of Cases Rules, 1978, it has been stated that the Legal Advisor to the Vigilance Department, Additional Legal Advisor to the Vigilance Department and Assistant Public Prosecutor Gr.
I shall belong to the State Cadre 334 in the sense that for the purpose of appointment, probation, seniority, discharge of probationers and approved probation ers for want of vacancy, the State shall be the unit whereas in the case of Assistant Public Prosecutor Gr.
II, the District concerned shall be the unit for all such purposes.
Thus if we take the argument of learned counsel for the appellant to its logical conclusion, the result would be that in a State if there existed a cadre of Prosecuting Inspectors or Assistant Public Prosecutors only in that case also the State Government would be bound to appoint Public Prosecutor and Additional Public Prosecutor only from among such cadre under sub section (6) of Section 24.
It could not have been the intention of the legislature while enacting sub section (6) of Section 24 of the Code.
It was also contended on behalf of the petitioners that in case the meaning to the expression "regular cadre of Prosecuting Officers" under sub section (6) of Section 24 is given as to consist of a regular cadre of Prosecuting Officers going upto Public Prosecutor at the top, then there is no benefit to such persons by enacting sub section (6) and (9) in Section 24 of the Code.
We find no force in this contention.
The basic intention of the Legislature was to appoint Public Prosecutors and Additional Public Prosecutors from the advocates having atleast seven years practice.
Section 24 as initially contained in Section 24 of the Code did not make any Prosecuting Officer even of the cadre of Public Prosecu tor prior to 1973 as eligible for being appointed as Public Prosecutor or Additional Public Prosecutors, they were made eligible by substituting Sec.
24 by the Amending Act of 1978 by introducing a new provision under subsection (9) of Section 24.
In this background when we consider the provi sion of sub section (6) of Section 24 which makes it incum bent to appoint Public Prosecutor and Additional Public Prosecutors only from a regular cadre of Prosecuting Offi cers, it can only be applied in case of such regular cadre which may go upto the level of Public Prosecutor.
In view of these circumstances we find that the Kerala High Court is right in taking the view that the expression "regular cadre of Prosecuting Officers" comprised a service with Assistant Public Prosecutor at the lowest level and Public Prosecutors at the top.
In case a regular cadre of Prosecuting Officers did not go into Public Prosecutor at the top, the State Government cannot be considered as bound to appoint Public Prosecutor or Additional Public Prosecutor only from among the persons constituting such cadre under the.
Code of Criminal Procedure for conducting cases in the Sessions Court.
There is another insurmountable difficulty which exists in the 335 way of the appellant and the petitioners in as much as the State Government has made the posts of Public Prosecutor and Additional Public Prosecutors as tenure posts It lies within the competence of the State Government to keep such posts of Public Prosecutor and Additional Public Prosecutor as tenure posts for some period based on contract and not to make such posts as regular or permanent under any service rule.
In this view of the matter till such posts are tenure posts, to be filled on contract basis for some period, the Assistant Public Prosecutors who are members of a regular service cannot claim any right to be appointed on such posts under sub section (6) of Section 24 of the Code of Criminal Procedure.
They are also eligible to be considered with any advocate of seven years standing if willing to join such post on tenure basis by the District Magistrate in consulta tion with the Sessions Judge.
We cannot accept the conten tion of the learned counsel for the petitioners in this regard that Assistant Public Prosecutors can be appointed on such tenure posts on deputation and may return back to their parent service after completion of the period of such tenure posts.
The State of U.P. in its counter has clearly brought out the distinction in these two kinds of posts in the manner and terms of their appointment, discharge of duties, emoluments etc.
The Assistant Public Prosecutors have ave nues of promotion in their own cadre and no argument can however be advanced in interpreting the provision of sub section (6) of Section 24 on this basis.
In the result both the above cases are dismissed with no order as to costs.
R.S.S. Appeal and Petition dismissed.
| IN-Abs | The appellant in the civil appeal was an Assistant Public Prosecutor Grade I in the State of Kerala.
The writ petition under Article 32 of the Constitution has been filed by the Uttar Pradesh Public Prosecutors ' Association con sisting of the membership of Assistant Public Prosecuters, including Prosecuting Officers, senior Prosecuting Officers, Deputy Director of Prosecution serving under the Government of Uttar Pradesh.
In both the cases the controversy raised is that there exists a regular cadre of Prosecuting Officers and as such the State Government is bound to appoint Public Prosecutors and Additional Public Prosecutors only from among the persons constituting such cadre in view of section 24(6) of the Code of Criminal Procedure, 1973, as amended by the Criminal Procedure Code (Amendment) Act of 1978.
The appellant 's writ petition filed in the High Court of Kerala was dismissed.
The High Court was of the view that the provisions of sub section (6) of section 24 could have application in respect of States where there was a regular cadre consisting of hierarchy of Prosecuting Officers with the Assistant Public Prosecutor at he lowest rung and having at the top level Additional Public Prosecutors and Public Prosecutors.
The High Court held that there was no regular cadre of Prosecuting Officers in the State of Kerala Com prising therein Public Prosecutors and Additional Public Prosecutors.
The High Court further observed that under the Kerala Government Law Officers (Appointment and Conditions of Service) and Conduct of Cases Rules, 1978 the posts of Public Prosecutors and Additional Public Prosecutors were tenure posts and as such the Assistant Public Prosecutors who were regular hands could not be appointed to the tenure posts.
320 Before this Court it was contended on behalf of the appellant/ petitioners that Assistant Public Prosecutors Grade I and Grade II together constituted a cadre of Prose cuting Officers so as to attract the applicability of sub section (6) of section 24 of the Code.
It was urged that in case the meaning to the expression "regular cadre of Prose cuting Officers" under sub section (6) of section 24 was given as to consist of a regular cadre of Prosecuting Offi cers going upto Public Prosecutor at the top, then there was no benefit to such persons by enacting sub sections (6) and (9) in section 24, by the Amending Act of 1978.
It was further urged that there was no bar for appointment of Assistant Public Prosecutors against tenure posts as offi cers on deputation.
The State of U.P. in its counter has brought out the distinction in these two kinds of posts in the manner and terms of their appointment, discharge of duties, emoluments etc.
It was further urged that in Uttar Pradesh there was no regular cadre of Prosecuting Officers within the meaning of section 24(6) of the Code of Criminal Procedure and as such the petitioners were not entitled to appointment as Public Prosecutors or Additional Public Prosecutors.
Dismissing the appeal and the writ petition, this Court, HELD: (1) The intention of introducing sub section (6) and the deeming fiction in sub section (9) was in order to safeguard the promotional rights of Prosecuting Officers in such of the States where there was already in existence a regular cadre consisting of a hierarchy of Prosecuting Officers going to the top level of Additional Public Prose cutors and Public Prosecutors.
[334E F] (2) The Kerala High Court was right in taking the view that the expression "regular cadre of Prosecuting Officers" comprised a service with Assistant Public Prosecutor at the lowest level and Public Prosecutors at the top.
In case a regular cadre of Prosecuting Officers did not go upto Public Prosecutor at the top, the State Government could not be considered as bound to appoint Public Prosecutor or Addi tional Public Prosecutor only from among the persons consti tuting such cadre under the Code of Criminal Procedure for conducting cases in the Sessions Court.
[334G H] (3) It was within the competence of the State Government to keep such posts of Public Prosecutor and Additional Public Prosecutor as tenure posts for some period based on contract and not to make such 321 posts as regular or permanent under any service rule.
In this view of the matter, till such posts were tenure posts, to be filled on contract basis for some period, the Assist ant Public Prosecutors who were members of a regular service could not claim any right to be appointed on such posts under sub section (6) of section 24 of the Code of Criminal Procedure.
[33SA C] (4) The contention of the petitioners that Assistant Public Prosecutors can be appointed on such tenure posts on deputation and may return back to their parent service after completion of the period of such tenure posts, was not acceptable.
[335C]
|
1, 3 and 10 of 1989 and 12 of 1990.
IN Writ Petition (C) No. 8209 of 1983 etc.
(Under Article 32 of the Constitution of India).
V.A. Bobde, V. Gauri Shankar, M.K. Ramamurthy, Prashant Bhushan, T. Sridharan, Ms. Shobha Dixit and M.A. Krishna murthy fox the Petitioners.
Ms. Anil Katiyar, Ms. A. Subhashini R.P. Srivastava (NP), Promod Dayal, R.B. Mehrotra and Raju Ramachandran for the Respondents.
The Order of the Court was delivered by RANGANATH MISRA, J.
On 30th of August, 1988, while disposing of two writ petitions being Nos. 8209 and 8821 of 1983, this Court came to the conclusion that the entire mining operation in the Doon Valley should come to a halt.
With a view to effectuating this conclusion all mining activity was directed to be stopped excepting in the case of a few for reasons indicated in that order.
Several applications thereafter came before this Court for permission to remove stacked material and almost for one and a half years now, many rounds of such applications have been filed before this Court which have led to inquiries being made by executive authorities, a joint inspection by the District Judge and the District Magistrate as also separate reports from the Monitoring Committee appointed by this Court.
After hearing parties in some cases the court has granted permission for removal and extended time for appropriating the mined material.
On the plea that within the time given by the Court removal was not possible, fresh extensions of extended dates have also been asked for.
At one stage, the Monitoring Committee reported that taking advantage of such extensions further mining was being illegally undertaken.
The Monitoring Committee also pointed out that where the 74 mined material was spread over it had consolidated and grass as also other vegetations have started growing.
In these circumstances, while either allowing or rejecting the appli cations for removal or extension or allowing removal under restrictions, this Court has been expressing itself clearly that the Doon Valley should be made available for afforesta tion to make good the loss that had been caused to the ecology and that work should no longer be interfered with.
A fresh set of applications have now been made for permission to remove the mined material, machinery and/or extension of time for the same.
This Court had called for a report on the basis of joint inspection by the District Judge and the District Magistrate of Dehradun and after the said report was received, the Monitoring Committee has made its report on the basis of this Court 's direction.
A group of these applications had been heard on 12th of February, 1990, but as some other applications remained to be disposed of on the basis of the report of the Monitoring Committee which was yet to be received, no orders had then been made.
The Monitoring Committee sent its report dated 6th of April, 1990, and the other group of applications which were then pending have in the meantime been heard on 26th of April, 1990.
We proceed to dispose of all the pending applications by this order.
We have considered the submissions with some amount of anxiety particularly as we are of the definite view that the Doon Valley should be left free to the planters for reaffor estation and the mine owners should be put out in every respect of the same.
Two or three aspects have, however, to be borne in mind while dealing with a case of this type.
Mining was stopped by our order all of a sudden within a month from 30th of August,/988.
Though fresh mining is stopped, mined material which had been appropriated by the mine owner by his own efforts should ordinarily be allowed to be taken by him.
There is no doubt that the mined materi al has been loosened from the original place by digging and even if it is allowed to be stacked, consolidation of such material is bound to take quite some time and within one year it is not likely to consolidate appropriately.
The mined material has a market and with the closure of the mining operation substantially in the Doon Valley, this material seems to have been fetching good price as there is demand for the same.
When mining was stopped, no compensa tion was provided and the only hope our order held out was rehabilitation.
At this stage, it is appropriate to extract a portion from the letter 75 Of the Chairman of the Monitoring Committee dated April 6, 1990, addressed to the Registrar of this Court.
The Chairman is no other than the Secretary to the Government of India in the Ministry of Environment and Forests.
He has pointed out: "The Committee would seek the indulgence of the Court to submit to the Hon 'ble Justices that the areas ravaged by these mines including the roads leading to the mine areas are in immediate need of afforestation to consolidate the soil and prevent soil erosion.
Permission granted to the miners will inevitably delay the process of afforestation and will destroy any natural vegetation that has come up along the roads and the mine areas since the last monsoon.
Shri David Paul (Lease No. 99) in fact broke several check dams in the process of lifting material taking advantage of this Court 's orders granting him permission to remove quar ried material.
The process of afforestation of these areas cannot even be started as long as various applications of these miners for removal of material are pending before this Hon 'ble Court.
It is humbly submitted that this Court must, therefore, once and for all, put an end to such applica tions, in order that the Monitoring Committee may vigorously take up the task of afforestation of these areas.
" We can quite appreciate the anxiety of the Monitoring Committee that initial permission and extension of time for removal has disturbed afforestation.
The Monitoring Commit tee must, however, appreciate that the enthusiasm which it is prepared to exhibit has to be sobered down in the initial period by such judicial directions as are called for taking the cause of equity and justice into consideration.
Even in such of the cases where permission or extension for removal would be granted now, we are of the view that the mine owners should not be permitted to operate and the District Magistrate should set up a machinery under his control and subject to the supervision of the Monitoring Committee to enable removal.
We do not propose to allow the process of removal to continue beyond 15th of June, 1990.
The process of afforestation for the year would begin only by that time awaiting the onset of the monsoons.
The ex lessees in whose case original or extended orders permitting removal would now be made have, therefore, to contact the District Magistrate within one week of this order and the District Magistrate would work out removal on appropriate payment from the respective areas of the ex lessees of 76 the extracted material as mentioned in this Court 's order of today on or before 15th of June, 1990.
We make it clear that no application either for original permission or for exten sion shall hereafter be entertained by this Court and the Registry is directed by this order not to entertain such petitions.
It may be that such direction may affect some one who has not been vigilant or has on account of some other difficulty or hardship been not able to remove the stacked material within his leasehold area in the Doon Valley; but taking the broad interests of the entire Valley into account such individual losses or inconveniences have to be sacri ficed and/or overlooked and equities can no longer be al lowed to be invoked.
B INTERLOCUTORY APPLICATIONS IN DISPOSED OF WRIT PETTION NO.
8209 OF 1983 1.
A. NO.
I OF 1989 This application is by the former lessee of lease No. 16 Ved Pal Singh Chaudhary.
The mine closed down on 30th of September, 1988 in terms of this Court 's direction dated 30.8.1988.
The first report on the record is dated 18th of February, 1989, jointly given by the Additional District Magistrate, Dehradun, D.P. Sharma, Geologist of Dehradun and the Forest Range Officer, Mussoorie.
This report indicated that limestone extracted was found lying scattered in dif ferent marble pits and also heaps of different shapes.
The estimated quantity in the heaps appeared to be 11,500 metric tons.
This Court permitted removal of the mined material and the report of the Monitoring Committee shows that between March and May, 1989, with extensions obtained from the Court, 11,539 metric tons have already been removed.
The joint inspection report of the District Judge and the District Magistrate has indicated that there was no fresh mining in the area after 30th of August, 1988, and it appeared that the scattered material had been collected and removed while the stack has remained untouched.
The present petition is for removal of the stack which is claimed to be more than 11,000 metric tons.
The Monitoring Committee on the basis of the fact that 11,539 metric tons had been removed has assumed that there must have been fresh mining to justify the presence of the stack.
It has also indicated in the report that there is no danger whatsoever of any scree or stacked 77 material rolling down and affecting and choking the streams.
According to the Committee, giving fresh opportunity for removal would encourage illicit mining and several mine owners are likely to carry on that clandestinely.
Keeping the two reports in view, we are inclined to hold that there has been no fresh mining and the stack now found is the old one; it would not be appropriate to assume that the stack has consolidated nor is it possible that the vegetation on such a stack would grow within a year.
For the reasons we have already indicated earlier we think it appropriate that ex mine owner of lease No. 16 should be permitted to have the existing stacked material of 11,500 metric tons removed from the leasehold area but the same shall be through the agency set up by the district Magistrate on terms of payment and the removal shall be completed on or before the 15th June, 1990.
It is made clear that the removal shall be supervised by the Monitoring Committee.
1. A. Nos. 3 and 10 of 1989 and 12 of 1990 These are applications made on behalf of Punjab Lime & Limestone Company for extension of time for lifting the mined material lying in the first two lease areas held by the aforesaid lessee and for original permission for the lease No. 96.
Under the final order of this Court dated 30th August, 1988, in Paragraph 51 of the deci sion three mines including lease No. 96 valid up to 12.12.
1989 were permitted to work.
Therefore, mining activity in respect of lease No. 96 must have stopped after 12th Decem ber, 1989.
The joint inspection report of the District Judge and the District Magistrate indicated that 2,269 metric tons of material were lying at the face of the mine in lease No. 14/ii while in regard to lease No. 14/i there was no materi al found and the scattered scree was reported to have total ly stabilised.
The Monitoring Committee has opposed removal from lease No. 14/ii by saying that permission to remove had been given and utilised.
We are of the view that the peti tion in regards to lease No. 14/i should be rejected in view of the concurrent reports of the joint inspection and the Monitoring Committee that the scree has already consolidat ed.
So far as 2,269 metric tons from lease No. 14/i are concerned there is no particular reason to take a different view and we direct that the same shall be removed through the machinery set up by the District Magistrate upon payment of the cost by the ex mineowner.
This removal shall also to be made prior to 15th June, 1990.
Lease No. 96 closed down operations on 12th December, 1989.
5000 metric tons of limestone are claimed to have been scattered over 78 the area and reliance is placed upon the rule permitting six months ' time from the date of closing for removal of such material. 'The Monitoring Committee has reported that there was no scree lying on the leased area.
It found that there is some scattered material on the surface of the mine which cannot conveniently be stacked up.
Since this is the first application of the ex lessee after the mining has been closed, we would have directed the Monitoring Committee to make a fresh inspection in the presence of the ex mine owner but in view of the clear report that there was no stacked material found by the Monitoring Committee and the further fact stated in the report that the scree has already consol idated even during the currency of the mining lease, we do not think it will be appropriate at this stage to permit any removal.
The petition is accordingly dismissed.
1. A. Nos. 5 and 6 of 1989 This petition is by the legal representatives of C.G. Gujral who as lessee of lease No. 76.
The first petition is for substitution of his legal representatives.
It is allowed.
So far as the second one is concerned, the legal representa tives of Shri Gujral, ex mine owner requests for permission for removal of the extracted mineral as also some machine parts from the leasehold area.
At the instance of Shri Gujral this Court on 30.1.89 had made the following order: "Heard learned counsel in C.M.P. for permission to remove the mining material already lying at the quarry site.
Subject to the verification by the Collector either person ally or by a responsible officer that the allegation is correct, removal may be permitted.
The entire stock either near the quarry or stocked in the stacking site should be removed within four weeks from the day permission is granted . . ".
It is alleged that soon after on 18th September, 1989, C.G. Gujral, original mine lessee died and his legal repre sentatives had instituted a suit.
The suit has now been dismissed by a separate order of this Court and interim relief granted has also been vacated.
This petition filed in July, 1989, seeks permission for removal of the stacked material and for permission to remove the machinery which comprises of compressors and tools said to be lying at the mine site.
The joint inspection report indicates that the mine site was not accessible.
16 Kms.
pathway had been damaged and even walking was not possible.
If we permit the roadway to be repaired, there is apprehension of 79 damage to the land in the locality.
If the work is left to the legal representatives of the ex mine owner they are likely to collect material for the purpose of repair which would definitely affect the ecology.
Yet there are valuable machines apart from the mined material to be collected.
We leave it to the Collector and the Monitoring Committee to find out if by some convenient path or any other process by which the machinery and the mined material can be moved out.
The legal representatives of the ex mine owner may now contact the Collector and the Monitoring Committee to find out the modality of removal and in case some convenient way is found out the stacked material and the machinery may be removed with the help of the agency of the Collector subject to the payment of the cost on or before 15th June, 1990.
C.M.P. No. 18702 of 1989 This application is by the ex lessee of lease No. 31.
The joint inspection report indicates that the mining was stopped on 12th March, 1985 and there has been no fresh quarrying.
The report indicates: "Under the mining faces in the slopes and in the river beds scree and fine material were seen lying and scattered.
Natu ral vegetation is overgrown.
Plants like . . were grow ing.
At some spots pine plants and furns were also found growing indicating that there is existence of humus and the already quarried material has compacted and settled binding the soil.
" In this view of the matter it becomes difficult to entertain this petition at this stage; the petition is accordingly dismissed.
1. A. No. 4 of 1989 This application is by the ex lessee of mine No. 17 asking for permission for removal of already extracted mineral lying at the mine site.
In the joint inspection report it has been indicated that this Court had granted some time for removal.
The ex lessee had also obtained an order from the Addl.
District Judge of Dehradun.
The report indicated that there was no sign of fresh mining.
We have taken all aspects into account and we are of the view that this application has to be rejected.
80 C.M.P. No. 18703 of 1989 This application is on behalf of the ex lessee of lease No. 8 for extension of time for lifting of mined mineral.
The joint inspection report indicates that mining in this area was stopped as early as 12th March, 1985, and "Natural vegetation has overgrown in and around the mining faces.
Considerable quarried material was lying scattered in the slopes, the quantity of which could not be ascertained or measured.
The Monitoring Committee in its report dated 10.8.89 assessed that approximately 7,000 metric tons of the mining material was lying scattered in the mining area.
" We have no intention to permit any meddling to unsettle the settled situation.
As the mining has stopped for more than five years and the report is that there has been overgrowth of natural vegetation we do not intend to permit extension of time as prayed for.
The petition is accordingly dis missed.
C.M.P. 11756 of 1988 The two writ petition Nos. 8209 and 8821 of 1983 clearly relate to the Doon Valley and mining activity falling within the district of Tehri Garhwal was not be the subject matter of those two writ petitions.
The CMP filed by the State of Uttar Pradesh is dismissed leaving it open to the State to agitate its contentions in regard to mining activity in Tehri Garhwal separately.
W.P. No. 151 of 1990 This is an application under article 32 of the Constitution asking for grant of leases in respect of five mines falling within the 'A ' category of the Bhargava Committee Report as also Category (1) of the Working Group Report to the Calcium Carbonate Manufacturers Association for carrying out limited mining activity to meet the essential and captive need of the Calcium Carbonate Industry.
When the main writ petitions were pending, CMP 30707/87 had been filed for the self same relief and it wanted to be impleaded in those two writ petitions.
The application was rejected on 30th of August, 1988, by saying: "From time to time, Civil Miscellaneous Petitions had been moved and orders were made.
We do not see any justification to make any further order in such cases.
All CMPs are disposed of.
" Thereafter, the petitioner made another application for the same relief 81 but the Registry did not entertain it in view of the final order of 30th August, 1988.
The present writ petition, in these circumstances, is not maintainable.
That apart, this Court had come to the conclusion on 30th of August, 1988, that mining activity in the Doon Valley area must ultimately stop.
The Court has taken into consideration the need for availability of minimum supply of the mineral in question and to make available such supply, controlled and regulated mining activity has been permitted.
Mining leases are not granted by this Court and in view of the conclusion already reached that no fresh mining activity should be carried on, we see no justification for entertaining this writ petition.
Contempt Petition No. 25 of 1989 There is already an order that the proceeding for con tempt is misconceived.
We do not find any justification to give any further time for lifting or removal.
The contempt petition is accordingly dismissed.
1. A. No. 9 of 1989 This application is by the Monitoring Committee appoint ed by this Court and the prayer is to recall the order of 19th October, 1989, and to direct the State of Uttar Pradesh to sell the material and utilise the proceeds for the pur poses of reafforestation and conservation.
In view of the steps we have taken in the connected matters, no particular directions are necessary.
C The only other question that is left for consideration is the recommendation of the Monitoring Committee that the payment of Rs.5 per metric ton of the extracted material fixed by this Court in 1988 should be raised to Rs.20 per metric ton.
We have heard counsel for the parties.
We have also perused the report and the papers produced on behalf of the lessees who are still running.
We are inclined, on the materials placed, to take the view that the rate should be enhanced to Rs. 10 from Rs.5 with effect from 1st June, 1990.
Since this will not have any retrospective effect the liability for such payment would be only in respect of the lessees who are running by permission of the Court given in the main judgment of August 30, 1988.
It has been contended by some of the lessees before us that the money which has been collected on the basis of Rs.5 per metric ton has 82 not yet been utilised for plantation.
We hope and trust that there is no basis for the criticism but would like to advise the Monitoring Committee to activise its steps in the proper direction.
A detailed report on the afforestation scheme may now be placed by the Monitoring Committee by 30th June, 1990, for the consideration of the Court on the 23rd July, 1990.
The rehabilitation scheme which has already been fur nished by the appropriate Committee should now be placed before the Court for orders also on 23rd July, 1990 R.N.J. Petition dis posed of.
| IN-Abs | Disposing of on 30.8.1988 Writ Petitions Nos. 8209 and 8821 of 1983 this Court had come to the conclusion that the entire mining operation in the Doon Valley should come to a halt excepting in the case of a selected few, for reasons indicated in that order.
Since then from time to time sever al applications had been moved by the ex lessees seeking permission for removing the stacked material or extension of time for appropriating the mined material.
In allowing or rejecting each such application this Court has been express ing itself clearly that the Doon Valley should be made available for afforestation to make good the loss caused to the ecology.
By today 's order while disposing of all the pending applications including one fresh Writ Petition in the light of the report of the Monitoring Committee appointed by this Court, the Court, HELD: No application either for original permission or for extension of time shall hereafter be entertained by this Court and the Registry is directed by this order not to entertain such petitions.
It may be that such direction may affect some one who has not been vigilant or has on account of some other difficulty or hardship not been able to remove the stacked material within his leasehold area in the Doon Valley; but taking the broad interest of the entire Valley into account such individual losses or inconveniences have to be sacrificed and/or overlooked and equities can no longer be allowed to be invoked.
[76A B] A detailed report on the afforestation scheme may now be placed by the Monitoring Committee by 30th June, 1990 for consideration of the Court on 23rd July, 1990.
The rehabili tation scheme which has already been furnished by the appro priate committee should also be 73 placed before the Court for orders on the said date.
[80B C]
|
Special Leave Petition (Criminal) No. 2531 of 1989.
From the Judgment and Order dated 29.9.
1989 of the Bombay High Court in Criminal Writ Petition No. 87 of 1989.
U.R. Lalit and Mukul Mudgal for the Petitioner.
Ashok H. Desai, Solicitor General, Ashok Srivastava and Ms. Sushma Suri for the Respondents.
Syed Ali Raza Shafiq Mohammed was detained by an order of detention passed under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988 (hereinafter referred to as the Act) dated 19.12.88 by the Secretary (II) to the Government of Maha rashtra, Home Department.
The detention order and the grounds of detention were given to the detenu on 20th Decem ber, 1988.
It may be mentioned that on 19.12.88 the detenu was already in jail as his bail application had been reject ed.
The wife of the detenu filed a writ petition before the Bombay High Court challenging the detention of her husband Syed Ali Raza Shafiq Mohammed.
The Division Bench of the High Court dismissed the writ petition by order dated 29th September, 1989.
The wife of the detenu has now filed the present Special Leave Petition aggrieved against the Judg ment of the Bombay High Court.
Learned counsel for the petitioner raised the following submissions before us: (1) There were no prospects of the detenu being enlarged on bail as he was involved in a case under the Act where the offence was punishable with minimum sentence of ten years.
The bail application filed on behalf of the detenu was rejected by the Metropolitan Magistrate and the detenu had not filed any application for bail either in the Sessions Court or in the High Court.
(2) That detention orders of Rai Chand Shah and Jai Lal Vora had already been struck down by the High Court on the 272 ground that the medical report in respect of the injury sustained by Rai Chand Shah was placed in a truncated form before the detaining authority.
The detention order of the present detenu also suffers from the same vice and as such his order of detention should also be set aside.
(3) That a declaration was issued under Sec. 10 (1) of the Act on 20th January, 1989 and the said declaration was served on the detenu after an unexplained delay of 21 days.
(4) The detenu submitted a representation on 31.1.89 which was jointly addressed to the Government of Maharashtra and the Government of India and the Hon 'ble Advisory Board for revocation of the impugned order of detention.
The State Government rejected the representation by its reply dated 21.2.89 and the Central Government by its reply dated 3.3.89.
Thus there was an inordinate and unexplained delay in considering the said representations of the detenu and this violated the right of the detenu under article 22(5) of the Constitution of India.
The order of detention is illegal on this count also.
We shall deal with the above contentions seriatem.
With regard to the first contention it was submitted by the learned counsel that the detenu was already in custody and his bail application had also been rejected and there was no likelihood of the detenu being released on bail in respect of the alleged offence under the Act where the minimum sentence of imprisonment was ten years.
It was submitted that the mere possibility of his release on bail was not enough for preventive detention unless there was material to justify the apprehension that the detention would be neces sary in order to prevent him from engaging in illicit traf fic in narcotic drugs and psychotropic substances, in case of his release on bail.
A mere possibility of release on bail and a bald statement that the detenu would repeat his criminal activities was alone not sufficient to sustain the order of detention.
It was further contended that the de taining authority did not apply its mind to this aspect of the matter, that the detenu was already in custody and his bail application having been rejected there was no possibil ity of his being released on bail in a serious offence under the Act.
Reliance in support of the above contention was placed on recent decisions of this Court in N. Meera Rani vs Government of Tamil Nadu & Anr., JT and Dharmendra Sugan Chand Chelwat.
vs Union of India & Ors.
, ; 273 On the other hand Learned,Solicitor General contended that it would depend on the facts and circumstances of each case whether a detention order is to be passed or not in case of a person who was already in custody.
An order of detention can be validly passed against a person in custody where the detaining authority was already aware of such facts and it is satisfied that the detenu is likely to be released from custody in the near future.
The detaining authority can take into account the nature of the antecedent activities of the detenu in order to arrive to the conclu sion that it is likely mat after his release from custody he 'would indulge in criminal activities and it was necessary to detain him in order to prevent him from engaging in such activities in the present case there was complete awareness in the mind of the detaining authority about the detenu being in custody and that if he is released on bail he is likely to indulge in the criminal activities.
The detaining authority was not only aware that the detenu was in jail but also noted the circumstances on the basis of which he was satisfied that the detenu was likely to come out on bail and continue to engage himself in the criminal activities.
It was submitted that the High Court has considered this aspect of the case and has given detailed reasons for upholding the order of detention and there is no ground or justification for interfering in the order of the High Court.
Reliance in support of the above contention was placed on San jeer Kumar Aggarwal vs Union of India & Ors., JT We have given our thoughtful consideration to the argu ments advanced by Learned counsel for the parties on the above point.
The latest decision of this Court on the above point is Sanjeev Kumar Aggarwal vs Union of India & Ors., (supra) decided on 4th April, 1990 in which all the earlier cases decided by this Court have been considered including the cases of N. Meera Rani vs Dharmendra Sugan Chand Chelwat (supra) on which reliance has been placed by the Learned counsel for the petitioner.
It was observed in Sanjeev Kumar Aggarwal 's case that no decision of this court has gone to the extent of holding that no order of detention can validly be passed against a person in custody under any circum stances.
Therefore, the facts and circumstances of each case have to be taken into consideration in the context of con sidering the order of detention in the case of a detenu who is already in jail.
The counsel for the detenu in the above case strongly relied on Smt.
Shashi Aggarwal vs State of U.P. & Ors., JT and Ramesh Yadav vs District Magistrate, Etah & Ors., and contended that the bail application could be opposed if moved or if en larged the same can be questioned in a higher court and on that ground the detention order should be held to be 274 invalid.
The Court negatived the above contention by observ ing that in N. Meera Rani 's case a Bench of three Judges noted the above observations in Smt.
Shashi Aggarwal 's case and Ramesh Yadav 's case and it was said that they were made on the facts of those particular cases.
The Court further held in the above case that on the material relied upon by the detaining authority it could not be said that there was no awareness in the mind of the detaining authority about the detenu being in custody and that if he is released on bail he is likely to indulge in the prejudicial activities.
If we examine the facts of the case before us as stated in the grounds of detention it would be clear that on the basis of specific information officers of the Narcotics Control Bureau, Bombay searched room No. G 2, Purab Paschim Apartments, Gilbert Hill Road, Munshi Nagar, Andheri (West), Bombay 58 and recovered 56 Kgs.
650 gms.
of Heroin (33 Kgs.
150 gms.
white and 23 kgs.
500 gms.
brown) and 4000 Mandrax Tablets (Methaeualone) totally valued at Rs. 1, 13,42000 on 21.10.88.
One Mr. Syed Asgar Ali was found in the room.
During the course of the search another person named Abdul Sattar Abdul Samad came on Motorcycle No. BLC 7768 Make Hero Honda and entered into the premises.
Thereafter, two more persons came into the premises who gave their names as Ali Raza Shafiq Mohamed (detenu in the present case) and Thakur Singh.
The Officers also searched and seized a Bajaj Scooter MAQ 169, the Motorcycle No. BLC 7768 and Fiat Car No. MMH 4348 which were parked in the compound of the said society.
According to the present detenu the said three vehicles belonging to him were used for transportation of Narcotic Drugs.
Telephone No. 6288769 was found installed in the prem ises.
It was subscribed by one Shirish Parikh K. 18 Azad Nagar Society, Juhu Scheme, Road No. 7, Bombay 56.
The detenu disclosed that he was living in Flat No. 15, 4th Floor, Chandra Co op.
Housing Society Ltd. Dawood Baug, Andheri, Bombay 58, which was also searched on 21.10.88 but nothing incriminating was found in the flat.
Telephone No. 6284105 was found installed there, which is subscribed by the detenu.
The detenu also disclosed that he was having two shops (i) M/s Ali Decorators, G I, Parag Niketan, 10th Road, Juhu, Bombay400 049 (ii) M/s Ali Decorators, Shop No. 9, A Wing, Twin Tower, Lokhandwala Complex, Andheri (West), Bombay 58 both of which were searched on 21.10.88 and some documents were seized from the former shop.
Nothing was seized from the 2nd shop.
275 The statements of the detenu were recorded on 21.10.88, 22.10.88 and 7.11.88 under Section 67 of the NDPS Act, 1985.
With regard to the statement given by the detenu on 21.10.88 it was mentioned as under in the grounds of detention.
"In your statement of 21.10.88 you inter alia, stated that you have a business of Video Libraries and Marriage decora tions; that you own the property and vehicles mentioned above; that you were initiated into drug trafficking some time in 1984 by one Anwar, owner of Anwar Star Petrol Pump Crawford Market, that in the beginning you were employed as a delivery boy on a compensation of Rs.30 per day; that you used to deliver Heroin to customers on the road side; that after sometime you started procuring Heroin from Pathans and repacking it in small packets and you used to store it in public toilets with the help of Municipal Sweepers and sell the same: that you used to buy heroin for Rs. 16,000 to 20,000 and sell it for RS.
18,000 to 25,000 per K.g.
that you were making a profit of Rs.4,000 to 5,000 that your main selling points were Colaba and Nariman Point; that there were a number of brokers hovering around the above places who contact the customers; that you gave samples to brokers who showed them to the customers; that if a sample was approved and the price agreeable, then you used to ask the purchaser to meet you at some point in Juhu or Andheri or some other places, that you used to pick up the required quantity of Heroin and deliver it to the customer and col lect the money; that initially you were storing the Heroin in your flat and later on you used to store it in the said room No. G/2, Purab Aur Paschim Apartments, Gilbert Hill Road, Andheri (W), Bombay 58.
As regards the source of the Heroin and Mandrax tablets you stated that you acquired 29 kgs.
of white Hereoin in instalment from one Mangal Pandey of Banaras and the remaining white hereoin from one Raichand Chandmal Shah, that 25 kgs.
of Brown Heroin was purchased from one Asgar of Phulgalli, Bhendi Bazar who has since died; that you did not know the address of Mangal Pandey, that you purchased the Heroin on credit; that over the last about 31/2 years you must have sold 300 kgs.
of Heroin that all the movable and immovable property acquired by you has been purchased from the profits from drug trafficking; that your income from legal business 276 of Video library and decoration is about Rs.2,000 per month.
" The statement recorded on 22.10.88 as mentioned in the grounds of detention is reproduced as under: "In your next statement of 22.10.88 you stated that because you had to make 3 4 trips to your native place and that was the reason why such a large quantity of heroin was lying with you; that you were keeping one car and two wheeler because you required them for transporting/selling of Man drax tablets and it is advisable to use different vehicles in this business; you further stated that Abdul Sattar and your brother Syed Asghar Ali were not involved in this business and that they did not know that you are dealing in heroin; they were present in the room where heroin was seized on 21.10.88; because you had sent them to supervise masonry work" The detaining authority further made the following observations in the grounds of detention: "You were arrested on 22.10.88 and produced before the Additional Chief Metropolitan Magistrate (Holiday Court) on 23.10.88 who remanded you to Judicial Custody till 4.11.88 which was extended from time to time.
You also filed appli cation for bail on 21.11.88 which was rejected by the AddI. Chief Metropolitan Magistrate, 8th Court, Bombay.
It may be further important.
to note that in the grounds of detention the detaining authority had noted that the other detenus Shri Raichand Shah and Sh.
Jailal Keshavlal Vora were already released on bail on 18.11.88 on furnishing a bail for an amount of Rs. 1,50,000 each in cash.
After taking note of all the above circumstances the detaining authority made the following observations in respect of the detenu having a likelihood of being released on bail: "It is clear that there is a ring of traffickers in heroin and Mandrax tablets in Bombay and you are a part of the ring and you have been habitually engaging yourself in posses sion, sale, purchase, transportation and storage of narcotic drugs and Psychotropic substances.
1 am aware that you 277 are still in judicial custody but I am also aware that under the normal law of the land you may be granted bail and be in a position to continue to pursue your nefarious activities.
I, therefore, consider it necessary to invoke the law of preventive detention and detain you under the PIINDPS Act, 1988 to prevent you from indulging in such prejudicial activities in future.
" Thus the material placed before the detaining authority and the facts mentioned in the grounds of detention clearly go to show that the detaining authority was fully aware that the bail application filed by the detenu had been rejected by the Additional Chief Metropolitan Magistrate 8th Court, Bombay The detaining authority was also conscious of the fact that the two other detenus who were arrested and de tained in the same raid had already been released on bail.
The antecedents of the detenu which were clear from his own statement went to show that he was initiated in drug traf ficking in 1984 and employed as a delivery boy on Rs.30 per day Within a short span of four years the detenu himself started buying and selling Narcotic Drugs and amassed huge movable and immovable properties in Bombay.
In the present raid itself heroin and Mandrax tablets worth Rs. 1, 13,42000 were seized from the ownership and possession of the detenu.
Not only that the detenu was using three vehicles for trans portation of these Narcotic drugs.
The detaining authority after taking into consideration the above materials placed before him, arrived to the conclusion that the detenu being in judicial custody may under the normal law of the land be granted bail and be in a position to continue to pursue his nefarious activities.
The detaining authority in these circumstances considered it necessary to invoke the law of preventive detention under the Act to prevent the detenu from indulging in his prejudicial activities in future.
In these circumstances it cannot be said that the order of detention was illegal on the ground that it was passed while the detenu was already in custody It was next contended on behalf of the petitioner that the detention orders of Rai Chand Chandmal Shah and Jai lal Keshavlal Vora had already been struck down by the High Court on the ground that the medical report in respect of the injury sustained by Rai Chand Shah was placed in a truncated form before the detaining authority.
It was thus argued that the detention order of the present detenu also suffers from the same vice and as such his order of deten tion should also be set aside.
278 We see no force in this ' contention.
We have perused the orders of the High Court quashing the detention orders of Rai Chand Shah and Jai Lal Vora.
A perusal of the orders of the High Court shows that the basis for the detention orders of Rai Chand Shah and Jai Lal Vora were their confessional statements.
It was alleged before the High Court that Rai Chand Shah was given a severe beating on account of which he sustained serious injuries and as such his alleged confes sional statement should not have been made a ground of detention.
The High Court in this regard observed that the confessional statement of Rai Chand Shah being product of threats and injuries sustained by him and his medical report having been placed in truncated form before the detaining authority, the certificate showing injuries in detail not having been placed before the detaining authority by the sponsoring authority, the detention became invalid.
Now so far as Jai Lal Keshav Lal Vora is concerned the High Court took the view that the statements of Rai Chand Shah formed integral and vital part of the grounds of detention of Jai Lal Vora and if such important and vital part of the materi al is obliterated and excluded it is not possible to say that the remaining material is ample and more than suffi cient to justify the detention of Jai Lal K. Vora.
The detention order of Jai Lal K. Vora was also declared ille gal.
Now so far as the case of the present detenu Syed Ali Raza Shafiq Mohd. is concerned as already mentioned above his detention is based on entirely distinct and separate materials including his own confessional statements.
The basis of the grounds of detention of the present detenu is not rounded on the truncated form of medical report of injuries sustained by Rai Chand Shah.
At the most it can be considered as a supplementary kind of material for the detention order of the present detenu.
Thus the present detenu cannot take advantage of any orders passed by the High Court declaring the detention orders of Rai Chand Shah and Jai Lal K. Vora as illegal.
It was next contended on behalf of the petitioner that though a declaration was issued under Sec.
10(1) of the Act on 20th January, 1989 but the same was served on the detenu on 10.2.89 after an unexplained delay of 21 days.
It was vehemently contended on behalf of the detenu that the detenu ought to have been served with the declaration as soon as may be after the issue of such declaration, but ordinarily not later than 5 days and in case it was not done within five days then reasons ought to have been recorded in writ ing for explaining the delay and that also could not have been later than 15 days in any case.
Learned Counsel in this regard submitted that under clause (5) of article 22 of the Constitution a right is guaranteed to the detenu to afford an earliest opportunity of making a representation against the order of 279 detention.
It was contended that when the liberty of a citizen is taken away he ought to be afforded an opportunity of making representation at the earliest and the provisions contained in Sub Sec.
(3) of Sec.
3 of the Act should in terms also apply in the case of communicating the declara tion issued under Sec.
10(1) of the Act.
We see no force in the above contention.
So far as the provision of Sub Sec.
(3) of Sec.
3 of the Act is concerned it clearly provides that for the purposes of clause (5) of article 22 of the Constitution, the communication to a person detained in persuance of a detention order of the grounds on which the order has been made shah be made as soon as may be after the detention, but ordinarily not later than five days, and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days, from the date of detention.
This provision thus relates to the commu nication of the grounds of detention.
In the case before us the grounds of detention were admittedly communicated on 20th December, 1988, while the detention order was of 19.12.88 Thus there is full compliance of the above provi sion and the order of detention cannot be challenged on this ground.
Now so far as the guarantee under Clause (5) of article 22 of the Constitution is concerned there can be no manner of doubt that the person detained under any law of preven tive detention ought to be communicated the grounds on which the order has been made so as to afford him the earliest opportunity of making a representation against the order.
The detenu was served with the grounds of detention on 20th December, 1988 and the detenu had full and ample opportunity to make a representation against the detention order.
Sub Sec.
(1) of Sec.
10 of the Act reads as under: "Notwithstanding anything contained in this Act, any person (including a foreigner) in respect of whom an order of detention is made under this Act at any time before the 31st day of July, 1990, may be detained without obtaining, in accordance with the provisions of sub clause (a) of clause (4) of article 22 of the Constitution, the opinion of an Advi sory Board for a period longer than three months but not exceeding six months from the date of his detention, where the order of detention has been made against such person with a view to preventing him from engaging in illicit traffic in narcotic drugs and psychotropic substances, and the Central Government or any officer of the Central Govern ment, not below the rank of an Additional Secretary to that Government, specially empowered for the 280 purposes of this section by that Government, specially empowered for the purposes of this section by that Govern ment, is satisfied that such person engages or is likely to engage in illicit traffic in narcotic drugs and psychotropic substances into, out of, through or within any area highly vulnerable to such illicit traffic and makes a declaration to that effect within five weeks of the detention of such person.
" In the counter affidavit filed before this Court it has been stated in para (L) as under: "Regarding the declaration, it may be stated that the same was dispatched by the Ministry of Finance on 20.1.1989 to the Home Secretary, Government of Maharashtra, Bombay, Maharashtra Government forwarded it to NCB, Bombay which was received in the NCS office on 1.2.89 from the State Govern ment.
It was then sent for translation, 4th and 5th Febru ary, being holidays (being Saturday and Sunday) the declara tion was dispatched on 6.2.89.
It was received by the Jail authorities on 10.2.1989 and served on the detenu same day.
" Thus the declaration had been made in this case on 20.1.89 by the Ministry of Finance within the statutory period of five weeks of the detention and the period taken in serving the same on the detenu on 10.2.89 has been sufficiently explained.
The detenu was lodged in Central Prison Bombay and the Advisory Board had fixed a date on 23.2.89 and as such the detenu had ample opportunity to challenge the declaration.
The High Court has also gone in detail in dealing with this aspect of the matter, and we agree with the finding recorded by the High Court.
The principle of five days and fifteen days as provided in Sub Section (3) of Section 3 relating to communication of grounds of detention cannot be applied in respect of declaration issued under Sec.
10(1) of the Act.
In the facts and circumstances of this case we are fully satisfied that the detenu has not been denied any opportunity of making any effective repre sentation against the declaration issued under Sec.
10(1) of the Act.
The last submission made on behalf of the detenu is that the detenu had submitted a representation on 31.1.89 jointly addressed to the Government of Maharashtra, the Government of India and the Advisory Board.
The State Government re jected the representation 281 by its reply dated 21.2.89 and the Central Government by its reply dated 3.3.89.
It was thus contended that there was an inordinate and unexplained delay in considering the said representations and this is violative of the right of the detenu conferred under Clause (5) of article 22 of the Consti tution The point should not detain us any longer as we fully agree with the finding of the High Court, recorded in this regard.
The High Court has given adequate and detailed reasons in holding that the delay has been explained by the counter affidavit filed by the respondents.
Thus we find no force in this ground of the detenu that his representations were disposed of after an inordinate and unexplained delay.
As a result of the above discussion, we find no force in this petition and it is accordingly dismissed.
Petition dismissed.
| IN-Abs | The petitioner filed a writ petition in the High Court challenging the detention of her husband, Syed Ali Raza Shafiq Mohammed, under section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988.
The detenu was then already in jail as he was involved in a case under the Act, and his bail applica tion in that case had been rejected.
3"he Division Bench of the High Court dismissed the writ petition.
Before this Court in the Special Leave Petition it was inter alia contended on behalf of the detenu that: (i) the mere possibility of the detenu 's release on bail was not enough for preventive detention unless there was material to justify the apprehension that his detention would be neces sary in order to prevent him from engaging in illicit traf ficking in narcotic drugs and psychotropic substances, in case of his release on bail; (ii) the detention orders of Rai Chand Shah and Jai Lal Vora, who were arrested and detained in the same raid, having been struck down by the High Court on the ground that the medical report in respect of the injuries sustained by Rai Chand Shah was placed in a truncated form before the detaining authority, the detention order of the detenu should also be set aside as it suffered from the same vice; (iii) though the declaration was issued under Sec.
10(1) of the Act on 20.1.1989 but the same was served on the detenu on 10.2.1989 after an unexplained delay of 21 days; and (iv) there was in an inordinate and unex plained delay in considering the representations made by the detenu.
On the other hand, it was contended on behalf of the respondents that: (i) it would depend on the facts and circumstances of each case whether a detention order was to be passed or not in case of a person who was already in custody; (ii) the detaining authority could take into ac count the nature of the antecedent activities of the detenu in order to 269 arrive at the conclusion that it was likely that after his release from custody he would indulge in criminal activities and it was necessary to detain him in order to prevent him from engaging in such activities; and (iii) in the present case there was complete awareness in the mind of the detain ing authority that if he was released on bail he was likely to indulge in the criminal activities.
Dismissing the special leave petition, this Court, HELD: (1) The material placed before the detaining authority and the facts mentioned in the grounds of deten tion clearly go to show that the detaining authority was fully aware that the bail application filed by the detenu had been rejected.
The detaining authority was also con scious of the fact that the two other detenus who were arrested and detained in the same raid had already been released on bail.
[277B C] (2) The antecedents of the detenu which were clear from his own statement went to show that he was initiated in drug trafficking in 1984 and employed as a delivery hay on Rs.30 per day and within a short span of four years had himself started buying and selling Narcotic Drugs and amassed huge movable and immovable properties in Bombay.
In the present raid itself hereoin and Mandrax tablets worth Rs. 1,13,42,000 were seized from the ownership and possession of the detenu.
[277C D] (3) The detaining authority after taking into consider ation the material placed before him, arrived at the conclu sion that the detenu being in judicial custody may under the normal law of the land he granted bail and be in a position to continue to pursue his nefarious activities [277E] (4) The detaining authority in these circumstances considered it necessary to invoke the law of preventive detention under the Act to prevent the detenu from indulging in prejudicial activities in future.
In these circumstances, it cannot be said that the order of detention was illegal on the ground that it was passed while the detenu was already in custody [277F] (5) The facts and circumstances of each case have to be taken into consideration in the context of considering the order of detention in the case of a detenu who is already in jail.
[273G] N. Meera Rani vs Government of Tamil Nadu, JT 478; Dharmendra Sugan Chand Chelwat vs Union of India, ; ; Sanjeev Kumar Aggarwal Union of India, JT ; Smt.
Shashi Aggarwal vs State of U.P., JT and Ramesh Yadav vs District Magistrate, Etah, , referred to.
(6) A perusal of the orders of the High Court quashing the detention orders of Rai Chand Shah and Jai Lal Vora shows that the basis for the detention orders were their confessional statements.
The High Court in this regard had observed that the confessional statement of Rai Chand Shah which also formed integral and vital part of the grounds of detention of Jai Lal Vora being product of threats and injuries sustained by him and further his medi cal report having been placed in truncated form before the detaining authority, their detention became invalid.
But, so far as the case of the present detenu is concerned, his detention was based on entirely distinct and separate mate rials including his own confessional statements.
The basis of the grounds of detention of the present detenu is not rounded on the truncated form of medical report of injuries sustained by Rai Chand Shah.
Thus the present detenu cannot take advantage of any orders passed by the High Court de claring detention orders of Rai Chand Shah and Jai Lal Vora as illegal.
[278A E] (7) So far as the provision of Sub Sec.
(3) of Sec.
3 of the Act is concerned, it clearly provides that for the purposes of clause (5) of article 22 of the Constitution, the communication to a person detained in pursuance of a deten tion order of the grounds on which the order has been made shah be made as soon as may he after the detention, but ordinarily not later than five days, and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days, from the date of detention.
This provision thus relates to the communication 01 ' the grounds of detention.
[279B C] (8) The principle of five days and fifteen days as provided in Sub section (3) of Section 3 of the Act relating to communication of grounds of detention cannot be applied in respect of declaration issued under Sec.
10(1) of the Act.
[280F] (9) There is no force in the contention that there was an inordinate delay in considering the representations submitted by the detenu.
The High Court has given adequate and detailed reasons in holding that the delay has been explained by the counter affidavit filed by the respondents.
[281A B] 271
|
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.
| IN-Abs | 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.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
|
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.
| IN-Abs | 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.
| IN-Abs | 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-Abs | 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. 101 of 1950.
Appeal by special leave from the Judgment and Decree dated the 20th September, 1949, of the High Court of Judica ture at Calcutta (Hurries C.J.and Chatterice J.) in Appeal No. 46 of 1949 arising out of Decree dated the 31st August, 1948, of the Hon 'ble S.B. Sinha J. of the Calcutta High Court in Suit No. 343 of 1943 instituted under the Original Jurisdiction of the High Court).
M.C. Setalvad, Attorney General for India (B. Sen,with him) for the appellant.
S.C. Isaac (B. Barterice, with him) for the respond ent. 1951.
December 18.
The leading judgment was delivered by Bose J. Fazl Ali J. agreed, 180 Bose J.
This is a defendant 's appeal in a suit for contribution brought by the son of a mortgagor against the co mortgagors.
The parties are related as below : Balai Lall Seal (died1917) I Megharnala Dassi (died 1945) I I I I I Bejoy Lall Biswa Lall Tarak Lall Kedar Lall NakuLall (D. 23 5 33) (D. Nov. 1936) Deft 1 Deft. 2 (Born (Born I I Jugal Lall Hari Lall 22 11 1907) 7 2 1910) (Plff.) The mortgagors were the plaintiff 's father Tarak Lall and Tarak 's two brothers Kedar and Naku.
The mortgage was exe cuted on the 12th June, 1936, in favour of one Mst.
Gyarsi for a consideration of Rs. 80,000.
For convenience I will call this the suit mortgage though this is not a suit on the mortgage.
The mortgagee sued in the year 1938 and obtained a preliminary decree for sale on the 17th of February, 1939, for a sum of Rs. 89,485 12 9 plus costs.
The decree was made final on the 22nd of December, 1989.
In execution the mortgagee proceeded against the proper ty of the plaintiff alone (as Tarak 's son) and, during the pendency of the execution, assigned her rights in the decree to the Hooghly Flour Mills.
The Mills continued the execu tion and on the 11th of March, 1943, the claim was satisfied in this way.
An order of the Court was obtained sanctioning sale of a part of the mortgaged property, 20 Round Tank Lane (which belonged exclusively to the plaintiff), to the decree holder for a sum of Rs. 1,50,000.
It was directed that the consid eration should first be applied in payment of the claim and costs and that the decreeholder should execute a reconvey ance of the rest of the mortgaged properties in favour of the mortgagors.
The sanction of the Court was necessary because the judgment debtor Hari Lall (present plaintiff) was a minor.
181 This was done and 20, Round Tank Lane, was conveyed by the present plaintiff to the Hooghly Flour Mills on the 18th of March, 1943.
Out of the consideration a sum of Rs. 97,116 11 0 was paid to the Mills in lull satisfaction of the claim and costs then outstanding.
The Mills executed a reconveyance of the rest of the properties to the mortgagors in release of the mortgage on the same day.
In addition to this Rs. 97, 116 11 0, further sums of Rs. 14,400 and Rs. 8,100 had also been paid before the dates of these transactions.
These sums were paid by a Receiver who had been appointed by the Court pendente lite.
These sums came out of the rents which the Receiver obtained from the plaintiff 's property, 20 Round Tank Lane.
The plaintiff says that in this way he paid a total of Rs. 1,19,116 11 0 in satisfaction of the mortgage.
His one third share in this comes to Rs. 39,872 3 8.
He claims that he is entitled to receive the balance of Rs. 79,744 7 4 from the two defendants and that each of them is liable for a half of that sum namely, Rs. 39,872 3 8.
In addition to this the plaintiff had incurred costs amounting to Rs. 1,144 8 6 in resisting Mst.
Gyarsi 's claim and in connection with the reconveyance.
He also claims one third of this sum, namely Rs. 381 8 2, from each of the defendants.
The total claim against each defendant accord ingly comes to Rs. 40,253 11 10.
In addition to this the plaintiff asked for (1) "a declaration that the properties mentioned in Schedule 'A '. belonging to the defendants stand charged with the repayment of the sum of Rs. 80,507 7 8 being the aggregate amount due and payable by the two defendants," and (2) "Decree under Order XXXIV of the Civil Procedure Code in proper form." Schedule A contains a list of the rest of the mortgaged properties which belong exclusively to the defendants, 24 182 It will be seen that the plaintiff claims on the basis that each of the three mortgagors is liable to contribute in equal shares towards payment of the mortgage debt.
The defendants did not deny their liability to contribute.
They only challenged the basis on which it was to be comput ed.
They ,pleaded a special agreement between Tarak Lal and themselves under which their liabilities were to be calcu lated in the following way.
According to them, the bulk of the Rs. 80,000 was borrowed on what I have called the suit mortgage to pay off previous debts which had been incurred by the parties on earlier mortgages.
The amount which went towards satisfaction of the defendant 's portion of these earlier liabilities was only Rs. 13,259 2 4.
Therefore, the only benefit they got out of this Rs. 80,000 was to that extent.
The plaintiff 's father Tarak on the other hand benefitted to the extent of Rs. 53,481 11 4.
They therefore agreed at the date of the suit mortgage that their respec tive liabilities as between themselves should be proportion ate to the benefit derived by each as above.
Sinha J., who tried the suit on the Original Side of the Calcutta High Court, held that the agreement was proved.
On appeal the learned Chief Justice of the High Court and Chatterjee J. disagreed and held that it was not.
As I agree with the learned appellate Judges for reasons which I shall give hereafter, it will be necessary to set out the further facts.
But I need not do so in any detail as they are given in full in the two judgments of the High Court.
We are only concerned here with the question of principle; so it will be more convenient to reduce the problem to its simplest terms.
We are concerned here with four items of property which I shall term Chittaranjan Avenue, Strand Road, No. 16 Round Tank Lane and 20 Round Tank Lane.
These properties were originally joint family properties, but in the year 1932 there was a partition which was compelled by reason of a suit filed by Tarak 183 against his brothers and mother.
The upshot was that the properties were divided as follows: (1) Bejoy, Kedar, Naku and the mother Meghamala obtained Chittaranj an Avenue.
(2) Tarak (plaintiff 's father) obtained 16 Round Tank Lane and 20 Round Tank Lane.
(3) Kedar, Naku and Biswa Lall obtained Strand Road.
Before this partition there were three mortgages: The first of these was executed on the 16th of June, 1925.
All five brothers joined in it and they mortgaged the Strand Road property for Rs. 10,000.
This was in favour of Bhuvan Chandra Bhur.
The second was on the 11th of October, 1926.
In this Bejoy and Tarak mortgaged their 2/5 share in Chittaranjan, Strand, Dum Dum and 20 Round Tank Lane for Rs. 5,000.
The mortgagee was Binode Behari Sen.
The third was on the 28th January, 1927.
In this Bejoy and Tarak again mortgaged their 2/5 share in the same items of property for Rs. 7,000 to Binode Behari Sen and Kunja Behari Sen.
All three sets of mortgagees, or their representatives, instituted suits on their respective mortgages and obtained final decrees Bejoy died on the 23rd of May, 1933, leaving a son Jugal.
On the 12th of June, 1936, came what I have called the suit mortgage executed by the three brothers,Tarak, Kedar and Naku, for Rs. 80,000.
The properties mortgaged were (1) the shares of Kedar and Naku in Chittaranjan Avenue and 16 Round Tank Lane; (2) 20 Round Tank Lane which had been allotted to Tarak; (3) the reversionary interest of all three in the share allotted to the mother.
The consideration of Rs. 80,000 was expended as follows:Rs.
29,667 10 0 was paid by Tarak, Kedar and Naku in satisfaction of the first mortgage and the 184 later decretal charge; Rs. 11,519 11 0 in satisfaction of the second and Rs. 13,502 14 0 in satisfaction of the third.
The balance of Rs. 25,310 is alleged by the appellants to have been retained by Tarak.
I have taken these figures from the judgments of the High Court.
I understand some of the details are disputed, so I make it clear that I am not setting out the decision of this Court regarding the de tails but only giving an overall picture.
Shorn of overburdening detail the problem, reduced to its simplest terms, comes to this.
Three persons A, B and C separately own properties of unequal value, Blackman, Whiteacre and Greenacre.
Let us assume that their values at the material date are Rs. 30,000, Rs. 20,000 and Rs. 10,000 respectively.
A, B and C, acting in various combinations from time to time, incur debts.
It matters not for present purposes whether those debts are secured on these properties or not because a time must come when their separate liabilities as amongst themselves have to be ascertained and apportioned.
Let us assume that when that is done, A 's responsibility extends to Rs. 2,000, B 's to Rs. 3,000 and C 's to Rs. 5,000.
In order to clear off these debts, A, B and C jointly mortgage their three estates for Rs. 10,000, the total aggregate sum due at the date of the mortgage from the three of them.
There is no contract between them, either in the mortgage deed or otherwise, regarding their respective shares of responsibility in the Rs. 10,000.
At the date of redemption the mortgage debt has swollen to Rs. 15,000.
A alone redeems by selling Blackacre, which is his separate estate, to the mortgagee for Rs. 35,000 that being the value of Blackacre at the date of redemption.
Rs. 15,000 of this is applied in satisfaction of the mortgage debt and the balance of Rs. 20,000 is retained by A.
What are A 's rights as against B and C ? Three solutions readily suggest themselves.
One is that the three contribute equally.
In that event B would pay A Rs. 5,000 and C would pay Rs. 5,000.
185 A second solution is that they pay in proportion to the extent of the benefits derived.
In that event B 's share would be 3/10 of Rs. 15,000, that is to say, Rs. 4,500.
and C 's would be 5/10 of Rs. 15,000, that is Rs. 7,500.
A third solution is that they pay proportionately to the values of the properties mortgaged.
In that event B would have to pay 2/6 of Rs. 15,000, that is Rs. 5,000, and C 1/6 of Rs. 15,000 ' which come to Rs, 2,500.
The problem is to know which of these three solutions to apply.
In the absence of other considerations, the most equitable solution is obviously the second.
But the matter is not as simple as that.
There are certain statutory provi sions which must first be examined.
The learned counsel for the plaintiff respondent con tended that section 43 of the Contract Act applied.
He relied on the following provision : "Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract.
If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.
" The argument is that unless a contrary intention appears from "the contract" the.
loss must be borne equally.
It was contended, and with that I agree, that the words "the con tract" can only refer to the main contract between the promisors on the one side and the promisee on the other.
That contract in this case is the suit mortgage.
There is no contract to the contrary in the document, therefore, it was contended, the section must apply.
That of course would be the clear, logical and simple conclusion ii there were no other provision of law to consider.
But we are dealing here with a mortgage and so we have also to look to the provisions of the Transfer of Property Act.
186 Incidentally, if this argument is pushed to its logical conclusion it would exclude any collateral or subsequent agreement between the promisors inter se which does not appear in the main contract.
But we need not enter into that here.
The sections of the Transfer of Property Act which concern us are 82 and 92.
The first confers a right of contribution.
The second a right of subrogation.
I will consider section 82 first.
It runs : "Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of owner ship therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage . . " That is the position here.
Next I turn to section 92.
That runs " . any co mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor . " That also applies.
Now these provisions at once raise a competition between sections 82 and 92 of the Transfer of Property Act, section 43 of the Contract Act and what I might term the principle of beneficial, as opposed to proportionate or equal, distri bution of liability.
I am of opinion that the second solution adumbrated earlier in this judgment, based on equities, must be ruled out at once.
These matters have been dealt with by statute and we are now only concerned with statutory rights and cannot in the face of the statutory provisions have recourse to equitable principles however fair they may appear to be at first sight.
The Privy Council pointed out in Rani Chhatra Kumari vs Mohan Bikram (1) that the doctrine of the (1) Pat. 851 at 869.
187 equitable estate has no application in India.
So also refer ring to the right of redemption their Lordships held in Mohammad Sher Khan vs Seth Swami Dayal(1) that the right is now governed by statute, namely section 60, Transfer of Property Act.
Sulaiman c.
J. (later a Judge of the Federal Court) ruled Court equitable considerations in the Allahabad High Court in matters of subrogation under sections 91, 92, 101 and 105, Transfer of Property Act, in Hira Singh vs Jai Singh(2) and so did Stone C.J. and I in the Nagpur High Court in Taibai vs Wasudeorao (3).
In the ease of section 82 the Privy Council held in Ganesh Lal vs Charan Singh(4) that that section prescribes the conditions in which contribution is payable and that it is not proper to introduce into the matter any extrinsic principle to modify the statutory provisions.
So, both on authority and principle the deci sion must rest solely on whatever section is held to apply.
So far as section 43 is concerned, I am not prepared to apply it unless sections 82 and 92 can be excluded.
Both sections 43 and 82 deal with the question of contribution.
Section 43 is a provision of the Contract Act dealing with contracts generally.
Section 82 applies to mortgages.
As the right to contribution here arises out of a mortgage, I am clear that section 82 must exclude section 43 because when there is a general law and a special law dealing with a particular matter, the special excludes the general.
In my opinion, the whole law of mortgage in India, including the law of contribution arising out of a transaction of mort gage, is now statutory and is embodied in the Transfer of Property Act read with the Civil Procedure Code.
I am clear we cannot travel beyond these statutory provisions.
Now, when parties enter into a mortgage they know, or must be taken to know, that the law of mortgage provides for this very question of contribution.
It confers rights on the mortgagor who redeems and directs that, in the absence of a contract to the contrary, he (1) (1922) 49 I.A. 60 at Nag. 206 at 216.
(2) A.I.R. 1937 All.
588, at 594.
(4) (1930) 57 I.A. 189.
188 shall be reimbursed in a particular way out of particular properties.
The parties are at liberty to vary these rights and liabilities by special contract to the contrary but if they do not do so, I can see no reason why these provisions should be abrogated in favour of a section in the Contract Act which does not deal with mortgages.
Slightly to vary the language of the Judicial Committee it is the terms and nature of the transaction viewed in the light of the law of mortgage in India which exclude the personal liability and therefore section 43, except where there is a contract to the contrary.
It was suggested that the rule is inequitable and will operate harshly in cases like the present.
But the remedy lies in the parties ' own hands.
It is open to them to make a contract to the contrary.
If they do not, then the law steps in and makes statutory rules to which effect must be given.
It is not for judges to consider whether that is the best possible solution but the rule at any rate obviates the necessity of roving enquiries into the objects of a borrow ing and the application of the funds.
On an overall basis it is perhaps as good as any other.
But that hardly matters.
The rule is there and full effect must be given to it.
The learned counsel for the plaintiff respondent urged that the defendants are shut out from relying on section 82 because that was not their case and the question was never raised by them in the High Court.
Such reference as there is to the section was with reference to an argument urged on behalf of the plaintiff.
I am not impressed with this objection.
, On the facts set out by the plaintiff it is evident that he is entitled to contribution.
The method of computation is a matter of law and it is for the judges to apply the law to the facts stated and give the plaintiff such relief as is appropriate to the case.
I turn now to the question of fact, the special agree ment pleaded by the defendants.
The only evidence in sup port of it is that of the first defendant Kedar.
According to him, the agreement was an oral one 189 though the parties contemplated writing and registration.
His explanation for lack of any writing is this.
He was asked whether anything was put down in writing and he re plied : "No, nothing was done then, but there was an understand ing that it would be done but Tarak went away to Darjeeling and when he came back he died soon after he came back and nothing could be done in writing.
" Later, he was asked "Therefore, you, contemplated that there would be a document which would have to be registered in connection with the adjustment ?" and he replied ' 'Yes".
He also tells us that the parties regarded the matter as confidential and so only three per sons were present, Tarak, Naku and himself.
It is to be observed that Naku, who is the second defendant, has not entered the box.
Stopping there, it is evident that we have to rely on the memory of a very interested person speaking nearly thirteen years after the event about a transaction affecting some Rs. 80,000.
Nor is it the memory of some simple event which might well have fixed itself in his mind.
The question whether and at what stage parties reach finality when writ ing is in contemplation is a difficult and complex one involving delicate considerations of much nicety even when the preliminaries are all in writing.
The turn of a phrase here, the use of a word there, may make a world of differ ence.
The law regarding this was examined by me at some length in the Nagpur High Court in Shamjibhai vs Jagoo Hernchand Shah (1).
How much greater are the difficulties when we do not know the exact words the parties used and have to delve into the mind of a dead man (Tarak) through the impressions of an interested witness given some thirteen years after the event.
I find it difficult to accept this version and consider it would be dangerous to do so, particularly when the (1) I.L.R. at 586 588, and 598 25 190 witness is a hesitant and reluctant one, as his examination discloses, and even evasive on some points; also when the defendants have deliberately withheld from the Court assist ance which it was in their power to render I refer to the absence of Naku, the only other person present, from the box.
I am unable to accept this testimony.
Nor is this the only point.
Despite the insistence of the witness that the parties were on good terms and trusted each other, the fact remains that Tarak found it necessary to institute a suit for partition against his brothers and fight it to a finish.
They were not able to arrange matters amicably.
it was suggested in argument that was probably because of creditors who could not be persuaded to agree and it was pointed out that creditors were joined in the suit, but that is not wholly convincing particularly when it is admitted that Tarak was insisting on writing and regis tration.
It is evident that he, at any rate, was not prepared to leave matters as they were and trust to the good faith of his brothers.
Now we know that Tarak was in Calcutta about three months after the date of the alleged agreement.
We also know that Kedar was most anxious to have such an agreement, for he tells us so.
He tells us further that there was before them a rough draft of the terms.
That document was produced in Court.
But the draft was neither signed nor initialled.
The only inference I can draw from these facts is that Tarak either refused to agree or had not made up his mind.
The figures put forward by the defendants were contested on behalf of the plaintiff and we were given an alternative set of figures which in turn were contested by the other side, but they were enough to show that the matter is not as straightforward or as simple as the defendants would have us believe.
Therefore, Tarak 's inaction during the three months and the omission of either side to initial the draft point clearly, at the lowest, to hesitancy on Tarak 's part.
It may be he wanted his lawyers to examine his position or it may be he refused to have anything to do with it.
191 It is just possible that there were negotiations, but on those broad facts I am not prepared to believe the witness when he tells us, or rather suggests, that the parties reached finality.
It would in any event be dangerous to believe a witness in circumstances like this.
But when the defendants deliberately withheld from the Court that assist ance which is its due I can only conclude that their case was too shaky to stand further proving.
On these broad grounds alone I would hold that the agreement is not proved.
Much was made in argument about the rule regarding the weight to be given to the estimate of the judge who saw and heard a witness.
I do not doubt the soundness of the rule but it can be pushed too far as their Lordships of the Judicial Committee pointed out in Virappa vs Periakaruppan(1).
In the present case, the learned Judge who tried the case believed Kedar not because of his demea nour but because the learned Judge considered that his story was inherently probable.
That, however, is a matter which the learned appellate Judges were in as good a position to appreciate as the learned trial Judge.
If probability is to be the test, then the conduct of Tarak suggests that it is very improbable that he could have agreed.
That leaves at large the nature of the relief to which the plaintiff is entitled.
In the view I take, there being no contract to the contrary, the plaintiff 's only remedy is under section 92 of the Transfer of Property Act read with section 82.
The question is, has his suit been so framed ? The plaintiff has claimed separate personal reliefs against the defendants.
As there is no personal covenant as between the mortgagors or any "contract to the contrary", that relief ' cannot be granted.
The plaintiff has also asked for a declaration of charge and for a decree under Order XXXIV, Civil Procedure Code.
The declaration of charge standing by itself is superfluous although Order XXXIV, rule 2 (1) does require that the decree in a mortgage suit shall (1) A.I.R. 1945 P.C. 35 at 37.
192 "declare the amount so due" at the date of the decree.
But reading the two reliefs together, I am of opinion that though the claim is inartistically worded the plaintiff has in substance asked for a mortgage decree up to a limit of Rs. 40,253 11 10 with interest against each defendant.
No other kind of decree could be given under Order XXXIV.
Therefore, though he has not used the word "subrogation" he has asked in substance for the relief to which a subrogee would be entitled under the Transfer of Property Act.
I would be slow to throw out a claim on a mere techni cality of pleading when the substance of the thing is there and no prejudice is caused to the other side, however clum sily or inartistically the plaint may be worded.
In any event, it is always open to a court to give a plaintiff such general or other relief as it deems just to the same extent as if it had been asked for, provided that occasions no prejudice to the other side beyond what can be compensated for in costs.
In the circumstances, in the absence of agreement be tween the parties as to the figures, I would remand this case to the High Court for (1) an enquiry regarding the sum paid by the plaintiff 's father for satisfaction of the mortgage dated the 12th June, 1936, (2) for the interest due on that sum at the contract rate in the mortgage from the date of payment to the date of decree, (a) lot the values of the various properties mortgaged at the date of the mort gage.
When the figures are ascertained, I would direct that the liability of each defendant be ascertained separately in the manner prescribed by section 82, Transfer of Property Act.
the event of this liability exceeding Rs. 40,253 11 10 with interest against either defendant, I would direct that his liability be reduced to Rs. 40,253 11 10 plus interest.
When these figures are ascertained, I would direct that a mortgage decree for sale be drawn up in the usual way affording either defendant the right to redeem the whole of the balance of the property 193 (excluding the plaintiff 's) for the aggregate sum due as above and, in default of payment, limiting the liabilities of each item of property to the sum rateably due on it under section 82.
On the question of costs.
The plaintiff repudiated section 82 in the course of the arguments before us and rested his case on section 43 of the Contract Act, nor did he clearly and unmistakably plead a case of subrogation in his plaint even in the alternative.
The defendants, on the other hand, set up a case which has failed on the facts.
I would, therefore, direct each side to bear its own costs in this appeal.
As regards the costs incurred in the Courts below and any costs which may be necessitated by a further enquiry, they will be determined according to the final result of the litigation and with due regard to all matters bearing on the question of costs.
FAZL ALI J.
I agree.
Case remanded.
| IN-Abs | The right to contribution as between co mortgagors is governed by sections 82 and 92 of the Transfer of Property Act and not by section 43 of the Indian Contract Act, inasmuch as section 43 of the Contract Act deals with contracts generally, while sections 82 and 92 of the Transfer of Property Act specifically deal with the right of contribution between co mortgagors.
It is an established principle that when there is a general law, and a special dealing with a particular matter, the special excludes the general.
Consequently, in the absence a contract to the contrary, co mortgagors are bound to con tribute proportionately to the value of the shares or parts of the mortgaged property owned by them and not in propor tion to the extent of the benefits derived by each of them.
As sections 82 and 92 of the Transfer.
of Property Act prescribe the conditions in which contribution is payable in India when there is a mortgage, it is not proper to introduce into the matter extrinisic principles based on equitable consid erations.
|
os. 120 122, 164, 199, 213, 255, 260, 363, 378, 402 & 407 of 1955, 6, 7, 43, 120, 126, 142, 153, 154, 198, 216 & 223 of 1956, 32, 49, 60, 61, 141 & 143 of 1957, 3, 7 & 104 of 1958.
Petitions under Article 32 of the Constitution for the enforcement of fundamental rights.
Achhru Ram and Ganpat Rai, for the petitioners in Petition No. 120/55.
D.R. Prem and Ganpat Rai, for the petitioners in Petitions Nos. 120, 121, 122, 164, 199, 213, 255, 260, 363, 402 & 407 of 1955, 6, 7, 43, 125, 142, 154, 198, 216 & 223 of 1956, 32, 60 & 143 of 1957, 7 & 104 of 1958.
D.R. Prem and section D. Sekhri, for the petitioner in Petition No. 378 of 1955.
D.R. Prem and P. C. Aggarwal, for the petitioner in Petition No. 120/56.
D.R. Prem and Raghu Nath, for the petitioner in Petition No. 49/57.
D.R. Prem and K. L. Mehta, for the petitioner in Petition No. 153/56.
Y.Kumar, for the petitioner in Petitions Nos.
61 & 141 of 1957 & 3 of 1958.
H. N. Sanyal, Additional Solicitor General of India, H. J. Umrigar and T. M. Sen, for the respondent.
October 10.
The Judgment of the Court was delivered by DAS, C. J.
By each of these 32 petitions under article 32 of our Constitution, which have been heard together, the respective petitioners challenge the constitutional validity of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953.
(Himachal 15 of 1954) which is said, to have been passed by the,.
Legislative Assembly of the State of Himachal Pradesh created by the Himachal Pradesh and Bilaspur (New State) Act (32 of 1954).
On November 23, 1954, the President of India gave his assent to the Bill which on being so assented to 21 162 became the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953, (Himachal 15 of 1954) (hereinafter called the Abolition Act).
On January 26, 1955, this Abolition Act was brought into force by a notification issued under section 1(3) thereof.
It will be convenient at this stage to refer to some of the relevant sections of the Abolition Act.
Section 11 confers a new right on the tenants to acquire the interests of the land owners.
According to this section notwithstanding any law, custom, or contract to the contrary a tenant other than a sub tenant shall, on application made to the compensation officer at any time after the commencement of the Act, be entitled to acquire, on payment of compensation, the right, title and interest of the land owner in the land of the tenancy held by him under the landowner subject to certain terms and conditions therein mentioned.
Section 14 permits the acquisition by the tenant of the rights of the landowner in a portion of the lands of the tenancy in certain specified circumstances on the surrender of the rest of the lands.
Section 15 sanctions the acquisition by the State Government of the rights of the landowners by notification in the Gazette declaring that, as from such date and in respect of such area as may be specified in the notification, the right, title and interest of the landowner in the lands of any tenancy held under him by a tenant shall stand transferred to and vest in the State Government free from all encumbrances created in such lands by the landowner.
Section 16 provides for the payment to the landowner, whose right, title and interest in lands, would be acquired by the State Government under section 15, of compensation to be calculated, as far as practicable, according to the provisions of sections 12 and 13.
Section 27 provides that notwithstanding anything contained in the provisions of the foregoing sections of that Chapter, a landowner who holds land, the annual land revenue of which exceeds Rs. 125 per year, the right, title and interest of such owner in such land shall be deemed to have been transferred and vested in the State Government free from all encumbrances.
Sub section (3) of this section lays down 163 that the landowner whose right is acquired under subs.
(1) by the State Government, shall be entitled to receive compensation which shall be determined by the Compensation Officer having regard to sections 17 and 18 of this Act, in accordance with the provisions of Schedule II, but in the case of such occupancy tenant who is liable to pay rent in terms of land revenue or the multiple of land revenue, the compensation payable to his landowner shall be computed in accordance with Schedule I.
The compensation provided in Schedule II to the Abolition Act may in certain cases work out to no more than twice the land revenue.
Section 39 fixes the maximum rent at one fourth of the crop which, it is apprehended, may not even cover the land revenue and the local rates and cesses.
Section 80 provides for the State management of lands in certain cases therein mentioned.
It is not necessary for our present purpose to refer to any of the other provisions of the Abolition Act.
On a cursory perusal of the foregoing sections one may well understand the natural apprehension of the landowners that the provisions thereof are much too drastic and are inconsistent with and take away or at any rate substantially abridge the right to their respective properties conferred on and guaranteed to them by Part III of our Constitution and thereby infringe the provisions of articles 14, 19 or 31.
It is, therefore, not surprising that the petitioners in all these petitions, all of whom are landowners, have moved this Court by separate petitions under article 32 for the enforcement of their fundamental rights to their respective properties.
In each of the several petitions which have been heard together two broad points have been taken, namely: (i)That the Abolition Act is entirely void by reason of its not having been passed by a duly constituted legislature; and (ii)That, in any event, the provisions of Ch.
III and of Ch.
VIII are repugnant to the Constitution.
Re (i) : In the First Schedule to the Constitution, as it was originally passed, were set out under the heading Part C States " the names of 10 States.
In that 164 list of Part C States Bilaspur was shown as item 3 and Himachal Pradesh as item 7.
The two States were quite separate, having separate territories respectively described at the foot of the said list in that Schedule as "territories which, by virtue of an order made under section 290A of the Government of India Act, 1935, were immediately before the commencement of this Constitution being administered as if they were a Chief Commissioner 's Province of the same name.
" The (49 of 1951), hereinafter referred to as " the States Act ", provides for Legislative Assemblies, Councils of Ministers and Councils of Advisers for Part C States.
By section 2(1)(g), however, " State " is defined to mean any State specified in Part C of the First Schedule to the Constitution other than Bilaspur.
Therefore, the Part C State of Bilaspur was excluded from the operation of that Act and was dealt with separately.
The Part C State of Himachal Pradesh, as it then was, which is hereinafter called the old Himachal Pradesh was, however, governed by the Part C States Act.
Section 3 of that Act provides that there shall be a Legis lative Assembly for each State and that the allocation of the seats in the Legislative Assemblies of the 6 States therein mentioned shall be as set out in the Third Schedule.
According to the Third Schedule, 'as it stood originally, the total number of seats allocated to the old Himachal Pradesh was 36 including 8 seats reserved for scheduled castes.
Section 4 authorises the President to determine by order the constituencies into which such State shall be divided, the extent of such constituencies, the number of seats allotted to each such constituency and the number of seats reserved for the scheduled castes or scheduled tribes.
Section 5 prescribes the duration of the Legislative Assemblies.
According to that section the Legislative Assembly, unless sooner dissolved, is to continue for five years from the date appointed for the first meeting and no longer.
Section 8 makes the provisions of Part I and Parts III to XI of the Representation of the People Act, 1951 and of any rules and orders made thereunder applicable in relation to an election to the 165 Legislative Assembly of a Part C State as they applied in relation to an election to the Legislative Assembly of a Part A State, subject to such modification as the President may, after consultation with the Election Commission, by order direct.
Section 9 authorises the Chief Commissioner to summon the Legislative Assembly from time to time but provides that six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.
Under section 10 the Legislative Assembly must, as soon as may be, choose two of its members to be respectively the Speakers and the Deputy Speaker thereof.
Section 14 enjoins that every member of the Legislative Assembly shall, before taking his seat, make and subscribe before the Chief Commissioner or some person appointed in that behalf by him an oath or affirmation 'according to the form set out for the purpose in the Fourth Schedule.
The form set out in the, Fourth Schedule ends by affirming that such member " will faithfully discharge the duty upon which I am about to enter ", which is in consonance with the provision of the section that oath is to be taken " before taking his seat ".
Section 16 provides for 'vacation of seats on the happening of certain events therein mentioned.
Section 18 provides penalty for sitting, and voting before making and subscribing the oath or affirmation which may extend to Rs. 500 for each day.
According to section 35 the validity of any proceedings in the Legislative Assembly of a State cannot be called in question on the ground of any alleged irregularity of procedure.
It is not necessary, for our present purpose, to refer to any other section of the Part C States Act.
In exercise of the powers conferred on him by section 4 of the Part C States Act, the President duly made an order, determining the constituencies into which the old Himachal Pradesh would be divided and thereafter in 1952 elections were duly held and 36 members were elected by the voters of the different constituencies so delimited.
Presumably the results of the general elections to the Legislative Assembly of the old Himachal Pradesh and the names of the members 166 elected for the various constituencies at the said election were duly published under section 74 of the Representation of the People Act, 1951, in the official gazette by the proper authority as soon after the date or the last of the dates fixed for the completion of the said elections as was possible.
There is no dispute that, in exercise of the powers conferred on him by section 9 of the Part C States Act, the Chief Commissioner summoned the Legislative Assembly of the old Himachal Pradesh thus constituted to meet at the appointed time and place.
There is also no dispute that every member of that Legislative Assembly before taking his seat made and subscribed the usual oath or affirmation under section 14 of the Part C States Act and elected one of the members Shri Jaiwant Ram as the Speaker and that the first session of the Assembly so constituted commenced functioning as the Legislative Assembly.
of the old Himachal Pradesh.
It was in this first session of this Legislative Assembly of the old Himachal Pradesh that in 1953 a Bill (Himachal 15 of 1953) which became the Abolition Act was introduced.
Pending the passage of that bill into an Act Parliament, on May 8, 1954, enacted an Act called the Himachal Pradesh and Bilaspur (New State) Act (32 of 1954), hereinafter I referred to as "the New State Act ".
This Act received the assent of the President on May 28, 1954, and was brought into force by a notification, dated July 1, 1954, issued by the Government of India in the official gazette under section 1(2) of the Act.
It will be convenient at this stage to set out the relevant provisions of this Act on which our decision on this point largely depends.
Section 3 of the New State Act says: " 3.
As from the commencement of this Act there shall be formed by uniting the existing States a new Part C State to be known as the State of Himachal Pradesh (hereafter in this Act referred to as the " new State) ".
Section 12 provides as follows: " 12.
(1) There shall be a Legislative Assembly for the new State.
167 (2)The total number of seats in that Legislative Assembly which shall be filled by direct election shall be 41.
" Section 14, which is very important, is expressed in the following terms: " 14.
(1) The new State shall, until other provision is made by law, consist of the following Assembly constituencies, namely : (i)the constituencies shown at the commencement of this Act in the Delimitation of Assembly Constituencies (Himachal Pradesh) Order, 1951 ; and (ii)the constituencies into which the part of the new State comprising the existing State of Bilaspur shall be divided.
(2)The President shall, as soon as may be after the commencement of this Act, after consulting the Election Commission of India, amend the Delimitation of Assembly Constituencies (Himachal Pradesh) Order, 1951, so as to include therein the constituencies into which the part of the new State comprising the existing State of Bilaspur, shall be divided and the said Order as so amended, shall, until superseded, be the Order relating to the delimitation of constituencies of the new State Sections 15 and 16 may also be set out: " 15.
(1) Every sitting member of the Legislative Assembly of the existing State of Himachal Pradesh representing a constituency of the said State shall, on and from the commencement of this Act, represent the constituency of the same name in the new State and shall be deemed to have been elected to the Legislative Assembly of the new State by that constituency.
(2)As soon as may be after the commencement of this Act, there shall be held elections to fill those seats of the Legislative Assembly which have been allotted to the constituencies into which the part of the new State comprising the existing State of Bilaspur shall be divided. . "16.
The period of five years referred to in section 5 of the (XLIX of 1951) shall, in the case of the Legislative 168 Assembly of the new State, be deemed to have commenced on the date on which the said period in the case of the Legislative Assembly of the existing State of Himachal Pradesh actually commenced.
" Subsequently, in exercise of powers conferred on him by section 14(2) the President made an order for the delimitation of the constituencies for the area that previously formed the territories of the then State of Bilaspur and which after the commencement of the New State Act formed a part of the new Part C State of Himachal Pradesh created thereby and hereinafter called the new Himachal Pradesh.
Thereafter, on May 13, 1955, five members were elected by the voters of the constituencies of that area so delimited so as to bring up the total number of members of the new Legislative Assembly of the new Himachal Pradesh to 41 as prescribed by section 12 of the New State Act.
In the meantime, on July 7, 1954, to be precise, the following notification was issued in the official Gazette: "Legislative Assembly NOTIFICATION Simla 4, the 7th July, 1954.
No. L.A. 109 28/54 The Lieutenant Governor, in exercise of the powers conferred by.
section 9 of the (XLIX of 1951), has been pleased to direct that the Second Session, 1954, of the Himachal Pradesh Legislative Assembly will commerce from Monday, the 16th August, 1954, at 9.30 a.m. in the Council Chamber,, Simla 4.
By order, of the Lieut.
Governor Mahesh Chandra (Judicial) Secretary" It is worthy of note.
that the notification, ex facie con vened the second session of the Legislative Assembly 0.PO1 169 of Himachal Pradesh.
It is not in dispute that, prior to the date of the aforesaid notification summoning the Legislative Assembly, no notification was issued by the appropriate authority declaring the 36 persons who had been the members of the old Legislative Assembly of the old Himachal Pradesh as members of the new Legislative Assembly of the New Himachal Pradesh or formally constituting and bringing into being the new Legislative Assembly of the new Himachal Pradesh created by and under the New State Act.
Nor is it in dispute that the 36 members of the old Legislative Assembly of the old Himachal Pradesh did not, in point of fact, make or subscribe any fresh oath or affirmation as members of the new Legislative Assembly of the new Himachal Pradesh as required by section 14 of the Part C States Act, which is on the same lines as articles 99 and 108 of the Constitution or that they elected a Speaker under section 10 of that Act.
There can be no getting away from the fact that the New State Act did create and bring into being a new State, also called the Himachal Pradesh.
It is not the case of the respondent that some additional territory which formerly belonged to the Part C State of Bilaspur was added to or merged into the territories of the old Himachal Pradesh and that the old Himachal Pradesh continued to exist.
The true legal position admittedly is that as a result of the New State Act the old Himachal Pradesh as well as the old State of Bilaspur both ceased to exist and there sprang to life a new Himachal Pradesh having for its territory the aggregate of the separate territories of the two defunct States, namely, the old Himachal Pradesh and the old Bilaspur.
Under section 12(1) of the New State Act, as under section 3(1) of the Part C States Act, this new Himachal Pradesh has to have a Legislative Assembly of its own the total number of members whereof, under section 12(2) of the New State Act shall consist of 41 to be filled by direct election.
The learned Additional Solicitor General takes his stand on section 15 of the New State Act which has already been quoted in full.
According to sub section
(1) of that section every sitting member of the 22 170 Legislative Assembly of the existing State of Himachal Pradesh (that is to say, the old Himachal Pradesh) that existed immediately prior to the commencement of the New State Act representing a constituency of ,,the said State shall, on and from the commencement of this Act, represent the constituency of the same name in the new Himachal Pradesh and shall be deemed to have been elected to the Legislative Assembly of the now Himachal Pradesh by that constituency.
Sub section (2) of that section provides for the holding of elections, as soon as may be after the commencement of that Act, to fill those seats of the Legislative Assembly which would under section 14(2) be allotted to the constituencies into which that part of the new Himachal Pradesh which was formerly comprised in the old State of Bilaspur would be divided.
The learned Additional Solicitor General also relies on section 16 of the New State Act which prescribes the life of the Legislative Assembly by making the period of five years mentioned in section 5 of the Part C States Act, for the purposes of computation, to run from the date when the old Legislative Assembly of the old Himachal Pradesh came into being.
His contention is that the result of these sections clearly is that the 36 members who had been elected previously as members of the old Legislative Assembly of the old Himachal Pradesh were, by the New State Act itself, constituted the new Legislative Assembly of the new Himachal Pradesh and that provision was made for the addition to this new Legislative Assembly of five members as and when elected by the voters of the constituencies into which the area formerly comprised in the territory of the old State of Bilaspur shall be divided.
In other words, his argument is that immediately on the com mencement of the New State Act the Legislative Assembly of the new Himachal Pradesh was duly constituted and came into being with 36 members as persona designate and that only five more members had to be brought in as and when elected so as to bring the total strength to 41.
According to the learned Additional, Solicitor General, the position in law is that there was a Legislative Assembly of the 171 new Himachal Pradesh then consisting of 36 members and that it was that Legislative Assembly that had been summoned by the Lieutenant Governor.
The learned Additional Solicitor General maintains that the fact that five members had not been elected from ' the constituencies of the area which was formerly comprised in the territories of the State of Bilaspur did not vitiate tile proceedings, for the Legislative Assembly had, under section 15(3) of the Part C States Act, power to act notwithstanding any vacancy in the membership thereof.
He has referred us to Webster 's Dictionary and Oxford Dictionary for the meaning of the words " vacant " and " vacancy ".
He has also referred us to section 147(2) of the Representation of the People Act, 1951 and section 25 of the , in support of his proposition that a post or place may be as appropriately said to be vacant when after its creation it had never been filled as it can be said to be vacant in the case of a post or place which after its creation had been filled and had then been vacated.
The learned Additional Solicitor General concedes that strictly speaking the 36 members of the old Legislative Assembly of the old Himachal Pradesh who, by the fiction created by section 15(1) of the New State Act had become members of the new Legislative Assembly of the new Himachal Pradesh, should have made and subscribed a fresh oath or affirmation but that the absence of that formality is a mere irregularity which, by virtue of section 15(3) of the Part C States Act corresponding to articles 100(2) and 189(2) of the Constitution, did not vitiate the proceedings of the Legislative Assembly which had passed the Abolition Act, which is under challenge in these petitions.
Section 15(1) of the New State Act only provides that each of the 36 sitting members of the old Legislative Assembly of the old Himachal Pradesh shall on and from the commencement of the Act represent the constituency of the same name in the new Himachal Pradesh and shall be deemed to have been elected by that constituency.
The purpose of this section is to obviate the necessity for going through the entire process of a fresh election so far as these 36 members 172 were concerned.
In other words, these 36 members were exempted from seeking election or from being elected and were, by a statutory fiction, taken as having been elected to the Legislative Assembly of the I new Himachal Pradesh.
By the operation of the deeming provision embodied in section 15(1) the 36 members have been placed in the same position as they would have been placed in had they gone through the entire process of election and had been returned elected.
The requirements of law to be followed after the election is completed have yet to be followed.
For the section to say that these 36 members shall represent the constituencies of the same name in the new Himachal Pradesh and shall be deemed to have been elected to the Legislative Assembly of the new Himachal Pradesh by the same constituencies is not to say that these 36 persons alone constitute the Legislative Assembly of the new Himachal Pradesh.
It only lays down that these 36 persons shall be deemed to have been elected without going through the actual process of election.
Apart from providing that these 36 persons shall represent the several constituencies and shall be deemed to have been elected by the voters of those constituencies, section 15(1) does not go further and say that these 36 persons shall, without more, constitute the Legislative Assembly.
Therefore, the requirements of Law applicable to the further stages after the election is over have still to be complied with.
In other words the purpose of section 15(1) is not to Constitute and bring into being the Legislative Assembly.
For that a notification under section 74 of the Representation of the People Act, 1951, has to be issued.
That notification gives life to the Legislative Assembly as section 73 of the amended section clearly indicates.
What did the Lieutenant Governor do or intend to do by issuing the notification dated July 7, 1954, quoted above ? The fact that the Lieutenant Governor did not intend to summon a meeting of the new Legislative Assembly of the new Himachal Pradesh is made clear by the fact that by the notification in question he convened what he described as the second ,session of the Legislative Assembly.
After the creation 173 of the new Himachal Pradesh there had been no previous session of its Legislative Assembly at all and the session convened, if it was to be a session of the new Legislative Assembly of the new Himachal Pradesh, was to be its very first session.
It was, there , fore, wholly inappropriate and utterly incorrect to describe the session thus convened as the second session.
The provision of section 16 of the new State Act which computes the period of five years duration from the date of the commencement of the old Legislative Assembly of the old Himachal Pradesh cannot affect the fact that the old Legislative Assembly as well as the old Himachal Pradesh had ceased to exist and that the meeting of the new Legislative Assembly of the new State after the commencement of the New State Act must be its first session and not the second.
It may well be that the Lieutenant Governor took the view that the new Legislative Assembly of the new Himachal Pradesh would not be constituted and brought into being until five members from the Bilaspur area had been elected so as to bring the total number of members to 41 as prescribed by section 12 and that until then the old Himachal Pradesh and the old Legislative Assembly would remain alive and that, therefore, the Bill which had been introduced in the first session of the old Legislative Assembly of old Himachal Pradesh had not lapsed under section 25 of Part C States Act.
The Lieutenant Governor in such a situation may well have thought that as under section 9 of the Part C States Act more than six months must not intervene between its last sitting in one session and ,the date appointed for its first sitting in the next session, and accordingly may have thought fit to convene the second session of the old Assembly.
This conclusion is further reinforced by the fact that no oath or affirmation was administered to the 36 persons when they assembled in pursuance of the summons as required by section 14 of the Part C States Act as well as by the further fact that the Legislative Assembly which was summoned by the Lieutenant Governor under section 9 of the Part C States Act did not choose any of the members to be the Speaker of that Legislative 174 Assembly.
Indeed the printed resume of the work done by the Himachal Pradesh Legislative Assembly during the second session 1954, as published by its Secretary, shows that the house granted leave of ,absence from the House to Sri Jaiwant Ram, Speaker, for the duration of that session.
Sri Jaiwant Ram is no other than the person who had been elected the Speaker of the old Legislative Assembly of the old Himachal Pradesh.
The discussion whether these irregularities can or cannot be cured under section 15(3) and section 35 of Part C States Act is not relevant at this stage.
Assuming that the word " vacancy " as used in the section has the wide connotation contended for by the learned Additional Solicitor General and without, for our present purpose, adverting to the obviously possible abuse such a wide meaning may lead to, it must be noted that the section clearly contemplates that there is a Legislative Assembly duly constituted and brought into existence and that it is subsequently discovered that "some persons" have sat and voted without making and subscribing an oath or affirmation.
The section postulates the existence of a duly constituted Legislative Assembly.
It does not apply to a case where the Legislative Assembly has not at all been constituted and brought into being by a notification issued by the appropriate authority and then duly summoned by the Lieutenant Governor.
Whether absence of such a notification will vitiate the proceedings even if all the members properly elected to the Legislative Assembly are summoned and they take part in the proceedings after taking the oath and electing a Speaker need not be considered on this occasion.
The present discussion is for the purpose of ascertaining as to what was in the mind of the Lieutenant Governor when he issued the notification convening the second session of the Legislative Assembly and what he purported to do.
The fact that he summoned the Legislative Assembly to a second session signifies that he bad in mind the Legislative Assembly of the old Himachal Pradesh which already bad a sitting before and summoned it to a second session.
The fact that no oath or affirmation 175 was administered to any member and that there was no election of a Speaker also quite clearly indicates that the Lieutenant Governor was not summoning the new Legislative Assembly of the new Himachal Pradesh.
This is made further clear by the fact that the Lieutenant Governor must have known that the old Himachal Pradesh having ceased to exist its Legislative Assembly had also gone with it, and that a bill pending in the Legislative Assembly thus dissolved would have lapsed under section 25 and the first sitting of the new Legislative Assembly of the., new State of Himachal Pradesh could not proceed with the lapsed Bill.
In this context the question whether the irregularity can be cured under section 15(3) of the Part C States Act or is made immune from challenge under section 35 does not arise at all.
The problem before us is to determine which Assembly the Lieutenant Governor had convened.
In our opinion the so called Legislative Assembly which was convened and which purported to pass the Abolition Act was not the Legislative Assembly of the new Himachal Pradesh created by the New State Act, therefore, the impugned Act cannot be regarded as a piece of validity enacted legislation.
That being the position the interference with the rights of the petitioners in and.
to their respective properties cannot be for a moment be justified or permitted and the first question raised on behalf of the petitioners must be answered in their favour.
In the view we have taken it is not necessary for us to go into the second question sought to be raised before its.
The result, therefore, is that we issue in each of the petitions a mandamus directing the respondent to forbear from giving effect to or acting in any manner under or on the basis of the said impugned Act and also restraining the respondent, its servants and agents, from taking any action on the basis of the said Act or interfering in any way with the petitioners ' properties or their rights in respect of their properties or from disturbing or affecting the petitioners ' possession thereof The petitioners will be entitled to the general costs of each of these petitions, but the respondent will 176 pay only three sets of costs for the hearing, namely, one set each to the petitioners represented by Shri Achhru Ram, Shri D. R. Prem and Shri Y. Kumar respectively and also one set of hearing fees for each of the advocates on record.
Petitions allowed.
| IN-Abs | The petitioners, who were land owners of Himachal Pradesh, challenged the constitutional validity of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953 (Himachal 15 of 1954), said to have been passed by the Legislative Assembly of the State of Himachal Pradesh functioning under the Himachal Pradesh and Bilaspur (New State) Act (32 Of 1954).
The impugned Act was introduced as a bill in the first session of the Legislative Assembly of the Old Himachal Pradesh elected under the Government of Part C States Act (49 Of 1951).
Before the bill could be passed, the Himachal Pradesh and Bilaspur (New State) Act (32 Of 1954) came into force on July 1, 1954, abolishing the old Act and uniting the two States into one.
While the Legislative Assembly for the New State was yet to be constituted, on July 7, 1954, the Governor issued the following notification, " The Lieutenant Governor, in exercise of.
the powers conferred by Section 9 of the (49 Of 1951), has been pleased to direct that the Second Session, 1954, Of the Himachal Pradesh Legislative Assembly will commence from Monday, the 16th August, 1954, at 9 30 a.m. in the Council Chamber, Simla 4.
" It was at this session that the impugned Act was passed.
Its provisions were said to be drastic and to infringe articles 14, 19 and 31 Of the Constitution.
It was contended on behalf of the petitioners that apart from violating those Articles, the impugned Act was void as it had not been passed by a duly constituted legislature.
It was sought to be contended on behalf of the respondent that under the new Act the members of the Old Legislative Assembly must be deemed to constitute the legislature for the New State and it was as such called by the Governor.
Held, that the contention raised by the respondent was with out substance and must be negatived.
It was apparent that the so called Assembly which the Governor had convened and which purported to pass the impugned Act was not the Legislative Assembly of the New State constituted under the Himachal Pradesh and Bilaspur (New State) Act (32 Of 1954) and as such the Act could not be regarded as a valid piece of legislation.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
|
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.
| IN-Abs | 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.
| IN-Abs | 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
|
Appeal No.426 of 1957.
Appeal from the judgment and order dated April 21, 1955, of the Orissa High Court at Cuttack in Special Jurisdiction Case No. 179 of 1951.
A. N. Kripal, R. H. Dhebar and D. Gupta, for the appellant.
A. V. Viswanatha Sastri, M. section K. Sastri and R. Jagannatha Rao, for the respondent.
October 14.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the judgment of the High Court of Orrissa in a reference under section 66(1) of the Indian Income tax Act, 1922, hereinafter referred to as the Act, and the point for decision is whether income received by the respondent by the sale of trees growing in his forests is agricultural income exempt from taxation under section 4(3)(viii) of the Act.
The respondent is the proprietor of the impartable zamin of Jaipur in Koraput District.
The estate is of the area of 12,000 sq.
miles of which 1540 sq.
miles are reserve forest and 100 sq. miles, protected forest.
The respondent derives income from the forests by the sale of timber such as teak, salwood, lac, myrabolam, tamarind, cashewnuts and firewood.
There is no 23 178 dispute either as to the receipt of such income or as to its quantum.
All tat appears in the account books of the respondent.
The point in controversy is as to whether this income is chargeable to tax.
It is the contention of the respondent that this is agricultural income as defined ins.
2(1) of the Act, and that it is, in consequence, exempt under section 4(3)(viii).
By his 31, 1943, the Income tax order dated January Officer held that the forests in question had not been proved to have been planted by the respondent, that the trees were of spontaneous growth, and that the income therefrom was not within the exemption under section 4(3)(viii); and this order was confirmed on appeal by the Appellate Assistant Commissioner.
The respondent took the matter in further appeal to the Appellate Tribunal, and there put forward the contention that the Incometax Officer had failed to take into account a letter of the Dewan dated June 3, 1942, which gave a detailed account of the operations carried on by the estate in the rearing and maintenance of forests and that on the facts mentioned in that letter, his finding that there had been no plantation of trees was errolieous.
By its order dated April 9, 1946, the Tribunal accepted this contention, and directed a fresh enquiry into the facts mentioned in the said letter.
Pursuant to this order, the Income tax Officer again enquired into the matter.
He observed that though he gave ample opportunities to the respondent to prove that there was plantation of trees by the estate, no materials were placed in proof of that fact and that neither plantation books nor any working plans for timber plantation had been produced.
He accordingly held that the forests had grown naturally, and that the income therefrom was assessable to tax.
On this report, the appeal again came up for hearing before the Tribunal.
The main contention urged by the respondent at the hearing was that the facts showed that the forests which had yielded income during the year, ' of account could not have been the virgin forests which had originally grown spontaneously on the hills, because they had been periodically denuded by the hill tribes in the process of Podu cultivation carried on by 179 them.
What this Podu cultivation means is thus stated in the ]District Gazetteer, Vishakapatnam, 1907: " This consists in felling a piece of jungle, burning the felled trees and undergrowth, sowing dry grain broadcast in the ashes (without any kind of tilling) for two years in succession, and then abandoning the plot for another elsewhere.
" The argument of the respondent was that as a result of the Podu cultivation, the original forests should have disappeared and that the trees that had subsequently grown into forest and sold as timber must have been planted by human agency and their sale proceeds must accordingly be agricultural income.
Dealing with this contention, the Tribunal observed that though there had been extensive destruction of forests in the process of Podu cultivation, nevertheless, considerable areas of virgin forests still survived, that the evidence of actual cultivation and plantation by the zamin authorities was meagre and unsubstantial, that no expenses were shown to have been incurred on this account prior to 1904, that the amount shown as spent during that year was negligible, that the trees planted then could not have been the trees sold as timber during the assessment years, and that the respondent bad failed to establish facts on which he could claim exemption.
It should be mentioned that this order covered the assessments for five years from 1942 43 to 1946 47, the facts relating to the character of the income being the same for all the years.
On the application of the respondent, the Tribunal referred the following question for the decision of the High Court : " Whether on the facts and in the circumstances the income derived from forest in this case is taxable under the Indian Income tax Act.
" The reference was heard by Panigrahi, C. J., and Misra, J., who answered it in the negative.
They observed : " It appears to us that the cases as set out by both parties have been put too high.
The department takes the view that unless there is actual cultivation of the 180 soil the income from the forest trees cannot be regard.
,led as agricultural income.
The fact that the assessee has spent some money and planted valuable trees in some areas is not sufficient to free the income out of the extensive forests which owe their existence to spontaneous growth, from its liability to taxation.
The assessee on the other hand seeks to create an impression that there is not a single tree of spontaneous growth, in these forests, and such trees as now constitute forests have sprung up out of the stumps left by the hillmen as a result of the system of I Podu ' cultivation adopted by them.
It appears to us that neither of these claims can be regarded as precise or correct." The learned Judges then observed that the forests in the Koraput area had been under Podu cultivation for a long period, and that as the result of that cultivation they had practically disappeared even by the year 1870, that the trees had subsequently grown into forests and they had also been destroyed by about the year 1901, and that therefore there could not have been any virgin forest left surviving.
Then they referred to the fact that the respondent had been maintaining a large establishment for the preservation of the forests, and that there had been organised activities (1) " in fostering the growth of the trees and preserving them from destruction by man and cattle; (2) in cultivation of the soil by felling and burning trees from time to time; (3) in planned exploitation of trees by marking out the areas into blocks; (4) in systematic cutting down of trees of particular girth and at particular heights; (5) in planting new trees where patches occur; and (6) in watering, pruning, dibbling and digging operations carried on from time to time ".
And they stated their conclusion thus: " All these and similar operations which have been undertaken by the assessee through his huge forest establishment, show that there has been both cultivation of the soil as well as application of human skill and labour, both upon the land and on the trees themselves.
It cannot be assumed therefore that all the trees are of spontaneous growth.
The indications, on 181 the other hand, appear to be that most of them are sprouts springing from burnt stumps.
There is no basis for the assumption made by the Income tax Department that all the trees are forty years old and that they owe their existence to spontaneous growth.
Apart from that it will be noticed that what distinguishes the present case from all the reported decisions is that practically the whole of the forest area has been subjected to process of 'Podu ' cultivation spreading over several decades so that it is impossible to say that there is any virgin forest left.
The onus was certainly upon the department to prove that the income derived from the forest was chargeable, to tax and fell outside the scope of the exemption mentioned in Section 4(3)(viii).
" In this view, they held that the Department had failed to establish that the income derived from the sale of trees was not agricultural income, and answered the reference in favour of the respondent.
The learned Judges, however, granted a certificate to the appellant under section 66(A)(2) of the Act, and that is how the appeal comes before us.
At the very outset, we should dissent from the view expressed by the learned Judges that the burden is on the Department to prove that the income sought to be taxed is not agricultural income.
The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Income tax Act.
The learned Judges were of the opinion that their conclusion followed on the principle of the law of Income tax that " where an exemption is conferred by a statute, the State must not get the tax either directly or indirectly ", and support for this view was sought in the following observations of Lord Somervell, L. J., in Australian Mutual Provident Society vs Inland Revenue Commissioners (1): " The rule must be construed together with the exempting provisions which, in our opinion, must be regarded as paramount.
So far as the rule, if taken (I) 182 in isolation, would have the effect of indirectly depriving the company of any part of the benefit of the exemption, its operation must be cut down, so as to prevent any such result, and to allow the exemption to operate to its full extent.
" These observations have, in our opinion, no bearing on the question of burden of proof.
They merely lay down a rule of construction that in determining the scope of a rule, regard must be had to the exemptions engrafted thereon, and that the rule must be so construed as not to nullify those exemptions.
No such question arises here.
There is ample authority for the view that the principle that a person who claims the benefit of an exemption has to establish it, applies when the exemption claimed is under the provisions of the Income tax Act.
Vide the observations of the Lord President and of Lord Adam in Maughan vs Free Church of Scotland (1) and the observations of Lord Hanworth, M. R., in Keren Kayemeth Le Jisroel Ltd. vs The Commissioners of Inland Revenue (2) at p. 36 that " the right to exemption under Section 37 must be established by those who seek it.
The onus therefore lies upon the Appellants ", and of Lord Macmillian at p. 58 that, " In my opinion, the Appellants, have failed to bring it within any one of these categories and consequently have failed in what was essential for them to make out, namely, that this Company is a body of persons established for charitable purposes only.
" The decisions of Indian Courts have likewise ruled and quite rightly that it is for those who seek exemption under section 4 of the Act to establish it.
Vide Amritsar Produce Exchange Ltd. In re (3) and Sm.
Charusila Dassi and others, In re (4).
So far as exemption under section 4(3) (viii) is concerned, the matter is concluded by a decision of this Court given subsequent to the decision now under appeal.
In Commissioner of Income tax vs Venkataswamy Naidu (5), this Court held, reversing the judgment of the High Court of Madras, that it (1) , 21 O. (2) (3) , 327.
(4) , 370.
(5) , 534. 183 was for the assessee to prove that the income sought to be taxed was agricultural income exempt from taxation under section 4(3)(viii).
Bhacgwati, J., delivering the ' judgment of the Court observed: " . the High Court erroneously framed the question in the negative form and placed the burden on the Income tax Authorities of proving that the income from the sale of milk received by the assessee during the accounting year was not agricultural income.
In order to claim an exemption from payment of incometax in respect of what the assessee considered agricultural income, the assessee had to put before the Income tax Authorities proper materials which would enable them to come to a conclusion that the income which was sought to be assessed was agricultural income.
It was not for the Income tax Authorities to prove that it was not agricultural income.
It was this wrong approach to the question which vitiated the judgment of the High Court and led it to an erroneous conclusion.
" On the inerits, the question what is agricultural income within section 2(1) of the Act is the subject of a recent decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
There, it was held that before an income could be held to be agricultural income, it must be shown to have been derived from land by agriculture or by one or the other of the operations described in cls.
(i) and (ii) of section 2(1)(b) of the Act, that the term St agriculture " meant, in its ordinary sense, cultivation of the field, that in that sense it would connote such basic operations as tilling of the land, sowing of trees, plantation and the like, and that though subsequent operations such as weeding, pruning, watering, digging the soil around the growth and removing undergrowths could be regarded as agricultural operations when they are taken in conjunction with and as continuation of the basic operations mentioned before, they could not, apart from those operations, be regarded as bearing the character of agricultural operations.
(1) ; , 155, 158, 160.
184 It is only " observed Bhagwati, J., delivering the judgment of the Court, " if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations. " " But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations.
" Dealing with trees which grow wild, Bhagwati, J., observed : " It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income.
There is no process of agriculture involved in the raising of these products from the land.
" The law being thus settled, in order to decide whether the income received by the respondent by the sale of trees in his forests was agricultural income or not, the crucial question to be answered is, were those trees planted by the proprietors of the estate, or did they grow spontaneously ? If it is the latter, it would be wholly immaterial that the respondent has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees, because ex hypothes, he performed no basic operations for bringing the forests into being.
Now, the Tribunal has clearly found that there were no plantations of trees by the estate authorities worth the name, and that the trees, the income from which is the subject matter of the assessments, must have been of sponta neous growth.
That is a finding of fact which is binding on the Court in a reference under section 66(1) of the Act.
The learned Judges declined to accept this finding, because they considered that the Tribunal had not appreciated the true significance of Podu cultivation.
That, in our opinion, is a misdirection.
If the point for decision had been whether the forest was a virgin forest or whether it had subsequently sprung up, the evidence relating to Podu cultivation would have 185 been very material.
But the point for decision is not whether the forests were ancient and primeval, but whether they had been planted by the estate authorities, and on that, the Podu cultivation would have no bearing.
As a result of the Podu cultivation, the original forests would have disappeared.
But the question would still remain whether the forest which again sprang up was of spontaneous growth, or was the result of plantation.
Now, there is no evidence that as and when the jungle had disappeared under Podu cultivation, the estate intervened and planted trees on the areas thus denuded.
On the other hand, the learned Judges themselves found that after the destruction of the original forests in the process of Podu cultivation, there was a fresh growth of forests from the stumps of the trees which had been burnt.
If that is the fact, then the new growth is also spontaneous and is not the result of any plantation.
In fairness to the learned Judges, it must be observed that at the time when they heard the reference there was a conflict of judicial opinion on the question whether subsequent operations alone directed to the preservation and improvement of forests would be agricultural operations within section 2(1) of the Act; and the view they took was that such operations when conducted on a large scale as in the present case would be within section 2(1) of the Act.
It was in that view that they observed that "it is therefore idle to regard tilling as the sole and indispensable test of agriculture ".
The decision of the learned Judges was really based on the view that though trees in the forest had not been planted by the estate authorities, the latter had performed subequent operations of a substantial character for the maintenance and improvement of the forest, and that, in consequence, the income was agricultural income.
This view is no longer tenable in view of the decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
It is contended by Mr. Viswanatha Sastri for the (1) ; , 155, 158, 160.
24 186 respondent that on the facts established in the evidence, the proper conclusion to come to is that the trees sold by the respondent had been planted by the estate authorities, and that the decision of the High Court that the income thus realised is within the exemption under section 4(3)(viii) could be supported even on the view of law taken in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1).
The argument was that there was unimpeachable evidence that the old forests had disappeared under Podu cultivation, that the estate had been regularly engaged in planting trees at least from the year 1904 as is shown by the accounts of the zamin, that it was a reasonable inference to make that there had been similar plantations even during the years prior to 1904 notwithstanding that no accounts were produced for those years, because it would not be reasonable to expect that such accounts would now be available, that though the amount shown as spent for plantation might not be considerable, that was understandable when regard is bad to the fact that the agricultural operations were conducted on the hills and not on the plains, that, on these facts, it would be proper to conclude that the forests were in their entirety the result of plantation.
It would be ail erroneous approach, it was argued, to call upon the assessee to prove tree by tree that it was planted.
Now, these are matters of appreciation of evidence on what is essentially a question of fact, viz., whether the trees were of spontaneous growth or were products of plantation.
On this, the Tribunal has given a clear finding on a consideration of all the material evidence, and its finding is final and not open to challenge in a reference under section 66 (1) of the Act.
Even the learned Judges of the High Court who considered themselves free to review that finding and, as already pointed out, without justification, could only observe that the trees must have mostly grown from the slumps left when the forests were burnt for purposes of Podu cultivations finding which is fatal to the contention now urged for the respondent that they (I) ; , 155, 158, 160.
187 were the result of plantation.
We are of opinion that there are no grounds on which the finding of the Tribunal could be attacked in these proceedings.
It remains to deal with one other contention urged on behalf of the respondent, and that is based on the fact that the amounts spent in the upkeep of the forrests were large in comparison with the receipts therefrom.
The following are the figures relating to the forest receipts and expenses for the years with which the present assessments are concerned: Years Receipts Expenses 1942 43 Rs. 438,894 Rs. 174,437 1943 44 Rs. 407,447 Rs. 209,895 1944 45 Rs. 552,122 Rs. 228,830 1945 46 Rs. 372,971 Rs. 247,216 1946 47 Rs. 689,366 Rs. 460,369 The argument is that from the high proportion of the expenses in relation to the receipts it could be inferred that the income from trees planted by the estate formed a substantial portion of the income derived from the forests.
And support for this conclusion is sought in the following observations in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1): " The expenditure shown by the assessee for the maintenance of the forest is about Rs. 17,000 as against a total income of about Rs. 51,000.
Having regard to the magnitude of this figure, we think that a substantial portion of the income must have been derived from trees planted by the proprietors themselves.
" To appreciate the true import of these observations, we must have regard to the context in which they occur.
The facts found in that case were that portions of the forest which was originally of spontaneous growth had gradually been denuded, that the propritor had planted trees in the areas so denuded, that this had gone on for a period of over 150 years, and that therefore " the whole of the income derived from (1) ; , 155, 158, 160.
188 the forest cannot be treated as non agricultural income ".
It was then observed that " If the enquiry had been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of a spontaneous growth and how much to trees Planted by the proprietors ", but that, in view of the long lapse of time, it was not desirable to remand the case for enquiry into the matter.
Then follow the observations on which the respondent relies, and when read in the light of the findings that the plantations made by the proprietors were not negligible, they mean nothing more than that out of the total income a substantial portion was likely to be agricultural income, and that it was therefore not a fit case for ordering fresh enquiry These observations do not lay down that if considerable amounts are expended in the maintenance of forests, then it must be held that the trees were planted by the proprietors.
They only mean that if a considerable portion of the forests is found to have been planted, a substantial portion of the forest income may be taken to have been derived therefrom.
And this too, it must be remarked, is only a presumption of fact, the strength of which must depend on all the facts found.
In the face of the clear finding in the present case that the forests with which the assessment years are concerned were of spontaneous growth, the observations quoted above can be of no assistance to the respondent.
It is scarcely necessary to add that the observations " If the enquiry bad been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of spontaneous growth and how much to trees planted by the proprietors " quoted above cannot be read, as was sought to be done for the respondent, as throwing on the Department the burden of showing that the income sought to be taxed was not agricultural income.
That, in their context, is not the true meaning of the observations, and the law is as laid down in Commissioner of Income tax vs Venkataswamy Naidu (1) , 534. 189 In the result, this appeal is allowed, the order of the Court below is set aside and the reference is answered in the affirmative.
The respondent will pay the costs of the appellant here and in the Court below.
Appeal allowed.
| IN-Abs | The respondent, the proprietor of an estate, derived income from the sale of trees growing in his forests and claimed that it was agricultural income as defined in section 2(1) of the Indian Income tax Act, 1922, and that it was exempt from payment of income tax under section 4(3)(viii).
The Appellate Tribunal found that the evidence to show that there was plantation by the estate authorities was meagre and unsubstantial, that the trees in question must have been of spontaneous growth and that the respondent had failed to establish facts on which he could claim exemption.
On reference, the High Court took the view that though trees in the forest had not been planted by the estate authorities, the latter had performed subsequent operations of a substantial character for the maintenance and improvement of the forest, and that the income was, therefore, agricultural income.
It also held that the onus was on the income tax authorities to prove that the income derived from the sale of trees was not agricultural income and that they had failed to show that the income fell outside the scope of the exemption mentioned in section 4(3)(viii) Of the Act.
Held, that the High Court erred in placing the burden on the income tax authorities to prove that the income sought to be taxed was not agricultural income.
The principle has been well established that where a person claims the benefit of an exemption under the provisions of the Act, he has to establish it.
177 Commissioner of Income tax vs Venkataswamy Naidu, [1956] 291.T.R. 529, followed.
The question whether the trees were of spontaneous growth or were products of plantation was essentially a question of fact and the finding of the Tribunal on this point was binding on the High Court in a reference under section 66(1) of the Act.
Held, further, that the income received by the respondent by the sale of trees in his forests was not agricultural income as the trees had not been planted by him, and that it was immaterial that he had maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees.
The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy; , , explained and followed.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
|
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.
| IN-Abs | 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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
|
Appeal No.793 of 1957.
Appeal by special leave from the judgment and order dated September 20, of the Patna High Court in M.J.C. No. 392 of 1955.
C. K. Daphtary, Solicitor General of India, A. B. N. Sinha and B. P. Maheshwari, for the appellant.
section P. Varma, for respondents Nos.
1,2,6 8 and 10 23. 1958.
November 4.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal with special leave is directed against the judgment of the High Court of Judicature at Patna dismissing the writ application of the appellant seeking to quash the proceedings in Miscellaneous Cases Nos. 26 and 27 of 1955 before the Industrial Tribunal, Bihar, Patna.
Gaya Sugar Mills Ltd., a Company incorporated in 1934 owned a Sugar Factory at Guraru, District Gaya.
An order for the compulsory winding up of the Company was passed on November 4,1951, and by a subsequent order dated February 1, 1952, one Dhansukh Lal Mehta was appointed liquidator of the Company.
In order to preserve the aforesaid Sugar Mills at Guraru in proper running order and also for the beneficial 256 winding up of the Company the liquidator obtained under section III (b) of the Indian Companies Act sanction of the Court to lease out the said Mills with all the lands, factory and residential buildings and machineries etc.
The Guraru Cane Development and Cane Marketing Union Ltd., were the former lessees of the said mills but on the expiration of their lease, the liquidator obtained from the Court an order on December 3, 1954, sanctioning the lease in favour of Shri Krishna Gyanody sugar Ltd .; the appellant herein, for the period December 5,1954 up to and inclusive of November 14,1955.
The liquidator executed in favour of the appellant lease of the said Mills on December 6, 1954, and handed over possession of the same to the appellant the same day.
The terms and conditions of the lease, in so far as they are material for our purposes provided that the appellant would be put into possession of the leasehold properties in a proper working order and would work and run the factory without any interference or obstruction by or on behalf of the lessor and would appropriate the entire income and profit thereof and the lessor would have no concern with profit or loss made by the lessee in running the said factory and would not be entitled to any sum or amount over and above the rent therein reserved.
The appellant was not to be in any way liable or responsible for any of the liabi lities of the Company or of the liquidator or of the out going lessees incurred whether before or after the appellant entered into possession except those mentioned therein.
The appellant was at its own cost entitled always to install 'any additional or other machinery or machineries and erect god owns or structures for the Purposes of and in connection with the running of the said Mills after intimation to the lessor.
The appellant was not bound to engage any or all of the employees of the lessor or of the" Outgoing lessees or any of the persons who had been working from before except the 18 employees who were mentioned in Cl. 11 of the lease and the appellant also agreed not to retrench any staff already employed at that date in the Factory at Guraru (vide cl.
13(v),of the lease).
The 257 properties demised by the said lease were deemed to be in the control of the Patna High Court and any dispute between the lessor and the appellant in respect of the said lease was to be placed before the said Court for decision and the decision made by the said Court was to be binding on all the parties.
It appears that on December 2, 1954, i.e., 4 (lays before, the execution of the said lease and delivery of possession of the said Mills by the liquidator to the appellant, the; Government of Bihar issued a notification referring certain disputes between the Managements of the, Sugar factories specified in Appendix I thereto and their workmen represented by the Unions specified in Appendix It for adjudication to an Industrial Tribunal of which Shri Ali Hassan, the respondent No. 1 herein, was to be tile sole member.
The terms of the reference stated : " Whereas the State Government is of opinion that ail Industrial dispute exists or is apprehended between the Management of the Sugar factories as specified in Appendix I and their workmen represented by the Unions as specified in Appendix 11 regarding the matters specified in Annexure A ; Now, therefore, in exercise of the powers conferred by section 7 read with sub section (1) of section 10 of the (XIV of 1947) and in supersession of Notification No. III/ DI 14020/54L15146 dated the 1st October, 1954, the Governor of Bihar is pleased to constitute an Industrial Tribunal of which Mr. Ali Hussan shall be the sole member and to refer the said dispute to the said Tribunal for adjudication.
Annexure "A" 1.
Retaining allowance to seasonal employees in Sugar factories in Bihar.
Leave and holidays to the employees including seasonal employees in Sugar factories.
Whether the deduction made in leave and holidays of the employees of the Management of the Sugar factories is unjustified and if so what compensation or relief, the workmen are entitled to 33 258 There were as many as 28 Sugar factories specified in Appendix I and as many as 38 Labour Unions specified in Appendix 11.
The Gaya Sugar Mills Ltd., Guraru was the second item in Appendix I and the Chini Mazdoor Sangh Guraru was mentioned at the third item in Appendix 11.
The respondent No. 1 entered upon the said reference.
Even though Gaya Sugar Mills Ltd., Guraru which was then in liquidation was not specifically described as such in Appendix 1, notice was given to the, liquidator by the respondent No. 1 for January 11, 1955, which was the date fixed for hearing before him.
The said letter however reached the liquidator on January 13, 1955, whereupon by his letter dated January 14, 1955, he informed respondent No.1 about it.
Respondent No. 1 however satisfied himself by merely endorsing on the letter of the liquidator that the hearing had already concluded and nothing further than inquiring of the post office as to the reason of the delay in the delivery of the letter could be done.
Respondent No.1 made his award on February 17, 1955, and it was published in the Official Gazette on February 23, 1955.
The adjudication proceedings which had thus commenced on the date of the reference viz., December 2, 1954, came to a conclusion on the expiry of 30 days of the publication of the award viz., on March 25, 1955, under section 20(3) of the .
It appears that an appeal was taken to the Labour Appellate Tribunal against this award and the appeal was decided on August 31, 1956.
Even though the appellant was in possession of the said Mills under the terms of the lease dated December 6, 1954, no notice was given by respondent No. 1 to the appellant and the appellant therefore could not and did not appear before respondent No. 1.
So far as the appellant was concerned the proceedings before respondent No. 1 were ex parte.
Two applications were, however, made on March 23, 1955, under section 33A of the , one by 15 persons alleging that the appellant had without any reason and without any notice discharged them from employ one by one during the months of January and February 259 1955 and the other by 5 persons alleging that the appellant had changed their conditions of service without any reason, contending that the said discharges and the change in conditions of service had been effected by the appellant during the pendency of the disputes before the Industrial Tribunal aforesaid without the permission of the Industrial Tribunal having been obtained under section 33 of the Act.
These applications were numbered as Miscellaneous Cases Nos. 26 and 27 of 1955 and the appellant received on April 7, 1955, two notices from respondent No. 1, both dated March 25, 1955, informing the appellant about the filing of the two miscellaneous cases and calling upon the appellant to file statements showing cause by April 19, 1955.
The appellant accordingly filed before respondent No. 1 two applications or statements contending inter alia that the application under section 33 A of the , filed by those persons (respondents Nos. 4 to 23 herein) were not maintain.
able and were otherwise fit to be rejected.
It was asserted on behalf of the appellant that the appellant as lessee of the said Mills had strictly complied with the terms and conditions of the lease and there had been no contravention on its part of section 33 of the Act, in regard to any of the workmen concerned in the aforesaid two miscellaneous cases.
It was pointed out that none of the persons who had filed the said applications was comprised in the 18 persons who were specifically mentioned in Cl. 11 of the lease and who were specifically exempted from the operation of the said clause nor were they comprised in the category of members of the staff whom the appellant as lessee, was not entitled to retrench under Cl.
13(v) of the lease, with the result that none of the said clauses of the lease could be said to have been violated by the appellant.
On July 13, 1955, the appellant filed in the High Court of Judicature at Patna a writ application under articles 226 and 227 of the Constitution being Miscellaneous Judicial Case No. 392 of 1955 impleading the Chairman, Industrial Tribunal, Bihar as respondent No. 1, the State of Bihar as respondent No. 2, the liquidator as respondent No. 3 and the applicants in 260 the said miscellaneous cases Nos. 26 and 27 of 1955 pending before the Industrial Tribunal as respondents 'Nos. 4 to 23 for a writ of certiorari quashing the said Miscellaneous Cases Nos. 26 and 27 of 1955, a writ of Mandamus restraining the respondent No. 1 from proceeding with or otherwise dealing with the said miscellaneous cases costs and further and other reliefs.
The main Contentions urged by the appellant in the said petition were: (1) that under each one of the points referred for adjudication, considerable burden was sought to be imposed on the sugar factories concerned ; that all the properties and effects of the Gay Sugar Mills Ltd., were in the custody of the Court as from the date of the order for Winding up viz., November 14,1951 ; that ,the said notification did not purport to include Gaya Sugar Mills Ltd., in that light and did not describe the company as having already gone into liquidation ; that no leave of the Court was obtained before commencing or continuing the proceedings before the Tribunal and in fact the liquidator was neither named as a party nor was any notice given to him of the commencement of the proceedings and that therefore go far as the Gava Stugar Mills Ltd., (In Liquidation) was concerned there was no proceedingly in the eye of the law before respondent No. 1 and as such the Miscellaneous Cases Nos. 26 and 27 of 1955 of which notices had been sent to the appellant were not maintainable; and (2) that no notice of the adjudication proceedings arising out of the aforesaid Notification dated December 2, 1954, " as at any stage given to the appellant who was in possession under the terms of the lease granted by the Court ; that the appellant being lessee under orders and under terms of the lease approved by the Court was liable for breach of the terms of the lease, if any, and that also to the Court alone; that there was no violation of section 33 of the , if the appellant bona fide acted up to the terms of the lease and being itself no party to any adjudication proceedings before any Tribunal or before respondent No. 1 there could be no breach of section 33 of 261 the Act and as such no application under section 33A.of the, Act could be maintained against the appellant.
No affidavit in reply was filed by or on behalf of any of the respondents and the application came up for hearing before Ramaswami, C. J. and Raj Kishore Prasad, J. who delivered the judgment of the Court on September 20, 1956, dismissing the application with costs.
Assuming but without, expressing any opinion that the reference made by the State Government under section 10(1) of the Industrial Disputes Act was a legal proceeding within the meaning of section 171 of the Indian Companies Act the High Court held that section 10(1) of the Industrial , Disputes Act, was not controlled by section 171 of the Indian Companies Act and therefore no leave of the Court was necessary before making a reference of the Industrial Disputes under section 10 (1) of the Industrial Disputes, Act.
It was also of opinion that even though the reference under section 10(1) of the Industrial Dispute Act was made by the State Government on December 2, 1954, and the applicant had taken the lease of the said Mills subsequently i. e., on December 6, 1954, the applicant was an " employer " within the meaning of the term used in sections 33 and 33A of the Act, and that it was not necessary for the application of either of those sections that the employer who discharges or punishes the workmen or who alters the conditions of service of the workmen should be the identical employer concerned in the industrial dispute which is the subject matter of adjudication.
It was sufficient for invoking the provisions of either of those sections that there is the relationship of employer and employee at the time the workman is discharged or punished or at the time his conditions of service are altered to his prejudice.
It was further of opinion that even though the liquidator was not made a party to the reference made by the State Government under section 10(1) of the , the Gaya Sugar Mills Ltd., Guraru was specifically mentioned as one.
of the parties in Appendix I, that the Gaya Sugar Mills Ltd., continued to be a legal personality though an order for winding up had been made and that there 262 fore the Company was properly made a party to the reference under section 10(1) of the Act.
The fact that the notice given to the liquidator on January 11, 1955, might have been received late by the liquidator did not, in the opinion of the Court, make any difference to the position inasmuch as the award of the Industrial Tribunal was made on February 17, 1955, i. e., long after the date of the notice and there was no lack of jurisdiction in the Industrial Tribunal to make the award valid and binding on the Gaya Sugar Mills Ltd., Guraru.
The High Court accordingly rejected the application as stated above.
The applicant applied for leave to appeal to this Court on November 9, 1956, but the High Court refused to grant the certificate on the ground that the proceeding for grant of a writ of certiorari under article 226 is not a civil proceeding within the meaning of article 133 of the Constitution.
The applicant thereupon applied for and obtained from this Court on April 1, 1957, special leave to appeal and the appeal has now come up for hearing and final disposal before us.
The two main contentions which were urged before us by the learned Counsel for the appellant were: (1) that the Gaya Sugar Mills Ltd., Guraru had been taken into liquidation and respondent No. 3 had been appointed the liquidator thereof; that the reference made by the State Government to the Industrial Tribunal on December 2, 1954, involved considerable financial burden on the said Mills and the State Government ought to have obtained the sanction of the Court under section 171 of the Indian Companies Act before making a reference of the industrial disputes to the Industrial Tribunal under section 10(1) of the , qua the said Mills and that not having been done, the reference was bad in law and there was no question of the applicability of either section 33 or section 33A of the Act, and (2) that on a true construction of sections 33 and 33A of the Act, the " employer " therein mentioned could only be the " employer " concerned in the industrial dispute which was the subject matter of reference, that the applicant had taken the lease of the said: 263 sugar Mills on December 6, 1954, 4 days after the date of reference made by the State Government under, section 10(1) of the Act, and that therefore the applicant was not an " employer " within the meaning of the terms as used in section 33 or section 33A of the Act, and even if the allegations made by the applicants in Miscellaneous Cases Nos. 26 and 27 of 1955 before respondent No. 1 were correct, it was not necessary for the applicant to have obtained the permission of the Industrial Tribunal under a. 33 of the Act, and therefore the said applications under section 33A of the Act, filed by res pondents 4 to 23 were not maintainable.
It will be appropriate at this stage to set out the relevant sections of the Indian Companies Act and the (as they then stood) which fall to be considered by us in this appeal.
section 171 (Indian Companies Act): " Suits stayed on winding up order: When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
" S.10(1) (Industrial Disputes Act, 1947):Reference of disputes to Boards, Courts or Tribunals: Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing (a) refer the dispute to a Board for promoting a settlement thereof; (b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry or (c) refer the.
dispute or any matter appearing to be connected with or relevant to, the dispute to a Tribunal for adjudication: Provided that where the dispute relates to a public utility service and a notice under section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so 264 to do, make a reference under this subsection not withstanding that any other proceedings under this Act in respect of the dispute may have commenced," section 33 (Ibid): Conditions of service etc., to remain unchanged during pendency of proceedings During the pendency of any conciliation proceedings or proceedings before a Tribunal in respect of any industrial dispute, no employer shall (a) alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable, to them immediately before the commencement of such proceedings; or (b) discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute, save with the express permission in writing of the conciliation officer, Board or Tribunal, as the case may be." 33 A (Ibid): Special provisions for adjudication as to whether conditions of service etc., changed during pendency of proceedings: " Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Tribunal and on receipt of such complaint that Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provision of this Act shall apply accordingly.
" As to (1): Section 171 of the Indian Companies Act occurs in Part V which relates to the winding up of companies and prescribes that once a winding up order has been made no suit or other legal proceedings shall be proceeded with or commenced against the Company except by leave.of the winding up Court and subject to such terms as the Court may impose.
The Court is in custody of all.
the properties and assets of the Company through the liquidator and is in control of the winding up proceedings with a view to the proper realization of the assets: and, the equitable, 265 distribution thereof amongst the creditors of the Company.
No suit or other legal proceeding can therefore be proceeded with or, commenced against the ' Company except by leave of the Court and such leave is a necessary prerequisite of the prosecution of such legal proceeding.
In order to decide the question of the applicability of section 171 of the Indian Companies Act it has to be ascertained (a) whether the reference in question is a proceeding against the Company, and, if So (b) whether such reference can be said to be a legal proceeding within the meaning of section 171 of the Indian Companies Act.
There has been unfortunately a considerable confusion of thought in the court below and the facts have not been properly appreciated.
The first question to determine was who was the party to the reference.
It appears to have been assumed that the Gay a Sugar Mills Ltd., was a party to the reference and that the only defect in the order of reference was that the liquidator was not made a party to the refer ence.
This difficulty was sought to be got over by holding that the Gaya Sugar Mills Ltd., continued to be a legal personality though an order for winding up had been made, that the Company had not ceased to exist as a legal.
entity, and, therefore, the Company was properly made a party to the reference under section 10(1) of the .
This was, however, not the correct position on a true interpretation of the terms of reference.
The reference was between the managements of the Sugar factories specified in Appendix I and their workmen represented by the Unions specified in Appendix 11.
Gaya Sugar Mills Ltd., Guraru was mentioned as item 2 in Appendix I but it is quite clear that what was intended to be made a party to the reference under this item was the: management of the Sugar factory which belonged to the Company called the Gaya Sugar Mills Ltd., whoever.
that management may be.
The mention of the Company was to indicate and to point out the particular factory whose management for the time being was to be one of the parties to the reference and 34 266 it required to be ascertained who was comprised within the " management " of the Mills.
The State Government could not have been oblivious of the fact that the Company had gone into liquidation and a liquidator of the Company had been appointed by the court and was leasing out the factory to different lessees.
If the Company itself were a party to the reference the liquidator ought to have been mentioned there as such but that apparently was not done for the simple reason that the factory was being worked by the lessees under the terms of the leases duly sanctioned by the court.
The liquidator was therefore not in management of the factory and the only persons who were in management were the then lessees to whom leases were granted by the liquidator with the sanction of the court.
The Industrial Tribunal was obviously in error when it gave notice of the proceedings to the liquidator.
The liquidator was no more in management of the factory and was therefore not entitled to be served with any notice; the then lessees were in management and they were the only parties to whom notice of the proceedings should have been given.
The liquidator no doubt wrote to the Industrial Tribunal that he had received the notice too late for him to attend.
This letter of the liquidator was treated with scant courtesy by the Industrial Tribunal who merely endorsed at the foot of the letter that the hearing had already concluded and nothing further than enquiring of the Post Office as to the reason of the delay in the delivery of the letter could be done.
The Industrial Tribunal proceeded to make its award on February 17, 1955, without having before it the management of the factory, viz., the lessees who had obtained the lease of the said Mills from the liquidator and for all practical purposes the said award was ex parte so far as the lessees who were at the date of the reference in management of the factory and were obviously intended to be a party to the reference were concerned.
The appellant came into management of the factory after the reference and could not at the date of the reference be in contemplation of the State Government as a party and in any 267 event, no notice whatever was given to the appellant ' of the proceedings before the Tribunal.
By no stretch of imagination could it be said that the Company (In Liquidation) was a party to the reference, the said Mills having been given on lease to the lessees who worked the Mills thereafter not for and on behalf of the Company but on their own account, they being responsible for the profit and loss in the working of the Mills.
The Company thus not being a party to the reference the proceedings which were commenced on December 2, 1954, before the Tribunal were not proceedings against the Company (In Liquidation).
This being the position on a true construction of the terms of the notification by which the reference was made the question whether the reference was a legal proceeding within the meaning of section 171 Of the Indian Companies Act does not arise for our decision and we prefer not to express any opinion on that part of the question.
As to (2): The next question to consider is the connotation of the term " employer " as used in sections 33 and 33A of the .
These sections postulate the pendency of a proceeding of an industrial dispute.
It requires two to raise a dispute.
An Industrial Dispute is thus defined in section 2(k) of the Act:,, Industrial dispute " means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with conditions of labour, of any person.
If this definition is bodily lifted from section 2 (k) and substituted for the expression " industrial dispute " ,occurring in section 33 and sections 33 and 33A of the Act are then read, it will at once become clear that the employer can be no other than the employer with whom the workers had the industrial dispute and cannot mean merely an employ who discharges or punishes or who alters the conditions of service of the workmen concerned.
If the interpretation adopted by the High Court was correct it would mean that the Industrial 668 dispute which is referred for adjudication to the Industrial Tribunal may have arisen between employer A and his workmen but during the pendency of those proceedings employer B who had nothing to do with employer A would be prevented from discharging or punishing the workmen or altering their conditions of service, provided only that the workmen concerned happened to be interested in the industrial dispute which was pending before the Industrial Tribunal.
If there is no connection at all between the employer A and the employer B in the illustration given above, one fails to see how a mere identity of the establishments or the identity of the workmen could be enough to bring the employer B within the purview of these sections.
The very purpose of the enactment of as.
33 and 33A of the is, as observed by this Court in the Automobile Products of India Ltd. vs Bukmaji Bala (1). " to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of those proceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relation between the employer and the workmen.
To achieve this object a ban has been imposed upon the ordinary right which the employer has under the ordinary law governing a contract of employment.
Section 22 of the 1950 Act and section 33 of the 1947 Act which impose the ban also provide for the removal of that ban by the granting of express permission in writing in appropriate cases by the authority mentioned therein.
" The scope of the enquiry under section 33 of the has also been the subject matter of adjudication by this Court and it was held in Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union (2) that the authority: " concerned would institute an enquiry and come to the conclusion whether there was a prima facie case (1) [1955] i S.C.R. 1241, 1256.
(2) ; , 787. 269 made out for the discharge or dismissal of the workman and the employer, his agent or manager was not actuated by any improper motives or did not resort to any unfair practice or victimisation in the matter of the proposed discharge or dismissal of the workman.
" A similar ratio would apply where an employer changes the conditions of service of the workmen concerned.
If this be the criterion for determining whether an employer was entitled to discharge or punish the workmen or alter their conditions of service without the permission in writing of the authority concerned that employer cannot be any other than the one who is concerned in the industrial dispute which is the subject matter of adjudication.
If employer B has nothing to do at all with employer A who is really the party concerned in such industrial dispute which is the subject matter of adjudication, there will be no question of attributing any improper motives or unfair practice or victimization to the employer B in regard to the action which he proposed to take against the workmen.
Whether the employer B would be entitled to such action or not would have to be determined in other proceedings which may be taken in the matter of industrial disputes which may subsequently arise between himself and his workmen after such action was taken.
But he would certainly not be bound before taking such action to seek the permission in writing of the Industrial Tribunal before which an industrial dispute was pending as between those workmen and another employer with whom he had no concern.
The latter interpretation is therefore more in consonance with the principle underlying the enactment of section 33 of the and it must be held that the employer contemplated by sections 33 and 33A of the must be the identical employer concerned in the industrial dispute which is the subject matter of adjudication.
In other words, the employer contemplated by sections 33 and 33A of the must be the employer with whom the workmen mentioned as aggrieved under section 33 had a subsisting relationship of employer 270 and employees at the commencement of the proceedings referred to in those sections.
The identity of the employer at the commencement of the reference with the employer who intends to take proceedings within the ban of section 33 of the Act must be established and if the latter has no concern with or relationship with the former sections 33 and 33A of the Act do not dome into operation at all.
Such identity could in the event of change in the employers be established by showing that the latter employer was merely a nominee or Benamidar of the former or that on the analogy of section 18(3)(c) of the he came with in the description of " his heirs, successors or assigns in respect of the establishment to which the dispute relates, in which event the award made by the Indus.
trial Tribunal would be binding on him just as much as on the former employer of the workmen concerned.
These are, however, the only cases in which according to the provisions of the the identity of the employers at the commencement of the proceedings and the intended discharge or punishment or change in the conditions of service of the workmen concerned could be established and unless the employer who intended to discharge or punish or change the conditions of service of the workmen was in this sense identical with the employer who was concerned in the industrial dispute which is the subject matter of adjudication no question could arise of the operation of section 33 or section 33A of the .
What then was the position of the appellant under the reference in question ? It does not appear from the record as to who was the management of the said Mills on December 2, 1954.
The lease in favour of the old lessees, Guraru Cane Development and Cane Marketing Union Ltd., had apparently come to an end by efflux of time, the period of the lease presumably being up to the end of the crushing season which would end some time in the month of November, 1954.
An application had been made by the liquidator to grant a lease in favour of the appellant and this application was granted by the Court on December 3, 1954, so that in any event before December 3, 1954, the appellant could 271 not be said to be in management of 'the said Mills.
As a matter of fact, the lease was executed in favour of the appellant on December 6, 1954, and the possession of the said Mills was also given to the appellant by the liquidator on the same day.
It could not, therefore, be said that the appellant was comprised within the description of the management of the Gaya Sugar Mills Ltd., at the date when the reference was made by the State Government.
If that was so, a reference Of a previous date, without anything more, could not comprise the appellant within its scope and that appears to have been the position as understood even by the Industrial Tribunal which gave no notice to the appellant but gave notice of the proceedings erroneously as we hold to the liquidator of the Company.
The appellant was not in management of the said Mills and it could not be bound by the reference because at no stage was any attempt made either to amend the terms of the reference or even to serve on the appellant a notice of the proceedings which were to take place before the Industrial Tribunal.
Under the Industrial Disputes (Central) Rules, 1947, enacted by the Central Government in exercise of the powers conferred upon it by section 38 of the , intimation of the place and time of hearing had got to be given to the parties to the reference (Rule 10); and the Industrial Tribunal was enjoined to call upon the parties at the first sitting to state their case (Rule 11) the only power given to the Industrial Tribunal to proceed ex parte was when a party to the proceedings failed to attend or to be represented without good cause shown (Rule 19) ; and the representatives of the parties appearing before an Industrial Tribunal were to have the right of examination, cross examination and of addressing the Tribunal when evidence had been called (Rule 24) : The 'whole of this procedure envisaged the parties to the reference being properly notified of the proceedings before the Industrial Tribunal and taking part therein either by themselves or through, their authorised representatives.
The fact that no such notice was given to the appellant by the Industrial Tribunal goes to show that in the circum 272 stances that obtained the appellant was certainly not understood by the Tribunal as having been a party to the reference and it could not be said on the terms of the reference itself which was made on December 2, 1954, that the appellant, which came into existence as the lessees of the said Mills on December 6, 1954, was a party to the said reference.
If the old lessees were in management of the said Mills on December 2 1954, there was no identity of employers as between them and the appellant, the appellant certainly did not claim under the old lessees nor could it be described as their " heirs, successors or assigns " in respect of the establishment to which the dispute related within the meaning of section 18(3) (c) of the , There is no suggestion whatever that the appellant was or is a benamidar of the previous lessees.
In no event could the appellant therefore be held to be, bound either by the reference or the award made by the Industrial Tribunal, the identity of the employers at the date of the reference with the employers at the time when the acts complained of in the applications under section 33 A of the were purported to be done by them not having been established.
If that is the true position, no question of the appellant obtaining written permission of the Industrial Tribunal under section 33 of the Act for discharging or punishing or for effecting a change in the conditions of service of the workmen concerned could arise.
If no such permission were needed, section 33A of the Act also could not come into operation and the applications in Miscellaneous Cases Nos. 26 and 27 of 1955 we 're not maintainable.
The result is no doubt unfortunate ; because the Industrial disputes which were referred to the Industrial Tribunal by the reference in question were general in their nature and would comprise within their scope the workmen who were working in the Gaya Sugar Mills Ltd., at all relevant times.
The appellant came in management of the said Mills from and after December 6, 1954, and it was certainly intended that these, disputes which had either existed or were apprehended between the appellant on the one hand and the workmen 273 working in the said Mills on the other should be adjudicated upon under the terms of that reference.
If the appellant could be comprised within the description of the " management " of the said Mills at the date of the reference, viz., December 2, 1954, the object and the purpose of the reference qua the workmen of the said Mills would be accomplished.
The difficulty, however, is that the several managements which would come into existence on successive leases being granted by the Court in the present case cannot be said to have been comprised within the term "managements of the Sugar factories specified in Appendix I" even though the Gaya Sugar Mills Ltd., Guraru is mentioned as item 2 therein.
Such a construction would make the several successive lessees who came into existence during the whole of the period when the reference was pending before the Industrial Tribunal parties to the reference involving fresh notices to be issued, fresh statements of case to be furnished, fresh hearing to be granted, to each of the successive lessees under the Industrial Disputes (Central) Rules, 1947, a result which certainly could not have been contemplated by the State Government when the reference was made.
It, therefore, follows that the appellant was not by any count a party to the reference dated December 2, 1954, and not being such a party was not an "employer" within the meaning of sections 33 and 33 A of the qua the workmen who filed the applications in Miscellaneous Cases Nos. 26 and 27 of 1955.
If the workmen felt that they have been victimised or that there had been an unfair labour practice, they could perhaps raise fresh industrial disputes and press the State Government to make a fresh reference of their industrial disputes under section 10(1) of the Act, as to which we say nothing, but it is quite clear to us that the workmen cannot in the circumstances of this case raise an industrial dispute indirectly by having recourse to an application under section 33 A of the Act.
In the premises if the appellant was not bound, as we hold it was not, to ask for the written permission of the 35 274 Industrial Tribunal before discharging, punishing or effecting a change in the conditions of service of the workmen concerned no application under section 33 A of the Act could be maintained against it even on the assumption that the allegations made in the said applications were correct.
The result, therefore, is that the proceedings in Mis cellaneous Cases Nos. 26 and 27 of 1955 before the res pondent No. 1, Industrial Tribunal, Bihar, Patna are without jurisdiction and liable to be quashed.
The appeal of the appellant will therefore be allowed, the order made by the High Court on September 20, 1956, will be set aside and a writ of certiorari will issue against respondent No. 1 quashing the proceedings in the said Miscellaneous Cases Nos. 26 and 27 of 1955.
The appellant will be entitled to its costs throughout against the contesting respondents.
Appeal allowed.
| IN-Abs | Gaya Sugar Mills Ltd. went into liquidation and the sugar factory owned by it was leased out to the appellant by the liquidator with the permission of the Court on December 6, 1954, to be worked in terms of the lease which provided, inter alia, that the lessee would neither be liable for any of the liabilities of the company, or of the liquidator or the outgoing lessees nor bound to engage any of their employees or those working from before except those specifically mentioned in the lease.
On December 2, 1954, i.e. four days before the appellant came into possession of the sugar factory, the Bihar Government issued a notification referring a dispute between the managements of certain specified sugar factories, including Gaya Sugar Mills Ltd., and their workmen represented by their Unions, for adjudication to the Industrial Tribunal constituted by the respondent No. i. No notice was given to the appellant and proceedings against it were all exparte.
Complaints, however, were made before the Industrial Tribunal by two batches of workmen against the appellant under section 33A of the Industrial Disputes Act alleging in one case that they had been discharged and in the other that the conditions of their service had been changed by the appellant without first obtaining the permission of the Tribunal under section 33 Of the Act.
It was asserted on behalf of the appellant that there was no breach of the terms of the lease and no contravention of section 33 Of the Act.
After unsuccessfully moving the High Court under articles 226 and 227 Of the Constitution for a writ of certiorari quashing the said proceedings, the appellant came up to this Court by special leave and it was contended on its behalf that (1) no leave of the Court having been obtained under section 171 Of the Indian Companies Act by the State Government before it made the reference under section 10(1) of the Industrial Disputes Act, the reference was bad in law and that (2) the word 'employer ' in sections 33 and 33A of the Industrial Disputes Act meant only such employer as was actually concerned with the industrial dispute which was the subject matter of the reference and the appellant having come into possession of the Mills after the reference, could not be an employer within the meaning of those sections.
255 Held, that the terms of the notification properly construed clearly showed that what was sought to be made a party to the reference was not the company itself but its management at the date of the reference and, therefore, no question of leave of the court under section 171 Of the Indian Companies Act could arise.
The word 'employer ' occurring in sections 33 and 33A of the Industrial Disputes Act meant the identical employer concerned with the industrial dispute, which was the subject matter of the adjudication, and could not include an employer who merely happened to discharge or punish or alter the conditions of service of workmen unless such employer could be shown to be a mere nominee or bentamiday of the former or fell within the category of his heirs, successors or assigns within the meaning Of section 18(3)(c) of the Act.
Since, in the instant case, the appellant satisfied none of these tests, it was not bound to seek the permission of the Tribunal under section 33 Of the Act and the proceedings under section 33A of the Act against it must be quashed.
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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-Abs | 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]
|
65 of 1958.
Petition under Article 32 of the Constitution of India for enforcement of fundamental rights.
AND CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 112 of 1958.
277 Appeal by special leave from the judgment and order dated February 28, 1958, of the Punjab High Court in Criminal Revision No. 145 of 1958.
N. C. Chatterjee and Nanak Chand, for the petitioner and the appellant.
H. N. Sanyal, Additional Solicitor General of India, H J. Umrigar, R. H. Dhebar and T. M. Sen, for the respondent in both the matters.
November 4.
The Judgment of Das, C. J., Bhagwati, Sinha and Wanchoo, JJ. was delivered by Sinha J., Subba Rao, J., delivered a separate judgment.
SINHA, J. Petition Nos.
65 of 1958, under article 32 of the Constitution, on behalf of one Thomas Dana, and Criminal Appeal No. 112 of 1958, by special leave to appeal granted to one Leo Roy Frey (appellant), raise substantially the same question of some constitutional importance, and have, therefore, been heard together, and will be covered by this judgment.
The main question for determination in these two cases, is whether there has been an infringement of the constitutional protection granted under article 20(2) of the Constitution.
For the sake of brevity and convenience, we shall refer to Thomas Dana as the first petitioner, and Leo Roy Frey, as the second petitioner, in the course of this Judgment.
The relevant facts are these : The first petitioner is a Cuban national.
He came to India on a special Cuban passport No. 11822, dated November 16, 1954, issued by the Government of the Republic of Cuba.
The second petitioner is a citizen of the United States of America, and holds a U.S.A. passport No. 45252, dated July 1, 1955.
In May, 1957, both the petitioners were in Paris.
There, the second petitioner purchased a motor car from an officer of the American Embassy.
He is said to have sold that car to the first petitioner on May 14, 1957, and the same month, it was registered in the first petitioner 's name.
The two petitioners sailed by the same steamer at the end of May. The car was also shipped by the same steamer.
They reached Karachi on June 11, 1957, and from there, flew to Bombay.
From June 11 to 19, 1957, they 278 stayed together in Hotel Ambassador in Bombay.
The car was delivered to the first petitioner in Bombay on June 13, and on June 19, both of them flew from Bombay to Delhi.
In Delhi also, they stayed together at Hotel Janpath.
The first petitioner received the car at Delhi by rail on June 22, and the same night, the two petitioners left by the said car for Amritsar, where they reached after mid night, and stayed in Mrs. Bhandari 's Lodge.
On the morning of June 23, they reached Attari Road Land Customs Station by the same car (No. CD On arrival at Attari, the petitioners presented themselves for completing customs formalities for crossing over to Pakistan.
The Customs officers at Attari Road Land Customs Station, handed over to them the Baggage Declaration forms, to declare the articles that they had in their possession, including any goods which were subject to the Export Trade Control and/or Foreign Exchange Restrictions, and/or were dutiable.
Both the petitioners completed the forms aforesaid, and handed those completed statements over to the Customs officers.
The first petitioner declared the under noted articles: Indian currency Rs. 40 Pakistan currency Rs. 50 U. section Dollars $. 30.00 Gold ring I (valued at Rs. 100) Personal effects Valued at $ 100.00 Car Valued at Rs. 15,000 On suspicion, the Customs officers searched his baggage which was being carried in the car aforesaid.
His person was also searched, and as a result of the search, the under noted articles which had not been declared by him, were recovered : Indian currency Rs. 900 Pakistan currency Rs. 250 U. section Dollars $ 1.00 Hong Kong Dollars $ 1100 Thailand currency 78 Pocket radio 1 Time piece 1 279 The second petitioner, in his statement, had declared the following articles: Indian currency Rs. 40 U. section Dollars $ 500.00 U. section Coins $ 1.23 Belgian coins BF 26.00 French coins BF 205.00 Italian coins L. 400.00 Wrist watch I Personal effects Rs. 1,00,000 On suspicion, the Customs staff searched the person of the second petitioner also.
They recovered from him one pistol of 22 bore with 48 live cartridges of the same bore.
As he could not produce a valid licence under the Indian law, the pistol and the cartridges were handed over to the police, for taking appropriate action under the Indian Arms Act.
The car was thoroughly searched, and as a result of the intensive search and minute examination on June 30, 1957, a secret chamber above the petrol tank, behind the hind seat of the car, was discovered.
The chamber was opened, and the following things which had not been declared by the petitioners, were recovered from inside the secret chamber: Indian currency Rs. 8,50,000 U. section Dollars $ 10,000.00 Empty tin containers 10(The containers bore (rectangular) marks to indicate that they were used for carrying gold bars) Mirror 1.
besides other insignificant things.
Under the Indian law, Indian currency over Rs. 50, Pakistan currency over Rs. 100 and any foreign currency, could not be exported out of India, without the permission of the Reserve Bank of India.
The export of a pocket radio also required a valid licence under the Imports and Exports (Control) Act, 1947.
The petitioners could not produce, on demand the requisite permission from the Reserve Bank of India. ' or the licence for the export of the pocket radio, or a permit for exporting 280 a time piece, as required by the .
The car also was handed over to the police for necessary action.
The offending articles, namely Indian currency Rs.8,50,900 Pakistan currency Rs.250 U. section Dollars $ 10,001.00 Hong Kong Dollar $.1.00
Thailand currency T.78.00 pocket radio, and the time piece, etc., were seized under section 178 of the .
Both the petitioners were taken into custody for infringement of the law.
On July 7, both the petitioners were called upon to show cause before the Collector of Central Excise and Land Customs, New Delhi, why a penalty should not be imposed upon them under section 167(8) of the , and why the seized articles aforesaid, should not be confiscated under section 167(8) and section 168 of the Act.
Both the petitioners objected to making any statements in answer to the show cause notice, on the ground that the matter was.
subjudice and any statement made by them, might prejudice them in their defence.
But at the same time, the second petitioner disclaimed any connection with the car in which the two petitioners were travelling, and which had been seized.
After some adjournments granted to the petitioners to avail themselves of the opportunity of showing cause, the Collector of Central Excise and Land Customs, New Delhi, passed orders on July 24, 1957.
He came to the conclusion that the petitioners had planned to smuggle Indian and foreign currency out of India, in contravention of the law.
They had been acting in concert with each other, and had, throughout the different stages of their journey from France to India, been acting together, and while leaving India for Pakistan, were travelling together by the same car, until they reached the Attari Road Land Customs Station, on their way to Pakistan.
He directed that the different kinds of currency which had been seized, as aforesaid, from the possession of the petitioners, be " absolutely confiscated " for contravention of section 8(2) of the Foreign Exchange Regulation Act, 1947, read with sections 23 A 281 and 23 B of the Act.
He also directed the confiscation of the car aforesaid, which could be redeemed on payment of a " redemption fine " of Rs. 50,000.
He also ordered the confiscation of the pocket radio and the time piece and other articles seized, as aforesaid, under section 167(8) of the , read with section 5 of the Imports and Exports (Control) Act, 1947, and section 7 of the .
He further imposed a personal penalty of Rs. 25,00,000 on each of the petitioners, under section 167(8) of the .
After making further inquiry, on August 12, 1957, the Assistant Collector of Customs and Central Excise, Amritsar, under authority from the Chief Customs Officer, Delhi, filed a complaint against the petitioners and a third person, named Moshe Baruk of Bombay, (since acquitted), under section 23, read with section 8, of the Foreign Exchange Regulation Act, 1947, and section 167 (81) of the .
The petition of complaint, after stating the facts stated above, charged the accused persons with offences of attempt ing to take out of India Indian and foreign currency, in contravention of the provisions of the Acts referred to above.
After recording considerable oral and documentary evidence, the learned Additional District Magistrate, Amritsar, by his judgment dated November 13, 1957, convicted the petitioners, and sentenced them each to two years ' rigorous imprisonment under section 23, read with section 23 B, of the Foreign Exchange Regulation Act, six month 's rigorous imprisonment under section 120 B(2) of the Indian Penal Code, the sentences to run con currently.
It is not necessary to set out the convictions and sentences in respect of the third accused Moshe, who was subsequently acquitted by the High Court of Punjab, in exercise of its revisional jurisdiction.
The learned Magistrate also, perhaps, out of abundant caution, directed that " The entire amount of currency and foreign exchange and the car in which the currency had been smuggled as well as the sleeveless shirt exhibit P. 39 and belt exhibit P. 40 shall be 36 282 confiscated to Government ".
This order of confiscation was passed by the criminal court, notwithstanding the fact, as already stated, that the Collector of Central Excise and Land Customs, New Delhi, had ordered the confiscation of the offending articles under section 167(8) of the and the other related Acts referred to above.
On appeal by the convicted persons, the learned Additional Sessions Judge, Amritsar, by his judgment and order dated.
December 13, 1957, dismissed the appeal after a very elaborate examination of the facts and circumstances brought out in the large volume of evidence adduced on behalf of the prosecution.
It is riot necessary, for the purposes of these cases, to set out in detail the findings arrived at by the appellate court, or the evidence on which those conclusions were based.
It is enough to state that both the courts of fact agreed in coming to the conclusion that the accused persons had entered into a conspiracy to smuggle contraband property out of this country.
The petitioners moved the High Court of Judicature for the State of Punjab, separately, against their convictions and sentences passed by the courts below, as aforesaid.
Both the revisional applications were dismissed summarily by the learned Chief Justice.
By his order dated February 28, 1958, the learned Chief Justice refused to certify that the case was a fit one for appeal to this Court.
The petitioners then moved this Court for, and obtained, special leave to appeal from the judgment and orders of the courts below, convicting and sentencing them, as stated above.
They also moved this Court for writs of habeas corpus.
The petition of the first petitioner for a writ of habeas carp= was admitted, and was numbered as petition No. 65 of 1958, and a rule issued.
The writ petition on behalf of the second petitioner was dismissed in limited.
All these orders were passed on April 28, 1958.
Subsequently, the first petitioner moved this Court for revocation of the special leave granted to him, and for an early hearing of his writ petition No. 65 of 1958, as the points for consideration were common to both the cases.
This 283 Court granted the prayers by its order dated May 13,1958.
Before dealing with the arguments advanced on behalf of the petitioners, in order to complete the narrative of events leading up to the filing of the cases in this Court, it is necessary to state that the petitioners had moved this Court separately under article 32 of the Constitution, against their prosecution in the Magistrate 's court, after the aforesaid orders of confiscation and penalty, passed by the Collector of Customs.
They prayed for a writ of certiorari and/or prohibition, and for quashing the proceedings.
There was also a prayer for a writ in the nature of habeas corpus.
On that occasion also, the protection afforded by article 20(2) of the Constitution, was pressed in aid of the petitioners ' writ applications.
This Court, after hearing the parties, dismissed those writ petitions, holding that the charge against the petitioners included an offence under s.120B of the Indian Penal Code, which certainly was not one of the heads of charge against them before the Collector of Customs.
This Court, therefore, without deciding the applicability of the provisions of article 20(2) of the Constitution, to the facts and circumstances of the present case, refused to quash the prosecution.
The question whether article 20(2) of the Constitution, barred the pro secution of the petitioners under the provisions of the and the Foreign Exchange Regulation Act, was apparently left open for future determination, if and when the occasion arose.
In view of the events that have happened since after the passing of the order of this Court, dated October 31, 1957, (reported in ; , it has now become necessary to determine that controversy.
It was vehemently argued on behalf of the petitioners that the prosecution of the petitioners under the provisions of the Acts aforesaid, and their convictions and imposition of sentences by the courts below, infringe the protection against double jeopardy enshrined in article 20(2) of the Constitution, which is in these terms 284 " No person shall be prosecuted and punished, for the same offence more than once.
" It is manifest that in order to bring the petitioners ' case within the prohibition of article 20(2), it must be shown that they had been " prosecuted " before the Collector of Customs, and " punished " by him for the " same offence " for which they have been convicted and punished as a result of the judgment and orders of the courts below, now impugned.
If any one of these three essential conditions, is not fulfilled, that is to say, if it is not shown that the petitioners had been it prosecuted " before the Collector of Customs, or that they had been " punished " by him in the proceedings before him, resulting in the confiscation of the properties aforesaid, and the imposition of a heavy penalty of Rs. 25,00,000, each, or that they had been convicted and " sentenced" for the " same offence ", the petitioners will have failed to bring their case within the prohibition of article 20(2).
It has been argued, in the first instance, on behalf of the petitioners that they had been " prosecuted " within the meaning of the article.
On the other hand, the learned Additional Solicitor General has countered that argument by the contention that the previous adjudication by the Collector of Customs, was by an administrative body which has to act judicially, as held by this Court in F. N. Roy vs Collector of Customs(1), and reiterated in Leo Roy Frey vs Superintendent, District Jail, Amritsar (2); but the Collector was not a criminal court which could in law, be said to have tried the petitioner for an offence under the Indian Penal Code, or under the penal provisions of the other Acts mentioned above.
It is, therefore, necessary first to consider whether the petitioners had really been prosecuted before the Collector of Customs, within the meaning of article 20(2).
To " prosecute ", in the special sense of law, means, according to Webster 's Dictionary, " (a) to seek to obtain, enforce, or the like, by legal process; as, to prosecute a right or a claim in a court of law.
(b) to pursue (a person) by legal proceedings for redress or (1) ; (2) ; 285 punishment; to proceed against judicially; espy., to accuse of some crime or breach of law, or to pursue for redress or punishment of a crime or violation of law, in due legal form before a legal tribunal; as, to prosecute a man for trespass, or for a riot." According to Wharton 's Law Lexicon, 14th edn., p. 810, " prosecution " means " a proceeding either by way of indictment or information,, in the criminal courts, in order to put an offender upon his trial.
In all criminal prosecutions the King is nominally the prosecutor.
" This very question was discussed by this Court in the case of Maqbool Hussain vs The State of Bombay (1), with of reference to the context in which the word " prosecution " occurred in article 20.
In the course of the judgment, the following observations, which apply with full force to the present case, were made: ". . and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure.
" In that case, this Court discussed in detail the provisions of the , with particular reference to Chapter XVI, headed " Offences and Penalties ".
After examining those provisions, this Court came to the following conclusion: "We are of the opinion that the Sea Customs Authorities are not a judicial tribunal and the adjudgeing of confiscation, increased rate of duty or penalty under the provisions of the do not constitute a judgment or order of a court or judicial tribunal necessary for the purpose of supporting a plea of double jeopardy." The learned counsel for the petitioners, did not categorically attack the correctness of that decision, but suggested that that case could be distinguished on the ground that in the present case, unlike the case then before this Court, a heavy penalty of Rs. 25,00,000 on each of the petitioners, was imposed by the Collector of Central Excise and Land Customs, (1) ; , 738, 739, 743. 286 besides ordering confiscation of properties and currency worth over 81 lacs.
But that circumstance alone cannot be sufficient in law to distinguish the previous decision of this Court, which is otherwise directly in point.
Simply because the Revenue Authorities took a very serious view of the smuggling activities of the petitioners, and imposed very heavy penalties under item 8 of the Schedule to section 167 of the , would not convert the Revenue Authorities into a court of law, if the Act did not contemplate their functioning as such.
That the did not envisage the Chief Customs Officer or the other officers under him in the hierarchy of the Revenue Authorities under the Act, to function as a Court, is made absolutely clear by certain provisions of that Act.
The most important of those is the new section 187A, which was inserted by the Sea Customs (Amendment) Act, (21 of 1955).
That section is in these terms:" 187A. No Court shall take cognizance of any offence relating to Smuggling of goods punishable under item 81 of the Schedule to section 167, except upon complaint in writing, made by the Chief Customs officer or any other officer of Customs not lower in rank than an Assistant Collector of Customs authorized in this behalf by the Chief Customs officer.
" This section makes it clear that the Chief Customs Officer or any other officer lower in rank than him, in the Customs department, is not a " court ", and that the offence punishable under item 81 of the Schedule to section 167, cannot be taken cognizance of by any court, except upon a complaint in writing, made, as prescribed in that section.
This section, in our opinion, sets at rest the controversy, which has been raised in the past upon certain expressions, like " offences " and " penalties used in Chapter XVI.
These words have been used in that Chapter in their generic sense and not in their specific sense under the penal law.
When a proceeding by the Revenue Officers is meant, as is the case in most of the items in the Schedule to section 167, those officers have been empowered to deal with the offending articles by way of confiscation, or with the person 287 infringing those rules, by way of imposition of penalties in contradistinction to a sentence of imprisonment or fine or both.
When a criminal prosecution and punishment of the criminal, in the sense of the Penal law, is intended, the section makes a specific reference to a trial by a Magistrate, a conviction by such Magistrate, and on such conviction, to imprisonment or to fine or both.
In this connection, reference may be made to the penalties mentioned in the third column against items 72, 74, 75, 76, 76A, 76B, 77, 78 and 81, which illustrate the latter class of the penalty in column 3.
The penalties mentioned in the third column of most of the items of the Schedule to section 167 of the Act, do not make any reference to a conviction by a Magistrate and punishment by him in terms of imprisonment or of fine or of both.
For example, item 76C, which was inserted by the Sea Customs Amendment Act X of 1957, in the third column meant for penalties, has only this " such vessel shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding one thousand rupees".
Item 76A, on the other hand, specifically mentioning conviction, imprisonment and fine, was inserted by XXI of 1955.
Both the amending Acts, by which the aforesaid additional offences were created, and penalties prescribed, were enacted after the coming into force of the Constitution.
The Legislature was, therefore, aware of the distinction made throughout the Schedule to section 167, between a proceeding before Revenue authorities by way of enforcing the preventive and penal provisions of the Schedule and a criminal trial before a Magistrate, with a view to punishing offenders under the provisions of the same section.
It is, therefore, in the teeth of these provisions to contend that the imposition of a penalty by the Revenue officers in the hierarchy created by the Act, is the same thing as a punishment imposed by a criminal court by way of punishment for a criminal offence.
This distinction has been very clearly brought out in the recent judgment of this Court in the case of Sewpujanrai Indrasanrai Ltd. vs The Collector of 288 Customs(2).
In that case, though the question of double jeopardy under article 20(2) of the Constitution, had not been raised, this Court has pointed out the difference in the nature of proceedings against offending articles and offending persons.
A proceeding under the and the corresponding provisions of the Foreign Exchange Regulation Act, in respect of goods which have been the subject matter of the proceeding, has been held to be of the nature of a proceeding in rem whereas, a proceeding against a person concerned in smuggling goods within the purview of those Acts, is a proceeding in personam, resulting in the imposition of a punishment by way of imprisonment or fine on him, where the offender is known.
In the former case, the offender may not have been known, but still the offending goods seized may be confiscated as a result of the proceedings in rem.
That case was not concerned with the further question whether, besides the liability to the penalty as contemplated by section 23(1)(a), namely, a penalty not exceeding three times the value of the foreign exchange in respect of which the contravention had taken place, the person contravening the provisions of the Foreign Exchange Regulation Act, 1947, upon conviction by a court, is also punishable with imprisonment which section 23(1)(b) prescribes, namely, imprisonment for a term which may extend to 2 years, or with fine, or with both.
The decision of this Court (supra) is also an authority for the proposition that in imposing confiscation and penalty under the , the Collector acts judicially.
But that is not the same thing as holding that the Authority under section 167 of the Act, functions as a Judicial Tribunal or as a Court.
An Administra.
five Tribunal, like the Collector and other officers in the hierarchy, may have to act judicially in the sense of having to consider evidence and hear arguments in an informal way, but the Act does not contemplate that in so doing, it is functioning as a court.
As already pointed out, section 187A, which was inserted by the Amending Act of 1955 (21 of 1955), brings out, in bold relief, the legal position that the Chief Customs (I) ; 289 Officer or any other officer of Customs, does not function as a court or as a Judicial Tribunal.
All criminal offences are offences, but all offences in the sense of infringement of a law, are not criminal offences.
Likewise, the other expressions have been used in their generic sense and not as they are understood in the Indian Penal Code or other laws relating to criminal offences.
Section 167 speaks of offences mentioned in the first column in the Schedule, and the third column in that Schedule lays down the penalties in respect of each of the contravention of the rules or of the sections in the Act.
There are as many as 81 entries in the Schedule to section 167, besides those added later, but each one of those 81 and more entries, though an offence, being an act infringing certain provisions of the section is and rules under the Act, is not a criminal offence.
Out of the more than 81 entries in the Schedule to section 167, it is only about a dozen entries, which contemplate prosecution in the criminal sense, the remaining entries contemplate penalties other than punishments for a criminal offence.
The provisions of Chapter XVII of the Act, headed " Procedure relating to offences, Appeals, etc.", also make it clear that the hierarchy of the Customs Officers under the Act have not been empowered to try criminal offences.
They have been only given limited powers of search.
Similarly, they have been given limited powers to summon persons to give evidence or to produce documents.
It is true that the Customs Authorities have been empowered to start proceedings in respect of suspected infringements of the provisions of the Act, and to impose penalties upon persons concerned with those infringements, or to order confiscation of goods or property which are found to have been the subjectmatter of the infringements, but when a trial on a charge of a criminal offence is intended under any one of the entries of the Schedule aforesaid, it is only the Magistrate having jurisdiction, who is empowered to impose a sentence of imprisonment or fine or both.
it was also suggested in the course of the argument that the use of a particular phraseology in the Act, 37 290 should not stand in the way of looking at the substance of the matter.
It may be that the Act has drawn a distinction between confiscation of property and goods, and imposition of penalties on persons concerned with the infringement, on the one hand, and the imposition of a sentence of imprisonment or fine or both by a Magistrate, on the other hand; but, it is further contended, the Customs Authorities, who impose a penalty or who order confiscation of goods of very large value, are in substance imposing punishments within the meaning of the criminal law.
In this connection, our particular attention was drawn to para.
24 of the order dated July 24, 1957, passed by the Collector of Central Excise and Land Customs, New Delhi, which is in these terms: " 24.
Having regard to all the circumstances of the case, I find that both Sarvshri Thomas Dana and Leo Roy Frey are equally guilty of the offence.
They attempted to smuggle Indian and foreign currency out of India.
I hold both of them as the persons concerned in the offence committed under section 167(8) of the .
The foregoing facts prove beyond doubt that the offence was the result of the most deliberate and calculated conspiracy to smuggle this huge amount of currency out of the country.
The offenders, therefore, deserve deterrent punishment.
1, therefore, impose a personal penalty of Rs. 25,00,000 (Rupees twenty five lakhs only) each on Shri Thomas Dana and Shri Leo Roy Frey which should be paid within two months from the date of this order or such extended period as the adjudicating officer may allow.
" The expressions " equally guilty of the offence the offence was the result of the most deliberate and calculated conspiracy to smuggle ", and " deserve deterrent punishment ", have been greatly emphasized in aid of the argument that the Collector had really intended to punish the petitioners in respect of the " offence", and found them ',guilty".
It is true that these expressions are commonly used in judgments given in criminal trials, but the same argument can be used 291 against the petitioners by saying that mere nomenclature does not matter.
What really matters is whether there has been a " prosecution ".
It is true that the petitioners were dealt with by the Collector of Central Excise and Land Customs, for the" offence " of smuggling; were found " guilty ", and a deterrent " punishment " was imposed upon them, but as he had not been vested with the powers of a Magistrate or a criminal court, his proceedings against the petitioners were in the nature of Revenue proceedings, with a view to detecting the infringement of the provisions of the , and imposing penalties when it was found that they had been guilty of those infringements.
Those penalties, the Collector had been empowered to impose in order not only to prevent a recurrence of such infringements, but also to recoup the loss of revenue resulting from such infringe ments.
A person may be guilty of certain acts which expose him to a criminal prosecution for a criminal offence, to a penalty under the law intended to collect the maximum revenue under the Taxing law, and/or, at the same time, make him liable to damages in torts.
For example, an assessee under the Income tax law, may have submitted a false return with a view to defrauding the Revenue.
His fraud being detected, the Taxing Officer may realise from him an amount which may be some multiple of the amount of tax sought to be evaded.
But the fact that he has been subjected to such a penalty by the Taxing Authorities, may not avail him against a criminal prosecution for the offence of having submitted a return containing false statements to his knowledge.
Similarly, a person may use defamatory language against another person who may recover damages in tort against the maker of such a defamatory statement.
But the fact that a decree for damages has been passed against him by the civil court, would not stand in the way of his being prosecuted for defamation.
In such cases, the law does not allow him the plea of double jeopardy.
That this is the law in America also, is borne out by the following quotation from the " Constitution 292 of the United States of America " revised and annotated in 1952 by Edward section Corwin at p. 840: "A plea of former jeopardy must be upon a prosecution for the same identical offense.
The test of identity of offenses is whether the same evidence is required to sustain them; if not, the fact that both charges relate to one transaction does not make a single offense where two are defined by the statutes.
Where a person is convicted of a crime which includes several incidents, a second trial for one of those incidents puts him twice in jeopardy.
Congress may impose both criminal and civil sanctions with respect to the same act or omission, and may separate a conspiracy to commit a substantive offense from the commission of the offense and affix to each a different penalty.
A conviction for the conspiracy may be had though the subsequent offense was not completed.
Separate convictions under different counts charging a monopolization and a conspiracy to monopolize trade, in an indictment under the Sherman Antitrust Act, do not amount to double jeopardy. ".
A forfeiture proceeding for defrauding the Government of a tax on alcohol diverted to beverage uses is a proceeding in rem, rather than a punishment for a criminal offense, and may be prosecuted after a conviction of conspiracy to violate the statute imposing the tax.
" To the same effect is the following placitum tinder article 240 in Vol.
22 of 'Corpus Juris Secundum ', headed " Offenses and Proceedings in Which Former Jeopardy Is a Defense ": " The doctrine applies to criminal prosecution only and generally to misdemeanours as well as felonies.
A former conviction or acquittal does not ordinarily preclude subsequent in rem proceedings, civil actions to recover statutory penalties or exemplary damages, or proceedings to abate a nuisance.
" On behalf of the petitioners, their learned counsel placed reliance upon the two American decisions in Morgan vs Zevine (1) and United States of America vs (1) ; ; 293 Anthony La Franca (,).
The former decision is really against the contention of double jeopardy, raised in this case.
That case lays down that persons who steal postage stamps and postal funds from a post office of the United States, after having committed burglary, and thus, having effected their entry into the premises, committed two distinct offences which may be separately charged and punished under the United States ' Penal Code.
Two separate convictions and Sentences as for two distinct offences in those circumstances were not held to be within double jeopardy within the meaning of the United States ' Constitutional 5th Amendment.
The reason given for the decision against the contention of double jeopardy was that though the offences had been committed in the same transaction, they had been constituted separate and distinct offences by the United States ' Penal Code articles 190 and 192.
In the latter case, the plea of double jeopardy was given effect to because the special statutes, infringements of which formed the subjectmatter of the controversy, namely, for unlawfully selling intoxicating liquor, had made a specific provision that if any act is a violation of earlier laws in regard to the manufacture and taxation of and traffic in intoxicating liquor, and also of the National Prohibition Act, a conviction for such act or offence under one statute, shall be a bar to prosecution therefor under the other.
It is clear, therefore, that where there is a specific statutory provision creating a bar to a second prosecution, the court is bound to give effect to the plea of double jeopardy.
It is not necessary to refer to certain decisions of the English courts, relied upon by the learned counsel for the petitioners, because those cases had reference to the question whether certain orders passed by certain courts were or were not made in a criminal case or matter within the meaning of the statutes then under consideration before the court.
Those are observations made with reference to the terms of those statutes, and are of no assistance in the present controversy.
The learned counsel for the petitioners was not able to produce before us any (1) ; ; 294 authority in support of the proposition that once a person has been dealt with by the Revenue Authorities for an infringement of the law against smuggling, he cannot also be prosecuted in a criminal court for a criminal offence.
In view of these considerations, and particularly in view of the decision of this Court in the case of Maqbool Hussain vs The State of Bombay (1), there is no escape from the conclusion that the proceedings before the Sea Customs Authorities under section 167(8) were not " prosecution " within the meaning of article 20 (2) of the Constitution.
In that view of the matter, it is not necessary to pronounce upon the other points which were argued at the Bar, namely, whether there was a " punishment " and whether " the same offence " was involved in the proceedings before the Revenue Authorities and the criminal court.
Unless all the three essential conditions laid down in el.
(2) of article 20, are fulfilled, the protection does not become effective.
The prohibition against double jeopardy would not become operative if any one of those elements is wanting.
It remains to consider a short point raised particularly on behalf of the second petitioner (Leo Roy Frey).
It was argued that the letter exhibit P. DD/2, admittedly written by him to his father in German, had not been specifically put to him with a view to eliciting his explanation as to the circumstances and the sense in which it had been written.
The learned Magistrate in the trial court put the following question (No. 20) to him : " It is in evidence that exhibit P. FF/I is the translation of the letter exhibit P. DD/2.
What have you to say about it The answer given by the accused to this question was " The translation of exhibit P. FF/I is mostly correct except for few variations which could have been due to misinterpretation of handwriting ".
It is clear from the question and answer quoted above, that the learned Magistrate did afford an opportunity to this petitioner to explain the circumstances appearing in the (1) ; , 738, 739, 743 295 evidence against him with particular reference to the letter.
If the court had persisted in putting more questions with reference to that letter, perhaps, it may have been argued that the examination under section 342 of the Code of Criminal Procedure, was in the nature of a cross examination of the accused person, which is not permitted.
In our opinion, there is no substance in the contention that the petitioner had not been properly examined under section 342, Criminal Procedure Code, to explain the circumstances appearing in the evidence against him.
It follows from what has been said above, that there is no merit either in the appeal or in the petition.
They are, accordingly dismissed.
SUBBA RAO, J.
I have had the advantage of reading the judgment prepared by Sinha J., but I cannot persuade myself to agree with my learned brother.
The facts are fully stated in the judgment of my learned brother and therefore it would suffice if I restate briefly the facts strictly relevant to the question raised.
On June 11, 1957, the petitioner arrived at Bombay, later came to Delhi and from there he travelled to Amritsar by car in company with Mr. Leo Roy Frey.
On June 23, 1957, he reached Attari Road Land Customs Station and was arrested under section 173 of the (Act VIII of 1878) on suspicion of having committed an offence thereunder.
He was served with a notice by the Collector of Central Excise and Land Customs, New Delhi, on July 7, 1957, to show cause why penalty should not be imposed on him under section 167(8) of the (hereinafter called the Act) and section 7(2) of the , and why the goods should not be confiscated.
By order dated July 24, 1957, the petitioner was adjudged guilty under section 167(8) of the Act and currency of the value of over 9 lakhs, car worth Rs. 50,000, and other things were confiscated, and he was punished with personal penalty of Rs. 25,00,000.
The petitioner was again prosecuted on the same facts before the Additional District Magistrate, Amritsar, on charges under section 167(81) of the Act and sections 23 and 23B of the 296 Foreign Exchange Regulation Act. 'He was convicted on charges under section 23 read with section 23B of the Foreign Exchange Regulation Act, section 167(81) of the Act and section 120B of the Indian Penal Code and sentenced to imprisonments of 2 years, 6 months and 6 months respectively by 'the Additional District Magistrate, Amritsar.
The conviction and sentences were confirmed on appeal by the Additional Sessions Judge, and the revision filed in the High Court was dismissed.
The learned counsel for the petitioner contends that the Courts in punishing him violated the fundamental right conferred on him under article 20(2) of the Constitution as he hag been prosecuted and punished for the same offence by the Collector of Customs.
The learned Additional Solicitor General counters this argument by stating that the petitioner was not prosecuted earlier before a judicial tribunal and punished by such tribunal, and, in any view, the prosecution was not for the same offence with which he was charged before the Magistrate, and therefore this case does not fall within the Constitutional protection given under article 20(2).
Before addressing myself to the arguments advanced it would be convenient at this stage to steer clear of two decisions of this Court.
The first is Maqbool Hussain vs The State of Bombay (1).
There proceedings had been taken by the Sea Customs Authorities under section 167(8) of the Act and an order for confiscation of goods had been passed.
The person concerned was subsequently prosecuted before the Presidency Magistrate for an offence under section 23 of the Foreign Exchange Regulation Act in respect of the same act.
This Court held that the proceeding before the Sea Customs Authorities was not a prosecution and the order for confiscation was not a punishment inflicted by a Court or a judicial tribunal within the meaning of article 20(2) of the Constitution and the prosecution was not barred.
The important factor to be noticed in that case is that the Sea Customs Authorities did not proceed against the person concerned but only confiscated the goods found in his possession.
At page (1) ; 297 742 Bhagwati J. says " Confiscation is no doubt one of the penalties which the Customs Authorities can impose.
But that is more in the nature of proceedings in rem than proceedings in personal, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law. .
Though the observations in the judgment cover a wider field.
I shall deal with them at a later stage the decision could be sustained on the simple ground that the previous proceedings were not against the person concerned and therefore he was not prosecuted and punished for the same offence for which he was subsequently proceeded against in the Criminal Court.
The second decision is Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs (1).
There also the Customs Authorities confiscated the goods found in the possession of the appellant.
Under section 8(3) of the Foreign Exchange Act, a restriction imposed by notification made under that section is deemed to have been imposed under section 19 of the , and all the provisions of the shall have effect accordingly.
But the said deeming provision is subject to an important qualification contained in the words ' without prejudice to the provisions of section 23 of the former Act '.
It was argued that by reason of the provisions of section 8(3) of the Foreign Exchange Regulations Act, the appellant should have been proceeded against under section 23 of that Act and it was not open to the Customs Authorities to take action against the offender under section 167(8) of the .
This Court negatived that contention accepting the principle that confiscation of the goods under section 167(8) of the was an action in rem and not a proceeding in personal.
Das, J., who delivered the judgment of the Court made the following observations in repelling the said argument: The penalty provided is that the goods shall be liable to confiscation.
There is a further provision in the penalty column that any person concerned in any such offence shall be liable to a penalty not exceeding (1) 298 three times the value of the goods etc.
The point to note is that so far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods whether the offender is known or not known; the order of confiscation under section 182, , operates directly upon the status of the property, and under section 184 transfers an absolute title to Government.
Therefore, in a case where the Customs authorities can proceed only against the goods, there can be no question of applying section 23 of the Foreign Exchange Act and even on the construction put forward on behalf of the appellant company as respects section 8(3), the remedy under the against the smuggled goods cannot be barred.
" This decision also indicates that the confiscation of the goods is an action in rem and is not a proceeding in personam.
A combined effect of the aforesaid two decisions may be stated thus: Section 167(8) of the Act provides for the following two kinds of penalties when contraband goods are imported into or exported from India: (1) such goods shall be liable to confiscation; (2) any person concerned in any such offence shall be liable to a penalty.
If the authority concerned makes an.
order of confiscation it is only a proceeding in rem and the penalty is enforced against the goods.
On the other hand, if it imposes a penalty against the person concerned, it is a proceeding against the person and he is punished for committing the offence.
It follows that in the case of confiscation there is no prosecution against the person or imposition of a penalty on him.
If the premises be correct, the subsequent prosecution of the person con cerned cannot be affected by the principle of double jeopardy, as he was not prosecuted or punished in the earlier proceedings.
But the question that arises in this case is whether, when there was a proceeding in personam and a penalty was imposed upon the person concerned under section 167(8) of the Act, he could be prosecuted and punished in regard to the same act before another tribunal.
On the facts of this case it is manifest that the 299 petitioner was prosecuted before the Magistrate for the same act in respect of which a penalty of Rs. 25,00,000 had been imposed on him by the Collector of Customs under section 167(8) of the Act.
The question is whether the prosecution and punishment of the petitioner infringed his fundamental right under article 20(2) of the Constitution.
It reads: " No person shall be prosecuted and punished for the same offence more than once.
" The words of this Article are clear and unambiguous and their plain meaning is that there cannot be a second prosecution where the accused has been prosecuted and punished for the same offence previously.
The clause uses the three words of well known connotation: (1) Prosecution; (2) punishment; and (3) offence.
The word offence ' is defined in section 3(38) of the , to mean any act or omission made punishable by any law for the time being in force.
Under section 4 of the Code of Criminal Procedure, it means any act or omission made punishable by any law for the time being in force.
An offence is therefore an act committed against law or omitted where the law requires it.
Punishment is the penalty for the transgression of law.
The terms 'punishment ' and 'penalty ' are frequently used as synonyms of each other; and, indeed under cl.
(I)of article 20 of the Constitution the word penalty issued in the sense of punishment.
The punishments to which offenders are liable under the provisions of the Indian Penal Code are: (1) death; (2) imprisonment for life; (3) imprisonment, which is of two descriptions, viz., (1) rigorous, i.e., with hard labour; and (ii) simple; (4) for feature of property ; and (6) fine.
The word 'prosecuted ' is comprehensive enough to take in a prosecution before an authority other than a magisterial or a criminal Court.
Having regard to the historical background, a restricted meaning has been placed upon it by this Court in Maqbool Hussain vs The State of Bombay (1).
Bhagwati, J., in delivering the Judgment of the Court observed at page 742 thus: (I) ; 300 Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty, the highest penalty which can be inflicted is Rs. 1,000.
Confiscation is no doubt one of the penalties which the Customs Authorities can impose, but that is more in the nature of proceedings in rem than proceedings in personam, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law and in respect of the confiscation also an option is given to the owner of the goods to pay in lieu of confiscation such fine as the officer thinks fit.
All this is for the enforcement of the levy of and safeguarding the recovery of the sea customs duties.
There is no procedure prescribed to be followed by the Customs Officer in the matter of such adjudication and the proceedings before the Customs Officers are not assimilated in any manner to the provisions of the Civil or the Criminal Procedure Code.
The Customs Officers are not required to act judicially on legal evidence tendered on oath and they are not authorised to administer oath to any witness.
The appeals, if any, lie before the Chief Customs Authority which is the Central Board of Revenue and the power of revision is given to the Central Government which certainly is not a judicial authority.
In the matter of the enforcement of the payment of penalty or increased rate of duty also the Customs Officer can only proceed against other goods of the party in the possession of the Customs Authorities.
But if such penalty or increased rate of duty cannot be realised therefrom the only thing which he can do is to notify the matter to the appropriate Magistrate who is the only person empowered to enforce payment as if such penalty or increased rate of duty had been a fine inflicted by himself.
The process of recovery can be issued only by the Magistrate and not by the Customs Authority.
All these provisions go to show that far from being authorities bound by any rules of evidence or procedure established by law and invested with power to enforce their own judgments or orders the Sea Customs Authorities are merely constituted administrative machinery for the purpose of 301 adjudging confiscation, increased rates of duty and Penalty prescribed in the Act.
" This Court therefore accepted the view that the earlier prosecution should have been before a Court of law or a judicial Tribunal, and that the Sea Customs Authorities when they entertained proceedings for the confiscation of gold did not act as a judicial Tribunal.
In my view the said decision unduly restricted the scope of the comprehensive terms in which the fundamental right is couched.
If res integral I would be inclined to hold that the prosecution before the Customs Authority for an offence created by the Act is prosecution within the meaning of Article 20, even though the Customs Authority is not a judicial Tribunal.
But I am bound by the decision of this Court in so far as it held that the earlier prosecution should have been held before a Court of law or a judicial Tribunal, and that the Customs Authority adjudging confiscation was not such a tribunal.
But the said observations must be confined to the adjudication of confiscation by the Customs Authority.
The outstanding question therefore is whether a Collector of Customs in adjudging on the question whether any person concerned in the importation or exportation of the prohibited goods committed an offence, and in imposing a penalty on him, acts as a judicial Tribunal.
There is a current of judicial opinion in support of the contention that under a particular Act an authority may act as a judicial Tribunal in discharge of certain duties and as an executive or administrative authority in discharge of other duties.
The question whether a particular authority in dis charging specified duties is a judicial tribunal or not falls to be decided on the facts of each case, having regard to the well settled characteristics of a judicial tribunal.
In 'Words and Phrases ', permanent edition, Vol. 23, Judicial Tribunal " has been defined thus: " It is a body who has the power and whose duty it is to ascertain and determine the rights and enforce the relative duties of contending parties.
" In I The Encyclopedia of Words and Phrases Legal Maxims ', 302 by Sanagan and Drynan, much to the same effect it is stated thus: " A 'judicial tribunal ' is one that dispenses justice, is concerned with legal rights and liabilities, which means rights and liabilities conferred or imposed by I law '.
These legal rights and liabilities are treated by a judicial tribunal as preexisting; such a tribunal professes merely to ascertain and give effect to them; it investigates the facts by hearing the 'evidence ' (as tested by long settled rules), and it investigates the law by consulting precedents.
A judicial tribunal looks for some law to guide it.
An administrative tribunal, within its province, is a law unto itself.
" In Cooper vs Wilson (1) the characteristics of a judicial decision are given as follows, at page 340: " A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (1) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) If the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence ; (3) If the dispute be.
tween them is a question of law, the submission of legal argument by the parties; and (4) A decision which disposes of the whole matter by a finding upon the facts in dispute and application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law.
" This passage has been approved by this Court in Maqbool Hussain 's Case (2).
In Venkataraman vs The Union of India (3) this Court considered the question whether article 20 protects an Officer against whom an enquiry was held under Public Servants Enquiries Act, 1850 (Act XXXVII of 1850) from being prosecuted again on the same facts before a Criminal (Court.
This Court held on a consideration of the provisions of that Act that the appellant was neither prosecuted nor punished (1) , 340, 341 (2) [1953] S C.R. 730.
(3) ; 303 for the same offence before a judicial tribunal.
But in coming to that conclusion the following criteria were applied to ascertain the character of the proceedings: (1) duty to investigate an offence and impose a punishment; (ii) prosecution must be in reference to the law which creates the offence and punishment must also be in accordance with what the law proscribes; (iii) there must be the trappings of a judicial tribunal and (iv) the decision must have both finality and authoritativeness, which are the essential tests of a judicial pronouncement.
Having regard to the aforesaid tests, I shall now proceed to consider the applicability of Article 20 to the present prosecution.
A fundamental right is transcendental in nature and it controls both the legislative and the executive acts.
Article 13 explicitly prohibits the State from making any law which takes away or abridges any fundamental right and declares the law to the extent of the contravention as void.
The law therefore must be carefully scrutinized to ascertain whether a fundamental right is infringed.
It is not the form but the substance that matters.
If the legislature in effect constitutes a judicial tribunal, but calls it ail authority, the tribunal does not become any the less a judicial tribunal.
Therefore the correct approach is first to ascertain with exactitude the content and scope of the fundamental right and then to scrutinize the provisions of the Act to decide whether in effect and substance, though not in form, the said right is violated or curtailed.
Otherwise the fundamental right will be lost or unduly restricted in our adherence to the form to the exclusion of the content.
The question therefore is whether the petitioner was in effect and in substance prosecuted and punished by a judicial tribunal for the same offence for which he is now prosecuted.
Section 167 of the Act opens with the following words: " The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively." Chapter XVI of the Act deals with 'Offences and 304 Penalties '.
Section 167 provides for offences and penalties in a tabular form.
The first column gives the particulars of the offences; the second column gives the sections of the Act to which the offence has reference ; and the third column gives the penalties in respect of the relevant offences.
Apart from the fact that the statute itself, in clear terms, describes the acts detailed in the first column of section 167 as offences against particular laws, the acts described therein clearly fall within the definition of 'offences ' in the and the Indian Penal Code.
There cannot therefore be the slightest doubt in this case that the contravention of any of the provisions of the Act mentioned in section 167 is an offence.
The next question is whether the penalties prescribed for the various offences in the third column of section 167 are punishments within the meaning of article 20 of the Constitution.
A glance at the third column shows that the penalties mentioned therein include direction of payment of money, confiscation of goods and the receptacles wherein they are found, and imprisonment.
The penalties may be imposed by the Customs Officers or Magistrates as the case may be.
Where a person is convicted by a Magistrate and sentenced to imprisonment or payment of fine or where a penalty is imposed by a Customs Officer, in either case, the punishment is described as penalty in the third column of section 167.
Section 167 clearly indicates that penalty is punishment inflicted by law for its violation for doing or failing to do something that is the duty of the party to do.
Section 167 therefore defines a criminal act and fixes a penaltv or punishment for that act.
The two words penalty ' and 'punishment ' are interchangeable and they convey the same idea.
The more difficult question is whether a Customs Authority, when it functions under section 167 of the Act, is a judicial tribunal.
It is not, and cannot be, disputed that a magistrate, who convicts and punishes a person for the infringement of some of the provisions of section 167 of the Act, is a judicial tribunal.
Is it reasonable to assume that when another authority adjudges on similar offences under the same section, it is 305 functioning in a different capacity ? Section 182 defines the jurisdiction of the Customs Authority in respect of the offences mentioned in section 167 of the Act.
It says: " In every case, except the cases mentioned in Section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which under this Act, anything is liable to confiscation or to increased rates of duty or any person is liable to a penalty, such confiscation, increased rate of duty or penalty may be adjudged (a) without limit, by a Deputy Commissioner or Deputy Collector of Customs, or a Customs collector; (b) up to confiscation of goods not exceeding two hundred and fifty rupees in value, and imposition of penalty or increased duty, not exceeding one hundred rupees, by an Assistant Commissioner or Assistant Collector of Customs ; (c) up to confiscation of goods not exceeding fifty rupees in value, and imposition of penalty or increased duty not exceeding ten rupees, by such other subordinate officers of Customs as the Chief Customs authority may, from time to time, empower in that behalf in virtue of their office : ".
Section 187 : " All offences against this Act, other than those cognizable under section 182 by officers of Customs, may be tried summarily by a Magistrate.
" It is therefore clear that some offences under section 167 are cognizable by the Customs Authorities and some offences by Magistrates.
Section 171A, inserted by the Sea Customs (Amendment) Act, 1955 (Act 21 of 1955), confers power on officers of Customs to summon any person to give evidence and produce documents; it reads: " 171A. (1) Any officer of Customs duly employed in the prevention of smuggling shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making in connection with the smuggling of any goods.
39 306 (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.
(3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct;.
and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908, shall be applicable to any requisition for attendance under this section.
(4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code.
" Under this section, the Customs Authority, who makes an inquiry, is empowered in connection with that inquiry, to summon persons to give evidence and produce documents and the witnesses summoned are under a statutory duty to speak the truth.
The cir cumstance that under el.
(4) of the said section, an inquiry is deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, viz., for the purpose of punishment for giving false evidence and for contempt of Court, does not detract from the judicial characteristics conferred upon the authority by the other clauses of the section.
Clause (4) must have been enacted only by way of abundant caution to guard against the contention that the authority is not a Court ; and to bring in the inquiry made by the Customs Officer in regard to administrative matters other than those conferred upon him under section 167, within the fold of section 193 and section 228 of the Indian Penal Code.
Sections 188, 189, 190A and 191 provide a hierarchy of tribunals for deciding appeals and revisions.
The Chief Customs authority May, suo motu or otherwise exercise revisional powers in regard to the orders of the subordinate officers.
Power is also conferred on Government to 307 inter in matters in regard whereof no appeal is provided for.
It is true that no rules have been framed providing the manner in which the Customs collector should proceed with the inquiry in regard to offences committed under the Act of which he is authorized to take cognizance.
But the record discloses that a procedure analogous to that obtaining in criminal Courts is followed in regard to the said offences.
Charges are framed, evidence is taken, advocates are heard, decision is given on the question whether an offence is committed or not; and, if the offence is held to have been committed, the person concerned is con victed and a penalty is imposed.
When the statute empowers the officer to take cognizance of an offence, to adjudge upon the question whether the offence is committed or not and to impose a penalty for the offence, it is implied in the statute that the judicial procedure is to be followed.
The entire scheme of the Act as disclosed in the leaves no doubt in my mind that so far as offences mentioned in section 167 are concerned, the Customs Authority has to function as a Judicial Tribunal.
I have therefore no hesitation to hold that the Customs Officers in so far as they are adjudicating upon the offences mentioned under section 167 of the Act are functioning as judicial tribunals.
If the other view, viz., that an authority is not a judicial tribunal, be accepted, it will lead to an anomalous position, which could not have been contemplated by the legislature.
To illustrate, a Customs Collector may impose a penalty of Rs. 25,00,000 as in this case on his finding that a person has committed an offence under section 167 (8) of the Act, and the accused can be prosecuted again for the same offence before a Magistrate.
On the other hand, if the prosecution is first laid before a Magistrate for an offence under section 167(81) and he is convicted and sentenced to a fine of a few rupees, he cannot be prosecuted and punished again before a Magistrate.
Unless the provisions of the Constitution are clear, a construction which will lead to such an anomalous position should not be accepted, for, by accepting such a construction, the right itself is defeated.
308 It is then contended that the offence for which the petitioner was prosecuted by the Magistrate is different from that in regard whereof he was sentenced by the Customs Officer.
The petitioner was convicted under section 167(8) of the Act, whereas he was subsequently prosecuted and punished under section 167(81) of the Act.
Section 167(81) of the Act reads as follows : "If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing, harboring, keeping or concealing or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid or with respect to the importation or exportation of which any prohibition or restriction is for the time being in force as aforesaid ; or if any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods, such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years, or to fine, or to both.
" It is contended that under section 167(81) knowledge or intention to defraud is an ingredient of the offence, whereas under section 167(8) they are not part of the offence, that offences under sections 167(8) and 167(81) are different, and that therefore the prosecution and punishment for an offence under the former sub section would not be a bar for prosecution and punishment under the latter sub section.
It is not necessary to consider the decisions cited in support of the contention that for the application of the principle of double ' jeopardy the offence for which a person is prosecuted and punished in a second proceeding should be the same in respect of which he has been prosecuted and 309 punished at an earlier stage.
That fact is self evident from article 20(2) of the Constitution itself.
If so, the only question is whether the petitioner was prosecuted before the Magistrate for the same offence in regard to which he was prosecuted before the Collector of customs.
It is true that the phraseology in section 167(8) is more comprehensive than that in sub section
(81) in that the offences under the former sub section take in acts committed without knowledge or intent to defraud.
But it does not exclude from its scope acts committed with knowledge or with intent to defraud.
For, a person who imports or exports prohibited goods with intent to defraud is also concerned in the offence of such importation or exportation.
The question of identity of offence is one to be determined on the facts and circumstances of a particular case.
One of the tests is whether an offence for which a person was earlier prosecuted takes in all the ingredients of the offence, the subject matter of the second prosecution.
The fact that he might have been prosecuted for a lesser offence is not a material circumstance.
The question therefore is not whether under section 167(8) a person can be found guilty of an offence even if there is no fraudulent intent or knowledge, but the question is whether the petitioner was prosecuted and punished on the same facts in regard to which he was subsequently prosecuted and punished before the Magistrate.
The record discloses that the petitioner was prosecuted before the Customs Authority as well as the Magistrate on the same facts, viz., that he, along with others, attempted to take out of India, Indian currency (as detailed in paragraphs 14 and 17 of the complaint of the Assistant Collector of Customs and Central Excise, Amritsar), in contravention of the law prohibiting such export.
It is not the case that the knowledge on the part of the petitioner of his illegal act is excluded from the first prosecution and included in the subsequent one.
In the circumstances, I cannot hold that the offence for which he was prosecuted by the Magistrate is different from that in regard to which he was prosecuted and punished by the Customs Authority.
In this view, the prosecution and punishment by the Magistrate 310 directly infringes the fundamental right under article 20 (2) of the Constitution.
No attempt has been made by the learned Solicitor General to contend that the offence under sections 23 and 23B of the Foreign Exchange Regulations Act for which the petitioner is convicted is an offence different from that for which he was prosecuted earlier under section 167(8) of the Act.
It is conceded that the decision in the writ petition covers the decision in the connected appeal also.
In the result, the writ petition and the appeal are allowed.
ORDER In view of the opinion of the majority, the Petition and the Appeal are dismissed.
| IN-Abs | The two petitioners were apprehended while attempting to smuggle a huge amount of Indian and foreign currency and other contraband goods out of India and the Collector of Central Excise and Land Customs passed orders confiscating the seized goods and imposing heavy personal penalties on both of them under 275 section 167(8) of the Sea Customs Act.
On a subsequent complaint made by the Customs Authorities on the same facts, the petitioners were convicted and sentenced by the Additional District Magistrate to various terms of imprisonment under section 23, read with section 23B, of the Foreign Exchange Regulation Act, section i67(8I) of the Sea Customs Act and section 120B of the Indian Penal Code.
The Additional Sessions judge in appeal affirmed the said orders of conviction and sentences and the High Court refused to interfere in revision.
It was contended on behalf of the petitioners, who had, at an earlier stage, made an unsuccessful attempt to move this Court under article 32 and have the prosecutions quashed, that the orders of conviction and sentences passed on them by the Courts below infringed the constitutional protection against double jeopardy afforded by article 20(2) Of the Constitution.
Held, (Per Das, C. J., Bhagwati, B. P. Sinha and Wanchoo, Jj., Subba Rao, J., dissenting) that the contention was without substance and must be negatived.
In order to sustain a plea of double jeopardy and to avail of the protection of article 20(2) of the Constitution it was incumbent to show that (1) there was a previous prosecution, (2) a punishment and (3) that for the same offence, and unless all the three conditions were fulfilled the Article did not come into operation.
The word 'prosecution ' as used in that Article contemplated a proceeding of a criminal nature either before a court or a judicial tribunal.
Maqbool Hussain vs The State of Bombay, ; , relied on.
The insertion of section 187A into the Sea Customs Act by the amending Act of 1955, left no scope for doubt that the hierarchy of Authorities under that Act functioned not as Courts or judicial tribunals but as administrative bodies, even though in recording evidence or hearing arguments they acted judicially.
The words " offences " and " penalties " used by the Act could not have the same meaning as in Criminal Law and a penalty or confiscation ordered under section 167(8) of the Act could not be a punishment such as is inflicted by a Criminal Court for a criminal offence.
Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs and others; , , referred to.
Nor were the Customs Authorities invested with the powers of a Criminal Court under the Schedule to section 167 and the procedure laid down by Ch.
XVII of the Act, and any orders passed by them either in rem or in personal, by way of confiscation of the goods or imposition of penalties on the person, could only be in the nature of administrative ones made in the interest of revenue and could not bar a criminal prosecution.
Morgan vs Devine, ; and United States of America vs Anthony La Franca, ; , considered.
276 The proceedings against the petitioners before the Collector of Customs under section 167(8) of the Sea Customs Act could.
not therefore, be a prosecution within the meaning of article 20(2) Of the Constitution and the petitioners were not put to double jeopardy.
Per Subba Rao, J.
The prosecution of 'the petitioners before the Magistrate and the punishment inflicted on them directly infringed article 20(2) of the Constitution.
There can be no inconsistency in an authority under an Act functioning in an administrative capacity in respect of certain specified duties while it acts as a judicial tribunal in respect of others, and the question as to which of them it discharges in a judicial capacity has to be decided on the facts of each case and in the light of well settled characteristics of a judicial tribunal.
Cooper vs Wilson, and Venkataraman vs Union of India; , , relied on.
Although this Court has held that the Sea Customs Autho rities in adjudging confiscation do not function as judicial tribunals but as mere administrative authorities, the question as to whether imposing personal penalties they act as judicial tribunals still remains open.
Maqbool Hussain vs The State.
of Bombay, ; and Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs, ; , explained.
An examination of the entire scheme of the Sea Customs Act leaves no manner of doubt that the Customs Authorities act as judicial tribunals so far as offences under section 167 Of the Act are concerned.
The word 'prosecuted ' used in article 20(2) of the Constitution is comprehensive enough to include a prosecution before an authority other than a Magistrate or a Criminal Court, and the offences described in section 167 Of the Sea Customs Act are offences within the meaning of the General Clauses Act and the Indian Penal Code and the penalties prescribed therefor are nothing but punishments inflicted for those offences either by the Customs Authorities or the Magistrate.
The question of the identity of an offence has to be deter mined on the facts of each particular case and the real test is whether the previous prosecution and punishment were based on the same facts on which rested the subsequent prosecution and punishments
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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-Abs | 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]
|
ivil Appeal No 138 of 1955.
Appeal from the judgment and decree dated October 15, 1953, of the Mysore High Court at Bangalore in Regular Appeal No. 255 of 1950 51, arising out of the order dated September 18, 1950, of the Court of the District Judge, Bangalore, in Misc.
Case No. 39 of 1947 48.
G. Channappa, Assistant Advocate General, Mysore R. Gopala Krishnan and T. M. Sen, for the appellant ' A. V. Viswanatha Sastri, M. A. Rangaswami, K. R. Sarma and K. R. Choudhury, for the respondent.
November 7.
The Judgment of the Court was delivered by section K. DAS, J.
This appeal by the Special Land Acquisition Officer, Bangalore, has been brought to this Court on a certificate granted by the High Court of Mysore, and is from the decision of the said High Court dated October 5, 1953, in a regular appeal from an order made by the 2nd Additional District Judge, Bangalore, on September 18, 1950, on a reference under section 18 of the Land Acquisition Act (herein.
after referred to as the Act).
The facts so far as they are relevant to the appeal before us are these.
An area of about 51,243 squard 406 yards of land was acquired by Government under Notification No. M. 11054 Med.
80 45 25 dated April 16, 1946, for development of the Appiah Naidu Maternity Home at Malleswaram, Bangalore City, into a Maternity Hospital.
There were eight owners interested in the property acquired, out of whom two objected to the award made by the Special Land Acquisition Officer, now appellant before us.
One of these two was T. Adinarayana Shetty, a diamond merchant of Mysore City.
Originally, he was the respondent before us, and on his death his son and legal representative has been brought into the record as the sole respondent to this appeal.
The deceased respondent Adinarayana Setty (hereinafter called the respondent) was interested in 48,404 sq.
yards out of the total area, and it may be stated here that there is no dispute before us that out of the said 48,404 sq.
yards an area of about 3,000 sq.
yards consists of land which has been variously characterised as a depression or a pit or low lying land (called 'halla ' in the local vernacular language).
Out of the total amount of compensation awarded by the Special Land Acquisition Officer, a sum of Rs. 1,41,169/was awarded to the respondent.
The Special Land Acquisition Officer proceeded on the following basis for his award.
Firstly, he found that the land value in and around Bangalore City had increased in recent years owing to the war and the respondent had paid to the Deputy Commissioner, Bangalore District, a sum of money called a conversion fine for sanctioning a scheme of converting the land into non agricultural land.
Thereafter, a layout for building sites was prepared and approved by the Municipality and the res pondent sold a few of the sites shown in the layout to some purchasers.
This was done before the publication of the preliminary notification of acquisition; but the sale of further building sites was stopped after the said publication.
Secondly, the Special Land Acquisition Officer took into consideration the value of the sites sold by the respondent and came to the conclusion that Rs. 10/ per sq.
yard was the market value of the land in question.
He awarded to the respondent compensation for approximately 48,404 sq. yards at the 407 rate of Rs. 10/ per sq. yard, but after deducting therefrom an area of 26,248 sq. yards which, according to the Special Land Acquisition Officer, was required for making roads and drains as per the layout scheme.
The total amount thus calculated came to Rs. 2,21,563.
and odd and from this a sum of Rs. 98,807 was again deducted as representing the expenditure which would be required for making roads and drains.
The net amount was thus found to be Rs. 1,22,756 and odd and adding 15% as the statutory compensation payable to the respondent the total amount awarded by, the Special Land Acquisition Officer to the respondent, came to Rs. 1,41,169/ .
Against this award, the respondent raised an objection, and a reference was accordingly made to the District Judge of Bangalore under section 18 of the Act.
This reference was heard by the 2nd Additional District Judge who, by his order dated September 18, 1950, came to the following conclusions: (i) that the rate awarded by the Land Acquisition Officer at Rs. 10/ per sq.
yard was fair and should be,upheld; (ii) that a sum of Rs. 10,000/ for providing electric installation out of the sum of Rs. 98,807/ deducted by the Land Acquisition Officer from the compensation payable to the respondent should not be deducted; and (iii) that with regard to the area of the low lying.
land which I was completely excluded by the Land Acquisition Officer, the respondent should get at the rate of Rs. 3/ per sq. yard or approximately a sum of I Rs. 10,000/ .
In other words, the learned Additional District Judge increased the compensation in favour of the respondent by a sum of about Rs. 20,000/ .
Not being satisfied, the respondent preferred an appeal to the High Court of, Mysore.
The learned Judges of the High Court found that the proper compensation for the land,.
except the portion characterised as low lying, should be Rs. 13/8/per sq. yard and as to the low lying portion it should be reduced by Rs. 51 per sq.
yard inasmuch as a sum of Rs. 15,000/ was necessary, according to the 408 evidence given in the case, for filling it up; in other words, the High Court awarded compensation at the rate of Rs. 8/8/ per sq. yard for the low lying land.
The High Court also reduced the area which had to be deducted for making roads, etc., according to the layout scheme from 26,248 sq.
yards to 12,101 sq.
yards.
It also reduced the layout charges to Rs. 64,432/ .
The High Court added to the compensation a sum of Rs. 7,000/ as the value of a building which the respondent had constructed on one of the sites on the finding that the construction was made prior to the preliminary notification.
In this respect the High Court departed from the finding of the Land Acquisition Officer that the building was put up after the publicaion of the preliminary notification.
The total amount of compensation which the High Court awarded came to about Rs. 4,80,000 and odd.
As the judgment of the High Court was a judgment of reversal and the appellant felt dissatisfied with it, a certificate of fitness was asked for and was granted by the High Court on July 6, 1954.
The present appeal has been brought to this Court in pursuance of that certificate.
The appellant has confined his appeal to the following three points: (1) payment of compensation of a sum of Rs. 7,000/ for the building said to have been constructed before the publication of the preliminary notification; (2) payment of compensation at Rs.
,8/8/per sq. yard for the low lying land (halla); and (3) payment of compensation at Rs. 13/8/ for the remaining land after deducting the area for making roads and buildings.
We may state that there is no dispute before us now as to the area which should be so deducted and also as to the amount of layout charges, as the findings of the High Court on these two points nave not been challenged before us.
On behalf of the respondent our attention has been ' drawn to the decisions of the Privy Council in Charan Das vs Amir Khan (1), Narsingh Das vs Secretary of State for India (2) and Nowroji Bustomji Wadia vs (1) (1920) 47 I.A. 255.
(2) (1924) 52 I.A. 133.
409 Bombay Government (1).
On these decisions it is submitted by learned counsel that though section 26 of the Act was amended in 1921 by insertion of sub section
(2) which says that every award shall be deemed to be a decree ' and thus an appeal therefrom must be considered and determined in the same manner as if it is a judgment from a decree in an ordinary suit the established practice of the Privy Council has been not to interfere with a finding on the question of valuation, unless there is some fundamental principle affecting the valuation which renders it unsound.
The practice, it is stated, was based on two considerations: first, that the courts in India were more familiar with local conditions and circumstances on which the valuation depended and, secondly, the Privy Council found it necessary to limit the extent of the enquiry in order to spare the parties costly and fruitless litigation.
On behalf of the appellant it is submitted that this Court has no doubt adopted the practice that it will not ordinarily interfere with concurrent findings of fact, but this Court has no such established practice as was adopted by the Privy Council in valuation cases even where a difference of opinion has occurred between two courts upon the number of rupees per yard to be allowed for a plot of land.
He has further submitted that the reasons for the practice adopted by the Privy Council do not apply with equal force to this Court.
In view of the facts of this case and the opinion which we have formed after hearing learned counsel for both parties, we do not think it necessary to make any final pronouncement as to the practice which this Court should adopt in a valuation case where two courts have differed.
We are content to proceed in this case on the footing that we should not interfere unless there is something to show, not merely that on the balance of evidence it is possible to reach a different conclusion, but that the judgment cannot be supported by reason of a wrong application of principle or because some important point affecting valuation has been overlooked or misapplied.
(1) (1925) 52 I.A. 367.
52 410 We are satisfied that there is no error of principle or otherwise in the findings of the High Court as to the first two points urged in support of the appeal.
As to the construction of the building for which a compensation of Rs. 7,000 has been awarded, the clear finding of the High Court is that it was constructed prior to the preliminary notification.
It has been further stated before us that the building is in actual occupation of the medical department.
Learned counsel for the appellant has taken us through the evidence on the question of construction of the house and the application for a licence for building the said ' house which was made by the respondent to the Bangalore Munici pality.
We are unable to hold that that evidence has the effect of displacing the clear finding of the High Court.
As to the low lying land, we consider that the High Court has given very good reasons for its finding.
Admittedly, the area of the low lying land (halla) is about 3,000 sq.
yards.
The Land Acquisition Officer valued it at Rs. 3 per sq. yard.
A sum of Rs. 15,000 has been deducted from the compensation payable to the respondent on the ground that that amount will be required for filling up the low lying land and converting it into building sites.
Therefore, the position is that the respondent has not only been made to part with 3,000 sq.
yards of land at 3 per sq. yard, but he has also been made to pay Rs. 15,000 for filling up the land.
If these two figures are added, even then the market value of the land comes to about Rs. 8 per sq. yard.
This is so even if we do not follow the method adopted by the High Court that the sum of Rs. 15,000 for 3,000 sq.
yards gives an average of Rs. 5 per sq. yard and that amount should be deducted from the rate of Rs. 13 8 0 per sq. yard fixed as the proper compensation for the remaining land.
We are of the opinion that on the materials before us the value per sq. yard fixed by the High Court for the low lying land is fully justified even on adoption of the method suggested by learned counsel for the appellant.
Learned counsel for the respondent has referred us to the circumstance that some of the sales 411 of building sites which the respondent had made appertained to the low lying land and he has further emphasised the circumstance that just opposite the low lying land which is at the eastern end of the entire area, some houses had been built.
We have taken these circumstances into consideration, but do not think that the conclusion which learned counsel for the respondent wishes us to draw follows therefrom.
First of all, it is by no means clear that the sales of the building sites at the low rate of Rs. 6 8 0 or thereabout appertained to the low lying land only, and, secondly, the mere circumstance that some buildings have been made on land opposite the low lying lands but on the other side of the road, does not necessarily mean that the low lying lands are as valuable as the other land in the area.
We are therefore of the view that the compensation fixed by the High Court for the low lying land is not vitiated by any error of the kind which will justify our interference with it.
We now proceed to consider the third and main point urged on behalf of the appellant, namely, the rate of 13/8 per sq. yard for the other land in the area.
Learned counsel for the appellant has submitted before us that the High Court has committed two fundamental errors in arriving at this finding.
Furthermore, the High Court has been influenced by extraneous considerations such as the purpose for which the land was acquired, the report of certain medical authorities as to the unsuitability of the land for the purpose for which it was acquired, and the delay in putting the land to the use for which it was acquired.
We agree with learned counsel for the appellant that these were extraneous considerations which had no bearing on the question of valuation and the learned Judges of the High Court misdirected themselves as to the scope of the enquiry before them when they imported these considerations into the question of valuation.
We further think that the High Court committed an error of principle in arriving at the figure Rs. 13/8 and the error was committed by adopting a wrong method in ascertaining the market value of the land at the 412 relevant time.
It is not disputed that the function of the court in awarding compensation under the Act is to ascertain the market value of the land at the date of the notification under section 4(1) and the methods of valuation may be (1) opinion of experts, (2) the price paid within a reasonable time in bonafide transactions of purchase of the lands acquired or the lands adjacent to the lands acquired and possessing similar advantages and (3) a number of years ' purchase of the actual or immediately prospective profits of the lands acquired.
In the case under our consideration the High Court adopted the second method, but in doing so committed two serious errors.
There were altogether seven transactions of alienation made by the respondent.
One was a gift which must necessarily be excluded.
The earliest of the sales was in favour of Muniratham which was made on May 15, 1945.
Another was made on July 18, 1945.
This was in favour of Venugopal who was the husband of a grand daughter of the respondent.
Four other transactions in favour of Kapinapathy, Puttananjappa, Shamanna and Rajagopal Naidu were made in August, 1945.
The notification under section 4 of the Land Acquisition Act was made on October 4, 1945.
What the learned Judges of the High Court did was to take only four out of the aforesaid six transactions into consideration and then to draw an average price therefrom.
The learned Judges gave no sufficient reason why two of the transactions were left out.
In one part of their judgment they said : " The evidence discloses that the appellant has effected four sales about a couple of months prior to the date of preliminary notification and the rates secured by him are Rs. 12, 15, 14 and 7/8 which on calculation give an average of Rs. 12/2 per sq. yard ".
Why the transaction of May 15, 1945, which was at a rate of Rs. 6/8 per sq. yard only was left out it is difficult to understand.
Similarly, the transaction of July 18, 1945, was at the rate of Rs. 10 per sq. yard.
That also was left out.
We are of the view that this arbitrary selection of four transactions only out of six has vitiated the finding of the High Court.
If all the six transactions of sale are taken into consideration, the average rate comes to about Rs. 10/13 per sq. yard only.
Having arbitrarily discarded two of the transactions, the learned Judges of the High Court committed another error in taking a second average.
Having arrived at an average of Rs. 12/2 per sq. yard from the four transactions referred to above, they again took a second average between Rs. 15, which was the maximum price obtained by the respondent, and Rs. 12/2.
Having struck this second average, the learned Judges of the High Court arrived at the figure of Rs. 13/8.
No sound reasons have been given why this second average was struck except the extraneous reasons to which we have already made a reference.
It is obvious that the maximum price Rs. 15 per sq. yard had already gone into the average when an average was drawn from the four transactions.
It is difficult to understand why it should be utilised again for arriving at the market value of the land in question.
We are of the view that if the aforesaid two errors are eliminated, then the proper market value of the land in question is Rs. 11 only.
Learned counsel for the appellant has drawn our attention to the claim made by the respondent himself before the Land Acquisition Officer (exhibit 11).
The respondent had therein said: Hence, under the standing orders compensation has to be paid at rates for building land in the neighbourhood.
This rate ranges from Rs. 10 to Rs. 12, an average of Rs. 10 a sq. yard, as could be verified from entries in the local Sub Registrar 's Office and Bangalore City Municipal Office.
At any rate, I myself have sold in the course of this year some six sites out of the land proposed to be acquired for rates ranging from Rs. 7 to Rs. 15 or on an average of Rs. 10 per sq. yard.
At this rate the compensation amount will be Rs. 5,12,430 and adding the statutory allowance of Rs. 76,860 at 15 per cent.
on the compensation amount on account of the compulsory nature of the acquisition, the total cost of the land will be Rs. 5,89,290 or nearly six lakhs of rupees.
" 414 The learned Judges of the High Court took the aforesaid claim to mean that the average rate was Rs. 10 ,per sq.
yard, only if the entire area was taken into consideration; but the rate would be different if small building sites were sold according to a layout scheme.
It is worthy of note, however, that in his claim the respondent clearly stated that even as building land the average rate in the neighbourhood ranged from Rs. 10 to Rs. 12 per sq. yard and he had himself sold six building sites at an average rate of about Rs. 10 per sq. yard.
It is worthy of note that the six transactions to which the respondent referred were sales of small building sites.
It appears to us, therefore, that the High Court had in effect given the respondent a rate more favourable than what he had himself claimed.
We consider, therefore, that on a proper consideration of the materials in the record and after eliminating the two errors which the High Court had committed, the proper value of the land in question should be Rs. 11 per sq. yard.
The result, therefore, is that we allow this appeal to this limited extent only, namely, the order of the High Court will be modified by substituting the figure Rs. 11 per sq. yard for the figure Rs. 13/8 awarded by the High Court as compensation to the respondent for land other than the low lying land.
We maintain the order of the High Court that the parties will receive and pay costs in proportion to their success and failure, as now determined, in the courts below; but so far as the costs of this Court are concerned, the parties must bear their own costs in view of their divided success here.
Appeal partly allowed.
| IN-Abs | Certain land belonging to the respondent was compulsorily acquired by the Government for a maternity hospital.
Most of the land consisted of building sites but there was a building on a small portion of the land and a portion was low lying land.
The Special Land Acquisition Officer held on the basis of the value of sites previously sold by the respondent, that the market value of the land was Rs. 10/ per sq. yard and awarded a sum of Rs. 1,41,169/ to the respondent as compensation.
He did not give any compensation for the low lying land or for the building.
Against this award the respondent raised an objection and a reference was made to the District judge.
The District judge accepted the rate of Rs. 10/ per sq. yard as fair, reduced the amount of deductions for providing electric installations by Rs. 10,000/ and allowed a sum of Rs. 10,000/ for the low lying area at the rate of Rs. 3/ per sq.
yard, thereby increasing the amount of compensation by Rs. 20,000/ .
Not being satisfied the respondent appealed to the High Court.
The High Court held that the rate of compensation for the land except the low lying portion, should be Rs. 13/8/ per sq yard and for the low lying portion it should be Rs. 8/8/ per sqyard.
It further awarded a sum of Rs. 7,000/ for the building.
In arriving at the figure of Rs. 13/8/ the High Court took into account only four sale transactions which had been made by the respondent at the rates of Rs. 12, I5, 14 and 7/8/ per sq. yard but did not take into consideration two other transactions which had been made by the respondent at the rates of Rs. 6/8/ and Rs. 10 per sq. yard.
It calculated the average of the four transactions to be Rs. 12/2/per sq. yard and then took a second average between Rs. 15/ , 405 which was the maximum price obtained by the respondent and RS.
12/2/ and arrived at the figure of Rs. 13/8/ .
The High Court was also influenced by considerations such as the purpose for which the land was acquired.
, the report of certain medical authorities as to the unsuitability of the land for the maternity hospital and the delay in putting the land to the use for which it was acquired.
Held, that with regard to the valuation of the land, other than the low lying portion, the High Court misdirected itself by taking into account extraneous considerations and had committed an error of principle in arriving at the figure of Rs. 13/8/ by adopting a wrong method of ascertaining the market value.
The High Court ought to have taken the average of all the six sale transactions and arrived at the proper valuation of Rs. 11/. per sq. yard.
There was no justification for ignoring two of the sale transactions or for taking a second average.
With respect to the compensation for the low lying land and the building there was no error of principle or otherwise in the findings of the High Court and no interference was called for.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
|
Appeals Nos. 271 272 of 1955.
Appeal by special leave from the judgment and order dated June 19, 1953, of the Calcutta High Court in Income tax Reference Nos. 6 & 7 of 1950.
A.V. Viswanatha Sastri, A. K. Dutt, section K. Kapur and Sukumar Ghose, for the appellant.
C.K. Daphtary, Solicitor General of India, R. Ganapathy Iyer, R. H. Dhebar and D. Gupta, for the respondent.
November 13.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
The appellant was a Hindu undivided family carrying on business as piecegoods merchants in the city of Calcutta.
The present proceedings relate to the assessment of its income for the year 1946 47, the previous year thereto being June 12, 1944, to April 24, 1945.
In the course of the assessment, the appellant filed a petition under section 25 A of the Incometax Act, 1922, claiming that there had been a partition in the family on April 24,1945.
On May 27,1945, the In.
come tax Officer enquired into both these matters, the factum of partition and the quantum of income charge.
able to tax, and pronounced orders thereon on June 30, 1945.
On the petition under section 25 A, he held that the partition was true, and that the family had become divided into five groups.
As regards the income assessable under section 23, the dispute related to six sums aggregating to Rs. 2,30,346 shown in the accounts as the sale proceeds of ornaments.
The case of the appellant with reference to these sums was that at the partition the jewels of the family were sold in six lots, that the price realised therefrom was invested in the business, and that the credits in question related thereto.
The Income tax Officer declined to accept this explanation.
He observed that while the books of the appellant 417 showed that what was sold was ornaments, the accounts of Chunilal Damani to whom they were stated to have been sold, showed sale of gold.
He also pointed out that while the weight of the ornaments according to the partition agreement, exhibit A, was 3422 tolas, the weight of gold which was actually sold to the purchaser was 3133 tolas.
The explanation given by the appellant for this discrepancy was that the jewels in question had come down to the family through several generations, and were not pure.
The Income tax Officer rejected this explanation, because he held that the weight which was actually deducted for impurities in the accounts of the purchaser was almost negligible, and that what was sold was thus pure gold and not gold in old family jewels.
He also remarked that the sales were in round figures of 500 tolas, and that "if the assessee had been taking old ornaments broken or unbroken for sale it is inconceivable that on three occasions out of six he took gold weighing 500 tolas in round figure." He also referred to the fact that there was no list of the family jewels, and that there was nothing in the family accounts to show what jewels were held by the family.
He accordingly held that the story of sale of family jewels was not true, and that the sum of Rs. 2,30,346 represented concealed profits of the business, and he included the said amount in the taxable income.
He also followed it up by an order imposing tax on the appellant under the Excess Profits Tax Act.
The appellant took both these orders in appeal to the Appellate Assistant Commissioner who again went into the matter fully, and observed that the appellant had been changing his version as to the true character of the sales from time to time.
Dealing with the discrepancy of 289 tolas between the weight shown in the partition agreement, exhibit A, and that appearing in the accounts books of Chunilal Damani, he remarked that while the explanation of the appellant before the Income tax Officer was that it was due to alloy and brass in the jewels, before him the position taken up was that it was due to pearls and stones which 53 418 had been removed from the jewels, and that the gold contained in the jewels was pure gold.
He did not accept this explanation as, in his opinion, the jewels which were stated to have been in existence for three or four generations should have contained much more of alloy than was shown in the accounts of the purchaser.
He also considered that the sale of gold in round figures of 250 or 500 tolas was a circumstance which threw considerable doubt as to the truth of the appellant 's version.
In the result, he confirmed the findings of the Income tax Officer, and dismissed the appeals.
Against these orders, the appellant appealed to the Appellate Tribunal.
There, he sought to rely on a certain proceedings book as showing that the family jewels were really broken up, and that what was sold to Chunilal Damani was the gold thus separated.
As this proceedings book forms the real sheet anchor of the appellant 's contention before us, it is necessary to refer to the facts relating thereto in some detail.
On February 20, 1945, the members of the family entered into an agreement, exhibit A, to divide their joint proper.
ties among the five branches, of which it was constituted.
In sch.
B to this document are set out the jewels to be divided, and their total weight is, in round figure, 3422 tolas.
Then we have the proceedings book, and that purports to be a record of the decisions taken by the members of the family from time to time for implementing exhibit A.
The minutes of the meeting held on February 23, 1945, show that the pearls and stones imbedded in the jewels were to be removed and divided among the members, and that a goldsmith called Inderban was engaged for the purpose of breaking up the jewels.
Then we have the minutes of a meeting held on February 28, 1945, and therein, it is recited that the weight of the pearls, stones and copper removed was, again in round figure, 289 tolas, and deducting this out of 3422 tolas being the weight of the jewels set out in exhibit A, the gold which was available for partition was 3133 tolas.
It is recorded that this quantity should be sold in the market and the sale proceeds credited in the capital accounts of the business.
And then we have the last of the proceedings dated April 21, 419 1945, which record that gold weighing 3133 tolas was sold and the price credited in the accounts.
Now, if these minutes are genuine and give a correct picture as to what really took place, they would go a long way to support the version given by the appellant as to how he came by the sums making up a total Rs. 2,30,346.
Quite naturally, therefore, the appellant applied to the Tribunal to receive the proceedings book in evidence, and the ground given in support of the application was that it had been filed before the Income tax Officer but had not been considered by him.
Then the question was raised as to whether the proceedings book was, in fact, produced before the Incometax Officer.
The argument of the appellant was that the decision taken at the meeting dated April 21, 1945, which forms the concluding portion of the book had been translated into English at the instance of the Income tax Officer, the original being in Hindi, that the said translation was marked exhibit B and contained the endorsement of the Officer " Original produced ", and that accordingly the book must have been produced before the Officer.
But the Tribunal was not impressed by this argument.
It observed that the book iselft had not been initialled by the Officer, and that though the minutes of the meeting dated April 21, 1945, were genuine, there was no certainty that when it was shown to the Income tax Officer it was contained in the book now produced, that such minutes could have found a place in another book as well, and that, therefore, the book which was sought to be admitted before it in evidence was not proved to be the book which was produced before the Officer.
It was also of the opinion that the minutes of the previous meetings could not have been shown to the Officer.
It accordingly refused to receive the book in evidence, and relying on the other circumstances mentioned in the order of the Income tax Officer and the Appellate Assistant Commissioner, it held that the sum of Rs. 2,30,346 was not the proceeds of the family jewels sold but secret profits made by the appellant in business.
Another contention raised by the appellant before 420 the Tribunal was that in the proceedings under section 25A, the Income tax Officer had held, after making enquiry, that the partition set up by it was true, and that as according to the appellant, the partition consisted in the division, inter alia, of family jewels weighing 3422 tolas, the Income tax Officer must be held to have decided that the family was in possession of the jewels mentioned in exhibit A and had divided them in the manner set out in exhibit B, and that as that order had become final, it must conclude the present question in favour of the appellant.
The Tribunal repelled this contention on the ground that the order under section 25A only decided that there was partition in the family, and that it had no bearing on the issues which arose for decision in the assessment proceedings.
In the result, both the appeals were dismissed.
Pursuant to an order of the High Court of Calcutta dated December 7, 1950, passed under section 66(2) of the Act, the Tribunal referred the following questions for its Opinion: (1)" Whether the Income tax Appellate Tribunal was bound by the findings of fact of the Income tax Officer relating to the nature and division of the assets of the joint family in question which he arrived at in his enquiry under Section 25A(l) of the Indian Income tax Act ? (2)Whether there was any material or evidence upon which the taxing authorities could legally hold that the amount of Rs. 2,30,346 (Rupees two lakhs thirty thousand three hundred and forty six) represented undisclosed profits of the accounting year in question ? " The reference was heard by Chakravarti, C. J., and Lahiri, J., who by their judgment dated June 19, 1953, answered the first question in the negative and the second in the affirmative.
The appellant then filed an application under section 66A(2) for leave to appeal to this Court, and that having been dismissed, has preferred the present appeals on leave granted by this Court under article 136.
Mr. Viswanatha Sastri, learned counsel for the appellant, raised the following contentions: 421 (1) In view of the order of the Income tax Officer under section 25A, it was not open to the Department to contend that the sum of Rs. 2,30,346 does not represent the value of family jewels.
(2)The finding of the Income tax authorities that the said amount represents concealed profits of business is not supported by legal evidence and is, in any event, perverse.
(3)There is no evidence that the amount in question represents profits of business, and it was therefore not chargeable to tax under the provisions of the Excess Profits Tax Act.
(1)On the first question, the appellant relied on certain observations in the order of the Income tax Officer passed under section 25A as amounting to a decision that the family had the jewels mentioned in exhibit A, and that what was actually divided was only the price received therefor.
Now, when a claim is made under section 25A, the points to be decided by the Income tax Officer are whether there has been a partition in the family, and if so, what the definite portions are in which the division had been made among the members or groups of members.
The question as to what the income of the family assessable to tax under section 23(3) was, would be foreign to the scope of an enquiry under section 25A.
That section was, it should be noted, introduced by the Indian Income tax (Amendment) Act, 1928 (3 of 1928), for removing a defect which the working of the Act as enacted in 1922 had disclosed.
Under the provisions of the Act as they stood prior to the amendment, when the assessee was an undivided family, no assessment could be made thereon if at the time of the assessment it had become divided, because at that point of time, there was no undivided family in existence which could be taxed, though when the income was received in the year of account the family was joint.
Nor could the individual members of the family be taxed in respect of such income as the same is exempt from tax under section 14(1) of the Act.
The result of these provisions was that a joint family which had become divided at the time of the assessment escaped tax altogether.
To 422 remove this defect, section 25A enacted that until an order is made under that section, the family should be deemed to continue as an undivided family.
When an order is made under that section, its effect is that while the tax payable on the total income is apportioned among the divided members or groups, all of them are liable for the tax payable on the total income of the family.
What that tax is would depend on the assessment of income in proceedings taken under section 23, and an order under section 25A would have no effect on that assessment.
It is in this context that we must read the observations in the order under section 25A relied on for the appellant.
In fact, that order does not expressly decide that the family had the jewels mentioned in exhibit A, and that they were converted into cash as claimed by the appellant.
Nor could such a finding be implied therein, when regard is had to the scope of the proceedings under section 25A and to the fact that the order under section 23(3) holding that the sum of Rs. 2,30,346 did not represent the value of the family jewels sold was passed on the same date as the order under section 25A and by the very same officer.
(2)The next question is and that is what was really pressed before us whether the sum of Rs. 2,30,346 represents the price of family jewels sold or whether it is concealed business profits.
That clearly is a question of fact the finding on which is open to attack in a reference under section 66 only if it could be shown that there is no evidence to support it or that it is perverse.
Now, the contention of Mr. Viswanatha Sastri for the appellant is that the finding that it is concealed profits was reached by the Income tax Officer and by the Appellate Assistant Commissioner by ignoring the very material evidence furnished by the proceedings book, and that the Appellate Tribunal had erroneously refused to receive the book in evidence.
This contention raises two controversies: (i) Was the proceedings book which was produced before the Tribunal the book which was produced before the Income tax Officer ? (ii) If it was, were the minutes of the meeting prior to April 21, 1945, relied on by the appellant before the Income tax Officer ? Whatever 423 view one might be inclined to take on the former question, so far as the latter is concerned, it is perfectly plain that they were not.
On May 27, 1947, the enquiry was held on both the petitions under s, 25A and on the quantum of income assessable to tax under section 23(3).
Exhibit D is an extract from the order sheet of the Income tax Officer, and it runs as follows: "Regarding credits amounting to Rs. 2,30,346 6 3 in the a/c.
Udoyaram Bhaniram the representatives state that besides the evidence produced, which are noted below, they are not in a position to produce any further evidence, (i) Account books of the assessee containing the details of the amounts aggregating the aforesaid sum.
(ii) Sale statements rendered by Chunilal Damani,copies of which have been filed.
(iii)Roker of Chunilal Damani containing entries for purchase of gold, sold by the assessee family along with Surajrattan Bagri the accountant of Chunilal Damani.
(iv) Statement of Lakhmichand Bhiwaniwalla and Pannalal Bhiwaniwalla, member of the assessee family.
" This statement is signed by the counsel for the appellant.
It is clear from the above that the proceedings book was not relied on as evidence on the character of the receipts making up the sum of Rs. 2,30,346.
The fact appears to be that the appellant produced the proceedings book in support of his petition under section 25A for the purpose of establishing that there was a completed partition, and relied only on the minutes of the meeting held on April 21, 1945, in proof thereof, and that is why that alone was translated in English and marked as exhibit B. It is also to be noted that there is no reference in the order of assessment by the Income tax Officer under section 23(3) to the minutes of the meetings prior to April 21, 1945, and that they were not even translated, as was the record of the meeting dated April 21, 1945.
The obvious inference is that they were not relied on by the appellant, and were therefore not considered by the Officer.
It is also 424 significant that the order of the Income tax Officer refers to sale of ornaments broken or unbroken.
The story that the gold which was separated from the jewels after removing the pearls and stones was melted and sold in quantities of 250 or 500 tolas, which was the argument pressed before us, was not put forward before him.
It is argued that in the appeal against the order of the Income tax Officer the ground was definitely taken that the proceedings book had been produced before him, and that it was also prominently mentioned in a petition supported by affidavit filed by the appellant.
But the order of the Appellate Assistant Commissioner does not deal with this matter either, and it is inconceivable that he would have failed to consider it if it had been pressed before him.
It is also to be noted that the appellant who had obtained a return of the proceedings book from the Income tax Officer did not file it before the Appellate Assistant Commissioner, nor did he move for its admission in evidence.
Apart from taking the grounds to which we were referred, the appellant appears to have presented his case before the Appellate Assistant Commissioner precisely on the same lines on which lie pressed it before the Income tax Officer.
In view of these facts, we are unable to hold that in refusing to admit the proceedings book as evidence in the appeal, the Appellate Tribunal acted perversely or unreasonably.
Indeed, counsel for the appellant did not contend in the High Court that the Tribunal had acted illegally or unreasonably in refusing to admit the proceedings book in evidence.
That being so, it cannot be said that the finding given by the Tribunal on an appreciation of the facts and circumstances already set out is unsupported by evidence or is perverse.
The position may thus be summed up: In the business accounts of the appellant we find certain sums credited.
The explanation given by the appellant as to how the amounts came to be received is rejected by all the Income tax authorities as untenable.
The credits are accordingly treated as business receipts which are chargeable to tax.
In V. Govindarajulu 425 Mudaliar vs The Commissioner of Income tax, Hyderabad (1), this Court observed: " There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amounts of cash received during the accounting year, the Income tax Officer is entitled to draw the inference that the receipts are of an assessable nature.
" That is precisely what the Income tax authorities have done in the present case, and we do not find any grounds for holding that their finding is open to attack as erroneous in law.
(3)Lastly, the question was sought to be raised that even if the credits aggregating to Rs. 2,30,346 are held to be concealed income, no levy of excess profits tax can be made on them without a further finding that they represented business income, and that there is no such finding.
When an amount is credited in business books, it is not an unreasonable inference to draw that it is a receipt from business.
It is unnecessary to pursue this matter further, as this is not one of the questions referred under section 66(2).
In the result, the appeals fail and are dismissed with costs.
Appeals dismissed.
(1) , 810.
| IN-Abs | For the assessment year 1946 47 the appellant, a Hindu undivided family carrying on business, filed a petition before the income tax Officer, under section 25A of the Indian Income tax Act, 1922, claiming that there had been a partition in the family on April 24,1945.
As regards the income assessable under section 23 Of the Act, the appellant 's case regarding six sums aggregating to Rs. 2,30,346 shown in the accounts as the sale proceeds of ornaments, was that at the partition the jewels of the family were sold and that the price realised therefrom was invested in the business.
The Income tax Officer held that the partition was true and that the family had become divided into five groups, but as regards the amount of Rs. 2,30,346 aforesaid he rejected the explanation given by the appellant as to how the amount came to be received and held that the amount was not the proceeds of the family jewels sold but represented concealed profits of the business.
He accordingly included the said amount in the taxable income.
The appellant 's contentions, inter alia, before the Appellate Tribunal were (1) that the order passed under section 25A of the Act by the Income tax Officer must be held to have decided the factum of a partition in the family as well as the 'possession and division of the jewels, as set up by the appellant, and that it was not open to the Department to contend that the amount in question did not represent the value of the family jewels; and (2) that, in any case, there was no evidence to show that the amount represented undisclosed profits.
Held, that when a claim is made under section 25A of the Indian Income tax Act, 1922, the points to be decided by the Incometax Officer are whether there has been a partition in the family, and, if so, what the definite portions are in which the division had been made among the members or groups of members.
The question as to what the income of the family assessable to tax under section 23(3) was, would be foreign to the scope of an enquiry under section 25A, and any finding thereon would not be conclusive in assessment proceedings under section 23.
416 Held, further, that the assessee in the present case having failed to explain satisfactorily the truth of what is a credit in business accounts, the Income tax Officer was entitled to draw the inference that the amount credited represents in reality a receipt of an assessable nature.
|
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.
| IN-Abs | 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]
|
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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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.
| IN-Abs | 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]
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