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ivil Appeal No. 2494 of 1978.
From the Judgment and Order dated 9.12.
1977 of the Andhra Pradesh High Court in Writ Appeal No. 465 of 1976.
A. Subba Rao for the Appellant.
A.S. Nambiar, B. Parthasarthy, G. Prabhakar and K. Ram Kumar for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This appeal by special leave is from the common Judgment of the High Court of Andhra Pradesh dismiss ing two writ appeals and a writ petition.
The Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 (hereinafter referred to as the 'old Act ') was applicable to Vijayawada Municipality of Andhra Pradesh and property tax was levied under that Act.
The Andhra Pradesh Municipalities Act 1965 (hereinafter referred to as the new Act ') came into force on 2.4.1965.
Section 2(11) of the new Act defined "council" to mean "a municipal council constituted under this Act.
" Section 391(1) of the new Act repealed the old Act.
Section 389 of the new Act provided: "389.
Act to be read subject to Schedule IX in regard to first reconstitution of a council etc.
: In regard to the first constitution of a council for any local area under Section 3. or to the first reconstitution in accordance with the provisions of this Act, of a council in existence at the commencement thereof, and otherwise in first giving effect to the provisions of this Act, this Act shall be read subject to the rules in schedule IX.
" 384 The Schedule IX to the new Act contained the transitional provisions in the rules therein.
Rule 12 thereof dealt with levy of taxes etc.
and said: "12.
Levy of taxes etc.
Any tax, cess or fee which was being lawfully levied by or on behalf of any council at the com mencement of this Act and which may be lawfully levied under this Act, shall notwithstanding any change in the method or manner of assessment or levy of such tax, cess or fee be levied by or on behalf of the council at such rate as may be prevailing at such commencement or at such other rate as may be determined by the council from time to time, by a resolu tion for the year in which this Act is brought into force, and unless the Government by general or special order other wise direct, for subsequent years also.
" The result was that tax lawfully levied and continued to be levied under the old Act had to be continued unless the council by resolution determined such other rate from time to time, and unless the Government by general or special order otherwise directed under the transitional provisions.
On 18.9.
1969 the Government of Andhra Pradesh issued G.O. Ms. No. 749 M.A. in exercise of its powers under the afore said Rule 12 of Schedule IX directing that all Municipal Councils, shall with effect from 1.4.70 levy the Property tax as per the provisions of the new Act.
But due to certain administrative difficulties the revision could not be com pleted before 1.4.
1970 and the Government, therefore. issued G.O. Ms. No. 293 M.A. dated 18.4.
1970 directing the Municipal Council to levy the property tax as per the provi sions of the new Act from 1.10. 1970.
By another G.O. Ms. No. 81 M.A. dated 30.1.1971 the Government directed the Municipal Council of vijayawada to continue to levy the property tax under the provisions of the old Act as certain rate payers had filed writ petition in the High Court and obtained stay.
However, by G.O. Ms. No. 675 M.A. the G.O. Ms. No. 81 was rescinded and the Vijayawada Municipal Coun cil was directed to collect revised taxes under the provi sions of the new Act with effect from 1.10. 1970.
This latter G.O. Ms. No. 675 was in its turn rescinded by G.O. Ms. No. 255 M.A. dated 15.6.73 whereby the Government or dered that the Vijayawada Municipal Council shall continue to levy the property tax under the provisions of the old Act and that G.O. was to be deemed to have come into force from 1.10.1970.
As a result the Vijayawada Municipality continued to levy and enhance the property tax under the provisions of the old Act.
It 385 may be mentioned that under section 82 of the old Act property, tax was levied on the basis of gross annual rental value, whereas under section 87 of the new Act the basis of assessment in owner occupied building was the capital value thereof to be determined in the prescribed manner.
The G.O. Ms. No. 255 dated 15.6.73 was challenged by house property owners in the High Court in two writ peti tions under Article 226 of the Constitution of India seeking writ in the nature of mandamus or order or direction re straining the Vijayawada Municipal Council from enforcing it and declaring the same illegal and void.
It was inter alia contended before the learned Single Judge that by earlier G.Os.
the Government having directed that taxes should be levied under the new Act, the transitional power under rule 12 had been already exercised and the power to levy any tax under the old Act therefore ceased and it was not open to the Government to rescind the previous orders and re direct taxes to be levied under the old Act.
That contention was accepted observing: "The language of the Rule is clear that once the Government by a general or special order, otherwise directs, the power to levy tax under the old Act is exhausted.
" Even so, it was held that in view of the provisions in section 4(1) of the Andhra Pradesh Municipalities (Fourth Amendment) Act (23 of 1975) which validated the actions taken, those could not be challenged as invalid.
The submissions that the Amendment Act was not retrospective and that the enhancement of the tax was not made following the procedure prescribed by law, were also negatived holding that the procedure prescribed under the old Act was followed inasmuch as under the old Act the property tax was levied on the basis of only rental value whereas under the new Act it was on the basis either of the rental value or of the capital value, and that under the old Act when tax was being levied on the basis of rental value there was no need to ascertain the capital value of the land and for enhancing the assessment all that the authority had to know was whether there had been an increase in the rent and Rule 6 of Schedule II which dealt with the value of the building for the purposes of property tax was inapplicable as the levy under the old Act on the basis of rental value and enhancement could be done accord ing to the procedure contained in Schedule VII Rule 10 of the old Act.
It was not denied that special notice as re quired under the old Act was given.
The writ petitions were accordingly dismissed.
386 Two writ appeals were filed by the writ petitioners.
Another writ petition having raised identical questions was heard with the two appeals by the Division Bench.
The Divi sion Bench held that the finding of the Single Bench that having already given directions by the General Orders under the transitory provision of Schedule IX Rule 12 the Govern ment 's power under that provision ceased and it had no power to rescind that order and direct that the taxes which were under the old Act must be continued to be collected was not challenged before it.
The Division Bench held that the Fourth Amendment Act had entrusted to the Municipal Councils the power to tax under the old Act, though that Act had been repealed.
It held that though the actions of the Vijayawada Municipal Council pursuant to the General Order might have been invalid those were validated by section 4(1) of the Fourth Amendment Act.
It was also held that the appellant could pursue their remedies by way of revision under the new Act.
Thus, the Division Bench having dismissed the two writ appeals as well as the writ petition by the impugned judg ment and also having refused the certificate, the appellant has obtained special leave.
Mr. A. Subba Rao, the learned counsel for the appellant, submits that under the old Act the basis for assessment of property tax was the annual rental value while under the new Act it was capital value.
By the G.O. No. 749 the Government having directed that property tax would be levied under the new Act, the subsequent G.Os.passed after rescinding the said G.O. No. 749 and redirecting assessment to be made under the old Act were invalid as was held by the Single Bench and that finding was not challenged before the Divi sion Bench.
Consequently, it is submitted, during the period from 1969 to 1973 there was no valid law to enable the Municipal Council to levy taxes under the old Act and the actions under the G.Os.
are sought to be validated by the Fourth Amendment Act of 1975, but unless the substantive law relating to the method of assessment was also amended retro spectively, the invalid actions could not be validated, as that law could not be deemed to have been in existence by a legal fiction.
Council submits that section 87 of the new Act relating to levy of Property Tax was amended so as to bring it in conformity with the corresponding provision of section 20 of the old Act which prescribed rental value as the basis for assessment.
It is pointed out that section 3 of the Fourth Amendment Act did not contain any indication that the said amendment was retrospective so as to bring it on the statute book by a fiction prior to 1973 when the invalid assessment was made.
The Fourth Amendment Act came into force only from 10th June, 1975 which was the date of the Ordinance.
The amendment of section 87 of the new Act 387 being not retrospective in its operation prior to 1973, it is submitted that the invalid assessments could not have been validated.
Mr. A.S. Nambiar, the learned counsel for the respond ents, submits that the old Act entitled the Municipality to collect the taxes which had been collected in accordance with law and after coming into force of the new Act accord ing to the intermediate G.Os.; and that the impugned G.O. Ms. No. 255 dated 15.6.73 having directed the taxes to be levied and collected in accordance with the old Act, there was.
no infirmity in the Judgments of the High Court.
It appears that after the writ petitions were filed challenging G.O. Ms. No. 255 dated 15.6.73 the Government issued the Andhra Pradesh Municipalities (Amendment) Ordi nance 1975 (Ordinance 1 of 1975) which became the Andhra Pradesh Municipalities (Fourth Amendment) Act, 1975 which was deemed to have come into force on the 10th June, 1975.
By the said Amendment act not only sections 85 and 87 of the new Act were amended but also certain intervening actions of the Municipal Council were sought to be validated.
Section 85 dealt with levy of tax and sub section (1) thereof said: "Where the council by resolution determines that a property tax shall be levied, such tax shall be levied on a11 build ings and lands within the municipal limits save those ex empted by or under this Act or any other law." Sub section (2) provided: "Save as otherwise provided in this Act and subject to the provisions of sections 81 & 87 and in accordance with the rules made by the Government in this behalf, these taxes shall be levied . .
Section 2 of the Fourth Amendment Act amended section 85 of the new Act by substituting clauses (a) and (b) of sub section (2) excluding the proviso thereto, by the following words: "At such percentages of the annual rental value of lands or buildings or both as may be fixed by the council.
" Section 86 of the new Act provided as follows: "86.
Levy of property tax on a direction by Government: 388 (1) The Government may, after consultation with the council by order published in the Andhra Pradesh Gazette, direct any council to levy the property tax referred to in sub section (1) of Section 81 or any class of such tax, at such rate and with effect from such date, not being earlier than the first day of the half year immediately following that in which the order is published, as may be specified in the order.
(2) When an order under sub section (1) has been published, the provisions of this Act relating to property tax shall apply as if the council had.
on the date of publication of such order, by resolution, determined to levy the tax at the rate and with effect from the date specified in the order and as if no other resolution of the council under Section 81 determining the rate at which and the date from which property tax shall be levied, had taken effect.
(3) A council shall not alter the rate at which the property tax of any class or such tax is levied in pursuance of an order under sub section (1) or abolish such tax except with the previous sanction of the Government.
" Section 87(1) of the new Act provided: "87(1) Every building shall be assessed together with its site and other adjacent premises occupied as an appurtenance thereto unless the owner of the building is a different person from the owner of such site or premises.
, ' By section 3 of the Fourth Amendment Act in sub section (2) of section 87 of the new Act the following words were substituted, namely: "(2) The annual rental value of lands and buildings Shall be deemed to be the gross annual rent at which they may reason ably be expected to let from month to month or from year to year less a deduction, in the case of buildings, of ten per cent of that portion of such annual rent which is attributa ble to the buildings alone, apart from their sites and the adjacent lands occupied as an appurtenance thereto; and the said deduction shall be in lieu of all allowance for repairs or on any other account whatever.
389 Provided that in respect of any building and the land appur tenant thereto, the fair rent of which has been fixed under section 4 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the gross annual rent shall be the annual amount of the fair rent so fixed.
" Section 4 of the Fourth Amendment Act sought to validate the actions taken earlier by providing as under: "4(1) Notwithstanding anything in the provisions of the principal Act or any order of the Government made under the rule 12 in Schedule IX to the Principal Act, any,action taken till the commencement of this Act by any municipal council to continue to levy and collect the property tax in accordance with the method or manner or assessment or levy as provided in the Andhra Pradesh (Andhra Area) District Municipalities Act, 1920 or the Andhra Pradesh (Telangana Area) District Municipalities Act, 1956, as the case may be, shall not be deemed to be invalid or ever to have been invalid by reason only of the fact that such action was taken by the said municipal council during the period when the power in this behalf had not been validly entrusted to it in accordance with the provisions of the principal Act or the rules made thereunder and accordingly: (a) The levy and collection of property tax made in pursu ance of such action shall for all purposes be deemed to be, and to have always been, made in accordance with law; and (b) no suit or other proceeding shall be instituted or continued in any court against the municipal council con cerned or any person or authority whatsoever on its behalf on the ground only that any such action or levy and collec tion was not taken or made in accordance with law.
(2) Notwithstanding anything in sections 85 and 87 of the Principal Act as amended by this Act, the property tax levied in accordance with the provisions of the Principal Act as it stood before the commencement of this Act by such of the municipalities as have come into existence after the commencement of the principal Act shall continue to.
be levied and collected by or on behalf of the Municipal 390 Council of any such municipality for the year commencing on the 1st April, 1975 .
" Admittedly the validity of the Fourth Amendment Act had not been challenged in the High Court.
In fact it was passed during the pendency of the writ petitions in the High Court.
Mr Suba Rao 's submission is that section 3 of the Fourth Amend ment Act having not been made retrospective, section 4 of the Act could not have said that the levy and collection of property tax made in pursuance of such action for all purposes be deemed to be and to have always been made in accordance with law.
It is true that only sub section (2) of Section 87 of the new Act was substituted as stated above by the Fourth Amendment Act.
However.
once the amendment substituted sub section (2) of section 87 it formed a part of that section.
This amendment only provided the basis of assessment and it itself did not provide for the commencement of such calcula tion which however might be taken from the other provisions of the new Act or from the General Orders issued by the Government.
Section 4(1) of the Fourth Amendment Act ex pressly validated any action taken till the commencement of that Act notwithstanding anything in the provisions of the new Act or in any Government Order made under rule 12 of Schedule IX of the new Act and the Municipal Council should continue to levy and collect the property tax in accordance with the method or manner of assessment or levy as provided in the old Act and those acts shall not be deemed to be invalid or ever to have been invalid by reason only of the fact that such action was taken by the said municipal coun cil during the period when the power in this behalf had not been validly entrusted to it in accordance with the provi sions of the new Act or the rules made thereunder and that the levy and collection of property tax may in pursuance of such action shall for all purposes be deemed to be, and to have always been, made in accordance with law.
From the above provisions of section 4( 1 ) of the Fourth Amendment Act there is no doubt that the legislature intended to validate the actions taken under the general orders and under the old as well as the new Act.
It may be interpreted that the impugned G.O. having been validated, the tenure covered by it must also be held to have been covered by it, so that there was really no interregnum in the process or procedure of assessment of property tax.
Mr. Subba Rao relies on Janapada Sabha, Chhindwara vs The Central Provinces Syndicate Ltd. and Anr., ; In that case in 1935, the Independent Mining Local Board, Chhindwara con 391 stituted under C.P. Local Self Government Act, 1920 resolved to levy a cess on coal extracted within the area at 3 pies per ton.
The sanction of the Local Government, as required by section 51(2) of the Act, was obtained for the levy.
In 1943, the levy was enhanced to 4 pies, in 1946 to 7 pies and in 1947 to 9 pies.
The validity of the enhanced levy was chal lenged and this Court, in appeal, held that the increased levy would also require the previous sanction of the Local Government and such sanction not having been obtained, the levy at a rate higher than 3 pies was illegal.
The State legislature thereafter enacted the Madhya Pradesh Koyala Upkar (Manyatakaran) Adhiniyam, 1964.
Section 2(a) of that act defined "Board" to mean the independent Mining Local Board, Chhindwara and its successor body the Janapada Sabha Chhindwara, the appellant, constituted under the C.P. and Berar Local Government Act, 1948.
Section 2(b) defined "cess" to mean "a cess imposed by the independent Mining Local Board Chhindwara or its successor" Section 3(1) of that Act provided that 'notwithstanding a judgment of any court, cesses imposed, assessed or collected by the Board in pursuance of the notifications specified in the Schedule shall.
for all purposes, be deemed to be, and to have been validly imposed.
assessed or collected as if the enactment under which they were issued stood amended at material times so as to empower the Board to issue the said notifications.
In the Schedule were specified three notifications enhancing the rate of cess.
On the question whether the enhanced levy was validated by the 1964 Act, this Court held that the Act did not give legal effect to the imposition of cess at the enhanced rates.
It was pointed out that the text or even the nature of the amendments was not disclosed though Section 51(2) of the 1920 Act could not be deemed to have been repealed by the 1964 Act, because the latter Act, in terms was limited in its application to the Independent Mining Local Board, Chhindwara, and its successor body and only in respect of the three notifications specified in the Sched ule.
An Act so limited in its application to one Local Board and to specified notification could not repeal the sub section which applied to all Boards.
Nor was there anything to indicate that notifications issued by the appellant Board without the sanction of the State Government must be deemed to have been issued validly.
It was held that such an in tendment could not be implied without express language, in a taxing statute.
It was further observed that it was open to the legislature within certain limits to amend the provi sions of an Act retrospectively and to declare what the law shall be deemed to have been.
But the Legislature, in that case attempted to overrule or set aside a decision of the Court.
It was not open to the Legislature to say that a judgment of a Court properly constituted and rendered in exercise of its powers in a matter brought 392 before it shall be deemed to be ineffective either as a precedent or between the parties.
That case is, therefore, clearly distinguishable from the instant case on facts.
Firstly, in the instant case there is no question of any judgment of any Court having been overruled or set aside.
The Single Bench Judgment was passed on 23.3.76, that is, after the Amendment Act which came into force on 10.6.75.
Secondly the language of Section 4(1) is very clear as to the intention of the legislature as to the contents of the amendment.
What the amendment in the instant case did was to amend the new Act and also validate actions taken under the G.O. impugned in the case.
What was prescribed by the im pugned G.O. was the same as was prescribed by the old Act which itself stood repealed by the new Act.
The procedure thus prescribed was one under the G.O. and not under the old Act, and Section 4(1) validated those actions without reviv ing the repealed old Act itself but by amending the new Act and validating the transitory measure taken by virtue of the Government 's orders issued under the transitional provision Schedule IX, of the new Act particularly Rule 12 thereunder.
The validity of Section 4(1) itself having not been chal lenged, it was not open for the Courts to give.
an interpre tation contrary to the clear and unequivocal language of the Section.
The rule is that an amendment Act must be read as if the words of amendment had been written into the Act except where that would lead to an inconsistency.
(Shamarao V. Parulekar vs The District Magistrate, Thana Bombay, at 689) Power of the legislature to pass a law includes the power to validate actions retrospectively, of course, within Constitutional limitations.
It is apt to remember that the State 's power to tax is derived from the Constitution and the municipality 's power to tax is derived from the State Legislature which could delegate that power in the manner the Constitution permits to the municipal council, an agent of the State Government, and the munici pality cannot refuse to raise taxes as directed.
The proper authority to determine what should and what should not constitute a public burden is the Legislature of the State.
This is not only true for the State itself but it is also true in respect of each municipality of the State; these inferior corporate bodies having only such authority in this regard as the legislature shall confer upon them.
A statute will not be declared unconstitutional unless it is specifi cally challenged and the principle is equally applicable to an enactment authorising levy of a tax for a public purpose.
The power to tax is a sovereign power and is legislative in character and it has to be exercised within the Constitu tional limitations.
The statutes relating to municipal taxes may be changed according to the existing legislative rules of State policy unless forbidden by the Constitution from doing so.
Irregular assessment may 393 also be regularised with retrospective effect within.
the same Constitutional limitations.
Where the Court has not already declared invalid a taxing measure which was of doubtful validity, it is permissible for appropriate legis lature to validate it by retrospective legislation.
No legal fiction is involved in such a case.
Mr. Subba Rao 's submis sion has, therefore, to be rejected.
We find force in the submission of Mr. Nambiar in this regard.
The G.O. impugned before the High Court has been covered and validated by the above provisions, the G.O. itself covered the period after the repeal of the old Act and till the date of commencement of the Fourth Amendment so that no interregnum was really there.
The assessment made according to the provisions of the old Act were validated as actions taken by the council pursuant to the impugned G.O. and not under the provisions of the old Act which was al ready repealed.
While referring to the old Act, the G.O. did not revive the Act but only prescribed the same procedure as was found in the repealed Act as a transitory measure.
The validity of section 4(1) of the Fourth Amendment Act having not been challenged before the High Court, we do not find any infirmity in the impugned judgments of the High Court.
In the result, this appeal fails and is dismissed but under the facts and circumstances of the case without any order as to costs.
Y. Lal Appeal dismissed.
| IN-Abs | Vijayawada Municipality of Andhra Pradesh earlier levied property tax under the Andhra Pradesh (Andhra Areas) Dis trict Municipalities Act, 1920.
That Act 'was repealed and the new Act known as the Andhra Pradesh Municipalities Act, 1965 came into force on 2.4.1965.
Under the old act property tax was levied on the basis of gross annual rental value, whereas under section 87 of the new Act the basis of assess ment in owner occupied building was the capital value there of to be determined in the prescribed manner.
Section 389 of the new Act provided that that Act was to be read subject to Schedule IX which contained transitional provisions in the rules.
Rule 12 thereof dealt with levy of taxes etc.
The Government under Rule 12 issued a G.O. Ms. No. 749 M.A. directing that all Municipal Councils shall with effect from 1.4.70 levy the property tax as per the provisions of the new Act, which date by a subsequent G.O. was changed to 1.10.1970.
By another G.O.Ms.
No. 81 M.A. dated 30.1.71, the Government directed the Vijayawada Municipal Council to continue to levy the property tax under the provisions of the old Act as rate payers had filed writ petitions in the High Court and obtained stay.
However, by G.O.Ms.
675 M.A., the G.O.No. 81 was rescinded and the Vijayawada Municipal Council was directed to collect revised taxes under the provisions of the new Act with effect from 1.10.70.
This G.O. was rescinded and by G.O. Ms. No. 255 M.A. dated 15.6.73 the Government directed the Vijayawada Council to levy the property tax under the old Act.
As a consequence, the Vijayawada Municipal continued to levy and enhance the property tax under the old Act.
The validity of G.O.Ms.
No. 255 dated 15.6.73 was chal lenged by house property owners in the High Court in two writ petitions seeking an order restraining the Vijayawada Municipal Council from enforcing it.
and declaring the same illegal and void.
The petitioners ' contention 382 amongst others was that the Government having directed that the taxes be levied under the new Act, the transitional power under rule 12 stood exercised, and the power to levy tax under the old Act had ceased and it was no longer open to the government to rescind the previous orders.
The High Court accepted the said contention, but held that in view of the provisions of section 4(1) of the Andhra Pradesh Munici palities (Fourth Amendment) Act (23 of 1975), which validat ed the actions taken, those could not be challenged as invalid.
The writ petitions were therefore dismissed.
Ap peals to 'the Division Bench, having failed, this appeal has been filed after obtaining special leave.
Dismissing the appeal, this Court, HELD: The State 's power to tax is derived from the Constitution, and the municipality 's power to tax is derived from the State Legislature, which could delegate that power in the manner the Constitution permits to the municipal council, an agent of the State Government and the municipal ity cannot refuse to raise taxes as directed.
The proper authority to determine what should and what should not constitute a public burden is the Legislature of the State.
This is not only true for the State itself, but it is also true in respect of each municipality of the State; these inferior corporate bodies having only such authority in this regard as the legislature shall confer upon them.
[202E F] A statute will not be declared unconstitutional unless it is specifically challenged and the principle is equally applicable to an enactment authorising levy of a tax for a public purpose.
The power to tax is a sovereign power and is legislative in character and it has to be exercised within the constitutional limitations.
The statutes relating to municipal taxes may be changed according to the existing legislative rules of State policy unless forbidden by the Constitution from doing so.
[202G H] Irregular assessment may also be regularised with retro spective effect within the Constitutional limitations.
Where the Court has not already declared invalid a taxing measure which was of doubtful validity, it is permissible for appro priate legislature to validate it by retrospective legisla tion.
No legal fiction is involved in such a case.
[203A C] The G.O. itself covered the period after the repeal of the old Act and till the date of commencement of the fourth amendment so that no interregnum was really there.
The assessment made according to the provisions of the old Act were validated as actions taken by the Council 383 pursuant to the impugned G.O. and not under the provisions of the old Act which was already repealed.
While referring to the old Act, the G.O. did not revive the Act but only prescribed the same procedure as was found in the repealed Act as a transitory measure.
[203B C] Janapada Sabha Chhindwara vs The Central Provim 'es Syndicate Ltd. and Anr., ; , referred to.
|
230 239, 241, 249 251, 256, 257, 290, 303, 306 349, 351, 352, 355 357 of 1955 and Nos. 33 & 36 of 1956.
Petitions under Article 32 of the Constitution of India.
480 Achhru Ram and Naunit Lal, for the petitioners in Petitions Nos. 239, 241 & 251 of 1955.
Naunit Lal, for the petitioners in Petitions Nos. 249 & 250 of 1955.
B.D. Sharma and K. L. Mehta, for the petitioners in Petitions Nos. 290, 303, 306 349, 351, 355 357 of 1955 and 36 of 1956.
B. D. Sharma, for the petitioner in Petition No. 33 of 1956.
K. L. Mehta, for the petitioner in Petition No. 352 of 1955.
I. N. Shroff, for the petitioners in Petitions Nos.
230 238, 256 257 of 1955.
H. N. Sanyal, Additional Solicitor General of India, M. N. Kaul and T. M. Sen, for the respondents.
November 14.
The Judgment of the Court was delivered by WANCHOO, J.
These sixty nine petitions under article 32 of the Constitution by various land owners in the former State of Ajmer attack the validity of the Ajmer Abolition of Intermediaries and Land Reforms Act, 1955 (Ajmer III of 1955) (hereinafter called the Act).
The petitions disclose a large number of grounds on which the validity of the Act is impugned; but learned counsel, Mr. Achhru Ram and Mr. B. D. Sharma, appearing for various petitioners, have confined their arguments only to certain grounds raised in the peti tions.
We propose, therefore, to consider only the grounds urged before us.
The Act was passed by the Ajmer Legislative Assembly and received the assent of the President on May 29, 1955.
Section 4 of the Act provided for vesting of all estates held by intermediaries, as defined in the Act, in the State Government from a date to be notified.
The Act came into force on June 23, 1955, and August 1, 1955, was notified as the date on which the estates held by intermediaries would vest in the State Government.
The present petitions followed on the fixing of this date.
It is not disputed that the Act is protected under article 31 A(l)(a) of the Constitution inasmuch as it is a 481 piece of legislation for acquisition by the State of any estate or of any rights therein.
The argument is that in spite of this protection, either the whole Act or certain provisions of it are invalid, for reasons urged by learned counsel on behalf of the petitioners.
Mr. Achhru Ram attacks only sections 8 and 38 of the Act.
Mr. Sharma attacks the competency of the Ajmer legislature to pass the Act and also urges that in any case it does not apply to the case of jagirdars, one of whom is a petitioner before us in Petition No. 33 of 1956.
These four are the only grounds that have been urged before us, and we shall deal with them seriatim.
Re. section 8.
Section 8 is in these terms " Where an intermediary has on or after the 1st day of June, 1950, (a) granted a lease of any land in the estate or any part thereof for any non agricultural purposes other than mining for a period of three years or more; or (b) granted a lease or 'entered into a contract relating to any forest, fishery or quarry in his estate for a period of three years or more ; Or (c)granted a lease for the cultivation of any area of bir or pasture or waste land ; and the Collector is satisfied that such lease or contract was not made or entered into in the normal course of management but in anticipation of legislation for the Abolition of Intermediaries, the Collector may, subject to any rules made under this Act, by order in writing, cancel the lease or the contract as the case may be." It provides for cancellation of certain leases granted on or after June 1, 1950, where the lease is for a period of three years or more with respect to matters dealt with in cls.
(a) and (b) and where the lease is for any period in respect of matters dealt with in cl.
The Collector has been given the power to cancel such leases if they are not, made in the normal course of management but in " anticipation of legislation for abolition of intermediaries.
The argument is that 61 482 there can be no retrospective cancellation of leases granted at a time when the land owner had a right to dispose of his property as he liked under article 19(1)(f) and there was no restriction on such right.
It is said that in certain contingencies the cancellation of a lease might expose the land owner to the risk of paying compensation to the lessee, particularly in cases where the land owner might have realised the entire lease money in one lump sum for a lease of more than three years ' duration.
We are of opinion that there is no force in this contention.
The legislature was certainly competent, under entry 18 of List 11 of the Seventh Schedule to the Constitution relating to Land, to make this provision.
It cannot be disputed that the legislature has power in appropriate cases to pass even retrospective legislation.
Provisions for cancellation of instruments already executed are not unknown to law; for example, the Insolvency Acts provide for setting aside transfers made by insolvents under certain circumstances.
Therefore, the Ajmer Legislature certainly had the power to enact such a provision, and in the circumstances in which this provision has been made in the Act, it cannot be said that it is not protected under article 31 A.
The provision is not an independent provision; it is merely ancillary in character enacted for carrying out the objects of the Act more effectively.
The intention of the legislature was to give power to the Collector after the estates vested in the State Government to scrutinise leases of this kind made after June 1, 1950, which was apparently the date from which such legislation was under contemplation and to see whether the leases were such as a prudent land owner would enter into in the normal course of management.
Such leases would be immune from cancellation ; but if the Collector found that the leases were entered into, not in the normal course of management but designedly to make whatever the land owners could before the estate came to be transferred to the State Government, he 'Was given the power to cancel the same, as they would obviously be a fraud upon the Act.
Such, cancellation would subserve the purposes of the Act, and 483 the provision for it would therefore be an integral part of the Act, though ancillary to its main object, and would thus be protected under article 31 A (1)(a) of the Constitution.
Re. section 38.
Section 38 reads as follows Notwithstanding any agreement, usage, decree or order of a court or any law for the time being in force, the maximum rent payable by a tenant in respect of the land leased to him shall not exceed one and half times the revenue payable in respect of such land.
" This section provides for fixing the maximum rent at fifty per cent.
above the land revenue, and it is urged that this is an unreasonable restriction on the right of the land owner to let his holding.
The object of this legislation is to do away with intermediaries, and for that reason the estates held by intermediaries have been ' made to vest in the State Government tinder section 4.
Chapter VI of the Act, however, provides for allotment of lands for personal cultivation to intermediaries whose estates have been taken over upto a certain limit and the intermediaries who have been allotted lands under section 29 of the Act are called Bhuswamis or Kashtkars according to the nature of the lands allotted to them; (see section 30).
Bhuswamis and Kashtkars hold land directly from the Government and pay revenue to the Government; (see section 32).
The intention of the Act, therefore, is that intermediaries who have been allotted lands should cultivate them personally.
But section 37 permits Bhuswamis to let the whole or any part of the land allotted to them, while Kashtkars are forbidden from letting any part of their land except in certain circumstances when they are suffering from some disability.
In order, however, that the main object of the Act (namely, that the land should be cultivated by the person to whom it is allotted and that there should be no rackrenting) is attained, section 38 has been provided fixing the maximum rent at 50 per cent.
above the land revenue.
Thus the profit which a Bhuswami 484 can make by letting his land is so reduced compared to what he would earn if he cultivated it himself as to discourage him from letting the land and becoming a. new kind of intermediary.
Section 38, therefore, is another ancillary section, like section 8, and is meant to subserve the purposes of the Act, namely, the abolition of all intermediaries and encouragement of self cultivation of the land.
We are, therefore, of opinion that section 38 is also protected under article 31 A(l)(a) of the Constitution as an ancillary provision necessary for the purposes of carrying out the objects of the Act.
The competency of the Ajmer Legislation.
The argument in this behalf is put in this way.
The Act is a piece of legislation for the acquisition of estates.
Before the Constitution (Seventh Amendment) Act, 1956, came into force on November 1, 1956, there were two entries relating to acquisition of property in the Seventh Schedule, namely, entry 33 of List 1 (acquisition or requisitioning of property for the purpose of the Union) and entry 36 of List II(acquisition or requisitioning of property, except for the purposes of the Union, subject to the provisions of entry 42 of List 111).
The argument continues that the Act was passed by the Ajmer legislature under the power it was supposed to have under entry 36 of List 11 read with section 21 of the Government of part C States Act, 1951 (XLIX of 1951).
But entry 36 of List 11 only gives power to the State legislature to acquire property for purposes other than the purposes of the Union.
As, however, the property aquired under the Act vested in the President and therefore the Union after its acquisition, the Act was really for the acquisition of property for the purposes of the Union and could not have been passed by the Ajmer legislature.
In support of this argument Mr. Sharma referred us to various Articles of the Constitution in Part XII thereof relating to Finance, Property, Contracts and Suits, and also articles 73 and 239.
He contends that these provisions show that before the Government of Part C States Act was passed, the legislative power with respect to the areas comprised in Part C States 485 was in the Union which also through the President had executive power over the subjects over which the Parliament could legislate with respect to what were Part C States.
After the passing of the Government of Part C States Act, by virtue of the power conferred on Parliament by article 240, there was no change so far as the executive power in Part C States was concerned and it is still vested in the President.
Any property acquired for the purposes of Part C States vests in the President or the Union.
Therefore, according to him, the Ajmer legislature would have no power to enact a law for acquiring estates under entry 36 of, List 11; for the property so acquired would really be for the purposes of the Union and no law under that, entry could be made for acquiring property for the purposes of the Union.
We are of opinion that the argument, though plausible, must be rejected.
Assuming, without deciding.
that even after the passing of the Government of.
Part C States Act, any property acquired for a Part C State vested in the Union Government by virtue of the provisions of Part XII of the Constitution, the question still remains whether the Ajmer legislature could make a law under entry 36 of List II acquiring estates even though the estates when acquired may legally vest in the Union Government.
Now, entry 33 of List I refers to acquiring of property for the purposes of the Union.
It does not lay down in whom the property should vest after it has been acquired.
Similarly, entry 36 of List 11 speaks of acquisition of property, except for the purposes of the Union, and makes no mention in whom the property should vest after it has been acquired.
Entry 42 of List II which deals with compensation for such acquisition as well as for acquisition for any other public purpose, also does not speak where the property should vest after acquisition.
It is not necessary, therefore, to consider where the property should vest after acquisition in deciding the ambit of the competence of the legislature under those two entries.
The key to the interpretation of these two entries is not in whom the property would vest after it has been acquired 'but whether the 486 property is being acquired for the purposes of the Union in one case or for purposes other than the purposes of the Union in the other.
It is in this context that the competency of the Ajmer legislature to enact this law under entry 36 of List 11 is to be judged.
Section 21 of the Government of Part C States Act created a Legislative Assembly for Ajmer and gave that legislative assembly power to make laws for the whole or any part of the State with respect to any of the matters enumerated in List II or List III of the seventh Schedule to the Constitution.
Ajmer legislature was thus given power to pass laws with respect to acquisition of property for purposes other than those of the Union.
In other words, it bad the power to make law to acquire property for the purposes of the State of Ajmer or for any other public purpose.
The question then is whether the Act was passed acquiring estates in the State of Ajmer for the purposes of the State of Active of where the title may vest.
The answer to this question to our mind can only be one; the Act was passed by the State legislature for acquiring estates within the State and it could only have been for the purposes of the State.
There is no reason to limit the meaning of these general words, namely, 'the purposes of the State ', by importing in them the idea of where the property would vest after its acquisition.
That the purposes for which the estates were acquired were purposes of the State of Ajmer would be quite clear from the fact that now that the State of Ajmer is part of the State of Rajasthan, the estates acquired under the Act have gone to Rajasthan and have not been kept by the Union on the ground that the title vested in the Union.
Therefore, as the estates were acquired in this case for the purposes of the State of Ajmer the Act would be within the competency of the Ajmer legislature as it falls within the plain words of entry 36 of List 11.
Jagirdars.
The contention on behalf of the petitioner in petition No. 33 of 1956 is that under the Act the word intermediary includes a jagirdar.
The Act also provides that the definitions in the Ajmer Tenancy and Land 487 Records Act, 1950 (Ajmer XLII of 1950), will be imported where the words used in it are not defined.
The word I jagirdar is defined in the Ajmer Tenancy and Land Records Act as a person to whom the revenue of any land has been assigned under a sanad issued by the Chief Commissioner before the commencement of the Ajmer Land and Revenue Regulation, l877 ; (see section 2 (15) ).
It is not in dispute that a sanad was issued to a predecessor of the petitioner before 1877 ; but it is urged that a jagirdar is merely the assignee of land revenue and so far as that assignment is concerned it may be said to have been acquired under the Act.
But the petitioner besides being an assignee of land revenue is also owner of land and that interest of his has not been acquired under the Act.
We are of opinion that there is no force in this argument.
The word I estate ' is defined in section 2(v) of the Act as having the same meaning as assigned to it in the Ajmer Land and Revenue Regulation, 1877.
The Ajmer Regulation does not define the word 'estate ' as such, but it has defined the word ' Malguzar ' as a person liable under section 64 for payment of the revenue assessed upon an estate, under section 2(d).
Further, section 64 provides that all persons who are bound by the agreement prescribed by section 61 and their successors ininterest shall, while they continue to be owners of land in the Estate to which such agreement relates, be jointly and severally liable for the payment of the whole amount of revenue assessed upon such estate.
The Ajmer Regulation also defines particular types of estates like ' Istimrari Estate ' and 'Bhum ' but the general meaning of the word 'estate ' under the Ajmer Regulation is an area of land separately assessed to revenue, which is payable by the holder of the estate.
I Intermediary ' as defined in section 2 (viii) of the Act is a holder of an estate and includes a jagirdar.
Under section 4 all the estates held by intermediaries Vest in the State Government on the issue of a notification.
Therefore, if the jagirdars are intermediaries, that is holders of estates, their estates will vest in the State Government under section 4 of the Act.
The distinction which the learned counsel for this petitioner draws between the 488 interest of the jagirdar as jagirdar and as land owner is in our opinion wholly unfounded.
A perusal of annexures B, C and D, filed by the.
petitioner himself, would make this clear.
Anexures B and C are sanads with respect to the jagirs held by the petitioner.
Entry in the remarks column of annexure IS begins with the words " Grant of this estate lasts. ".
Similarly, in annexure C the opening words in the remarks column are " The Grant is to the Dudhadhari for the time being.
No part of the estate is transferable by sale or mortgage. ".
Therefore, the grants themselves designated these jagirs as estates.
They were assessed to revenue, which was, however, remitted and the estates thus came to be known as revenue free jagirs and the estate holder was designated as jagirdar.
It was because of this remission of the land revenue that the word I jagirdar ' was defined in the Ajmer Tenancy and Land Records Act, 1950, as assignee of land revenue.
Annexures B and C also show that when the grants were made before 1877 a large part of the area covered by the grant was uncultivated.
Annexure D shows that disputes arose between the jagirdars and the Biswedars in these jagirs about these uncultivated lands, and one such dispute was decided as late as 1954.
In that judgment (annexure D) history of jagir tenure was traced and it was held that the jagirdar was the owner of uncultivated land in his jagir and not the Biswedar.
Therefore, the distinction which has been drawn by the learned counsel between the jagirdar as an assignee of land revenue based on the definition in the Ajmer Tenancy and Land Records Act, 1950, and the same person as the land owner is unfounded.
It appears that though the jagirdar may have been defined as assignee of land revenue because of the peculiar fact that in the case of a jagirdar there had been remission of land revenue by sanads granted before 1877, he was the proprietor of his jagir and the grantee of the estate given to him as jagir There is no question, therefore, of separating the interest of jagirdar as the assignee of land revenue from, his interest as the holder of jagir estate by virtue of a grant before 1877.
The petitioner therefore in petition 489 No. 33 of 1956 is the holder of the jagir estate and therefore his entire interest in the estate is liable to resumption under the Act.
In the Ajmer Regulations, (Vol.
H to L) at pp.
564 6, these two estates have been considered and their history is given, and they are called jagirs.
The history of jagirs in Rajasthan was considered by this Court in Thakur Amarsinghji vs State of Rajasthan (1), at p. 330 onwards, and the word I jagir ' was hold to connote all grants which conferred on the grantees rights in respect of land revenue.
In the case of these two jagirs also, as annexures B and C show, land revenue was remitted and they were granted as estates for particular purposes.
They are, therefore, clearly estates in view of the origin of the title of the holder of these estates who is called a jagirdar and therefore the State could take them over under section 4 of the Act.
There is no force in any of the points raised on behalf of the petitioners, and the petitions fail and are hereby dismissed with one set of costs to the contesting respondent.
Petitions dismissed.
| IN-Abs | Section 4 Of the Ajmer Abolition of Intermediaries and Land Reforms Act, 955, provided for vesting of all estates held by intermediaries, as defined in the Act, in the State from a date to be notified, and the petitioners who were affected thereby filed petitions under article 32 Of the Constitution of India challenging the validity of the Act and, in particular sections 8 and 38 of the Act on the grounds that (1) entry 36 of List 11 of the 479 Seventh Schedule to the Constitution gave power to the State legislature to acquire property for purposes other than the purposes of the Union, while the property acquired under the Act vested in the President and therefore the Union after its acquisition, and the Act was really for the acquisition of property for the purposes of the Union and could not have been passed by the, Ajmer legislature, (2) section 8 provided for retrospective cancellation of leases granted at a time when the land owner had a right to dispose of his property as he liked under article 19(1)(f) of the Constitution and there was no restriction on such right, and (3) section 38 which fixed a maximum rent was an unreasonable.restriction on the right of the land owner to let his holding.
It was also contended for some of the petitioners who were assignees of land revenue as also owners of land that, under the Act, an intermediary included a jagir and that as a jagirdar was merely an assignee of land revenue, only that assignment could be said to have been acquired under the Act.
Held, (1) that the purposes for which the estates were acquired were purposes of the State of Ajmer and, consequently, the Act was within the competency of the Ajmer legislature as it fell within entry 36 of List II of the Seventh Schedule to the Constitution, and it was not necessary to consider where the property should vest after acquisition in deciding the ambit of the competence of the legislature under the entry ; (2) that the provisions in section 8 of the Act which gave power to the Collector to cancel leases which were found to have been made in anticipation of legislation for abolition of intermediaries and which were, consequently, a fraud upon the Act, subserve the purposes of the Act and would, therefore, be an integral part of the Act, though ancillary to its main object, and were protected under article 31 A(1)(a) of the Constitution ; (3)that the intention of the Act was that the intermediaries who were allotted lands should cultivate them personally and the object of section 38 was to discourage them from letting the land and becoming a new kind of intermediaries, and, consequently, the section being an ancillary provision necessary for the purposes of carrying out the objects of the Act, was protected under article 31 A(1)(a) of the Constitution; and (4)that in view of the origin of the title of the holders of these estates who were called jagirdars, a distinction could not be made between jagirdars as assignees of land revenue and the same persons as land owners, and therefore, the State could take over the entire interest in the estate under section 4 Of the Act.
|
ivil Appeal No 2960 of 1987.
From the Judgment and Order dated 18.2.
1986 of the Punjab & Haryana High Court in R.S.A. No. 3204 of 1984.
428 0 K. Khuller and R .C.
Kohli for the Appellant.
C.M. Nayar for the Respondent.
This appeal by special leave is against the judgment and decree dated February 18, 1986 in Second Appeal No. 3204 of 1984 of Punjab & Haryana High Court at Chandigarh.
The appellant/plaintiff while was working as Inspector.
Food and Supplies at Algaon.
the Director.
Food and Supplies.
Punjab on June 10.
1976 visited the place and found him to have purchased sub standard wheat landing him in receiving a charge sheet on June 29. 1976 for his miscon duct.
The appellant had submitted his explanation.
Rules 8 and 9 of the Punjab Civil Services (Punishment and Appeal) Rules.
1970 for short 'the Rules ' envisage the procedure to conduct an enquiry into the misconduct.
But the disciplinary authority.
on consideration of the explanation found that the appellant committed a minor misconduct.
Accordingly by order dated April 12.
1977 directed stoppage of two incre ments with cumulative effect.
The appellant laid the suit for a declaration that the offending order amounts to major penalty and imposition thereof without conducting enquiry as enjoined under Rules 8 and 9 is illegal.
On contest by the respondent state, the trial court held that the impugned order amounts to major penalty and granted a decree invali dating the order.
On appeal, though the Distt.
Court con firmed, on further Second Appeal the High Court held it to be minor penalty within the meaning of Rule 5(iv) of the Rules obviating the need to make regular enquiry.
Assailing the legality thereof this appeal has been filed.
The only question that needs decision is whether stop page of two increments with cumulative effect is a major penalty '? Admittedly Rules 8 and 9 envisage conducting an enquiry into misconduct after giving an opportunity to the delinquent employee in the manner prescribed therein and on establishing the charge to pass an appropriate order impos ing a major penalty prescribed in either clauses V to IX or minor penalty under clauses I to IV of Rule 5 of the Rules.
If it is a minor penalty indisputably the need to conduct regular enquiry has been dispensed with.
Rule 5 prescribes the penalties thus: "5.
Penalties: The following penalties may, for good and sufficient reasons.
and as hereinafter provided.
be imposed on a Government employee.
namely: 429 Minor Penalties (i) Censure; (ii) withholding of his promotions; (iii) recovery from his pay of the whole or part of any pecuniary loss caused by him to the Government by negligence of breach of orders; (iv) withholding of increments of pay; Major Penalties (v) reduction to a lower stage in the time scale of pay for a specified period, with further directions as to whether or not the Government employee will earn increments of pay during the period of such reduction and whether on the expiry of such period, the reduction will or will not have the effect of postponing the future increments of his pay; (vi) reduction to a lower time scale of pay, grade, post or service which shall ordinarily be a bar to the promotion of the Government employee to the time scale of pay, grade, post or service from which he was reduced, with or without further directions regarding conditions of restoration to the grade or post or service from which the Government employee was reduced and his seniority and pay on such restoration that grade, post or service; (vii) compulsory retirement; (viii) removal from service which shall be a disqualifica tion for future employment under the Government; (ix) dismissal from service which shall ordinarily be a disqualification for future employment under the Govern ment '.
Clauses VI to IX are not relevant to the facts of the case.
Withholding of increments of pay simpliciter undoubtedly is a minor penalty within the meaning of Rule 5(iv).
But sub rule (v) postulates reduction to a lower stage in the time scale of pay for a specified 430 period with further directions as to whether or not the Government employee shall earn increments of pay during the period of such reductions and whether on the expiry of such period the reduction will or will not have the effect of postponing the future increments of his pay.
It is an inde pendent head of penalty and it could be imposed as punish ment in an appropriate case.
It is one of the major penalties.
The impugned order of stoppage of two increments with cumulative effect whether would fall within the meaning of Rule 5(v)? If it so fails Rules 8 and 9 of the Rules require conducting of regular enquiry.
The contention of Shri Nayar, learned counsel for the State is that withholding two increments with cumulative effect is only a minor penalty as it does not amount to reduction to a lower stage in the time scale of pay.
We find it extremely difficult to countenance the contention.
With holding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rule 5(iv) of the Rules.
But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably mean that the two increments earned by the employee was cut off as a measure of penalty for ever in his upward march of earning higher scale of pay.
In other words the clock is put back to a lower stage in the time scale of pay and on expiry of two years the clock starts working from that stage afresh.
The insidious effect of the impugned order, by necessary implication, is that the appel lant employee is reduced in his time scale by two places and it is in perpetuity during the rest of the tenure of his service with a direction that two years ' increments would not be counted in his time scale of pay as a measure of penalty.
The words are the skin to the language which if pealed off its true colour or its resultant effects would become apparent.
When we broach the problem from this per spective the effect is as envisaged under Rule 5(v) of the Rules.
It is undoubted that the Division Bench in Sarwan Singh vs State of Punjab & Ors., I.L.R. , P.C. Jain, A.C.J. speaking for the division bench, while considering similar question, in paragraph 8 held that the stoppage of increments with cumulative effect, by no stretch of imagination falls within clause (v) of Rule 5 or in rule 4.12 of Punjab Civil Services Rules.
It was further held that under clause (v) of Rule 5 there has to be a reduction to a lower stage in the time scale of pay by the competent authority as a measure of penalty and the period for which such a reduction is to be effective has to be stated and on restoration it has further to be specified whether the reduction shall operate to postpone the future increments of his pay.
In such cases withholding of the increments without cumulative effect does not at all arise.
In case 431 where the increments are withhold with or without cumulative effect the Government employee is never reduced to a lower stage of time scale of pay.
Accordingly it was held that clause (iv) of Rule 5 is applicable to the facts of that case.
With respect we are unable to agree with the High Court.
If the literal interpretation is adopted the learned Judges may be right to arrive at that conclusion.
But if the effect is kept at the back of the mind, it would always be so, the result will be the conclusion as we have arrived at.
If the reasoning of the High Court is given acceptance, it would empower the disciplinary authority to impose, under the garb of stoppage of increments, of earning future incre ments in the time scale of pay even permanently with ex pressly stating so.
This preposterous consequences cannot be permitted to be permeated.
Rule 5(IV) does not empower the disciplinary authority to impose penalty of withholding increments of pay with cumulative effect except after hold ing inquiry and following the prescribed procedure.
Then the order would be without jurisdiction or authority of law, and it would be per se void.
considering from this angle we have no hesitation to hold that the impugned order would come within the meaning of Rule 5(v) of the Rules; it is a major penalty and imposition of the impugned penalty without enquiry is per se illegal.
The further contention of Shri Nayar that the procedure under Rule 8 was followed by issuance of the show cause notice and consideration of the explanation given by the appellant would meet the test of Rules 8 and 9 of the Rules is devoid of any substance.
Conducting an enquiry, dehorse the rules is no enquiry in the eye of law.
It cannot be countenanced that the pretence of an enquiry without reason able opportunity of adducing evidence both by the Dept.
as well as by the appellant in rebuttal, examination and cross examination of the witnesses, if examined, to be an enquiry within the meaning of Rules 8 and 9 of the Rules.
Those rules admittedly envisage, on denial of the charge by the delinquent officer, to conduct an enquiry giving reason able opportunity to the presenting officer as well as the delinquent officer to lead evidence in support of the charge and in rebuttal thereof, giving adequate opportunity to the delinquent officer to crossexamine the witnesses produced by the Dept. and to examine witnesses if intended on his behalf and to place his version; consideration thereof by the enquiry officer, if the disciplinary authority himself is not the enquiry officer.
A report of the enquiry in that behalf is to be placed before the disciplinary authority who then would consider it in the manner prescribed and pass an appropriate order as per the procedure in vogue under the Rules.
The gamut of this procedure was not gone through.
Therefore, the issuance of the notice and consideration of the 432 explanation is not a procedure in accordance with Rules 8 and 9.
Obviously, the disciplinary authority felt that the enquiry into minor penalty is not necessary and adhering to the principles of natural justice issued the show cause notice and on receipt of the reply from the delinquent officer passed the impugned order imposing penalty thinking it to be a minor penalty.
If it is considered, as stated earlier, that it would be only a minor penalty, the proce dure followed certainly meets the test of the principles of natural justice and it would be a sufficient compliance with the procedure.
In view of the finding that the impugned order is a major penalty certainly then a regular enquiry has got to be conducted and so the impugned order is clearly illegal.
The Trial Court rightly granted the decree.
The judgment and the decree of the High Court is vitiated by manifest illegality.
At this distance of time it is not expedient to direct an enquiry under rules 8 and 9 of the Rules.
The appeal is accordingly allowed and the judgment and decree of the High Court is set aside and that of the trial court is restored but in the circumstances without costs.
G.N. Appeal allowed.
| IN-Abs | The appellant, while working as Inspector, Food and Supplies, was found to have purchased sub standard wheat and hence chargesheeted for misconduct.
He submitted his expla nation.
Though Rules 8 and 9 of Punjab Civil Services (Punishment and Appeal) Rules, 1970 envisage the procedure to conduct an enquiry into the misconduct, the disciplinary authority, only on considering the explanation, found that that the appellant committed a minor misconduct.
According ly, an order was passed for stoppage of two increments with cumulative effect.
Appellant filed a suit for declaration that the said order imposed a major penalty which was ille gal in the absence of an enquiry under Rules 8 and 9.
The Trial Court granted a decree invalidating the said order.
On appeal, the District Court confirmed the decree.
However, on second appeal, the High Court held that the penalty imposed was a minor penalty within the meaning of Rules 5(iv) of the Rules obviating the need to make regular enquiry.
Aggrieved, the appellant has preferred this appeal, by special leave.
Allowing the appeal, HELD: 1.
Withholding of increments of pay simpliciter without any hedge over it certainly comes within the meaning of Rule 5(iv) of the Punjab Civil Services (Punishment and Appeal) Rules.
But when penalty was imposed withholding two increments i.e. for two years with cumulative effect, it would indisputably mean that the two increments earned by the employee was cut off as a measure of penalty for ever in his upward march of earning higher scale of pay.
In other words the clock is put back to a lower stage in the time scale of pay and on expiry of two years the clock starts working from that stage afresh.
The insi 427 dious effect of the impugned order by necessary implication, is that the appellant employee is reduced in his time scale by two places and it is in perpetuity during the rest of the tenure of his service with a direction that two years ' increments would not be counted in his time scale of pay as a measure of penalty.
Rule 5(iv) does not empower the disciplinary authori ty to impose penalty of withholding increments of pay with cumulative effect except after holding inquiry and following the prescribed procedure.
Then the order would be without jurisdiction or authority of law, and it would be per se void.
Considering from this angle the impugned order would come within the meaning of Rule 5(v) of the Rules, and the imposition of major penalty without enquiry is per se ille gal.
Sarwan Singh vs State of Punjab & Ors., ILR , overruled.
Rules 8 and 9 admittedly envisage, on denial of the charge by the delinquent officer, to conduct an enquiry giving reasonable opportunity to the presenting officer as well as the delinquent officer to lead evidence in support of the charge and in rebuttal thereof, giving adequate opportunity to the delinquent officer to cross examine the witnesses produced by the Department and to examine witness es if intended on his behalf and to place his version; consideration thereof by the enquiry officer, if the disci plinary authority himself is not the enquiry officer.
A report of the enquiry in that behalf is to be placed before the disciplinary authority who then would consider it in the manner prescribed and pass an appropriate order as per the procedure in vogue under the Rules.
The gamut of this proce dure was not gone through.
Therefore, the issuance of the notice and consideration of the explanations not a procedure in accordance with Rules 8 and 9. 4.
The Trial Court rightly granted the decree, and it is restored.
The judgment and the decree of the High Court is vitiated by manifest illegality and is set aside.
At this distance of time it is not expedient to direct an enquiry under Rules 8 and 9 of the Rules.
|
ivil Appeal No. 173 of 1986.
From the Judgment and Order dated 29.3.
1985 of the Andhra Pradesh Administrative Tribunal, Hyderabad in Repre sentation Petition No. 1589 of 1983.
WITH Writ Petition (Civil) Nos.
11135 37 of 1984.
485 (Under Article 32 of the Constitution of India).
C. Sitharamaiah, G. Prabhakar, D. Prakash Reddy, B. Rajeshwar Rao and Vimal Dave for the Appellants.
Subodh Markandeya, W.A. Nomani, Seshagiri Rao, Mrs. Chitra Markandeya and A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
Civil Appeal No. 173 of 1986: By the judgment under appeal the Andhra Pradesh Adminis trative Tribunal has accepted the claim of seniority pressed by the respondents in their Representation Petition No. 1589 of 1983.
The respondents were working as Lower Division Clerks (LDCs) in the district police offices/units in Andhra Pra desh, when the question of appointing LDCs in the Chief Office arose.
It was decided to give an opportunity to the LDCs working in the district police offices/units on the condition that they would be willing not to rely upon their service rendered in the district police offices/units for the purpose of seniority and that their seniority would be counted with effect from the date they joined the Chief Office.
Accordingly a Memorandum Rc.
No. 1020/S1/68 dated 21.11.
1968 (Annexure 'A ') was issued to the district police offices/units.
The choice was limited to probationers and approved probationers having good service records.
The letter expressly stated that the appointees were to be put at the bottom of the list of probationers or approved proba tioners already working in the Chief Office.
Immediately thereafter the respondents and two other LDCs, who are not parties to the present case, expressed their desire to join the Chief Office on the condition as mentioned in the said memorandum.
They in positive terms declared in Annexure 'C ' series their willingness to forego their seniority.
After examination of their service records, orders were passed and accordingly Memorandum Rc.
No. 1020/S1/68 dated 1.6.
197 (1 Annexure '0 ') was issued to the heads of departments of the concerned district police offices/units.
A pointed reference to the memorandum of 21.11.
1968 was made stating that the clerks in question were to take their seniority from the date of their joining the duty in the Chief Office as already mentioned in their letters.
Accordingly, all the five respondents joined their duty in the Chief Office after submitting, with reference to the memorandum dated 1.6.
1970, separate letters (at pages 40 44 of the 486 paper book) addressed to the Inspector General of Police, stating that: "I submit that I am willing to take the last rank in senior ity in the category of LDCs.
in Chief Office from the date reporting duty in Chief Office.
" Their respective dates of joining the Chief Office are detailed in the Memorandum dated 7.9.1970, Annexure 'H ' (page 47 of the paper book).
They were placed on probation with the condition that if they failed to complete their probation satisfactorily they would be sent back to their original district/unit offices.
The respondents satisfactorily completed their proba tion and were substantively confirmed in the Chief Office and their seniority was counted with effect from the dates they joined the Chief Office.
In 1983 they filed an applica tion before the Andhra Pradesh Administrative Tribunal claiming that they were entitled to count their service rendered in the district police offices/units for the pur pose of their seniority in the Chief Office, which has been allowed by the impugned judgment.
In support of their claim the respondents relied on the Memorandum Rc.
No. 1020/S1/68 dated 18.1.
1969 (Annexure 'B ') issued by the office of the Inspector General of Police to the heads of the district police organisations/units, stating that, "In continuation of the Chief Office memorandum cited, the Commissioner of Police, all Superintendents of Police and Commandants etc., are requested to state whether there are any L.D. Clerks willing to come on transfer to Chief Office, if the condition stipulated in the Memorandum cited regarding taking of last rank is not insisted upon.
The records of the L.D. Clerks recommended should be good.
" It has been argued before the Tribunal as also before us that this letter clearly indicates that adequate number of clerks from the district police offices/units were not available and a decision to forgo the condition in regard to the seniority of the clerks was taken.
It has been contended that in view of this departmental decision the respondents should not be bound down by their statements made in Annex ures 'C ' series and in their letters Annexures 'E ' series.
The Tribunal has accepted their plea.
487 5.
Mr. C. Sitharamaiah, the learned counsel appearing in support of the appeal, has urged that the Memorandum Annex ure 'B ' does not indicate any final decision taken by the Department.
The learned counsel appears to be right.
A perusal of the letter makes it clear that the office of the Inspector General of Police was only making an inquiry in the terms indicated therein.
It is true that presumably.
sufficient number of volunteers from the district police offices/units were not available which promoted the authori ty concerned to issue the letter Annexure 'B ', but it does not go beyond circulating a query.
It cannot be suggested on its basis that there was a reversal of the policy with respect to the counting of the seniority of the incoming LDCs from the district police offices/units.
It has been asserted in the counter affidavit of the State filed before the Tribunal that not a single person was allowed to join the Chief Office on the condition indicated in Annexure 'B ', and it has not been denied on behalf of the respondents either before the Tribunal or before us.
The respondents have not been able to produce a copy of any decision taken on the lines indicated in Annexure 'B ' nor have they been able to cite even a single case of an LDC joining the Chief Office on such a supposed decision.
We have, therefore, no hesitation in holding that the condition mentioned in Annex ure 'B ' is of no avail to the respondents.
The learned counsel for the respondents referred to r. 16 of the A.P. Ministerial Service Rules (hereinafter referred to as the Rules) and urged that when the respond ents were permitted to join the Chief Office, they were allowed to do so by way of a regular transfer from one department to another and this was done for administrative exigencies of the Police Department, within the meaning of the said Rules, and not on their own request.
They are, therefore, entitled to count their earlier service for the purpose of seniority.
It is alleged that the fact that the respondents were paid travelling allowances for joining the Chief Office corroborates their stand.
We have considered the argument addressed on behalf of the respondents along with the relevant documents but do not find any merit in their stand.
It has to be appreciated that the cadre of the Chief Office is altogether different from cadre,of the district police offices/units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office.
The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services.
It is true that the differential advantage was not so substantial as to attract every LDC working in the dis trict offices/units, and in that situation the letter Annex ure 'B ' had to be circulated.
However, so far the respond ents and the two others 488 were concerned, they found it in their own interest to forego their claim of seniority on the Oasis of their past services and they did so.
It is significant to note that their letters Annexures 'E ' series were sent to the Inspec tor General of Police many months after the issuance of Annexure 'B ' and they were allowed to join the Chief Office on clear Understanding that they would not be entitled to count their past services.
It is, therefore, idle to suggest that the respondents can.now turn back and repudiate their commitment expressly made many months after Annexure 'B '.
So far the allegation regarding payment of travelling allowance is concerned, the same has been dealt with in paragraph 6 of the counter affidavit of the appellant filed before the Tribunal in the following terms: "They cannot claim seniority now after a lapse of 13 years on the ground that they were given T.T.A. at the time of their transfer.
No orders were issued from this office to the Subordinate Officer that the petitioners are eligible for T.T.A. and joining time.
In fact the Dy.
Inspr.
of Police, Hyderabad Range in his order No. 534/E/256/70 Hr.
Dt. 5.6.70, addressed to Supdt.
of Police, Medak had specif ically informed that the petitioners No. 1 and 2 are not entitled for any T.T.A. and joining time." [t is urged that inspite of the clarification made by the Deputy Inspector General of Police, as stated above, if some officers permitted the respondents to draw travelling allow ance, this cannot be a ground to hold that it was a case of regular departmental transfer.
The '.
16 cannot, therefore, be held to be applicable in the present case.
Mr. Sitharamaiah urged that having regard to the entire circumstances as spelt out of the different documents on the records of the present case, it should be held that the Memorandum Annexure A ' issued by the Office of the 'Inspector General of Police was a mere invitation to the LDCs in the district police offices/units to apply for appointment in the Chief Office with the condition mentioned therein.
and availing of the opportunity, the respondents accordingly requested by their statements and letters for appointment in the Chief Office.
It is suggested by the learned counsel that if the case be treated to be one of transfer, it has to be held, in the circumstances, to be at the request of the LDCs concerned within the meaning of r. 16 of the Rules.
There considerable substance in the alter native argument of Mr. Sithara 489 maiah also, but, it is not necessary to go into this ques tion deeper as the absorption of the respondents in the Chief Office cannot be treated by way of transfer within the meaning of the Rules.
Besides the above infirmities there are two other important considerations which weigh heavily against the respondents.
The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum Annexure 'A ' must have been passed in favour of the other incumbents of the service.
The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period.
Besides, the respond ents, in the application before the Tribunal, did not im plead their colleagues who have been prejudicially affected by the impugned judgment.
It cannot be assumed that the respondents had no knowledge about them.
As was rightly pointed out by Mr. Sitharamaiah, although in paragraph 4(d) of their application before the Tribunal (page 53 of the paper book) the respondents mentioned one Vijaya Chand alleged to be an officiating LDC who was put over them, they did not implead even him.
We are, therefore, of the view that apart from the merits of the case, the petition of the respondents before the Tribunal was fit to be rejected on the ground of the above mentioned last two points.
Finally the learned counsel for the respondents said that in any event they should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there.
We do not find any merit in this submission either.
Accordingly, the judgment under appeal passed by the Andhra Pradesh Administrative Tribunal is set aside and the Representation petition of the respondents is dismissed.
The appeal is allowed, but, in the circumstances, there will be no order as to costs.
Writ Petitions (Civil) Nos.
11135 37 of 1984: 11.
These applications under Article 32 of the Constitu tion have been filed by the three petitioners who were appointed during the years 1965 67 in the Central Office of the Inspector General of Police (now redesignated as Direc tor General and Inspector General of Police), Andhra Pra desh.
Since they had not passed the general examination held for the purpose, a special qualifying examination was held in 1968 to facilitate the petitioners and other similarly situated persons to pass at the test.
The petitioners, however, did not appear at this 490 examination.
Another special qualifying examination was held in 1974 and the petitioners successfully cleared the same.
Thereafter, by an order dated 17.6.
1976 (Annexure 'E '), their services were regularised with effect from 1.8.1972.
Their claim in the present case is for counting their sen iority with effect from their initial dates of appointment in the years 1965 67 12.
It has been contended by the learned counsel for the petitioners that they were not qualified for the 1968 exami nation and at the very first opportunity available to them in 1974, they passed the special qualifying examination and, therefore, they should not be penalised by ignoring their services rendered before 1.8. 1972.
It is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years.
By way of a preliminary objection, Mr. Subbarao, the learned counsel appearing for some of the officers impleaded as respondents in this petition, has drawn our attention to the fact that earlier a writ application, being W.P. No. 106 of 1980, was filed by some of the employees of the central office making similar claim of seniority and the present petitioners specifically stated that their case would be governed by the judgment in the earlier writ petition which was ultimately dismissed by this Court on August 8, 1986 (M. Nirmala and Others vs State of Andhra Pradesh and Others, Mr. Subbarao contends that after the dismissal of the earlier case, the petitioners now cannot be permitted to urge any new ground in support of their claim.
The reply on behalf of the petitioners is that if the earli er writ application had been allowed, they would also be entitled to succeed, but after its dismissal their claim cannot be rejected without examination of the additional questions which did not arise in the earlier case.
On merits the reply on behalf of the Government of Andhra Pradesh is that the respondent officers had joined the office of the Inspector General of Police after qualify ing at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers.
The general examinations for recruitment to the central office were held in 1964, 1965, 1966, 1967 and 1968, but the peti tioners did not choose to avail of the ordinary method for joining the service.
Instead 491 they entered the service by the side door and their depart ment, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations.
It is contended that in these circumstances the rule as laid down in Memorandum No. 473/Y1/70 5 dated 24.7.
1970 (Annex ure 'VII ') is clearly applicable, and for the purpose of seniority the petitioners were given the advantage of two years of service rendered by them prior to their successful ly completing the special qualifying examination.
The argu ment is well founded.
The learned counsel also pointed out that the standard of the special qualifying examination was not the same as that of the general examination held for recruitment.
Besides the weakness in the case of the petitioners as mentioned above, the delay of 8 years on their part to initiate legal remedy is fatal and these writ petitions are fit to be rejected on this ground alone.
The writ applica tions are, therefore, dismissed with costs payable to the respondents represented by Mr. Subbarao.
G.N. Appeal allowed and writ petition dismissed.
| IN-Abs | The respondents in the Civil Appeal, were working as Lower Division Clerks in the district police offices/units.
Some posts of Lower Division Clerks fell vacant in the Chief Office and it was decided to fill up the same by appointing Lower Division Clerks with good service record from the district police offices.
Accordingly a Memorandum was issued on 21.11.
1968 which expressly stated that the appointees would be put at the bottom of the list of Lower Division Clerks already working in the Chief Office.
The respondents and two others expressed their willingness to join and also to forego their seniority.
Accordingly an order was passed and the respondents joined duty in the Chief Office in 1970 and were placed on probation.
They completed the probation satisfactorily and were confirmed with their seniority counted from the dates they joined Chief Office.
Later, in 1983 they filed a Representation Petition before the State Administrative Tribunal that in view of Memorandum dated 18.1.1969 which stated that the condition regarding taking last rank would not be insisted upon, the respondents were entitled to count their service rendered in the district police offices/units for the purpose of senior ity in the Chief Office.
The Tribunal allowed the petition.
The State has preferred the appeal against the said order.
The petitioners in the Writ Petitions were appointed in the years 1965 to 1967.
Since they did not pass the general examination, a special qualifying examination was held in 1968.
They did not appear at the examination.
Another chance was given in 1974 and the petitioners successfully cleared the same.
By an order dated 17.6.1976, their services were regularised with effect from 1.8.1972.
The petitioners challenged the validity of the order, claiming, that their seniority 483 should be counted from the dates they were appointed.
Allowing the appeal and dismissing the Writ Petitions, HELD: 1.
It has to be appreciated that the cadre of the Chief Office is altogether different from the cadre of the district police offices/ units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office.
The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services.
It is true that the differential advantage was not so substantial as to attract every Lower Division Clerk working in the district offices/units, and in that situation the letter dated 21.11.1968 had to be circulated.
However, so far the respondents and the two others were concerned, they found it in their own interest to forego their claim of seniority on the basis of their past services and they did so.
It is significant to note that their letters expressing their willingness to join Chief Office by foregoing their seniority were sent to the Inspector General of Police many months after the issuance of circular dated 18.1.1969 stat ing that the condition of foregoing seniority would not be insisted upon and they were allowed to join the Chief Office on clear understanding that they would not be entitled to count their past services.
It is, therefore, idle to suggest that the respondents can now turn back and repudiate their commitment expressly made many months after the said circu lar.
[297G H; 298A B] 2.
So far the allegation regarding payment of travelling allowance is concerned, if some officers permitted the respondents to draw travelling allowance, this cannot be a ground to hold that it was a case of regular departmental transfer.
Rule 16 of the Andhra Pradesh Ministerial Service Rules cannot, therefore, be held to be applicable in the present case.
[298C E] 3.
The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum dated 21.11.1968, must have been passed in favour of the other incumbents of the service.
The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period.
Besides, the respondents, in the application before the Tribunal, did not implead their colleagues who have been prejudicially affect ed by the impugned judgment.
It cannot be assumed that the respondents had no knowledge about them.
Apart from the merits of the case, the petition of the respondents before the Tribunal 484 was fit to be rejected on these grounds.
[298B D] 4.
There is also no merit in the contention that the respondents should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there.
[299E] 5.1 As regards the Writ Petitions, it is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years.
[300C] 5.2 Though a Writ Petition was filed by some of the employees of the Central Office making similar claim of seniority the same was ultimately dismissed by this Court on August 8, 1986.
[300E] M. Nirmala and others vs State of Andhra Pradesh and Others, , referred to.
5.3 The respondent officers had joined the Central Office after qualifying at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers.
The general examinations for recruitment to the Central Office were held in 1964, 1965, 1966, 1967 and 1968, but the petitioners did not choose to avail of the ordinary method for joining the service.
Instead they entered the service by the side door and their department, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations.
However, for the purpose of seniority the petitioners were given the advan tage of two years of service rendered by them prior to their successfully completing the special qualifying examination.
Even the standard of the special qualifying examination was not the same as that of the general examination held for recruitment.
[300G H; 301A B]
|
vil Appeal Nos. 778 and 781 of 1976.
From the Judgment and Order dated 30.6. 1975 and 8.8. 1975 of the Kerala High Court in Writ Appeal Nos. 126 and 378 of 1973.
V. Gaurishanker, section Rajappa and Ms. A. Subhashmi for the Appellant.
G. Vishwanatha Iyer.
Mrs. K. Prasanti and N. Sudhakaran for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
These appeals on certificate issued by the High Court under Article 133 of the Constitution are direct ed against the order and judgment of the High Court of Kerala.
Briefly, the facts giving rise to these appeals are: the respondent was a member of the erstwhile Nilambut Kovilagam governed by the Madras Marumakkathyyam Act, she was assessed to Income Tax as Hindu Undivided Family as the family pos sessed considerable property including lands.
forests and other properties.
The Income Tax Officer assessed the re spondent for the assessment years 1967 68, 1968 69 and 1969 70 treating the members of the family included within the HUF.
Before the Income Tax Officer, the respondent raised a plea, that there had been division of Tavazhi under a partition agreement dated 3.7.
1958 whereby all lands except forest lands were divided among the members of the family.
The respondent further claimed that the members of the Tavazhi swelled to 14 and these members effected a division in status by a registered document dated 21.2.
She further alleged that the division of Tavazhi into 14 shares was effected by a Civil Court decree in partition suit No. O.S. 22/1961 in the Court of Kozhikode.
It was pointed out on behalf of the respondent that the partition suit was decreed and the properties were 477 allotted to the respective share holders.
The Civil Court had appointed a commissioner to divide the property by metes and bounds in accordance to the shares of individual mem bers.
The respondent further claimed that since the status of HUF was disrupted on account of the decree of partition the HUF could not be assessed to income tax, instead the income derived by individual members could be considered for assessment.
The Income Tax Officer rejected the respondent 's claim and assessed the respondent as the head of the Tavazhi for the assessment years 1967 68, 1968 69 and 1969 70 by his order dated 16.3.
1970/ 27.3.
The Income Tax Officer held that the decree of the Civil Court merely conferred right on the members of the family for separate possession of the land falling to their share after the physical parti tion, and the final partition could be made on application made by _ individual members after depositing Commissioner 's fee.
Since the Civil Court decree was a preliminary decree and no final decree had been passed and no actual partition had been effected and no physical partition by metes and bounds had taken place in pursuance of the decree of partition, the status of HUF continued for purposes of assessment.
The Income Tax Officer observed that earlier the assessee was assessed having the status of HUF, and since no other evi dence except the decree of the Civil Court had been produced by her to show that there has been a real partition, there fore, the assessee 's claim for partition could not be ac cepted.
The respondent filed a writ petition in the High Court under Article 226 of the Constitution for quashing the orders of the Income Tax Officer on the ground that he failed to recognise the disruption of HUF in making the assessment.
A learned single of the High Court allowed the writ petition and quashed the assessment orders.
On appeal at the instance of the Revenue, a Division Bench of the High Court affirmed the order of the single Judge.
On an applica tion made on behalf of the Revenue the High Court granted certificate under Article 133 of the Constitution.
Hence these appeals.
The learned single Judge held that Section 171 of the Income Tax Act does not apply to a case where the division was effected before commencement of the accounting period, and the HUF having received no income during the accounting period it could not be assessed tax notwithstanding the fiction introduced by Section 171.
In appeal the Division Bench held that there was no express provision in Section 171 nor was there any necessary implication arising from the provisions of the Section that the income of the family after its division must 478 be treated or deemed to be the income of the HUF inspite of disruption of joint status '.
The Bench held that a HUF is a separate and distinct entity from the members constituting it and if that entity does not receive any income, the members ' income could not be assessed as income of the HUF.
The Division Bench further held that since there had been partition in the family and Tavazhi had ceased to be HUF long before the accounting periods, the provisions of the Act could not be pressed into service for the purpose of taxing the income of the individual members of the family treating them having the status of HUF with the aid of Section 17 1 of the Act.
The main question which fails for consideration is as to whether the partition as effected by the agreement dated 21.2.
1963 and also the decree of the Civil Court amount to "partition" under the explanation to Section 171 of the Act and further whether the Income Tax Officer acted contrary to law in holding that inspite of the partition as alleged by the respondent, the status of HUF was not disrupted and that status continued for the purposes of assessment during the relevant assessment years.
Under Section 171 a Hindu Family assessed as HUF, is deemed for the purposes of the Act to continue as HUF except where partition is proved to have been effected in accordance with the section.
The section further provides that if any person at the time of making of assessment claims that partition total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of partition.
If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them.
What would amount to partition for the purposes of the Section is contained in the Explanation to the Section which defines partition as under: "Explanation In this Section (a) 'partition ' means (i) where the property admits of a physical division, a physical division of the property, but a physical division of the income without a physical division of the property producing the income shall not be deemed to be a partition; or (ii) where the property does not admit of a physical divi sion, then such division as the property admits of, but a 479 mere severance of status shall not be deemed to be a parti tion.
" The above definition of the partition does not recognise a partition even if it is effected by a decree of court unless there is a physical division of the property and if the property is not capable of being physically divided then there should be division of the property to the extent it is possible otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court.
Ordinarily decree of a Civil Court in a partition suit is good evidence in proof of partition but under Sec tion 171 a legal fiction has been introduced according to which a preliminary decree of partition is not enough.
instead there should be actual physical division of the property pursuant to final decree.
by metes and bounds.
The Legislature has assigned special meaning to partition under the aforesaid Explanation with a view to safeguard the interest of the Revenue.
Any assessee claiming partition of HUF must prove the disruption of the status of HUF in ac cordance with the provisions of Section 171 having special regard to the Explanation.
The assessee must prove that a partition effected by agreement or through court 's decree, was followed by actual physical division of the property.
In the absence of such proof partition is not sufficient to disrupt the status of Hindu Undivided Family for the purpose of assessment of tax.
Under the Hindu Law members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court 's decree.
Members of the family may also agree to share the income from the property according to their re spective share.
In all such eventualities joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of Income Tax.
Section 171 of the Act and the Explanation to it, prescribes a special meaning to partition which is different from the general principles of Hindu Law.
It contains a deeming provision under which partition of the property of HUF is accepted only if there has been actual physical division of the property, in the absence of any such proof, the HUF shall be deemed to continue for the purpose of assessment of tax.
Any agreement between the members of the joint family effecting partition, or a decree of the Court for partition cannot terminate the status of HUF unless it is shown that the joint family property was physically divided in accordance with the agreement or decree of the Court.
480 On behalf of the respondent it was urged that the High Court has placed reliance on a Full Bench decision of Kerala High Court in Parameswaran Nambudiripad vs Inspecting As sistant Commissioner of Agricultural Income tax, 72 I.T.R. 664 where it was held that if the HUF was in fact not in existence during any part of an accounting period.
and the HUF as such had not received any income, the family could not be assessed to tax as HUF.
The view taken by the Full Bench has been approved by this Court in Inspecting Assist ant Commissioner of Agricultural Income Tax and Sales Tax (Special), Kozhikode vs Poomuli Manekkal Parameswaran Nam boodiripad, 33 I .T.R. 108.
On a careful scrutiny of the judgment of this Court we find that in that case interpreta tion of Section 29 of the Kerala Agricultural Income Tax Act 1950 as amended in 1964 was involved.
Section 29 after its amendment in 1964 made provision for assessment of Agricul tural tax after partition of a Hindu Undivided Family.
Under that Section there was no provision in the nature of Expla nation to Section 171 of the Income Tax Act.
This Court had no occasion to interpret Section 171 instead the Court interpreted Section 29 of that Act which is quite different from Section 17 1, therefore the appellant cannot draw any support from that decision.
In Kaloomal Tapeshwar Prasad vs
C.I.T., Kanpur, this Court interpreted Section 171 of the Act in detail.
On an elaborate discussion the Court held that under the Hindu Law it is not necessary that the property must in every case be partitioned by metes and bounds or physically into different portions to complete a partition.
Disruption of status can be brought about by any of the modes permissible under the Hindu Law and it is open to the parties to enjoy their share of property in any manner known to law according to their desire but the Income Tax Law does not accept any such partition for the purposes of assessment of tax instead it has introduced certain conditions of its own to give effect to the partition under Section 17 1 of the Act.
The Court held that in order to claim disruption of HUF on the basis of partition it is necessary to show that the partition had been effected physically by metes ,red bounds.
and in the absence of any such proof, the property would continue to be treated as belonging to the HUF and its income would continue to be included in its total income treating the assesse as HUF.
The High Court referred to Section 25A of the Income Tax Act, 1922 and placed reliance on a number of decisions in holding that in view of the decree of Civil Court for parti tion.
the HUF status had been disrupted and since there was no evidence on record to show that the HUF had received any income in the accounting year, the income received by indi vidual members of the joint family could not be 481 treated to be the income of HUF.
The High Court placed reliance on the Privy Council decision in Sunder Singh Majithia vs Commissioner of Income Tax, and a number of other decisions also in holding that the legal fiction introduced under Section 171 of the Act could not be extended to create tax liability on the HUF even after disruption of its status, pursuant to the Civil Court 's decree for partition.
We do not consider it neces sary to discuss those decisions, as the purpose and object of Section 171 and the extent of the legal fiction intro duced by it has already been considered by this Court in Kaloomal 's case.
The view taken by the High Court under the impugned judgment is not sustainable in law as it is con trary to that decision.
In Shankar Narayanan vs Income Tax Officer, 153 I .T.R. 562 a learned Judge of the Kerala High Court while considering the interpretation of Section 171 held that the view taken by the High Court in the Judgment trader appeal Income Tax Officer, Assessment V Calicut vs Smt.
N.K. Sarada Thampatty, ceased to be good law in view of the decision of this Court in Kaloomal 's case.
In the instant case since there was no dispute that prior to the assessment year 1967 68 the assessment was made against the HUF of which the respondent was a member.
The respondent for the first time raised the plea of partition and disruption of HUF in the proceedings for the assessment years 1967 68, 1968 69 and 1969 70.
There was no dispute before the income Tax Officer that there had been no physi cal division of the properties by metes and bounds, there fore the Income Tax Officer was justified in holding that the status of HUF had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the HUF character.
The High Court in our opinion committed error in quashing the order of the Income Tax Officer.
In the result, we allow the appeals and set aside the order of the High Court and dis miss the writ petition filed by the respondent.
There will be no order as to costs.
V.P. Appeals allowed.
| IN-Abs | Respondent was assessed for the assessment years of 1967 68, 1968 69 and 1969 70 treating her as the head of the HUF.
She contended before the income Tax Officer that under the partition agreement dated 3.7.1958 the Tavazhi was divided, the HUF status of the Tavazhi was disrupted on account of the CIvil Court decree made in a partition suit and the properties were divided into 14 shares and the HUF could not be assessed to income tax.
The Income Tax Officer rejected the claim of the respondent on the ground that since the preliminary decree of the Civil Court, and not become final and no physical or actual partition had taken place; the status of HUF continued for the purpose of Tax.
The Single Judge of the High Court allowed the Writ Petition of the respondent holding that Section 171 of the Income Tax Act does not apply to a case where the division was effected before the commence 474 ment of the accounting period and HUF having received no income during the accounting period it could not be assessed to tax notwithstanding the legal fiction under Section 171.
In appeal the Division Bench held that there was no express provision in Section 171 nor was there any necessary impli cation arising from the provisions of the section that the income of the family after its division must be treated or deemed to be the income of the HUF inspite of disruption of joint status.
The Bench held that HUF is a separate and distinct entity from the members constituting it and if that entity does not receive any income, the members ' income could not he assessed as income of the HUF.
The Division Bench further held that since there had been partition in the family and Tavazhi had ceased to he HUF long before the accounting periods, the provisions of the Act could not he pressed into service for the purpose of taxing the income of the individual members of the family treating them having the status of HUF with the aid of Section 171 of the Act.
The High Court granted certificate to the Revenue under Article 133 of the Constitution.
Hence these appeals.
Allowing the appeal, the Court, HELD: 1.
Under Section 171 a Hindu Family assessed as HUF, is deemed for the purposes of the Act to continue as HUF except where partition is proved to have been effected in accordance with the section.
The section further provides that if any person at the time of making of assessment claims that partition total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of parti tion.
If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them.
The definition of partition does not recognise a partition even if it is effected by a decree of court unless there is a physical division of the property and if the property is not capable of being physically divided then there should be division of the property to the extent it is possible otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court.
Ordinarily decree of a Civil Court in a partition suit is good evidence in proof of partition but under Sec tion 171 a legal fiction has 475 been introduced according to which a preliminary decree of partition is not enough, instead there should be actual physical division of the property pursuant to final decree, by metes and bounds.
The Legislature has assigned a special meaning to partition under the aforesaid Explanation with a view to safeguard the interest of the Revenue.
Any assessee claiming partition of HUF must prove the disruption of the status of HUF in accordance with the provisions of Section 171 having special regard to the Explanation.
The assessee must prove that a partition ef fected by agreement or through court 's decree, was followed by actual physical division of the property.
In the absence of such proof partition is not sufficient to disrupt the status of Hindu Undivided Family for the purpose of assess ment of tax.
Under the Hindu Law members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court 's de cree.
Members of the family may also agree to share the income from the property according to their respective share.
In all such eventualities joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of Income Tax.
Section 171 of the Act and the Explanation to it, prescribes a special meaning to partition which is different from the general principles of Hindu Law.
It contains a deeming provision under which partition of the property of HUF is accepted only if there has been actual physical division of the property, in the absence of any such proof, the HUF shall be deemed to continue for the purpose of assessment of tax.
Any agreement between the members of the joint family effecting partition, or a decree of the Court for partition cannot terminate the status of HUF unless it is shown that the joint family property was physically divided in accord ance with the agreement or decree of the Court.
The respondent for the first time raised the plea of partition and disruption of HUF in the proceedings for the assessment years 1967 68, 1968 69 and 1969 70.
There had been no physical division of the properties by metes and bounds.
The status of HUF had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the HUF character.
Parameswaran Nambudiripad vs Inspecting Assistant Com missioner of Agricultural Income tax, ; In specting Assistant Commissioner of Agricultural Income Tax and Sales Tax (Special), Kozhikode vs Poomulli Manekkal Parameswaran Namboodiripad, , distinguished.
476 Kaloomal Tapeshwar Prasad vs
C.I.T., Kanpur, 133 I.T.R. 690, followed.
Sunder Singh Majithia vs Commissioner of Income Tax, Shankar Narayanan vs Income Tax Offi cer, , referred.
|
Criminal Appeal No. 206 of 1979.
From the Judgment and Order dated 27.9.
1978 of the Punjab and Haryana High Court in Criminal Appeal No. 17 13 of 1975.
494 A.S. Sohal and S.K. Jain for the Appellant.
Mahabir Singh and A.G. Prasad for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
Raj Kumari (20), the daughter of Ishar Dass.
was married to the appellant Baldev Raj a year before her tragic death in February, 1975.
It appears that all was not well with the couple.
Raj Kumari left for her parents house in village Raison 75 Kms.
away from her matrimonial home in village Urlana Khurd.
She stayed with her parents for some days complaining ill teatment by the husband.
On the assurance of the father in law, she was sent back with her husband hardly a couple of months before the incident on 14.2.
On that fateful day, it is said that Raj Kumari took meals to the appellant who was working in the wheat field near his tubewell. ' Raj Kumari did not return home.
Her dead body was discovered in the drain on 16.2.
Multiple injuries were seen on her person.
Complaint was lodged at the police station on February 16, 1975 at about 5.30 P.M. against the appellant who was finally chargesheet ed for the offence under section 302 and 201, I.P.C. The learned Sessions Judge convicted the appellant under section 302, I.P.C., and sentenced him to undergo imprisonment for life.
The High Court dismissed the appeal against the con viction and sentence.
This appeal by special leave is di rected against the judgment of the High Court.
The conviction of the appellant is based on circumstan tial evidence only.
The main item of the evidence consists of the extrajudicial confession stated to have been made by the appellant in the presence of Ishar Dass (PW 3).
Ramji Dass (PW 4) and Satnam Dass (PW 5) at the panchayat on 16.2.
besides the recovery of incriminating articles at the instance of the appellant and the motive as spoken to by Ishar Dass.
According to the prosecution, on 15.2.1975 the appellant 's father Hakam Chand contracted Ishar Dass when Raj Kumari was found missing from 14.2.
Ishar Dass arrived at village Urlana Khurd accompanied by Satnam Dass, Sarpanch of his village, and others.
At the panchayat held in the presence of Ramji Dass, Nand Lal, Satnam Dass and others, the appellant stated that he killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments.
PWs 3, 4 and 5 testified the fact but Nand Lal (DW I) did not support the prosecution version.
It is also the prosecution case that the appellant was handed over to and arrested by the police at the time the complaint was lodged after the 495 discovery of the dead body and that the appellant had pro duced the kassi and the gold ornaments concealed in the hut near the tubewell.
PW 10.
the Sub Inspector of Police, deposed to having interrogated the appellant and effected the recovery on the basis of the statements made by the appellant.
Ishar Dass (PW 3) narrated the events that pre ceded the occurrence and also proved the letter he had received from the appellant 's father when Raj Kumari was staying with him.
He also stated the circumstances under which he happened to be at the panchayat on 16.2.
1975 along with the others after being informed by Hakam Chand.
PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence.
The evidence was accepted by the trial court and the High Court to sustain the conviction against the appellant.
The argument on behalf of the appellant that the medical evidence is conflicting with the prosecution case was re jected by the High Court finding that the ante mortem in juries found on the body of Kumari could have been caused with the weapon recovered even on the statement made by the Doctor (PW 1).
The recovery of the bloodstained earth from the wheat field near the tubewell, recovery blood stained kassi and the ornaments worn by Raj Kumari by PW 10 in the opinion of the High Court lent assurance to the statement mad,: by the appellant before the panchayat.
The High Court was of the view that the various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt.
The main contention advanced on behalf of the appellant before us is that the High Court failed to appreciate the inherent infirmities in the prosecution evidence and that there is no legal evidence to support the findings.
It was maintained that the testimony of PWs 3, 4 and 5 relating to the extra judicial confession is discrepant and incredible, that the confession even if true, was not voluntary but induced and the same having been retraced cannot form the basis for a conviction in the absence of any material cor roboration.
The learned counsel for the appellant contended that the High Court had refused to give benefit of doubt to the accused despite facts apparent on the face of the record any interference is called for.
The extra judicial confession, according to the learned counsel, being a very weak piece of evidence, could not have been accepted as true or voluntary in view of the admission made by the prosecution witnesses and improvement in the story given by Ishar Dass.
He pointed out that at the panchayat the appellant was induced to make a statement on the 496 promise that he would be pardoned and therefore the confes sion is unacceptable.
Normally this Court does not interfere with the concur rent findings of the facts of the courts below in the ab sence of very special circumstances or gross errors of law committed by the High Court and violation of the well estab lished principles of the appreciation of circumstantial evidence, which results in serious and substantial miscar riage of justice to the accused.
We heard the learned coun sel at length.
We find that the High Court was right in its conclusion and there is no good ground for interference.
The first information was lodged by Ishar Dass at the police station where the appellant was also present.
In the first information report itself Ishar Dass has narrated the story of the panchayat having been held in the presence of PWs 4 and 5 and the appellant having made the confession.
PW 5 accompanied Ishar Dass from village Raison.
It is difficult to hold that these persons hailing from another village would have been in a position to influence the local people against the appellant and foist a case against him.
PW 4, Lambardar (Ramji Dass) substantially supported the prosecution case.
The courts below have carefully analysed the evidence and accepted the same.
As rightly pointed out by the High Court, we find no merit in the submission that the medical evidence is not in consonance with the prosecu tion case.
The facts that the autopsy was held nearly 72 hours after the injuries were caused and the witnesses were examined long after the weapon was recovered are relevant in appreciating the evidence of the medical witness.
The evi dence of this witness read as a whole is only consistent with the case that the injuries could have been caused with the weapon.
The fact that the appellant made the confession is proved by cogent evidence.
The circumstances that his father was present throughout and the appellant himself did not protest when he was present at the police station nega tives the suggestion of inducement or threat.
The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from, the roof of the hut and blood stained kassi from its premises near the tubewell are material circumstances pro viding connecting links in the chain of circumstantial evidence.
The appellant when examined did not offer any explanation except to deny his involvement.
Ishar Dass testified to the fact that Raj Kumari had complained about the ill treatment by her husband.
In the light of such evidence, it is preposterous to maintain that the deceased may have been assaulted by some unidentified assailant somewhere in the fields and the appellant 497 had been falsely implicated in the offence.
The confessional statement is not a long narration.
The substance of the statement is that the appellant killed his wife and threw the dead body in the drain.
PW 4 is the Lambardar of village Urlana Khurd and PW 5 the Sarpanch of Gram Panchayat of village Raison.
The fact that a panchayat was held at village Urlana Khurd is admitted even by the hostile witness Nand Lal (DW I).
Ishar Dass when informed by Hakam Chand at his village that Raj Kumari was found missing entertained suspicion.
He met his villagers and proceeded to the appellant 's village the next day, along with the Sar panch and other persons.
The panchayat was held there on 16.2.
The appellant and his father were brought before the panchayat.
The appellant was questioned and was asked to speak the truth and then the appellant with folded hands said that he murdered his wife in the wheat field when she came there with meals and later threw the dead body in the drain.
The prompting by the panchayat does not amount to inducement or threat and the circumstances under which the statement was made leave no room for doubt that the confes sion was voluntary.
An extra judicial confession, if voluntary, can be relied upon by the court along with other evidence in con victing the accused.
The value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made.
It is true that the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invariable rule that the court should not accept the evidence, if not the actual words but the substance were given.
It is for the court having regard to the credibility of the witness to accept the evidence or not.
When the court believes the witness before whom the confession is made and it is satisfied that the confession was voluntary, conviction can be rounded on such evidence.
Keeping these principles in mind, we find that the confession has been properly accepted and acted upon by the courts below and there is no scope for any doubt regarding the complicity of the appellant in the crime.
The confession of the appellant was voluntary.
The testimony of PW 4 and PW 5 being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appellant.
The very presence of the appellant and his father with the party of Ishar Dass throughout the operation upto lodging of com plaint at the police station dispel any suspicion against the prosecution case and clearly point to the truthfulness of the same.
We are, therefore, unable to find any infirmity in the confession which has been accepted and relied upon by the courts below.
498 The circumstances proved are conclusive of the guilt of the appellant and incapable of being explained on any other reasonable, hypothesis.
Conviction has therefore to be maintained.
The appeal is accordingly dismissed.
The appel lant who is on bail shall surrender to custody to undergo the sentence of imprisonment.
P.S.S. Appeal dismissed.
| IN-Abs | The appellant was convicted under section 302 IPC for murder ing his wife.
The prosecution case was that on the fateful day the deceased had taken meals to the appellant while he was working in the field near his tubewell.
Her dead body was recovered two days later in a nearby drain.
He made an extra judicial confession the same day at the panchayat in the presence of PWs 3, 4 and 5 to the effect that he had killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments.
The FIR was lodged thereafter in the presence of the appellant and the fact of his statement was recorded therein.
The weapon of offence, the kassi, and the ornaments were recovered from the hut near the tubewell at his instance.
PW 3 narrated the events that preceded the occurrence.
PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence.
The evidence was accepted by the trial court.
The High Court sustained the conviction on the view that various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt.
In the appeal it was contended for the appellant that the extrajudicial confession even if true, was not voluntary but induced on the promise that he would he pardoned and the same having been retracted could not form the basis for a conviction in the absence of any material corroboration.
Dismissing the appeal, HELD: 1.
The High Court was right in its conclusion and there was no ground for interference.
2.1 An extra judicial confession, if voluntary can be relied upon by the court alongwith other evidence in con victing the accused.
The 493 value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made.
Though the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invaria ble rule that the court should not accept the evidence, if not the actual words but the substance were given.
It is for the court having regard to the credibility of the witness to accept the evidence or not.
When the court believes the witness before whom the confession is made and it is satis fied that the confession was voluntary, conviction can be rounded on such evidence.
2.2 In the instant case, the fact that the appellant made the confession is proved by cogent evidence.
He and his father were brought before the panchayat held in the presence of PWs 3, 4 and 5.
He was questioned and was asked to speak the truth.
This prompting by the panchayat does not amount to inducement or threat.
The testimony of PW 4, a lambardar, and PW 5, the Sarpanch being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appel lant.
The circumstances under which the statement was made leaves no room for doubt that the confession was voluntary.
2.3 The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from the roof of the hut and blood stained kassi from the hut near the tubewell were material circumstances providing connecting links in the chain of circumstantial evidence.
The appellant when exam ined did not offer any explanation except to deny his in volvement.
PW 3 had testified to the fact that the deceased had complained about the illtreatment by her husband.
In the light of such evidence, it is preposterous to maintain that she may have been assaulted by some unidentified assailant somewhere in the fields and the appellant had been falsely implicated in the offence.
The circumstances thus proved were conclusive of the guilt of the appellant and incapable of being explained on any other reasonable hypothesis.
Conviction has, therefore, to be maintained.
|
: Writ Petition (Crimi nal) Nos.
757,759 & 760 of 1990 (Under Article 32 of the Constitution of India.) N. Devarajan and V. Krishnamurthy for the Petitioners.
Kapil Sibal Additional Solicitor General and A Subba Rao for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Three persons, namely, (1) M.M. Shahul Hameed @ Gani Asiam, (2) Haja Mohideen @ Shahul Hameed Asarudeen and (3) Naina Mohammed @ Raja Mohd. Zafar were intercepted by the officers of Department of Revenue Intelligence on 5th October, 1989 at the Sahar International Airport, Bombay, as they were suspected to be involved in smuggling activities.
They were escorted to the office of Directorate of Revenue Intelligence, Waldorf, Colaba, Bombay, where they were interrogated.
On interrogation it was found that M.M. Shahul Hameed was to board flight No. CX 750 to Hongkong while the other two were to proceed to Dubai by Emirate Flight No. E 5 10 on that day.
The said three persons were searched.
Two balloon covered rolls secreted in the rectum of M.M. Shahul Hameed were removed and were found to contain diamonds and precious stones weighing about 905.70 carats and 77.37 carats, respectively.
The said diamonds and precious stones valued at about Rs.70 lacs were attached under a Panchnama.
In addition to the same foreign currency of the value of Rs. 10,706 was also recovered and attached.
His passport was also seized.
The other two persons were found to have swallowed 100 capsules each containing foreign currency of the total value of Rs.6,99,930.
The capsules were extracted from their persons and the currency was recovered and attached under a Panchnama.
In addition thereto foreign currency of the value of Rs. 1,466.50 was also found on their person during their search and the same too was attached and seized.
Their passports were also seized.
460 All the aforesaid three persons belonged to Village Namboothalai of District Ramnath, Tamilnadu.
Their state ments were recorded on the same day i.e. 5th October, 1989.
M.M. Shahul Hameed disclosed that his cousin Kasim, owner of a film company at Madras, had offered him a sum of Rs.4,000 for smuggling diamonds, etc., to Hongkong.
On his agreeing, he was trained and was sent to Bombay with one Mohammad who was to introduce him to Mohideen and Rahim who were supposed to entrust him with the diamonds, etc., to be carried to Hongkong.
Accordingly he came to Bombay with the said Moham mad and was duly introduced to the aforesaid two persons at a fiat in Chembur where he stayed.
The said Mohideen and Rahim arranged for his passport and ticket and gave him two roll wrapped in balloons containing diamonds, etc., on the night of 4th October, 1989 for being carried to Hongkong.
As per the training he had received, he concealed these bal loons in his rectum before leaving for the Airport to catch the flight to Hongkong.
In addition to the same he was given a paper on which something was scribbled in Arabic.
In the course of his interrogation he admitted the recovery and seizure of diamonds and precious stones and also gave the description of Kasim and Rahim.
On 12th October, 1989 he wrote a letter retracting his statement made on 5th October, 1989.
However, in his further statement recorded on 19th October, 1989 he admitted that his signature was obtained on the letter of 12th October, 1989 without disclosing the contents thereof to him and that his earlier statement of 5th October, 1989 was both voluntary and correct.
Inciden tally the statement of retraction was rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989.
The other two persons whose statements were also record ed on 5th October, 1989 disclosed that they were both work ing at a Tea shop in Madras and knew Mohideen and Rahim who too were working with them.
Rahim had suggested that they would be paid Rs.2,000 each if they were willing to smuggle foreign currency to Dubai by swallowing capsules containing the same.
On their agreeing they too were trained and were then taken to Bombay where they were lodged in Vimi Lodge at Bhindi Bazar.
On 4th October, 1989 they were given an tick ets for travel to Dubai and 100 capsules each containing foreign currency.
They swallowed the capsules and left by taxi for the Airport in the early hours of 5th October, 1989.
They too were given a paper containing some scribbling in Arabic by Mohideen and Rahim.
While they were waiting to catch their flight, they were intercepted as stated earlier.
Both of them also signed letters dated 12th October, 1989 retracting their statements made under Section 108 of the Customs on 5th October, 1989.
However, in their subsequent statement of 19th October, 1989 they admitted that they were not aware of the contents of the letter of 12th October, 1989.
They further admitted that what they had disclosed on 5th October, 1989 was both voluntary and correct.
Their statements of retraction were also rejected by the Deputy Director of Revenue Intelligence on 20th October, 1989.
All the three aforesaid persons were produced before the learned Additional Chief Metropolitan Magistrate, Esplanade.
Bombay on 6th October, 1989.
They were taken on remand by the police for investigation.
Barring M.M. Shahul Hameed, the other two had preferred applications for bail which were kept for hearing initially on 27th October 1989 but the date was later extended upto 16th November, 1989.
Their co accused, Kasim was arrested on 6th October.
1989 and was produced before the Additional Chief Metropolitan Magistrate, Egmore, Madras.
He too was taken on remand.
On 19th October, 1989 he too had preferred a bail application which was kept pending as the investigation was in progress.
Since the period of remand was extended from rime to time in the case of all the aforesaid four persons finally upto 16th November, 1989, the bail applications were also fixed for hearing on that date.
In the meantime on 10th November, 1989 the Joint Secretary to the Government of India in the Ministry of Finance, Department of Revenue, passed an order under sub section (1) of Section 3 of the (hereinafter called 'the Act ') directing the detention of all the three persons 'with a view to preventing him from smuggling goods '.
They were directed to be detained in the Central Prison.
Bombay.
This order of detention, though passed on 10th November.
1989 was in fact served on the three detenus on 21st November, 1989.
i.e., after a lapse of about 11 days.
The grounds of detention dated 10th November, 1989 were also served on the three the same day.
Thereafter the Additional Secretary to the Government of India in the Ministry of Finance, Department of Revenue made a declara tion concerning the three detenus dated 20th December 1989, under sub section (1) of section 9 of the Act after record ing a satisfaction that they were likely to smuggle goods out of and through Bombay Airport.
an area highly vulnerable to smuggling within the meaning of Explanation 1 to that section.
This declaration was served on the detenus within the time allowed by law.
Thereupon.
the wives of all the three detenus filed separate habeas corpus writ petitions under Article 226 of the Constitution in the High Court of 462 Bombay on 19th January.
These writ petitions were numbered 66, 67 and 68 of 1990.
Four contentions were raised before the High Court, namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed nonapplication of mind by describing the offence with which the detenus were charged as 'bail able '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the authorities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation.
All the three petitions came up for hearing before a Division Bench of the High Court on 21st March, 1990.
The High Court rejected all the four contentions and dismissed the writ petitions.
The said dismissal has led to the filing of Special Leave Petitions (Criminal) Nos.
73 1,732 & 733 of 1990.
Besides filing the said special leave petitions under Article 136 of the Con stitution, the wives of the detenus have also filed separate Writ Petitions (Criminal) Nos. 757,759 and 760 of 1990 under Article 32 of the Constitution.
We have heard the three special leave petitions as well as the three writ petitions together and we proceed to dispose them of by this common judgment.
The learned counsel for the petitioners raised several contentions including the contentions negatived by the High Court of Bombay.
It was firstly contended that the detenus had made representations on 18th December, 1989 which were rejected by the communication dated 30th January, 1990 after an inordinate delay.
The representations dated 18th Decem ber, 1989 were delivered to the Jail Authorities on 20th December, 1989.
The Jail Authorities despatched them by registered post.
23rd, 24th and 25th of December, 1989 were non working days.
The representations were received by the COFEPOSA Unit on 28th December, 1989.
On the very next day i.e 29th December, 1989 they were forwarded to the sponsor ing authority for comments.
30th and 31st December, 1989 were non working days.
Similarly 6th and 7th January, 1990 were non working days.
The comments of the sponsoring au thority were forwarded to the COFEPOSA Unit on 9th January, 1990.
Thus it is obvious that the sponsoring authority could not have received the representations before 1st January, 1990.
Between 1st January, 1990 and 8th January, 1990 there were two non working days, namely, 6th and 7th January, 1990 and, therefore, the sponsoring authority can be said to have offered the comments within the four or five days available to it.
It cannot, therefore, be said that the sponsoring authority was guilty of inordinate delay.
The contention that the views of the sponsoring authority were 463 totally unnecessary and the time taken by that authority could have been saved does not appeal to us because consult ing the authority which initiated the proposal can never be said to be an unwarranted exercise.
After the COFEPOSA Unit received the comments of the sponsoring authority it dealt with the representations and rejected them on 16th January, 1990.
The comments were despatched on 9th January, 1990 and were received by the COFEPOSA Unit on 11th January, 1990.
The file was promptly submitted to the Finance Minister on the 12th; 13th and 14th being non working days, he took the decision to reject the representations on 16th January, 1990.
The file was received back in the COFEPOSA Unit on 17th January, 1990 and the Memo of rejection was despatched by the post on 18th January, 1990.
It appears that there was postal delay in the receipt of the communication by the detenus but for that the detaining authority cannot be blamed.
It is, therefore, obvious from the explanation given in the counter that there was no delay on the part of the detaining authority in dealing with the representations of the detenus.
Our attention was drawn to the case law in this behalf but we do not consider it necessary to refer to the same as the question of delay has to be answered in the facts and circumstances of each case.
Whether or not the delay, if any, is properly explained would depend on the facts of each case and in the present case we are satisfied that there was no delay at all as is apparent from the facts narrated above.
We, therefore, do not find any merit in this submission.
It was next submitted by the learned counsel for the petitioners that there was no compelling reason for the detaining authority to pass the impugned orders of detention as the detenus were already in custody on the date of the passing of the detention orders as well as the service thereof.
Besides, he submitted.
it is apparent from the averments in paragraph 15 of the grounds of detention that the concerned authority was labouring under a misconception that the detenus were charged with a 'bailable ' offence which betrays total non application of mind.
He further submitted that the delay in the service of the detention orders discloses that there was no urgency about ordering detention.
Taking the last limb of the argument first, we may refer to the counter filed in the writ petitions in this behalf.
Therein it is stated that after the detention orders were signed on 10th November, 1989, it was realised that certain documents which were not in Tamil language would have to be translated.
The services of a professional trans lator were requisitioned.
Between 10th and 21st November, 1989 there were five holidays on 11th, 12th, 13th, 18th & 19th.
As soon as the translations were ready and received by the Department, the police autho 464 rities were directed on 20th November, 1989 to execute the detention orders.
This was done on 21st November, 1989, Thus the time taken between 10th and 21st November.
exclud ing 5 holidays, was only of six days during which all the documents were got translated in Tamil language and were served on the detenus along with grounds of detention.
These facts clearly show that the time taken in the service of the detention orders cannot be attributed to lack of sense of urgency on the part of the authorities but it was to get the documents translated in Tamil language before they were supplied to the detenus.
Under the circumstances we do not see any delay which would vitiate the detention orders.
It is indeed true that in paragraph 15 of the grounds of detention the detaining authority has averted that the detenus are charged with a bailable offence.
After setting out the fact that two of the detenus had made an application for bail in the Bombay Court and their co accused Kasim had made a similar application in the Madras Court, the authori ty proceeds to state as under: "Though you are in judicial custody but can be released on bail any time as the offence with which you have been charged is bailable in which case you may indulge in similar prejudicial activities.
It is necessary to bear in mind the context in which the expression bailable ' is used.
In the counter filed by the Joint Secretary who passed the detention orders and prepared the grounds for detention it is stated that his past experi ence in such eases was that normally and almost as a matter of rule courts grant bail after the investigation is com pleted.
It was in this background, says the officer, that he used the expression 'bailable '.
We may reproduce his exact words from the counter: "It is also submitted that the word bailable which has not been used in the legal sense, it was intended to convey that normally in such cases one gets bail and in that context, the word 'bailable ' was used".
Proceeding further it is averred in the counter that even in nonbailable offences the Sessions Court and the High Court are empowered to grant bail.
He was, therefore, of the view that in such cases courts normally grant bail.
It was in this background that he used the word bailable in the grounds of detention.
465 Mr. Sibbal the learned Additional Solicitor General, contended that the expression bailable was used in the backdrop of the fact that two of the detenus and Kasim had already applied for bail.
The court had not rejected their applications but had adjourned them as the investigation was in progress.
That gave rise to the belief that bail would be granted.
His normal experience also was that in such cases courts ordinarily granted bail on the conclusion of the investigation.
He, therefore, loosely described the offence as bailable and did not use that word in the technical sense of section 2(a) of the Code of Criminal Procedure.
The High Court also pointed out that even in respect of non bailable offences it is generally open to the Sessions Court and the High Court to release the accused on bail.
It further points out that it is equally open to the Magistrate to release the accused on bail after a period of two months.
In the circum stances the High Court was of the opinion that the use of the expression 'bailable ' cannot lead one to the conclusion that there was no application of mind.
We are inclined to think that having regard to the background in which this expression is used in paragraph 15 of the grounds of deten tion and bearing in mind the explanation and the fact that in such cases courts normally grant bail, it cannot be said that the use of the said expression discloses non applica tion of mind.
It was then submitted that the detenu M.M. Shahul Hameed had not applied for bail and, therefore, there was no question of his being released on bail.
We do not think that there is any merit in this submission for the simple reason that if the co accused are released on bail he too could seek enlargement on bail at any time.
Therefore, the possibility of all the detenus being released on bail was a real one and not an imaginary one.
This was based on past experience which is re inforced by the observations of the High Court that even in non bailable cases courts of Sessions and High Court do grant bail.
The second limb of the contention is, therefore, clearly devoid of merit.
Counsel for the detenus, however, vehemently argued that since the detenus were in custody, there was no compelling necessity to pass the detention orders for the obvious reason that while in custody they were not likely to indulge in any prejudicial activity such as smuggling.
In support of this contention reliance was placed on a host of decisions 01 ' this Court beginning with the case of Vijay Narain Singh vs State of Bihar, and ending with the case of Dharmendra Suganchand Chelawat vs Union of India, ; It is necessary to bear in mind the fact that the grounds of detention clearly reveal that the detaining authority was aware of the fact that the detenus were appre hended while they were about to board the flights 466 to Hongkong and Dubai on 5th October, 1989.
He was also aware that the detenu M.M. Shahul Hameed had secreted dia monds and precious stones in his rectum while the other two detenus had swallowed 100 capsules each containing foreign currency notes.
He was also aware of the fact that all the three detenus were produced before the Additional Chief Metropolitan Magistrate, Espalande, Bombay and two of them had applied for bail.
He was also conscious of the fact that the hearing of the bail applications was postponed because investigation was in progress.
His past experience was also to the effect that in such cases courts ordinarily enlarge the accused on bail.
He was also aware of the fact that the detenu M.M. Shahul Hameed had not applied for bail.
Con scious of the fact that all the three detenus were in custo dy, he passed the impugned orders of detention on 10th November, 1989 as he had reason to believe that the detenus would in all probability secure bail and if they are at large, they would indulge in the same prejudicial activity.
This inference of the concerned officer cannot be described as bald and not based on existing material since the manner in which the three detenus were in the process of smuggling diamonds and currency notes was itself indicative of they having received training in this behalf.
Even the detenus in their statements recorded on 5th October, 1989 admitted that they had embarked on this activity after receiving training.
The fact that one of them secreted diamonds and precious stones in two balloon rolls in his rectum speaks for itself.
Similarly the fact that the other two detenus had created cavities for secreting as many as 100 capsules each in their bodies was indicative of the fact that this was not to be a solitary instance.
All the three detenus had prepared them selves for indulging in smuggling by creating cavities in their bodies after receiving training.
These were not ordi nary carriers.
These were persons who had prepared them selves for a long term smuggling programme and, therefore, the officer passing the detention orders was justified in inferring that they would indulge in similar activity in future because they were otherwise incapable of earning such substantial amounts in ordinary life.
Therefore, the criti cism that the officer had jumped to the conclusion that the detenus would indulge in similar prejudicial activity with out there being any material on record is not justified.
It is in this backdrop of facts that we must consider the contention of the learned counsel for the detenus whether or not there existed compelling circumstances to pass the impugned orders of detention.
We are inclined to think, keeping in view the manner in which these detenus received training before they indulged in the smuggling activity, this was not a solitary effort, they had in fact prepared themselves for a long term programme.
The decisions of this Court to which our attention was drawn by the learned 467 counsel for the petitioners lay down in no uncertain terms that detention orders can validly be passed against detenus who are in jail, provided the officer passing the order is alive to the fact of the detenus being in custody and there is material on record to justify his conclusion that they would indulge in similar activity if set at*liberty.
We will now consider the case law in brief.
In Vijay Narain Singh (supra) this Court stated that the law of preventive detention being a drastic and hard law must be strictly construed and should not ordinarily be used for clipping the wings of an accused if criminal prosecution would suffice; So also in Ramesh Yadav vs District Magis trate ET, this Court stated that ordinarily a detention order should not be passed merely on the ground that the detenu who was carrying on smuggling activities was likely to be enlarged on bail.
In such cases the proper course would be to oppose the bail application and if grant ed, challenge the order in the higher forum but not circum vent it by passing an order of detention merely to supersede the bail order.
In Suraj Pal Sahu vs State of Maharashtra, ; the same principle was reiterated.
In Binod Singh vs District Magistrate, Dhanbad, ; it was held that if a person is in custody and there is no imminent possibility of his being released therefrom, the power of detention should not ordinarily be exercised.
There must be cogent material before the officer passing the detention order for inferring that the detenu was likely to be released on bail.
This inference must be drawn from material on record and must not be the ipse dixit of the officer passing the detention order.
Eternal vigilance on the part of the authority charged with the duty of maintain ing law and order and public order is the price which the democracy in this country extracts to protect the fundamen tal freedoms of the citizens.
This Court, therefore, empha sized that before passing a detention order in respect of the person who is in jail the concerned authority must satisfy himself and that satisfaction must be reached on the basis of cogent material that there is a real possibility of the detenu being released on bail and further if released on bail the material on record reveals that he will indulge in prejudicial activity if not detained.
That is why in Abdul Wahab Sheikh vs
S.N. Sinha; , this Court held that there must be awareness in the mind of the detaining authority that the detenu is in custody at the time of actual detention and that cogent and relevant material disclosed the necessity for making an order of detention.
In that case the detention order was quashed on the ground of non application of mind as it was found that the detaining authority was unaware that the detenu 's application for being released on bail was rejected by the 468 designated Court, In Meera Rant ' vs State of Tamil Nadu, ; the case law was examined in extension.
This Court pointed out that the mere fact that the detenu was in custody was not sufficient to invalidate a detention order and the decision must depend on the facts of each case.
Since the law of preventive detention was intended to prevent a detenu from acting in any manner considered preju dicial under the law.
ordinarily it need not be resorted to if the detenu is in custody unless the detaining authority has reason to believe that the subsisting custody of the detenu may soon terminate by his being released on bail and having regard to his recent antecedents he is likely to indulge in similar prejudicial activity unless he is pre vented from doing so by an appropriate order of preventive detention.
In Shashi Aggarwal vs State of Uttar Pradesh, ; it was emphasized that the possibility of the court granting bail is not sufficient nor is a bald state ment that the detenu would repeat his criminal activities enough to pass an order of detention unless there is credi ble information and cogent reason apparent on the record that the detenu, if enlarged on bail, would act prejudicial ly.
The same view was reiterated in Anand Prakash vs State of Uttar Pradesh, ; and Dharmendra 's case (supra).
In Sanjay Kurnar Aggarwal vs Union of India, ; the detenu who was in jail was served with a detention order as it was apprehended that he would indulge in prejudicial activities on being released on bail.
The contention that the bail application could be opposed, if granted, the same could be questioned in a higher forum, etc., was negatived on the ground that it was not the law that no order of detention could validly be passed against a person in custody under any circumstances.
From the catena of decisions referred to above it seems clear to us that even in the case of a person in custody a detention order can validly be passed (1) if the authority passing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity and (3) if it is felt essential to detain him to prevent him from so doing.
If the authority passes an order after recording his satisfaction in this behalf, such an order cannot be struck down on the ground that the proper course for the authority was to oppose the bail and if bail is granted notwithstanding such opposition, to question it before a higher court.
What this court stated in the case of Ramesh Yadav (supra) was that ordinarily a detention order should not be passed merely to pre empt or circumvent enlargement on bail in cases which 469 are essentially criminal in nature and can be dealt with under the ordinary law.
It seems to us well settled that even in a case where a person is in custody, if the facts and circumstances of the case so demand.
resort can be had to the law of preventive detention.
This seems to be quite clear from the case law discussed above and there is no need to refer to the High Court decisions to which our attention was drawn since they do not hold otherwise.
We, therefore.
find it difficult to accept the contention of the counsel for the petitioners that there was no valid and compelling reason for passing the impugned orders of detention because the, deronus were in custody.
Counsel for the petitioners next submitted that while making the representation dated 18th December.
1989 the detenus had requested for the supply of copies of the decla rations made by them before the customs authorities at the Bombay Airport before boarding their respective flights and for copies of the search warrants mentioned in the grounds of detention.
It was stated that the detenus needed these documents for the purpose of making a representation.
While rejecting their representation by the memorandum of 18th January.
1989 the detenus were informed that the sponsoring authority was requested to supply the copies of search authorisations to the detenus.
The petitioners complained that despite this communication the sponsoring authority did not supply copies of the search authorisations whereupon another letter dated 6th February, 1990 was written to the detaining authority asking for the said documents.
By the memorandum of 14th February, 1990, the detenus were informed that the Deputy Director of Revenue Intelligence.
Bombay, was requested to supply the documents asked for by the deronus.
In response to the same the detenus were supplied copies of the search warrants but not copies of the declara tions made to the customs officers at the airport.
It is further complained that this delay had resulted in depriving the detenus of their valuable right to make an effective representation against the impugned detention orders.
The High Court while dealing with this contention came to the conclusion that the declarations made by the detenus at the airport were neither relied on nor referred to in the grounds of detention.
As regards the search authorisations, it may be pointed out that although there is a mention of the premises searched in the grounds of detention, the incriminating material found has neither been used nor made the basis for formulating the grounds of detention.
Mere reference to these searches by way of completing the narra tion cannot entitle the detenus to claim copies of the search authorisations.
The High Court, therefore, rejected this contention by observing as under: 470 "We fail to understand how the Detaining Authority can be compelled to give documents which were not relied upon while arriving at the subjective satisfaction.
We are also unable to appreciate how the declaration made by the detenu before proceedings to board the aircraft has any relevance while considering whether the order of detention should be passed to prevent the detenu from indulging in any prejudicial activities in future.
In our judgment, the complaint that some documents which according to the detenu were relevant for making representation were not furnished by the Detain ing Authority and, therefore, the order or the continuation of the detention is bad, is without any substance.
" In the counter it is specifically mentioned that 'these documents were not placed before the detaining authority nor the detaining authority has relied upon those documents while issuing the detention order '.
The detenus would have been entitled to any document which was taken into consider ation while formulating the grounds of detention but mere mention of the fact that certain searches were carried our in the course of investigation, which have no relevance to the detention of the detenus, cannot cast an obligation on the detaining authority to supply copies of those documents.
Much less can an obligation be cast on the detaining author ity to supply copies of those documents in Tamil language.
In the peculiar circumstances of the present petitions we are of the opinion that the view taken by the High Court cannot be assailed.
Reliance was, however, placed on a decision of the Delhi High Court in Gurdip Singh vs Union of India & Ors., Criminal Writ No. 257 of 1988 decided on 7th October, 1988 (1989 Crl.
L.J. NOC 41 Delhi) wherein Malik Sharief ud din, J. observed that the settled legal position was that all the documents relied upon for the purpose of ordering detention ought to be supplied pari passu with the grounds of detention to the detenu and documents not relied upon but casually referred to for the purpose of narration of facts were also to be supplied to the detenu if demanded.
Where documents of the latter category are supplied after the meeting of the Advisory Board is over it was held that that would seriously impair the detenu 's right to make an effective and purposeful representation which would vitiate the detention.
Counsel for the petitioners, therefore, submitted that in the present case also since the search authorisations were supplied after the meeting of the Advi sory Board, the detention orders stood vitiated.
But in order to succeed it must be shown that the search authorisa tions had a bearing on the detention orders.
If, merely an incidental refe 471 rence is made to some part ' of the investigation concerning a coaccused in the grounds of detention which has no rele vance to the case set up against the detenu it is difficult to understand how the detenus could contend that they were denied the right to make an effective representation.
It is not sufficient to say that the detenus were not supplied the copies of the documents in time on demand but it must fur ther be shown that the non supply has impaired the detenu 's right to make an effective and purposeful representation.
Demand of any or every document, however irrelevant it may be for the concerned detenu, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order.
No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that the failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insig nificant it may be.
In the present case, except stating that the documents were not supplied before the meeting of the Advisory Board, there is no pleading that it had resulted in the impairment of his right nor could counsel for the peti tioners point out any such prejudice.
We are, therefore, of the opinion that the view taken by the Bombay High Court in this behalf is unassailable.
The declaration under section 9(1) dated 20th December, 1989 is challenged on the ground that the second respondent failed to forward the copies of the document on which he placed reliance for arriving at the subject to satisfaction that the detenu were likely to smuggle goods out of and through Bombay Airport, an area highly vulnerable to smug gling as defined in Explanation 1 to section 9(1) of the Act.
Now if we turn to paragraph 2 of the declaration it becomes evident that the second respondent merely relied on the grounds of detention and the material in support thereto which had already been served on the detenu and nothing more.
Counsel for the petitioners relying on a decision of the Bombay High Court in Nand Kishore Purohit vs Home Secre tary, Maharashtra, [2986]2 Bombay C.R. 25, however urged that it was obligatory for the second respondent to supply the grounds of detention and the accompanying documents 'afresh ' if the declaration 'was based thereon.
We are afraid we cannot subscribe to this point of view.
If the documents relied on for the purpose of framing a declaration under section 9(2) are the very same which were earlier supplied to the detenu along with the grounds of detention under section 3(1), we fail to see what purpose would be served by insisting that those very documents should be supplied afresh.
Such a view would only result in wasteful.
expenditure and avoidable duplication.
We do not think that 472 we would be justified in quashing the declaration made under section 9(1) of the Act on such a hyper technical ground.
We, therefore, do not see any merit in this contention.
There are a few other minor grounds on which the deten tion orders are challenged.
These may stated to be rejected.
Firstly, it was contended that under section 3(1) of the Act a detention order can be passed on one or more of the five grounds set out in clauses (i) to (v) thereof.
Since the impugned orders make no mention of the clause number on which they are rounded they are bad in law.
The detention orders clearly state that the power is being exercised with a view to preventing the smuggling of goods referrable to clause (i) of the subsection.
Merely because the number of that clause is not mentioned, it can make no difference whatsoever.
So also we see no merit in the contention that the value of goods seized varies in the grounds of detention from that mentioned in the panchnama or appraisal report.
How that has prejudiced the detenus is difficult to compre hend in the absence of any material on record.
The submis sion that the declaration under section 9(1) was required to be communicated within five weeks from the date of its making is not specifically raised in the writ petitions nor was it argued before the High Court.
We were, however, told that the declaration was communicated in the first week of January 1990, a statement which was not contested on behalf of the petitioners.
In fact the submission was not pursued after this fact was disclosed.
We also see no merit in it.
Lastly, it was said that the authority had failed to take notice of the retraction of the statement recorded under section 108 of the .
In fact there is a specific reference to the retraction letter dated 12th October, 1989 and the subsequent letter of 19th October, 1989, wherein the detenus stated that they had signed the letter of 12th October, 1989 without knowing the contents thereof and had in fact not disowned their earlier statement of 5th October, 1989.
It is clear from the above that this challenge is also without substance.
These were the only contentions urged at the hearing of the special leave petitions as well as the writ petitions.
As we do not see any merit in any of these contentions we dismiss the special leave petitions as well as the writ petitions and discharge the rule in each case.
R.N.J. SLPs and Writ Petition dismissed.
| IN-Abs | The petitioners are the wives of three detenus who had been detained under an order dated 10th November, 1989 passed under subsection (1) of section 3 of the against each of them with a view to preventing them from smuggling goods '.
The order of detention as well as the grounds of detention dated November 10, 1989 were served on the three detenus on 21st November, 1989 while they were already in jail custody on remand following their arrest at the Sahar International Airport on October 5, 1989 when on suspicion they were searched which resulted in the recovery of diamonds, precious stones and foreign currency which they had planned to smuggle out.
Thereafter on Decem ber 20, 1989 a declaration under section 9(1) of the Act was passed in respect of each detenu which was served on them within the time allowed by law.
Thereupon the wives of all the three detenus filed separate habeas corpus writ peti tions in the High Court of Bombay.
Four contentions were raised before the High Court namely, (1) since the detenus were in custody their detention was unwarranted; (2) the detaining authority had betrayed non application of mind by describing 458 the offence as 'bailable '; (3) the representation of the detenus dated 18th December, 1989 had not been disposed of promptly and there was inordinate delay; and (4) the author ities had failed to supply certain crucial documents called for by the detenus thereby depriving them of the opportunity of making an effective representation.
The High Court nega tived all the contentions and dismissed the writ petitions.
Against that the wives of the detenus have filed Special Leave Petitions and also separate writ petitions under Article 32 of the Constitution raising several contentions including those negatived by the High Court.
Dismissing all the Special Leave Petitions and Writ Petitions and upholding the view taken by the High Court this, Court, HELD: Even in the case of a person in custody a deten tion order can validly be passed (1) if the authority pass ing the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudicial activity; and (3) if it is felt essential to detain him to prevent him from so doing.
[278F G] It is not sufficient to say that the detenu was not supplied the copies of the documents in time on demand but it must further be shown that non supply has impaired the detenu 's right to make an effective and purposeful represen tation.
[281B] Demand of any and every document, however irrelevant it may be, merely on the ground that there is a reference thereto in the grounds of detention, cannot vitiate an otherwise legal detention order.
No hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that failure to supply the documents before the meeting of the Advisory Board had impaired or prejudiced his right, however slight or insignificant it may be.
[281B C] Vijay Narain Singh vs State of Bihar, [1984] 3 S.C.C. 14; Dharmendra Suganchand Chelawat vs Union of India, ; ; Ramesh Yadav vs District Magistrate E.T., ; Suraj Pal Sahu vs State of Maharashtra, ; ; Binod Singh vs District Magistrate, Dhanbad, ; ; Abdul Wahab Sheikh vs
S.N. Sinha; , ; Meera Rani vs State of Tamil Nadu, ; ; Shashi Aggarwal vs State of Uttar Pradesh, ; ; Anand Prakash vs State of Uttar Pradesh, ; ; Sanjay Kumar Aggarwal vs Union of 459 India; , ; Gurdip Singh vs Union of India & Ors., [1989] Crl.
L.J. NOC 41 Delhi and Nand Kishore Purohit vs Home Secretary, Maharashtra, [1986] 2 Bombay C.R. 25 referred to.
|
ivil Appeal No. 4457 of 1989.
Appeal under Section 35 L(b) of the Central Excise and Salt Act, 1944 from the Order No. 285/89 C dated the 29th June, 1989 of the Customs, Excise and Gold (Control), Appel late Tribunal, New Delhi in Appeal No. E/2489/87 C. K.K. Venugopal, D. Shroff, Ravinder Narain, Raj Darak, P.K. Ram and D.N. Mishra for the Appellant.
Kapil Sibal, Additional Solicitor General, P. Parmeshwa ran and Ms, Indu Malhotra for the Respondent.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal involves the question whether the products, Bifuran Supplement, Neftin 50 and Neftin 200, manufactured by the appellant, are chargeable to excise duty as 'patent or proprietary medicines ' under Item 14 E of the First Schedule to the Central Excise and Salt Act, 1944, (hereinafter referred to as the 'Excise Tariff ') or the said products are exempted from excise duty under notification No. 6/84 dated February 15, 1984, as animal feed supplement.
At the relevant time Item 14 E of the Excise Tariff was as under. "14 E Patent or proprietary medicines not containing alco hol, opium, Indian Hemp or other narcotic drugs or 446 other narcotics other than those medicines which are exclu sively Ayurvedic, Unani, Sidha or Homeopathic.
Explanation I 'Patent or Proprietary Medicines ' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals which bears either or itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulacy or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade mark under the (43 of 1958), or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as a proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.
Explanation II 'Alcohol ', 'Opium ', 'Indian Hemp ', 'Narcotic Drugs ' and 'Narcotics ' have the meanings respec tively assigned to them in Section 2 of the .
" Item 68 of the Excise Tariff was in the nature of a residuary provision and it read as under: "All other goods, not elsewhere specified but excluding: (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian Hemp and other narcotic drugs and narcot ics; and (c) dutiable goods as defined in Section 2(c) of the Medici nal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955).
Explanation For the purpose of this Item, goods which 447 are referred to in any preceding Item in this Schedule for the purpose of excluding such goods from the description of goods in that Item (whether such exclusion is by means of an Explanation to such Item or by words of exclusion in the description itself or in any other manner) shall be deemed to be goods not specified in that Item." In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Gov ernment issued notification dated February 28, 1982 whereby the goods of the descriptions specified in the Schedule annexed to the said notification and falling under Item 68 of the Excise Tariff were exempted from the levy of central excise duty.
Entry at section No. 10 in the Schedule annexed to the said notification was: "Animal feed including compound live stock feed." The said notification dated February 28, 1982 was super seded by notification dated November 1, 1982, which also exempted from levy of central excise duty goods of the description specified in the Schedule annexed to the said notification falling under Item 68 of the Excise Tariff.
Entry at section No. 10 in the Schedule annexed to the said notification was in the same terms as in the previous noti fication dated February 28, 1982.
The notification dated November 1, 1982 was amended by notification dated February 15, 1984 whereby entry at section No. 10 in the Schedule annexed to the notification dated November 1982 was substituted by the following entry: "Animal feed including compound live stock feed, animal feed supplements and animal feed concentrates.
" By the aforesaid notification dated February 15, 1984, the following explanation was also inserted: "Explanation II For the purposes of this notification.
the expression (i) "animal feed supplements" means an ingredient or combi nation of ingredients, added to the basic feed mix or parts thereof.
to fulfil a specific need, usually used in micro quantities and requiring careful handling and mixing; (ii) "animal feed concentrates" means a feed intended to 448 be diluted with other feed ingredients to produce complete food of optimum nutrient balance.
" The appellant carries on business as manufacturer of pharmaceuticals.
Among the products manufactured by it are Bifuran Supplement, Neftin 50 and Neftin 200.
Prior to the notification dated February 15, 1984 the appellant was classifying the products mentioned above under Item 14E and was paying central excise duty on that basis.
After the notification dated February 15, 1984 the appellant filed a classification list effective from March 1, 1984 whereby the above mentioned products were classified as 'animal feed supplements ' under Item 68 and exemption was claimed under notification dated February 15, 1984.
The said classifica tion list submitted by the appellant was approved by the Assistant Collector of Central Excise on June 4, 1984.
Subsequently the Assistant Collector realised that the said classification had been wrongly approved and he gave a show cause notice dated January 31, 1985 to the appellant wherein it was stated that the above mentioned products classified by the appellant to be "animal feed supplement" do not appear to fulfil the conditions enumerated in the notifica tion dated February 15, 1984 and the appellant was required to show cause why the exemption granted to the said products should not be withdrawn.
The appellant submitted a reply dated March 29, 1985 to the said show cause notice.
After considering the said reply Assistant Collector passed an order dated August 21, 1985 whereby it was held that the exemption granted to the above mentioned products of the appellant has to be withdrawn with effect from March 1, 1984 as the conditions set out in the Notification No. 6/84 dated February 15, 1984 had not been fulfilled and the duty involved on the clearance of the said formulations had to be paid and further clearance could be effected under the revised classification list by including these items in Tariff Item 14E. The ' said order was set aside, on appeal, by the Collector of Central Excise (Appeals) by his order dated December 12, 1985 and the matter was remanded to the Assistant Collector to decide the classification in de novo proceedings after recording evidence to establish that the product has definite therapeutic or preventive value for disease in animals.
Thereafter the Assistant Collector initiated de novo proceedings.
The appellant submitted written submissions and filed documents.
After giving a personal hearing to the representation of the appellant the Assistant Collector passed an order dated November 17/21, 1986 holding that products Neftin 50, Neftin 200 and Bifuran Supplement manufactured by the appellant are correctly classifiable under erstwhile Tariff Item 14E and that effec tive from February 8, 1986 the said products are 449 classifiable under sub heading 3003.9.
The said order was set aside by the Collector of Central Excise (Appeals) by his order dated May 28. 1987.
who held that the said products are animal feed supplements and these products merit classification only under the erstwhile Tariff Item 68 and not under Tariff Item 14E. Aggrieved by the said order of the Collector (Appeals) the Department filed an appeal before the Customs, Excise & Gold Control Appellate Tribu nal, which was allowed by order dated June 29, 1989.
The tribunal held that the aforesaid three products manufactured by the appellant are patent and proprietary medicines as defined in Tariff Item 14E inasmuch as they have therapeutic and preventive use in respect of the specific ailments in animals.
The tribunal was also of the view that if the products satisfy the requirements of Tariff Item 14E there was no question of considering their classification under Tariff Item 68, which is a residuary item.
Aggrieved by the said order of the tribunal the appellant has filed this appeal under Section 35L of the Central Excise and SaIL Act, 1944.
During the course of arguments Shri K.K. Venugopal, the learned counsel for the appellant fairly stated that accord ing to the printed pamphlet issued by the appellant the use of Bifuran Supplement is to promote growth rate, weight gains and feed conversion efficiency in growers and broilers by keeping coccidiosis away during growing period, and that the said product can be regarded as preventive medicine failing under Tariff Item 14E and he has confined his sub missions in respect of the other two products, namely, Neftin 50 and Neftin 200.
Shri Venugopal has urged that Neftin 50 and Neftin 200 are manufactured by the appellant for use as animal feed supplement and not for use as medicine and therefore they should have been classified as animal feed supplement under Tariff Item 68 and were exempted from payment of central excise duty under notification dated February 15. 1984.
Shri Venugopal has invited our attention to the printed litera ture issued by the appellant for the sale of these products as well as certain certificate issued with regard to the use of these products as additive to poultry feed and their usefulness for that purpose.
Shri Venugopal has pointed out that in the printed literature it has been specifically mentioned: "For use in poultry feed only.
Not for medicinal use.
" Shri Venugopal also pointed out that as regards uses of Neftin 50 and Neftin 200 it is stated in the said printed literature: 450 "To improve egg production, feed/egg ratio and hatchability in layers; to increase weight gains and growth rate in broilers and growers." The learned Additional Solicitor General, on the other hand, has urged that both these products are patent and proprietary medicines chargeable to central excise duty under Tariff Item 14E.
In this connection the learned Addi tional Solicitor General has pointed out that Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazo lidone 20% W/W.
The submission of the learned Additional Solicitor General is that Furazolidone is used as an aid in the prevention of coccidiosis as well as for treatment of coccidiosis and that Furazolidone is a patent drug and in England it is sold to the public on the prescription of a registered practitioner only.
The learned Additional Solici tor General also urged that the finding that aforesaid two products are patent and proprietary medicines falling under Tariff Item 14E is essentially a finding of fact based on the materials placed before the excise authorities and the said finding is not normally open to challenge in appeal before this Court.
The submission of the learned Additional Solicitor General is further that in the present case it cannot be said that the aforesaid products manufactured by the appellants can be regarded as animal feed supplement as defined in Explanation II, inserted by notification dated February 15,1984 in the notification dated November 1, 1982.
In the instant case we are not required to consider the scope of two competing entries of the Excise Tariff because Item 68 was a residuary entry which dealt with all other goods not elsewhere specified.
A product which is found to be covered by the other items of the Schedule of the Excise Tariff would be outside the ambit of Item 68.
Therefore, the primary question to be considered is whether the products in question, namely, Neftin~50 and Neftin 200, are patent and proprietary medicines falling within Item 14E.
In this context we may refer to the decision of this Court in Dunlop India Ltd. vs Union of India and Others, ; where the question was whether V.P. Latex manufactured by the appellant in that case was raw rubber and classifiable under Item 39 or it was classifiable under the residuary entry contained in Item 87.
It was found that V.P. Latex fell within Item 39 and in view of the said finding it was held that it could not fall within the resid uary entry of Item 87.
It was observed: 451 "When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classifi cation to deny it the parentage and consign it to an orphan age of the residuary clause.
The question of competition between two rival classification will, however, stand on a different footing." (P. 113).
Similarly in Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co.; , the question was whether carbon paper was taxable under Item 17 or under the residuary entry at Item 68.
It was found that carbon paper was taxable as paper under Item 17(2) and, therefore, it would not fall in the residuary entry at Item 68.
As noticed earlier, Item 14E refers to patent or pro prietary medicines.
The expression 'patent or proprietary medicines ' has been defined in Explanation I in Item 14E to mean any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailment in human beings or animals.
What is, therefore, required is that the product must be a prepara tion for use in the treatment or prevention of ailments in human beings or animals.
Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazolidone 20% W. The Assist ant Collector in his order dated 17/21 November, 1986 has referred to the following authorities on the subject.
(a) British Pharmacopoeia 1980, Vol.
I, wherein with refer ence to Furazolidone it has been stated: "A yellow crystalline powder, odourless, to be protected from light.
An antibacterial, antifungal and antiprotozol." (P. 205) (b) British Pharmacopoeia Codex 1979 wherein it has been stated: "A bacteriacide which is observed only slightly from the intestinal mucosa and has therefore been used in the treat ment of bacterial diarrhoea and gestro enteritis.
It is also active against, "Giardia lamblia." "Furazolidone is used in animals as an antibacterial agent 452 and for the promotion and treatment of histomoniasis." "For histomoniasis in poultry, the usual prophylectic dosage is 100 ppm in the feed and the usual therapeutic dosage is 400 ppm in the feed for 10 days." (P. 376) (c) Scientific Foundations of Veterinary Medicine, 1980 Edn.
: "Bloody or cecal coccidiosis is an acute hemorrhagic disease and is the most severe form of coccidiosis in chickens." "Furazolidone is fed continuously at 0.0055% in the feed as an aid in the prevention of coccidiosis caused by E. tenel la, E. necatrix, and E. acervulina.
Furazolidone can also be used for the treatment of these same coccidia species when fed at 0.011% for 5 to 7 days." (P. 193) (d) Medicines and Poisons Guide, 2nd Edn. 1980, prepared by the Law Department of Pharmaceutical Society of Great Brit ain: "Furazolidone is a prescription only veterinary drug and by virtue of an entry in the medicines order (prescription only) may be sold or supplied to the public only on a prac titioner 's prescription." (P. 59) These observations indicate that Furazolidone is an antibacterial, antifungal and antiprotozol compound and it is used for prevention and treatment of coccidiosis as well as histomoniasis in poultry.
From this material it also appears that in England Furazolidone is a prescription only veterinary drug and it can be sold or supplied to the public on a practitioner 's prescription only.
Furazolidone is thus a drug or medicinal preparation used for treatment and prevention of ailments in poultry and since Neftin 50 and Neftin 200 contain only Furazolidone, the said products are also drugs or medicinal preparations for use in the treat ment and prevention of ailments in poultry.
In this context it would be relevant to mention that apart from Neftin 50 and Neftin 200 the appellant also manufactures Neftin Tab lets.
The appellant has not disputed that Neftin Tablets manufactured by it are drugs or medicines falling within the ambit of Item 14E and it pays central excise duty on the same.
Shri Venugopal has laid stress on the word "used" in Explanation I in Item 14 ,red has submitted that Neftin Tablets are manufactured 453 for use as medicine whereas Neftin 50 and Neftin 200 are manufactured for use as animal feed supplement and are not manufactured for use as medicine.
Shri Venugopal has invited our attention to the decision of this Court in Annapurna Carbon Industries Co. vs State of Andhra Pradesh, ; In that case the question for consideration was whether Cinema Arc Carbons were taxable to sales tax under the entry relating to cinematographic equipment and parts and accessories 'required for use therewith '.
This Court held that the main use of the arc carbon was proved to be that of production of powerful light used in projectors in cinemas and the fact that they can also be used for search lights, signalling, stage lighting or where powerful light ing for photography or other purposes may be required, could not detract from the classification to which the carbon arc belong, which is determined by their ordinary or commonly known purpose or user and hence their sale was subject to sales tax under the said entry.
Here we find that Neftin 50 and Neftin 200 contain Furazolidone which is administered for prevention and treatment of ailments viz., Coccidiosis and Histomoniasis in poultry.
Merely because Neftin 50 and Neftin 200 can also be used for improving egg production and increase in growth rate of broilers would not in any way detract from the fact that the said products are medicines for use in the treatment and prevention of ailments in poultry.
Once it is found that Neftin 50 and Neftin 200 are medicines for use for treatment and prevention of ailments in poultry they have to be regarded as patent and proprie tary medicines chargeable to excise duty under Item No. 14E and the question whether the said products fail in the residuary, entry at Item 68 does not arise.
The exemption from payment of central excise duty which has been granted under notification dated November 1, 1982 as amended by notification dated February 15, 1984, is confined in its application to goods specified in the Sched ule annexed to the said notification which fall under Item 68.
The said notification does not grant exemption in re spect of a product falling in any other entry of the excise tariff.
It cannot be construed as transferring a product from an entry other than Item 68 to Item 68.
The insertion of animal feed supplement in the Schedule to the Notifica tion dated November 1, 1982 by the Notification dated Febru ary 15, 1984, would not mean that a product which was liable to payment of central excise duly under Item 14E prior to such insertion would cease to be so liable and would become exempt from such payment of duty by virtue of this notifica tion.
It is not disputed that prior to the notification dated February 15, 1984.
the appellant was paying central excise duty on Neftin 50 and Neftin 200 454 patent and proprietary medicines falling under Item 14E.
In the absence of any notification granting exemption in respect of products falling under Item 14E, Neftin 50 and Neftin 200, which are patent and proprietary medicines falling under Tariff Item 14E and which do not fall under the residuary entry at Item 68, cannot be claimed to be exempt from central excise duty as animal feed supplement under notification dated November 1, 1982, as amended by notification dated February 15. 1984.
Shri Venugopal has contended that the appellant has been subjected to arbitrary and hostile discrimination inasmuch as similar products of other manufacturers which contain the same percentage of Furazolidone as Neftin 50 and Neftin 200 are being exempted from payment of central excise duty under notification dated November 1, 1982.
as amended by notifica tion dated February 15, 1984.
In support of this submis sion Shri Venugopal has invited our attention to the pam phlets issued by other manufacturers about their products and the contents of those products.
Shri Venugopal has placed reliance on the decisions of the U.S. Supreme Court in Cumberland Coal Co. vs Board of Revision, 76 Law Edn. 147 and Iowa Des Moines National Bank vs E.R. Bennett, 76 Law Edn. 265 as well as the decision of this Court in Vishnudas Hindumal Etc.
vs State of Madhya Pradesh and Ors.
, ; The learned Additional Solicitor General has submitted that the other manufacturers referred to by Shri Venugopal are located at different places and are assessable to excise duty by different authorities and that merely because the relevant notifications have been wrongly applied to those manufacturers by the concerned authorities and the said manufacturers are enjoying exemption from duty in respect of their products would not mean that the impugned order passed against the appellant is liable to be quashed on the ground on violation of the right to equality under Article 14 of the Constitution.
The learned Additional Solicitor General has also stated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
It is not the case of the appellant that the same au thority has passed orders discriminating between the appel lant and other producers of similar products.
The grievance of the appellant is that on account of difference in the interpretation of notification dated February 15, 1984, amending notification dated November 1, 1982, by the excise authorities in other regions while the appellant is being required to pay excise duty on Neftin 50 and Neftin 200 manufactured by it, other manufacturers of similar products in other regions are 455 enjoying exemption from payment of such duty.
The appellant, in substance, wants that because other producers have been granted exemption, though wrongly, the same exemption should be extended to it.
In our opinion this is impermissible.
The appellant cannot obtain such an exemption in disregard of the law by invoking the right to equality before the law and equal protection of the laws guaranteed under Article 14 of the Constitution.
A similar question arose before this Court in Narain Dass vs The Improvement Trust, Amritsar & Another, AIR 1972 S.C. 865.
In that case it was contended that while administering Section 56 of the Punjab Town Improvement Act, 1922, there had been hostile discrimination against the appellants because lands under orchards belonging to persons similarly placed had been exempted whereas the appellants had been refused exemption.
Rejecting this contention this Court has observed: "In any event if the appellants had failed to bring their case within Section 56 of the Act, then merely because some other party had erroneously succeeded in getting his lands exempted ostensibly under that Section that by itself would not clothe the present appellants with a right to secure exemption for their lands.
The rule of equality before the law or of the equal protection of the laws under Article 14 could not be invoked in such a case.
" In Cumberland Coal Co. (Supra) and Iowa Des Moines National Bank (supra) it was found that there was intention al and systematic discrimination in favour of certain per sons by the officials administering the law.
In the instant case it is not said that there has been intentional and systematic discrimination in favour of the producers other than the appellant.
The said decisions have, therefore no application to the present case.
Vishnudas Hindureal vs State of Madhya Pradesh (Supra) was in respect of a scheme for nationalisation of motor transport whereunder the permits of the appellants before this Court had been curtailed and they were prohibited from operating their stage carriages on that portion of the route for which they had permits which was overlapping with the notified route while others similarly situate were permitted to ply their stage carriages over the routes for which they had permits passing over a portion of the notified route without any let or hindrance and their permits were neither curtailed nor cancelled.
This Court found that this was due to an error or omission on the part of the Regional Trans port Authority in not supplying full information to the 456 Special Secretary about all the valid permits in force at the relevant date, After referring to the decision of this Court in Ramnath Verma vs State of Rajasthan, ; wherein it was held that discrimination under Article 14 is conscious discrimination and not accidental discrimination that arises from oversight which the State is ready to rectify, this Court observed: " We did not find any willingness on the part of the State authorities to rectify the error in the High Court or before this Court." In these circumstances.
this Court, instead of rejecting the whole scheme, considered it appropriate to rectify the same by removing the discrimination by putting the appel lants before it in the same class as those who had enjoyed favourable treatment by inadvertance on the part of the Regional Transport Authority.
The present case stands on a different footing.
Here the discrimination complained of arises on account of orders passed by different excise authorities acting quasi judicially.
Moreover it cannot be said that there is no willingness on the part of the author ities to recover excise duty on similar products manufac tured by other producers because the learned Additional Solicitor General, during the course of his arguments, has indicated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
The decision in Vishnudas 's case (supra) has, therefore, no application to the present case.
For the reasons aforesaid we find no substance in this appeal and it is accordingly dismissed.
There will be no order as to costs.
P.S.S. Appeal dismissed.
| IN-Abs | Item 14 E of the First Schedule to the at the relevant time dealt with patent or proprietary medicines not containing alcohol, opium, Indian hemp or other narcotic drugs or narcotics.
Explanation I thereto defined 'patent or proprietary medicines ' to mean any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the preven tion of ailments In human beings or animals.
Item 68 dealt with all other goods, not elsewhere specified but excluding alcohol, opium, Indian hemp and other narcotic drugs and narcotics.
The Central Government by a notification dated February 28, 1982 exempted certain goods falling under Item 68 from the levy of central excise duty.
Entry at section No. 10 in the schedule annexed thereto read "animal feed including com pound livestock feed".
The said notification was superseded by notification dated November 1, 1982 which also provided the same exemption.
This notification was again amended by notification dated February 15, 1984.
Entry at section No. 10 in the schedule thereto read "animal feed including compound livestock feed, animal feed supplement and animal feed concentrates".
A question arose as to whether Bifuran Supplement, Neftin 50 and Neftin 200 manufactured by the appellant were chargeable to excise duty as patent or proprietary medicines under Item 14 E or could be classified as "animal feed supplement" under Item 68 and exempted from payment of excise duty.
The Assistant Collector of Central Excise held that the said formulations were classifiable under Tariff Item 14 E.
His order was, however, set aside by the Collec tor of Central Excise (Appeals) who held that the said products were animal feed supplements which merited classi fication only under the erstwhile Tariff Item 68 and not under Tariff Item 14 E.
On appeal by the Department, the Tribunal held that the aforesaid three products manufactured by the 443 appellant were patent and 'proprietary medicines as defined in Tariff Item 14 E inasmuch as they have therapeutic and preventive use in respect of the specific ailments in ani mals, that if the products satisfied the requirements of Tariff Item 14 E there was no question of considering their classification under Tariff Item 68 which was a residuary item.
In this appeal under section 35 L of the Act it was stated on behalf of the appellant that since the use of Bifuran Sup plement was to promote growth rate, weight gains and feed conversion efficiency in growers and broilers by keeping coccidiosis away during growing period, it could be regarded as a preventive medicine falling under Tariff Item 14 E.
However, in respect of Neftin 50 and Neftin 200 it was urged that these were manufactured for use as animal feed supple ment and not for use as medicines and, therefore, they should have been classified as animal feed supplement under Tariff Item 68 and exempted from payment of excise duty under notification dated February 15, 1984.
It was further contended that the appellant had been subjected to arbitrary and hostile discrimination as similar products of other manufacturers were being exempted from payment of excise duty under the said notification.
For the respondent it was contended that Neftin 50 contains Furazolidone 5% w/w and Neftin 200 contains Furazolidone 20% w/w, that Furazolidone is used as an aid in the prevention of coccidiosis as well as for treatment of coccidiosis, that Furazolidone is a patent drug and in England it is sold to the public on the prescription of a registered practitioner only that the finding that these two products were patent and proprietary medicines failing under Tariff Item 14 E was essentially a finding of fact based on the materials placed before the excise authorities and the said finding was not normally open to challenge in appeal, that the other manufacturers whose products were exempted were located at different places and were assessable to excise duty by different authorities, and that the relevant notifications have been wrongly applied to those manufacturers by the concerned authorities.
Dismissing the appeal, the Court, HELD: 1.
Item 68 of the Excise Tariff was a residuary entry which dealt with all other goods not elsewhere speci fied.
A product which is found to be covered by the other items of the Schedule of the Excise Tariff would be outside the ambit of Item 68.
[260F] Dunlop India Ltd. vs Union of India & Ors., ; and Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., ; , referred to.
444 2.
What is required for purposes of Item 14 E is that the product must be a preparation for use in the treatment or prevention of ailments in human beings or animals.
Furaz olidone is an antibacterial, antifungal and antiprotozoal compound.
It is used for prevention and treatment of coccid iosis as well as histomoniasis in poultry.
In England it.is a veterinary drug and it can be sold or supplied to the public on a practitioner 's prescription only.
Furazolidone is thus a drug or medicinal preparation used for treatment and prevention of ailments in poultry.
Since Neftin 50 and Neftin 200 contain only Furazolidone, the said products are also drugs or medicinal preparations for use in the treat ment and prevention of ailments in poultry.
They have, therefore, to be regarded as patent and proprietary medi cines chargeable to excise duty under Item No. 14 E. [262E G] Annapurna Carbon Industries Co. vs State of A.P ; , referred to.
The exemption under notification dated November 1, 1982, as amended by notification dated February 15, 1984 was confined in its application to specified goods which fell under Item 68.
The said notification did not grant exemption in respect of a product failing in any other entry 'of the excise tariff.
It could not be construed as transferring a product from an entry other than Item 68 to Item 68.
The insertion of 'animal feed supplement ' in Entry No. 10 in the schedule to the notification dated November 1, 1982 by the notification dated February 15, 1984, would not mean that a product which was liable to payment of excise duty under Item 14 E prior to such insertion would cease to be so liable and would become exempt from such payment of duty by virtue of that notification.
Prior to the notification dated February 15, 1984, the appellant was paying excise duty on Neftin 50 and Neftin 200 as patent and proprietary medicines failing under Item 14 E.
In the absence of any notification granting exemption in respect of products falling under Item 14 E, Neftin 50 and Neftin 200 could not be claimed to be exempt from Central Excise duty as animal feed supplement.
[263F H; 264A B] 4.
It was not the case of the appellant that the same authority had passed orders discriminating between the appellant and other producers of similar products.
Nor it is said that there has been intentional and systematic discrim ination in favour of the producers other than the appellant.
The discrimination complained of arose on account of orders passed by different excise authorities acting quasi judi cially.
Merely because on account of difference in the interpretation of the relevant notifications by the excise authorities in other regions other manufac 445 turers of similar products in those regions were enjoying exemption from payment of such duty the same exemption could not be extended to it.
The appellant could not obtain such an exemption in disregard of the law by invoking the right to equality before the law and equal protection of the laws guaranteed under Article 14 of the Constitution.
[264G H; 265A B] Narain Dass vs The Improvement Dust, Amritsar, & Anr., AIR 1972 S.C. 865, referred to.
Cumberland Coal Co. vs Board of Revision, 76 Law Edn. 147; Iowa Des Moines National Bank vs E.R. Bennett, 76 Law Edn.
265; Vishnudas Hindumal vs State of Madhya Pradesh & Ors., ; and Ramnath Verma vs State of Rajasthan, ; , distinguished.
|
Civil Appeal Nos.
2 166/87 & 2 146/84.
From the Judgment and Order dated 26.6.
1987 & 16.11.
1983 of the Bombay High Court in W.P. Nos.
2161/86 and 500 of 1983.
V.A. Bobde.
R.N. Keshwani, A.G. Ratnaparkhi and S.D. Mudaliar for the Appellant.
523 S.B. Bhasme, Dr. N.M. Ghatate, S.V. Deshpande and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The interpretation of Rule 3 of the Maharashtra Ground Water Service, Class I (Recruitment) Rules.
1976 (hereinafter called 'the rule ') arises for consideration in these appeals.
That Rule related to the appointment to the post of a Deputy Director in Maharashtra Ground Water Service, Class I and the relevant portions of it as is stood in 1983 read as follows: "3.(1) Appointment to the post of a Deputy Director in the Maharashtra Ground Water service Class 1 shall be made either (a) by promotion from amongst Senior Geologists in the Ground Water Surveys and Development Agency of Government, possessing the qualifications mentioned in sub clauses (ii) and (iii) of Clause (c) of this sub rule; (b) by transfer of a suitable officer from the Department of Geology and Mining of Government; (c) by nomination from amongst the candidates who (i) unless already in the service of Government are not more than 45 years of age on the first day of the month in which the post is advertised, and (ii) Possess a post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mine, Dhanbad, or any quali fications recognised by Government to be equivalent thereto, and (iii) have practical experience in the field of (a) carrying out systematic hydro geological surveys in ingeneous sedi mentary and metamorphic terrains (b) ground water explora tion and assessment by drilling and testing and (c) process ing, interpretation of field date and in preparing and editing technical reports for a total period of ten years out of which three years.
experience shall be in organising.
supervising and guiding field units.
" We are now concerned with the case of promotion from amongst the Senior Geologists under Sub Clause (a) of Rule 3(1) of the Rules.
524 The appellant herein joined in the Agricultural Depart ment of the State some time in the year 1963 and at that time he possessed the qualification of B.Sc.
with Geology as a principal subject.
He was promoted as Senior Geologist on 25.6. 1979.
He passed his M.Sc.
(Geology) in 1982 with first class and he was also first in the Nagpur University in the subject of pure Geology.
He is also the senior most in the seniority list of senior Geologists.
He was also holding the additional charge as Deputy Director from 16.6.
1982 for quite some time.
The Maharashtra Public Service Commission by the notification dated 21st May. 1983 called applications for direct recruitment to the post of Deputy Director in the Ground Water Survey and Development Agency.
which is gov erned by Rule 3(1)(c) of the Rules.
In regard to the quali fication for appointment the advertisement stated: Qualifications: Candidates must possess: (i) A post graduate degree in Geology or Applied Geology of a recognised University or Diploma in Applied Geology of the Indian School of Mines, Dhanbad or any qualification recog nised by Govt., to be equivalent thereto; (ii) 10 years practical experience in the field of (a) Carrying out systematic hydrological surveys in ingene ous sedimentary and metamorphic terrains.
(b) Ground water exploration and assessment by drilling and testing and (c) Processing, interpretation of field data and in prepar ing and editing technical reports, of which three years ' experience shall be in organising supervising and guiding field units.
N.B. (1) The academic qualifications and experience ac quired upto the last date prescribed for receipt of applica tions alone will be taken into account in determining the eligibility of candidates for the posts and for selecting them for the interview.
(2) Academic qualification shall be deemed to have been acquired on the date on which the result of the relevant examination is declared by the competent authority.
(3) Experience acquired after obtaining the prescribed 525 academic qualifications only will be taken into account.
" The appellant applied to the Service Commission but he was not called for an interview on the ground that he acquired the post graduate degree in Geology only in the year 1982 and he does not possess the necessary qualification of 10 years practical experience after obtaining the post graduate degree.
The appellant filed Writ Petition No. 500 of 1983 before the High Court of Judicature of Bombay at Aurangabad contending that rule 3(1)(c) of the Maharashtra rules does require the practical experience after obtaining the quali fication of a post graduate degree in Geology and the in sistence on such experience after obtaining the prescribed academic qualification was illegal.
In this connection he contended that sub clauses (ii) and (iii) of clause (c) of Rule 3(1) of the rules are two independent requirements, that they have to be read disjunctively and the experience required under subclause (iii) need not be after possessing the basic educational qualification of a post graduate degree in Geology.
This contention was not accepted by a Division Bench of that Court and by order dated 16.
1983 Writ Petition No. 500 of 1983 was dismissed.
Against that judgment the appellant has preferred Civil Appeal No. 2146 of 1984.
While granting special leave this Court in its order dated 16.4.
1984 observed "The Government will decide itself as to whether the petitioner should or should not be reverted".
However it appears the petitioner was reverted on 4.7. 1985 to the position of Senior Geologist.
Subsequently the Government created a new post of Deputy Director Ground Water Survey at Aurangabad.
This post was sought to be filled by promotion under Rule 3(1)(a) of the rules by the Selection Committee.
The appellant was selected and appoint ed as Deputy Director on 14.12.
This appointment was challenged under Writ Petition No. 2161 of 1986 on the file of Nagpur Bench of the Bombay High Court by one Bhaiyya s/o Govindrao Karale on the ground that even for promotion from amongst the Senior Geologists the candidate should possess not only a post graduate degree in Geology but also IO years experience posterior to such acquisition of post graduate degree and that since the appellant does not have the neces sary experience he is not qualified to be promoted under clause (a) of Rule 3(1) of the rules.
This Division Bench also took similar view as in the earlier case and by an order dated 26th June, 1987 the writ petition was allowed and the selection and promotion of the appellant as Deputy Director under Rule 3(1)(a) of the rules was also quashed.
Against this judgment Civil Appeal 2 166 of 1987 has been filed.
When this appeal was pending the Government of Maha rashtra amended Rule 3(1)(a) by 526 substituting for the words "sub clauses (ii) and (iii) of clause (c)", the words "sub clause (ii) of clause (c)".
Thus the requirement of 10 years experience mentioned in sub clause (iii) of clause (c) was deleted in respect of ap pointment by promotion.
In the counter affidavit filed by the State Government it is stated that this was done because in the case of a promotion the requirement of 10 years experience subsequent to the acquisition of post graduate degree in Geology was redundant and, therefore.
should not be insisted upon and it is in that view the rule was amend ed.
However, in direct recruitment the 10 years experience after acquiring the post graduate qualification was re tained.
On the interpretation of the rule prior to its amendment which was relevant for considering Civil Appeal No. 2 146 of 1984 we are of the view that the view taken by the Aurangabad bench does not call for any interference.
Normally when we talk of an experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications required and.
there fore.
necessarily will have to be posterior to the acquisi tion of the qualification.
However, in the case of a promo tion the same interpretation may not be just or warranted.
It would depend on the relevant provisions as also the particular type of experience which is required.
However.
this need not detain us because as we have already stated the Government have now omitted the requirement of experi ence by the said Amendment.
The Amendment was made on 16th February.
1988 and published in the Gazette on 24.3.
Though the Rule does not say anything about its retrospec tive operation there could be no doubt that it is retroac tive.
This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and this appointment is with reference to a case of promotion and appointment, It is true that at the time when the appellant was promoted the Rule had not been amended.
However it may also be mentioned that the appellant is the senior most among the Senior Geologists and even if he is to be considered again trader the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now.
In the circumstances we are of the view that the appeal against the decision in Writ Petition No. 2161 of 1986 will have to be allowed though Civil Appeal No. 2146 of 1984 will have to be dismissed.
Accordingly we allow Civil Appeal No. 2166 of 1987 set aside the judgment of the Division Bench in Writ Petition No. 2161 of 1986.
Civil Appeal No. 2146 of 1984 is however dismissed.
There will be no order as to costs.
G.N. CA No. 2166/87 allowed.
and CA No. 2146/85 dismissed.
| IN-Abs | The appellant joined the Agricultural Department in 1963 with B.Sc.
(Geology).
Later, in 1979 he was promoted as Senior Geologist.
In 1982 he passed his M.Sc.
(Geology) and stood first in the University.
Sometime in 1982 he was also holding additional charge as Deputy Director.
In 1983, the State Public Service Commission called for applications for direct recruitment of Deputy Director in the Ground Water Survey and Development Agency.
The appel lant applied in response to the said advertisement, but was not called for interview, on the ground that he did not possess the necessary qualification of 10 years practical experience after acquiring the post graduate degree.
Ag grieved, the appellant filed a Writ Petition before the High Court contending that educational qualification and experi ence are two independent requirements and have to be read disjunctively and the experience required need not be after possessing basic educational qualification.
However, the High Court did not agree with the contention and dismissed the Writ Petition.
Against the said dismissal, the appellant preferred an appeal by special leave which was granted, by this Court in 1984, with an observation that the petitioner should not be reverted.
However, he was reverted to the post of Senior Geologist but subsequently promoted as Deputy Director in a new post created.
The appellant 's promotion was challenged by one of his colleagues by way of a Writ Petition contend ing that even for promotion, 10 years experience posterior to acquisition of post graduate degree was essential.
The High Court quashed the promotion of the appellant.
The appellant appealed against the said order after obtaining special leave of this Court in 1987.
522 During the pendency of these two appeals the State Government amended Rule 3(1)(a) whereby the requirement of 10 years experience mentioned in sub clause (iii) was delet ed in respect of appointment by promotion.
According to the State Government since the said requirement was redundant, it was deleted.
Allowing the 1987 appeal, and dismissing the 1984 ap peal, this Court, HELD: 1.1.
On the interpretation of Rule 3 of Maharash tra Ground Water Service, Class I (Recruitment) Rules, 1976 prior to its amendment, the view taken by the High Court on the Writ Petition filed by the appellant, does not call for any interference.
Normally when one talks of experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications re quired and, therefore, necessarily will have to posterior to the acquisition of the qualification.
However, in the case of promotion the same interpretation may not be just or warranted.
It would depend on the relevant provisions as also the particular type of experience which is required.
[336C D] 1.2.
The requirement of experience has been omitted by an amendment made on 16th February, 1988 and published in the Gazette on 24.3.1988.
Though the Rule does not say anything about its retrospective operation there could be no doubt that it is retroactive.
This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and the appointment in question is by promotion.
It is true that at the time when the appellant was promoted, the Rule had not been amended.
However, the appellant is the senior most among the Senior Geologists and even if he is to be considered again under the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now.
[336E F]
|
Appeal No. 183 of 1984.
From the Judgment and Order dated 23.10.1982 of the Kerala High Court in A.S. No. 309 of 1977.
Dr. Y.S. Chitale, Aseem Mehrotra, Mukul Mudgal, R.K. Aggarwal, S.K. Aggarwal and Sudhir Gopi for the Appellant.
545 G. Viswanatha Iyer and P.K. Pillai for the Respondents.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
In this appeal an important question touching upon the interpretation of Section 9 of The ( 'Act ' for short) defining 'holder in due course ' falls for consideration.
The appeal is directed against the judgment of the High Court of Kerala confirming the judgment of the Subordinate Judge, Tellicherry in Original Suit No. 74 of 1975.
To appreciate the question involved it becomes necessary to state the relevant facts and while stating so we shall refer to the parties as arrayed in the suit for convenience sake.
The plaintiff Catholic Syrian Bank Ltd. is a banking company incorporated under the Indian Companies having its Head Office in Trichur and branches at various places.
The first defendant firm consisting of defendant Nos. 2 to 4 as partners who are brothers, was doing business in Telli cherry in hill produces and they were allowed credit facili ties by the plaintiff Bank, like accommodation by way of Hundi discount, key loan and cheque purchases upto a limit of Rs.35,00,000.
A promissory note was executed by defend ants Nos. 2 to 4 in favour of their mother, the 5th defend ant for an amount of Rs.35,00,000 and the same was endorsed in favour of the plaintiff as security for the facilities granted to the first defendant firm.
The 5th defendant had also deposited the title deeds of her properties shown in the plaint schedule to create an equitable mortgage to secure the repayment of the amounts due from first defend ant.
The first defendant firm had dealings with 6th defend ant as well as others.
The first defendant firm was supply ing goods consisting of hill products and used to receive payments by way of cheques.
On 26.10.74, 6th defendant drew a cheque on the Union Bank of India, Palghat Branch in favour of the first defendant payable to the first defendant firm on order a sum of Rs.2,00,000.
The cheque was purchased by the plaintiff Bank from the first defendant on 30.10.1974 on valid consideration and proceeds were credited by the Bank to the account of the first defendant.
Similarly anoth er cheque was drawn on 31.10.1974 and the first defendant endorsed the same to the plaintiff for valid consideration and the proceeds were credited to the account of the first defendant who withdrew the amount at various dates.
The plaintiff Bank sent the cheques for collection but the Union Bank of India returned the same with the endorsement "full cover not received".
The defendant Nos. 2 to 5 by two sepa rate agreements offered to pay 546 the amounts to the plaintiff Bank and as per the terms therein they were to pay Rs. 1,000 per month and the 5th defendant was to pay the amount realised by her from the tenants by way of rent and they could pay only 12,3 13.35 p. Thereupon after exchange of notices between defendant No. 6 and other defendants a suit was filed for the recovery of the balance amount from defendant No. 6 also who issued the cheques.
The defendant No. 6 who is the appellant herein, con tended that the cheques were issued to the first defendant on their representation that they would supply a large consignment of pepper, dry ginger etc.
and the understanding was that the cheques would be presented only after the consignment was despatched.
Since the first defendant failed to despatch the goods, the 6th defendant could not pay the money in the Bank and therefore the cheques were not ho noured.
He also pleaded that he would not admit the purchase of cheques by the plaintiff and that plaintiff was only a collection agent and there was no consideration for purchase and therefore the plaintiff was not a holder in due course.
It was also contended that plaintiff acted negligently and in disregard of the provisions of law, therefore there was no valid cause of action against the defendant.
It may not be necessary for us to refer to the stand taken by the other defendants.
The trial court held that the plaintiff is a 'holder in due course ' and as such is entitled to enforce the liability against the 6th defendant, who is the maker of the cheques.
The trial court also held that the defendant Nos. 2 to 4 were personally liable for the plaint claim and the assets of the first defendant would also be liable if the hypothecation is not sufficient to discharge the decree amount.
The 6th defendant alone filed an appeal in the High Court and the others figured as respondents.
The High Court confirmed the findings of the trial court but modified the decree holding that immovable properties described in the Schedule to the plaint would be proceeded against in the first instance and if the entire decree amount cannot be realised by the sale of those properties, the plaintiff Bank would proceed against the assets of the first defendantfirm, and for the balance, if any, the decree holder would proceed against defendants Nos. 2 to 4 and 6 and the liability of the 5th defendant is restricted to the extent of immovable properties mortgaged by her.
Aggrieved by the said judgment and decree, the 6th defendant has preferred this appeal.
Dr. Chitale, learned counsel appearing for the appellant submitted that respondent No. 1 herein namely the plaintiff Bank is not a 'holder in due course ' and therefore cannot maintain any legal action 547 against the appellant i.e. defendant No. 6 who had drawn the cheques.
His main submission is that the plaintiff Bank acted negligently and did not act in good faith in paying the amounts due under the cheques to the defendant firm without making any enquiries regarding the "title" of the person namely defendant No. 1 from whom the Bank claims to have purchased the cheques for consideration.
It is submit ted that the cheques were issued by defendant No. 6, the appellant, with the understanding that the goods would be supplied and the plaintiff Bank without making any enquiries whether the goods were supplied or not and without any verification from the Union Bank of India paid the amounts to the payee namely defendant No. 1 within few days in a hasty and negligent manner.
Therefore, according to the learned counsel, the necessary ingredients of the definition of 'holder in due course ' in the case of plaintiff are not satisfied and consequently the plaintiff Bank can not main tain any claim against the appellant.
Section 9 of the which defines 'holder in due course ' reads as under: "Holder in due course" means any person who for considera tion became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if payable to order before the amount mentioned in it became payable, and with out having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
" The definition makes it clear that to be a 'holder in due course ' a person must be a holder for consideration and the instrument must have been transferred to him before it becomes overdue and he must be a transferee 'in good faith and another important condition is that the transferee namely the person who for consideration became the possessor of the cheque should not have any reason to believe that there was any defect in the title of the transferor.
It is beyond dispute that the plaintiff bank credited the proceeds to the account of the first defendant who also withdrew the amount on various dates.
Therefore it has been rightly held that the plaintiff purchased the cheques for valid consideration after the necessary endorsement by the bearer before they became overdue.
In this con 548 text, the learned counsel.
however, contended that the plaintiff was only a holder and was only a collection agent as per the endorsement made by the defendant No. 1.
Section 8 defines 'holder ' as a person entitled in his own name to the possession of a cheque or bill of exchange or a promis sory note and to receive or recover the amount due thereon from the parties thereto.
Section 118 of the which deals with the presumptions as to negotiable instruments provides in clause (g) that the holder of a negotiable instrument shall be presumed as a holder in due course.
Section 118(g) reads as under: "118.
Until the contrary is proved, the following presump tions shall be made: XX XX XX XX XX XX (g) that the holder of a negotiable instrument is a holder in due course; provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or accept or thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
" In the instant case, the holder namely defendant No. 1 made the necessary endorsements in the two cheques in favour of the plaintiff Bank and the Bank endorsed "payee account credited".
The defendant No. 1 withdrew this amount and there is no dispute about it.
It must also be noted in this context that there is no endorsement on the cheque made by the drawer namely the appellant that the cheques are not negotiable.
In the absence of the cheques being crossed as "not negotiable" nothing prevented the plaintiff Bank to purchase the cheques for a valuable consideration and the presumption under Section 118(g) comes to his rescue and there is no material whatsoever show that the cheques were obtained in any unlawful manner or for any unlawful consid eration.
Now the question is whether the other requirement of the definition i.e. "without having sufficient cause t9 believe that any defect existed in the title of the person from whom he derived his title" is satisfied.
It is contended on behalf of the appellant that the cheques were issued on the representation that the defendant No. 1 would 549 supply the goods and that the cheques would be presented after the despatch and delivery of the goods but defendant No. 1 failed to despatch the goods and that plaintiff with out any enquiries about the title of the payee could not have purchased the cheques because there was sufficient cause to believe that the title of the bearer was not free from defects.
According to the learned counsel, the Indian Law is stricter, and is not satisfied merely with the hones ty of the person taking the instrument, but requires the person to exercise due diligence.
and goes a step further then English Law in scrutinising the causes which go to make up the belief in the mind of the transferee.
To appreciate the submission of the learned counsel it becomes necessary to refer to the various authorities cited by him including the text books, in the first instance an English law and then on Indian Law on the subject.
In Eng lish Law, Section 29 of the Bills of Exchange Act, 1882 defines 'holder in due course '.
The relevant part of Section 29(1)(b) reads thus: "29.
Holder in due course (a) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions.
namely: (a) xx xx xx (b) that he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negoti ated it.
" Section 90 of this Act reads as under: "90.
Good faith: A thing is deemed to be done in good faith within the meaning of this Act, where it is in fact done honestly, whether it is done negligently or not." These provisions have been understood and interpreted to mean that the holder should take the bill in good faith and he is deemed to have 'acted in good faith and if he acts honestly and negligence will not affect his title.
In Byles of Bills of Exchange, 25th Edn.
Page 206 a passage reads thus: 550 "A wilful and fradulent absence of inquiry into the circum stances, when they are known to be such as to invite in quiry, will (if the jury thinks that the abstinence from inquiry arose from a suspicion or belief that inquiry would disclose a vice in the bills) amount to general or implied notice.
" There must, however, be something to put the holder on inquiry." In Nelson vs Larholt, the defendant re ceived cheques for value drawn by an executor in fraud of the testator.
Denning, J. held that the defendant could not escape liability because he knew or ought to have known of the executor 's want of authority.
In Baker vs Barclays Bank Ltd., the expression "notice" occur ring in Section 2(1)(b) of the Bills of Exchange Act, 1882 is interpreted to mean actual notice and there is no ques tion of constructive notice.
In Chitty on Contracts, 26th Edn.
the learned author states the requirement that must be fulfilled before a person may be considered a holder in due course as under: "First, he must take the bill when it is complete and regu lar on its face.
Secondly, he must take it before it is overdue and without notice that it was previously disho noured, if such was the fact.
Knowledge that a bill is bound to be dishonoured may also be relevant.
Thus, a Canadian authority suggests that a holder, who has taken a cheque with the knowledge of its having been countermanded, is not a holder in due course.
Thirdly, he must take it in good faith and without having notice of any defect in the title of the person who negotiates the bill to him.
In particular the title of the person who negotiates the bill is defective when he obtained the bill or its acceptance by fraud, duress or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith or under circum stances amounting to fraud.
Last, a holder in due course must take the bill for value i.e. consideration.
" The learned author dealing with the presumption of good faith has noted in paragraph 2781 thus: "Presumption of good faith.
Every party whose signature appears on a bill is prima facie deemed to have become a 551 party thereto for value.
Every holder of a bill is prima facie deemed to be a holder in due course; but if the ac ceptance, issue or subsequent negotiation of the bill was affected with fraud, duress or illegality, the burden of proof is shifted, and the holder must prove that.
subsequent to the alleged fraud or illegality, value was in good faith given for the bill.
Thus, once a fraud is proved.
the burden of proof is shifted to the holder who must then show not only that value has been given for the bill.
but also that he took the bill in good faith and without notice of the fraud.
If the holder can discharge this onus he is, again, in the position of a holder in due course." (emphasis supplied) The learned author Chitty in paragraph 2778 dealing with the subject 'The Consideration for a Bill ' has stated thus: "For example, if a person whose banking account is overdrawn negotiates to this bankers a cheque.
drawn by a third party, to reduce the overdraft, the banker becomes a holder for value of the cheque.
The pre existing debt of the overdraft is a sufficient consideration for the negotiation of the cheque to the banker.
" A consideration of the above passages and decisions goes to show that English law requires that the holder in taking the instrument should act in good faith and that he had no notice of any defect in the title and if he has acted hon estly, he is deemed to have acted in good faith whether it is negligently or not.
With the above background of English Law.
we shall now examine the Indian law on the subject.
In Bhashyam & Adiga on the , 15th Edn.
at page 171, the authors have dealt with the position in Indian law and it is observed that it would be Seen that the Indian Legislature has adopted the older English law as laid down by Abbott.
C.J., (later Lord Tent erden) in Gill vs Cubitt, English Reports 107~ King 's Bench 806.
Relying on this passage the learned counsel proceeded to submit that the Indian law is stricter than English law and requires the person to exercise due diligence and in this context the Indian law goes even a step further than English law in scrutinising the causes which go to make up the belief in the mind of the transferee.
Gill 's case (supra) is a case where a bill of exchange was stolen during the night.
and taken to the office of a discount broker early in the following 552 morning by a person whose features were known, but whose name was unknown to the broker and the latter being satis fied with the name of the acceptor, discounted the bill, according to his usual practice, without making any enquiry of the person who brought it.
On these facts it was held that the plaintiff had taken the bill under circumstances which ought to have excited the suspicion of a prudent and careful man.
Abbott.
C.J. (later Lord Tenterden) observed: "It appears to me to be for the interest of commerce, that no person should take a security of this kind from another without using reasonable caution.
If he takes such security from a person whom he knows, and whom he can find out, no complaint can be made of him.
In that case he has done all any person could do.
But if it is to be laid down as the law of the land.
that a person may take a security of this kind from a man of whom he knows nothing, and of whom he makes no enquiry at all, it appears to me that such a decision would be more injurious to commerce than convenient for it.
by reason of the encouragement it would afford to the purloin ing, stealing, and defrauding.persons of securities of this sort.
The interest of commerce requires that bona fide and real holders of bills, known to be such by those with whom they are dealing, should have no difficulties thrown in their way in parting with them.
But it is not for the inter est of commerce that any individual should be enabled to dispose of bills or notes without being subject to inquiry.
" Bayley, J. agreeing with Abbott, C.J. however, added: admit that has been generally the case; but I consider it was parcel of the bona fides whether the plain tiff had asked all those questions which, in the ordinary and proper manner in which trade is conducted, a party ought to ask.
I think from the manner in which my Lord Chief Justice presented this case to the consideration of the jury, he put it as being part and parcel of the bona fides; and it has been so put in former cases.
" Holroyd. J., having agreed with Abbott, C.J. further ob served that: 553 "The question whether a bill or note has been taken bona fide involves in it the question whether it has been taken with due caution.
It is a question of]act for the jury, under all the circumstances of the case.
whether a bill has been taken bona fide or not; and whether due and reasonable caution has been used by the person taking it.
And if a bill be drawn upon parties of respectability capable of answering it, and another person discounts it merely because the acceptance is good, without using due caution, and without inquiring how the holder came by it, I think that the law will not, under such circumstances, assist the parties so taking the bill, in recovering the money.
If the bill be taken without using due means to ascertain that it has been honestly come by, the party, so taking on himself the risk for gain.
must take the consequence if it should turn out that it was not honestly acquired by the person of whom he received it.
Here the person in possession of the bill was a perfect stranger to the plaintiff, and he discounted it, and made no inquiry of whom the bill had been obtained, or to whom he was to apply if the bill should not be taken up by the acceptor.
I think those circumstances tend strongly to show that the party who discounted the bill did not choose to make inquiry, but supposing the questions might not be satisfactorily answered, rather than refuse to take the bill, took the risk in order to get the profit arising from commission and interest." (emphasis supplied) In Chalmers on Bills of Exchange, 13th Edn.
at page 283 the learned author deals with the expression good faith ' occur ring in Section 90 of the said Act and it is stated as under: "Test of bona fides The test of bona fides as regards bill transactions has varied greatly.
Previous to 1820 the law was much as it now is under the Act.
But under the influence of Lord Tenterden (Abbott, C.J. in Gill vs Cubbitt) due care and caution was made the test, and this principle seems to be adopted by Section 9 of the Indian ." (emphasis supplied) The learned author Parathasarathy in his book 'Cheques in Law and 554 Practice '.
4th Edn. has also noted this aspect.
At page 74, a passage reads thus: "The Indian definition imposes a more stringent condition on the holder in due course than does the English definition.
Under English law, he should not have notice of a defect in the transferor 's title and he should have taken the instru ment in good faith.
Under Indian law, there should be no cause to believe that any such defect existed.
Hence, it is not sufficient if the holder acts in good faith.
He should also exercise due care and caution in taking the instrument.
Perhaps, the Indian definition is based on Gill vs Cubbit, ; In Raghavji Vizpal vs Narandas Parmanandas, Bombay Law Reporter Vol.
VIII (1906) 921 the Bombay High Court, howev er.
held that negligence does not affect the title of a person taking the instrument in good faith for value.
It is observed thus: "The test of good faith in such cases is thus: Regard to the facts of which the taker of such instruments had notice is most material whether he took in good faith.
If there be anything which excites suspicion that there is something wrong in the transaction, the taker of the instrument is not acting in good faith if he shuts his eyes to the facts presented to him and puts the suspicions aside without further inquiry." (emphasis supplied) We may also mention it here that there is no reference to Gill 's case in the above decision.
In Bhashyam & Adiga on the , 15th Edn.
at page 172.
the author having noticed the ratio in Raghavji 's case observed: "The Bombay High Court quoted the later English decisions with approval and applied them to the facts of the case before them, but the question is not discussed in the light of the words of this Section, and the decision is opposed to the opinion expressed by Chalmers in his commentaries on the Indian Act.
" In Durga Shah Mohan Lal Bankers vs Governor General in Council & Others, AIR 1952 Allahabad 590 a Division Bench examined the scope 555 of the provisions of Section 9 of the Act and held that: "The provision that the person must have become possessor of a cheque "without having sufficient cause to believe" is more favourable to the person who claims to ' have become holder in due course than the words "acting bona fide".
His claim would be defeated only if it is found that there was sufficient cause for him to believe that a defect existed.
If he fails to prove bona fides or absence of negligence, it would not negative his claim.
There must be evidence of positive circumstances on account of which he ought to have believed that some defect existed." (emphasis supplied) In this case also there is no reference to Gill 's case.
The learned counsel for the appellant submitted that the deci sion in Raghavji 's case is in favour of the appellant.
however.
conceded that the Durga Shah 's case is in favour of the respondent i.e. the plaintiff Bank.
We may, however, note another judgment of the learned Single Judge of the Bombay High Court in Sunderdas Sobhraj, a firm vs Liberty Pictures, a firm, AIR 1956 Bombay 618 wherein the scope of Section 9 is considered and it is held thus: "The rule as laid down in section 9 of the which defines "holder in due course" is stricter than the rule of English law on the subject and a payee or endor see of a negotiable instrument can, under our.law.
prefer a claim to be a holder in due course of the instrument only if he obtained the same without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
A bona fide holder for value without notice is, of course.
as I have already observed.
in a different position.
" The learned Single Judge has not.
however.
referred to the Raghavji 's case.
We have.
already noted that in Raghavji 's case reliance was placed on English decisions later to the decision in Gill 's case.
The authors Chalmers.
Bhashyam & Adiga and Parathasarathy have uniformly stated that Section 9 of the Act is based on the ratio in Gill 's case.
Learned counsel appearing on both sides could not place any other decision directly on the question.
The view taken by the Allahabad High Court in Durga Shah 's case is more or less in accordance 556 with the principle laid down in Gill 's case.
However, with regard to the legal importance of negli gence in appreciating the principle of "sufficient cause to believe" a passage from Chalmers ' took "The Law Relating to Negotiable Instruments in British India" 4th Edn.
may use fully be noted: "All the circumstances of the transactions whereby the holder became possessed of the instrument have a bearing on the question whether he had "sufficient cause to believe ' ' that any defect existed.
It is left to the Court to decide, in any case where the holder has been negligent in taking the instrument without close enquiry as to the title of his transferor.
whether such negligence is so extraordinary as to lead to the presumption that the holder had cause to believe that such title was defective." (emphasis supplied) This view is more sound and logical.
The legal position as explained by Chitty may be noted in this context which reads as under: "While the doctrine of constructive notice does not apply in the law of negotiable instruments the holder is not entitled to disregard a "red flag" which has raised his suspicions.
therefore.
modify the view taken by the Allahabad High Court in Durga Shah 's case to the extent that though the failure to prove bona fide or absence of negligence would not negative the claim of the holder to be a holder in due course.
yet in the circumstances of a given case.
if there is patent gross negligence on his part which by itself indicates lack of due diligence.
it can negative his claim.
for he can not negligently disregard a "red flag" which arouses suspicion regarding the title.
In this view of the matter we hold that the decision in Raghav.
ii 's case does not lay down correct law.
We agree with the view taken by the Allahabad High Court with above modification.
Before we apply the above principles to the facts of this case we would like to advert to another submission of the learned counsel Dr. Chitale.
He urged that in the in stant case the plaintiff Bank has not acted in good faith and with due diligence in crediting the proceeds to 557 the account of the defendant No. 1 inasmuch as there is no authority either by way of express or implied contract between them and the defendant No. 1.
In support of this submission he relied on certain passages in Halsbury 's Laws of England.
In Halsburv 's Law of England, 4th Edn.
in para graph 22 1 (page 186) the author says: "Bank as holder for value.
A banker who is asked by a cus tomer to collect a cheque and who.
pursuant to a contract express or implied to do so.
credits the customer forthwith with the amount of the cheque before the proceeds are re ceived, in fact receives the sum for himself and not for the customer; but he has the same statutory protection in such circumstances as if he had received payment of the cheque for the customer.
XX XX XX Every holder is deemed to be a holder in due course; but.
if the instrument is shown to be affected by fraud.
a banker dealing with it must show that he gave value in good faith subsequent to the fraud.
The status of holder for value may be claimed by the bank; where cash has been given for the cheque over the counter; where the cheque is paid in intro duction of an overdraft.
where the cheque is paid in on the footing that it may be at once drawn against, whether in fact it is drawn against or not; or where the cheque is subject to a lien.
However, the mere existence of an over draft.
though the banker 's lien in respect thereof makes him a holder for value to the extent of that lien, would not preclude the protection.
XX XX XX A banker who gives value for.
or has a lien on, a cheque payable to order which the holder derives to him for collec tion without endorsing it as such, if any rights as he would have had if, upon delivery, the holder has endorsed the cheque in blank.
A banker taking such a cheque is the holder thereof and.
if the requisite conditions are present, a holder for value or in due course.
It is not essential that the cheque be credited to the account of the holder.
" Yet another important passage in paragraph 222 reads as under: "222.
Crediting as cash.
The mere fact that the banker has 558 credited the cheque in his customer 's account before receiv ing the proceeds does not deprive him of protection against the true owner in the event of his customer having no title.
or a defective title, to the cheque.
Crediting the custom er 's account does not of itself alter the position of the banker from that of agent for collection to that of holder for value.
It is a question of fact in each case.
In order to constitute the banker a holder for value on his ground there must be a contract, express or implied, that the customer should be entitled to draw against the amount of the cheque before it is cleared.
If the banker becomes a holder for value.
he may.
in the absence of a forged endorsement and unless the cheque is crossed 'not negotiable ' sue upon a cheque in his own name as a holder in due course and may debit the customer if the cheque is dishonoured.
, He may apparently plead that he is a holder for value as against the person claiming as true owner, except where the endorsement is forged or the cheque is marked 'not negotiable. '" (emphasis supplied) The above two passages indicate that the Banker who is asked to collect a cheque can credit the customer with the amount before the proceeds are received and if he has acted in good faith he has the necessary statutory protection and credit ing the customer account does not by itself alter his posi tion but that however is a question of fact in each case namely whether there was such a contract express or implied that the customer should be entitled to draw against the amount of cheque before it is cleared.
In A.L. Underwood Ltd. vs Bank of Liverpool and Martins, Same vs Barclays Bank, at page 241 Atkin, L.J. dealing with the protection that can be availed by a banker in such case, observed as under: "It is sufficient to say that the mere fact that the bank.
in their books.
enter the value of the cheques on the credit side of the account on the day on which they receive the cheques for collection.
does not, without more.
constitute the bank a holder for value.
To constitute value there must be in such a case a contract between banker and customer.
express or implied.
that the bank will, before receipt of the 559 proceeds.
honour cheques of the customer drawn against the cheques.
Such a contract can be established by course of business and may be established by entry in the customer 's pass book, communicated to the customer and acted upon by him.
Here there is no evidence of any such contract." (emphasis supplied) To the same effect is the ratio laid down in Baker vs Bar clays Bank Ltd. After applying the dictum of Atkin, L.J. in Underwood 's case it is observed therein that "it was not enough to show merely that the bank had entered the value of the cheques on the credit side of the account on which the bank received the cheques.
To constitute value there must be in such a case a contract between banker and customer, express or implied, that the bank will before receipt of the proceeds honour cheques of the customer drawn against the cheques.
" We find another passage in the above decision at page 581 which reads thus: "What is suggested is that the bank did not give value.
and the question arises which often arises in cases of this sort.
namely, whether, when a cheque is given to a bank in these circumstances, the bank takes the cheque giving value for and then becoming a holder in due course, or whether the bank takes the cheque merely to collect the amount of the cheque for someone else.
That is a question of fact.
The true relationship has to be inferred from the acts of the parties." (emphasis supplied) From the above discussion it emerges that the Indian definition imposes a more stringent condition on the holder in due course then the English definition and as the learned authors have noted the definition is based on Gill 's case.
Under the Indian law, a holder, to be a holder in due course, must not only have acquired the bill, note or cheque for valid consideration but should have acquired the cheque without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.
This condition requires that he should act in good faith and with reasonable caution.
However, mere failure to prove bona fide or absence of negligence on his part would not negative his claim.
But in a given case it is left to the 560 Court to decide whether the negligence on part of the holder is so gross and extraordinary as to presume that he had sufficient cause to believe that such title was defective.
However.
when the presumption in his favour as provided under Section 118(g) gets rebutted under the circumstances mentioned therein than the burden of proving that he is a 'holder in due course ' lies upon him.
In a given case, the Court.
while examining these requirements including valid consideration must also go into the question whether there was a contract express or implied for crediting the proceeds to the account of the bearer before receiving the same.
The enquiry regarding the satisfaction of this requirement invariably depends upon the facts and circumstances in each case.
The words "without having sufficient cause to believe" have to be understood in this background.
In the instant case there is sufficient evidence estab lishing the fact that the defendants were allowed credit facilities upto a limit of Rs.35,00.000 by the Bank and this fact is not in dispute.
The pledging of the title deed by 5th defendant of her properties with the bank with an inten tion to create an equitable mortgage to secure the repayment of the amounts due from 1st defendant and the fact that a pronote for an amount of Rs.35,00,000 executed by defendant Nos.
2 to 4 in favour of the 5th defendant was endorsed in favour of the plaintiff Bank would establish that there was an express contract for providing the credit facilities.
It should therefore necessarily be inferred that there is also an implied contract to credit the proceeds of the cheques in favour of defendant No. 1 to his account before actually receiving them.
As a question of fact this aspect is estab lished by the evidence on record.
In such a situation the plaintiff need not make enquiries about the transactions of supply of goods etc.
that were going on between defendants Nos. 1 and 6.
Even if defendant No. 1 has not supplied the goods in respect of which the cheque in question were issued by defendant No. 6 there was no cause at any rate sufficient cause for the plaintiff to doubt the title of defendant No. 1 nor can it be said that the plaintiff acted negligently disregarding 'red flag ' raising suspicion.
Viewed from this background it cannot be said that there was sufficient cause to doubt the title nor there is scope to infer gross negli gence on the part of the plaintiff.
There is no material which amounts to rebuttal of the presumption in his favour as provided under Section 118(g).
On the other hand.
the plaintiff has discharged the neces sary burden to the extent on him and has proved that he is a holder in due course for valid consideration.
Therefore, we hold that he could validly maintain an action 561 against all the defendants including defendant No. 6.
There fore, we affirm the judgments of the courts below and dis miss the appeal.
In the circumstances of the case, parties are directed to bear their own costs throughout.
Y. Lal Appeal dismissed.
| IN-Abs | What is the true meaning and scope of the expression 'holder in due course ' as defined in Section 9 of the Nego tiable Instruments Act, 1881, was the question that arose for consideration in this appeal.
Consequent upon the pleading of promissory note and other title deeds relating to her property by Defendant No. 5, (mother of Defendants 2 to 4) in favour of the respondent Bank as security, thereby creating an equitable mortgage, the respondent Bank allowed credit facilities like accommo dation by way of Hundi discount, Key loan and cheque pur chases upto a limit of Rs.35,00,000 to Defendant No. 1, a firm consisting of defendants Nos. 2 to 4 as partners.
The first defendant firm had business dealings with the appel lant defendant No. 6.
In course of business it was supplying goods consisting of hill products and used to receive pay ment by way of cheques from defendant No. 6.
Defendant No. 6 issued two cheques drawn on the Union Bank of India, Palgh at, in favour of the first defendant payable to the first defendant firm on order.
The cheques were purchased by the Respondent bank and proceeds thereof were credited by the bank to the account of first defendant, on valid considera tion.
The first defendant withdrew the amount at various dates.
When the respondent bank sent the cheques for collec tion, the Union Bank of India returned the cheques with the endorsement "full cover not received".
Defendants 2 to 5 agreed to pay the amounts to the Bank but could not pay the full amount, with the result the Bank filed a suit for recovery of the balance amount from Defendant No. 6 also who had issued the cheques in question.
At the trial, Defendant No. 6 contended that since the firm (defendant No. 1) did not supply the goods, it could not pay the money in the bank.
According to Defendant No. 6, the appellant, did not admit the purchase of cheques by the respondent bank for valid consideration and hence denied that the bank was 'holder in due course '.
The trial court held that the re spondent bank is a 'holder in due course ' and as such enti tled to enforce the liability against the appellant defend ant No. 6.
543 The trial court also held defendants 2 to 4 personally liable for the plaint claim.
Against the order of the trial court the appellant defendant No. 6 alone appealed to the High Court.
The High Court affirmed the findings of the trial court but modified the decree holding that the immova ble properties mentioned in the schedule to the plaint would first be proceeded against and in case the entire amount of decree is not realised by the sale of those properties, the Bank would proceed against the assets of the firm defendant No. 1 and for the balance, if any, the decreeholder would proceed against the defendants Nos. 2 4 and 6.
Aggrieved by the said order of the High Court, the 6th defendant has preferred this appeal.
Dismissing the appeal, this Court, HELD: Indian Law is stricter, and is not satisfied merely with the honesty of the person taking the instrument, but requires the person to exercise due diligence, and goes a step further than English Law in scrutinising the causes which go to make up the belief in the mind of the transfer ee.
[359B] In the instant case, the holder namely defendant No. 1 made the necessary endorsements in the two cheques in favour of the plaintiff Bank and the Bank endorsed "payee account credited".
The defendant No. 1 withdrew this amount and there is no dispute about it.
It must also be noted in this context that there is no endorsement on the cheque made by the drawer namely the appellant that cheques are not nego tiable.
In the absence of the cheques being crossed "not negotiable" nothing prevented the plaintiff Bank to purchase the cheques for a valuable consideration and the presumption under Section 118(g) comes to his rescue and there is no material whatsoever to show that the cheques were obtained in any unlawful manner or for any unlawful consideration.
[358E G] In a given case it is left to the court to decide wheth er the negligence on part of the holder is so gross and extraordinary as to presume that he had sufficient cause to believe that such title was defective.
[370A] The court while examining these requirements including valid consideration must also go into the question whether there was a contract express or implied for crediting the proceeds to the account of the bearer before receiving the same.
The enquiry regarding the satisfaction of this re quirement invariably depends upon the facts and cir 544 cumstances in each case.
The words "without having suffi cient cause to believe" have to be understood in this back ground.
[370B C] In the instant case, there is also an implied contract to credit the proceeds of the cheques in favour of defendant No. 1 to his account before actually receiving them.
As a question of fact this aspect is established by the evidence on record.
In such a situation the plaintiff need not make enquiries about the transactions of supply of goods etc.
that were going on between defendants No. 1 and 6.
Even if defendant No. 1 has not supplied the goods in respect of which the cheques in question were issued by defendant No. 6 there was no cause at any rate sufficient cause for the plaintiff to doubt the title of defendant No. 1 nor can it be said that the plaintiff acted negligently.
Viewed from this background it cannot be said that there was sufficient cause to doubt the title nor there is scope to infer gross negligence on the part of the plaintiff.
[370E G] Nelson vs Larhold, ; Baker vs Barclays Bank Ltd., ; Gill vs Cubitt English Reports, 107 Kings ' Bench 806; Durg Shah Mohan Lal Bankers vs Governor General in Council and Others, AIR 1952 Allaha bad 590; Sunderdas Sobhraj, a firm vs Liberty Pictures, a firm, AIR 1956 Bombay 618; A.L. Underwood Ltd. vs Bank of Liverpool and Martins; Same vs Barclays Bank, at page 241, referred to.
Raghavji Vizpal v Narandas Parmanandas Bombay Law Re porter, Vol.
VIII (1906) 921, Overruled.
Chitty on Contracts, 26th Edn.
Paragraphs 2778 & 2781; Chalmers on Bills of Exchange, 13th Edn.
at p. 283; Paratha sarathy on Cheques in Law and Practice, 4th Edn.
p. 74; Halsbury 's Laws of England, 4th Edn.
paragraph 221 page 186 and paragraph 222, referred to.
|
ON: Civil Appeal No. 786 of 1976.
From the Judgment and Order dated 12.1.
1976 of the Gujarat High Court in Special Civil Application No. 873 of 1970.
516 P.H. Parekh for the Appellant.
Krishan Kumar for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Gujarat dismissing the appel lant 's writ petition made under Article 227 of the Constitu tion of India challenging the validity of the order of the Revenue Courts in dismissing the appellant 's suit for evic tion of respondents.
Briefly, the facts giving rise to this appeal are: the respondents are tenants of agricultural land which had been let out to them by the appellant 's predecessors in title.
The appellant made applications on behalf of minor Ashok Kumar for the eviction of the respondents on the ground that the agricultural land in dispute was bona fide required by the landlord for his personal cultivation.
The appellant pleaded that the land in dispute had been bequeathed to him by his maternal grandmother under a Will and as such he was the landlord of the disputed land entitled to maintain the applications for eviction of the respondents under Section 29 read with Section 3 IA of the Bombay Tenancy and Agricul tural Lands Act 1948 (hereinafter referred to as the Act) as applicable to the State of Gujarat.
The tenants raised a preliminary objection to the maintainability of the suit on the ground that the appellant being a transferee of the land from his maternal grandmother was not entitled to maintain the suit as a landlord under Section 31A of the Act, inas much as he had not inherited the property from his ances tors.
The Mamlatdar upheld the preliminary objection and dismissed the eviction ' suit.
On appeal the District Deputy Collector upheld the order of the Mamlatdar.
The appellant preferred revision application before the Gujarat Revenue Tribunal at Ahmedabad but the same too was dismissed uphold ing the tenants ' objection.
The appellant thereafter filed a writ petition under Article 227 of the Constitution before the High Court challenging the correctness of the view taken by the Revenue Courts.
The High Court by its order dated 12.1.
1976 dismissed the writ petition on the finding that the view taken by the Revenue Courts in upholding the ten ants ' objection to the maintainability of the eviction suit was correct.
The appellant has preferred this appeal against the aforesaid order of the High Court.
There is no dispute that under Section 31A of the Act a landlord has a right to determine tenancy of agricultural land and to evict the 517 tenant on fulfilling the conditions prescribed therein.
The conditions prescribed are that if the landlord has no other land of his own and if he has not. been cultivating person ally any other land, he is entitled to take possession of the land let out to a tenant to the extent of permissible ceiling area.
If the land cultivated by the landlord person ally is less than the ceiling area he is entitled to take possession of so much area of land as would be sufficient to make up the area in his possession to the extent of ceiling area.
further the income by the cultivation of the land of which he is entitled to take possession should be the prin cipal source of income for his maintenance.
These conditions as laid down in clauses (a), (b) and (c) of Section 31A of the Act must be satisfied for making an application for the eviction of a tenant from agricultural land.
In addition to these conditions, clause (d) further prescribes additional conditions which must also be fulfilled by the landlord.
Section 31A(d) as amended by the Gujarat Act No. XVI of 196(1 reads as under: "31.A The right of a landlord to terminate a tenancy for cultivating the land personally under Section 31 shall be subject to the following conditions.
(a) . . . . . . . . (b) . . . . . . . . (c) . . . . . . . . (d) The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January, 1952 and thereafter during the period between the said ,date and the appointed day in the name of the landlord himself.
or of any of his ancestors (but not of any person from whom title is derived, whether by assignment or Court sale or otherwise) or if the landlord is a member of a joint family, in the name of a member of such family.
" The above provision primarily requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.
1952 and he should further be recorded as landlord on the appointed day, namely, 15.6. 1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction of the tenant will not be maintainable.
The provision 518 of clause (d) further provides that even if the landlord 's name is not recorded.
but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provision indicates the legisla tive intent that a person succeeding to the property from his ancestor is entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
Clause (d) of Section 31A of the Act as it stood before its amendment by the Gujarat Act XVI of 1960 reads as follows: "The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January 1952 and thereafter during the period between the said date and the appointed day in the name of the landlord himself, or of any of his ancestors, or if the landlord is a member of a joint family in the name of a member of such family.
" The above provision before its amendment was interpreted by the Bombay High Court in Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267.
The High Court placing reliance on Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201 held that the term 'landlord ' according to clause (d) of Section 31A of the Act included any person from or through whom he may have derived his title to the land, and therefore for proper compliance of the conditions mentioned in clause (d) of Section 3 IA it is sufficient that either the name of the claimant or his predecessors in title stands in the record of fights during the required period.
A Full Bench of the Gujarat High Court in Bhanushanker Ambalal vs Laxman Kala & Ors., [1960] 1 Gujarat Law Reporter 169 disagreed with the view taken by the Bombay High Court in Warnan Ganesh Joshi 's case (supra).
The Full Bench held that the expression "in the name of landlord himself" occurring in clause (d) of Section 3 IA must be read as the landlord individually and not any one claiming through him as a successor in interest, therefore a transferee from a landlord in whose name the land is shown to stand cannot fit into the structure of the clause.
The Full Bench judgment was rendered on 28.7.
1960 prior to the amendment of the Section by the Gujarat Act XVI of 1960.
After the amendment of Section by Gujarat Act XVI of 1960, the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of 519 right during the relevant period were not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment.
court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
The Legislature has clearly laid down that a person inheriting property from his ancestor would be landlord provided his ancestor 's name appears in the record of right during the required period.
But a person claiming title on the basis of transfer, assignment, auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendants by gift or will to evade the ceiling law and to evict tenants.
Under Section 31A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
In Umraomiya Akbarmiya Malek vs Bhulabhai Mathurbhai Patel & Anr., [1965] 6 Gujarat Law Reporter 788 the peti tioner therein made application for eviction of tenant claiming to be landlord on the basis of a gift made in his favour by his maternal grand father who was recorded in the record of rights during the required period.
The question arose whether the once who had acquired the property under a gift made by his maternal grand father was a landlord within the meaning of clause (d) of Section 31A.
The High Court on an elaborate discussion held that the petitioner therein was not a landlord within the meaning of the Section.
A Division Bench of the High Court of Gujarat in Special Civil Appeal No. 112/63 decided on March 3, 1972 considered the question whether a person who obtained the property under a Will from his grand mother was a landlord under clause (d) of Section 31A of the Act, the Division Bench held that having regard to the context, the object and scheme of the enactment such a person was not a landlord within the meaning of clause (d) of Section 31A.
The Bench further held that the Legislature intended to restrict the right of landlord to obtain possession for bona fide cultivation purposes, and it did not intend to include the case of a landlord who derived title under a Will.
We arc in agreement with the view taken by the Division" Bench.
The learned single Judge of the High Court while rendering the, impugned judgment followed the view taken by the aforesaid Division 520 Bench.
In this view, we find no legal infirmity in the impugned judgment of the High Court.
Learned counsel for the appellant referred to certain decisions of the Bombay High Court where contrary view had been taken.
Since the interpretation of Section 31A(d) of the Act as made by the Gujarat High Court in the aforesaid decision has been the law for the last 25 years.
and as that interpretation is justified having regard to the legislative history of the Section, we do not consider it necessary to deal with those decisions.
The appeal fails and is accord ingly dismissed.
but there will be no order as to costs.
V.P.R. Appeal dismissed.
| IN-Abs | Appellant on behalf of minor landlord, who got title by will, initiated eviction proceeding against the respondent tenants under Section 29 read with section 31 A(d) of the Bombay Tenancy and Agricultural Lands Act.
1948 before the Mamlatdar on the ground of bona fide requirement of the land for his personal cultivation.
Respondent tenants raised preliminary objection on the question of maintainability of the suit on the ground that as the appellant, being a trans feree of the land and having not inherited the same was not the 'landlord ' under Section 31 A. Upholding the objection of the Respondents the Mamlatdar dismissed the application.
Appellant 's appeal before District Deputy Collector and his revision before the Revenue Tribunal were dismissed.
Chal lenging the orders of the Revenue Courts, writ application was filed in the High Court, which was also dismissed and against which the present appeal was filed.
Dismissing the appeal, this Court, HELD: 1.
Section 31(d) requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.1952 and he should further be recorded as landlord on the appointed day, namely.
15.6.1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction the tenant is not maintainable.
The provisions of clause (d) further provides that even if the landlord 's name is not recorded, but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provi sion indicates the legislative intent that a person succeed ing to the property from his ancestor is 515 entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
After the amendment of Section 31A(d) the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of rights during the relevant period are not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment, court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
A person inherit ing property from his ancestor would be landlord provided his ancestor 's name appears in the record of rights during the required period.
But a person claiming title on the basis of transfer, assignment.
auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendents by gift or will to evade the ceiling law and to evict tenants.
Under Section 31 A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267; Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201;over ruled.
Bhanushanker Ambalal vs Laxman Kala & Ors., [1960], Gujarat Law Reporter 169, approved.
Umraomiya Akbartniya Malek vs Bhulabhai Mathurbhai Patel Appeal No. 112/63 decided on 3.3.
1972 (High Court of Guja rat) referred.
|
ivil Appeal No. 2231 of 1988.
From the Judgment and Order dated 19.8.1987 of the Madras High Court in Appeal No. 86 of 1982.
R. Venkataramani for the Appellants.
section Balakrishnan and M.K.D. Namboodiri for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal by special leave is directed against the decree passed by the High Court in favour of the plaintiff respondents in a suit for partition.
The property in suit belonged to Smt.
Rathinammal, who after executing a registered will died in 1942.
Accord ing to the terms of the will, her two sons Natesan.
defend ant No. 1, and Subramanian.
plaintiffs ' witness No. 2 (PW 2), were to remain in possession of the properties without any power of alienation and had to pay the taxes and conduct regularly certain religious festivals; and thereafter their sons were to manage the properties on similar terms.
The will further provides that after their attaining majority the great grand sons, i.e., 510 the son 's sons ' sons of the testatrix will get the proper ties as absolute owners.
Subramanian, the younger son of the testatrix, who has been in 'the present suit examined as the second witness on behalf of the plaintiffs, has one son Arunachalam, de fendant No. 15.
The three plaintiffs, Ramesh, Ganesh and Sivalingam are the sons of the defendant No. 15.
The defend ant No. 1 got four sons and ten sons ' sons.
The main dispute in the suit is about the share which the plaintiffs are entitled to, under the terms of the will.
They claim that they being the only grand sons of Subramanian have half share in the properties, the remaining half going to the grand sons of the defendant No. 1, namely, defendants No. 5 to 14.
On behalf of the defendants it is pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares.
The defendants also contended that the suit was fit to be dismissed as the defendant No. 1 and the defendant No. 15 had finally parti tioned the properties in 1975, and no question of a further partition arises.
The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity.
The trial court rejected the plea based on the rule against perpetuity.
Having regard to the interest of the defendant No. 1, his brother Subramanian and Arunachalam, defendant No. 15, the court held that the alleged partition of 1975 was illegal and not binding on the plaintiffs.
So far the shares of the plaintiffs and the defendants No. 5 to 14 are concerned, agreeing with the defence case, the court held that the parties would take the properties as per capita.
However, the suit was dismissed on the ground that the plaintiffs were still minor.
On appeal by the plaintiffs, the High Court confirmed the finding of the trial court that the 1975 partition was illegal.
On the question of the shares of the parties, the High Court agreed with the plaintiffs and held that the division would take place as per stirpes.
Taking into ac count the fact that during the pendency of the appeal two of the plaintiffs had attained majority, the High Court passed a decree in their favour for one sixth share each.
So far the third plaintiff is concerned, the High Court declared his right without passing a decree for partition.
The de fendants are challenging the decision of the High Court by the present civil appeal.
The learned counsel for the appellants has contended that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and the conclusion of the 511 High Court on this aspect is illegal.
The English version of the operative portion of the will has been quoted in para graph 7 of the judgment of the trial court and is not chal lenged by either party before us.
After mentioning the rights and the duties of her sons the testatrix has stated the position of her grand sons and great grand sons thus: "They (that is, sons ' sons) have also to pay the taxes and out of their income conduct the aforesaid festivals regular ly.
Then their male issues after attaining majority, have to take possession of the said properties in equal shares and enjoy them with all powers of alienation.
" It has been stated by the learned counsel for the parties before us that the words "the said properties in equal shares" are the English version of the words SAMABHAGAMAGA ADAINTHU.
The learned counsel for the appellants translated this portion of the will as stating that, "they (that is, the sons ' sons) shall pay the taxes due to the Government and will carry on the charitable/religious activities without fail and their male issues would on attaining majority get the properties in equal portion (SAMABHAGAMAGA ADAINTHU) and will possess, own and enjoy it absolutely.
" The crucial expression is SAMABHAGAMAGA ADAINTHU which according to the learned counsel for the parties means in equal portions.
The question is as to whether in view of this provision in the will, the entire properties left by the testatrix are to be divided equally amongst all her great grand sons; or, the three plaintiffs shall amongst themselves take half, the remaining half going to their cousins.
The High Court has interpreted the crucial part of the will, mentioned in the preceding paragraph, as directing the plaintiffs on the one hand and the defendants 5 to 14 on the other respectively to "share equally out of each branch".
It has been assumed that the properties finally descended on the two branches in equal shares, and conse quently parties belonging to the two branches inherited the properties as stirpes.
The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; ; were more or less similar, which this Court construed in the manner as suggested by the plaintiffs in the case before us.
We are not in agreement with the.
approach of the High Court.
512 8.
It is well settled that a court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances, the posi tion of the testator.
his family relationship 'and the probability that he used the words in a particular sense also must be taken into account.
They lend a valuable aid in arriving at the correct construction of the will.
Since these considerations are changing from person to person.
it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases, the disputed will approximates closely.
Recourse to prece dents, therefore, should be confined for the purpose of general principle of construction only.
which, by now, are well settled.
There is still another reason as to why the construction put on certain expressions in a will should not be applied to a similar expression in the will under ques tion for, a will has to be considered and construed as a whole, and not piecemeal.
It follows that a fair and reason able construction of the same expression may vary from will to will.
For these reasons it has been again and again held that in the matter of construction of a will.
authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur (see Ramachandra Shenoy and Another vs Mrs. Hilda Brite and Others, ; at p. 736.
The risk in not appreciating this wholesome rule is demonstrated by the case before us.
Assuming that the will in the case of Boddu Venka takrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; ; was somewhat similar to that in the present case.
the High Court.
following the construction given on the will in the reported case, has held in the judgment under appeal that the great grand sons of the testatrix shall be taking the properties as per stripes.
While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case.
There.
the testatrix who was a childless widow.
had bequeathed under the will life es tates to two children who were defendants 4 and 5 in the case and whom she had brought up from their infancy.
and subject to the same, the property was to go to their chil dren after their death.
The conclusion of the High Court on the construction of the will.
with which this Court agreed.
was expressed thus.
"the bequest in favour of defendants 4 and 5 was that of a life estate with a vested remainder in favour of their children and that the children should take the vested re mainder per stripes and not per capita".
513 In the case before us no life estate was created in favour of anybody.
otherwise there would not arise any question of the plaintiffs ' getting any share in the proper ty even on their attaining majority during the lifetime of their father and uncle.
The High Court has also.
under the impugned judgment, observed that a Hindu is not ordinarily expected to create a joint tenancy but, failed to appreciate that there is only presumption.
to this effect, which can not override the provisions 'of the will, if the language is unambiguous and clear.
In the present case there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate in the properties.
It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property abso lutely without waiting for the death of their respective fathers or grand fathers.
We should, therefore.
interpret the will without being influenced by the meaning given to the will in the reported case.
The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time "under equal shares".
Since this is the first occasion for the shares in the property to be defined the expression "equal shares" must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix.
In other words.
they take the properties as per capita.
Admittedly the third plaintiff has also attained majority during the pendency of the present appeal and has, therefore.
become entitled to a share in the properties now.
The suit.
is accordingly decreed in favour of all the plain tiffs, their share being one thirteenth each.
The plea that the disposition under the will was hit by the rule against perpetuity was rejected by the trial court in paragraph 7 of judgment on the ground that the sons of the testatrix, namely, the first defendant and the plain tiff 's witness No. 2 as also their respective sons the defendants No. 2 to 4 are alive.
The point was not pressed in the High Court.
The view of the trial court appears to be correct, and does.
not require reconsideration at this stage.
In the result, the appeal is allowed in part as indicated above.
The suit is accordingly decreed in favour of all the three plaintiff.
The share of the three plain tiffs and the ten defendants, that is, defendants No. 5 to 14, shall be onethirteenth each in the suit properties.
There shall be no order as to costs.
N.V.K. Appeal party allowed.
| IN-Abs | The property in the suit belonged to the great grand mother of the plaintiffs and defendant Nos. 5 to 14 who executed a registered will.
According to the terms of the will, her two sons, defendant No. 1 and plaintiffs ' witness No. 2 were to remain in possession of the properties without any power of alienation, to pay the taxes and conduct regu larly certain religions festivals, and their male issues on attaining majority were to get the property in equal por tions and enjoy it absolutely.
The main dispute in the suit was about the share which the plaintiffs are entitled to under the terms of the afore said will.
The plaintiffs claimed that they being the only grand sons of the younger son of the testatrix were entitled to half share in the properties, the remaining half going to the grand sons of defendant No. 1 namely, defendant Nos. 5 to 14.
The suit was contested on behalf of the defendants, who pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares, and that the suit was fit to be dismissed as defendant No. 1 defendent No. 15 had finally partitioned the properties in 1975, and no question of further partition arises.
The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity.
The trial Court rejected the plea based on the rule against perpetuity but having regard to the interest of defendant No. 1, his brother, and defendant No. 15, it held that the alleged partition of 1975 was illegal and not binding on the plaintiffs and that so far as the shares of the plaintiffs and defendant Nos. 5 to 14 are concerned held that the parties would take the properties as per capita.
The suit was however dismissed on the ground that the plain tiffs were still minor.
In the appeal to the High Court by the plaintiffs, the High Court confirmed the findings of the trial court that the 1975 partition was illegal, but held that the division would take place as per stirpes, and taking into account the fact that during the pendency of the appeal, two of the plaintiffs had attained majority, the High Court passed a decree in theft favour for one sixth share each.
So far as the third plaintiff was concerned, it declared his right without passing a decree for partition.
The appellants defendants challenged the decision of the High Court in 508 this Court by special leave, contending that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and that the conclusion of the High Court on this aspects was illegal, and that reliance by the High Court, on Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Satyavathi & Ors., ; was inapplicable to the facts of this case.
Allowing the appeal in part, and decreeing the suit in favour of all the plaintiffs, that the share of the three plaintiffs and defendant Nos. 5 to 14 shah be one thirteen each in the suit properties this Court, HELD: 1.
A Court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances the position of the testator, his family relationship and the probability that he used the words in a particular sense also must be taken into account.
They lend a valuable aid in arriving at the correct construction of the will.
Since these considerations are changing from person to person it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases.
the disputed will approx imates closely.
Recourse to precedents, therefore, should be confined for the purpose of general principles of construc tion only.
2.There is still another reason as to why the construc tion put on certain expressions in a will should not be applied to a similar expression in the will under question for, a will has to be considered and construed as a whole, and not piecemeal.
It follows that a fair and reasonable construction of the same expression may vary from will to will.
Therefore, in the matter of construction of a will, authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur.
In the instant case, the High Court has interpreted the crucial part of the will containing the expression 'SAMABHA GAMAGA ADAINTHU ' as directing the plaintiffs on the one hand and the defendants5 to 14 on the other to "share equally out of each branch".
The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venka takrishna Rao & Ors.
vs Shrbnati Boddu Satvavathi & Ors., ; ; were more or less similar.
It has also been assumed that the properties finally descended on the two branches in equal shares and consequently parties be longing to the two branches inherited the properties as per stripes.
While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case.
The conclusion of the High Court on the construction of the will was therefore not correct.
In the instant case, there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate 509 in the properties.
It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property absolutely without waiting for the death of their respective fathers or grandfather.
The will has therefore to be interpreted with out being influenced by the meaning given to the will in the reported case.
The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time 'under equal shares '.
Since this is the first occasion for the shares in the property to be defined, the expression 'equal shares ' must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix.
In other words they take the properties as per capita.
The third plaintiff has also attained majority during the pendency of the present appeal and has therefore become entitled to a share in the properties.
The suit is decreed in favour of all the plaintiffs their share being one thirteenth each.
Ramachandra Shenoy and Another vs Mrs.Hilda brite and Others; , , relied on.
Boddu Venkatakrishna Rao & Ors.
vs Shrimati Boddu Sat vavathi & Ors.
; , , distinguished.
The plea that disposition under the will was hit by the rule against perpetuity was rightly rejected by the trial court on the ground that the sons of the testatrix as also their respective sons were alive.
|
100 of 1958.
Petition under Article 32 of the Constitution for enforcement of fundamental rights.
M. K. Nambyar, K. Mangachari, G. Suryanarayana and P. V. R. Patachari, for the petitioners and intervener.
M. C. Setalvad, Attorney General for India, R. Ganapathi lyer, P. R. Ramachandra Rao and T. M. Sen, for the respondents.
November 5.
The Judgment of Das, C. J., Bhagwati and Subba Rao, JJ., was delivered by Subba Rao, J. Sinha and Wanchoo, JJ., delivered separate judgments.
SUBBA RAO, J. This is an application under article 32 of the Constitution for the enforcement of the petitioners fundamental right to carry on the business of motor transport in Krishna District in Andhra Pradesh, and for prohibiting the respondents from taking over the routes on which the petitioners have been plying their stage carriages.
41 322 The petitioners have been carrying on motor transport business in Krishna District for several years past by obtaining permits under the (IV of 1939), as amended by Act 100 of 1956, hereinafter called the Act, in respect of various routes.
They estimate the value of their investment in the business at a sum of Rs. 20,00,000.
The amending Act inserted a new Chapter IV A in the Act providing for the State Transport Undertaking running the business to the exclusion, complete or partial, of all other persons doing business in the State.
Chapter IV A provided for a machinery called the State Transport Undertaking, defined under section 68 A(b) as an undertaking providing road transport service, to run the transport business in the State.
In exercise of the powers conferred by section 68 C of the Act, one Shri Guru Pershad, styled as the General Manager of the State Transport Undertaking of the Andhra Pradesh Road Transport, published a scheme for the purpose of providing an efficient, adequate, economical and properly coordinated transport service in public interest to operate the transport service mentioned therein with effect from the date notified by the State Government.
Objections were in vited within 30 days from the date of the publication of the proposal in the Official Gazette, viz., November 14, 1957.
138 objections were received.
Individual notices were issued by the State Government by registered post to all the objectors.
On December 26, 1957, the Secretary to Government, Home Department, in charge of transport, heard the objections.
88 of the objectors represented their cases through their advocates ; three of them represented their cases personally and the rest were not present at the time of hearing.
After considering all the objections and after giving an opportunity to the objectors, their representatives and the representatives of the State Transport Undertaking the State Government found that the objections to the scheme were devoid of substance.
On that finding, the State Government approved of the scheme in G.O. Ms. 58, Home (Transport IV), dated January 7, 1958, and the approved scheme was published in the 323 Andhra Pradesh Gazette dated January 9, 1958.
The scheme was ordered to come into force with effect from January 10, 1958.
The Government of Andhra Pradesh also established a Road Transport Corporation under the (LXIV of 1950), called the Andhra Pradesh Road Transport Corporation, with effect from January I I, ' 1958, and by its order dated January 11, 1958, the said Corporation was empowered to take over the management of the erstwhile Road Transport Department.
The said Transport Corporation is now implementing the scheme of nationalisation of bus transport under a phased programme.
The petitioners, who are plying their buses on various routes in Krishna District, apprehending that their routes would be taken over by the Corporation pursuant to the aforesaid scheme, seek the aid of this Court to protect their fundamental right to carry on their business against the action of the State Corporation on various grounds.
Mr. M.K. Nambiar, appearing for the petitioners, contends that the scheme, in pursuance of which the bus routes operated by the petitioners are sought to be taken over by the State Road Transport Corporation, is ultra vires and illegal on two grounds, viz., (a) that the provisions of Chapter IV A of the Act violates the fundamental rights secured to the citizens by the Constitution and (b) that the scheme frained under the, Act is ultra vires the Act.
The first ground is sought to be supported by the contention that Chapter IV A of the Act, in substance and effect, authorizes the State to acquire the undertakings of citizens without providing for compensation for the entire undertakings and therefore it is a fraud on the Constitution, particularly on article 31 thereof.
Shortly stated, his argument is that under article 31 of the Constitution no law shall be made for the transfer of ownership or right to possession of any property to the State or to a Corporation without fixing the amount of compensation or specifying the principles on which compensation is to be determined and given, and that Chapter IV A of the Act is a colourable legislation enabling such a transfer of ownership without providing 324 for compensation for the property transferred, under the guise of cancellation of a permit.
To appreciate this argument it would be convenient, at this stage, to read the relevant provisions of the Articles of the Constitution, omitting the words unnecessary for the purpose of this case.
article 191 : All citizens shall have the right (g) to practise any profession, or to carry on any occupation, trade or business.
(6) Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause, shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to (i). . . . . . . . . . (ii) the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
article 311: No person shall be deprived of his property save by authority of law.
(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and given; and no such law shall be called in question in any 'Court on the ground that the compensation provided by that law is not adequate.
(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation owned or controlled by the State, it shall not be deemed to 325 provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.
" The Constitution (First) Amendment Act of 1951, which came into force on June 18, 1951, amended cl.
(6) of article 19 by adding sub cl.
(ii) to that clause, along with other amendments.
Clause (2) of article 31 has been amended, and cl.
(2A) has been inserted by the Constitution (Fourth) Amendment Act, 1955.
Clause (2A) has been inserted with a view to supersede the majority decisions of this Court in the cases of State of West Bengal vs Subodh Gopal Bose (1), Dwarkadas Shriniwas of Bombay vs Sholapur Spinning and Weaving Co. Ltd. (2) and Saghir Ahmed vs State of U.P. (3).
In Subodh Gopal 's case, a majority of a Bench of this Court held: Clauses (1) and (2) of article 31 are thus not mutually exclusive in scope and content, but should in my view, be read together and understood as dealing with the same subject, namely, the protection of the right to property by means of the limitations on the State power referred to above, the deprivation contemplated in clause (1) being no other than the acquisition or taking possession of property referred to in clause (2).
" In Dwarkadas 's case (1),this Court, while confirming the aforesaid principle, held that the word 'acquisition ' has quite a wide concept, meaning the procuring of property or the taking of it permanently or temporarily and need not be confined to the acquisition of legal title by the State in the property taken possession of In Saghir Ahmed 's case (3) applying the said principles, this Court held (at p. 728): " If the effect of prohibition of the trade or business of the appellants (citizens) by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of article 31 (2) of the Constitution, does not the legislation offend against the provision of that clause inasmuch as no provision for compensation has been made in the Act? " (1) ; , 608.
(2) ; (3) ; , 728.
326 It may be noted that though the said decision was given after the Constitution (First) Amendment Act 195 1, amending article 19 (6), it dealt with a matter that arose before the said amendment came into force.
In the aforesaid decisions, this Court by a majority broadly laid down the two principles: (a) that both cls.
(1) and (2) of article 31 dealt with the doctrine of 'eminent domain '; they dealt with the topic of 'compulsory acquisition of property '; and (b) that the word `acquisition ' does not necessarily imply acquisition of legal title by the State in the property taken possession of, but may comprehend cases where the citizen has been 'substantially dispossessed ' of the right to onion the property, with the result that the right to enjoy property has been seriously ' impaired or the value of the property has been 'materially ' reduced by the impugned State legislation.
The Constitution (Fourth) Amendment Act, 1955, amended cl.
(2) of article 31 and inserted cl.
(2A) in that Article.
The amendments, in so far as they are relevant to the present purpose, substitute in place of the words 'taken possession of or acquired ' the words 'compulsorily acquired or requisitioned ' and provide an explanation of the words `acquired and requisitioned ' in cl.
The result is that unless the law depriving any person of his property provides for the transfer of the ownership or right to the possession of any property to the State, the law does not relate to 'acqtuisition or requisition ' of property and therefore the limitations placed upon the legislature under cl.
(2) will not apply to such law.
While realising this legal position brought about by the amendment to the Con stitution, the learned counsel contends that the right to do business is property as held in Saghir Ahmad 's case(1) and that Chapter IV A of the Act in effect transfers ownership of that business to the Corporation, owned or controlled by the State, though not directly but by the dual process of preventing the citizen from doing the business and enabling the Corporation to do the same business in his place and that that result is effected by a device with a view to avoid payment of (1) [1955] i S.C.R. 707, 728.
327 compensation for the entire business so transferred.
The colourable nature of the legislation, the argument proceeds, lies in its device or contrivance to evade limitations imposed under article 31 (2).
To solve the problem presented, it is necessary to have a correct appreciation of the phrase `colourable legislation '.
This Court considered this question in The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga(l).
In that case the constitutional validity of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), was questioned.
In the context of the Bihar Land Reforms Act, 1950 (Bihar 30 of 1950), it was contended that the impugned Act was a fraud on the Constitu tion and therefore void.
It was stated that the Act, while pretending to comply with the Constitutional provisions when it provided for the payment of compensation, in effect produced a scheme for non payment of compensation by shift or contrivance.
Mahajan, J., as he then was, in rejecting the argument observed at p. 947, thus: " All these principles are well settled.
But the question is whether they have any application to the present case.
It is by no means easy to impute a dishonest motive to the legislature of a State and hold that it acted mala fide and maliciously in passing the Bihar Land Reforms Act or that it perpetrated a fraud on the Constitution by enacting this law.
It may be that some of the provisions of the Act may operate harshly on certain persons or a few of the zamindars and may be bad if they are in excess of the legislative power of the Bihar Legislature but from that circumstance it does not follow that the whole enactment is a fraud on the Constitution.
From the premises that the estates of half a dozen zamindars may be expropriated without payment of compensation, one cannot jump to the conclusion that the whole of the enactment is a, fraud on the Constitution or that all the provisions as to payment of compensation are illusory." The aforesaid observations lend support to the argument that the doctrine of colourable legislation imputes dishonest motive or mala fides to the State (1) 328 making the law.
But, Mukherjea, J., as he then was, clarified the legal position in K. C. Gajapati Narayan Deo vs The State of Orissa (1).
It was contended in that case that the Orissa Estates Abolition Act, 1952, was a colourable legislation and as such void.
Adverting to that argument, Mukherjea, J., as he then was, says at p. 10 thus: " It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature.
The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law.
If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant.
On the other hand, if the legislature lacks competency, the question of motive does not arise at all.
Whether a statute is constitutional or not is thus always a question of power. . .
If the Constitution of a State distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamedtal rights, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers.
Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression 'colourable legislation ' has been applied in certain judicial pronouncements.
The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears on proper examination, to be a mere presence or disguise.
As was said by Duff, J., in Attorney General for Ontario vs Reciprocal Insurers at p. 337): " Where the law making authority is of a limited or qualified character it may be necessary to examine (1) [1954] S.C.R. i. 329 with some strictness the substance of the legislation for the purpose of determining what is that the legislature is really doing. ' In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject matter in substance is, something which is beyond the powers of that legislature to legislate upon, the form in which the law is clothed would not save it from condemnation.
The legislature cannot violate the constitutional prohibitions by employing an indirect method.
" We have quoted the observations in extensor as they neatly summarise the law on the subject.
The legal position may be briefly stated thus: The legislature can only make laws within it legislative competence.
Its legislative field may be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution.
The legislature cannot over step the field of its competency, directly or indirectly.
The Court will scrutinize the law to ascertain whether the legislature by device put ports to make a law which, though in form appears to be within its sphere, in effect and substance, reaches beyond it.
If, in fact, it has power to make the law, its motives in making the law are irrelevant.
The learned counsel for the petitioners can only succeed if he can establish ' that the provisions of Chapter IV A constitute colourable legislation within the meaning of the aforesaid definition.
To test the validity of the argument, it may be summarised thus : Business is I property ' within the meaning of article 191 (g) of the Constitution.
Chapter IV A of the Act transfers the business to the Corporation controlled.
by the State Government.
Such a law should have provided for payment of compensation for the business transferred to the State Corporation ; instead, it adopted the device of cancelling the permit of the citizen and giving it to the Corporation and providing compensation to the citizen only for tile unexpired period of the permit.
42 330 We shall now proceed to ascertain whether any of the aforesaid ingredients of device or contrivance are established in this case.
Does Chapter IV A, in effect and substance, authorize, in law or fact, the transfer of the business of the citizens to the State or a Corporation, owned or controlled by the State ? Under article 191 of the Constitution, every citizen has a fundamental right to carry on any business subject to reasonable restrictions imposed by the State under cl.
(6) of article 19 in the interest of the general public.
The Constitution (First) Amendment Act, 1951, reserved to the State the right to make law for carrying on by the State or by a Corporation, owned or controlled by the State, any business to the exclusion, complete or partial, of the citizens or otherwise.
The Constitution, therefore, enables the State to make a law placing reasonable restrictions on the right of a citizen to do business or to create a monopoly or to make a law empowering the State to carry on business to the exclusion of a citizen.
The right to carry on business in transport vehicles on public pathways is certainly one of the fundamental rights recognized under article 19 of the Constitution.
The (IV of 1939), regulates the right of a citizen to carry on the said business for protecting the rights of the public generally. 'Permit ' is defined under cl.
(20) of section 2 of the Act to mean the document issued by the Commission or a State or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage or stage carriage, or authorising the owner as a private carrier or public carrier to use such vehicle.
Section 57 of the Act prescribes the procedure for applying for and granting permits to carry on the business in transport vehicles on public highways.
Section 47 lays down the matters to be considered by the Regional Transport Authority in the disposal of applications for such transport carriers.
Section 59 gives the conditions of every permit and also prohibits the transfer of permit.
from one person to another except with the permission of the Transport Authority.
Under section 60, the Transport Authority which granted permit may cancel the permit or may suspend it for 331 such period as it thinks fit for any of the reasons mentioned therein.
Section 61 provides for cases where, a permit holder dies.
That section enables the success .
sor to use the permit for a period of three months and to get the permit transferred to him subject to the conditions laid down therein.
Section 68 F authorises the Regional Transport Authority, for the purpose of giving effect to an approved scheme in respect of a notified area or notified route, to refuse to entertain any application for the renewal of any other permit, to cancel any existing permit, to modify the terms of any existing permit so as to render the permit ineffective beyond a specified date, and to reduce the number of vehicles authorised to be used under the permit.
It is manifest from the aforesaid provisions that the Regional Transport Authority can, in exercise of its regulatory power conferred on it in the interest of the public, issue a permit to a 'person in regard to a stage carriage authorising him to use the same in a particular route for a particular period subject to the conditions laid down in the permit, suspend or cancel the same under specified conditions, and renew or refuse to renew the same after the expiry of the period subject to the conditions laid down in the Act.
Under Ch.
IV A, if a scheme has been promulgated empowering the State Transport Undertaking to take on hand the transport service in relation to any area, route or portion thereof to the exclusion of any person, who has been carrying on the business in that route, the Transport Authority is empowered to cancel the existing permit and issue a permit to the State Transport Undertaking.
It cannot be said that if the Transport Authority cancels the permit of a person carrying on his transport business in a route and gives it to another, the process in.
volves a transfer of business or undertaking of the quondam permit holder to the new entrant.
Indeed the process does not involve even a transfer of the permit from one to another.
The true position is that one permit comes to an end and another permit comes into being.
The power of cancellation of a permit in favour of one and issuing a new permit to another are 332 necessary steps in the regulatory jurisdiction entrusted to the Regional Transport Authority.
The business of one has nothing to do with the business of another; they are two independent businesses carried on under two different licences.
If that be the true legal position in the case of issue of permits before Chapter IV A was inserted in the Act, we cannot see that the power of cancellation of an existing permit and issuing one to the State Transport Undertaking should involve a transfer of the previous permit holder 's business to the State Transport Undertaking.
The argument that the process contemplated by section 68 F of the Act involves two integrated steps, viz., cancelling the existing permit and preventing the previous permit holder from doing the business and then issuing a permit to a nominee of the State to enable it to do the same business and thereby, in effect and substance, transferring the business of the existing permit holder to the State or its nominee, appears to be attractive, but, in our view, it is fallacious.
It may be that by the said process the existing permit holder is precluded from doing his business and it may also be that the State Transport Undertaking carries on a similar business; but by no stretch of language or extension of legal fiction can it be said that the State Transport Undertaking is doing the same business which the previous permit holder was doing.
If there is no transfer in the case of cancellation of a permit in favour of one and issue of a new permit to another, equally there cannot be any such transfer in the case of issue of a permit to the State Transport Undertaking.
Looking at the business not simply from the standpoint of the right to do it or the activity involved in it, but also from the standpoint of its assets, it becomes clear that no assets pertaining to the business of the quondam permit holder are transferred to the State Transport Undertaking.
Though the cancellation of the permit has the effect of crippling his business, none of the assets of the business is taken over by the State Transport Undertaking; he is left in the possession of the entire assets of the business.
It is no doubt true that in the context of the scheme of nationalisation he may not be able to make 333 use of his assets in other routes or dispose of them at a great advantage to himself; but, it cannot be said that by cancelling the permit, what is left with him is only the ' husk '.
In fact the entire assets of the business are left with him and the State Transport Undertaking has not taken over the same.
Lastly it is said that sections 68 G of the Act which provides for payment of compensation to the holder of the permit, indicates that the legislature proceeded on the basis that the cancellation of a permit involved a transfer of property ' from the previous permit holder to the State.
In our view, no such irresistible conclusion flows from the said provision; as the permit is cancelled before the expiry of the term fixed therein, the legislature thought it fit and proper to give some compensation to the permit holder who is prevented from doing his business for the unexpired period of the permit.
Whether it is enacted by way of abundant caution, as the learned Attorney General says, or the provision is made by the legislature to mitigate the hardship that is caused to the permit holder by the premature cancellation of the permit, we find it difficult to draw the inference from the said provision that the legislature assumed that a transfer of the business is involved in the process laid down in Chapter IV A.
We therefore bold that Chapter IV A of the Act does not provide for the transfer of ownership or the right to possession of any property to the State or to a Corporation, Owned or controlled by the State.
Under article 31 of the Constitution unless there is such a transfer, the law shall be deemed not to provide for compulsory acquisition or requisition of property ; and therefore, in such a case, no compensation need be provided for under article 31(2) of the Constitution.
We therefore hold that Chapter IV A of the Act does not infringe the fundamental right of the petitioners under article 31 of the Constitution of India.
The next argument of the learned counsel for the petitioners is that even if Chapter 1V A of the Act is constitutionally valid, the petitioners could be deprived of their rights only in accordance with the law enacted for the purpose and in the manner provided 334 therein, and that in the present case, the scheme was promulgated in derogation of the provision of the said Chapter.
The learned counsel contends that the provisions of Bs.
68 C and 68 D have not been complied with in framing the scheme.
The learned counsel 's contentions in this regard fall under different sub heads, and we shall proceed to consider them seriatim.
The first contention is that no State Transport Undertaking is constituted under the Central Act and therefore the scheme initiated by the said Transport Undertaking constituted under the Motor Vehicles (Hyderabad Amendment) Act, 1956, ",as bad.
To appreciate this argument some of the facts may be stated.
Before the State of Andhra Pradesh was formed in November 1956, eight districts, popularly called the Telengana, which are now in the Andhra Pradesh State, were formerly part of the Hyderabad State.
On September 29, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956, became law, whereunder Chapter IV A was inserted in the Central Act in its application to the State of Hyderabad.
Under section 68_ A of Chapter IV A of that Act, the State Transport Undertaking was defined to mean the Road Transport Department of the State providing road service.
Under that Act, therefore, the Road Transport Department of the Hyderabad State was functioning as a statutory authority.
After the States Reorganisation Act came into force, the said eight districts of the Hyderabad State became part of the State of Andhra Pradesh; with the result that the Road Transport Department of the Hyderabad State became the Road Transport Department of the State of Andhra Pradesh, though it was exercising its powers only in respect of that part of the Andhra Pradesh State, popularly known as Telengana.
After the Andhra Pradesh State was formed, Sri Guru Pershad, styled as the General Manager of the Andhra Pradesh Road Transport Undertaking, published the scheme under section 68 C of the Act.
The argument is that the State Transport Authority constituted under Chapter IV A of the Hyderabad (Amendment) Act was not legally 335 constituted as the State Transport Undertaking under the Central Act and, therefore, the initiation of the scheme by the Hyderabad State Transport Undertaking, which has no legal status under the Central Act was bad.
It is also pointed out that the State Transport Authority under the Hyderabad Act differs from that under the Central Act in the following three, respects: (1) statutory parentage; (2) character and constitution ; and (3) territorial jurisdiction; and therefore the authority constituted under the Hyderabad Act cannot function under the Central Act.
This argument has no relevancy to the facts of the present case.
We are not concerned in this case with a statutory authority created under one Act and pressed into service for the purpose of another Act, when the latter has adopted the said statutory authority as one constituted under that Act.
Here there is the Andhra Pradesh Road Transport Department providing road transport service in Telengana, which is a part of that State, and that Department, when it was a part of the Hyderabad State was functioning as part of the Hyderabad State Secretariat.
The mere fact that the Road Transport Department of the Andhra Pradesh State was originally part of a department of another State and came under the definition of the State Transport Undertaking of the Hyderabad Act could not make the said department any the less the Road Transport Department of the Andhra Pradesh State.
Assuming.
for a moment that the Hyderabad Act is still in force in the Telengatia area, there is nothing in law which prevents a department coming under the definition of two statutes.
Under the Act, the State Transport Undertaking means an Undertaking providing road trasport service where such undertaking is carried on by a State Government.
This section does not prescribe the parentage of the undertaking or impose a condition that the undertaking should be providing transport service throughout the State.
The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking.
The citation from Salmond on, 336 Jurisprudence to the. effect that the law in creating legal persons always does so by personifying some real thing does not touch the question that falls to be decided in this case; for, the real thing, viz., the department, falls under the definition of both the Acts and therefore it can function as a statutory authority under both the Acts.
We therefore hold that the Road Transport Department of the Andhra Pradesh Government is a State Transport Undertaking under the Central Act and therefore it was within its legal competence to initiate the scheme.
The next objection raised is that the scheme was published by Sri Guru Pershad, the General Manager of the State Transport Undertaking and that it has not been established that he had been legally authorized to represent the State Transport Undertaking, the statutory authority constituted under the Act.
We have already held that the Transport Department of the disintegrated Hyderabad State continued to function as the Transport Department of the Andhra Pradesh State after the merger of Telengana areas with the Andhra State.
In the affidavit filed by the petitioners, it is stated that Sri Guru Pershad was the General Manager of the Road Transport Department of the erstwhile Hyderabad State, that he was never appointed as the General Manager of the State Transport Undertaking of the Andhra Pradesh State and that, therefore, he had no legal authority whatever to publish the scheme.
In the counter affidavit filed on behalf of the first respondent, it is averred that the General Manager of the Andhra Pradesh Road Transport, which was a State Transport Undertaking within the meaning of section 68 B of the Act, prepared a scheme and that was published in the Andhra Pradesh Gazette on November 14, 1957.
It is therefore a common case that Sri Guru Pershad was the General Manager of the Road Transport Undertaking of the erstwhile Hyderabad State.
It is not denied that Sri Guru Pershad continued to be the General Manager of that Department functioning in Andhra Pradesh.
We have already held that the same department was the statutory authority functioning under 337 the Central Act.
Sri Guru Pershad was also the General Manager of that undertaking.
In the circumstances, there is no substance in the contention that Sri Guru Pershad should have been appointed as the General Manager of the Undertaking under the Central Act.
This is the first argument under a different garb.
The preexisting Road Transport Department of the erstwhile Hyderabad State, with its General Manager, Sri Guru Pershad, continued to function as a statutory authority under the Central Act and therefore he had the legal authority to represent the State Transport Undertaking, which was a statutory authority.
lie published the scheme and subscribed it as Guru Pershad, the General Manager of the State Transport Undertaking (Andhra Pradesh State Road Transport).
The notification, therefore, must be held to have been issued by the State Transport Undertaking functioning under the Central Act.
The learned counsel then contends that the scheme published does not disclose that the State Transport Undertaking was of the opinion that the scheme was necessary in the interests of the public and, therefore, is the necessary condition for the initiation of the scheme was not complied with, the scheme could not be enforced.
Section 68 C says that where any State Transport Undertaking is of opinion that for specified reasons it is necessary in the public interest that road port service should be run or operated by the Transport Undertaking, it may prepare a scheme giving particulars of the scheme and publish it in the Official Gazette.
An express recital of the formation of the opinion by the Undertaking in the scheme is not made a condition of the validity of the scheme.
The scheme published in terms of the section shall give particulars of the nature of the service proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto.
It is true that the preparation of the scheme is made to depend upon the subjective opinion of the State Undertaking as regards the necessity for such a scheme.
The 43 338 only question, therefore, is whether the State Transport Undertaking formed the opinion before preparing the scheme and causing it to be published in the Official Gazette.
The scheme published, as already noticed, was signed by Guru Pershad, General Manager, State Transport Undertaking, Andhra Pradesh Road Transport.
The preamble to the scheme reads : " In exercise of the powers conferred by section 68 C of the , it is hereby proposed, for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest, to operate the following transport services as per the particulars given below with effect from a date to be notified by the Government.
" We have already held that Guru Pershad represented the State Transport Undertaking.
The scheme was proposed by the said Undertaking in exercise of the powers under section 68 C of the Act for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest.
Except for the fact that the word 'opinion ' is omitted, the first part of the section 68 C is incorporated in the preamble of the scheme ; and, in addition, it also discloses that the scheme is proposed in exercise of the powers conferred on the State Transport Undertaking under section 68 C of the Act.
The State Transport Authority can frame a scheme only if it is of opinion that it is necessary in public interest that the road transport service should be run or operated by the Road Transport Un dertaking.
When it proposes, for the reasons mentioned in the section, a scheme providing for such a transport undertaking, it is a manifest expression of its opinion in that regard.
We gather from a reading of the scheme that the State Transport Undertaking formed the necessary opinion before preparing the scheme and publishing it.
The argument of the learned counsel carries technicality to a breaking point and for the aforesaid reasons, we reject it.
The next attack of the learned counsel centres round the provisions of section 68 D (2) of the Act.
It would be convenient, before adverting to his argument, to read 339 section 68 D and the relevant rules made under the Act.
They read : Sec.
68 D : (1) Any person affected by the scheme published under section 68 C may, within thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government.
(2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter, if they so desire, approve or modify the scheme.
(3) The scheme as approved or modified under sub section (2) shall then be published in the Official Gazette by the State Government and the same shall thereupon become final and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route.
Provided that no such scheme which relates to any inter State route shall be deemed to be an approved scheme unless it has been published in the Official Gazette with previous approval of the Central Government.
Rule 8 : Filing of objections (procedure) Any person, concern or authority aggrieved by the scheme published under section 68 C may, within the specified period, file before the Secretary to Government in charge of Transport Department, objections and representations in writing setting forth concisely the reasons in support thereof Rule 9 : Conditions for submission of objections No representation or objection in respect of any scheme published in the Official Gazette shall be considered by the Government unless it is made in accordance with rule 8.
Rule 10 : Consideration of scheme (Procedure regarding) : After the receipt of the objections referred to above, the Government may, after fixing the date, time and place for holding an enquiry and after giving if they so desire, at least seven clear days ' notice of 340 such time and place to the persons who filed objections under rule 8, proceed to consider the objections and pass such orders as they may deem fit after giving an Opportunity to the person of,being heard in person or through authorised representatives.
" Under the section, the procedure prescribed for the approval of a scheme may be summarized thus : The State Transport Undertaking prepares a scheme providing for road transport service in relation to an area, to be run or operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons, and publishes it in the Official Gazette.
Any person affected by the scheme may, within thirty days from the date of its publication, file before the Secretary to Government in charge of Transport Department objections and representations in writing with reasons in support thereof.
After receiving the objections and representations, the Government fixes a date for the hearing and after giving an opportunity to the persons of being heard in person or by authorized representatives, considers the objections and then modifies or approves of the scheme.
The following procedure was in fact followed by the Government in this case: After the scheme was prepared and published in the Official Gazette, the petitioners and others filed objections before the Secretary to Government Transport Department, within the time prescribed.
138 objections were received and individual notices were issued by the Government by registered post to all.
the objectors fixing the date of the hearing for December 26, 1957.
The Secretary to Government, Home Department, in charge of Transport, heard the representations made by the objectors, some in person and others through their advocates, and also the representation is made by the General Manager of the Road Transport Undertaking.
The Secretary, after hearing the objections, prepared notes and placed the entire matter, with his notes, before the Chief Minister, who considered the matter and passed orders rejecting the objections and approving the scheme; and the approved scheme was thereafter issued in the name of the Governor.
341 On the aforesaid facts, the first contention raised is that the State Government in approving the scheme was discharging a quasi judicial act and therefore the Government should have given a personal hearing to the objectors instead of entrusting that duty to its Secretary.
Secondly, it is stated that a judicial hearing implies that the same person hears and gives the decision.
But in this case the hearing is given by the Secretary and the decision by the Chief Minister.
Thirdly, it is contended on the same hypothesis, that even if the hearing given by the Secretary be deemed to be a hearing given by the State Government, the hearing is vitiated by the fact that the Secretary who gave the hearing is the Secretary in charge of the Transport Department.
The Transport Department, it is stated, in effect was made the judge of its own cause, and this offends one of the fundamental principles of judicial procedure.
Lastly, it was pointed out that though the enquiry was posted for hearing on December 26, 1957, even before the enquiry was commenced, the Chief Secretary to the Government gave an interview to the 'Deccan Chronicle ' and the I Golconda Patrika ' to the effect that the Government bad already taken a decision to nationalize the road transport in Krishna District and some routes had been chosen, including the Guntur Vijayawada route, thereby indicating that the Government has prejudged the case before holding the enquiry.
The learned Attorney General counters the said argument by stating that the State Government strictly followed the procedure prescribed under section 68 C of the Act, that the said Government, being an impersonal body, (gave the hearing through the machinery prescribed by law, that the said Government was discharging only an administrative act and not a judicial act in the matter of approving the scheme, that even if it did perform a judicial act, the Home Secretary in charge of Transport Department had only collected the material and the final orders were made only by the Chief Minister and that the Secretary 's press interview was nothing more than a mere indication of the factum of the proposed scheme.
342 At the outset it would be convenient to consider the question whether the State Government acts quasijudicially in discharging its functions under section 68 C of the Act.
The criteria to ascertain whether a particular act is a judicial act or an administrative one, have been laid down with clarity by Lord Justice Atkin 'in Rex vs Electricity Commissioners, Ex Parte London Electricity Joint Committee Co. (1) elaborated by Lord Justice Scrutton in Rex vs London County Council, Ex Parte Entertainments Protection Association Ltd. (2) and authoritatively re stated by this Court in Province of Bombay vs Khusaldas section Advani (3) .
They laid down the following conditions: (a) the body of persons must have legal authority; (b) the authority should be given to determine questions affecting the rights of subjects and (c) they should have a duty to act judicially.
In the last of the cases cited supra, Das, J., as he then was, analysed the scope of the third condition thus at page 725: " (i) that if a statute empowers an authority not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act; and (ii)that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to the act and the subject opposing it, the final determination of the authority will yet be a quasi.
judicial act provided the authority is required by the statute to act judicially.
" In the case In re Banwarilal Roy (4) Das, J., as he then was, said much to the same effect at page 800: " A judicial or quasi judicial act, on the other hand, implies more than mere application of the mind (1) (3) ; (2) (4) 343 or the formation of the opinion.
It has reference to the mode or manner in which that opinion is formed.
It implies a proposal and an opposition ' and a decision on the issue.
It vaguely connotes 'hearing evidence and opposition ' as Scrutton, L. J., expressed it.
The degree of formality of the procedure as to receiving or hearing evidence may be more or less according to the requirements of the particular statute, but there is an indefinable yet an appreciable difference between the method of doing an administrative or executive act and a judicial or quasi judicial act.
" This statement is practically in accord with the first proposition extracted above.
This Court again, in Nagendra Nath Bora vs Commissioner of Hills Division (1) in the context of the provisions of Eastern Bengal and Assam Excise Act, 1910 (I of 1910), considered the scope of the concept of 'judicial act '.
Sinha, J., who delivered the.
judgment of the Court, made the following observations at page 408: " Whether or not an administrative body or authority functions as a purely administrative one or in a quasi judicial capacity, must be determined in each case, on an examination of the relevant statute and the rules framed thereunder." In Express Newspapers Ltd. vs The Union of India (2) this Court again reviewed the law on the subject to ascertain whether the Wage Board functioning under the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955) was only discharging administrative functions or quasijudicial functions.
Bhagwati, J., made the following observation at page 613: " If the functions performed by the Wage Board would thus consist of the determination of the issues as between a proposition and an opposition on data and materials gathered by the Board in answers to the questionnaire issued to all parties interested and the evidence led before it, there is no doubt that there would be imported in the proceedings of the Wage Board a duty to act judicially and the functions (1) ; (2) 344 performed by the Wage Board would be quasi judicial in character.
" The aforesaid three decisions lay down that whether an administrative tribunal has a duty to act judicially should be gathered from the provisions of the particular statute and the rules made thereunder, and they clearly express the view that if an authority is called upon to decide respective rights of contesting parties or, to put it in other words, if there is a lis, ordinarily there will be a duty on the part of the said authority to act judicially.
Applying the aforesaid test, let us scrutinize the provisions of sections 68 C and 68 D and the relevant rules made under the Act to ascertain whether under the said provisions the State Government performs a judicial act or an administrative one.
Section 68 C may be divided into three parts: (1) The State Transport Undertaking should come to an opinion that it is necessary in public interest that the road transport service in general or any particular.
class of such service in relation to any area or route or portion thereof should be run or operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons or otherwise ; (ii) it forms that opinion for the purpose of providing an efficient, adequate, economical and properly co ordinated road transport service; and (iii) after it comes to that opinion, it prepares a scheme giving particulars of the nature of the services proposed to be rendered, area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and causes it to be published in the Official Gazette.
The section, therefore, makes a clear distinction between the purpose for which a scheme is framed and the particulars of the scheme.
To state it differently, though the purpose is to provide an efficient, adequate, economical and coordinated road transport service in public interest, the scheme proposed may affect individual rights such as the exclusion, complete or partial, of other persons or otherwise, from the business in any particular route or routes.
Under section 68 C, therefore, the State Transport Undertaking may propose a scheme affecting the proprietary rights 345 of individual permit holders doing transport business in a particular route or routes.
The said proposal threatens the proprietary right of that individual or individuals.
Under section 68 D read with Rules 8 and 10 made under the Act, any person affected by the aforesaid proposed, scheme may file objections within the prescribed time before the Secretary of the Transport ' Department.
Under the said provisions,.
the State Government is enjoined to approve or modify the scheme after holding an enquiry and after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the matter in person or through authorised representatives.
Therefore, the, proceeding prescribed is closely approximated to that obtaining in courts of justice.
There are two parties to the dispute.
The State Transport Undertaking, which is a statutory authority under the Act, threatens to infringe the rights of a, citizen.
The citizen may object to the scheme on public grounds or on personal grounds.
He may oppose the scheme, on the ground that it is not in the interest of the public or on the ground that the route which he is exploiting should be excluded from the scheme for various reasons.
, There is, therefore, a proposal and an opposition and the third party, the State Government is to decide that lis and prima facie it must do so judicially.
The position is put beyond any doubt by the provision in the Act and the Rules which expressly require that the State Government must decide the dispute according to the procedure prescribed by the Act and the Rules framed thereunder, viz., after considering the objections and after hearing.
both the parties.
It therefore appears to us that this is an obvious case where the Act imposes a duty on the State Government to decide the act judicially in approving or modifying the scheme proposed by the Transport Undertaking.
The learned Attorney General argues that sections 68 C and 68 D do not contemplate the enquiry in regard to the rights of any parties, that the scheme proposed is 44 346 only for the purpose of an efficient, adequate, economical and properly coordinated bus transport service and should relate only to that purpose and that, therefore, the enquiry contemplated under section 68 D, though assimilated to a judicial procedure, does not make the approval of the scheme any the less an administrative act.
To put it shortly, his contention is that the Government is discharging only an administrative duty in approving the scheme in public interest and no rights of the parties are involved in the process.
There is some plausibility and attraction in the argument, but we cannot accept either the premises or the conclusions.
The scheme proposed may exclude persons, who have proprietary rights in a route or routes.
As we have pointed out, the purpose must be distinguished from the particulars in the scheme.
The scheme propounded may exclude persons from a route or routes and the affected party is given a remedy to apply to the Government and the Government is enjoined to decide the dispute between the contesting parties.
The statute clearly, therefore, imposes a duty upon the Government to act judicially.
Even if the grounds of attack against the scheme are confined only to the purpose mentioned in section 68 C we cannot agree with this contention the position will not be different, for, even in that case there is a dispute between the State Transport Undertaking and the person excluded in respect of the scheme, though the objections are limited to the purpose of the scheme.
In either view the said two provisions, sections 68 C and 68 D, comply with the three criteria of a judicial act laid down by this Court.
Support is sought to be drawn for this contention from the decision of the House of Lords in Franklin vs Minister of Town and Country Planning (1).
As strong reliance is placed on this decision, it is necessary to consider the same in some detail.
The facts of that case are: On August 3, 1946, the respondent, Lewis Silkin, as Minister of Town and Country Planning, prepared the draft Stevenage New Town (Designation) Order, 1946, under para.
1 of Schedule 1 to the New (1) ; 347 Towns Act, 1946, and on or about August 6, 1946, he caused the same to be published and notices to be given as prescribed by paragraph 2 of Schedule I to the Act.
Thereafter objections were received from a number of persons, including the appellants.
Accordingly, the respondent instructed Mr. Arnold Morris, an Inspector of the Ministry of Town and Country Planning, to hold a public local inquiry as prescribed by paragraph 3 of the said Schedule.
Mr. Morris held the inquiry at the Town Hall, Stevenage, on October 7 and 8, 1946, and on October 25, made a report to the respondent in which he set out a summary of the sub.
missions made and the evidence given by and on behalf of the objectors and attached thereto a complete transcript of the proceedings, which began with an opening statement by Mr. Morris giving a brief recapitulation of the reasons that had led to the designation of Stevenage as the site of a New Town.
On November 11, 1946, the respondent made the order in terms of paragraph 4 of Schedule I to the Act.
The appellants applied to the High Court to have the order quashed.
It was contended, inter alia, that the said order was not within the powers of the New Towns Act, 1946, or alternatively, that the requirements of the said Act have not been complied with; that the Minister who made the order had stated, before the Bill was made into law, that he would make the said order, and therefore he was biassed in any consideration of the said objections.
The House of Lords held that the respondent 's functions under the Act were only administrative and that he had complied with the provisions of the statute.
In that view, the order of the Court of Appeal dismissing the applications filed by the appellants was confirmed.
Lord Thankerton in his speech at page 102, observed thus: "In my opinion, no judicial, or quasi judicial, pinion, no duty was imposed on the respondent, and any reference to judicial duty, or bias, is irrelevant in the present case.
The respondent 's duties under section 1 of the Act and sch.
1 thereto are, in my opinion, purely administrative, but the Act prescribes certain methods of or steps in, discharge of that duty. . . . it 348 seems clear also, that the purpose of inviting objections, and, where they are not Withdrawn I of having a public inquiry, to be held by someone other than the respondent, to whom that person reports, was for the further information of the respondent in order to the final consideration of the Soundness of the scheme ' of the designation. . . .
I am of opinion that no judicial duty is laid on the respondent in discharge of these statutory duties, and that the only question is whether he has complied With the Statutory directions to appoint a person to hold the public inquiry, and to consider that person 's report.
At first sight the facts of this case may appear to have some analogy to those in the present case, but on "a deeper scrutiny of the facts and the provisions of the New Towns Act, 1946, and Chapter IV A of the Act, they disclose essential differences in fundamentals.
Under the New Towns Act, 1946, the following steps for developing a new town have been laid down: (1) It is left to the Minister 's Subjective satisfaction, after consulting local authorities, who appear to him to be concerned, to make an order designating.
a particular area as the site of the proposed new town ; (2) when he proposes to make an order, he prepares a draft of that order giving the necessary parti culars and publishes it in the London Gazette calling for objections to the, proposed order within a prescribed time; (3) if any objection is made to the proposed order, he shall cause a public local enquiry to be held and shall consider the report of the person by whom the enquiry was held; and (4) any person desiring to challenge the validity of that order may apply to the High Court and he can get that order set aside only if he satisfies the Court that the order is not within the powers of that Act or that his interests have been substantially prejudiced by any requirements of that Act not having been complied with.
The steps to be taken for nationalising the Road Transport under the Act are as follows: (1) The State Transport Undertaking, which is a statutory authority under the Act, proposes a scheme; (2) the scheme may provide that the road transport services 349 should be run or operated by the State Transport Undertaking to the exclusion of a person or persons; (3) any Person, affected may file objections before the Government;(4) the Government following the rules of judicial procedure decides the dispute between the Undertaking and the person or persons affected; (5)the dispute is not necessarily confined only to the question whether the 'statutory requirements have been complied with, but may also relate to the question whether a particular person or persons should not.
be excluded; and (6) a personal hearing should be given to both the parties by the Government.
A comparison of the procedural steps under both the Acts brings out in bold relief the nature of the enquiries contemplated under the two statutes.
There, there is no lis, no personal hearing and even the public enquiry contemplated by a third party is presumably confined to the question of statutory requirements, or at any rate was for eliciting further information for the Minister.
Here, there is a clear dispute between the two parties.
The dispute comprehends not only objections raised on public grounds, but also in vindication of private rights and it is required to be decided by the State Government after giving a personal ' hearing and following the rules of judicial procedure.
Though there may be some justification for holding, on the facts of the case before the House of Lords that that Act did not contemplate a judicial act on that question we do not propose to express our opinion there is absolutely none for holding in the present case that the Government is not performing a judicial act.
Robson in 'Justice and Administrative Law ', commenting upon the aforesaid decision, makes the following observation at page 533: " It should have been obvious from a cursory glance at the New Towns Act that the rules of natural justice could not apply to the Minister 's action in making an order, for the simple reason that the initiative lies wholly with him.
His role is not to consider whether an order made by a local authority should be confirmed, nor does he have to determine a controversy between a, public authority and private interests.
350 The responsibility of seeing that the intention of Parliament is carried out is placed on him.
" The aforesaid observations explain the principle underlying that decision and that principle cannot have any application to the facts of this case.
In I Principles of Administrative Law by Griffith and Street, the following comment is found on the aforesaid decision : After considering the provisions of section 1 of the New Towns Act, 1946, the authors say " Like the town planning legislation, this differs from the Housing Acts in that the Minister is a party throughout.
Further, the Minister is not statutorily required to consider the objections.
It is obvious, as the statute itself states, that the creation of new towns is of national interest.
" At page 176, the authors proceed to state: Lord Thankerton did not analyse the meanings of I judicial ' and I administrative nor did he specify the particular factors which motivated his classification.
It is permissible to conclude that he looked at the Act as a whole, applying a theory of interpretation similar to the rule in Heydon 's Case ; , 7b).
" At page 178, they conclude thus: " It is submitted, however, that the thoroughness with which the Courts analysed the statutes in the Errington, Robinson, Johnson and Franklin Cases and the emphasis which they have placed on the fact that their decisions have been based solely on the statute under consideration makes such an approach inevitable.
" It is therefore clear that Franklin 's Case is based upon the interpretation of the provisions of that Act and particularly on the ground that the object of the enquiry is to further inform the mind of the Minister and not to consider any issue between the Minister and the objectors.
The decision in that case is not of any help to decide the present case, which turns upon the construction of the provisions of the Act.
For the aforesaid reasons, we hold that the State Government 's order under section 68 D is a judicial act.
351 The next question is whether the State Government disposed of the objections of the petitioners judicially in the manner prescribed by the Act.
It is said that under the Act and rules framed thereunder, the State Government should hear the dispute, but in this case the Secretary in charge of the Transport Department, who is not the State Government, gave the hearing.
The State Government is an impersonal body and it can only function through the machinery and in the manner prescribed by law.
Clause (60) of section 2 of the , defines I State Government ' as respects anything done or to be done after the commencement of the Constitution (VII Amendment) Act, 1956, to mean, in a State, the Governor, and in a Union Territory, the Central Government.
Under article 154(1) of the Constitution, I the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution '.
Article 163 enacts that ' there shall be a Council of Ministers with the Chief Minister at the head to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this Constitution required to exercise his functions or any of them in his discretion '.
Article 166(1) enjoins that I all executive action of the Government of a State shall be expressed to be taken in the name of the Governor '.
Sub clause (2) of that Article says that 'orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor '.
And under sub cl.
(3), 'the Governor shall make rules for tile more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion '.
In exercise of the powers conferred by cls.
(2) and (3) of article 166 of the Constitution, the Government of Madras made rules styled as 'The Madras Government Business Rules and Secretariat Instructions '.
Rule 9 thereof prescribes 352 that without prejudice to the provisions of r. 7, the Minister in charge of a. department shall be primarily responsible for,the disposal of the business appertaining to that department.
Rule 21 enacts that except as otherwise provided by any other Rule, cases shall ordinarily be disposed of by or under the authority of the Minister in charge who may, by means of standing orders, give such directions as he thinks fit for the disposal of cases in the department.
Copies of such standing orders shall be sent to the Governor and the Chief Minister.
Rule 11 says that I all orders or instruments made or executed by or on behalf of the Government of the State shall be expressed to be made or executed in the name of the Governor '.
Under r. 12, every order or instrument of the Government of the State shall be signed either by a Secretary, an Additional Secretary, a Joint Secretary, a draftsman, a Deputy Secretary, an, Under Secretary or an Assistant Secretary to the Government of the State or such other officers as may be specially empowered in that behalf and such signature shall be deemed to be the proper authentication of such order or instrument '.
After the formation of the Andhra State on, October 3, 1953, the rules made by the Governor of Madras, under the provisions of the States Reorganization Act, Continue to be the rules of the Andhra State till they are amended in accordance with ', such law.
The Governor of Andhra State, in exercise of the powers conferred by cls.
(2) and (3) of article 166 of the Constitution directed that until other provisions are made in this regard, 'the business of the Government of Andhra be transacted in accordance with the Madras Government Business Rules.
and Secretariat Instructions in force on the first day of October, 1953 '.
On October 26, 1956, after the formation of the Andhra Pradesh State, as the Andhra Pradesh was not a new State but a continuation of the Andhra State, though there is change, in its name, the business rules of the Andhra state continue to govern the Secretariat of the AndhraPradesh Government.
The effect of the aforesaid provisions may be stated thus: A State Government 353 means the Governor; the executive power of the State vests in the Governor; it is exercised by him directly or by officers subordinate to him in accordance with the provisions of the Constitution; the Ministers headed by the Chief Minister advise him in the exercise of his functions; the Governor made rules enabling the Minister in charge of particular department to dispose of cases before him and also authorizing him, by means of standing orders, to give such directions as he thinks fit for the disposal of the cases in the department.
Pursuant to the rule, the record discloses, the Chief Minister, who was in charge of Transport, had made an order directing the Secretary to Government, Home Department, to hear the objections filed against the scheme proposed by the State Transport Autho rity.
The aforesaid machinery evolved by the rules for the disposal of cases by the State Government has been followed in this case.
The petitioners and others filed objections to the proposed scheme before the Secretary to the Government Transport Department.
He gave a personal hearing to the parties some of them appeared in person and others by representatives; the entire material recorded by him was placed before the Chief Minister in charge of Transport, who made his order approving the scheme; and the order was issued in the name of the Governor, authenticated by the Secretary in charge of the Transport Department.
It may therefore be said that the State Government gave the hearing to the petitioners in the manner prescribed by the rules made by the Governor.
At this state, the argument hinted at but not seriously pressed, may be noticed.
The Rules the Governor is authorised to make, the argument proceeds, are only to regulate the acts of the Governor or his subordinates in discharge of the executive power of the State Government, and therefore will not govern the quasi judicial functions entrusted to it.
There is a fallacy in this argument.
The concept of a quasijudicial act implies that the act is not wholly judicial; 45 354 it describes only a duty cast on the executive body or authority to conform to norms of judicial procedure in performing some acts in exercise of its executive power.
The procedural rules made by the Governor for the convenient transaction of business of the State Government apply also to quasi judicial acts, provided those 'Rules conform to the principles of judicial procedure.
The mode of performing quasi judicial acts by administrative tribunals has been the subject of judicial decisions in England as well as in India.
The House of Lords in Local Government Board vs Arlidge (1) in the context of the Housing, Town Planning Etc., Act, 1909, made the following observations at page 132: " My Lords, when the duty of deciding an appeal is imposed, those whose duty it is to decide it must act judicially.
They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made.
The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice.
But it does not follow that the procedure of every such tribunal must be the same.
" In New Prakash Transport Co., Ltd. vs New Swarna Transport Co., Ltd. (2) this Court reviewed the case law on the subject and came to the conclusion that the rules of natural, justice vary with varying constitutions of statutory bodies, and the rules prescribed by the legislature under which they have to act, and the question whether in a particular case they have been contravened must be judged not by any preconceived notion of what they may be but in the light of the provisions of the relevant Act.
This Court re affirmed the principle in Nagendra Nath Bora vs Commissioner of Hills Division (supra) (3).
With this background we shall proceed to consider the validity of the three alleged deviations of the State Government from the fundamental judicial procedure.
In the present case, the officer who received (1) (2) ; (3) ; 355 the objections of the parties and heard them personally or through their representatives, was the Secretary of the Transport Department.
Under the 'Madras Government Business Rules and Secretariat Instructions ' made by the Governor under article 166 of the Constitution, the Secretary of a department is its head.
One of the parties to the dispute before the State Government was the Transport Department functioning as a statutory authority under the Act.
The head of that department received the objections, heard the parties, recorded the entire proceedings and presumably discussed the matter with the Chief Minister before the latter approved the scheme.
Though the formal orders were made by the Chief Minister, in effect and substance, the enquiry was conducted and personal hearing was given by one of the parties to the dispute itself.
It is one of the fundamental principles of judicial procedure that the person or persons who are entrusted with the duty of hearing a case judicially should be those who have no personal bias in the matter.
In Ranger vs Great Western Ry.
Co.(1) Lord Cranworth, L.C., says: 'A judge ought to be, and is supposed to be, indifferent between the parties.
He has, or is supposed to have, no bias inducing him to lean to the one side rather than to the other In ordinary cases it is just ground of exception to a judge that he is not indifferent, and the fact that he is himself a party, or interested as a party, affords the strongest proof that he cannot be indifferent.
" In Rex vs Sussex Justices Ex Parte McCarthy (2) Lord Hewart, C. J., observed: " It is said, and, no doubt, truly, that when that gentleman retired in the usual way with the justices, taking with him the notes of the evidence in case the justices might desire to consult him, the justices came to a conclusion without consulting him, and that he scrupulously abstained from referring to the case in any way.
But while that is so, a long line of cases shows that it is not merely of some importance (1) ; , 89; ; , 827.
(2) , 258.
356 but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done.
The question therefore is not whether in this case the deputy clerk made any observation or offered any criticism which he might not properly have made or offered; the question is whether he was so related to the case in its civil aspects as to be unfit to act as clerk to the justices in the criminal matter.
The answer to that question depends not upon what actually was done, but upon what might appear to be done.
" This was followed in Rex vs Essex Justices Ex Parte Perkins(1).In Franklin 's Case (2), though on a construction of the provisions of that Act under consideration in that case it was held that the Minister was not acting judicially in discharging his duties, his Lordship accepted the aforesaid principle and expressd his view on the doctrine of 'bias ' thus, at page 103: " My Lords, I could wish that the use of the word 'bias ' should be confined to its proper sphere.
Its proper significance, in my opinion, is to denote a departure from the standard of even handed justice which the law requires from those who occupy judicial office, or those who are commonly regarded as holding a quasi judicial office, such as an arbitrator.
The reason for this clearly is that, having to adjudicate as between two or more parties, he must come to his adjudication with an independent mind, without any inclination or bias towards one side or other in the dispute.
" The aforesaid decisions accept the fundamental principle of natural justice that in the case of quasi judicial proceedings, the authority empowered to decide the dispute between opposing parties must be one without bias towards one side or other in the dispute.
It is also a matter of fundamental importance that a person interested in one party or the other should not, even formally, take part in the proceedings though in fact he does not influence the mind of the person, who finally decides the case.
This is on the principle that (1) (2) ; 357 justice should riot only be done, but should manifestly and undoubtedly be seen to be done.
The hearing given by the Secretary, Transport Department, certainly offends the said principle of natural justice and the proceeding and the hearing given, in violation of that principle, are bad.
The second objection is that while the Act and the ' Rules framed thereunder impose a duty on the State Government to give a personal hearing, the procedure prescribed by the Rules impose a duty on the Secretary to hear and the Chief Minister to decide.
This divided responsibility is destructive of the concept of judicial hearing.
Such a procedure defeats the object of personal hearing.
Personal hearing enables the authority concerned to watch the demeanour of the witnesses and clear up his doubts during the course of the arguments, and the party appearing to persuade the authority by reasoned argument to accept his point of view.
If one person hears and another decides, then personal hearing becomes an empty formality.
We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure.
The learned counsel further contends that the mind of the State Government was foreclosed before the hearing was given and therefore no real enquiry was held by it as contemplated by the Act.
This argument is based upon the reports published on 27 12 1957 in the 'Deccan Chronicle ' and 'Golconda Patrika '.
Therein it was stated under date December, 26, as follows : " The Chief Secretary, Mr. M. P. Pai, told pressmen today that the Government has already taken a decision to nationalize the road transport in Krishna District and some routes had been chosen.
The Guntur Vijayawada route also comes under the nationalisation scheme.
About 65 buses would be plying oil these routes.
" The Chief Secretary was giving this information on December 6, 1957, even before the enquiry was commenced.
On the basis of this publication, it is contended, that the Government had already taken a decision to nationalize the road transport before the scheme 358 was approved by the Government and that the entire procedure was put through to implement the decision already taken to meet the requirements of the technicalities of law.
In the counter affidavit filed by the first respondent it is stated that the scheme was published in the Andhra Pradesh Gazette dated 24 12 1957 and that the alleged statement only referred to the said proposal under section 68 C of the .
Though the wording of the information published speaks of the decision of the Government, the Chief Secretary obviously must have been referring to the contents of the notification published two days earlier, on 24 12 1957.
We cannot from this publication in the newspapers come to the conclusion that the Government having finally decided to reject all possible objections, went through a farce of an enquiry.
We therefore hold, for the first two reasons, that the quasi judicial enquiry held by the State Government was vitiated by the, violation of the aforesaid fundamental principles of natural justice.
The last argument of the learned counsel for the petitioners is that the Road Transport Corporation, i.e., the first respondent, cannot implement the scheme proposed by the defunct State Transport Undertaking.
Some of the relevant facts are as follows The State Transport Undertaking published the scheme in the Andhra Pradesh Gazette dated November 14, 1957.
It also appeared through its representative, the General Manager, who made his representation to the Secretary of the Transport Department on 26 12 1957.
The State Government approved of the scheme on 7 1 1958 and the approved scheme was published in the Andhra Pradesh Gazette dated 9 1 1958 and it was directed to come into force with effect from 10 1 1958.
The Government of Andhra Pradesh established a Road Transport Corporation under the (Act LXIV of 1950), for the State of Andhra Pradesh, with effect from 11 1 1958.
The State Government transferred the business of the Road Transport Department to the said Corporation for management.
Thereafter, the said Corporation was taking subsequent steps to implement the scheme.
359 The argument is that the Road Transport Corporation has no power under the to take over the business of the State Transport Undertaking and to implement the scheme initiated by that Undertaking.
The said Corporation admittedly comes under the definition of 'State Transport, Authority ' under the Act.
But the question is whether ' the said Corporation is also a successor to the State Transport Authority that initiated the scheme.
It would certainly be the successor if the Corporation was legally entrusted with the duty of carrying on the business the Road Transport Department was doing before.
On January 9, 1958, in exercise of the powers conferred by section 3 of the , the Governor of Andhra Pradesh established with effect from January 11, 1958, a Road Transport Corporation called the Andhra Pradesh Road Transport Corporation for the State of Andhra Pradesh.
In exercise of the power conferred by section 34 of the , the Governor of Andhra Pradesh made an order dated 11th January, 1958, for the following administrative arrangements to come into force "(I) The Andhra Pradesh Road Transport Corporation (hereinafter referred to as the Corporation) shall take over the management of the existing Road Transport Department of the Government of Andhra Pradesh.
(2)All land and all stores, articles and other goods of the Road Transport Department shall pass to the Corporation.
(3) (a) Subject to the provisions of sub paragraphs (b)and (c), all the assets and liabilities of the Road Transport Department shall pass to the Corporation.
The other clauses need not be read as they are only consequential to the aforesaid clauses.
It is therefore clear from the said order that the Government entrusted the management of the Road Transport Department to the Road Transport Corporation and directed the transfer of all assets and liabilities to the said Corporation.
The effect of the said order is that the State 360 Corporation carries on the Road Transport business in the place of the State Transport Department which was functioning as the State Transport Undertaking under the Act before the said order.
If there was no legal impediment in the Government transferring the business carried on by one of its departments and its assets to the Corporation, the Corporation would be a successor to the pre existing State Transport Undertaking.
The petitioners contest the position that the Government has any such power under section 34 of the Road Transport Corporations.
Act, 1950.
Section 34 reads: "(1) The State Government may, after consultation with a Corporation established by such Government, give to the Corporation general instructions to be followed by the Corporation, and such instructions may include directions relating to the recruitment,, conditions of service and training of its employees, wages to be paid to the employees, reserves to be maintained by it and disposal of its profits and stocks.
(2) In the exercise of its powers and performance of its duties under this Act, the Corporation shall not depart from any general instructions issued under subsection (1) except with the previous permission of the State Government.
" The Road Transport Corporation Was constituted for extending and improving the facilities of the road transport in the Andhra Pradesh area.
The Government transferred the Undertaking and its assets to that Corporation and gave it directions under section 34 of the , to take over the management of the said undertaking.
The fact that under the Road Transport Corpora tions Act the Corporation can acquire an undertaking after paying compensation is not of much relevancy for, in this case, the Corporation does not purport to acquire any transport undertaking of the petitioners.
It has not been brought to our notice that the said direction is inconsistent with any of the provisions of the .
We, therefore, hold that the first respondent is the successor to the State Transport Undertaking which 361 proposed the scheme and as admittedly it satisfied the requirements of the definition of I Road Transport Authority ' under the Act, it is within its rights in implementing the scheme approved by the Government.
In the result, for the reason that the State Government did not make the enquiry consistent with the principles of natural justice in approving the scheme, the order approving the scheme is hereby quashed and a direction issued to the first respondent to forbear from taking over any of the routes in which the petitioners are engaged in transport business.
This judgment will not preclude the State Government from making the necessary enquiry in regard to the objections filed by the petitioners in accordance with law.
The petitioners will have liberty to file additional objections if any.
As the petitioners have failed on substantive points in the case, the parties are directed to bear their own costs.
WANCHOO, J.
This petition under Article 32 of the Constitution challenges the scheme of road transport introduced in the Krishna district of Andhra Pradesh.
The petitioners raise two main contentions, namely, (1) that the provisions of Chapter IV A of the , violate their fundamental rights guaranteed under the Constitution, and (2) that the scheme introduced is ultra vires Chapter IV A. I have had the advantage of reading the judgment prepared by my brother Subba Rao, J.
I agree with what he has said on the first contention and therefore do not propose to repeat the facts and the reasons given by him.
I have, however, been unable, with utmost respect, to persuade myself to agree fully with what has been said on the second contention.
I, therefore, proceed to deal with that only.
The second contention of the petitioners is that the scheme of road transport, which is sought to be put into effect, is ultra vires Chapter IV A of the , (IV of 1939), (hereinafter called the Act), inasmuch as the provisions of that Chapter have not 46 362 been strictly followed.
Before I deal with the contentions of the petitioners in this matter, I may indicate briefly the steps required to be taken before a scheme of road transport is finalised under Chapter IV A of the Act.
The first step is the preparation of the Scheme under section 68C, which lays down that where any State Transport Undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State Transport Undertaking may prepare a scheme for the purpose.
After the scheme is prepared, it has to be published in the Official Gazette and also in such other manner as the State Government may direct.
The next step is that any person affected by the scheme published under section 68C may, within thirty days from the date of publication, file objections thereto before the State Government; [section 68D(l)].
The third step is that the State Government has to consider the objections and after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the matter, to approve or modify the scheme; (section 68D (2)).
Finally, the scheme as approved or modified is published in the Official Gazette as the approved scheme; (section 68D(3)).
Then comes the provisions for putting.
this approved scheme into effect.
Section 68F provides that the Regional Transport Authority shall thereupon issue permits to the State Transport Undertaking on its application in pursuance of the approved scheme.
The Regional Transport Authority is also given power to cancel or modify any existing permit or refuse to renew any existing permit for this purpose.
Section 68G provides for compensation where any existing permit is cancelled or its terms are modified.
The main attack of the petitioners is that sections 363 68C and 68D were not complied with.
The particulars of the attack may be summarised as below: (1) There was no State Transport Undertaking in existence which could have published the scheme (68C) (2) Even if a State Transport Undertaking was there, it did not form an opinion as required by section 68C and in particular, the General Manager, who acted for the State Transport Undertaking, had no authority to do so; (3)S. 68D(2) contemplates a hearing by the State Government of the objections filed.
There was no such hearing, as the Home Secretary in charge of Transport Department, who heard the objectors must be deemed to be one of the parties who have to be heard by the State Government, and in any case, the hearing by the Secretary was no hearing by the State Government.
(4)There was no real bearing at all and no genuine consideration of the objections by the State Government as the issue bad already been prejudged, (vide speech of the Chief Secretary on the 26th of December, 1957); and (5)The scheme could not be enforced by the Road Transport Corporation, which replaced the Road Transport Department soon after the scheme had been approved by the State Government.
It is necessary in order to appreciate and decide the point raised on behalf of the petitioners to mention briefly the facts relating to the preparation of the scheme and subsequent steps taken for its approval and enforcement.
The scheme was published on November 14, 1957, under the authority of Shri Guru Pershad, General Manager of the State Transport Undertaking Andhra Pradesh Road Transport.
Chap ter IV A of the Act had come into force from the 15th of February, 1957.
Before that Hyderabad State, as it then was, had passed Act XLV of 1956, amending the locally and incorporating in it provisions similar to the present Chapter IV A. Under the Hyderabad Act, the State Transport Undertaking was defined as the Road Transport 364 Department of the State providing road transport services.
When the Hyderabad State came to end and what was known as the Telengana area of that State was merged in the State of Andhra Pradesh, the Road Transport Department of Andhra Pradesh took over the road transport services in the Telengana area which were being run by the former Hyderabad State.
The present scheme was published, as already stated, on the 14th of November, 1957, by Shri Guru Pershad on behalf of the Road Transport Department of Andhra Pradesh.
The objections to the scheme were received by the Secretary to Government in charge of the Road Transport Department, and the objectors were heard by the Home Secretary in charge of the Transport Department on the 26th and 27th of December, 1957.
The scheme was finally approved by the Governor of Andhra Pradesh on the 7th of January, 1958, and was to come into force from the 10th of January, 1958.
The approved scheme was published in the Gazette on January 9, 1958.
In the meantime, the Government of Andhra Pradesh decided to establish a Road Transport Corporation under the , No. LXIV of 1950, for the State of Andhra Pradesh.
This decision was published on the 20th of December, 1957, and the Road Transport Corporation was to come in existence from the 11th of January, 1958.
It was to take over the business of the Road Transport Department of the State.
The members of the Road Transport Corporation were appointed on the 9th of January, 1958, and the Corporation was established with effect from the 11th of January, 1958.
It was this Corporation, which took over the duty of implementing the approved scheme, which was published on the 9th of January, 1958, and was to come into effect from the 10th of January, 1958.
The steps necessary under sections 68F, 68G and 68H of the Act to put the scheme into force were taken by this Corporation.
The argument of the petitioners under this head is put thus: There was a State Transport Undertaking under Hyderabad Act, which was operating in the present Telengana area of Andhra Pradesh.
This 365 was the Road Transport Department of the Hyderabad State, which became the statutory body under the Hyderabad Act.
When, however, the Hyderabad State came to end and the Telengana area was merged in Andhra Pradesh on the 1st of November, 1956, the State Transport Undertaking of the Hyderabad State continued to function as such for the Telengana area of Andhra Pradesh.
There was no extension of the Hyderabad Act to the rest of Andhra Pradesh, and the present scheme relates to Krishna District which is not in the Telengana area; consequently, it was not open to the State Transport Undertaking which was existing under the Hyderabad Act to frame this scheme for an area which was not in Telengana.
It was also urged that no State Transport Undertaking was formed as such after the coming into force of Chapter IV A of the Act in February, 1957.
I am of the opinion that there is no force in this argument.
It is true that tinder the Hyderabad Act, the State Transport Undertaking was defined as " the Road Transport Department of the State providing road transport service ".
When Hyderabad State came to end on the 1st of November, 1956, the Road Transport Department of Andhra Pradesh became the State Transport Undertaking within the meaning of the Hyderabad Act, though, as that Act was in force only in the Telengana area, road transport services could only be run in that area.
When, however, Chapter IV A of the Act came into force from the 15th of February, 1957, and applied to the whole of the State of Andhra Pradesh, the Hyderabad Act must be deemed to have been repealed by necessary implication, as Chapter IV A of the Act covered exactly the same field as was covered by the Hyderabad Act.
On the 15th of February, 1957, there was only Road Transport Department of Andhra Pradesh, which was in existence and which was providing transport services in certain areas of the State.
Now, under section 68A, a State transport undertaking is defined as any undertaking providing road transport service, where such undertaking is carried on by the Central Government or the State Government. " The Road Transport Department 366 of Andhra Pradesh was obviously an undertaking providing road transport service though only in a part of the State, and was carried on by the State Government of Andhra Pradesh.
Therefore, the Road Transport Department of Andhra Pradesh became the State Transport Undertaking under the definition in Is.
The fact that this undertaking which came in existence by virtue of the definition on the 15th of February, 1957, was at that time providing road transport services only in a part of the State, would not make it any the less a State Transport Undertaking within the meaning of that term and there is nothing in Chapter.
IV A, which precludes a State Transport Undertaking, which is for the time being providing transport services in a part of the State, from extending its activities and framing a scheme for other parts of the State.
I am, therefore, of opinion that a State Transport Undertaking was in existence in November, 1957, when the scheme was prepared and published, and it was the Road Transport Department of Andhra Pradesh.
The contentions on this head are two fold.
In the first place, it is urged that the General Manager, who acted for the State Transport Undertaking had no authority to do so on its behalf This is a question of fact and should have been specifically raised in the petition.
All that, however, is said about the authority of Shri Guru Pershad is to be found in paragraph 11 (e) of the petition in these words: "Mr. Guru Pershad was the General Manager of the Road Transport Department of the erstwhile Hyderabad State.
He was never appointed as Manager of the State Transport Undertaking of Andhra Pradesh, and therefore, he has no legal authority whatever to publish a scheme ".
Now, it is obvious that this objection was only confined to one point, namely, that Shri Guru Pershad had no authority to act for the State Transport Undertaking of Andhra Pradesh, as he was never appointed as manager of that undertaking.
It was not the case of the petitioners that even if he had been appointed as Manager of the Andhra Pradesh State Transport 367 Undertaking, he would have no authority to frame and publish a scheme on behalf of that undertaking.
It appears that Shri Guru Pershad, who was the Manager of the road transport services when they were run by the former Hyderabad State, continued to be such after the Telengana area of the Hyderabad State was merged in Andhra Pradesh.
It is unthinkable that Shri Guru Pershad should have issued a notification in the Gazette on the 14th of November, 1957, styling himself as " General Manager, State Transport Undertaking, Andhra Pradesh Road Transport ", if he was not in fact the General Manager of the Andhra Pradesh Road Transport.
It must, therefore, be held that Shri Guru Pershad was the General Manager of the Andhra Pradesh Road Transport, and, therefore, of the State Transport Undertaking.
His authority to publish the scheme, if he was the Manager of Andhra Pradesh State Transport Undertaking, has not been attacked.
The scheme was published on the 14th of November, 1957, by Shri Guru Pershad as such Manager.
The petitioners cannot at this stage be allowed to challenge his authority to do so, when they did not specifically raise this point in their petitions.
When, therefore, he prepared and published the scheme, it must be held that he did so on behalf of the State Transport Undertaking.
The second part of this contention is that the notification of the 14th November, 1957, does not say that the State Transport Undertaking was of opinion that it was necessary in the public interest that the road transport services should be run and operated by the State Transport Undertaking.
The actual words used in the notification are these: "In exercise of the powers conferred by section 68C of the , it is hereby proposed, for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service in public interest, to operate the following transport service as per the particulars given below with effect from a date to be notified by the Government.
" No doubt, the words " that the State Transport Undertaking is of opinion " are not expressly to be found in this notification ; but at the same time it is impossible that a proposal like this should be prepared and published on behalf of the State Transport Undertaking without its forming an opinion that it was necessary in the public interest to do so.
I am of opinion that the State Transport Undertaking must have formed the opinion necessary under section 68C before it published its proposal and invited objections to the same.
There 175 no exact form of words provided for this purpose, and it would be quite in order to draw the inference from the words used in the notification that it was published after the State Transport Undertaking had formed the opinion necessary under section 68C.
In this connexion, reference may be made to paragraph 2 of the counter affidavit filed on behalf of the Andhra Pradesh State Road Transport Corporation, where it is said that the General Manager of the Andhra Pradesh Road Transport which was the State Transport Undertaking, was of opinion that the transport services in the Krishna District of Andhra Pradesh should be operated in the public interest by the Andhra Pradesh Road Transport.
It was, however, urged on behalf of the petitioners that this only disclosed the opinion of the General Manager and not of the State Transport Undertaking; but, as I have already said above, the authority of the General Manager to speak on behalf of the State Transport Undertaking was never specifically challenged in the petition.
There is, therefore, no force in this contention, and it must be rejected.
This contention relates to the hearing by the State Government under section 68 D(2).
In order to determine this question, it is necessary to consider whether the State Government, when it gives a hearing under section 68 D(2), is acting as a quasi judicial tribunal or is merely performing administrative functions.
If the State Government acts as a quasi judicial tribunal certain considerations apply to the nature of the hearing granted ; if, on the other hand, the State Government acts administratively, certain other 369 considerations apply in determining the propriety of the hearing in fact given in this case.
The contention on behalf of the petitioners is that the hearing contemplated is as a quasi judicial tribunal.
The learned Attorney General, on the other hand, contends that the State Government merely acts administratively when it gives a hearing under this provision.
What constitutes a quasi judicial act has been considered by this Court in Province of Bombay vs Kusaldas section Advani (1).
The principle has been summarised by Das J. (as he then was) at p. 725, in these words: The principles, as I apprehend them are: (i)that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act; and (ii)that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi judicial act provided the authority is required by the statute to act judicially.
In other words, while the presence of two parties besides the deciding authority will prima facie and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi judicial act if the authority is nevertheless required by the statute to act judicially.
" Now, it may be mentioned that the statute is not likely to provide in so many words that the authority (1) ; 47 370 giving the hearing is required to act judicially; that can only be inferred from the express provisions of the statute.
In the present case, it is urged by Mr. Nambiar appearing for the petitioners that there were two parties before the State Government, which was the deciding authority under section 68D(2), namely, the objectors and the representatives of the State Transport Undertaking.
Therefore, according to him, prima facie, there would be a duty to act judicially and there is no other factor which would take away the inference to be deduced from the presence of two parties before the State Government, which has to decide the matter.
Whether there is any other factor will, however, depend upon the circumstances of each case, and the nature of the matter under hearing and the scope of the hearing.
The learned Attorney General contends that if one looks at the nature of the matter to be heard and considers the scope of the hearing before the State Government in this case the only conclusion possible is that the State Government acts administratively when it gives a hearing under section 68(2).
What then is the nature of the hearing before the State Government ? Article 19(6)(ii) is of help in this connection.
It provides that nothing in sub clause (g) of article 19(1), which deals among other things with the right to carry on trade or business shall prevent the State from making any law relating to the carrying on by the State or by a corporation owned or controlled by the State, of any trade, or business, whether to the exclusion, complete or partial, of citizens or otherwise.
Chapter IV A has been inserted in the Act to carry out this purpose, so that the State may operate transport services to the exclusion, complete or partial, of citizens.
The scheme which has been published provides that there will be a complete exclusion of citizens when the scheme is enforced in the area to which it relates.
Now, the question is whether the exclusion of citizens as a whole is also an issue to be decided by the State Government when it hears objections.
Mr. Nambiar submits that the most important thing for the State Government to decide is whether there should be complete exclusion of citizens 371 on the enforcement of the scheme.
The learned Attorney General on the other hand contends that all that the State Government has to do is to see whether the scheme published is in the interest of the public and also whether it will provide an efficient, adequate, economical and properly coordinated road transport service.
The argument continues that if the State Government comes to that conclusion, the complete exclusion which the scheme provides ipso facto follows, and the State Government has not to decide the matter of exclusion as a separate issue.
In other words, the argument is that the State Government is not to decide between the competing claims of citizens providing transport privately and the State Transport Undertaking providing transport to the exclusion of citizens, and there is, therefore, no real lis in this case.
It is also pointed out that objection can not only be filed by the bus operators of that area who are to be excluded but also by anybody who is affected by the scheme, including the members of the travelling public.
Giving, my best consideration to the arguments on either side on this aspect of the matter, I have come to the conclusion that the scope of the hearing before the State Government is of a limited character, though the decision may affect citizens providing transport, the question whether private citizens should or should not be allowed to provide transport is really not a matter in issue before the State Government.
What is in dispute before the State Government is only whether the scheme that is proposed by the State Transport Undertaking is an efficient, adequate, economical and properly coordinated scheme for road transport service and whether it is in the interest of the public.
If the State Government comes to the conclusion that it is so, a complete exclusion proposed automatically follows and the question of exclusion is not to be determined as a separate issue as between the objectors and the State Transport Undertaking.
It is true that the State Government has the right to modify the scheme and in so doing it may drop a part of the scheme; but here again it is not modifying the scheme because of any right of a 372 private citizen to carry on road transport service in a particular area but because it considers that the scheme so far as that particular area is concerned is not efficient, adequate, economical or properly coordinated or in the public interest.
Unless it comes to that conclusion with respect to any part of the area.
comprised in the scheme and modifies it, the consequence of complete exclusion ipso facto follows.
What I wish to emphasise is that the State Government is not determining whether there should be Statemonopoly or private enterprise when it is considering objections under section 68D(2); it is only deciding whether the scheme put forward before it is such as can be approved with or without modifications within the four corners of the law laid down under section 68C. If it comes to that conclusion, the complete or partial exclusion follows.
If on the other hand it modifies any part of the scheme, exclusion fails to that extent.
Considering, therefore, the nature and the scope of the hearing under section 68D(2) it seems to me that there is really no lis.
Even though there may be two parties before the State Government at the bearing, there is no determination of the rights of the parties before it.
The determination is only of the efficiency etc.
of the scheme.
proposed and whether it is in the public interest.
Therefore, it cannot be said that the nature of the hearing in this case makes the State Government a quasi judicial tribunal and the decision a quasijudicial act within the meaning of the principles laid down in Advani 's Case(1).
I may in this connexion refer to Franklin vs Minister of Town and Country Planning (2).
The facts there were these: Under the New Towns Act, 1946, the Minister prepared a draft order for a new town and caused it to be published, and notices were given to the persons affected.
Thereafter objections were received from a number of persons who were the owners and occupiers of dwelling houses and lands in the affected area.
The Act provided that on receipt of the objections, an inspector was to hold a public local inquiry into the objections and make a report to (I) ; (2) ; 373 the Minister.
Thereupon, the Minister made the order under the Act.
These proceedings, as provided by the Act, were taken with respect to a place called Stevenage in 1946 and the Minister passed the necessary order eventually.
Some of the owners and occupiers of dwelling houses and lands situate at Stevenage applied to the Court to have the order quashed, on the ground, among others, that the requirements of the said Act had not been complied with and the interests of the appellants had been substantially prejudiced.
According to them, the New Towns Act, 1946, impliedly required that the objections of the appellants should be fairly and properly considered by the Minister and that the Minister should give fair and proper effect to the result of such consideration in deciding whether the said order should be made and that such implied requirements were not complied with.
It was held in that case that the Minister of Town and Country Planning had no judicial or quasi judicial duty imposed on him and the procedure followed was according to the requirements of the Act.
Now, substitute in the place of the New Towns Act, 1946, Chapter IV A of the Act; substitute in the place of the draft order of the Minister, the draft scheme of the State Transport Undertaking ; and substitute in place of the final order, the final approval of the State Government after hearing the objections.
It would seem, therefore, that the parallel between the present case and Franklin 's case (1) is complete.
There a draft order was published, followed by objections and an inquiry and hearing and a final order.
Here also a draft scheme is published, followed by objec tions and hearing, and final approval.
There the interest of persons occupying lands and houses in the area proposed to be affected by the order were involved.
Here also the interests of the bus operators at least, if not also of the travelling public, are involved.
In spite of that it was held that the Minister had no judicial or quasi judicial duty imposed on him by the Act, and the reason was that he was merely considering whether the scheme should go through.
Once he came to that conclusion after following the procedure (1) ; 374 provided in the Act, the ' effect on those occupying lands and dwelling houses would follow, according to the provisions of the Act.
Here also once the State Government decides that the scheme should be approved, the effect would be complete or partial exclusion of the bus operators of that area, as envisaged in the scheme.
To my mind, therefore, the present case is parallel to Franklin 's case (1) and on a parity of reasoning I would hold that the function of the State Government was administrative when it considered the objections under section 68D(2) and not quasi judicial.
The only difference that I see between the two cases is that the New Towns Act provided specifically for hearing of the objections by an Inspector and not by the Minister while this is not so in the present case.
I shall consider the effect of this later; but this has in my opinion, little, if any, bearing on the question whether the State Government was acting quasi judicially when deciding objections under section 68D(2).
I may also in this connexion refer to Nagendra Nath Bora vs Commissioner of Hills Division (2), where it was held by this Court that the question whether or not an administrative body or authority functions as purely administrative or in a quasi judicial capacity, must be determined in each case on an examination of the relevant statute and rules framed thereunder.
Similar was the view expressed by this Court in Express Newspapers Ltd. vs The Union of India (3), when considering the functions performed by a wage Board, and it was observed that whether the wage Board exercised judicial or quasi judicial functions is to be determined by the relevant provisions of the statute incorporating it and it would be impossible to lay down any universal rule which would help in the determination of this question.
Applying, therefore, the principles laid down by this Court in these cases and taking into account the express provisions contained in Chapter IV A and the Rules framed thereunder, the conclusion at which I arrive is that the hearing under section 68D(2) was not before a quasi judicial tribunal and the decision was not a quasi judicial act and (I) ; (2) A. I.R. 1958 S.C. 398.
(3) A.I.R. 1958 S.C. 878.
375 the State Government was acting purely administratively.
Having reached this decision, let me see what actually happened in this case.
The matter pertains to the Road Transport Department which was in charge of the Chief Minister.
The Home Secretary works under the Chief Minister and was in charge of the Road Transport Department.
The Chief Minister ordered, when the objections were put up before him, that the representation should be heard by the Home Secretary, and thereupon, the Home Secretary heard the objectors and a note of the hearing was placed before the Chief Minister for orders.
The Chief Minister then passed the order approving the scheme.
The main attack on this kind of hearing is two fold.
It is urged in the first place that rule 10 framed under Chapter IV A of the Act provides that the objectors will be given an opportunity of being heard in person or through authorised representatives.
It is said that in view of this rule it was not open to the Chief Minister to direct the Home Secretary to bear the objections when the decision was to be made by the Chief Minister.
It is pointed out that in Franklin 's case (1) there was a specific provision that an Inspector will hold an inquiry and hear the objections and make his report, and thereafter the Minister will pass the final order on the report of the Inspector.
There is no such specific provision in the Act or the Rules in this case, and, therefore, the hearing by the Home Secretary in these circumstances cannot be said to be a hearing by the State Government or the Chief Minister who had to decide the objections.
The learned Attorney General relies in this connexion on the Rules of Business framed under article 166(3) of the Constitution which provides for the making of rules for the more convenient transaction of the business of the Government of the State, a copy of which was shown to us.
It is said in paragraph 13(1) of the counter affidavit that these Rules do not provide for personal hearing; but it is open to the Minister to pass a standing order as he thinks fit for the disposal of business in his Ministry.
Consequently, in exercise of this power, the (1) ; 376 Chief Minister passed an order that the Home Secretary should hear these representations in order to comply with the provision of Chapter IV A and Rule 10, even though there is no provision in the Rules of Business for oral hearing by the Minister or the Secretary.
It is urged by Mr. Nambiar that the order passed by the Chief Minister in this case that the hearing should be given by the Home Secretary was not a standing order but an order in this particular case.
That seems to me to be correct ; but the question is whether, when an administrative hearing of this nature is being given under a rule which provides that the State Government should give a hearing to objectors, it is necessary that the Minister who decides must also hear.
It seems to me that where the hearing is administrative, it is not essential that the Minister must hear, so long as a hearing is given by an officer of the Government.
I may in this connexion refer to article 154 of the Constitution, which provides that the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution.
This being an ad ministrative hearing comes within the executive power of the State and there would be no infirmity if the Governor, who in view of the provisions of the , is the State Government, authorised through the Chief Minister a subordinate officer to give the hearing.
Reference in this connection may also be made to Local Government Board vs Arlidge (1), which dealt with the manner of hearing of an appeal by the Local Government Board under the Housing, Town Planning &c., Act, 1909.
The following observations of Lord Haldane at p. 132 are apposite in this context : " In the case of a Court of Law tradition in this country has prescribed certain principles to which in the main the procedure must conform.
But what that procedure is to be in detail must depend on the nature of the tribunal.
In modern times it has become increasingly common for Parliament to give an appeal (1) , 132. 377 in matters which really pertain to administration, rather than to the exercise of the judicial functions of an ordinary Court, to authorities whose functions are administrative and not in the ordinary sense judicial.
Such a body as the local Government Board has the duty of enforcing obligations on the individual which are imposed in the interest of the community.
Its, character is that of an organization with, executive functions.
In this it resembles other great departments of the State.
When, therefore, Parliament entrusts it with judicial duties, Parliament must be taken, in the absence of any declaration to the contrary, to have intended it to follow the procedure which is its own, and is necessary if it is to be capable of doing its work efficiently.
" These observations show that when one is dealing with a body like the State Government one has to take into account the procedure usually followed by the State Government in matters that come before it.
In these circumstances if the Minister ordered, in the absence of specific rules on the point, that the hearing should be by the Secretary, he was, in my opinion, complying with the essential requirement, namely, that there should be an oral hearing by the State Government before the decision of the objections.
The bifurcation of the function of hearing from the function of deciding cannot in the circumstances, when the hearing was administrative, be said to be improper or against rule 10, and was necessary in order that the Government may function efficiently.
Therefore, I am of opinion that the hearing by the Secretary was sufficient compliance of rule 10, which required a personal hearing before the decision of the objections.
The second ground of attack under this head is that in any case the Home Secretary who was also in charge of the Road Transport Department was not the right person to hear the objections on the ground that the scheme was put forward by his department.
Here again the fact that the hearing was of an administrative nature has to be borne in mind.
Bearing that in 48 378 mind and also considering that it was the Chief Minister who finally decided the matter and approved the scheme, it cannot be said that the Home Secretary in charge of the Transport Department was an improper person to give the hearing.
After all, the scheme was put forward as a proposal.
It was open to approval or modification after hearing the objections.
The body which put forward the scheme was the State Transport Undertaking which was a limb of the Government.
The Government has in a case of this kind to hear objections against a scheme prepared by one of its own limbs.
In these circumstances, if the Head of the Department, namely, the Secretary hears the oral objections on a scheme prepared by some one in that department who would necessarily be under him, like the General Manager of the Road Transport Department, it does not follow that the Secretary is an improper person to give the hearing because he hears his subordinate who put forward the scheme also, along with the objectors.
Further, the Secretary in this case is not the deciding authority which is the Chief Minister ' He made notes of the hearing and conveyed the arguments to the Chief Minister, and as the matter was purely administrative, the procedure cannot be said to be improper.
I am, therefore, of opinion that the contentions under this head must be rejected.
It is said that there was no real hearing at all and no genuine consideration of the objections as the issue had already been pre judged, and reliance in this connexion is placed on the statement of the Chief Secretary dated the 26th of December, 1957.
It appears that the Chief Secretary said that the Government had already taken a decision to nationalise transport in Krishna District and some routes had been chosen.
Learned Attorney General contends that this only refers to the scheme which had already been published on the 14th of November, 1957.
Mr. Nambiar on the other hand contends that it goes much further and shows that the Government had already made up their mind to nationalise road transport in Krishna District and therefore the hearing which the State Government gave to the objectors to the scheme was 370 a farce.
Now, taking into account what I have said above about the scope of the hearing under section 68D(2), it would be clear that there was no prejudging of the issue so far as the scheme was concerned.
It is true that the Chief Secretary said that there would be nationalisation in Krishna District, which meant of course complete exclusion of the private bus operators; ' but I have already said that the scope of the hearing under section 68D(2) is to consider whether the scheme is efficient, etc., and is in public interest.
If the answer is yes, complete exclusion follows.
Therefore, when the Chief Secretary said that the Government had decided to nationalise road transport in Krishna District, he was certainly not saying that the Government was wedded to the scheme which was published and to which objections had been invited.
The speech merely emphasises the aspect of complete exclusion; but it nowhere says that the scheme which was to bring about the exclusion into effect had already been approved.
I may again in this connection refer to Franklin 's case (ibid), where also an argument was raised that the Minister was biased so far as any consideration of the draft order was concerned, as he had said in an earlier speech that he would make the said order.
It was held that as the Minister had no judicial or quasi judicial duty imposed on him, consideration of bias in the execution of this duty was irrelevant, the sole question being whether or not he genuinely considered the report and the objections.
In the present case also, the sole question was whether the objections to the scheme were genuinely considered.
If after genuine consideration they were approved, complete exclusion would follow.
Simply because the Chief Secretary said that the Government had decided to nationalise road transport in Krishna District, it did not follow that the Government was not prepared to consider fairly the objections to the scheme on the approval of which nationalisation would follow through complete exclusion.
Considering, therefore, that the hearing before the State Government under section 68D(2) was purely administrative, there is no force in this objection.
380 Re.
It is urged that the scheme was proposed by the Andhra Pradesh Road Transport Department as the State Transport Undertaking within the meaning of section 68A and was approved while that undertaking was still in existence.
But immediately after the scheme was approved the Undertaking came to an end and the Road Transport Corporation came into existence and that Corporation could not carry out the scheme which had been approved before it came into existence.
The argument seems to be that the body which prepared the scheme and got it approved is the body which can enforce it, and as the Road Transport Corporation neither prepared it nor got it approved, it cannot enforce it.
I am of opinion that there is no force in this contention.
The Road Transport Corporation came into existence oil the 11th of January, 1958.
On the same date the State Government passed an order under section 34 of the Road Transport Corporation Act No. LIV of 1950 by which it directed that the Corporation shall take the management of the Road Transport Department of the Government of Andhra, Pradesh and all assets and liabilities of the Department shall pass to the Corporation.
The staff of the Road Transport Department were given option to serve under the Corporation and direction was given that those who opt to serve the Corporation shall be employed by the Corporation subject to the regulations made under the Act and the assurance given by the Government to the employees.
It was urged in the first place that such an order could not be passed under section 34 of the Road Transport Corporation Act.
Section 34, however, gives very wide powers to the State Government to give directions to the Corporation, including directions relating to the recruitment, condition of service and training of its employees, wages to be paid to the employee, reserve to be maintained by it and disposal of its profits or stocks.
In the circumstances, it was open to the State Government, under the wide powers Conferred by section 34 of the Road Transport Corporation Act, to ask the Corporation which was being created to take over the assets, liabilities and the employees of the Road Transport 381 Department which was being wound up.
Now, the effect of this order was to make the Road Transport Corporation a successor of the Road Transport Department.
It is true that there is nothing in Chapter IV A of the Act which provides for succession of one kind of undertaking as defined in section 68A(b) by another kind of undertaking as defined therein, but when in fact it happens that the Road Transport Corporation is ordered under section 34 of the Road Transport Corporation Act to take over everything from the Road Trans port Department, there is no reason why it should not be considered to be the successor of the Road Transport Department which was at that time the State Transport Undertaking.
If the Road Transport Corporation is thus a successor of the State Transport Undertaking from the 11th of January, 1958, I do not see why it cannot enforce the scheme which had already been approved at the instance of its predecessor.
I can see no sense in requiring the Road Transport Corporation to go through all these steps which had been gone through by its predecessor, except that it would delay the coming into force of the scheme ; probably, the argument has been raised merely for the sake of delay.
But I am of opinion that the Road Transport Corporation in this case being the successor of the State Transport Undertaking which got the Scheme prepared and approved is en titled to enforce it under section 68 F of Chapter IV A in the absence of any provision to the contrary in the Chapter.
This contention also fails.
In view of what I have said above on the second contention, the petition fails and I would dismiss it with costs.
SINHA, J. I have had the advantage of perusing the judgments prepared by our brothers, Subba Rao and Wanchoo, JJ.
After giving my best consideration to the opinions expressed in the two judgments, I have come to the conclusion that I am not in a position to agree with all the conclusions arrived at by our brother Subba Rao.
Two main controversies were raised on behalf of the petitioners, namely, (1) that the provisions of Chapter 382 IVA of the (which will be referred to in the course of this judgment as the Act), violate the fundamental rights guaranteed to citizens of India under the Constitution, and (2) that the scheme framed under the Act, was ultra vires the Act.
I agree with my brother Subba Rao that the said Chapter IVA of the Act does not infringe any fundamental rights of the petitioners, and that those provisions are constitutionally valid.
I also agree with him in holding that the Road Transport Department of the Andhra Pradesh Government, is a State Transport Undertaking under the Central Act; that the Notification publishing the scheme had been validly done, and that the conditions precedent to the initiation of the scheme, had been fulfilled.
But I do not agree with him in his conclusion that the State Government, in approving the published scheme, was discharging any judicial or quasi judicial function.
On the other hand, I agree with my brother Wanchoo in his conclusion that in so doing, the State Government was only performing its normal administrative function.
As my learned brothers aforesaid have stated the relevant facts in detail, it is not necessary for me to repeat them, but as I differ from my learned brother Subba Rao, with whom some of my colleagues on the Constitution Bench have agreed, and for whose opinions, I have the greatest respect, I should state my reasons for differing from them and for agreeing with our brother Wanchoo.
It may be taken as the settled view of this Court that the question whether a certain decision envisaged in a statute, is judicial or quasijudicial or only administrative in character, must de pend upon the terms of the statute law itself, apart from any pre conceived notions about the functions of a court or other tribunals vested with the duty and jurisdiction to decide controversies as a judicial body, vide Province of Bombay vs Kusaldas section Advani (1), Nagendra Nath Bora vs Commissioner of Hills Division(2) and Express Newspapers Limited vs Union of India (3).
Now, let us see what has been envisaged by the im (1) ; (2) ; (3) 383 pugned provisions of Chapter IVA of the Act.
The first step in the process is the preparation of a scheme of road transport service by a State Transport Undertaking "for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service.
" Such a scheme may be to the exclusion, complete or partial, of other persons or otherwise.
The second step would be to publish such a scheme in the Official Gazette and also in such other manner as the State Government may direct, giving particulars of the nature of the service proposed to be rendered, area or route proposed to be covered and other prescribed particulars (section
68 C).
The third step in that process is the filing of objections to the scheme by any person affected by the scheme so published.
Those objections have to be filed before the State Government within thirty days from the date of the publication of the scheme (section
68 D (1)).
The fourth step is to be taken by the State Government, of considering the objections after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking, to be heard (section
68 D(2) ).
And the last step is that after hearing all concerned, the State Government may approve or modify the scheme.
It is noteworthy that this section does not contemplate an outright rejection of the scheme but only a modification, if it is necessary.
The scheme as approved or modified, has then to be published in the Official Gazette, and thereupon, the scheme becomes final.
Such a scheme is called the "approved scheme ", and the area or route to which it relate,,;, is called the "notified area" or "notified route" Is.
68 D(3) ).
The approved scheme may at any time be cancelled, or modified by the State Transport Undertaking, according to the procedure already indicated, as contained in section 68 C and section 68 D, if it is proposed to modify it (section 68 E).
The provisions of Chapter IV, relating to the grant of stage carriage permits, etc., have been abrogated so as to make it obligatory on the Regional Trans port Authority to issue permits applied for by a State Transport Undertaking, in pursuance of the approved scheme.
Not only that, with a view to giving effect 384 to the approved scheme in respect of a notified area or notified route, the Regional Transport Authority has been authorized to refuse renewal of any permit, to cancel any existing permit, or to modify the terms of any existing permit (section
68 F).
The provisions of section 64, relating to appeals by aggrieved persons against orders of refusal to grant a permit, or of revocation or suspension of a permit, or of refusal to renew a permit, etc., have been abrogated in so far as those orders have been passed under section 68 F. A review of the provisions aforesaid, contained in sections 68 C to 68 F in Chapter IV A, leads to the following conclusions: (1)A State Transport Undertaking has been authorized to determine whether or not it is in the public interest that road transport services in general, or any particular class of service, should be run and operated by the State Undertaking, in relation to any area or route or a portion thereof, keeping in view the purpose of providing an efficient, adequate, economical and properly coordinated road transport service.
It is for the State Transport Undertaking to prepare a scheme in furtherance of its determination in favour of such a service, and to publish the same in the Official Gazette and elsewhere, with a view to informing the public, including those who may be affected by such a scheme.
(2) Objections to such a scheme may be taken by parties interested, but such objections are not claims.
(3) The State Government is authorized to decide the question whether the proposed scheme should be approved or modified, after hearing the parties or their representatives in support of their objections to the scheme.
As the objections have to be directed to the merits of the scheme proposed by the State Transport Undertaking, there is no question of any lis between conflicting claims.
(4) No particular person or body of persons in the Governmental hierarchy of officers, has been designated as the Authority to hear the objections and to pronounce upon them, unlike the provisions in Chapter IV.
Neither the provisions in Chapter IV A nor the rules made in pursuance of section 68 1, contemplate 385 adducing evidence or calling witnesses in support of or in opposition to the proposed scheme.
(5)The right of appeal as contemplated by section 64 in Chapter IV, has been expressly abrogated by section 68 F(3).
Nor is there any provision in Chapter IV A, requiring reasons to be given in writing for an order.
passed by a Regional Transport Authority under section 68 F(1) and (2), as contrasted with section 57(7) in Chapter IV, which requires the Authority to give its reasons in writing for refusing an application for a permit of any kind, because such an order is open to appeal, revision or review.
The question now arises whether, in view of the provisions of Chapter IV A, summarized above, and the conclusions as indicated above, the determination by the State Government is judicial or quasi judicial in character, as contended for the petitioners, or only of an administrative character, as contended on behalf of the respondents.
In order that a determination may be characterized as judicial or quasi judicial, it is essential that it should be objective, based on evidence pro and con (not necessarily given in accordance with the strict rules of evidence) by a determinate authority who should not have the right to delegate such a function of a judicial character.
Section 68 D(2) authori zes the State Government to decide whether or not the proposed scheme should be approved or modified.
' The "State Government" may mean the Governor himself or any of his Ministers or Deputy Ministers or any officers in the Secretariat, according to the rules of business promulgated under article 166 of the Constitution.
Section 68 D(2) could not have meant that the Governor himself or any of his Ministers should personally hear the objections that would be throwing too great a burden on them.
The objections may be heard by any one who has been delegated that power.
If that is correct, the function to be performed under section 68 D(2), does not satisfy the test of a judicial hearing.
Under that section, the objections may be heard by 'A ' and the decision arrived at by 'B '.
If that is 49 386 a regular procedure under that section, that is not an index of a judicial process.
Another very important consideration pointing to the conclusion that the determination under section 68 D(2) is not of a judicial character (using it in the comprehensive sense, including 'quasi judicial ', which expression has not been approved by high judicial authorities), is that no objective tests have been laid down in Chapter IV A with reference to which, the determination has to be arrived at.
The expressions "efficient", "adequate", "economical", "properly coordinated" and "public interest", are matters of opinion and policy as section 68 C itself indicates, and do not lay down any objective tests.
If I am right in that conclusion, there cannot be any question of evidence forthcoming in proof of something which is subjective to the authority determining that matter.
A very fundamental consideration in this connection, is whether sections 68 C and 68 D contemplate any lis.
In other words, what is the proper scope and ambit of the inquiry envisaged by those sections ? The scheme prepared and published in accordance with section 68 C, by a State Transport Undertaking, is placed before the public only after the Undertaking has reached the conclusion that it is necessary in the public interest.
After the scheme has been prepared and published as aforesaid, the objections to be filed under section 68 D have reference to the basic question whether or not the scheme as published, was in public interest.
Such objections are open to any person or organization, e.g., an Automobile Association, and are not limited only to persons who are providing road transport services.
In my opinion, it is a mistake to suppose that the objections contemplated by section 68 D(l), could be on grounds personal to the objectors who are engaged in the business of providing road transport services.
It is not open to any particular individual carrying on the business of providing road transport services, to claim that his route should be excluded from the operation of the published scheme.
I am led to that conclusion by the effective words of section 68 D(l), namely, "file objections thereto", that is, to the scheme published under section 68 C. 387 The objections have to be limited to the merits of the scheme as propounded by the State Transport Undertaking.
It will, therefore, be opening the gates too wide to hold that the objections have reference to particular routes or portions of routes covered by private transport services.
The underlying purpose of inviting objections, is not to invite "claims" by individual businessmen engaged in providing road transport services, but to bring out useful information bearing on the feasibility and soundness of the scheme, as propounded by the Undertaking.
Once, the Government has decided upon a policy of nationalization of road transport facilities, the question of safeguarding the interest of individual businessmen in that line, is no more relevant.
What is relevant.
for the purpose of the inquiry by the Government, on receipt of objections, is whether the published scheme is in the interest of the public.
In my opinion, therefore, it is erroneous to suppose that the object of section 68 D(l) is to afford any remedy to a private individual in his personal interest.
Particulars of the scheme required to be published under section 68C, are meant for the information of the public, so that persons feeling interested in a public venture like that, may offer intelligent and constructive criticism with reference to the merits of the scheme.
It is equally erroneous to suppose that there are two parties one, represented by the Undertaking, and the other, represented by persons who are engaged in the business of providing road transport services and that the Government is the third party, which is the arbitrator between the two contesting parties.
That, in my opinion, is not a correct reading of the provisions of Chapter IV A of the Act.
The whole aim and object of that Chapter is to replace individual businessmen engaged in that trade, by nationalised road transport services which are meant to be run in the interest of the community as a whole, and thus to serve the best public interest.
The Government is as much interested in the scheme as the Road Transport Undertaking which is a creature and a limb of the Government, brought into existence with a view to implementing the policy of the Government to provide nationalised 388 road transport services.
That being the whole scheme of the policy of nationalisation, it is not correct to represent the State Transport Undertaking as entering into competition with other individuals or incorporated bodies whose business it is to provide the same kind of transport facilities.
That is made clear by the provisions of section 68 F, which, as indicated above, make it obligatory on the Regional Transport Authority to issue permits as applied for by the State Transport Undertaking.
It follows from the foregoing observations that there is no question of the Government functioning as an adjudicating authority as between the rival claims of the Undertaking and private persons engaged in the same kind of activity, or that the Secretary to Government in the Department of Road Transport, when he personally heard the objections, was functioning as a judge, or that he was disqualified, by any bias, from hearing those objections.
If we carry this line of reasoning to its logical conclusion, then even the Minister in charge of the Department, may be said to be equally interested, and therefore, equally biased, and thus, disqualified from hearing those objections and coming to his own determination, as contemplated in section 68 D(2).
In my opinion, the concept that a person should not be a judge in his own cause, is wholly foreign to the scheme and provisions of Chapter IV A of the Act.
The scheme as prepared and published, may have proposed, as it did in the instant case, completely to exclude other persons from providing road transport service in the notified area by the notified routes.
But the State Government is not concerned with determining whether any or some or all of the objectors could be permitted to provide or continue to provide their own road transport service.
The State Government under section 68 D(2) has only to decide whether or not the proposed scheme should be approved or modified in any way.
The decision to be arrived at by the State Government, is confined to the scheme, and is not concerned with rival claims by persons providing road transport service in the same area or by the same routes.
That, in my opinion, is the reason why under that section, the State Government has not been authorized altogether to.
389 cancel the scheme, but only to approve or modify it.
The State Government has to examine the soundness of the declaration made by the Road Transport Undertaking that the proposed scheme is in public interest.
The stage of cancellation comes, if at all, later under section 68 E, when experience gained in working the approved scheme, may lead the State Transport Undertaking to the conclusion that it should be cancelled or modified.
But at the initial stage, that is to say, under section 68 D, the proposed scheme is already there only to be approved or modified in the light of the objections raised, if any.
It has been held and it may be taken as well settled that when there is a competition between a number of applicants for a particular route for supplying road transport service, the Regional Transport Authority or any other Authority deciding between those conflicting claims, has to determine the matter in a quasijudicial way, because they are determining questions affecting the rights of individuals.
But in the proceeding before the State Government, no such rival claims have to be decided upon.
What has to be determined is whether the proposed scheme will serve public interest.
Thus, in proceedings under Chapter IV of the Act, individual claims have to be decided upon, whereas under Chapter IVA, it is the collective interest of the community as a whole, which is the subjectmatter of determination by the State Government.
In other words, the proposed scheme is the outcome of the decision by a limb of the State Government (State Transport Undertaking), which has come to the con clusion that it is in the public interest that road trans port service should be run and operated by the State.
The calling of objections by persons affected by the scheme, is not with a view to deciding between the rival claims of the State Undertaking and individuals providing road transport services in the areas or routes proposed to be covered.
The State Transport Undertaking has not made any claim at this stage.
Such a claim arises after the determination by the State Government Under section 68D(2).
That stage is reached when the State Transport Undertaking applies for permits under section 68F.
Such a claim for a permit, once 390 made by the Undertaking, is no more a rival claim to be treated along with the claims of other individuals providing such road transport services, but an absolute claim which under that section shall be granted by the Regional Transport Authority which is authorized even to cancel an existing permit or modify the terms of an existing permit, or to refuse renewal of permits, with a view to implementing the approved scheme.
In my opinion, therefore, it is not correct to view the proceedings under Chapter IVA before the State Government as a lis between any rival claims, unlike proceedings under Chapter IV of the Act.
In view of these considerations, I would hold that there is no lis between rival claims, no determinate tribunal to determine any lis, and no procedure prescribed in Chapter IVA approximating or even simulating judicial procedure.
That being so, there is no question of any bias, because there can be none in a determination which is come to by officers of the Government in the discharge of their administrative duties.
As already indicated, the question now under consideration, does not admit of a general answer.
The answer must depend upon the relevant statutory provisions, and one case decided on its own basic statutory provisions, cannot be a controlling authority for another; but, by way of illustration, reported cases dealing with similar questions, have been referred to.
My learned brother Wanchoo, J., has referred in detail to Franklin 's case, hence, I need not add any observations with reference to that case.
But another case, namely, Robinson vs Minister of Town and Country Planning (1), perhaps, not referred to at the bar, seems to me to be instructive in so far as it has discussed this very question with reference to the provisions of section 1(1) of the Town and Country Planning Act, 1944, which is in these terms: : " Where the Minister of Town and Country Planning (in this Act referred to as 'the Minister ') is satisfied that it is requisite, for the purpose of dealing satisfactorily with extensive war damage in the area of a local planning authority, that a part or parts of their (I) , 853, 854.
391 area, consisting of land shown to his satisfaction to have sustained war damage or of such land together with other land contiguous or adjacent thereto, should be laid out afresh and redeveloped as a whole, an order declaring all or any of the land in such a part of their area to be land subject to compulsory purchase for dealing with war damage may be made by the Minister if an application in that behalf is made to him by the authority before the expiration of five years from such date as the Minister may by order appoint as being the date when the making of such applications has become practicable.
A part of the area of a local planning authority as to which the Minister is satisfied as aforesaid is in this Act referred to as an 'area of extensive war damage '.
" Lord Greene, M. R., who delivered the leading judgment of the Court of Appeal, reversing that of Henn Collins, J. thus summarized the procedure laid down in the Act : " The procedural provisions in connection with the obtaining of an order under the sub section may, so far as relevant, be summarised as follows: (a) Under sub section
(4) at least two months before the application is made the authority must publish a notice in a local newspaper; (b) under sub section
(5) the application must 'designate ' the land to which the application relates by reference to a map with or without descriptive matter ; (c) under sub section
(6) the a application must be accompanied by a statement illustrated by a map, for indicating the manner in which it is intended that the land in the area of extensive war damage should be laid out as respects its internal arrangement and in relation to the existing or intended lay out of the surrounding locality, and the manner in which it is intended that such land should be used whether for purposes requiring the carrying out of development or otherwise '; (d) under sub section
(7) if the Minister is satisfied that these particulars are adequate for enabling the expediency of the making of an order ' to be properly considered, he notifies the authority who must then advertise for objections; (e) under sched.
I unless the Minister, apart from an objection (which must be accompanied by a 392 written statement of its grounds) decides to refuse the application or to make an agreed modification to meet the objection, he must 'consider the grounds of the objection as set out in the statement ' and may call for a further statement.
Under para.
4 of the schedule the Minister, 'if satisfied that he is sufficiently informed, 'for the purpose of his deciding as aforesaid (sc.
whether or not to make the order applied for), as to the matters to which the objection relates ' he may decide to make the order without further investigation.
Subject, to this, the Minister (para. 5) must give the objector an opportunity of appearing before a person nominated by the Minister and, if the objector avails himself of this, a similar opportunity to the authority.
Under para.
6, if it appears to the Minister that the matters to which the objection relates call for investigation by a public inquiry, he must cause such an inquiry to be held, in which case, the requirements of para.
5 as to a private hearing need not be complied with; (f) under section 1(8), subject to the provisions of sched.
1, the Minister may make the order with or without modification, except that he cannot extend the area unless all persons interested consent.
" In the case of Phoenix Assurance Co., Ltd. vs Minister of Town and Country Planning (1), Henn Collins, J. considered the nature of the order to be passed under section I (I) of the Town and Country Planning Act, 1944, and came to the conclusion that the Minister 's function was of a quasi judicial character.
He followed that decision in the case which came up before the Court of Appeal in Robinson vs Minister of Town and, Country Planning (2).
The Court of Appeal reversed the decision of the learned Judge, and did not approve of his decision in Phoenix Assurance Co., Ltd. vs Minister of Town and Country Planning (1).
In the course of his judgment, Lord Greene, M. R., observed as follows at page 859: " It is the case of an original order to be made by the Minister as an executive authority who is at liberty to base his opinion on whatever material he thinks fit, (I) (2) , 853, 854.
393 whether obtained in the ordinary course of his executive functions or derived from what is brought out at a public inquiry if there is one.
To say that, in coming to his decision, he is in any sense acting in a quasi judicial capacity is to misunderstand the nature of the process altogether.
I am not concerned to dispute that the inquiry itself must be conducted on what may be described as quasi judicial principles, but this is quite a different thing from saying that any such principles are applicable to the doing of the executive act itself, i.e. , the making of the order.
The inquiry is only a step in the process which leads to that result, and there is, in my opinion, no justification for saying that the executive decision to make the order can be controlled by the courts by reference to the evidence or lack of evidence at the inquiry which is here relied on.
Such a theory treats the executive act as though it were a judicial decision (or, if the phrase is preferred, a quasi judicial decision) which it most emphati cally is not.
" I have devoted considerable space to the decision of the Court of Appeal, (supra), to show the close resemblance between the procedure envisaged in the Act of the British Parliament, and the law as laid down in Chapter IV A of the Act.
In the reported case also, there had to be an inquiry if objections were raised to the notified scheme of town planning, and the Minister concerned had to consider all the evidence led on behalf of the objectors.
In that case, unlike the instant case, there was a provision for receiving evidence pro and con, but even then, the Court of Appeal did not hold that the function of the Minister was of a judicial or quasi judicial character, chiefly on the ground that no objective tests were possible in coming to his conclusions before passing the order under the relevant section of the Act of Parliament.
For the reasons given above, I have come to the conclusion, in agreement with my brother Wanchoo, J., that the Government or the Minister concerned, when passing an order under section 68 D(2), had not to discharge a quasi judicial function, but was acting only in its or 50 394 his administrative capacity.
It follows from this con clusion that all considerations flowing from the basic idea of the proceedings before the State Government being of a quasi judicial character, are wholly out of the way.
It must, therefore, be held that the order of the State Government, impugned in this case, is not open to any interference by the courts.
I would, therefore, dismiss the petition with costs.
ORDER In view of the opinion of the majority the order approving the scheme is hereby quashed and a direction issued to the first respondent to forbear from taking over any of the routes in which the petitioners are engaged in transport business.
This will not preclude the State Government from making the necessary enquiry in regard to the objections filed by the petitioners in accordance with law.
The petitioners will have liberty to file additional objections, if any.
The parties to bear their own costs.
| IN-Abs | With a view to nationalise the road transport services under Ch.
IV A of the (IV Of 1939), inserted into it by the amending Act 100 of 1956, the General Manager of Andhra State Transport Undertaking published a scheme under section 68C of the Act in the Official Gazette and invited objections thereto.
By an order of the Chief Minister the objections were received and heard by the Secretary to the Home Department, who was in charge of Transport, but were decided by the Chief Minister.
The State Government approved of the scheme and published it in the Official Gazette.
The petitioners, who were plying their buses on various routes in the Krishna District as permit holders under the Act, apprehending that their routes would be taken over by the newly established State Corporation in implementation of the scheme, applied to this Court for the protection of their fundamental rights to carry on their business.
It was contended, inter alia, on their behalf, (i) that Ch.
IVA of the Act was a piece of colourable legislation whose real object was to take over their business, under cover of cancellation of permits, in contravention of article 31 of the Constitution, (2) that the scheme itself was ultra vires the Act, for the reason, amongst others, that the State Government whose duty it was to act judicially in approving the scheme, had transgressed certain fundamental principles of natural justice.
Held (Per curiam), that the question of colourable legislation was, in substance, really one of legislative competence of the legislature that enacted it.
The legislature could only make laws within its legislative competence.
Its legislative field might be circumscribed by specific legislative entries or limited by fundamental rights created by the Constitution.
The legislature could not over step the field of its competency, directly or indirectly.
It would be for the Court to scrutinize if the legislature in purporting to make a law within its sphere, in effect and substance, 320 reached beyond it, it had infact the power to the law, its motive in making it would be irrelevant.
K. C. Gajapaji Narayan Deo vs The ' State of Orissa, [1954] S.C.R. i, followed.
The State of Bihar vs Maharajadhiraja sir Kameshwar singh of darbhangha considered So judged; it could not said that CH.
IVA of the Act was a colourable piece of legislation.
The power vested in the Regional ' Transport Authority by section 68F of the Act involved no transfer of business of the ,existing permit holders to the State Transport Undertaking nor could the latter be said thereunder to take over any assets of the former.
Section 68G of the Act in providing for compensation for un expired period of the permit did not imply that CH.
IVA of the Act involved any transfer of property or possession so as to entitle the permit holder to any compensation under article 31(2) Of the Constitution.
Chapter 1VA of the Act did not, therefore infringe the fundamental right of the petitioners under ' article 31 Of the Constitution.
Per Das, C. J., Bhagwati, and Subba Rao, jj.
While the purpose of section 68C of the Act was no doubt to provide a scheme of road transport service on the lines prescribed by it, the scheme proposed might affect the rights of individual permit holders by excluding them, partially or completely, from the business in any particular route or routes, and the procedure prescribed by section 68D and Rules 8 and 10 framed under the Act, required that the Government should hear both the objectors and the State Transport Undertaking before approving or modifying the scheme.
There was no doubt, therefore, that the State was deciding a lis and it was to do so judicially.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, and Express Newspapers Ltd. vs The Union of India, , relied on.
Franklin vs Minister of Town and Country Planning, [19481 A. C. 87, held inapplicable.
It was a fundamental principle of natural justice that the authority empowered to decide a matter must have no bias in it and another, no less fundamental, was that where the Act provided for a personal hearing the authority that heard the matter must also decide it.
The procedure followed in the instant case whereby the Home Secretary, in charge of Transport, himself a party to the dispute, heard the objections and the Chief Minister decided them, violated those principles, and the order of the State Government approving the scheme, therefore,must be quashed.
Per Sinha and Wanchoo, jj.
The sole object of Ch.
IVA, of the Act was to nationalise the road, transport services and the inquiry envisaged by it was of a limited character.
That inquiry 321 was meant to find out whether the scheme propounded was in public interest as required by section 68C of the Act, and not to adjudicate rival claim of permit holder on the one hand and the State Transport Undertaking on the other ; for, on approval of the scheme, exclusion of private transport as proposed by the scheme was bound to follow as a matter of course.
There could, therefore, be no lis, and the Government in approving or modifying the scheme under Ch.
IVA and the Rules framed thereunder must be held to act in its normal administrative capacity.
No objections could be taken, in the instant case, to the procedure adopted by the Government in empowering the Secretary to hear objections while the Chief Minister decided them, and the Secretary could in no sense be a party to any dispute.
Province of Bombay vs Kusaldas section Advani, ; , Nagendra Nath Bora vs Commissioner, Hills Division, ; and Express Newspapers Ltd. vs The Union of India, , referred to.
Franklin vs Minister of Town and Country Planning, [19481 A.C. 87, applied.
Robinson vs Minister of Town and Country Planning, [1947] I All E. R. 851, referred to.
|
Civil Appeal No. 626 of 1975 etc.
From the Judgment and Order dated 28.7.
1972 of the Calcutta High Court in Civil Rule No. 2029 of 1967.
P.K. Mukherjee.
D.N. Mukherjee, N.R. Choudhary.
Ranjan Mukherjee.
Somnath Mukherjee.
for the Appellants.
Sukumar Ghosh.
D.P. Mukherjee and G.S. Chatterjee.
for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
All these cases involve a common point which has been decided by a Full Bench of the Calcutta High Court reported as Madan Mohan Ghosh vs Shishu Bala Atta, AIR 1972 Cal.
Civil Appeal No. 626/75 is a direct appeal from the judgment of the Full Bench in one of the batch of cases dealt with therein.
In the other cases, the High Court has decided the matter by following the Full Bench decision and that is the subject matter of appeal before this Court.
Basically, the question is whether the right of pre emption conferred on co sharers under the Bengal Tenancy Act, 1885 (hereinafter referred to as 'the Tenancy Act '), is available to the holders after their interests in the holding have vested in the Government under the West Bengal Estates Acquisition Act, 1953 (hereinafter referred to as 'the 1953 Act ').
This question has been answered by the Full Bench (Coram: A.K. Mukherjea, Sabyasachi Mukharji and M.M. Dutt, JJ.) in the negative and it is the correctness of this conclusion that is assailed in these proceedings.
To provide a factual background it may be sufficient to set out the brief facts in C.A. No. 626/75.
The respondent, Smt.
Gangamoni Mondal, purchased, on 29.
1963, the suit property being land measuring about 15 acres.
She excavated a portion of the land, filled up other portions of it, constructed a small structure thereon and started living there from 1964.
About three years and five months after her purchase, Ardhendu Bhusan Halder, the predecessor in inter est of the appellants, made an application for pre emption under section 26 F of the Tenancy Act.
His case was that he was a Co sharer Of the holding which comprised the land purchased by the respondent.
The holding was previously a Raiyati Mokarari interest and it had vested in the State under the provisions of the 1953 Act.
The case of the re spon 530 dent was that.
though the predecessor in interest of the appellant and her vendor were the joint holders of the property in question.
the right of pre emption available to the co sharer had ceased with the coming into force of the 1953 Act.
The pre emption.
application was allowed by the learned Munsif and his order was confirmed by the learned Additional District Judge.
The respondent moved the High Court in revision.
The matter came up for hearing before the two learned Judges of the Calcutta High Court who referred the matter to the Full Bench.
The question.
as already stated.
was answered by the Full Bench in the negative with the result that the application for preemption stood dis missed.
Hence the appeal before us.
The other appeals before us also involve the same point but there are some difference.
We shall refer to these aspects later, to the extent necessary.
The question raised lies within a very narrow compass.
The relevant statutory provisions may first be set out.
As already mentioned, the Tenancy Act provides, in section 26 F. that except in the case of a transfer to a co sharer in the tenancy whose existing interest has accrued otherwise than by purchase, one or more cosharer tenants of the hold ing, a portion or share of which is transferred.
may apply to the Court for the said portion or share to be transferred to himself of themselves.
In other words, the section con ferred, On a co sharer tenant of an occupancy holding, a right to compel another co sharer tenant to sell his share in the holding to him instead of to a stranger.
The term "co sharer" envisages that the holding must be under the ownership of more than one person.
The holding must be an OCCupanCy holding: that is.
it must be the holding of raiy ats having occupancy rights.
So long as a division of the holding does not take place in accordance with section 88 of the Tenancy Act.
the holding remains a joint holding and each co sharer will be entitled to pre empt in case of transfer of a share or portion of the holding by a co sharer to a stranger.
The 1953 Act came into force on February 12, 1954.
Sub section (1) of section 4 of the Act provides that the State Government may from time to time by notification declare that with effect from the dale mentioned in the notifica tion.
all estates and the rights of every intermediary in each such estate situate in any district or part of a dis trict specified in the notification shall vest in the State free from all incumbrances.
Pursuant to section 4(1), a notification was published, which prescribed the date of vesting as 15th April.
The term 531 "intermediary" was defined in the Act to mean "a proprietor, tenureholder.
under tenure holder or any other intermediary above a raiyat or a non agricultural tenant ' '.
Thus a raiyat was not an intermediary.
However, Chapter VI of the Act contains provisions for acquisition of interests of raiyats and under raiyats.
Under section 49, the provisions of Chapter VI were to come into force on such date and in such district or part of a district as the State Government may, by notification in the Official gazette, appoint.
The notification under section 49 was published on 9th April, 1956, by which Chapter VI was brought into force in all the districts of West Bengal with effect from April 10, 1956.
The effect of such a notification was that the provisions of the earlier Chapters of the Act became operative mutatis mundandis "to raiyats and under raiyats as if such raiyats and under raiyats were intermediaries and the land held by them were estates and a person holding under a raiyat or an under raiyat were a raiyat for the purpose of clauses (c) and (d) of section 5." Notifications were issued under section 4 by the State Government as a result of which the interests of raiyats and under raiyats vested in the State with effect from April 14, 1956.
As already mentioned, the effect of 1953 Act was to vest the rights of intermediaries (an expression subsequently extended to cover raiyats and under raiyats) in the State Government.
However, section 6 confers certain rights on the intermediaries to retain certain lands.
The relevant por tions of section 6 can be extracted for purpose of conven ient reference.
Right of intermediary to retain certain lands.
(1) Notwithstanding anything contained in sections 4 and 5, an intermediary shall, except in the cases mentioned in the proviso to sub section (2) but subject to the other provi sions of that sub section, be entitled to retain with effect from the date of vesting (a) land comprised in homesteads; (b) land comprised in or appertaining to buildings and structures, owned by the intermediary or by any person, not being a tenant, holding under him by leave or licence.
XXX XXX XXX (c) non agricultural land in his khas possession, including land held under him by any person not being a tenant, by 532 leave or licence, not exceeding fifteen acres in area, and excluding any land retained under clause (a); Provided that the total area of land retained by an interme diary under clauses (a) and (c) shall not exceed twenty acres, as may be chosen by him: Provided further that if the land retained by an intermedi ary under clause (c) or any part thereof is not utilised for a period of five consecutive years from the date of vesting, for a gainful or productive purpose, the land or the part thereof may be resumed by the State Government subject to payment of compensation determined in accordance with the principles laid down in section 23 and 24 of the Land Acqui sition Act, 1894 (Act I of 1894); (d) agricultural land in his khas possession not exceeding twenty five acres in area.
as may be chosen by him; Provided that in such portions of the district of Darjeeling as may be declared by notification by the State Government to be hilly portions, an intermediary shall be entitled to retain all agricultural land in his khas possession, or any part thereof as may be chosen by him." In other words.
broadly speaking, the intermediary was allowed to retain agricultural land upto the extent of twenty five acres and nonagricultural land to the extent of fifteen acres, leaving out the special provisions in respect of homesteads, lands on which buildings are put up and lands in the hilly areas of Darjeeling.
Section 52 while applying these provisions to raiyats and under raiyats, states: "Provided that where raiyat or an under raiyat retains.
under section 6 read with this section.
any land comprised in a holding, then notwithstanding anything to the contrary contained in sub section (2) of section 6, he shall pay : (a) in cases where he was paying rent for the land comprised in the holding and held by him immediately before the date of vesting (hereafter in this proviso referred to as the holding lands), (i) if he retains all the holding lands, the same rent as he 533 was paying therefore immediately before the date of vesting, and (ii) if the land retained by him forms part of the holding lands, such rent as bears the same proportion to the rent which he was paying for the holding lands immediately before the date of vesting as the area of the land retained by him bears to the area of all the holding lands; (b) in cases where he was liable to pay rent but was not paying any rent for the holding lands immediately before the date of vesting on the ground that the rent payable by him therefore was not assessed, such rent as may be assessed, mutatis mutandis, in accordance with the provisions of section 42; (c) in cases where he was liable to pay rent wholly in kind or partly in kind and partly in cash, then notwithstanding anything contained in clause (c) of section 5, such rent as may be assessed in accordance with the provisions of section 40, and (d) in cases where he was liable immediately before the date of vesting to pay for the holding lands a variable cash rent periodically assessed, such rent as may be assessed, mutatis mutandis in accordance with the provisions of section 42.
" By a notification dated 28.5.
1984, the Government of West Bengal framed rules called the West Bengal Estates Acquisition Rules.
1954 (hereinafter referred to as 'the rules ').
Rule 4 originally provided that: "every intermediary who retains possession of any land by virtue of the provisions of sub section (1) of section 6, shall, subject to the provisions of the Act, be deemed to hold such land from the date of vesting (a) If it is agricultural land, on the same terms and condi tions as an occupancy raiyat under the Bengal Tenancy Act, 1885; (b) If it is non agricultural land on the same terms and 534 conditions as a tenant under the West Bengal Non agricultur al Tenancy Act, 1949, holding non agricultural land for not less than 12 years without any lease in writing.
" The following rule 4 was substituted for the above rule by a notification dated 7th September, 1962: "4.
Any land retained by an intermediary under the provi sions of sub section (1) of section 6 shall, subject to the provisions of the Act be held by him from the date of vest ing on the terms and conditions specified below: XXX XXX XXX (3) if the land held by the intermediary be agricultural land, then (1) he shall hold it, mutatis mutandis, on the terms and conditions mentioned in sections 23, 23A, clause (a) of section 25, sections 26 to 26G . " The rule was again amended by a notification dated August 1, 1964 by which, for the words and figures "Sections 26 to 26G, 52 to 55", the words "sections 26, 26B, 26C, 26G, sections 52 to 55" were substituted.
In other words, the original rule 4 merely provided that in the case of agricul tural land retained by the intermediary, he shall hold it on the same terms and conditions as an occupancy raiyat under the Tenancy Act leaving it undefined as to whether these terms and conditions would also include the right of pre emption available under the Act.
The amendment of 1962 specifically included the right of preemption available under section 26 F but the reference to section 26 F was omitted by the amendment of 1964.
The provisions of these various enactments and the availability of the right of pre emption to the former joint tenants of the holding came up for consideration before a number of Benches of the Calcutta High Court.
It is not necessary to refer to the details of these decisions inas much as the matter has been considered at length by the Full Bench.
The arguments addressed in support of the survival of the right of pre emption despite these legislative changes were broadly these: (i) The 1953 Act, after Chapter VI came into force only vested the holding of the raiyats and under raiyat in the State.
The word 535 'intermediary ' in section 6 ' includes the plural 'intermedi aries '.
Hence, the previous co sharers continue to be co sharers; only instead of being tenants under an intermedi ary, they become tenants under the State.
The vesting is of the holding as a whole; its integrity is not impaired.
(ii) The Act, the rules and the forms prescribed thereunder provide for the partition, demarcation, separate determina tion of the rents for the lands so partitioned and demarcat ed and consequent modification of the record of rights; until all this is done, the holding remains single and the erstwhile co sharers continue to be such.
(iii) Rule 4(3), as it originally stood, preserved the rights of tenants to co sharers.
The 1962 amendment made this clear.
The 1964 deletion of the reference to section 26 F was not with a view to take away the right of pre emption under section 26 F.
It was only consequential to the enactment of the 1955 Act, section 8 of which provided for a pre emption right corresponding to section 26 F of the Tenancy Act.
The Full Bench, however, repelled the contentions and held that the right of pre emption did not survive.
Its reasons may be summarised thus: (1) By virtue of section 52, read with section 6, each raiyat becomes a direct tenant under the State with effect from the date of vesting in respect of the land which he is entitled to retain.
The proviso to the section provides for the apportionment of the rent among the various holders making it clear that the land retained by a raiyat of a holding becomes the subject matter of a separate tenancy.
It was, therefore, no longer possible to call them co sharers.
Each became entitled to a direct tenancy in respect of a share of the previous holding and, in regard to his inter est, the previous holders had no manner of right or title.
One raiyat could not claim to have any interest in the land comprising the holding which the others are entitled to retain or have retained.
Before vesting, each of the raiyats of a holding had an interest or share in every part of the land comprised in the holding and each was a co sharer of the other, but this is not the position after the vesting when each of the raiyats of the holding becomes a direct tenant under the State in respect of the land of the holding which he is entitled to retain under the provisions of sub section ( 1 ) of section 6. 536 (2) The expression "an intermediary" in sub section (1), (2) and (5) of section 6 cannot be read as including the plural.
If the word "intermediaries" was substituted in the place of "an intermediary" in sub section (1) of section 6 the result will be that all the intermediaries would be jointly entitled to retain only 25 acres of agricultural land in his khas possession whereas clause (d) envisages that each intermediary is entitled to retain 25 acres of agricultural land in his khas possession and to exercise his choice of retention of land within such time and in such manner as may be prescribed.
The forms prescribed under the schedule in this connection and the foot notes thereto make it clear beyond all doubt that each intermediary separately, and not the intermediaries jointly, could exercise their choice of retention.
This was clear from clauses (iii), (iv), (v) and (vi) of the foot notes appended to the form.
This Was also the only reasonable interpretation for differ ent co sharers of a holding may have other lands in their possession and unless the right of choice and the computa tion of 25 acres is separately read into the provisions it would be impossible to work the same.
(3) While it is true that on the vesting no partition of any holding is effected and the various records are also not immediately corrected, the definition of 'holding ' in the Tenancy Act clearly shows that an undivided share in land can be the subject matter of a separate tenancy and can constitute a holding of a raiyat or a under raiyat.
There fore, though the land remains undivided till it is demarcat ed by metes and bounds there is nothing wrong in saying that the undivided share for a raiyat becomes the subject matter of a separate tenancy directly under the State as from the date of vesting.
Merely because the finally published re cord of rights has not been drawn up under section 47 read with rule 31A, it cannot be said that the holding continues to be a joint holding or that the raiyats continue to be the co sharers of each other.
(4) It is true that the expression "terms and condi tions" in rule 4 includes the right of pre emption under section 26 F and section 26 F has also been specifically included within the meaning of Rule 4(3) as amended in 1962.
However, the exercise of a right of pre emption under sec tion 26 F is conditional on the person claiming to exercise the right being a co sharer of the holding a portion or share of which has been transferred to outsider.
In view of the conclusion that the individual co sharers of the holding cease to be co sharers after the vesting, there will be no scope for any application under section 26 F. This, however, does not mean that rule 4(3) as amended in section 537 26 F is redundant.
It may be that on the date of vesting there may be no co sharer in a raiyati holding.
But, where after the date of vesting, the individual holder dies and a number of co sharers come into being by devolution of his interest, the provisions of section 26 F read with rule 4(3) will come into play.
Similarly, if subsequent to the date of vesting, one of the erstwhile co sharers transfers a portion of his holding to another, that person becomes a co sharer of the holding along with his vendor.
If one of these two co sharers transfers a portion of the holding to another person, section 26 F will apply.
Thus section 26 F has a part to play even in the new scheme of things and is not rendered otiose or redundant by the findings given earlier.
(5) It is true that sub rule (3) of rule 4 was further amended on 1st August, 1964, deleting the reference to section 26 F in that sub rule.
This deletion, however, did not mean that the right of preemption has been taken away.
This amendment took place because the West Bengal Land Reforms Act, 1955, by section 8 created a right of pre emption similar to the one conferred by section 26 F.
This section came into force on 22nd October, 1963.
Initially there were some differences between section 26 F and section 8 of the West Bengal Land Reforms Act in that, under the former, the application had to be made to the Court while, under the later, it had to be made to the Revenue Officer.
After the enforcement of section 8 it became wholly unneces sary to allow section 26 F to remain in sub rule (3) of rule 4.
It took some time for this amendment to be given effect to.
Section 8 will apply regarding transfers taking place after the enforcement of section 8.
We have heard arguments on behalf of several counsel in respect of the points at issue in these appeals.
The Full Bench judgment of the Calcutta High Court has discussed all the various aspects and it has come to the conclusion for the reasons summarised above, and elaborated by it, that the right of pre emption could not survive the 1953 Act.
Counsel have been unable to persuade us to take a view different from that of the Full Bench.
We, therefore, express complete concurrence with the views of the Full Bench.
We would also like to point out that the decision of the Full Bench has been in force in the State of West Bengal since 1972.
Interests in land must have been transferred during the past eighteen years on the basis that the princi ples of the Full Bench decision would apply.
So, even if there were any force in the contention urged on behalf of the appellants and as we have already pointed out, no 538 grounds have been urged before us strong enough to persuade us to differ from the Full Bench we would have been very reluctant to alter the legal position as settled for a very long time in the State of West Bengal by the decision of the High Court.
By this observation we should not be understood to have expressed any reservations on our part in accepting the Full Bench decision as correct.
On the other hand, having considered the pros and cons urged before us, which had also been urged before the High Court, we are in full agreement with the Full Bench decision.
We, therefore, affirm the judgment of the Full Bench.
In the light of the above discussion, we may now consid er the several appeals before us: (1) C.A. 626/75 is a direct appeal from the Full Bench judgment.
It stands dismissed.
Sri Ghosh, for the respondents, also urged that the application for pre emption in the present case was made section 26 F of the Tenancy Act which had ceased to be effec tive after 1964 amendment and hence should have been reject ed.
He also contended that section 26 F could be availed of only in respect of an occupancy raiyat whereas the interest transferred in the present case was a "mokarari" interest.
These points do not appear to have been raised in the High Court.
Anyhow, it is unnecessary to go into these conten tions as we have held, even otherwise, that the application for pre emption is not maintainable.
(2) C.A. 291 of 1976 A11 the Courts have concurrently applied the Full Bench decision.
The appeal, therefore, fails and is dismissed.
(3) C.A. 2449/80 1n this matter, the land in question is nonagricultural land.
The High Court held that the Full Bench decision relates only to agricultural lands and that the interests of non agricultural tenants remains unaffected by the 1955 Act.
This point requires a little consideration.
So far as non agricultural tenancies are concerned, a right of pre emption among co sharers was conferred by section 24 of the West Bengal Non agricultural Tenancy Act, 1949.
We have earlier seen that the 1953 Act originally provided for vesting only of the interest of 'intermediaries ' in the State and the definition of 'intermediary ' took in only a holder above 'a raiyat or under raiyats ' in respect of agricultural land and above 'a non agricultural tenant '.
The rights of 539 'raiyats and under raiyats ' were brought within the purview of the vesting provisions when Chapter VI of the 1953 Act was brought into force; but there is no statutory provision that brings non agricultural tenants within the scope of the vesting provisions.
This has been pointed out by this Court in Shibasankar vs Prabartak Sangha, at p. 563 which has been followed in a number of decisions of the Calcutta High Court and applied, after the Full Bench deci sion, in Sastidas Mullick vs J.L.R.O. Parrackpore Circle and Ors., at p. 701 by a Bench comprising of Sabyasachi Mukharji and M.M Dutt.
The High Court, in our view, was right in making the distinction and upholding the right of pre emption in this case.
The appeal.
therefore.
fails and is dismissed.
(4) C.A. 825/81 This is a case for claim of pre emption under section 8 of the 1955 Act.
It is necessary to set out a few facts.
The lands in R.S. Khatian No. 331 belonged to four brothers Jadhunath, Madhusudan.
Siddeshwar and Maniklal.
Later, Madhusudhan died and his interest devolved on his father Ashutosh and his brother Mukti.
Siborani purchased plot Nos.
1947, 2199 and 363 in this khatian by a registered deed dated 28/5/68 from the holders.
The second petitioner purchased plot No. 2169 in the khatian on 19.5.69 from the holders.
The respondent Shravani Ghosh is a stranger who purchased the disputed property from Jadhunath, Siddeswar and Maniklal by a deed dated 4.5.71.
Subsequently, a deed dated 21.6.71 was executed in her favour by Maniklal and Ashutosh purportedly to rectify a defect in the earlier deed.
Thereupon, the purchasers under the earlier deeds, Siborani and another claimed a right of pre emption under section 8 of the 1955 Act.
The application was allowed by the Munsif and the District Judge but disallowed, on revision, by the High Court.
Learned counsel for the appellant contended that the present case 'fell within the exceptions outlined in the Full Bench case, under which the right of pre emption sur vives.
He relied, in support of this contention, on sub paras (2) and (3) in the following passage from the Full Bench judgment, where the High Court summed up its conclu sions: "28.
For the reasons aforesaid, we hold as follows (1) After the enforcement of Chapter VI of the Act and the vesting of interest of raiyats and under raiyats on and from April 14, 1956 corresponding to Baisakh 1, 1363 B.S. the co sharer raiyats of a holding ceased to be coshar ers and each raiyat of the holding became a direct 540 tenant under the State in respect of the land of that hold ing which he is entitled to retain under sub section (1) of section 6.
As the co sharer raiyats ceased to be co sharers on and from the date of vesting the question of exercise of the right of pre emption under section 26 F cannot arise, for, the condition precedent to the exercise of the right of pre emption under Section 26 F being that the person exercising that right must be a co sharer of the person making the transfer.
(2) When a raiyat having a separate holding or tenancy created by virtue of sub section (2) of section 6 relating to the land retained by him under sub section(1) of section 6 dies leaving more than one heir, such heirs will become co sharers of such holding and will be entitled to the right of preemption under Section 26 F. Similarly, when the raiyat of such a holding transfers a portion of the holding to another person, that person will become a co sharer of the raiyat and the right of pre emption will also be available in such a case.
(3) A transfer made by a co sharer raiyat as contemplated by CI.
(2) above before the enforcement of Section 8 of the West Bengal Land Reforms Act, 1955, may be pre empted by another co sharer in the tenancy in accordance with Section 26 F, but a transfer made after the enforcement of Section 8, the right of pre emption by a co sharer can only be exercised in the manner laid down in Section 8 of the West Bengal Land Reforms Act.
(4) The under raiyats have been elevated to the status of raiyats on the enforcement of Chapter VI.
There is no dif ference between the position of raiyats and that of under raiyats and our decision on the question as to the effect of the enforcement of Chapter VI on the right of pre emption of raiyats will also apply to under raiyats.
(5) The decisions in 68 Cal.
W.N. 574 (A.I.R. 1964 Cal.
460) and Jyotish Chandra Das vs Dhananiay Bag., [1964] 68 Cal.
W.N. 1055 in so far as they proceeded on the footing that the raiyats of a holding continued to be co sharers even after vesting, are erroneous but they have correctly inter preted the expression 'terms and conditions ' in Rule 4." 541 Learned counsel for the respondents, on the other hand, contended that, while the first instance given in sub para (2) above by the Full Bench may be correct, the second instance and its follow up in subpara (3) are not correct.
He pointed out that once each co sharer in the earlier holding is held to become an independent tenant directly under the State, any alienee from him acquires his interest pro tanto and cannot become his co sharer.
His submission was that the Full Bench has erred in considering them to be co sharers.
It is not necessary to express any views on this contention as, in our opinion, the above observations are not applicable on the facts found in the present case.
Here the "co owners" of the former R.S. Khatian 313 have sold identifiable plots under different sale deeds to different parties.
In this state of affairs, the transferees under the 1968 and 1969 deeds have acquired title to identifiable plots and are not co sharers in the original transferors.
There is no question of their claiming pre emption as against the transferees under the 1971 documents merely because all the plots at one time formed part of one inte gral holding.
We are, therefore, of opinion that the High Court was correct in holding that no right of pre emption could be exercised by the petitioners.
This appeal, there fore, fails and stands dismissed.
(5) C.A. 2231/82 This appeal has to be dismissed in view of our order upholding the Full Bench decision.
We direct accordingly.
(6) S.L.P. (Civil) 1037/74 1n this case, the High Court, following the Full Bench decision, held that the petitioner was not entitled to claim pre emption.
The peti tion has, therefore, to be dismissed.
We order accordingly.
(7) S.L.P. (Civil) 1577/74 The High Court disposed of this matter by following the Full Bench decision.
The deci sion is affirmed and this petition dismissed.
(8) S.L.P. (Civil) 9882/80 Since the High Court has only followed the Full Bench decision, there are no merits in this appeal which is dismissed.
All the appeals and SLPs, therefore, fail and are dis missed.
But in the circumstances we make no order as to costs.
R.S.S. Appeals and SLPs dismissed.
| IN-Abs | Gangamoni Mondal, the respondent in one of the appeals, purchased on 29.1.1963 the suit property.
About three years and five months after her purchase, the prede cessor in interest of the appellants made an application for pre emption under section 26 F of the Bengal Tenancy Act, 1885 on the ground that he was a co sharer of the holding which comprised the land purchased by the respondent.
The holding was previously a Raiyati Mokarari interest which had vested in the State under the provisions of the West Bengal Estates Acquisition Act, 1953.
the defence of the respondent was that, though the predecessor in interest of the appel lant and her vendor were the joint holders of the property in question, the right of pre emption available to the co sharer had ceased with the coming into force of the Estates Acquisition Act of 1953.
The pre emption application was allowed by the learned Munsif and his order was confirmed by the learned Additional District Judge.
In revision, the Full Bench of the High Court negatived the contention of the applicant and dis missed the pre emption application.
Dismissing the appeals and SLPs, this Court, HELD: (1) The Full Bench has rightly come to the conclu sion that the right of pre emption could not survive under the West Bengal Estates Acquisition Act, 1953.
[348B] (2) Section 26 F of the Tenancy Act, 1885 conferred on a cosharer tenant of an occupancy holding, a right to compel another co 528 sharer tenant to sell his share 'in the holding to him instead of to a stranger.
The term "co sharer" envisages that the holding must be under the ownership of more than one person.
The holding must be an occupancy holding: that is, it must be the holding of raiyats having occupancy rights.
So long as a division of the holding does not take place in accordance with section 88 of the Tenancy Act, the holding remains a joint holding and each co sharer will be entitled to preemption in case of transfer of a share or portion of the holding by a co sharer to a stranger.
[340E F] (3) By virtue of the notifications issued by the State Government under section 4 of the 1953 Act from time to time the interests of raiyats and under raiyats vested in the State with effect from April 14, 1956.
[341C] (4) The effect of 1953 Act was to vest the rights of intermediaries (an expression subsequently extended to cover raiyats and under raiyats) in the State Government.
Each raiyat became a direct tenant under the State and the land retained by a raiyat of a holding became the subject matter of a separate tenancy.
It was, therefore, no longer possible to call them co sharers entitled to pre emption case of a transfer to a stranger.
[341D; 345E] (5) By a notification dated 28.5.
1954, the Government of West Bengal framed rules called the West Bengal Estates Acquisition Rules, 1954.
The original rule 4 merely provided that in the case of agricultural land retained by the inter mediary, he shall hold it on the same terms and conditions as an occupancy raiyat under the Tenancy Act, leaving it undefined as to whether these terms and conditions would also include the right of pre emption available under the Tenancy Act.
The amendment of 1962 specifically included the right of pre emption available under section 26 F but the reference to section 26 F was omitted by the amendment of 1964.
This definition, however, did not mean that the right of pre emption was taken away.
[343F; 344E F; 347F] (6) There is no statutory provision that brings non agricultural tenants within the scope of the vesting provi sions.
The High Court was right in making the distinction and upholding the right of pre emption in the case of non agricultural tenancies.
[349A B] Shibasankar vs Prabartak Sanghs, Sastidas Mullick vs J.L.R.O. Parrachpore Circle and Ors., , referred to.
|
ON: Civil Appeal No. 2876 of 1986.
From the Judgment and Order dated 14.5.1986 of the Delhi High Court in Civil Writ No. 1422 of 1985.
Soli J. Sorabji, Attorney General, Ashok Desai, Solici tor General, Vinod Bobade, M.C. Bhandare, M.K. Ramamurthy, R.K. Garg, Mrs. Shyamala Pappu, P.P. Rao, Mrs. J. Wad, Mrs. Aruna Mathur, Ms. A. Subhashini.
P. Parmeshwaran, D.K. Garg, A.K. Sil, G. Joshi, S.K. Gupta, B.R. Sabharwal, Mrs. Seita Vidyalingam, S.K. Bisaria (NP), Salman Kurshid, Irshad Ahmad, V.D. Phadke, A. Sharan, Lalit Bhasin, Ms. Nina Gupta, Vineet Kumar, R.C. Bhatia, P.C. Kapur (NP), B.S. Charya (NP), Vijay K. Verma, C.M. Nayar, H.S. Munjral and A.V.S.L. Somayajulu (NP) for the appearing parties.
Satnam Singh appellant in person in C.A. No. 1115 of 1976.
The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ.
These civil appeals, special leave petitions and civil miscellaneous petitions deal with the question of constitutional validity of the right of the employer to terminate the 175 services of permanent employees without holding any inquiry in certain circumstances by reasonable notice or pay in lieu of notice.
The facts involved in these matters are diverse but the central question involved in all these is one, i.e. whether the clauses permitting the employers or the authori ties concerned to terminate the employment of the employees by giving reasonable notice or pay in lieu of notice but without holding any inquiry, are constitutionally valid and, if not, what would be the consequences of termination by virtue of such clauses or powers, and further whether such powers and clauses could be so read with such conditions which would make such powers constitutionally and legally valid? In order to appreciate the question the factual matrix of these cases so far as these are relevant for the ' determination of the aforesaid questions, will have to be borne in mind in the light of the actual legal provisions involved in the respective cases.
It will, therefore, be proper and appropriate to deal with the relevant facts in civil appeal No. 2876 of 1986 first.
The appellant herein the Delhi Transport Corpora tion, is a statutory body formed and established under Section 3 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 (hereinafter called 'the Act ').
The appellant carries out the objects of vital public utility, according to the appellant, i.e. transport of passengers in the Union Territory of Delhi and other areas.
Respondent No. 2, Sri Ishwar Singh was appoint ed as conductor therein on probation for a period of 1 year in 1970.
The probation period was extended thereafter for a further period of one year and thereafter he was regularised in service of the appellant.
Similarly, respondent No. 3 Sri Ram Phal was appointed as Assistant Traffic Incharge and after the probation period he was regularised in serv ice.
Respondent No. 4 Sri Vir Bhan was appointed as driver and after completing the probation period he was also regu larised in service.
It is stated that respondents Nos. 2 to 4 became, according to the appellant, inefficient in their work and started inciting other staff members not to perform their duties.
They were served with termination notices on 4th June, 1985 under Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952.
On 11th June, 1985 respondents Nos. 2 to 4 and their Union being respondent No. I DTC Mazdoor Con gress, filed writ petition No. 1422/85 in Delhi High Court, challenging the constitutional validity of Regulation 9(b) of the Delhi Road Transport Act.
On 11th May, 1986 the division bench of the High Court of Delhi allowed the said writ petition and struck down Regulation 9(b) of the said Regulations, and directed the appellant to 176 pay back respondents ' wages and benefits within 3 months from the date of the said judgment.
This is an appeal, therefrom, by special leave.
The question, therefore, is, was the High Court justified in the view it took? It may be mentioned that regulations 9(a) & (b) were framed in exer cise of the powers conferred u/s 53 of the said Act, which enables the formulation of Regulations.
Regulation 9 of the said regulations, which is material for the present contro versy, reads as follows: "9.
Termination of service: (a) Except as otherwise speci fied in the appointment orders, the services of an employee of the authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reason thereof.
(ii) For misconduct, (iii) On the completion of specific period of appointment.
(iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment.
(b) Where the termination is made due to reduction of estab lishment or in circumstances other than those mentioned at (a) above, one month notice or pay in lieu thereof will be given to all categories of employees.
(c) Where a regular/temporary employee wishes to resign from his post under the authority he shall give three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the conditions regarding the period of notice of resignation or pay in lieu thereof." The said Regulation, as set out hereinbefore, deals with termination of services.
Four contingencies are contemplated vide clause (a) of Regulation 9, whereupon the services of employees may be terminated without any notice or pay in lieu thereof except as otherwise provided in the appointment order.
Apart from these four contingencies where termination is made due to reduction of establishment 177 or in circumstances other than those mentioned in clause (a) above, one month 's notice of pay in lieu thereof is required to be given to all categories of employees.
Therefore, except in the said four cases, if there is reduction of establishment or there is any termination uncovered by these four contingencies referred to in clause (a) the same shall be by giving one month 's notice or pay in lieu thereof to all categories of employees.
Clause (c) postulates when a regular or temporary employee wishes to resign from his post under the authority then in such a situation one month 's notice in writing or pay in lieu thereof to the authority may be provided.
The High Court in the judgment under appeal noted that since the filing of this petition the notices issued by D.T.C. to its various employees have been withdrawn and all these persons have been reinstated, therefore, the court was not concerned with the validity of clause (a) of Regulation 9 but respondents Nos. 2 to 4 against whom action had been taken by the appellant by issuing notices of termination under Regulation 9(b) had not been reinstated and the court considered the validity of Regulation 9(b).
It was held by the court that the said provision gave absolute, unbridled and arbitrary powers to the Management to terminate the services of any permanent or temporary employee.
It was contended that such power was violative of Article 14 of the Constitution.
In support of this contention, reliance had been placed, on which the High Court also relied upon, on the decision of this Court in Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors., ; In that case, Standing Order 31 of M/s. Hindustan Steel Ltd., a public sector undertaking, had prescribed for a detailed procedure for dealing with cases of misconduct; and for imposing major penalty, the employer had to draw up a chargesheet and give an opportunity to the delinquent workman to make his repre sentation within 7 days.
If the allegations were controvert ed, an enquiry had to be held by an officer to be nominated by the management and in such an enquiry reasonable opportu nity of explaining and defending the alleged misconduct had to be given to the workman.
Suspension of the delinquent workman pending enquiry was also permitted.
At the end of the enquiry, if the charges were proved, and it was provi sionally decided to impose any major penalty, the delinquent workman had to be afforded a further reasonable opportunity to represent why the penalty should not be imposed on him.
Standing Order 32 provided for a special procedure in case a workman was convicted for a criminal offence in a court of law or where the General 178 Manager was satisfied for reasons to be recorded in writing that it was inexpedient or against the interests of security to continue to employ the workmen ' viz. the workman could be removed or dismissed from service without following the procedure laid down in Standing Order No. 31.
There the appellant was an Assistant in the respondent 's undertaking, who was removed from service on the ground that it was no longer expedient to employ him.
The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant therein had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the po lice.
In the reference to the Industrial Tribunal, the Tribunal held that as the employer dispensed with the disci plinary enquiry in exercise of the power conferred by Stand ing Order 32, it could not be said that the dismissal was unjustified, and that if there were allegations of miscon duct, the employer was quite competent to pass an order of removal from service without holding any enquiry in view of the provisions contained in Standing Order 32, and rejected the reference.
There was an appeal to this Court.
This Court held that the reasons for dispensing with the enquiry do not spell out what was the nature of the misconduct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry.
As there was no justification for dispensing with the enquiry, imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 was illegal and invalid.
It was directed that the respondent should recall and cancel the order dated 24th August, 1970 removing the appellant from service, and reinstate him and on the same day the appellant was directed to tender resignation of his post which should be accepted by the respondent.
The respondent should pay as and by way of back wages and future wages, a sum of Rs.1.5 lakhs to the appellant within 2 months which should be spread over from year to year commencing from the date of removal from service.
It was reiterated that where an order casts a stigma or affected livelihood, before making the order, principles of natural justice of a reason able opportunity to present one 's case and controvert the adverse evidence must have full play.
Even under the Consti tution which permits dispensing with the inquiry under Article 311(2) a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the inquiry.
Standing Order 32 nowhere obligates the General Manager to record reasons for dispensing with the inquiry as prescribed by Standing Order 31.
On the contrary, it was held that the language of Standing Order 32 enjoins a duty upon the Gener al Manager to record reasons for his satisfaction why it was inexpedient 179 or against the interest of the security of the State to continue to employ the workman.
Reasons for dispensing with the enquiry and reasons for not continuing to employ the workman, stand wholly apart from each other.
This Court finally observed that it was time for the public sector undertaking to recast Standing Order, and to bring it in tune with the philosophy of the Constitution failing which the vires of the said Standing Order ,would have to be examined in an appropriate proceeding.
Reliance was also placed before this Hon 'ble Court on the decision of this Court in the case of West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116, where this Court was concerned with regulations 33 and 34 of the West Bengal State Electricity Board.
The said regulations 33(1) and 34 were as follows: "33(1) Unless otherwise specified in the appointment order in any particular case, the services of a permanent employee of the Board may be terminated without notice (i) on his attaining the age of retirement or by reason of a declaration by the competent medical authority that he is unfit for further service; or (ii) as a result of disciplinary action; (iii) if he remains absent from duty, on leave or otherwise, for a continuous period exceeding 2 years.
In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof.
" The High Court had come to the conclusion in that case that Regulation 34 was arbitrary in nature and suffered from the vice of enabling discrimination.
The High Court, there fore, struck down the first paragraph of Regulation 34 and as a consequence quashed the order terminating the services of the first respondent therein.
It was contended before this court on appeal that the Regulation 34 did not offend Article 14 of the Constitution, that Sections 18 A and 19 of the Electricity Supply Act laid down sufficient guidelines for the exercise of the power under Regulation 34 and in any case the power to terminate the services of any permanent employee was vested in high ranking officials who might be expected to exercise the same in a 180 reasonable way.
This Court was unable to accept that argu ment.
This Court was of the view that the regulation was totally arbitrary and conferred on the Board a power which was capable of vicious discrimination.
This Court was of the view that it was naked 'hire and fire ' rule, the time for banishing which, according to this Court in the said deci sion, altogether from employer employee relationship was fast approaching.
It is only parallel, this Court was of the view, to the Henry VIII clause so familiar to administrative lawyers.
Reference was made to the decision of this Court in Moti Ram Deka vs North East Frontier Railway, , where Rules 148(3) and 149(3) of the Indian Railway Estab lishment Code had been challenged on the ground that these Rules were contrary to Article 311(2) of the Constitution.
The challenge was upheld though no opinion was expressed on the question whether the rule offended Article 14 of the Constitution or not since then Article 14 has been inter preted in several decisions of this Court and conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this Court as offending Article 14 of the Constitution.
Indeed, it was noted in S.S. Muley vs J.R.D. Tara, by this Court that, Justice Sawant, of Bombay High Court had considered at great length Regulation 48(a) of the Air India Employees ' Service Regulations which conferred similar power on the Corporation as Regulation 34 confers on the Board in the present case.
The learned Judge therein (Sawant, J.) had struck down that Regulation.
Reli ance had also been placed on another decision of the Bombay High Court in the case of Manohar P. Kharkhar vs Raghuraj.
This Court found it difficult to accept the reasoning therein.
In that view of the matter the appeal was dismissed.
Reference in this connection may also be made to the decision of this Court in Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Anr., There the appellant Corporation was a Government company incorporated under the Companies Act.
The majority shares of the Corporation were held by the States of West Bengal and Assam.
Article 51 of the Articles of Association of the Corporation conferred upon the President of India power to issue directions/instructions regarding affairs and conduct of the business of the Corporation or of the Directors thereof as also regarding exercise and per formance of its functions pertaining to national security and public interest.
Article 51 A of the 181 said articles entitled the President to call for returns, accounts etc.
of the Corporation.
Articles 14, 15, 16, 17 and 37 conferred on the President power to appoint and remove Chairman and the Board of Directors of the Corpora tion.
Articles 41 and 42 were regarding the ' President 's control over the working of the Corporation.
Article 47 provided for appointment of the auditors of the Corporation to be made by the Central Government on the advice of the Comptroller ' and Auditor General of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts.
Since another company namely the Rivers Steam Navigation Co. Ltd. was carrying on the same business as the Corporation was doing, a Scheme of Arrangement was entered into between the Corpo ration and that Company for dissolution of the latter and taking over of its business and liabilities by the former.
The Scheme, inter alia, stipulated that the Corporation shall take as many of the existing staff or labour as were possible and that those who could not be taken over shall be paid by the transferor company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Disputes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues.
The Calcutta High Court approved the Scheme.
Each of the respondents therein were in the service of the said company.
Their services were taken over by the Corpora tion after the High Court 's sanction to the Scheme of Ar rangement.
While the respondent Ganguly therein was appoint ed as the Deputy Chief Accounts Officer and was later pro moted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was later promoted as General Manager (River Services) Their appoint ment letters were in stereotype forms under which the Corpo ration could without any previous notice terminate their services, if the Corporation was satisfied that the employee was unfit medically or if he was guilty of any insubordina tion, intemperance or other misconduct, or of any breach of any rules pertaining to this service or conduct or non performance of his duties.
The letters of appointment fur ther stipulated that they would have been subject to the rules and regulations of Corporation.
Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 had provided that the services of permanent employee could be terminated on three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case might be in lieu of the notice.
By confidential letter the respondent Ganguly was asked to reply within 24 hours to the allegations of negligence made against him.
After having his representation and detailed reply, a notice under 182 Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay.
Similarly a charge sheet was issued to the respondent Sengupta intimat ing that a disciplinary inquiry was proposed against him under the Rules and calling upon him to file his written statement of defence.
Sengupta denied the charges made against him and asked for inspection of documents and copies of statements of witnesses mentioned in the said charge sheet.
But a notice was serviced on him under Rule 9(i) terminating his services with immediate effect of paying three months ' salary.
Both Ganguly and Sengupta filed Writ Petitions before High Court.
A Division Bench of that Court allowed the same.
The Corporation filed appeals before this Court.
The main questions for determination therein were (i) whether the appellant Corporation was an instrumentality of the State as to be covered by Article 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 of the Constitution and as such whether Rule 19(i) which formed part of the contract of employment be tween the Corporation and its employees to whom the said Rules applied, was void? This Court confirmed the judgment of the High Court with modification in the declaration made and dismissed the Corporation 's appeal to this Court.
This Court held that the appellant was State within the meaning of Article 12 of the Constitution.
This Court further held that an unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court.
This Court was of the view that the doctrine of distributive justice is another jurisprudential concept which has affected the law of contracts.
According to that doctrine, distributive fairness and justice in the possession of wealth and property could be achieved not only by taxation and regulatory control of private and contractu al transactions even though this might involve some sacri fice of individual liberty.
This Court referred to articles 38 and 39 of the Constitution so far as the test of reasona bleness was concerned.
The test of reasonableness or fair ness of a clause in a contract where there was inequality of bargaining power is another theory recognised in the sphere of law of contacts.
It was reiterated in that decision that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or a clause in the contract.
Reference was made to the observa tions of Lord Diplock in A. Schroeder Music Publishing Co. Ltd. vs Macaulay (formerly Instone), [1974] i W.L.R. 1308 and that test was: 183 "Whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promiser under the contract? For the purpose of this test all the provisions of the contract must be taken into consideration." Justice Madon of this Court in the said decision found that this was in consonance with right and reason, intended to secure social and economic justice and conformed to the mandate of the equality clause in Article 14 of the Consti tution.
It was further recognised that there might be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power.
These cases can neither be enumer ated nor fully illustrated.
The Court must judge each case on its own facts and circumstances.
The above principle would apply, this Court reiterated, where the inequality of bargaining power is the result of the disparity in the economic strength of the contracting parties or where the inequality is the result of circumstances, whether of the creation of the parties or not or where the weaker party is in a position in which he could obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them or where a man had no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in pre scribed or standard form or to accept a set of rules as part of the contract, however, unfair, unreasonable and uncon scionable clause in that contract or form or rules might be.
This Court, however, reiterated that this principle would not apply where the bargaining power of the contracting parties is equal or almost equal.
This principle would not apply where both parties are businessmen and the contract is a commercial transaction.
The contracts of this type to which the principle formulated above applied were not con tracts which were tainted with illegality but were contracts which contained terms which were so unfair and unreasonable that they shock the conscience of the Court.
In the vast majority of cases such contracts are entered into by the weaker party under pressure of circumstances, generally economic, which results in inequality of bargaining power.
Such contracts will not fall within the four corners of the definition of "undue influence" given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other.
Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with large number of persons or 184 a group of persons, if they are unconscionable, unfair and unreasonable, are injurious to the public interest, should be adjudged void according to Justice Madon, under Section 23 of the Contract Act on the ground of being opposed to public policy.
Public policy, it was reiterated, is not the policy of any particular Government.
It connotes some matter which concerns the public good and the public interest.
The principles governing public policy must be and are capable on proper occasion, of expansion or modification.
If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public goods and public interest declare such practice to be opposed to public policy.
In any case which is not covered by authority, courts should be guided by the Preamble to the Constitution and the principles underlying the Fundamental Rights and the Directive Principles.
Rule 9(i) can aptly be called 'the Henry VIII Clause" this Court opined therein.
It confers an absolute, arbitrary and un guided power upon the Corporation to exercise that power.
This Court was concerned with the "Central Inland Water Transport Corporation Ltd. Service Discipline and Appeal Rules" framed by the Corporation.
The relevant provisions of the said Rule 9 relating to permanent employees therein were as follows: "9.
Termination of employment for Acts other than misdemea nour (i) The employment of a permanent employee shall be subject to termination on three months ' notice on either side.
The notice shall be in writing on either side.
The Company may pay the equivalent of three months basic pay and dearness allowances, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice.
(ii) The services of a permanent employee can be terminated on the grounds of "services no longer required in the inter est of the Company" without assigning any reason.
A perma nent employee whose services are terminated under this clause shall be paid 15 days ' basic pay and dearness allow ance for each completed year of continuous service in the Company as compensation.
In addition he will be entitled to encashment of leave to his credit." This Court found that Rule 9(i) can be called 'the Henry VIII 185 Clause '.
It confers an absolute, arbitrary and unguided power upon the Corporation.
It does not even say who on behalf of the Corporation was to exercise that power.
While the Rules provided for four different modes in which the services of a permanent employee could be terminated earlier than his attaining the age of superannuation, namely, Rules 9(i), 9(ii), 36(iv)(b) read with 38 and 37, Rule 9(i) is the only rule which does not state in what circumstances the power conferred by that rule is to be exercised.
Thus even where the Corporation could proceed under a regular disci plinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the trouble of an inquiry.
No opportunity of a hearing was at all intended to be afforded to the permanent employee whose service was being terminated in the exercise of that power.
It violated audi alteram partem rule of natural justice also which was implicit in Article 14 of the Constitution.
It is not covered by any of the situations which would justify the total exclusion of the audi alteram parterm rule.
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it con sisted of responsible and highly placed persons ignored, it was held, the fact that however highly placed a person might be, he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts absolutely.
" It was, however, held that Rule 9(i) was also discriminatory for the Corporation was given power to discriminate between employee and employee.
It was stated that it could back up one employee and apply to him Rule 9(i).
It could pick up another employee and apply to him Rule 9(ii).
It was further reiterated that the Corporation was a large organisation.
The said Rules formed part of the contract of employment between the Corporation and its employees who were not workmen.
These employees had no powerful Union to support them.
They had no voice in the framing of the said Rules.
They had no choice but to accept the said Rules as part of their contract of employment.
There was gross disparity between the Corporation and its employees, whether they be workmen or officers.
The Corporation could afford to dis pense with the services of an officer and will find many others to take his place but an officer cannot afford to lose his job because if he does so, there are not many jobs waiting for him.
It was, therefore, held that clause 9(i) of the said regulation was against right and reasons and it was wholly unconscionable.
It had been entered into between parties between whom there was gross inequality of bargain ing power.
Rule 9(i) was a term of the contract between the Corporation and all its officers, it was noted.
It affected a large number of persons and it squarely fell within the principle stated earlier.
The Government and its agen cies and instrumentalities constitute the largest employer in the country.
A 186 clause such as Rule 9(i) in a contract of employment, it was noted, affecting large sections of the public was harmful and injurious to the public interest for it tended to create a sense of insecurity in the minds of those to whom it applied and consequently against public good.
Such a clause, therefore, was opposed to public policy and as such it is void under Section 23 of the Contract Act, it was held.
It was further held that it was not possible to accept the contention that this was a contract entered into by the Corporation like any other contract entered into by it in the course of its trading activities and the Court, there fore, ought not to interfere with it.
The employees could not be equated with goods which could be bought and sold, nor could a contract of employment be equated with a mercan tile transaction between two businessmen much less when the contract of employment was between a powerful employer and a weak employee.
Although it was reiterated that the aforesaid rule 9(i) was supported by mutuality inasmuch as it con ferred an equal right upon both the parties but considering the unequal position of the Corporation and its employees, there was no real mutuality, this Court opined.
It was reiterated that the Corporation being covered by Article 12, its actions must also be in accordance with the Directive Principles prescribed by Part IV of the Constitution.
Refer ence may be made to paragraph 39 of the aforesaid decision where this Court noted that in the working of the Constitu tion, it was found that some of the provisions of the Con stitution were not adequate for the needs of the country or for ushering in a Welfare State and the constituent body empowered in that behalf amended the Constitution several times.
By the very first amendment made in the Constitution, namely, by the Constitution (First Amendment) Act, 1951 clause (6) of Article 19 was amended with retrospectitive effect.
Under this amemdment, sub clause (g) of Article 19(1) which guarantees to all citizens the right to carry on occupation, trade or business, was not to prevent the State from making any law relating to the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial of citizens or otherwise.
This amendment also validated the operation of all existing laws insofar as these had made similar provisions.
Article 298 of the Constitution, as originally enacted, provided that the executive power of the Union and of each State was to extend, subject to any law made by the appropriate legis lature, to the grant, sale, disposition or mortgage of any property held for the purposes of the Union or of such State as the case may be, and to the purchase or acquisition of property for those purposes respectively, and to the making of contracts.
and it further provided that all property acquired for the purposes of the Union or of 187 State was to vest in the Union or in such State, as the case might be.
This Court referred to the decision of this Court in Sukhdev vs Bhagatrarn Sardar Singh Raghuvanshi, ; , "the Governing power wherever located must be subject to the fundamental constitutional limitations.
" The High Court in the judgment under appeal was unable to accept the plea of alternative remedy and allowed the Writ Petition and declared regulation 9(b) of the Regula tions to be illegal and ultra vires and as a consequence thereof the orders terminating the services of respondents Nos. 1 to 4 were quashed and these respondents were deemed to be in the service of DTC and back wages and all other benefits by way of annual increments were directed to be paid.
Learned Solicitor General of India contended before us that in the facts and the circumstances of this case, there was sufficient guideline in the Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution.
It may be mentioned that under the general law of contract of employ ment, which was commonly known as the 'law of master and servant ', which is not termed as law of employer and employ ee, whether the contract of service is for a fixed period or not, if it contained a provision for its termination by notice, it could be so terminated.
If there was no provision for giving notice and the contract was not for a fixed period, the law implied an obligation to give a reasonable notice.
Where no notice in the first case or no reasonable notice in the second case was given and the contract was wrongfully terminated, such wrongful termination would give rise to a claim for damages.
In this connection, reference may be made to the observations of this Court in the five judge bench decision in Union of India & Anr.
vs Tulsi Ram Patel, [1985] Supp.
2 SCR 131 at p. 166.
This is also the position at common law.
See Chitty on Contract; 26th Edition Vol.
II, p. 808 or 25th Edition Vol.
II p. 712, paragraph 3490.
In this connection, reliance may also be placed at paragraphs 607 and 608 of Volume No. 16, 4th Edition of Halsbury 's Law of England.
Under the Industrial Law, subject to the relevant statu tory provision, the services of an employee could be termi nated by reasonable notice.
In such a case it was always open to the Industrial Tribunal to examine whether the power of termination by reasonable notice was exercised bona fide or mala fide.
If, however, the industrial Court was satis fied that the order of discharge was punitive, that it was mala fide, or that it amounted to victimisation or unfair labour practice, the 188 industrial court was competent to set aside the order and in proper cases, direct the reinstatement of the employee.
Reference may also be made to the observations of this Court in Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130.
If, however, the exercise of such power was challenged on the ground of being colourable or mala fide or on account of victimisation or unfair labour practice, the employer must disclose to the Court the ground of his im pugned action, so that the same may be tested judicially.
See the observations of this Court in L. Michael & Anr.
vs M/s Johnston Pumps India Ltd.; , at 498.
The relationship between a statutory corporation and its employees is normally governed by the relevant rules, regu lations and standing orders.
A statutory Corporation is "State" within the meaning of Article 12 of the Constitution and its action is subject to judicial review in certain cases and certain circumstances.
In the facts and circum stances of these cases, we have proceeded on that basis and we are of the opinion that it is the correct basis.
The exercise of such power under regulations similar to the one impugned which has been upheld in various types of cases are instructive in their variety.
It may be mentioned that the exercise of power under the very same Regulation 9(b) was upheld by the Court in a matter, wherein in an action by the employee of D.T.C., this Court in Delhi Transport Corpora tion Undertaking vs Balbir Saran Goel, ; at 764 held that even if the employees of the respondent thought that he was a cantankerous man and it was not de sirable to retain him in service it was open to them to terminate his services in terms of Regulation 9(b) and it was not necessary to dismiss by way of punishment for mis conduct.
Reliance was placed on this decision by the High Court in the Judgment under appeal.
The High Court in our opinion rightly pointed out, however, that the decision was on a different basis and could not be availed of in deciding controversy involved in the present determination.
In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , this Court dealing with the power of the Air India to terminate the services of a person who was alleged to have misbehaved with air hostesses, observed on page 6 16 of the report that the anxiety of the Legislature to effective ly achieve the object of duly protecting the workmen against victimisation of unfair labour practice consistently with the preservation of the employer 's bona fide right to main tain discipline and efficiency in the industry for securing the maximum production in peaceful, harmonious atmosphere is obvious from the 189 overall scheme of these sections.
This Court on page 620 of the report observed that the record merely disclosed that the appellant had suspicion about the complainant 's suit ability for the job in which he was employed and this led to loss of confidence in him with the result that his services were terminated under Regulation 48.
Loss of confidence in such circumstances could not be considered to be mala fide, it was held.
Similarly in Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006, where it was alleged that the services of an employee of Bombay Municipal Corporation were unsatisfactory, this Court held that the powers of dismissal after an inquiry and the powers of simpliciter termination are to distinct and independent powers and as far as possible neither should be construed so as to emasculate the other or to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequence.
It may be mentioned that the case of civil servants is, however, governed by their special constitutional position which accords them status; the legal relationship (between the Government and its servants) is something entirely different, something in the nature of status.
It is much more than a purely contractual relationship voluntarily entered into between the parties.
The duties of state are fixed by the law and in the enforcement of these duties society has an interest.
In the language of jurisprudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned.
See the observa tions of this Court in Roshan Lal Tandon vs Union of India, ; at 195 D E.
But even then the services of a temporary civil servant (although entitled to the protection of Article 311 of the Constitution) is subject to termina tion by notice.
But beside the above, the government may find it necessary to terminate the services of a temporary servant if it is not satisfied with his conduct or his suitability for the job and/or his work.
See the observa tions of this Court in Champak Lal Chiman Lal Shah vs The Union of India, at 204.
The services of a temporary government servant, further.
may be terminated on one month 's notice whenever the government thinks it neces sary or expedient to do so for administrative reasons.
It is impossible, this Court observed, to define before hand all the circumstances in which the discretion can be exercised.
The discretion was necessarily left to the Government.
See observations of this Court in Ram Gopal Chaturvedi vs State of M. P., ; at 475. 190 The aforesaid position of a government servant has been analysed in depth by the decision of this Court in Union of India vs Tulsi Ram Patel, (supra), where it was reiterated that the doctrine of pleasure is not a relic of the feudal ages or based upon any special prerogative of the Crown but is based on public interest and for the public good because it is as much in public interest and for public good that government servants who are inefficient, dishonest or cor rupt or have become a security risk should not continue in service and that the protection afforded to them by the Acts and the Rules made under Article 309 and by Article 311 of the Constitution be not abused by them to the detriment of the public interest and public good.
It was reiterated on page 190 of the report that if in a situation as envisaged in one of the three clauses of the second proviso to Clause (2) of Article 311 arises and the relevant clause is proper ly applied and the disciplinary inquiry dispensed with, the concerned government servant cannot be heard to complain that he is deprived of his livelihood.
This Court reiterated that the livelihood of an individual is a matter of great concern to him and his family but his livelihood is a matter of his private interest where such livelihood is provided by the public exchequer and the taking away of such livelihood is in the public interest and for the public good, and the former must yield to the latter public policy, it was reit erated, requires, public interest needs and public good demands that there should be such a doctrine.
It was further reiterated that the rules of natural justice are not immuta ble but flexible.
These rules can be adopted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the rules by which such Tribunal is governed.
Not only, can the principles of natural justice be modified but in exceptional cases they can even be excluded.
See the observations of this Court at page 237 G of the aforesaid report.
Reference was also made to the observations of this Court at pages 214 215 of the aforesaid report.
Thus, the Constitution Bench laid down that even where a government servant enjoys constitutional status there can be exclusion of inquiry in the cases prescribed for termination of employment.
It must, however, be borne in mind that in some recent cases this Court has taken the view that a regulation pro viding for the termination of the service of an employee of the public corporation by notice only or pay in lieu thereof is invalid under Article 14 of the Constitution.
We have referred to the decisions of the Workmen of Hindustan Steel 's case (supra); West Bengal State Electricity Board 's case (supra) and Central Inland Water Transport Corpora tion 's case (supra).
Mr. 191 Ashok Desai, learned Solicitor General of India submitted that the decisions in the West Bengal State Electricity Board 's (supra) and Central Inland Water Transport Corpora tion 's case (supra) were incorrectly decided and the deci sion proceeded on the theory of unconscionable bargains and that termination by notice is against public policy.
He, however, drew our attention to Gheru Lal Parekh vs Mahadeo das Maiya & Others, [1959] Supp.
2 SCR 406 and 440 where it was held that though theoretically it may be permissible to evolve a new head under exceptional circumstances in a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads of avoidance of such clauses in these days.
Furthermore, as stated above, learned Solicitor General submitted that in the ordinary law of contract termination of employment by reasonable notice on either side has never been regarded as unconscionable.
Therefore, the learned Solicitor General submitted that this part of the above judgments was errone ous and should be overruled.
It must, however, be noted that in a later judgment of this Court, which followed this line of reasoning, it was recognised that a public corporation requires protection from employees who are inefficient or those who lacked probity or even made faulty policy decisions.
Reference was made to the decision of this Court in O.P. Bhandari vs 1.
T.D.C. & Ors.
, ; where this Court held that so far as some of the higher placed employees are concerned (described as 'gold collar ' employees) public sector under takings may be exposed to irreversible damage on account of faulty policy decisions or on account of lack of efficiency or probity of such employees and its very existence might be endangered beyond recall.
A public corporation may not be able to cut the dead wood and get rid of a managerial cadre employee in case he is considered to be wanting in perform ance or integrity.
Reference may be made to page 343 para graph 5 (supra) of the report.
It may be mentioned that in Moti Ram Deka 's case (supra) at p. 707 of the said report, a similar rule was considered by seven learned Judges in the context of government servants in Railway.
The majority judgment did not express opinion on the question of the Railway rule being bad on the ground of unguided and uncana lised power.
In his judgment, Mr. Justice Das Gupta held that the rule gave no guidance and was, therefore, violative of Article 14.
(See page 769 of the report).
On this point Mr. Justice Shah, as the learned Chief Justice then was, in his judgment observed at page 799 800 of the aforesaid report: "In considering the validity of an order an assumption that the power may be exercised mala fide and on that ground 192 discrimination may be practised is wholly out of place.
Because of the absence of specific directions in Rule 148 governing the exercise of authority conferred thereby, the power to terminate employment cannot be regarded as an arbitrary power exercisable at the sweet will of the author ity, when having regard to the nature of the employment and the service to be rendered, the importance of the efficient functioning of the rail transport in the scheme of our public economy, and the status of the authority invested with the exercise of power would appropriately be exercised for the protection of public interest on grounds of adminis trative convenience.
Power to exercise discretion is not necessarily to be assumed to be a power which will invali date the conferment of power.
Conferment of power has neces sarily to be coupled with the duty to exercise it bona fide and for effectuating the purpose and policy underlying the rules which provide for the exercise of the power.
If in the scheme of the rule, a clear policy relating to the circum stances in which the power is to be exercised is discerni ble, the conferment of power must be regarded as being made in furtherance of the scheme, and is not open to attack as infringing the ' equality clause.
It may be remembered that the rules relating to termination of employment of temporary servants and those on probation, and even those relating to compulsory retirement generally do not lay down any specific directions governing the exercise of the powers conferred thereby.
The reason is obvious: the appointing authority must in all these cases be left with discretion to determine employment having regard to the exigencies of the service, suitability of the employee for absorption or continuance in the cadre, and the larger.
interest of the public being served by retaining the public servant concerned in service.
" Learned Solicitor General submitted that the question is whether it is the very existence of power which is bad or the exercise is bad in any specific case.
It was submitted that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power is exer cised only for that purpose.
It was submitted that even if a statute makes no clarification Court would ascertain if the statute laid down any principle or policy.
In such a case, the statute will be upheld although a given exercise may be struck down in particular cases.
See 193 the observations of this Court in Shri Ram Krishna Dalmia vs Justice Tandolkar; , at 299.
The guidance in the statute for the exercise of discretion may be found from the preamble read in the light of surrounding circumstances or even from the policy or the purpose of the enactment or generally from the object sought to be achieved.
See the observations of this Court in Jyoti Prasad vs The Adminis trator for the Union Territory of Delhi; , at 139.
Even a term like 'public interest ' can be sufficient guidance in the matter of retirement of a government employ ee.
See the observations of this Court in Union of India vs Col. J.N. Sinha & Anr., at 461 and such a provision can be read into a statute even when it is not otherwise expressly there.
Learned Solicitor General draw our attention to the observations of this Court in N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619.
It is well settled and the learned Solicitor General made a point of it that the Court will sustain the presumption of constitutionality by considering matters of common knowledge and to assume every state of facts which can be conceived and can even read down the section, it was submitted, if it becomes necessary to uphold the validity of the provision.
Reliance was placed on the decision of this Court in Commissioner of Sales Tax, M.P., Indore & Ors.
vs Radhakrishan & Ors.
, ; at 257.
In the case of Olga Tellis & Ors.
vs Bombay Munici pal Corporation & Ors., [1985] Suppl.
2 SCR 51 at 89 this Court has held that considering the scheme of the act, a section which enabled the Commissioner to remove encroach ment without notice must be read to mean that notice would be given unless circumstances are such that it is not rea sonably practicable to give it.
This Court further held that the discretion is to be exercised in a reasonable manner so as to comply with the constitutional mandate that the proce dure accompanying the performance of a public act must be fair and reasonable.
We must lean in favour of that inter pretation because it helps to sustain the validity of the law.
Learned Solicitor General submitted that the appeal involved herein the power of Delhi Transport Corporation (a statutory corporation) regarding termination of service simpliciter under Regulation 9(b).
These Regulations were framed as mentioned under Section 53 of the Delhi Road Transport Authority Act, 1950.
The said Act was replaced by the Delhi Municipal Corporation Act, 1957 but the regula tions have been saved and even though in 1971 a new Corpora tion, viz. the Delhi Transport Corporation (the appellant), was constituted 194 under the Road Transport Corporation Act, 1950, the regula tions have been continued.
The guidelines for the exercise of such power, according to the Solicitor General, could be found in the statutory provisions of the 1950 Act under which the regulations have been framed, the preamble; Sections 19 and 20 (equivalent to Sections 18 and 19 of the Road Transport Corporation Act, 1950); Section 53 (equivalent to 45 of the Road Transport Corporation Act, 1950); the context of Regulation 9(b) read with 9(a) and 15.
Even for the exercise of this power, reasons could be recorded although they need not be communi cated.
This will ensure according to the Solicitor General, a check on the arbitrary exercise of power and effective judicial review in a given case.
The present regulations are parallel, to but not identical with, the exceptions carved out under Article 311(2) proviso.
It was submitted that even the power of termination simpliciter under Regulation 9(b) can only be exercised in circumstances other than those in Regulation 9(a), i.e., not where the foundation of the order is 'misconduct '.
The exercise of such power can only be for purposes germane and relevant to the statute.
It was submit ted by the learned Solicitor General that these would in clude several cases which have been held by Courts to give rise to termination simpliciter including where the employee shows such incompetence or unsuitability as to make his continuance in employment detrimental in the interest of the Corporation, where the continuance of the employee is a grave security risk making his continuance detrimental in the interest of the Corporation, if there is a justifiable lack of confidence which makes it necessary in the interest of the Corporation to immediately terminate the services.
These are illustrative and not exhaustive.
It was submitted by the learned Solicitor General that the above guidelines of recording reasons and confining action under Regulation 9(b) for purposes germane and rele vant to the statute would prevent arbitrary action by the Corporation while enabling it to run its services efficient ly and in public interest.
Thus, there is no vice of arbi trariness in the regulation.
The judgment of the High Court, therefore, cannot and should not be upheld according to the learned Solicitor General.
In Civil Appeal No. 2876 of 1986, the learned Attorney General urged that the settled rule judicially evolved in matters of constitutional adjudication is that in order to sustain the constitutionality of legislation, the words of a statute may be qualified, its operation limited and condi tions, limitations and obligations may be implied or 195 read into the statute in order to make it conform to consti tutional requirements.
The underlying rationale, according to the learned Attorney General, of this rule of interpreta tion, or the doctrine of reading down of a statute is that when a legislature, whose powers are not unlimited, enacts a statute, it is aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requi site limitations and conditions to immunise it from the virus of unconstitutionality.
From what the learned Attorney General submitted and what appears to be the correct that every legislature intends to act within its powers.
There fore, in a limited Government, the legislature attempts to function within its limited powers.
It would not, therefore, be expected to have intended to transgress its limits.
In Re The Hindu Women 's Rights to Property Act, , the question before the Federal Court was about the meaning of the word 'property ' in the Act.
The Court limited the opera tion of the word 'property ' to property other than agricul tural land because otherwise the Central Legislature would have had no competence to enact the statute.
The Court observed at pages 26 and 27 of the Report as follows: "No doubt if the Act does affect agricultural land in the Governors ' Provinces, it was beyond the competence of the Legislature to enact it: and whether or not it does so much depend upon the meaning which is to be given to the word 'property ' in the Act.
If that word necessarily and inevita bly comprises all forms of property, including agricultural land, then clearly the Act went beyond the powers of the Legislature; but when a Legislature with limited and re stricted powers makes use of a word of such wide and general import, the presumption must surely be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.
The question is thus one of construction, and unless the Act is to be regarded as wholly meaningless and ineffective, the Court is bound to construe the word 'property ' as referring only to those forms of property with respect to which the Legislature which enacted the Act was competent to legis late; that is to say, the property other than agricultural land . " See also the observations of Chief Justice Gwyer at pages 27 to 29 of the Report on how legislations of legisla ture with limited powers should be construed.
See also the observations of this Court in R.M.D. 196 Chamarbaugwalla vs Union of India, ; , at p. 935 and 938.
There section 2(d) of defined 'prize competition ' as meaning any competition in which prizes are offered for the solution of any puzzle.
As defined, the statute covered not only competition in which success depended on chance but also those which involved substantial degree of skill.
It was conceded that the Act would be violative of Article 19(1)(g) of the Constitution if competitions which involved substantial degree of skill were included in the statutory definition.
See the observa tions of this Court at p. 935 of the report.
This Court rejected the argument of the petitioners therein that since the language of the definition of prize competition was wide and unqualified, it was not open to the Court to read into it a limitation which was not there.
This principle was reiterated and applied by this Court in the case of Kedar Nath Singh vs State of Bihar, [1962] Supp.
(2) SCR 769.
The question before this Court was about the validity of section 124A of the Indian Penal Code.
This Court in order to sustain the validity of the section on the touch stone of Article 19(1)(a) of the Constitution of India, limited its applica tion only to acts involving intention or tendency to create disorder, or disturbance of law and order, or incitement to violence.
This Court held that it was well settled that if certain provisions of law construed in one way would make them consistent with the Constitution, and another interpre tation would render them unconstitutional, the Court would lean in favour of the former construction.
The provisions of the sections read as a whole, along with the explanations, make it reasonably clear that the sections aim at rendering penal only such activities as would be intended, or have a tendency, to create disorder or disturbance of public peace by resort to violence.
Reference may also be made to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, ; where the question was about the Constitutionality of sec tion 41(aa) of the .
This Court upheld the validity of the section following the principle of interpreting the said rule in a way which would be consistent with the Constitution.
See the observations of this Court at p. 797 of the said report.
The technique of reading down has been adopted in numer ous cases to sustain the validity of the provision.
For example, in Jagdish Pandey vs The Chancellor, University of Bihar & Anr., ; 1, at pages 236 37, this Court made resort to section 4 of the Bihar State Universities Act, 1962.
It was observed that section 4 so read literally it did appear to give uncanalised powers to the Chancellor to 197 do what he liked on the recommendation of the Commission with respect to teachers covered by it.
But this Court was of the opinion that the legislature did not intend to give such an arbitrary power to the Chancellor and was of the opinion that section 4 should be read down and if it is read down, there was no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor and that power cannot be struck down ,as discriminatory under Article 14 of the Constitution.
See the observations of this Court in Sunil Batra vs Delhi Administration & Ors., ; There the constitutionality of section 30, sub section (2) and section 56 of the was in question.
Krishna Iyer, J, speaking for this Court at p. 511, para 34, of the report observed that the Court does not 'rush in ' to demolish provisions where judicial endeavour, amelioratively interpretational, may achieve both constitutionality and compassionate resurrection.
This salutary strategy, the learned Judge observed, of sustaining the validity of the law and softening its application was of lovely dexterity.
The semantic technique of updating the living sense of a dated legislation is, in our view, perfectly legitimate.
Semantic readjustments are necessary to obviate alegicidal sequel and a validation oriented approach becomes the phi losophy of statutory construction sometimes.
Similar obser vations were made in N.C. Dalwadi vs State of Gujarat, (supra).
In Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; , this Court upheld the valid ity of sections 9 and 10 of the Act by reading in several matters by necessary implication in order to sustain the validity of the sections.
In Charan Lal Sahu & Ors.
vs Union of India, [1989] Supp.
SCALE 1, at pages 53 and 54, paras 101 as well as p. 61, para 114, it was observed that this principle of reading down has been adopted in U.S. Supreme Court in several cases.
See also United States of America vs Edward A. Rumely, 97 Lawyers Edition 770 at 775.
The princi ple as enunciated in Rumely 's case (supra) has been approved by this Court in Shah & Co. vs State of Maharashtra, ; at 477 78.
This principle of reading down or placing limited construction has been adopted by courts in England in deciding the validity of bye laws and regula tions.
See Reg.
vs Sadlers Co., ; , at 460 and 463 and Faramus vs Film Artists Association, at 542.
The courts must iron out the creases, as said Lord Denning in Seaford Court Estates, This Court has also on numerous occasions followed this practice.
See the observations of this Court in M. Pentiah and Ors.
vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc.
vs A. Rajappa & Ors., ; See also H.M. Seervai 's 'Constitutional Law of India ', 3rd Edn.
I, pages 119 120.
In the background of this, the learned Attorney General also 198 drew our attention that the present regulation, as mentioned hereinbefore, should be read and construed in the said manner and the reasons and conditions of its exercise can be spelt out and it may be so construed.
He submitted that it should be spelt out that the regulation requires reasons to be there, reasons which are germane and relevant.
The principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma.
The principles of natural justice are not incapable of exclusion in a given situation.
For example, Article 311(2) of the Constitution which essentially em bodies the concept of natural justice, itself contemplates that there may be situations which warrant or permit the non applicability of the principles underlying Article 311(2) of the Constitution.
Reference may be made to the second proviso to Article 311 of the Constitution.
This court has also recognised that the rule of audi alteram partera can be excluded where having regard to the nature of the action to be taken, its object and purpose and the scheme of the relevant statutory provision, fairness in action does not demand its application and even warrants its exclusion.
If importing the right to be heard has the effect promptitude or the urgency of the situation so demands, natural justice could be avoided.
See the observations of this Court in Maneka Gandhi 's case at p. 681 of the report (supra).
This Court in Tulsi Ram Patel 's case (supra) had in terms ruled that not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded.
But the principles of natural justice must not be displaced save in exceptional cases.
Consequent ly, the learned Attorney General submitted that the words "where it is not reasonably practicable to hold an enquiry" may be imported into the regulations.
It was submitted by the learned Attorney General that the exclusion of audi alteram partera rule in circumstances which are circum scribed and coupled with the safeguard of recording of reasons which are germane and relevant, the termination in such a situation would not render the regulation unreasona ble or arbitrary.
Then it could not be said that the power was uncanalised or unguided if the regulation is construed and read down in the manner indicated above, according to the learned Attorney General.
The reading down, the learned Attorney General conceded cannot, however, be done where there was no valid reason and where it would be contrary to proclaimed purpose.
See the observations of this Court in Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , at p. 239 and 259.
On behalf of the workmen of the respondent DTC, Shri 199 Ramamurthi, submitted that the Constitutional questions of great public importance arising in the present appeal, have to be examined in the light of the law laid down by the Full Court in the case of R.C. Cooper vs Union of India, ; at 577 and by larger Constitution Benches in the cases of Maneka Gandhi vs Union of India (supra), Moti Ram Deka vs Union of India (supra), State of West Bengal vs Union of India, (supra) and the Constitution Bench decisions in the cases of Olga Tellis and Others vs Bombay Municipal Corporation and Others, (supra), Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61, Union of India vs Tulsiram Patel and Others (supra), Sukhdev Singh & Others vs Bhagat Ram Sardar Singh Raghuvanshi and Another (supra) and Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102.
According to Shri Ramamurthi these deci sions are authority for the following propositions: (a) The declarations in the provisions contained in the Fundamental Rights Chapter involve an obligation imposed not merely upon the "State" but upon all persons to respect the rights declared, unless the context indicates otherwise, against every person or agency seeking to infringe them.
See the observations of this Court in State of West Bengal vs Union of India, [1964] 1 SCR 371 at page 438: (b) Part III of the Constitution weaves a pattern of guarantee on the texture of basic human rights.
The guaran tees delimit the protection of those rights in their allot ted field.
They do not attempt to enunciate distinct right.
[See R.C. Cooper 's case (supra( at p. 577 of the report].
The extent of protection against impairment of a fundamental right is determined not by the object of the Legislature nor 2by the form of the action, but by its direct operation upon the individual 's rights.
(c) Any person who is deprived of his right to live lihood except according to just and fair procedure estab lished by law can challenge the deprivation as offending the right to life, conferred by Article 21.
See the observations of this Court in Olga Tellis 's case (supra( at 80 81 and 85 of the report.
Therefore, the holding to the contrary in A.V. Nachane & Anr.
vs Union of India & Anr., ; is no longer good law.
In any event Counsel is right that the observations made at p. 259 of the report (supra) were in a different context and the challenge 200 based on Articles 19(1)(g) and 31 does not appear to have any substance in resolving the present controversy before us.
Mr. Ramamurthi submitted that provision of any Rule that service shall be liable to termination on notice for the period prescribed therein contravenes Article 14 of the Constitution as arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken.
See the observations of this Court in Moti Ram Deka 's case (supra) at p. 770 and 751 of the re port.
It was submitted that Articles 14, 19 and 21 of the Constitution are inter related and the law must, therefore, now be taken to be well settled that Article 21 does not exclude Article 19 and even if there is a law providing a procedure for depriving a person of personal liberty (this will equally apply to life) and there is, consequently, no infringement of fundamental right conferred by Article 21, such law in so far as it abridges or takes away any funda mental right under Article 19 would have to meet the chal lenge of the Article.
See the observations of this Court in Maneka Gandhi 's case (supra).
Article 19(1)(g), it was urged, confers a broad and general right which is available to all persons to do work of any particular kind and of their choice.
See the observations in Fertilizer Corporation Kamgar Union 's case (supra) at p. 60 61 of the report.
According to Mr. Ramamurthi, there is a distinction between Public Employment or service and "pure master and servant cases".
He referred to the observations of this Court in India Tobacco Co. Ltd. vs The Commercial Tax Offi cer, Bhavanipore & Ors., at 657; followed in A.L. Kalra vs The Project and Equipment Corporation of India Ltd., ; at 664; Whenever, therefore, according to Shri Ramamurthi, there is arbitrariness in State Action whether it be of the Legislature or of the Executive or of an authority under Article 12, article 14 immediately springs into action and strikes down such State action.
In fact, the concept of reasonableness and non/arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution.
See the observations of this Court in Bandhua Mukti Morcha vs Union of India & Ors., at 101.
A violation of a principle of natu ral justice by State action is a violation of Article 14 of the Constitution, which can be excluded only in exceptional circumstances.
See the observations of this Court in Tulsi Ram Patel 's case (supra) at 229, and at 233 of the report.
It was, therefore, submitted that a clause authorising the ?201 employer to terminate the services of an employee whose contract of service is for an indefinite period or till the age of retirement, by serving notice violates the fundamen tal rights guaranteed under Articles 14, 19(1) (g) and 21 of the Constitution for Article 21 is violated when right to livelihood is taken away by termination of service of a person; employed for an indefinite period or till the age of retirement except for proved misconduct.
Assuming, it was argued, that in such a case right to livelihood can be taken away by termination of service by giving notice, nonetheless it could be validly done only, according to Shri Ramamurthi, if: (i) There is a fair and just procedure by way of (1) recording of reasons and (2) notice to show cause; (ii) And the right to terminate is restricted to exceptional grounds.
When the service of a person employed for an indefinite period or till the age of retirement is terminated, Shri Ramamurthi assets, then Article 14 is violated when there is no guidance for the exercise of power and reasons are not required to be recorded and principles of natural justice are abrogated.
Similarly Article 19(1)(g) is violated, according to him, for the reasons that there is no guidance, no requirement of reasons to be recorded and there is viola tion of the principles of natural justice.
Shri Ramamurthi reminded us that before India became independent in 1947, the was ap plicable only to British India on its own force.
By Merged State Laws Act, 1949 it was extended to the new provinces and merged States to the States of Manipur, Tripura by Vindhya Pradesh by Union territories Law Act 1950.
It was also extended to the States merged in the States of Bombay and Punjab by Bombay Act 4 of 1950 and Punjab Act 5 of 1950.
With the promulgation of the Constitution, the Indian Con tract Act 1872 extends to the whole of India except the State of Jammu & Kashmir.
Shri Ramamurthi asserted the what ever might have been the position in regard to the provinces comprised in British India before independence, as far as other areas, forming part of the Union of India under the Constitution are concerned, only the is applicable.
By article 372 of the Constitution, this Act has been continued in operation even after the Constitu tion came into force, subject to the other provisions of the Constitution.
202 A contract of service, according to Shri Ramamurthi is a species of contract and will, therefore, be governed by the provisions of the .
This Act has been held to be an Amending as well as a Consolidating Act.
Therefore, there can be no question of common law of Eng land, as made applicable in India during the British Rule, being the basis for deciding any question relating to con tract of employment after 1950.
In any event any provisions of either the , or of the English Common Law Applicable in British India before the Constitu tion came into force would be void by reason of Article 13 of the Constitution if it infringed any of the fundamental rights contained in Part III of the Constitution, pleaded Mr. Ramamurthi before us.
Under Section 2(h) of the an agreement (including an agreement of service) becomes a contract only when it is enforceable by law.
If it is not enforceable in law, it would be void by reason of section 2(g) of the Contract Act.
The question for consideration would, therefore, be whether a clause in an agreement of service when it is for an indefinite period or till the age of retirement providing for termination by giving notice would be enforceable? It was submitted by the workers ' union that it would not be enforceable if it vio lates the fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution.
See the observations of this Court in Moti Ram Deka 's case (supra) at 709 of the Report.
It was submitted that the broader submission was that under our Constitution there can be no contract of employment providing for termination of service by an em ployer of an employee by giving notice, when the employment is for indefinite period or till the age of retirement.
In any event, such a clause cannot find a place either in the contract of service or in the statutory provisions governing the conditions of service in the case of public employment under the 'state ' as defined in Article 12 of the Constitu tion.
Shri Ramamurthi urged that the observations contained in the judgment of this Court in Tulsiram Patel 's case (supra) at 166 of the report, regarding the ordinary law of master and servant cannot be construed as laying down the proposi tion that under the Indian law, even if a contract of serv ice is for an indefinite period or till the age of retire ment, it can still be terminated by giving reasonable period of notice.
In any event, even in the Common Law of England, a distinction is made between public employment and "pure master and servant cases" [See the observations of this Court in Sukhdev Singh 's case (supra) at page 657 of the report.
Mr. Ramamurthi submitted that the doctrine of pleasure 203 advanced by the learned Solicitor General of India was confined to employment under the Union of India and States dealt with under Part XIV, Chapter I of the Constitution and cannot and do not extend to employment under local or other authorities referred to under Article 12 of the Constitu tion.
There cannot be any pleasure by such authority in respect of employment of the permanent employee.
It was submitted by Shri Ramamurthi further that even in cases of employment under the Union and the States, the pleasure doctrine is limited by the express provisions of Article 311 of the Constitution.
For that reason, according to him, it has lost some of its majesty and power.
He referred us to the observations of this Court in Moti Ram Deka 's case (supra) at p. 704 and Tulsi Ram Patels 's case (supra) at page 196.
In dealing with the question of validity of rules autho rising the Government to terminate the services of temporary servants as upheld by this court in Champaklal Chimanlal Shah 's case (supra) and Ram Gopal Chaturvedi 's case (supra) it was submitted that it is important to note that the validity of the rules was challenged on the ground of denial of equality of opportunity in employment under the State guaranteed by Article 16 of the Constitution.
In that con text this Court observed at p. 20 1 (supra) of the report that there can also be no doubt, if such a class of tempo rary servants could be recruited, there could be nothing discriminatory or violative of equal opportunity if the conditions of service of such servants are different from those of permanent employees.
It is thus apparent that this Court, it was submitted, had no occasion to consider the reasonableness of a provision for termination of service on giving notice under Article 14 of the Constitution and, therefore, this decision can be of no assistance to the appellants.
Shri Ramamurthi submitted that since, audi alteram partem is a requirement of Article 14, in view of recent decisions of this Court, and conferment of arbitrary power itself is contrary to Article 14, the rule in question can, according to Shri Ramamurthi, no larger be sustained as valid.
As far as the decision in Ram Gopal Chaturvedi 's case (supra) was concerned, Shri Ramamurthi submitted that the reasons given for rejecting the argument that the rule confers an arbitrary and unguided power are not valid for in Moti Ram Deka ' case (supra), where the view of two learned judges of this Court who had held similar power to be arbi trary had not ever been noticed.
The observation that it is impossible to define before hand all the circumstances in which the discretion can be exercised and the discretion had necessarily to be left to the Government, has not taken into consideration the circumstance 204 that the denial of audi alteram parlem which is a require ment of Article 14, can be only in exceptional circumstances and, therefore, such circumstances have necessarily to be spelt out.
This Court had no occasion, according to Shri Ramamurthi, to consider the cumulative impact of the funda mental rights guaranteed by Article 14, 19(1)(g) and 21 of the Constitution.
Shri Ramamurthi sought to urge before us that industrial law recognises the right of the employer to exercise, bona fide, the power to terminate the services of workman by giving notice, except in case of misconduct, which is unlike the law of master and servant.
Shri Ramamurthi urged that it is important to note that in all cases under industrial law, decisions have been rendered by industrial tribunal when disputes had been raised by workmen challenging the action of the employer terminating their services by giving notice, under the terms of the contract of service or the Certified Standing Orders.
The question was never raised, nor could it be raised, before the Tribunals that the very term in the contract of service or in Standing Orders would have to stand the test of Articles 14, 19(1)(g) and 21 of the Con stitution.
Further a constitution bench of this Court had rejected the contention that Industrial Tribunals should make a distinction between public sector and private sector industries.
Reliance was placed on the observations of this Court in Hindustan Antibiotics Ltd. vs The Workmen & Ors., at 669.
On the consideration of the rele vant material placed before us, we are asked to come to the conclusion that the same principles evolved by industrial adjudication in regard to private sector undertakings will govern those in the public sector undertakings having a distinct corporate existence.
Therefore, all the decisions referred to by the appellant, it was argued, and interven ers, were all concerned with applying the industrial law even though some Of them dealt with employees, working in statutory corporations or public sector undertakings.
It was, therefore, submitted by Shri Ramamurthi that these decisions could afford no assistance to the Court, in decid ing the issues raised in the present case, where the validi ty of a term of employment, permitting the employer to terminate the services of a permanent employee by simply giving notice, is challenged on the ground that such a term violates fundamental rights guaranteed by Articles 14, 19(1)(g) and 21 of the Constitution.
It was submitted fur ther that the constitutional guarantees under Articles 14 and 21 of the Constitution are for all persons and there can be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws apply and those who are outside their purview.
The laws applicable to the former 205 can only add to and not detract from the rights guaranteed by Part III of the Constitution.
It was important to note that all the decisions so far rendered by this Court striking down rules and regulations or a provision in the contract of service, authorising termination of service of permanent employees by giving notice relate to cases of non workman and we were referred to the decisions in West Bengal State Electricity Board 's case (supra), Central Inland Water Transport Corporation Ltd. 's case (supra) and O.P. Bhandari 's case (supra).
There is the theory that possibility of abuse of power is no ground for striking down the law.
Attention may be drawn to the observations of this Court in The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 and Commissioner of Sales Tax, Madhya Pradesh vs Radhakri shan & Ors.
(supra).
However, these decisions, it was sub mitted on behalf of the respondents, would have no relevance for the present case because the power to terminate the services of a person employed to serve indefinitely or till the age of retirement can be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Articles 14, 19(1)(g) and 21 of the Constitution.
Unless the exceptional circumstances are spelt out the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, it was urged.
This was particularly so because the requirement of audi alteram partem which is a part of the guarantee of Article 14 is sought to be excluded.
There can be no guidance available in the body of the law itself because the purpose for which an undertaking is established and the provisions dealing with the same in the law can provide no guidance regarding excep tional circumstances under which alone the power can be exercised.
The question involved, Shri Ramamurthi empha sised, in these cases is not the exercise of power which an employer possesses to terminate the services of his employee but the extent of that power.
Shri Ramamurthi drew our attention to the award and referred to paragraph 5.6 of the Shastri Award and other provisions of the award defining misconduct and also para graph 522 of the Award dealing with the procedure for termi nation of employment and 523 onwards.
Mr. Ramamurthi further submitted that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 cannot be rendered constitutional by reading the requirement of recording reasons and confin ing it to cases where it is not reasonably practicable to hold an enquiry 206 and reading it down further as being applicable to only exceptional cases would not be permissible construction and proper.
Shri Ramamurthi drew our attention to the true scope of Regulation 9(b) of the aforesaid Regulations in the light of the judgment of this Court in Balbir Saran Goel 's case (supra).
This rule, it has to be borne in mind, according to him, has been interpreted as applicable to all cases of termination including termination for misconduct as defined in the Standing Orders.
In the aforesaid decision, at p. 761 of the report.
this Court observed that: "Regulation 9(b) clearly provides for termination of serv ices in two modes: the first is where the services may be terminated without any notice or pay in lieu of notice.
This can be done among other reasons for misconduct.
The second mode is of terminating the services owning to reduction of establishment or in circumstances other than those mentioned in clause (a) which relate to termination without notice.
When termination is made under clause (b) one month 's notice or pay in lieu thereof is to be given to the employee.
Thus it is clear that if the employer chooses to terminate the services in accordance with clause (b) after giving one month 's notice or pay in lieu thereof it cannot amount to termination of service for misconduct within the meaning of clause (a).
It is only when some punishment is inflicted of the nature specified in Regulation 15 for misconduct that the procedure laid down therein for an enquiry etc.
becomes applicable.
" If this was the true scope of the Regulation, Shri Ramamurthi contended, then it was obvious that it leaves the choice entirely to the DTC Management either to proceed against the person for misconduct by holding an enquiry or for the same misconduct terminate his services by giving one month 's notice.
It is the conferment of such a power that has been held to be unguided and arbitrary in all decisions from Moti Ram Deka 's case (supra) to the more recent deci sions of this Court such as West Bengal Electricity Board 's case (supra), etc.
Therefore, it was submitted that the argument based on the assumption that Regulation 9(b) was confined to cases under than misconduct really overlooked the interpretation placed upon this Regulation by this Court.
Shri Ramamurthi further submitted that if regulation 9(b) con 207 fers this arbitrary power of leaving it to the DTC manage ment to pick and choose then it is plain that there is nothing in the provisions of the Act or the regulations from which the DTC management can find any guidance.
It was, therefore, the submission of the respondents that in order to conform to the Constitutional guarantees contained in Articles 14, 19(1)(g) and 21 of the Constitution as inter preted by this Court, the first and foremost the regulation will have to make a distinction between cases where services are sought to be terminated for misconduct and cases of termination on grounds other than what would constitute misconduct.
As far as termination or dismissal on ground of misconduct is concerned, ordinarily the detailed procedure for establishing misconduct had to be followed.
In cases where it is not possible to follow the detailed procedure, then at least the minimum procedure of issuing a show cause notice should be followed after recording reasons why it is not practicable to hold a full fledged enquiry.
In cases where even this requirement of the elementary principles of natural justice is not to be followed, then the regulation must itself indicate those cases in which principles of natural justice can be totally abrogated after recording reasons.
As far as termination of service of a permanent employee on grounds which do not constitute misconduct is concerned, assuming that this is held to be permissible, it can be only in very exceptional cases and that too after observing at least the elementary principle of natural justice of asking for explanation before terminating the services and also recording reasons.
Shri Ramamurthi urged that to read all this into the regulations would literally mean re writing the regulations which is not permissible under any of the decisions or the law.
As one of the cases cover termination under The Punjab Civil Services Rules, 1952, Shri Ramamurthi drew our atten tion to some of the provisions of these rules.
He drew our attention to rule 3.12 which provides that unless in any case it be otherwise provided in those rules, a Government employee on substantive appointment to any permanent post acquired a lien on that post and ceased to hold any lien previously acquired on any other post.
He also drew our attention to rule 3.15(a) which provided that except as provided in clause (b) and (c) of that rule and in note under rule 3.13, a Government employee 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result would be to leave him without a lien or a suspended lien upon a permanent post.
Clause (b) of rule 3.15 provided that notwithstanding the provisions of rule 3.14(a), the lien of a Govern 208 ment employee holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 6.21; or on his appoint ment substantively to the post of Chief Engineer of the Public Works Department.
And clause (c) of this rule provid ed that a Government employee 's lien on a permanent post, shall stand terminated on his acquiring a lien on a perma nent post (whether under the Central Government or a State Government) outside the cadre on which he is borne.
Note under rule 3.13 speaks about a Government employee holding substantially the post of a Chief Engineer of the Public Works Department, taking leave immediately on vacating his post he then shall during the leave be left without a lien on any permanent post.
The expression 'vacate ' used in the note refers only to vacation as a result of completion of tenure of attainment of superannuation.
Mr. R.K. Garg, appearing for the respondents in C.A. No. 4073 of 1986 stated that the Attorney General had rightly pointed out that employee 's services were terminated under Para 522 of the Shastri Award merely because he had failed to mention a loan of Rs. 1.5 lakhs taken from another Branch of the Bank.
Mr. Garg pointed out that the loan had been repaid.
The failure to mention this loan had deprived the appellant of his livelihood.
The use of this power claimed under Para 522 of the Shastri Award was not defended by the Attorney General in this case.
We had fairly conceded that he might not support this termination when the case is heard on merits.
But, that does not derogate from the wide ampli tude of this uncontrolled, arbitrary power claimed by the management under Para 522 of the Shastri Award.
Powers claimed under Para 522 must, therefore, be examined in the background of the facts and circumstances of this Appeal.
It was submitted that this Court must hold that nothing in Para 522 of the Shastri Award confers on the management power so far as they can get rid of permanent employees of the Banks merely after service of notice on the imaginary belief that they were doing so for "efficient Management" of the Banks.
Mr. Garg reminded us that it is common knowledge that all despots act as tyrants in the firm belief that the intolera ble indignities and atrocities they inflict, were necessary in public interest and to save the Society.
Mr. Garg submit ted that the rule of law cannot be preserved if absolute, uncontrolled powers are tolerated and fundamental rights or Directive Principles are allowed to be reduced to a "dead letter".
Mr. Garg urged that the fundamental requirements of natural justice are not dispensible luxury.
The express language of Para 522 of 209 the Shastri Award is totally destructive of this require ment.
The express language as mentioned hereinbefore of Para 522 of the Shastri Award provides: "(1) In cases not involving disciplinary action for miscon duct and subject to clause (6) below.
The employment of a permanent employee may be terminated by three months ' notice or on payment of three months ' pay and allowances in lieu of notice.
The services of a probationer may be terminated by one month 's notice or on payment of a month 's pay and allow ances in lieu of notice." Rule 148(3) reads: "(3) Other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" "Note: The appointing authorities are empowered to reduce or waive, at their discretion, the stipulated period of notice to be given by an employee, but the reason justifying their action should be recorded.
" Rule 348(4) reads: "In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice." Rule 149(3) reads: "Other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not howev er, required in cases of dismissal or removal as a discipli nary measure after compliance with the provisions 210 of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" It was urged by Mr. Garg that the services of a perma nent bank employee cannot be terminated without charge of 'misconduct ' and without an enquiry and the aforesaid para graph gives no indication as to on what conditions this arbitrary uncontrolled power can be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts.
It was further urged that this provision provides for "insecurity of tenure" for lakhs of permanent employees, Articles 14, 19(1)(g) and 21 of the Constitution and the integrated protection of these Fundamental Rights excludes the "doctrine of pleasure" and insists on security of tenure "during good behaviour".
The right to livelihood cannot be rendered precarious or reduced to a glorious uncertainty", it was urged by Mr. Garg.
Mr. Garg submitted that the right to "hire and fire" was the prerogative claimed by the employer in the days of uncontrolled "laissez faire.
" This was the "doctrine of pleasure of the Crown" in case of Government servants, who held office during the pleasure of the King who had absolute powers over his sub jects.
Articles 14, 19(1)(g) and 21 secure the rights of the citizen and act as limits on the powers of the "State" in Democratic Republic of India.
Unjust, arbitrary, uncon trolled power of "premature" termination of services of permanent employees should not be tolerated according to Mr. Garg by the Constitution of free India.
In case of Government servants, Articles 311(1) and 311(2) of the Constitution expressly restrict the "doctrine of pleasure" contained in Article 310.
Article 14 also insists on natural justice as was provided in Article 311(2), in order to prevent arbitrary use of power of termi nation.
Articles 19(1)(g) and 21 read together require just, fair and reasonable procedure for termination of services for good cause.
Without these safeguards, employees are reduced to the status of slaves of their masters.
Employers are no longer masters as in the days of slavery of feudal relations, Mr. Garg tried to emphasise.
He submitted that Article 14 of the Constitution did not permit permanent railway employees to be exposed to termination of their services on notice without charge of misconduct or a reason able opportunity to answer the charge.
Rules 148 and 149 of the Railway Establishment Code which have been set only hereinbefore have the same effect, as is the effect of para 522 of the Shastry Award, and both these Rules were declared unconstitutional in Moti Ram Deka 's case (supra) by a seven 211 Judges ' Bench, according to Mr. Garg.
Rules 148 and 149 were found violative of Article 14 for two reasons, it was submitted: (i) Railway servants in the matter of termination of service could not form a separate Class from other Govern ment servants (As per majority view, in the Judgment of Justice Gajendragadkar, in Moti Ram Deka '5 case ; ,729 731).
(ii) Rule 148 conferred unguided, uncontrolled power of termination and, therefore, was hit by Article 14.
(As per Justice Subba Rao and Justice Das Gupta, in Moti Ram Deka 's case (supra).
Mr. Garg sought to urge that this binding decision of seven Judges ' Bench in Moti Ram Deka 's (supra) was applied in Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593 by the Constitution Bench of five Judges to strike down a Service Rule which permitted compulsory retirement on completion of 10 years ' services on the ground of 'inefficiency ' etc.
This Court held that Compulsory retirement could not be tolerated even after 10 years of service in view Of such retirement being not based on rele vant considerations, including expected longivity of life of the employees in India.
If the power of removal by way of compulsory retirement even after ten years was held uncon stitutional in Gurdev Singh 's case (supra) para 522 of the Shastri Award was far more arbitrary, unjust and unreasona ble, it was urged before us.
It was reiterated before us that in view of the binding decision of seven Judges in Moti Ram Deka 's Case and its application by five Judges in Case of compulsory retirement after 10 years in Gurdev Singh 's Case (supra), it is not open to the employees to submit that similar powers claimed under paragraph 522 of the Shastri Award, even without 10 years ' service for removal without charge of 'misconduct ' and without enquiry, can be upheld as constitutional on any grounds whatsoever.
It cannot be upheld as constitutional on any grounds whatsoever.
It cannot be done without over ruling Moti Ram Deka 's case or without an express constitu tional provision like second Proviso (a), (b) or (C) to Article 311(2), which was adopted.by the Constituent Assem bly, not by a court of law, it was reiterated before us.
212 It was submitted that no principle of interpretation permits reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate.
(R. M.D.C. 's case (supra).
It was urged that it was established law that on reading down a provision, Court cannot preserve a power for a pur pose which is just the opposite of what the legislature had intended.
Para 522 of the Shastri Award was not at all intended to be used within limits expressed or implied.
The Court must not legislate conditions such as were adopted by the Constituent Assembly in case of second Proviso to Arti cle 311(2) in the Constitution of India.
Even Parliament could not graft such limitations on Article 311(2), if second Proviso to Article 311 was not there in the Constitu tion.
This Court cannot and ought.
it was submitted not to arrogate powers to legislate what was patently outside even the competence of Parliament of India.
It was submitted that in Tulsi Ram Patel 's Case, the majority decision could not hold second Proviso to Article 311(2) unconstitutional.
In order to give effect to the express language of second Proviso to Article 311(2), Court denied the protection of Article 14 to permit the President to terminate the services without following principles of natural justice ' in cases covered by the said Proviso.
In every other case, natural justice is the command of Article 311(2) of the Constitution was submitted.
The operation of Articles 14, 19(1)(g) and 311(2) of the Constitution does not permit Courts to lay down essential legislative policy, such as was laid down by the Constituent Assembly to over ride 311(2) of the Constitution.
Mr. Garg, therefore, submitted that the requirement of defining 'misconduct ' in the Standing Orders and providing by meticulous provisions for a just, fair and reasonable enquiry into charges of 'misconduct ' are the mandatory requirement of Industrial Employment Standing Orders Act.
(U. P State Electricity Board vs Hari Shankar Jain, Shri Garg urged that the I.L.O. Conventions, accepted by India.
required all employers to frame Standing Orders.
He further urged that the demands of natural justice, which form part of Article 14 of the Constitution have been raised to the status of 'public policy ' controlling section 23 of the .
On that basis, clauses in 213 contract of employment which provide for removal from serv ice on the will of the employer have been condemned as 'The Henry VIII Clause ' (see the observations of this Court in Central Inland Water Transports case (supra) against the ethos of the Constitution of Socialist Democratic Republic of India.
In this connection, reference was made to the decision of this Court in Central Inland Water Transport 's case (supra) and Maneka Gandhi 's case (supra).
In India, Shri Garg submitted.
workers have a right to participate in the management.
The participation in the management cannot exclude the 'power to be heard ' and thus participate in a decision to remove a permanent employee.
Government alone has power to refer to the industrial tribunal, Shri Garg submitted.
He was against any reading down which is contrary to the principles of interpretation.
He referred to the observations of the Privy Council in Nazir Ahmed 's case [AIR 1936 PC 253].
He submitted that if two provisions exist, firstly, to remove from service after holding an enquiry on a charge of a 'misconduct '; and secondly without serving a charge sheet or holding an enquiry all provisions for hold ing enquiry will be rendered otiose and will be reduced to a mere redundancy.
Such an interpretation will expose workers to harsher treatment than those guilty of misconduct, who will enjoy greater protection than those who have committed no misconduct.
Such powers are patently discriminatory.
Reference under section 10 of the Industrial Disputes Act would serve no purpose, submitted Mr. Garg.
Court has a duty, according to him.
to correct wrongs even if orders have been made which are later found to be violative of any fundamental right and to recall its orders to avoid injus tice.
He referred to the decision of this Court in A.R. Antulay vs R.S. Nayak and Anr., ; He remind ed us that no draft had been submitted by the Attorney General or the Solicitor General, which could be added as a proviso to para 522 of the Shastri Award by this Court as a piece of judicial legislation to amend the impugned para 522.
Substantive provision of para 522 could not be con trolled or curtailed effectively so that its operation could be confined within narrow constitutional limits.
Mr. Garg reminded us that it is not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogate uncontrolled unconstitutional powers, which are neither necessary nor germane for supposed efficiency of services in the Banks as a business enter prise.
Mr. Garg submitted that in a system governed by rule of law, discretion when conferred upon executive authorities must be confined within clearly defined limits.
The rule of law from this point means that decisions should be made by the application of known 214 principles and rules and.
in general, such decisions should be predictable and the citizen should know where he is.
Law can only reach its finest moments when it has freed man from the unlimited discretion of ruler.
He referred to the obser vations of this Court in S.C. Jaisinhhani vs Union of India and Ors., ; at p. 718 19.
On behalf of the Interveners in Civil Appeal No. 2876, Mr. P.P. Rao submitted that the aforesaid decision in Tulsi Ram Patel 's case (supra) was an authority for the proposi tion that but for clause (b) of the second proviso to Arti cle 311(2) of the Constitution, the principles of natural justice could not have been excluded from the scope of Article 14 of the Constitution.
It was urged by him that the said second proviso to Article 311(2) being itself a consti tutional provision, such exclusion was upheld by this Court in the said Tulsi Ram Patel 's case (supra).
page 237 and at last para to p. 242.
Mr. Rao drew our attention to the well settled rule of interpretation and submitted that where two interpretations are possible, one of which would pre serve and gave the constitutionality of the particular statutory provision while the other would render it uncon stitutional and void, the one which saves and preserves its constitutionality should be adopted and the other should be rejected.
Fie, further, submitted that unless the provision of the Constitution itself excludes the principles of natu ral justice, they continue to be applicable as an integral part of the right to equality guaranteed by the Constitu tion.
It was further reiterated that as the employees of the DTC were not Government employees, Article 311(2) of the Constitution was not applicable.
Consequently, the second proviso thereof was also not applicable, with the result that Article 14 of the Constitution fully applied to them and it included the principles of natural justice as held in Tulsi Ram Patel 's (supra) itself at p. 233, last paragraph.
Mr. Rao submitted that it is not permissible to read down statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever.
That would be reading down contrary to the expressed or manifest intention of the legislature.
He drew our attention to the observations of this Court in Minerva Mills Limited vs Union of India & Ors., ; at 261.
Therein, at p. 259 of the report, it was reiterated that the principles of reading down could not be distorted even when words of width are used inadvertently.
In the instant case, Mr. Rao submit ted, reading down would amount to distortion of the right to equality conferred by Article 14, which was regarded as a basic feature of the Constitution.
Nothing short of an amendment of the Constitution could cut down the scope of the basic 215 principle of equality, submitted Mr. Rao then referred to us Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 S.C.R. 1 and submitted that any constitutional amendment which impairs the doctrine of equality would be liable to be declared unconstitutional on the ground of violation of the basic structure of the Constitution.
In the instant case, Mr. Rao submitted, regulation 9(b) deliberately conferred wide power of termination of service without giving a reasonable opportunity to an employee even if he is a regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry.
Therefore, the intention of the regulation making authority was clear and unambiguous.
The provision is not capable of two interpretations.
Consequent ly, the question of reading down did not arise.
Mr. Rao drew our attention to the observations of the Supreme Court of America in Elliott Ashton Welsh, II vs United States, 26 Lawyers ' Edition 2nd, 308 at 327.
Mr. Rao submitted that the decisions referred to by the learned Attorney General were not applicable to the instant case.
He submitted that the decision of the Federal Court in Re The Hindu Women 's Rights to Property Act 's case (supra) involved the interpretation of a single word in the context of legislative competence.
That was not the context of the present controversy, submit ted Mr. Rao.
Mr. Rao submitted that R.M.D. Chamarbaughwal la 's case (supra) was a case on severability.
That was a case where the word 'competition ' was interpreted.
In the present case, the suggested reading down involves, according to Mr. Rao, not interpretation of any single word in regula tion 9(b) but adding a whole clause to it which amounted to rewriting the provisions.
Courts have refused to rewrite legislation to make up for the omissions of the legislature.
Reliance was placed by Mr. Rao on Nalinakhya Bysack vs Shyam Sunder Halder & Ors., ; , at p. 544 545.
Mr Rao referred to the observations of this Court in Kedar Nath Singh vs State of Bihar, (supra) involving the interpreta tion of section 124A IPC in the context of Article 19(1)(a) of the Constitution.
The content of Article 19(1)(a) was not cut down.
In the present case, the suggested reading down would inevitably drain out Article 14 of its vitality.
Shri Rao drew our attention to the decision of this Court in R.L. Arora vs State of Uttar Pradesh, (supra) and submitted that the said decision did not involve cutting down the scope of a fundamental right.
He also drew our attention to the decision of this Court in Jagdish Pandey vs The Chancellor, University of Bihar (supra) which did not involve reading down so as to sacrifice the principle of natural justice 216 which are considered an essential part of the rule of law.
In Municipal Committee, Amritsar & Anr.
vs State of Punjab & Ors.
, ; , this Court was concerned with the intention of the legislature and interpreted the Act con sistent with the said intention.
In the instant case.
the intention was to confer power of termination of services of all categories of employees without any further enquiry.
Sunil Batra vs Delhi Administration (supra) was again a decision where this Court found that the intention of the legislature was not to confer arbitrary power.
In the in stant case, the intention was different.
N.C. Dalwadi vs State of Gujarat.
(supra) was a case of giving reasonable interpretation to a provision which was capable of such an interpretation.
In the scheme of DTC Regulations.
regulation 9(b) was not susceptable to two interpretations.
submitted Mr. Rao.
According to Mr. Rao, the principle of reading down was not applicable where the intention of the law maker was to confer too wide a power intended to be exercised without giving an opportunity to the affected party to be heard.
It was, therefore, submitted that the principle of reading down was not applicable and if applied would amount to cutting down the scope of Article 14 and subjecting permanent em ployees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution.
Mr Nayar, appearing in Civil Appeal No. 1115 of 1976 (Shri Samara Singh vs Zila Parishad Ferozepure) for the respondent, drew our attention to the fact that the appellant, Shri Satnam Singh was appointed by the respondent vide letter of appointment dated 9th March.
1961 the appel lant ceased to work for the respondent, when his services were terminated simpliciter vide Resolution dated 26th November, 1965.
He, therefore, had worked for the respondent only for a short period of less than four years.
The serv ices of the appellant ceased on the basis of the contract.
the terms of which were mutually agreed between the parties.
In case he had continued to work, he would have reached the age of superannuation in the year 1984.
His total emoluments with effect from 1st November, 1964 to 30th September, 1984 would have been approximately Rs.2,46,464.
Mr. Nayar filed a detailed statement and stated that the appellant ceased to work for the respondent with effect from 26th November, 1964 when he was discharged from service.
In this case, it is necessary to bear in mind that the appellant, Shri Satnam Singh was appointed by the respond ent, Zila Parishad, Ferozepure by letter of appointments dated 9th March.
The Board approved his terms of appointment and the same were duly 217 accepted by the appellant.
The 'relevant clause of Contract between the parties for present purposes was clause 4 which was as follows: "His services will be terminated on one month 's notice on either side provided it will be open to pay him his salary for the period by which the notice falls short of one month.
Similarly, if he wishes to resign he may do so by depositing with the District Board his salary for the period by which the notice given by him fails short of one month.
" The appellant, however, was continued to be governed by the Statutory Rules, known as District Board Rules, 1926.
According to the respondent, the appellant did not cooperate inasmuch as he was not available in the Headquarters and presumably left without permission and without handing over important record and documents of the District Board, etc.
But the appellant 's version, as stated in the grounds of appeal, was entirely different.
He urged that it was on account of vindictive attitude on the part of some of the employees of the respondent, which had produced his termina tion order without enquiry.
The District Board resolved that in terms of condition 4 of the terms of appointment, his services should be terminated on one month 's notice or pay in lieu thereof.
Mr. Nayar submitted that rule 1(i) of District Board Rules, 1926, Part V also gave right to both the parties to terminate the contract of employment on one month 's notice, etc.
The said rule reads as follows: "In the absence of a written contract to the contrary every officer or servant employed by a District Board shall be entitled to one month 's notice before discharge or to one month 's wages in lieu thereof, unless he is discharged during the period of probation or for misconduct or was engaged for a specified term and discharged at the end of it.
" The services of the appellant were terminated vide Resolution dated 26th November, 1964 of the Board and he was discharged by allowing him one month 's salary in lieu of notice.
The termination order was dated 14th December, 1964.
The appellant, Shri Satnam Singh filed a suit for declara tion in the Court of Senior Sub Judge, Ferozepure, challeng ing the order of termination dated 14th December, 1964 as illegal, void, ultra vires, etc.
The Senior Sub Judge, Ferozepure, vide judgment and decree dated 9th January, 1969 held 218 that the discharge of the appellant amounted to dismissal and as clearly no enquiry was held against him, the termina tion simpliciter was bad in law.
The respondent, Zila Pari shad filed an appeal in the Court of 3rd Additional District Judge, Ferozepure, who vide order dated 22nd December, 1969 affirmed the decision of the trial Judge and dismissed the appeal of the respondent.
The respondent filed regular appeal in the High Court of Punjab and Haryana at Chandi garh, inter alia, pleading that the appellant was validly discharged in terms of his appointment order and rule 1(i), Part V A of the District Board Rules, 1926.
The learned Single Judge of the High Court considered the matter in detail and referred to various judgments of this Court and held that it could not be said that the action of termination prima facie amounted to an order of dismissal even though the appellant was at the time a con firmed employee of the respondent.
The learned Single Judge found that the respondent had a contractual right to termi nate the services of the appellant by giving a month 's notice or a month 's salary in lieu of notice.
According to Shri Garg, the removal of the appellant from service was in accordance with the terms governing his appointment.
Merely because on the 7th of November, 1964, the respondent re solved to charge sheet the appellant for acts of omission and commission and ordered an enquiry, and such an enquiry never commenced, would certainly not be enough reason to hold that the termination of the appellant 's services, was ordered by way of punishment and therefore, amounted to his dismissal, argued Mr. Nayar.
It was submitted by Mr. Nayar that the appellant had conceded that condition No. 4 was legally good but he had argued that it was not meant to be effective after the appellant had been confirmed.
Aggrieved by the order mentioned above, the appellant had filed Letters Patent Appeal before the Division Bench of the High Court.
The Division Bench of the High Court by an order dated 13th September, 1972 referred the question of law for the decision of the full bench.
The full bench of the High Court refrained the question of law as under: "Whether, the termination of services of a permanent Dis trict Board Employee by giving him one month 's notice or pay in lieu thereof in terms of the conditions of his appoint ment and/or rule 1 in part V A of the District Board Rules, 1926, is bad in law and cannot be made? 219 The majority of the learned Judges, inter alia, held that the appellant not being a government servant cannot have the protection of Article 311 of the Constitution as he was not a civil servant under the Central Government of the State Government.
He was an employee of the District Board and his tenure of appointment was governed by the provisions of the District Board 's Act, 1883 and the rules flamed thereunder as well as by the terms and conditions of his appointment.
The condition No. 4 gave mutual right to the District Board as well as to the appellant to terminate the service by giving one month 's notice or pay in lieu of notice, etc.
The condition in the appointment letter shall not be deemed to have been abrogated by the Punjab Civil Services Rules.
The Court held further that the condition stated in the letter of appointment of the appellant contin ued to bind the parties even after the appellant 's confirma tion and his services could be terminated by an order of discharge simpliciter in accordance with the condition No. 4 thereof as this condition was almost in the same terms as Rule I in Part V A of the Rules.
It was further held by the full bench of the High Court that the Punjab Civil Service Rules had no over riding effect and these rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be".
Rule 8.1 of the Business Rules reads as under: "In all matters relating to the conditions of service of its employees the Board shall so far as may be follow the rules from time to time in force for servants of the Punjab Gov ernment.
" The finding of the Letters Patent Bench in this regard was as under: "According to Rule 8.1 ibid, the Punjab Civil Services Rules were to apply in respect of matters for which no provision had been made anywhere else because of the phrase used "so far as may be".
Naturally, if a provision was made anywhere else, which went counter to the Punjab Civil Services Rules, the application of the latter rules It thus follows that the Punjab Civil Services Rules were not to apply to the appel lant in respect of matters for which specific provision was made in his letter of appointment, which constituted the contract of service between him and the District Board, as he joined 220 service on those terms.after accepting the same.
" The learned Chief Justice of Punjab & Haryana High Court, however, dissented.
The answer to the question, therefore, was given in the negative vide order dated 3rd April, 1974.
The Division Bench of the High Court which heard the matter after the question of law was answered by the Full Bench, dismissed the appeal of the appellant vide order dated 28th October, 1974 and this appeal to this Court arises from this order.
The appellant in Civil Appeal No. 1115/76, who appeared in person before us reiterated the relevant facts and urged that his removal was bad and the rule under which he was removed may be quashed.
It may be mentioned that as regards letter of Shri Kuldip Singh Virk to the Senior Superintend ent of Police, Ferozepure regarding the charges of corrup tion against the appellant, a case under section 5(2) of the Prevention of Corruption Act was registered.
The appellant was tried for the said alleged offence and acquitted of the charges by the Special Judge Ferozepure.
A further case was registered under sections 381/ 409 of IPC against the appellant.
Accordingly, the appellant was tried by the Judicial Magis trate Ferozepure.
The charge was framed by the Judicial Magistrate against the appellant.
Against the aforesaid, the appellant filed a petition in the High Court and the charge and the proceedings in question were thereupon quashed by the High Court in July/August, 1967.
There were three more cases tried by the Special Judge, Ferozepure and acquitted.
The appellant filed a document in this Court claiming the monetary claim on the basis that his termination was wrongful.
According to the appellant, he was entitled to recover Rs.4,83,061.90 paise.
However.
according to the statement filed by Shri Nayar, learned counsel for the respondents in this case, the appellant was entitled to withdraw from the District Board Rs.2,46,464.46 paise, in case he would have been in service before his date of super annuation, i.e., 30th September, 1984.
There is no evidence from either side as to whether the appellant had worked somewhere else though the appellant did not work with the respondent because of his suspension.
The appellant had, however, stated that he did not so work.
In that view of the matter, if the contentions or ' the appellant are accepted that the clause under which the terms of employment of the appellant was agreed and under which the termination was effected without any enquiry and further in view of the fact that the learned trial Judge before whom the appellant had filed the suit first and decreed the suit declaring the 221 appellant to be entitled to be in service, the appellant, in our opinion.
should rightly be granted a monetary claim for Rs.4,83,061.90 paise and further interest at 6% from 30th September, 1984.
This would be in consonance with justice and equity in the facts and the circumstances of this case.
This order, however, will have to be passed if we accept the contention on behalf of the appellant herein on the con struction of the clause.
In the matter of M/s Indian Airlines, which is the subject matter of the Application for Intervention No. 1 of 1990:in Civil Appeal No. 2846 of 1986, Mr. Lalit Bhasin, on behalf of the interveners contended that there has been distinction between the discharge simpliciter and dismissal from service by way of punishment.
According to Mr. Bhasin the effect of the judgments of this Court in the Central Inland Water 's case (supra) and West Bengal 's (supra) was to take away the right of the employer to terminate the serv ices of an employee by way of discharge simpliciter.
Accord ing to Mr. Bhasin, this Court had recognised the existence of the inherent right of an employer to terminate the serv ices of an employee in terms of the contract of employment and also under the various labour enactments.
Attention of this Court was invited to the provisions of the , which applies to all industrial establishments whether in the public or private sector.
Under and as a part of the said Act, model standing ' orders are set out and Standing Order No. 13 provides for simple termination of employment by giving one month 's notice etc.
Similarly, there are provi sions under various Shops and Establishments Acts of differ ent States providing for termination of employment of perma nent employee after giving one month 's notice or pay in lieu of notice.
Attention of this Court was invited to section 30 of Delhi Shops and Establishments Act.
The Industrial Disputes Act itself makes distinction between discharge and dismissal and attention of this Court was invited to section 2(00) of the Industrial Disputes Act, which defines 'retrenchment '.
This section expressly ex cludes termination of services as a result of nonrenewal of contract of employment.
Section 2(s) of the Industrial Disputes Act defines 'workman ' to include any person who has been dismissed, discharged or retrenched.
Section 2A distin guishes discharge, dismissal and retrenchment.
It is pertinent to point out that the Original Regula tion 13 of Indian Airlines Employees Service Regulations was set out as under: 222 "13.
The services of an employee are terminable at 30 days on either side or basic pay in lieu: Provided however, the Corporation will be at liberty to refuse to accept the termination of his service by an em ployee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management.
" After the decisions of this Court in Central Inland Water 's case (supra), Indian Airlines initiated steps to amend its Regulation 13 and bring it in line with Article 311(2) of the Constitution as directed by this Court in Hindustan Steels Lid ' case (supra).
It appears that the Board of Directors of Indian Airlines had accordingly ap proved of the amendments to Regulation 13 and the amended Regulation reads as under: "(a) The services of an employee may be terminated without assigning any reasons to him/her and without any prior notice but only on the following grounds not amounting to misconduct under the Standing Orders, namely: (i) If he/she is, in the opinion of the Corporation (the Board of Directors of Indian Airlines) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the inter est of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Indian Airlines), a grave security risk making his/her continuance in a service detrimental to the interests of the Corporat ion; OR if in the opinion of the Corporation (the Board of Directors of Indian Airlines) there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary in the interest of the Corporation, to immediately terminate his/her services.
223 (b) The employee can seek termination of his/her employment by giving 30 days notice or basic pay in lieu: Provided however the Corporation will be at liberty to refuse to accept the termination of his/her service by an employee where such termination is sought in order to avoid disciplinary action contemplated or taken by the Management." According to Mr. Bhasin, in the amended Regulation 13, Indian Airlines had taken care to set out the circumstances in which the services of an employee can be terminated by way of discharge and without holding enquiry.
Mr Bhasin urged that these are eventualities which do not constitute misconduct and yet retention of an employee in the service by the management for any one of the grounds mentioned in the aforesaid Regulation might be considered as detrimental for the management or against public interest.
Mr. Bhasin submitted that the power has been vested with the Board of Directors and not with any individual.
According to Mr. Bhasin, plain reading of Regulation 13, as amended, would clearly establish that the vice.
if any, or arbitrariness is completely removed and sufficient guidelines are made avail able to the highest functionary, namely, the Board of Direc tors to exercise the restricted and limited power now avail able to the employer under these Regulations.
Similar submissions have been made on behalf of Air India, who are interveners.
Submissions made hereinbefore were alternative submissions.
The original Regulation 48 of Air India Employees Service Regulations was as follows: "Termination . ' The services of an employee may be terminated without as signing any reason, as under: (a) of a permanent employee by giving him 30 day 's notice in writing or pay in lieu of notice; (b) of any employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice: (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice.
224 Explanation. ' For the purposes of the regulation, the word "pay" shall include all emoluments which would be admissible if he were on Privilege leave.
" After the decisions of this Court declaring the afore said Regulation as void in Civil Appeal No. 19 of 1982 in the Case of Manohar P. Kharkar & Anr. vs Kaghu Raj & Anr., Air India amended the aforesaid Regulation, which now reads as under: "(a) The services of a permanent employee may be terminated without assigning any reasons to him/her and without any prior notice but only to the following grounds not amounting to misconduct under Service Regulation 42, namely: (i) if he/she is, in the opinion of the Corporation (the Board of Directors of Air India) incompetent and unsuitable for continued employment with the Corporation and such incompetence and unsuitability is such as to make his/her continuance in employment detrimental to the interests of the Corporation; OR If his/her continuance in employment constitutes, in the opinion of the Corporation (the Board of Directors of Air India), a/grave security risk making his/her continuance in service detrimental) to the interests of the Corporation; OR If, in the opinion of the Corporation (the Board of Direc tors of Air India), there is such a justifiable lack of confidence which, having regard to the nature of duties performed, would make it necessary, in the interest of the Corporation, to immediately terminate his/her services.
(b) The services of an employee on probation may be termi nated without assigning any reason to him/her but on giving 30 days notice in writing or pay in lieu thereof.
(c) The services of a temporary employee may be terminated without assigning any reason to him/her but on giving 15 days notice in writing or pay in lieu thereof.
225 Explanation For the purpose of this Regulation the word "pay" shall include all emoluments which would be admissible if he were on privilege leave.
" The question regarding justification of the action taken by the management was touched by this Court, but since the action was based on the old Regulation 48, it had to be quashed.
It was submitted on behalf of the Air India that care had been taken to suit the circumstances in which the services of an employee could be terminated by way of dis charge simpliciter and without holding enquiry.
These are eventualities which do not constitute misconduct and yet retention of an employee in the service of the management for any one of the grounds mentioned in the said Regulation might be considered as detrimental for the management or against public interest.
It was submitted that the said regulation 48 has to be read with Regulation 44(A) which reads as under: "44(A)(i) Notwithstanding anything contained in these Regu lations and if, in the opinion of the Corporation (the Board of Directors of Air India), it is not possible or practica ble to hold an enquiry under the relevant provisions of these Regulations, the Corporation may, if satisfied that the employee has been guilty of any misconduct, any one of the punishment mentioned in Regulation 43 on the employee concerned.
Provided that before exercising his extra ordinary power, the Board shall give 30 days prior notice to the employee concerned of the act of misconduct that the reasons why it is not possible or practicable to hold an enquiry into such misconduct, and the punishment proposed by the Board and the employee shall be entitled to make a full written represen tation to the Board in response to such notice.
(ii) No action shall be taken under the Regulation until the Board has taken into consideration the representation made by the concerned employee under the proviso to Section (i) within the notice period.
" The original regulation 44 was also modified.
According to the interveners, the cumulative reading of regulation 48, as amended, and regulation 44, as amended, would clearly establish that the vice, if any, of arbitrariness is com pletely removed and sufficient guidelines are 226 made available to the Board of Directors to exercise the restricted and limited power now available to the employer under these Regulations.
In C.M.P. No. 30309 of 1988, on behalf of the New India Assurance Co., the intervention application was filed.
It was stated that in the courts below the writ petition No. 835 of 1975 was filed by the employee challenging his termi nation and the appeal filed thereon were decided on grounds available to the petitioner at that time.
A special leave petition was filed by the employee concerned which has now become C.A. No. 655 of 1984.
After the judgment in the Central Inland Water 's case (supra), an additional ground is now being taken to contend that a contract entered into way back in the sixties when the employee concerned was an employee of the Orissa Cooperative Insurance Society Ltd., Cuttack could not be enforced now and the same ought to be declared void in view of the Central Inland Water 's case (supra).
The intervention was allowed on 24th January, 1990 and Smt.
Shyamla Pappu, Senior Advocate submitted written sub missions.
It was submitted that adjudication on the merits and the consideration of the facts and circumstances of the case may be left to the Bench hearing the matter after the decision of the question of law referred to the Constitution Bench.
In this connection, it may, however, be noted that the General Insurance was nationaIised under the provisions of the General Insurance Provisions (Nationalisation) Act, 1972 and the said Act came into force on 20th September, 1972.
Prior to this, was passed under the provisions of which Act all under takings of all Insurers vested in the Central Government with effect from I3th May, 1971.
This was pending nationali sation which took place in 1972 as aforesaid.
Section 7(1) of the said Act which provided for the takeover of former employees reads as under: "Every whole time officer or other employee of an existing Insurer other than an Indian Insurance Company, who was employed by that insurer, wholly or mainly with his general insurance business immediately before the appointed day, shall, on the appointed day, become an officer or other employee, as the case may be, of the Insurance Company, in which the Undertaking to which the service of the officer 227 or other employee relates has vested and shall hold his office or service on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and shall continue to do so until his employment in the Indian Insurance Company in which the undertaking or part has vested, is terminated or until his remuneration, terms and conditions are duly altered by that Indian Insur ance Company.
" The original terms and conditions had not been altered and the employees like the appellant in C.A. No. 855/84 continued to be governed by the original terms and condi tions of the contract at the time of termination.
The origi nal terms and conditions of employment, therefore, continued in force.
The contract of service was entered into when the appellant joined the Orissa Cooperative Insurance Society Ltd. way back in 196 1 and at the time of take over by the Central Government was the Divisional Manager of the said society.
After the take over by the Central Government of general insurance in 1972, a great deal of reorganisation had to be effected in order to tone up the system of general insurance which had become unwieldy due to the mushroom growth of societies with no control whatsoever when insur ance was in private hands.
It was submitted by Smt.
Shyamla Pappu that there are many such cases where action was taken soon after nationali sation of general insurance in 1972.
If such orders are set aside today, Smt.
Shyamla Pappu posed the question, what would be the result? Would the order set aside, at this stage give the employee a right to be reinstated '? If the answer to the above is in the affirmative, would it be conducive to efficiency in the conduct of a public utility such as general insurance, Smt.
Pappu raised the question.
Would it not hamper the Company 's business considering that the reduction/reorganisation of staff was essential for the effective functioning of the public service? Smt.
Pappu asked the question would the public service not be saddled with unnecessary and/or incompetent staff, thus, burdening the public utility/service with unmanageable costs and staff that is ineffective '? It was urged that the New India Assur ance Company had a clause, in the contract at the relevant time, which was as follows: "in the event of the society not having any further need of any employees services, whether permanent or temporary, which shall be decided by the board, the Principal Officer 228 shall give 30 days notice in writing for termination of his services or in lieu thereof pay such employee a sum equiva lent to one month pay including allowance upto the period of notice.
" The above clause covered cases of retrenchment, aboli tion of posts and other situations which had been adjudicat ed upon by this Court.
If, however, the Central Inland Water 's case (supra) is applied, Smt.
Shyamla Pappu submit ted, then the management of the Intervene r Company will be powerless even in a case of abolition of posts or retrench ment or any other allied situation.
It is seen that the power to terminate an employee is co existent with the power to appoint.
Shyamla Pappu relied on the General Clauses Act and submitted that the Central Inland Water 's case (supra) was erroneous in so far as it made a complete nega tion of this power.
Then, it was submitted by her that in case of an employer who had made all the necessary investi gation and the employee concerned has been fully heard before the order 01 ' termination and if the decision of Central Inland Water 's case was applied, then even such a case would be a case of illegal termination, considering that there would be no power to terminate.
It was submitted that the Central Inland Water 's case had to be read down because paras 77, 92 and 93 of the report take in even private employment.
The sweep of the judgment cannot hold good and had to be curtailed.
According to Smt.
Pappu, what then was the position of terminations effected when the law was different? It cannot be said that they are entitled to relief now.
It should be clarified that the judgment of this Court would apply pro spectively, it was submitted.
Past cases might be treated as concluded in view of the law prevailing at that time and also in view of the contentions urged by the parties in the courts below at various stages.
In the event, this Court comes to the conclusion that even old cases would be covered by the judgment now rendered, the orders already passed may be upheld and a post decisional hearing might be directed so that the management concerned has the opportunity of showing that there existed good reasons for termination though the same were not communicated to the employee concerned because the law then existing did not require such a communication.
In the interest of justice, we should allow such a course.
In the light of the provisions and in the facts and the circumstances of the case, it is, therefore, necessary to consider the validity of the power of termination of employ ment by the employers or authorities of the employees with out holding any enquiry in the circum 229 stances noted in the several civil appeals and applications herein.
In these civil appeals.
the question of actual user of power is not the main issue.
but the validity of clauses or regulations containing the aforesaid power.
The instances of actual user of power, however, are not wholly irrelevant on the question of the validity or extent of the power because these explain the extent and content of power and/or occa sion for such user.
Firstly.
we have to.
in view of the facts and the circumstances of the Civil Appeal No. 2876 of 1986, consider the amplitude of the power under clause (b) of Regulation 9 of the Regulations concerned.
We have noted the contents of that Regulation.
We have also noted the amplitude of the expression of that power as was canvassed before the High Court in the matter under appeal and as noticed by the decision of this Court in Delhi Transport Undertaking vs Balbir Saran Goel 's case (supra).
A survey of the several authorities of law and the development of law from time to time would lead one to the conclusion that the philosophy of the Indian Constitution, as it has evolved, from precedent to precedent.
has broaden the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employ ment.
This is the basic concept of the evolution from the different angles of law of master and servant or in the evolution of employer and employee relationship.
It is true that.
the law has travelled in different channels, govern ment servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations.
But it has to be borne in mind that we are concerned in these matters with the employees either of semi Government or statutory corporations or public undertakings who enjoy the rights.
privileges.
limitations and inhibitions of institutions who come within the ambit of Article 12 of the Constitution.
It is in the background of these parameters that we must consider the question essentially and basically posed in these matters.
The basic and the fundamental ques tion to be judged is.
in what manner and to what extent, the employees of these bodies or corporations or institutions could be affected in their security of tenure by the employ ers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted.
We have noted the exhaustive and the learned analysis of the background of the diverse facts projected in the several cases and appeals before us.
230 Efficiency of the administration of these undertakings is very relevant consideration.
Production must continue, services must be maintained and run.
Efficacy of the serv ices can be manned by the disciplined employees or workers.
Discipline, decency and order will have to be maintained.
Employees should have sense of participation and involvement and necessarily sense of security in semi permanent or quasi permanent or permanent employment.
There must be scope for encouragement for good work.
In what manner and in what measure.
this should be planned and ensured within the framework of the Constitution and, power mingled with obli gations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitution.
We have noted several decisions, numerous as these are, and the diverse facts, as we have found.
We have noted that in some cases arbitrary action or whimsical action or dis criminatory action can flow or follow by the preponderance of these powers.
The fact that the power so entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse.
At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency.
Yet, discipline has to be maintained, efficiency of the institution has to be ensured.
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern.
It is not always possible to have enquiry because disclosure is difficult; evidence is hesitant and difficult, often impossible.
In those circum stances, what should be the approach to the location of power and what should be the content and extent of power, possession and exercise of which is essential for efficient running of the industries or services '? It has to be a matter both of balancing and adjustment on which one can wager the salvation of rights and liberties of the employees concerned and the future of the industries or the services involved.
Bearing in mind the aforesaid principles and objects, it appears to us that the power to terminate the employment of permanent employment must be there.
Efficiency and expedien cy and the necessity of running an industry or service make it imperative to have these powers.
Power must, therefore,.
with authorities to take decision quickly, objectively and independently.
Power must be assumed with certain conditions of duty.
The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions 231 of exercise of such powers.
The manner in which such exer cise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power.
All these are essential to ensure that power is fairly exercised and there is fair play in action.
Reasons, good and sound, must control the exercise of power.
We have noted the rival submissions.
Learned Attorney General of India and the learned Solicitor General and others appearing those who sought for sustaining the power by the employers or the authorities, contend that for effi ciency of the industry, for the attainment of the very purpose for which institutions are created, there should be power to terminate the employment of undesirable, ineffi cient, corrupt, indolent, disobedient employees in those cases where holding of enquiry or prolonging these employees for that purpose would be detrimental, difficult and frus trating.
It is in this context that we should examine the power under the aforesaid Regulation 9(b).
The power must be there, the power must be utilised by person or authority, high ranking enough or senior enough who can be trusted or who can be presumed to be able to act fairly, objectively and independently.
The occasion for the exercise of the power must be delimited with precision, clarity or objectiv ity.
And those occasions must be correlated to the purpose for which the powers are sought to be exercised.
In concrete terms, for the running of the industry or the service, efficiently, quickly and in a better manner or to avoid deadlocks or inefficiency or friction, the vesting of the power in circumstances must be such that will evoke credita bility and confidence.
Reasons must be there, reasons must be perspectable, reasons must be relevant and the reasons must be of authority independently, fairly and objectively arrived at.
Notice of hearing may or may not be given, opportunity in the form of an enquiry may or not be given, yet arbi trariness and discrimination and acting whimsically must be avoided.
These power must, therefore, be so read that the powers can be exercised on reasons, reasons should be re corded, reasons need not always be communicated, must be by authorities who are competent and are expected to act fair ly, objectively and independently.
The occasion for the use of power must be clearly circumscribed in the above limits.
These must also circumscribe that the need for exercise of those power without holding a detailed or prolonged enquiry is there.
As we have noted, a good deal of controversy was that these 232 inhibitions or limitations or conditions are not there in the amplitude or the extent of the power enumerated or stated in Regulation 9(b) of the aforesaid Regulations concerned or of similar provisions that we have examined in these cases.
We have noted the argument, learned and interesting, on the question of judicial law making imputing to the legisla tures what these have not articulated.
Should the courts say or can say what the legislatures have not said '? We have noted the controversy of how should legislation of limited legislatures, Parliaments or rule making bodies, who are not expected or enjoined to make rules or laws contrary to or in derogation or the constitutional prohibitions and inhibi tions be read.
We have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the persons involved in the exercise of those powers and, therefore, should be attributed those powers on conditions which will only make these legal or valid.
Our law making bodies are not law into themselves and cannot create or make all laws.
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid.
Such powers conferred must conform to the consitu tional inhibitions.
The question, therefore, is is it possible or desirable to read down the power conferred under Regulation 9(b) or similar regulations permitting employer or the authority to terminate the employment of the employ ees by giving reasonable notice or pay in lieu of notice without holding enquiry with the conditions indicated or mentioned hereinbefore? Will it or will it not amount to making laws of stating which the legislature or the law making body has not stated? We have been reminded that judges should not make laws.
But the question is can the judges articulate what is inarticulate and what can be reasonably and plainly found to be inherent on the presumption that a legislature or a law making body with the limited authority would act only within limitations so as to make the legislation or law valid and the legislature must be presumed to act with certain amount of knowledge and fairness protecting the rights of people concerned and aiming at fairness in action? We have noted the rival contentions.
We have noted the submission that Mr. Garg, Mr. Ramamurthi and others invited us not to read down and against legislating positively with conditions.
But the question is are those conditions which we are invited to attribute to 233 the legislature or the law making bodies contrary to or against the manifest intention of the legislature? Legislation, both statutory and constitutional, is enacted, it is true, from experience of evils.
But its general language should not, therefore, necessarily be confined to the form that evil had taken.
Time works changes, brings into existence new conditions and purposes and new awareness of limitations.
Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth.
This is particularly true of the constitutional constructions.
Constitutions are not ephemeral enactments designed to meet passing occasions.
These are, to use the words of Chief Justice Marshall, "designed to approach immortality as nearly as human insti tutions can approach it . . ".
In the application of a Constitutional limitation or inhibition, our interpretation cannot be only of 'what has been ' but of 'what may be '.
See the observations of this Court in Sunil Batra vs Delhi Administration (supra).
Where, therefore, in the interpreta tion of the provisions of an Act, two constructions are possible, one which leads towards constitutionality of the legislation would be preferred to that which has the effect of destroying it.
If we do not read the conferment of the power in the manner we have envisaged before, the power is liable to be struck down as bad.
This, we say in spite of the argument by many including learned Solicitor General of India and Smt.
Shyamla Pappu that in contractual obligations while institutions or organisations or authorities, who come within the arebit of Article 12 of the Constitution are free to contract on the basis of 'hire and fire ' and the theory of the concept of unequal bargain and the power conferred subject to constitutional limitations would not be applica ble.
We are not impressed and not agreeable to accept that proposition at this stage of the evolution of the constitu tional philosophy of master and servant framework or if you would like to call it employer or employee relationship.
Therefore, these conferments of the powers on the employer must be judged on the constitutional peg and so judged without the limitations indicated aforesaid, the power is liable to be considered as arbitrary and struck down.
Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to ,foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity.
The English language, and for that matter any language in use today, is not an instrument of mathematical precision.
It has been said that our literature would have been much the poorer if it were.
Leaving, how 234 ever.
the question of richness or poverty of our literature apart, we must proceed on the assumption that human mind cannot foresee everything.
It has, therefore, been said that when a question arises whether the power has been properly conferred and even if so, the extent of it.
Lord Denning has opined that a Judge in such a situation cannot simply fold his hand and blame the draftsmen and look for new enactment.
Lord Denning invites us to set to work on the construction task of finding the intention of the Parliament or the law making body and we must.
however.
do this not only from the language of the statute.
because.
as we have seen.
language is an imperfect medium and very often thoughts are perpetu ally in search of 'broken language '.
But the judge must also do it from a consideration of the social conditions which give rise to it, and o[ the mischief which it was intended to remedy and also in the light of the constitutional inhi bitions and then supplant the written words and add to it end give 'force and life ' to the intention and purpose of the legislature or the law making authority.
A judge must not alter the material of which a law or an instrument is woven, but he can and should iron out the creases and if one may venture to say, make articulate the inarticulate premise but make articulate only which follow from necessary compul sions of the situations and the constitutional position.
See in this connection the observations of Lord Denning in "The Discipline of Law" at p. 12.
It is true that judicial jealously of legislature in law making has long been outdrawn, but the strict construction remains still an established rule.
It is generally accepted principle that judges in interpreting statutes, should give effect to the legislators ' intent.
By doing so.
the courts do recognise their subordinate position and their obligation to help the legislature to achieve its purpose.
But in that effort.
creativity is essential.
There have been differences of opinion on the practices that the courts may employ in attempting to discover the legislative intent.
In the begin ning, conventional practice was only to look to the words of the statutes.
Now the entire spectrum has to be examined.
It has been said that judges are not unfettered glossators.
is true that there is no actual expression used ena bling the legislation or the statute in question indicating the limitations or conditions as aforesaid.
But it must proceed on the premise that the law making authority intend ed to make a valid law to confer power validly or which will be valid.
The freedom, therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of the Parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid.
This is a power which 235 is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed intention of the legislature or the implied pur pose of the legislation.
It was not as Shri Ramamurthi tried to argue that legislature wanted to give an uncontrolled and absolute power to discharge employees on the part of the employers without any enquiry in all circumstances.
That cannot be and that was not intended to be as can be implied from all the circumstances.
In the aforesaid view of the matter, I would sustain the constitutionality of this conferment of power by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies.
It should be done objective ly, the reasons should be recorded, it should record this and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution.
The reasons should be recorded, it need not be communicated and only for the purpose of the running of the institution, there should be factors which hamper the running of the institution without the termination of the employment of the employee concerned at that particular time either because he is a surplus, inefficient, disobedient and dangerous.
Construction or interpretation of legislative or rule provisions proceeds on the assumption that courts must seek to discover and translate the intention of the legislature or the rule making body.
This is one of the legal fictions upon the hypothesis of which the framework of adjudication of the intention of a piece of legislation or rule proceeds.
But these are fictional myths to a large extent as experi ence should tell us.
In most of the cases legislature, that is to say, vast majority of the people who are supposed to represent the views and opinions of the people, do not have any intention, even if they have, they cannot and do not articulate those intentions.
On most of these issues their is no comprehension or understanding.
Reality would reveal that it is only those who are able to exert their view points, in a common parliamentary jargon, the power lobby, gets what it wants, and the machinery is of a bureaucratic set up who draft the legislation or rule or law.
So, there fore, what is passed on very often as the will of the people in a particular enactment is the handy work of a bureaucrat ic machine produced at the behest of a power lobby control ling the corridors of power in a particular situation.
This takes the mythetical 236 shape of the 'intention of the people ' in the form of legis lation.
Again, very often, the bureaucratic machine is not able to correctly and properly transmute what was intended to be conveyed.
In such a situation, is it or is it not better, one would ponder to ask, whether the courts should attribute to the law making body the knowledge of the values and limitations of the Constitution, and knowledge of the evils that should be remedied at a particular time and in a situation that should be met by a particular piece of legis lation, and the court with the experience and knowledge of law, with the assistance of lawyers trained in this behalf, should endeavour to find out what will be the correct and appropriate solution, and construe the rule of the legisla tion within the ambit of constitutional limitations and upon reasonable judgment of what should have been expressed.
In reality, that happens in most of the cases.
Can it be con demned as judicial usurpation of law making functions of the legislature thereby depriving the people of their right to express their will? This is a practical dilemma which Judges must always, in cases of interpretation and construction, face and a question which they must answer.
I have noted the guidelines for the exercise of the power, preamble, relevant sections from which the reasons should be inferred and recorded, although they need not be communicate.
These should be recorded in order to ensure effective judicial review in a given case.
Termination simpliciter under Regulation 9(b) or similar powers can be exercised only in circumstances other than those in regula tion 9(a).
The exercise of such powers can only be for purposes germane and relevant to the statute.
There are several illustrations of that, namely, the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee.
These, however, are illustrative and not exhaustive.
There fore, each case of the conferment of the power involved should be decided on the aforesaid basis.
I am conscious that clear intention as indicated in a legislation cannot be permitted to be defeated by means of construction.
It has been said that if the legislature has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
I do not agree.
Our 237 legislatures are limited by the constitutional inhibitions and it is time, in my opinion, that we should read their Acts and enactments with the attribute that they know their limits and could not have intended to violate the Constitu tion.
It is true that where there are clear, unambiguous and positive terms in a legislation, the Court should be loath to read down.
It should proceed with a straight forward method of striking down such legislations.
But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly.
It is true perhaps, as has been said, that in the history of constitutional law, statutes are seldom read down to mean what they say and intend.
It is begging the question.
If the statutes are seldom read down to mean what they say and intend.
It is begging the question.
If the statute does not specifically say, in such circumstances, as to how do we find the intention to transgress the constitutional limita tions.
At least, the relevant provisions of the relevant statutes and the rules, mentioned hereinbefore, are, in my opinion, on these points, not expressive enough to betray an intention transgress constitutional limitations.
I am afraid that reference to Elliott Ashton Welsh, II vs United States, ; ; is inept in the background of the principles we are confronted with.
The plain thrust of legislative enactment has to be found out in the inarticu late expressions and in the silence of the legislation.
In doing so, to say what the legislature did not specifically say, is not distortion to avert any constitutional colli sion, In the language of the relevant provisions with which we are confronted, I do not find that intention of the legislature to flout the constitutional limitations.
I am also unable to accept the contention of Mr. Garg as well as Mr. Ramamurthi that it is clear as a result of the constitutional position of the security of tenure of the employees as well as the expressed language of the provi sions of several enactments that there is no valid power of the termination of employment of the permanent employees without holding an enquiry or giving an opportunity to the employees to rebut the charges on the grounds of termination in all circumstances.
It was contended, as I have noted, by Shri R.K. Garg that no principle of interpretation permitted reading down a provision so as to make it into a different provision altogether different from what was intended by the legislature or its delegate.
Reference was made to the decision of this Court in R.M.D.C. 's case (supra).
I am unable to accept this contention.
It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended.
238 Legislature had not intended arbitrary or uncontrolled or whimsical power.
Indeed it considered.
This is not the proper way to read that power in the said Regulation 9(b).
Para 522 of the Shastri Award, read properly, must be cir cumscribed with the conditions indicated above as a neces sary corollary or consequence of that power.
It is also not reading to the legislature conditions which were not there in the second proviso Article 311(2) of the Constitution.
In view of the ratio of the five judge Bench decision of this Court in Tulsiram 's case (supra), which had examined all the relevant decisions, I am unable to accept the submission of Shri R.K. Garg and Mr. Ramamurthi.
Absolute powers, it is true, cannot be regulated without essential legislative policy, but here properly read, absolute power was not there.
Power that was only constitutionally valid, that power can be presumed to have been given and if that pre sumption is made, conditions indicated above inevitably attach.
We are not concerned with the concept of industrial democracy sought to be propounded by Mr. Garg in this case.
The validity and the propriety of having industrial democra cy is not in issue.
What is in issue is demonstrable fair play and justice, as sought for by Mr. Garg, in the exercise of the power which must be conceded as an essential at tribute for proper functioning of the institution.
It is true that no drafts as such have been submitted by the learned Attorney General or by the learned Solicitor General nor by any counsel appearing for the management.
But these conditions, which we have noted, are necessary corol lary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and effi cient running of the industry.
In the aforesaid view of the matter, 1 am unable to accept the submissions of Mr. Garg and Mr. Ramamurthi.
The power must be there, the power must be read down in the manner and to the extent indicated above, in my opinion, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be by either virtue of the silence of the provision indicating the contingencies of termination or by virtue of constitutional inhibitions.
That reading would not violate the theory that judges should not make laws.
In the aforesaid view of the matter, I direct that whenever question of exercise of the power of termination of permanent employees by reasonable notice without holding any enquiry arises, the extent of 239 the power should be read in the manner indicated above and we reiterate that such powers can be exercised for the purposes of the Act which will be determinable by the pream ble and by relevant enacting provisions and the contingen cies for the exercise of the power must be specified and powers should be exercised by authority competent and inde pendent enough and should be articulated by reasons stated even if not communicated.
These are the limitations inherent and latent in the framework of our Constitution and the power with these limitations is valid.
Having regard to the aforesaid view, I will have to dispose of the appeals in terms of the aforesaid principles.
Next the question arises what would be the position of the rights and liabilities determined as anterior to or before our reading these powers to be conditioned as afore said.
Having regard to the finality of the position of law and having regard to the theory that parties have adjusted their rights on the understanding of the law as it was, in our opinion, justice of the situation would be met if we declare and hold that pending litigations should be examined in the light of the aforesaid principles and dispose of in the aforesaid light, namely, where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have not been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues are pending in the light of these principles, that is say, the exercise of the power should be judged on these conditions and in the light of those conditions.
If in the light of these conditions, the exercise of the power is valid, the termination should be held to be valid, if on the other hand, there was exercise without compliance with these conditions, the termination would be invalid and conse quences in law of damages or reinstatement or others will follow.
But previous terminations where the lis is no longer pending before any authority will not be reopened.
To that extent.
I will declare this to be the law prospectively.
I had, after circulating the draft judgment herein, the advantage of the views of my learned brothers.
They do not agree with me.
With respect.
I am definitely of the opinion that time has come for the judicial interpretation to play far more active, creative and purposeful role in deciding what is "according to law".
Law as evolved in India today, in my opinion, makes the limitations on user of power quite clear and distinct, in this branch.
These are constitutional limitations.
Therefore, every provision in any legislation by limited legislatures, in 240 my opinion, should be judged bearing in mind that the legis lature and the law making authorities were aware and are bound by these constitutional limitations.
These inhibitions must be read into these provisions so that law becomes effective, purposeful and legal.
In that view of the matter, I am of the opinion that we should approach the question of constitutional limitations or inhibitions in our interpreta tion in deciding in each individual cases by not 'what has been ' but 'what may be '.
This is the role and purpose of constitutional interpretation by the apex Court of the country.
I know that this view of mine is not shared in this decision by my learned brothers.
I respect their views, but I would like to hope that one day or the other this Court would be mature enough to fulfil what is purposeful and I believe to be the true role and purpose of the Court in interpretation in the light of constitutional inhibitions.
Having had the advantage of the views of my learned broth ers, I regret, with respect, I cannot join them in their views.
I am the loser for the same, but I will fondly hope only for the time being.
I believe that we must do away with 'the childish fic tion ' that law is not made by the judiciary.
Austin in his Jurisprudent at page 65, 4th edn.
has described the BIack stone 's principle of finding the law as 'the childish fic tion '.
Chief Justice K. Subba Rao in I.C. Golak Nath & Ors.
vs State of Punjab & Ant '.
, ; at p. 811 has referred to these observations.
This Court under Article 14 1 of the Constitution is enjoined to declare law.
The ex pression 'declared ' is wider than the words 'found or made '.
To declare is to announce opinion.
Indeed, the latter in volves the process, while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law.
The law declared by this Court is the law of the land.
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful in strument of justice placed in the hands of the highest judiciary of this country.
See the observations of Chief Justice K. Subba Rao in 1.
C. Golak Nath & Ors '.
vs State of Punjab & Anr.
, (supra at pp.
813/14).
I would, therefore, plead for a more active and creative role for the courts in declaring what the law is.
In the aforesaid light, in Civil Appeal No. 2876 of 1986, having regard to the facts and the circumstances and the attitude taken by the Delhi Transport Corporation, I do not interfere with the order of the High Court.
The appeal shall, therefore, fail.
241 Having regard to the facts and the circumstances and the observations above.
Civil Appeal No. 655 of 1984 (M.L. Kamra vs Chairman cum Managing Director, New India Assurance Co. ) will be placed before a division bench of this Court to be disposed of in accordance with law and the light of the observations made herein.
For the reasons that I have indicated above, in Civil Appeal No. 1115 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Anr., ), with the facts herein where apparently no reasons were recorded, the appeal of Satnam Singh suc ceeds and in the interest of justice, the monetary relief should be given to the appellant which is quantified at Rs.4,83,061.90 paise (Rupees four lakhs eighty three thou sand and sixty one and ninety paise).
I have indicated before the basis on which this quantification has been made.
For the same reasons, Civil Appeal No. 4073(NL) of 1986 (Mahesh Kumar Giroti vs Regional Manager, Region 11, Region al Office, State Bank of India, Bareilly & Ors.), Civil Appeal No. 331 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Hans Raj), Civil Appeal No. 328 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Rohtash Singh), Special Leave Petition No. 75 12 of 1987 (Delhi Transport Corporation vs Shri Mohinder Singh & Anr.), and Civil Appeal No. 330 of 1987 (The Delhi Transport Corporation & Anr.
vs Shri Prem Singh) should be placed before the divi sion bench of this Court to be disposed of in accordance with the observations made herein and in accordance with law.
The appeals I would dispose of accordingly.
Intervention of the parties are allowed and the C.M.Ps.
are disposed of in the aforesaid terms.
RAY, J. I have had the privilege of deciphering the judgment rendered by the learned Chief Justice.
As the question involved in these groups of appeals for decision is very important, it is deemed necessary to express my views on this important matter.
The pivotal question which arises for consideration is whether Regulation 9(b) of the Regulations framed under section 53 of the Delhi Road Transport Act, 1950 which provides for termination of services of permanent employees on giving simply one month 's notice or pay in lieu thereof without recording any reason therefore in the order of termination is arbitrary, illegal, discriminatory and viola tive of Audi Alteram Partern Rule and so constitutionaly invalid and void.
It is 242 also necessary to consider in this respect whether the said Rule 9(b) can be interpreted and read down in such a manner to hold that it was not discriminatory nor arbitrary nor does it confer unbridled and uncanalised power on the trans port authority to, terminate, however, the services of any employee including permanent employee without any reason whatsoever by the Delhi State Transport Authority.
It is also necessary to consider whether such a power can be exercised without conforming to the fundamental right em bodied in the Article 14 as interpreted by this Court in E.P. Royappa 's case that arbitrariness is the anti thesis of equality enshrined in Article 14 of the Constitution.
In other words, whether such a regulation has to comply with the observance of fundamental rights guaranteed by Part III of the Constitution and whether such a power is to be exer cised in furtherance of and in consonance with the Directive Principles embodied in Article 38 and 39 of the Constitu tion.
It is convenient to set out the relevant provisions of Regulation 9(b) framed by the Delhi Road Transport Authority under the 1950 Act.
9(b) Termination of services (b) Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) one month 's notice or pay in lieu thereof will be given to all categories of employees.
On a plain reading of this Regulation it is apparent that the authority has been conferred the power to terminate the services of any employee whether permanent or temporary by giving the month 's notice or pay in lieu thereof without recording any reason whatsoever in the purported order of termination of services.
Thus a regular, temporary or perma nent employee of the State Transport Authority can be dis missed or removed from service at the whims and caprices of the concerned authority without any reason whatsoever and undoubtedly this evidence that such unbridled, indiscrimi nate and uncanalised power to terminate the services even of a permanent employee without assigning any reason and with out giving any opportunity of hearing as far play and jus tice demands a reasonable procedure is per se, arbitrary and discriminatory.
It has been contended by the Attorney Gener al, appearing on behalf of the State that such a power is not uncanalised or unbridled and arbitrary in as much as firstly such power has been conferred on the responsible authority namely D.T.C. 243 for public purposes and secondly, the Regulation 9(b) is to be read down so as to make it constitutionally valid.
It will be seen that there is guidance for exercise of this power in the regulation itself.
It has also been submitted in this connection by the learned Attorney General that a provision of the Constitution has to be presumed to be valid unless it is proved by the other side challenging the con stitutional validity of such a provision that the same is arbitrary and so void.
Several authorities have been cited at the Bar on this point.
It is profitable to refer to the earlier pronouncements of this Court on this crucial question.
Rules 148(3) and 149(3) in contravention of the provision of Article 14 of the Constitution were challenged before this Court in the case Moti Ram Deka etc.
vs General Manager, N.E.F. Railways, Maligaon, Pandu, etc.
; , Rule 148(3) of the Railways Establishment Code is set out here under: "148(3) "Other (non pensionable) railway servants: The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Arti cle 311 of the Constitution, retirement on attaining the age of superannuation and termination of service due to mental or physical incapacity.
" In this case the service of Moti Ram Deka, a peon em ployed by the Railway and Sudhir Kumar Das a confirmed clerk, whose services have been terminated under Rule 148(3) of the said Rules challenged the termination of their serv ices before the Assam High Court which rejected the same and ultimately it came up to this Court on Special Leave.
It was held by the Majority that Rules 148(3) and 149(3) are in valid in as such as they are inconsistent with the provi sions of article 311(2), as they purport to removal from serv ice of permanent servants without compliance with the proce dure prescribed by Article 311(2).
It was also held that the Rule 148(3) contravenes article 14 as it does not give any guidance for exercise of the discretion by the authority concerned and hence it is invalid.
It is necessary to refer in this connection to the pronouncement of this Court in the case of Parshotam Lal Dhingra vs Union of India, ; where it has been held that protection of Article 311 is 244 available only where dismissal, removal or reduction in rank is sought to be inflicted by way of punishment and not otherwise.
Thus even the probationer or temporary employee if removed from service or dismissed from service as a penal measure having civil consequences has to conform to the procedure prescribed by Article 311(2) of the Constitution.
Even a probationer who has no right to the post cannot be removed from service as a penal measure without complying with Article 311(2) of the Constitution.
In the case of Shyam Lal vs The State of Uttar Pradesh and Anr., ; it was held by this Court that a compulsory retirement from service under the Civil Services (Classification, Control and Appeal) Rules does not amount to dismissal or removal within the meaning of Article 311 of the Constitution and therefore does not fall within the provision of the said Act.
In the case of Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, ; the constitutionali ty of the Commission of Enquiry Act, 1952 was challenged.
It was held that the Act was valid and intra vires and that the notification was also valid excepting the words "as and by way of securing redress or punishment" in CI.
10 thereof which went beyond the Act.
It has been further held that it is now well settled that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legis lation.
Thus, to pass the test of permissible classification two conditions must be fulfilled, namely, that (i) That the classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question.
It has also been held that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds.
This Court observed in Jyoti Pershad vs The Administra tor For the Union Territory of Delhi; , while holding that Section 19 of the , was not obnoxious to the equal protec tion of laws guaranteed by Art, 14 of the Constitution, there was enough guidance to the competent 245 authority in the use of his discretion under Section 19(1) of the Act.
The restrictions imposed by Section 19 of the Act could not be said to be unreasonable.
It has been further observed that (1) If the statute itself or the rule made under it applies unequally to per sons or things similarly situated, it would be an instance of a direct violation of the Constitutional Guarantee and the provision of the statute or the rule in question would have to be struck down.
(2) The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated.
This would happen when the legislature vests a discretion in an authority, be it the Government or an administrative official acting either as an executive officer or even in a quasi judicial capacity by a legisla tion which does not lay down any policy or disclose any tangible or intelligible purpose, thus clothing the authori ty with unguided and arbitrary powers enabling it to dis criminate.
In State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; the respondent joined service of the State Government in 1938.
In the service record certain date of birth was recorded.
In 196 1 Government held enquiry as to date of birth and she was asked to show cause why a certain date of birth should not be taken as a date of birth.
The enquiry report was not disclosed to her and she was not given any opportunity to meet the evidence.
The Government refixed her date of birth and ordered that she will be compulsorily retired.
It was held that such a enquiry and decision were contrary to the basis concept of justice and cannot have any value.
It is true that the order is adminis trative in character, but even an administrative order which involves civil consequences as already stated, must be made consistently with the rules of natural justice after inform ing the first respondent of the case of State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence.
No such steps were admittedly taken; the High Court was, in our judgment, right in setting aside the order of the State.
In A.K. Kraipak and Others vs Union of India and Others, it has been held at page 268 269 Paragraph 13: "The dividing line between an administrative power and a 246 quasi judicial power 'is quite thin and is being gradually obliterated.
For determining whether a power is an adminis trative power or a quasi judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised.
Under our Constitution the rule of law per vades over the entire field of administration.
Every organ of the State under our Constitution is regulated and con trolled by the rule of law.
In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate.
The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner.
The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously.
The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision . .
What was considered as an administrative power some years back is now being considered as a quasi 'judicial power. ' ' In the case of Union of India vs Col. J.N. Sinha and Anr., 1.
J.N. Sinha was compulsorily retired by an order of the President of India dated 13.8.69 under Section 56(j) of the Fundamental Rules from Government service without assigning any reason in the order.
The High Court on a writ petition against the impugned order held that there was violation of principles of natural justice.
On an appeal on Special Leave this Court held: "Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights.
As observed by this Court in Kraipak and Ors.
vs Union of India "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules can operate only in areas not covered by any law validly made.
If a statutory provision can be read consist ently with the principles of natural justice, the courts should do so because it must be presumed that the legisla 247 ture and the statutory authorities intend to act in accord ance with the principles of natural justice.
But on the other hand a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the princi ples of natural justice.
Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the ex press words of the provisions conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power.
" It was held that Fundamental Rule 56(j) does not in term require that any opportunity should be given to the con cerned servant to show cause against the compulsory retire ment.
The order of the President is, therefore, not bad as the authority bona fide forms that opinion.
In the case of Air India Corporation vs V.A. Rebello & Anr., ; the service of the respondent was terminated under Regulation 48 of the Air India Employees ' Service Regulations.
The said Regulation 48 reads as under: CHAPTER VIII Cessation of Service X X X X X X X X X X X X X X X X X X 48.
Termination: The service of an employee may be terminat ed without assigning any reason, as under: (a) of a permanent employee by giving him 30 days ' notice in writing or pay in lieu of notice; (b) of an employee on probation by giving him 7 days ' notice in writing or pay in lieu of notice; (c) of a temporary employee by giving him 24 hours ' notice in writing or pay in lieu of notice.
In this case the complainant, V.A. Rebello was dismissed from service under Regulation 48 by paying salary of 30 days in lieu of notice.
The order does not suggest any misconduct on behalf of the 248 complainant and it is not possible to hold that the order was passed on any misconduct.
This has been challenged by the complainant by filing a complaint before the National Industrial Tribunal.
Under Section 33 A of the the order was challenged as amounting to dismissal from service.
The Tribunal held in its award that the discharge of the respondent is not a discharge simplic iter but in breach of section 33 A of and as such directed the complaint to be considered on the merits.
On appeal by Special Leave this Court while considering the purpose and scope of Section 33(1) and 33(2) of the , held following its decision in The Workmen of Sudder Office Cinnamara vs The Management, as follows: "That if the termination of service is a colourable exercise of the power vested in the management or as a result of victimisation or unfair labour practice, the Industrial Tribunal would have jurisdiction to intervene and set aside such a termination.
In order to find out whether the order of termination is one of termination simpliciter under the provisions of contract or of standing orders, the Tribunal has ample jurisdiction to go into all the circumstances which led to the termination simpliciter.
The form of the order of termination, is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of dismissal for misconduct.
It is, therefore, open to the Tribunal to go behind the form of the order and look at the substance.
If the Tribunal comes to the conclusion that though in form the order amounts to termination simpliciter but in reality cloaks a dismissal for misconduct, it will be open to it to set aside the orders as a colourable exercise of power by the management.
" The same principles have also been reiterated in the later decision of this Court in Tara Oil Mills Co. Ltd. vs Workmen & Anr., ; It has been observed in this case: "That the position of the industrial workman is different from that of a Government servant because an industrial employer cannot "hire and fire" his workmen on the basis of an unfettered right under the contract of employment, that right now being subject to industrial adjudication; and there is also on the other hand no provision of the Consti tution like articles 3 10 and 311 requiring consideration in the 249 case of industrial workmen.
" It has been further observed: "That Regulation 48 which has been set out earlier as its plain language shows does not lay down or contemplate any defined essential pre requisite for invoking its operation.
Action under this Regulation can be validly taken by the employer at his sweet will without assigning any reason.
He is not bound to disclose why he does not want to continue in service the employee concerned.
It may be conceded that an employer must always.
have some reason for terminating the services of his employee.
Such reasons apart from misconduct may, inter alia, by want of full satisfaction with his overall suitability in the fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee does not necessarily imply misconduct on his part." In the case of Maneka Gandhi vs Union of India, 1.
The petitioner was issued a passport on June 1, 1976 under the Passport Act, 1967.
On the 4th July, 1977, the petitioner received a letter dated 2nd July, 1977, from the Regional Passport Officer, Delhi, intimating to her that it was decided by the Government of India to impound her passport under section 10(3)(c) of the Act "in public interest.
" The petitioner was required to surrender her passport within 7 days from the receipt of that letter.
The petitioner immediately addressed a letter to the Regional Passport Officer requesting him to furnish a copy of the statement of reasons for making the order as provided in Section 10(5), reply was sent by the Government of India, Ministry of External Affairs on 6th July 1977 stating inter alia that the Government decided "in the interest of the general public" not to furnish her copy of the statement of reasons for the making of the order.
The petitioner challenges the action of the Government in impounding her passport by a writ petition.
Sub section (1) of Section 10 empowers the Passport Authority to vary or cancel the endorsement on a passport or travel document or to vary or cancel it on the conditions subject to which a passport or travel document has been issued having regard to, inter alia, the provisions of section 6(1) or any notification under Section 19.
Sub section (2) confers powers on the Passport Authority to vary or cancel the conditions of the passport or travel document on the application of the holder of the passport or travel document and with the previous approval of the Central Government, Sub section (3) pro 250 vides that the Passport Authority may impound or cause to be impounded or revoke a passport or travel document on the grounds set out in cl.(a) to (h).
The order impounding the passport in the present case was made by the Central Govern ment under cl.
(c) which reads as follows: "(c) If the passport authority deems it necessary so to do in the interest of the sovereignty and integrity of India, the security of India, friendly relations of India with the foreign country, or in the interest of the general public.
" It was held that the right to travel and go outside the country is included in the right to Personal Liberty.
In order to apply the test contained in articles 14 and 19 of the Constitution we have to consider the objects for which the exercise of inherent rights recognised by article 21 of the Constitution are restricted as well as the procedure by which these restrictions are sought to be imposed, both substantive and procedural laws and actions taken under them will have to pass the test imposed by articles 14 and 19, whenever facts justifying the invocation of either of these Articles may be disclosed.
Violation for both articles 21 and 19(1)(g) may be put forward making it necessary for the authorities concerned to justify the restriction imposed by showing satisfaction of tests of validity contemplated by each of these two Articles.
The tests of reason and justice cannot be abstract.
They cannot be divorced from the needs of the nation.
The tests have to be pragmatic otherwise they would cease to be rea sonable.
The discretion left to the authority to impound a passport in public interest cannot invalidate the law it self.
The orders under Section 10(3) must be based upon some material even if the material concerns in some cases of reasonable suspicion arising from certain credible asser tions made by reliable individual.
In an emergent situation, the impounding of a passport may become necessary without even giving an opportunity to be heard against such a step which could be reversed after an opportunity is given to the holder of the passport to show why the step was unnecessary.
It is well settled that even if there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an indi vidual, which affects the right of 251 that individual the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action.
An order impounding a passport must be made quasi judi cially.
This was not done in the present case.
It cannot be said that a good enough reason has been shown to exist for impounding the passport of the petitioner.
The petitioner had no opportunity of showing that the ground for impounding it given in this Court either does not exist or has no bearing on public interest or that the public interest can be better served in some other manner.
The order should be quashed and the respondent should be directed to give an opportunity to the petitioner to show cause against any proposed action on such grounds as may be available.
Even executive authorities when taking administrative action which involves any deprivation of or restriction on inherent fundamental rights of citizens must take care to see that justice is not only done but manifestly appears to be done.
They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness.
They have to act in a manner which is patent ly impartial and meets the requirements of natural justice.
It is also pertinent to refer in this connection the pronouncement of this Court in the case of E.P. Royappa vs State of Tamil Nadu and Anr., ; "Equality and arbitrariness are sworn enemies, one belongs to the rule of law in a public while the other to the whim and caprice of an absolute monarch.
Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment.
The principle of reasonableness which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omni presence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14, it must be right and just and fair and not arbitrary, fanciful or oppressive.
" In the case of Municipal Corporation of Greater Bombay vs Malvenkar and Ors., ; the services of respondent No. 2, a permanent clerk in the Bombay Electric Supply and Transport Undertaking, which is run by the appel lant were terminated from the 252 close of work on January 23, ' 1968 as her record of service was unsatisfactory.
The order of termination stated that the respondent No. 2 should be paid one month 's wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking.
The respondent No. 2 made an application before the Labour Court under Section 42(4) of the Bombay Industrial Relations Act contending that the order terminating her services was invalid as it was not passed by the competent authority as envisaged by the Stand ing Order and that the so called Executive Assistant to the General Manager had no authority to terminate her services because no validly sanctioned post of that designation existed on 20th or 23rd January, 1968.
It was also contended that the aforesaid oders besides being mala fide was viola tive of the principles of natural justice in as much as the same was passed without holding any enquiry.
The Labour Court dismissed the application.
The respondent 's appeal before the President of the Industrial Court was however allowed.
The Industrial Court held that the impugned orders bore only the initials of the Central Manager and therefore it was passed by an authority which was lacking in authori ty, the wording "unsatisfactory service record" cast a stigma and was patently punitive attracting the non observ ance of Standing Order No. 26 which did not create an abso lute right in the management to terminate the services of an employee for misconduct without holding an enquiry or giving her a fair opportunity of being heard.
A Writ application filed by the appellant was dismissed holding inter alia that the appellant was dismissed holding inter alia that the fact that Standing Order 26 required reasons to be mentioned in the order terminating the services of an employee did not mean that an order of dismissal on the ground of misconduct could be converted into an order of discharge simpliciter by mentioning therein the nature of misconduct.
While allowing the appeal on Special Leave it was held by this Court that under Standing Order 26 powers have been given to the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form.
One is the power of holding disciplinary enquiry under clause (3) of Standing Order 231 read with standing Order 23 and the other is the power to terminate the services of an employee by one calendar month 's written notice or pay in lieu thereof under Standing Order 26.
The question is as to which power has been exer cised by the Management in a particular case and this ques tion has to be determined having regard to the substance of the matter and not its form.
There are two distinct and independent powers and as far as possible, neither should 253 be construed so as to emasculate the other or to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate sim pliciter the service of an employee without any other ad verse consequences.
Proviso (i) to clause (1) of Standing Order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of services of the employee under Standing Order 26.
The Management is required to articulate the reason which operated in its mind for terminating the services of the employee.
But merely because the reason must obviously not be arbitrary.
capricious or irrelevant, it would not necessarily in every case make the order of termination punitive in character so as to require compliance with the requirements of clause (2) of Standing Order 21 read with Standing Order 23.
It was further held that the service of the respondent was not satisfactory was undoubtedly based on past incidents set out in the record but for each of these incidents punishment is one form or another had already been meted out to her and it was not by way of punishment for any of these incidents, but because as gathered from these incidents, her record of service was unsatisfactory that her service was terminated by the man agement under Standing Order 26.
The appellant produced satisfactory evidence to show that the impugned order termi nating the service of the respondent was justified and hence the impugned order must be sustained despite its having been passed without complying with the requirements of clause (2) of Standing Order 21 read with Standing Order 23.
This decision has been made in the special facts and circum stances in that particular case.
In the case of Manohar P. Kharkhar And Anr.
vs Raghuraj & Anr., the petitioners challenged the order of termination of services dated 29.4.
1981, under Regulation 48 of Air India Employees ' Service Regulations.
The petitioner No. 1 was The Director of Engineering and the Head of the Engineering Department while the petitioner No. 2 was Deputy Director of Engineering (Maintenance) and the Head of the Maintenance Division of the Air India Corpora tion.
The Chairman and Managing Director of the said Corpo ration lost confidence in their ability and suitability to hold such important posts of Head of Departments which were reasonable for maintenance of the Air Crafts, safety of the Air Crafts and safety of the passengers carried therein and the order of termination were based on the note of The Chairman dated 29.4.
Loss of confidence was the result of the negligence and failure to discharge their duty culmi nating in the admitted sabotage in the case of Makalu, an air craft 254 for the flight of VVIP.
On this occasion the petitioners services were terminated on April 29, 1981 by the Chairman who recorded in its record the ground of loss of confidence.
This order was challenged as arbitrary and capricious and Regulation 48 was violative of Article 14 of the Constitu tion as it contained to guidelines for choosing between employees and employees, occasion to occasion for the con templated action.
In negativing the contentions, it was held after exhaus tively analysing the note dated 29.4.1981, that sheer un suitability and unfitness to hold office is not a misconduct in its generic sense or in its artificial meaning under Regulation 42.
Regulations 42 to 44 have no application.
Confidence in the petitioners ' suitability was lost due to such overall inefficiency of the departments under the petitioners.
Conclusions could not be different even if it assumed that the note contemplated finding of the petition ers guilty of gross inefficiency and negligence.
Inefficien cy by itself did not amount to misconduct in its generic sense.
It was further held that the petitioners have no right to the post and do not possess any security of tenure.
It was also held that if the Corporation choose to act under Regulation 48 and the action is not mala fide, arbitrary or capricious the question of its having acted in colourable exercise of its power could not arise.
It was further held that the power conferred under Regulation 48 to terminate the services of permanent employees on 30 days notice with out assigning any reason is not violative of Article 14 of the Constitution.
Accordingly the writ petition was dis missed and the rule was discharged.
This decision however has not duly considered the ratio of the decision made by this Court in L. Michael & Anr.
vs Johnaton Pumps India Ltd., ; and also in the case of Air India Corporation vs V.A. Rebello, (supra) as well as the ratio of the decision in the case of Sukhdev Singh & Ors.
vs Bhagat Ram Sardar Singh Raghuvanshi & Anr., [1975] 1 SCC421.
In the case of S.S. Muley vs J.R.D. Tata & Ors., constitutionality came up for consideration and this Court held the said Regulation 48 to be discriminatory and void as it gives unrestricted and unguided power on the Authority concerned to terminate the services of a permanent employee by issuing a notice or pay in lieu thereof without giving any opportunity of hearing to the employee concerned and thereby violating the principles of natural justice and also Article 14 of the Constitution.
255 In West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh and Others, [1985] 3 SCC 116 the first respond ent, a permanent employee of the West Bengal State Electric ity Board, filed the writ petition out of which the appeal arises in the Calcutta High Court to quash an order dated March 22, 1984 of the Secretary, West Bengal State Electric ity Board terminating his services as Deputy Secretary with immediate effect on payment of three months ' salary in lieu of three months ' notice.
The order was made under Regulation 34 of the Board 's Regulations which enables the Board to terminate the services of any permanent employee 'by serving three months ' notice or on payment of salary for the corre sponding period in lieu thereof.
" The Regulation 34 reads as follows: "34.
In case of a permanent employee, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof.
" This order of termination was challenged on the ground that Regulation 34 was arbitrary in nature and it was pat ently discriminatory.
The High Court struck down the first paragraph of Regulation 34 and quashed the order of termina tion of service of the first respondent.
In the case of Workmen of Hindustan Steel Ltd. and Anr.
vs Hindustan Steel Ltd. and Ors., ; Standing Order 32 which provided for conferment of power in the General Manager to terminate the services of an employee if satisfied for reasons recorded in writing that it was inex pedient or against the order of security to employ the workman, the workman could be removed or dismissed from service without following the procedure laid down in Stand ing Order 31.
Special Procedure in certain cases.
Where a workman has been convicted for a criminal offence in a Court of law or where the General Manager is satisfied, for reasons to be recorded in writing, that it is inexpedi ent or against the interests of security to continue to employ the workman, the workman may be removed or dismissed from service without following the procedure laid down in Standing Order 31." The appellant, an Assistant in the 1st Respondent under taking was removed from service on the ground that it was 'no longer expe 256 dient ' to employ him.
The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the police.
The Tribunal held that as the employer dispensed with the disciplinary enquiry in exercise of the power conferred by Standing Order 32, it could not be said that the dismissal from service was not justified and the respondent was quite competent to dismiss him from service without holding any enquiry.
It was held that the reasons for dispensing with the enquiry do not spell out what was the nature of the miscon duct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry.
As there was no justification for dispensing with the enquiry imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 is illegal and invalid.
It was further held that : "A Standing Order which confers such arbitrary.
uncanalised and drastic power to dismiss an employee by merely stating that it is inexpedient or against the interest of the security to continue to employ the workman is violative of the basic requirement of natural justice inasmuch as that the General Manager can impose penalty of such a drastic nature as to affect the livelihood and put a stigma on the character of the workman without recording reasons why disciplinary inquiry is dis pensed with and what was the misconduct alleged against the employees.
It is time for such a public sector undertaking as Hindustan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under article 12 in an appropriate proceeding, the vires of S.O. 32 will have to be examined.
It is not necessary to do so in the present case because even on the terms of S.O. 32, the order made by the General Manager is unsustainable.
" In the case of Tata Oil Mills Co. Ltd. vs Workmen & Anr., (supra) the service of Mr. Banerjee, an employee of the appellant, was terminated on the ground that the appel lant had lost confidence in him and in lieu of notice he was paid one month 's salary.
The Union to which Mr. Banerjee belonged took up his cause and on the failure of 'he par ties to reach a settlement the matter was referred to the Industrial Tribunal by the Government.
It was contended before the Tribunal by the appellant that the order of termination of services of Mr. 257 Banerjee was an order of discharge which it was competent to make under R. 40(1) of the Service Rules, whereas the re spondent contended that the termination was not a discharge simpliciter but was in substance dismissal and that the Tribunal was entitled to consider the propriety of the appellant 's action.
The Tribunal held that it had jurisdiction to look into the reasons behind the discharge of an employee.
On the examination of the evidence the Tribunal found that no mala fides on the part of the employer had been proved and that the termination of service did not amount to victimisation or unfair labour practice.
Even so it held that the dis charge was not justified and directed the reinstatement of Mr. Banerjee.
This Court held that in the matter of an order of dis charge of an employee the form of the order is not decisive.
An Industrial Tribunal has jurisdiction to examine the substance of the matter and decide whether the termination is, in fact, discharge simpliciter or it amounts to dismiss al which has put on the cloak of discharge simpliciter.
The test always has to be whether the act of the employer is bona fide or whether it is a mala fide and colourable exer cise of the powers conferred by the terms of contract or by the standing orders.
In O.P. Bhandari vs Indian Tourism Development Corpora tion Ltd. and Others, ; The question of constitutionality of Rule 31(v) of the Indian Tourist Devel opment Corporation Rules came up for consideration before this Court in this case.
Rule 31 is quoted below: "31.
Termination of services The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner: (v) of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days ' notice or pay in lieu thereof.
" It has been observed by this Court: "This rule cannot co exist with Articles 14 and 16(1) of the Constitution of India.
The said rule must therefore die, so that the fundamental rights guaranteed by the aforesaid 258 constitutional provisions remain alive.
For otherwise.
the guarantee enshrined in Articles 14 and 16 of the Constitu tion can be set at naught simply by framing a rule authoriz ing termination of an employee by merely giving a notice.
In order of uphold the validity of the rule in question it will have to be held that the tenure of service of a citizen who takes up employment with the State will depend on the pleas ure or whim of the competent authority unguided by any principle or policy.
And that the services of an employee can be terminated though there is no rational ground for doing so.
even arbitrarily or capriciously.
To uphold this right is to accord a "magna carta" to the authorities in vested with these powers to practice uncontrolled discrimi nation at their pleasure and caprice on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices.
An employee may be retained solely on the ground that he is asycophancy and indulges in flattery, whereas the services of one who is meritorious (but who is wanting in the art of sycophancy and tempermen tally incapable of indulging in flattery) may be terminated.
The power may be exercised even on the unarticulated ground that the former belongs to the same religious faith or is the disciple of the same religious teacher or holds opinions congenial to him.
The power may be exercised depending on whether or not the concerned employee belongs to the same region.
or to the same caste as that of the authority exer cising the power, of course without saying so.
Such power may be exercised even in order to make way for another employee who is favourite of the concerned authority.
Pro vincialism, casteism, nepotism, religious fanaticism, and several other obnoxious factors may in that case freely operate in the mind of the competent authority on deciding whom to retain and whom to get rid of.
And these dangers are not imaginary ones.
They are very much real in organisations where there is a confluence of employees streaming in from different States.
Such a rule is capable of robbing an employee of his dignity, and making him a supine person whose destiny is at the mercy of the concerned authority (whom he must humour) notwithstanding the constitutional guarantee enshrined in Articles 14 and 16 of the Constitu tion of India.
To hold otherwise is to hold that the funda 259 mental right embedded in Articles 14 and 16(1) is a mere paper tiger and that is so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorizes termination of the service of an employee by merely giving a notice of termination.
Under the circum stances the rule in question must be held to be unconstitu tional and void.
" This decision followed the observations of this Court in Central Inland Water Transport Corporation Limited And Another vs Brojo Nath Gangtdy and Another and West Bengal State Electricity Board vs Desh Bandhu Ghosh and Ors., (Supra).
In Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Another, the appellant Corporation is a Government Company incor porated under the Companies Act.
The Majority shares of the Corporation are held by the Union of India and the remaining shares are held by the State of West Bengal and Assam.
Article 47 provided for appointment and reappointment of the auditors of the Corporation to be made by the Central Gov ernment on the advice of the Comptroller and AuditorGeneral of India and the nature of control to be exercised by the Comptroller and Auditor General in the matter of audit and accounts.
Article 51 A entitled the President to call for returns, accounts etc.
of the Corporation.
The respondents in the two appeals were in the service of the said company.
Their appointment letters were in a stereotype form under which the Corporation could without any previous notice terminate their services.
A Scheme of Arrangement was en tered into between the Corporation and that company for dissolution of the latter and takeover of its business and liabilities by the former.
The Scheme inter alia stipulated that the Corporation shall take as many of the existing staff or labour as possible and that those who could not be taken over shall be paid by the concerned company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Dis putes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the transferor Company who would pay these dues.
The two re spondents were in the service of the said company and their services were taken over by the Corporation after the Scheme of Arrangement was sanctioned by the High Court.
The re spondent Ganguly was appointed as the Deputy Chief Accounts Officer and was later promoted as Manager (Finance), the respondent Sengupta was appointed as Chief Engineer (River Services) and was 260 later promoted as General Manager (River Services).
Rule 9(i) of the Corporation 's Service, Discipline and Appeal Rules of 1979 provided that the services of a perma nent employee could be terminated on three months ' notice on either side or on payment of three months ' pay plus DA to the employee or on deduction of a like amount from his salary as the case may be in lieu of the notice.
A notice under Rule 9(i) was served on him terminating his services with immediate effect by paying three months ' pay.
Both Ganguly and Sengupta filed writ petition before High Court and a Division Bench of that Court allowed the same.
The Corporation filed appeals before Supreme Court.
The impugned questions for determination were (i) whether the appellant Corporation was an instrumentality of the State so as to be covered by Articles 12 and 36 of the Constitution and (ii) whether an unconscionable term in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act and violative of Article 14 and as such whether Rule 9(i) which formed a part of the contract of employment between the Corporation and its employees to whom the said Rules applied, was void? This Court held that it being a Government Company within the meaning of Article 12 of the Constitution has to comply with the rights embodied in Part III of the Constitution and the Directive Principles in Part IV of the Constitution.
It was further held that by extending the executive power of the Union and each of the States to the carrying on any trade or business.
Article 298 does not convert either the Union of India or any of the States which collectively form the Union into a merchant buying and selling goods or carrying on either trading or business activity, for the executive power of the Union and the States, whether in the field of trade or business or in any other field, is always subject to constitutional limitations and particularly the provisions relating to Fundamental Rights in Part III and is exercisa ble in accordance with and for the furtherance of the Direc tive Principles of State Policy.
Rule 9(i) can aptly be called the 'Henry VIII Clause '.
It confers an absolute.
arbitrary and unguided power upon the Corporation.
It does not even state who on behalf of the Corporation is to exercise that power.
While the Rules provide for four different modes in which the services of a permanent employee can be terminated earlier than his at taining the age of superannuation, namely, Rules 9(i), 9(ii).
36(iv)(b) read with Rules 38 and 37.
Rule 9(i) is the only rule which does not state in what circumstances the power conferred by the rule is 261 to be exercised.
Thus even where the Corporation could proceed under Rule 36 and dismiss an employee on the ground of misconduct after holding a regular disciplinary inquiry, it is free to resort instead to Rule 9(i) in order to avoid the hassle of an inquiry.
No opportunity of a hearing is at all to be afforded to the permanent employee whose service is being terminated in the exercise of this power.
It thus violates audi alteram partent rule of natural justice also which is implicit in Article 14.
It is not covered by any of the situations which would justify the total exclusion of the audi alteram partem rule.
The view that the Board of Directors would not exercise this power arbitrarily or capriciously as it consists of responsible and highly placed persons ignores the fact that however highly placed a person may be he must necessarily possess human frailties and "power tends to corrupt, and absolute power corrupts abso lutely." Rule 9(i)is also discriminatory for it enables the Corporation to discriminate between employee and employee.
It can pick up one employee and apply to him Rule 9(i).
It can pick up another employee and apply to him Rule 9(ii).
It can pick up yet another employee and apply to him Rule 36(iv)(b) read with Rule 38 and to yet another employee it can apply Rule 37.
All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee.
This court in Delhi Transport Undertaking vs Balbir Saran Goel, ; considered the question whether the services of a permanent employee under Delhi Transport Undertaking could be terminated under Regulation 9(b) of the Regulation without complying with the procedure prescribed by Regulation 15 and (ii) whether although the order was made in perfectly harmless and innocuous terms purporting to be within Regulation 9(b) it was a mere camouflage for inflicting punishment for breach of Standing Order 17.
as the respondent approached the High Court without exhausting the Departmental remedies and held that the order was not proved to be made mala tide on the part of the authority terminating the service nor the question of mala fide was gone into by the Courts below.
Regulation 9(b) empowered the authorities to terminate the service after giving one month 's notice or pay in lieu thereof.
The order was held to have been made unequivocally in terms of the Regulation 9(h) as the employee was a con tankerous person and it was desirable to retain him in service.
The order was upheld.
The question 262 whether Regulation 9(b) was illegal and void as it conferred arbitrary and uncanalised power to terminate the service of a permanent employee without recording any reason and with out giving any opportunity of hearing before passing the purported order as required under Article 14 of the Consti tution was neither raised nor considered in this case.
In L. Michael & Anr.
vs M/s Johnston Pumps India Ltd., (supra) the services of the appellant, an employee of the respondent, were terminated by the latter giving him one month 's notice as per.
the standing orders without assigning any reasons for the termination.
An industrial dispute was referred to the Labour Court.
The management alleged that the employee misused his position by passing an important and secret information about affairs of the company to certain outsiders, that even after he was transferred to another section he made attempts to elicit information from the section with a view to pass it on to outsiders, and that therefore, the management lost confidence in the employee and terminated his services by a bona fide order.
The Labour Court confirmed the order.
On appeal this Court set aside the order holding that the Labour Court has misled itself on the law.
This Court directed reinstatement of the employee with all back wages.
The manner of dressing up an order does not matter.
The Court will lift the veil to view the reality or substance of the order.
The Tribunal has the power and indeed the duty to X ray the order and discover its true nature, if the object and effect, if the attendant circumstances and the ulterior purpose be to dismiss the employee because he is an evil to be eliminated.
But if the management, to cover up the ina bility to establish by an inquiry, illegitimately but inge niously passes an innocent looking order of termination simpliciter, such action is bad and is liable to be set aside.
Loss of confidence is no new armour for the manage ment; otherwise security of tenure, ensured by the new industrial jurisprudence and authenticated by a catend of cases of this Court can be subverted by this neo formula Loss of Confidence in the law will be the consequence of the Loss of Confidence doctrine.
An employer who believes and suspects that his employee particularly one holding a position of confidence, has betrayed that confidence, can, if the conditions and terms of employment permit 263 terminate his employment and discharge him without any stigma attaching to the discharge.
But such belief or suspi cion or ' the employer should not be a mere whim or fancy.
It should be bona fide and reasonable.
It must rest on some tangible basis and the power has to be exercised by the employer objectively ', in good faith.
which means honestly and with due care and prudence.
If the exercise of such power is challenged on the ground of being colourable or mala fide or an act of victimisation or unfair labour prac tice.
the employer must disclose to the Court the grounds of his impugned action so that the same may be tested judicial ly.
This Court in the case of workmen of Hindustan Steel Ltd. and Ant.
vs Hindustan Steel Ltd. and Ors.
, (supra) while considering the constitutionality of Standing Order 32 of the Hindustan Steel Ltd. which conferred power on the General Manager to remove or dismiss a workman without following the procedure for holding a disciplinary enquiry laid down in Standing Order 31 observed that: "It is time for such a public sector undertaking as Hindu stan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under Article 12 in an appropriate proceeding, the views of S.O. 32 will have to be examined.
" It is convenient to refer in this context relevant passage in paragraph 4 in Chitty on Contracts, 25th Edition, Volume 1: "These ideas have to a large extent lost their appeal today. 'Freedom of contract ', it has been said, 'is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interest of the community at large. ' Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered.
Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the other.
These are called 'contracts d 'adhesion ' by French lawyers.
Traders frequently contract, not on individually negotiated terms, but on those contained in a standard form of contract settled by a trade association.
And the 264 terms of an employee 's contract of employment may be deter mined by agreement between his trade union and his employer, or by a statutory scheme of employment.
Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking.
" This Court has observed in Central Inland Water Trans port Corporation Ltd. and Anr.
vs Brojo Nath Ganguly and Anr. (supra)as under: .
Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws.
The principle deducible from the above discus sions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14.
This principle is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreason able clause in a contract.
entered into between parties who arc not equal in bargaining power . .
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them." The Court has.
therefore, the jurisdiction and power to strike or set aside the unfavourable terms in a contract of employment which purports to give effect to unconscienable bargain violating article 14 of the Constitution Thus on a conspectus of the catena of cases decided by this Court the only conclusion follows is that Regulation 9(b) which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the impugned order is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution.
It has also been held consistently by this Court that the Govern ment carries on various trades and business activity through the instrumentality of the State such as Government Company or Public Corporations.
Such Government Company or 265 Public Corporation being State 'instrumentalities are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part III as well as to conform to the directive principles in Part IV of the Constitution.
In other words the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of Consti tution.
Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
Regulation 9(b), therefore, confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the principles of natural justice.
There is no guideline in the Regulations or in the Act, as to when or in which cases and circumstances this power of termination by giving notice or pay in lieu of notice can be exercised.
It is now well settled that the 'audi alteram partem ' rule which is es sence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here.
Rules of natural justice do not supplant but supplement the Rules and Regulations.
Moreover, the Rule of Law which permeates our Constitution demands that it has to be observed both substantially and procedure ly.
Considering from all aspects Regulation 9(b) is illegal and void as it is arbitrary, discriminatory and without any guidelines for exercise of the power.
Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.
Regula tion 9(b) does not expressly exclude the application of the 'audi alteram partern ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice under Regulation 9(b) or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purport ed order is made.
It will be profitable to refer in this connection the observations of this Court in the case of Union of India and Anr.
vs Tulsiram Patel and Ors., [1985] Supp.
(2) SCR 131 where the constitutionality of provisions of article 311 par ticularly the 2nd proviso to clause (2) of 'the said Article came up for consideration.
This Court referred to the find ings in Roshan Lal Tandon vs Union of India, ; wherein it was held that though the origin of a Govern ment service is contractual 266 yet when once appointed to his post or office, the Govern ment servant acquires a status and his rights and obliga tions are no longer determined by the consent of both the parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government.
In other words, the legal position of a Government servant is more one of status than of contract.
The hall work of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties.
It has been observed that article 14 does not govern or control article 311.
The Constitution must be read as a whole.
article 311(2) embodies the principles of natural jus tice including audi alteram partem rule.
Once the applica tion of clause (2) is expressly excluded by the Constitution itself, there can be no question of making applicable what has been so excluded by seeking recourse to Article 14 of the Constitution.
In the case of Sukdev Singh & Ors.
vs Bhagatrarn Sardar Singh Raghuvanshi & Anr.
(supra), Mathew, J. pointed out that: "The governing power wherever located must be subject to the fundamental constitutional limitations.
" This has been referred to and relied upon in Central Inland Water Transport Corporation Ltd. and Anr.
vs Brojo Nath Ganguly and Anr.
(supra) and a similar Rule 9(i) was termed as "Henry VIII clause" as it confers arbitrary and absolute power upon the Corporation to terminate the service of a permanent employee by simply issuing a notice or pay in lieu thereof without recording any reason in the order and without giving any opportunity of hearting to the employee.
Thus, the Rule 9(i) of the Services Discipline and Appeal Rules, 1979 was held void under Section 23 of the , as being opposed to public policy and is also ultra vires of Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months ' notice in writing or by paying him the equivalent of three months ' basic pay and dearness allowance in lieu of such notice.
Regulation 9(b) of the impugned Regulation framed under the Delhi Transport Corporation Act which is in pare materia with the said Rule 9(i) is void under Section 23 of the Contract Act as being opposed to public policy and is also ultra vires of Article 14 of the Constitution.
Another crucial question is to consider how far the impugned provisions of Regulation 9(b) framed under the Delhi Road Transport 267 Act can be read down in order to save it from unconstitu tionality.
Several decisions have been cited at the bar in order to impress upon the Court that the impugned provisions have been made for public purposes and for public interest and as such it should be read down in a manner that will save the said provisions from the on slaught of constitu tional invalidity.
In the case of Commissioner of Sales Tax, Madhya Pra desh, Indore and Ors.
vs Radhakrishnan and Ors.
, ; it has been held by this Court that for sustaining the presumption of constitutionality, the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived and can even read down this section.
It is convenient to mention here the meaning and scope of the word 'reading down ' and 'Severance ' dealt with on page 7, para B in Australian Federal Constitutional Law by Colin Howard which reads as follows: "The High Court presumes the validity of legislation to the extent that it will not of its own motion raise questions of constitutionality.
Legislation is treated as valid unless the parties to litigation challenge it on constitutional grounds.
The techniques of construction known as reading down and severance are corollaries of this presumption.
Reading down puts into operation the principle that so far as it is reasonably possible to do so, legisla tion should be construed as being within power.
It has the practical effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more limited sense so as to keep it within power.
XX XX XX XX XX XX It does not necessarily follow that because a statute cannot be read down it is wholly invalid.
The presumption of valid ity leads naturally to the view that where a statute cannot be held wholly valid it should be held valid at least to the 268 extent that it is reasonably possible or practicable to do so.
Where reading down is not available the court next decides where there is a case for severing the invalid parts of the statute from the parts which, standing alone, are valid.
If this can be done the court declares only the invalid parts to be beyond power and leaves the remainder operative.
In Re The Hindu Women 's Rights to Property Act, 1937, and The Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 2 13 of the Government of India Act, 1935, the question arose whether the Hindu Women 's Rights to Property Act, 1937 (Central Act XVIII of 1937) and the Hindu Women 's Rights to Property (Amendment) Act, 1938 (Central Act XI of 1938), are applicable to agricultural land and what was the meaning of the word 'property '.
It was observed that: "When a Legislature with limited and restricted powers makes use in an Act of a word of such wide and general import as "property", the presumption must be that it is using it with reference to that kind of property with respect to which it is competent to legislate and to no other.
The word "proper ty" in the Hindu Women 's Right to Property Act must accord ingly be construed as referring to property other than agricultural land.
There is a general presumption that a Legislature does not intend to exceed its jurisdiction.
" In the case of R.M.D. Chamarbaugwalla vs The Union of India, ; the petitioners who had been promoting and conducting prize competitions in the different States of India, challenged the constitutionality of sections 4 and 5 of the (42 of 1955) and rr. 11 and 12 framed under section 20 of the Act on the grounds that prize competition as defined in section 2(d) of the Act included not merely competitions that were of a gambling nature but also those in which success depended to a substantial degree on skill and the sections and the rules violated their funda mental right to carry on business, and were unsupportable under Act.
19(6) of the Constitution, that they constituted a single inseverable enactment and, consequently.
must fail entirely.
It was held that validity of the restrictions imposed by sections 4 and 5 and rr 11 and 12 of the Act as re gards gambling competitions was no longer open to challenge under article 19(6) of the Constitution in view of the decision of this Court that gambling did not 269 fall within the purview of article 19(1)(g) of the Constitu tion.
It has been further observed that: "When a question arises as to the interpretation to be put on an enactment, what the Court has to do is to ascertain "the intent of them that make it" and that must of course.
be gathered from the words actually used in the statute.
To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act . .
To decide the true scope of the present Act, therefore, we must have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the legislation and the purposes thereof, the mischief which it intended to suppress and the other provisions of the statute, and construe the language of section 2(d) in the light of the indications furnished by them." Having regard to the circumstances, it was held that the law which the State Legislatures moved Parliament to enact under article 252(1) was one to control and regulate prize competitions of a gambling character and as such it was held that the Act was valid It has been further observed that where the legislation falls in part within the area allotted to it and in part outside it, it is undoubtedly void as to the latter.
In the case of R. 1.
Arora vs State of Uttar Pradesh and Ors., ; challenge was thrown to the constitu tionality of the amendments made to Ss. 40, 41 and section 7 by the Land Acquisition Amendment Act (Act 31 of 1962) on the ground that it contravened article 31(2) inasmuch as it makes acquisition for a company before July 20, 1962 as being for a public purpose even though it may not be so in fact.
Section 7 was also challenged on the ground that it contra venes article 14 inasmuch as it makes an unreasonable discrimi nation in the matter of acquisition for a company before July 20, 1962 and after that date insolaf as the former acquisitions are validated on the basis of their being deemed to be for a public purpose while the latter acquisi tions are not so deemed and have to satisfy the test of public purpose.
it has been held that if the language of a provision of law is capable of only one construction and if according to that construction 270 the provision contravenes a constitutional provision it must be struck down.
A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used.
It has been further held following the observa tions in The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp.
2 SCR 127 that it is well settled that if certain provisions of law construed in one way will be consistent with the Constitution and if another interpretation would render them unconstitutional the court would bear in favour of the former construction.
In the case of Jagdish Pandey vs The Chancellor Univer sity of Bihar & Anr., ; 1 the challenge was to the constitutionality of section 4 of Bihar State Universities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 as discriminatory and violative of article 14 of the Constitution.
It has been urged that section 4 confers uncana lised powers on the Chancellor without indicating any crite rion on the basis of which the power under section 4 can be exercised.
It has been observed that: " .
There is no doubt that if one reads section 4 literal ly it does appear to give uncanalised powers to the Chancel lor to do what he likes on the recommendations of the Com mission with respect to teachers covered by it.
We do not however think that the Legislature intended to give such an arbitrary power to the Chancellor.
We are of opinion that section 4 must be read down and if we read it down there is no reason to hold that the legislature was conferring a naked arbitrary power on the Chancellor.
" Seervai in his book 'Constitutional Law of India ', Third Edition has stated at p. 119 that: " . the Court are guided by the following rules in discharging their solemn duty to declare laws passed by a legislature unconstitutional: (1) There is a presumption in favour of constitutionality and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; "to doubt the 271 constitutionality of a law is to resolve it in favour of its validity." . . . . . . . . . . . . . . . (6) A Statute cannot be declared unconstitutional merely because in the opinion of the Court it violates one or more of the principles of liberty, or the spirit of the Constitu tion, unless such principles and that spirit are found in the terms of the Constitution.
" On a proper consideration of the cases cited hereinbe fore as well as the observations of Seervai in his book 'Constitutional Law of India ' and also the meaning that has been given in the Australian Federal Constitutional Law by Coin Howard, it is clear and apparent that where any term has been used in the Act which per se seems to be without jurisdiction but can be read down in order to make it con stitutionally valid by separating and excluding the part which is invalid or by interpretting the word in such a fashion in order to make it constitutionally valid and within jurisdiction of the legislature which passed the said enactment by reading down the provisions of the Act.
This, however, does not under any cicumstances mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulation that it confers arbitrary, uncanlised, unbridled, unrestricted power to terminate the services of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, cannot be read down to save the said provision from constitutional invalidity by bringing or adding words in the said legisla tion such as saying that it implies that reasons for the order of termination have to be recorded.
In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambigu ous meaning can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity.
Therefore, on a consideration of the above decisions, it is impossible to hold by reading down the impugned provisions of Regulation 9(b) framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the prin ciples of natural justice and equality as 272 envisaged in Article 14 of the Constitution of India.
I am, therefore, constrained to uphold the judgment of the Delhi High Court in C.W.P. No. 1422 of 1985 and dismiss Civil Appeal No. 2876 of 1986.
I allow Civil Appeal No.1115 of 1976 and agree with the order proposed to be passed thereon by the learned Chief Justice.
The other appeals as referred to in detail in the judgment of the learned Chief Justice be placed before the Division Bench of this Court to be dis posed of in accordance with the observations made herein.
I agree with conclusion arrived of by my learned brother K. Ramaswamy, J. SHARMA.J.
I have gone through the judgments prepared by the learned Chief Justice and by my other learned Brothers.
In view 01 the elaborate consideration by them of the ques tions raised by the parties, from both points of view.
I proceed to indicate my conclusions without further discus sion.
I agree with the learned Chief Justice that the rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the manage ment cannot have unrestricted and unqualified power of terminating the services of the employees.
In the interest of efficiency of the public bodies, however.
they should have the authority to terminate the employment of undesira ble, inefficient, corrupt.
indolent and disobedient employ ees.
but it must be exercised fairly, objectively and inde pendently: and the occasion for the exercise must be delim ited with precision and clarity.
Further, there should be adequate reason for the use of such a power.
and a decision in this regard has to be taken in a manner which should show fairness.
avoid arbitrariness and evoke credibility.
And this.
in my view, is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation.
An element of uncertainty is likely to lead to grave and undesirable consequences.
Clarity and precision are.
there fore.
essential for the guidelines.
Examining in this back ground, I am of the view that Regulation 9(b) of the Delhi Road Transport Authority (Condition of Appointment and Service) Regulation, 1952 cannot be upheld for lack of adequate and appropriate guidelines.
For these reasons Civil Appeal No. 2876 of 1986 is dismissed.
I also agree that the Civil Appeal No. 1115/76 should be allowed in the terms indicated in the judgment of the learned Chief Justice.
The other cases shall be placed before a division bench for final disposal.
273 SAWANT.
I had the advantage of reading the judg ments of the learned Chief Justice and B.C. Ray and K. Ramaswamy, JJ.
While with respect I agree with the conclu sion of the learned Chief Justice in Civil Appeal No. 1115/76, with utmost respect to him, I am unable to share his view of law on the subject in Civil Appeal No. 2876/86.
I am in respectful agreement with the view on the point expressed by Ray and Ramaswamy, JJ.
in the said Civil Ap peal.
I give my separate reasons for the same.
The only question involved in all these matters is whether the absolute power given to the Management of the public undertakings under their respective rules/regulations to terminate the services of an employee without assigning any reason, is constitutionally valid.
It is not necessary to refer to the facts and service rules in each case.
It will be sufficient if I reproduce hereinbelow the relevant service regulation of one of the public undertakings, viz., Delhi Transport Corporation (DTC ' for short) the validity of which is in question in the present case.
The said regulation being Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appoint ment & Service) Regulations, 1952 (hereinafter referred to as the "Regulations") reads as follows: Termination of service: (a) Except as otherwise specified in the appointment orders, the services of an employee of the Authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reasons thereof, (ii) For misconduct, (;,ii) On the completion of specific period of appointment, (iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord ance with the terms of appointment.
(b) Where the termination is made due to reduc tion of establishment or in circumstances other than those mentioned at (a) above, one month 's notice or pay in lieu 274 thereof will be given to all categories of employees.
(c) Where a regular/temporary employee wishes to resign from his post under the Authority he shall given three/one month 's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the condition regard ing the period of notice of resignation or pay in lieu thereof.
" It will be obvious from the provisions of clause (b) the above that it applies not only in the case of retrenchment of employees on account of reduction in the establishment but also in circumstances other than those mentioned in clause (a).
The circumstances mentioned in clause (a) are (i) probationary period, (ii) misconduct, (iii) completion of specific period of appointment and (iv) expiration of contractual period of appointment when the appointment is contractual.
In other words, when the management decides to terminate the services of an employee but not for his mis conduct 'or during his probation or because his tenure of appointment, contractual or otherwise, has come to an end, it is free to do so without assigning any reason and by merely giving either a notice of the specific period or pay in lieu of such notice.
Reduced to simple non technical language, clause (b) contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract.
There is no dispute that although the language differs, the substance of the relevant rules of the other public undertakings which are before us, is the same and hence what applies to Regulation 9(b) of the Regulations will apply equally to the relevant rules of the other undertakings as well.
The contentions advanced before us on behalf of the managements of the undertakings acknowledge at the very outset that such a service rule without anything further was not only ultra vires the Constitution but was indefensible in law even otherwise being opposed to the principles of natural justice vesting as it does the naked arbitrary power in the management.
The contention, however, was that the rule had to be read down to imply that the power vested by it could be exercised only in certain circumstances and for valid reasons and not otherwise.
It was further contended that the rigour of the rule is mitigated because the power granted by it is exercised by a high ranking officer.
It was also urged that the exercise of the said power can be con trolled by holding that it is open to scrutiny by the court, in individual cases.
In other words, the contention was that the rule by itself 275 is innocent and legal and its movements are properly con trolled being under elderly care.
Its occasional wayward behaviour in unguarded moments can be corrected by chastise ment by the courts.
But the rule, it was solemnly urged, was necessary since otherwise the management of the undertakings will be well high impossible.
The controversy before us thus lies in a narrow compass, viz., whether the rule whatever its admitted demerits, should continue to blot the statute book because it is necessary and will be used in certain circumstances only and its use in any other circumstances can be checked by the Court.
It can at once be discerned that at the bottom of all the lengthy ardent arguments lies an anxiety not to specify the circumstances under which the power given by the rule will be exercised on the spacious plea that such circum stances cannot be stated in advance and in the interests of the administration of the undertakings it is best that they are not so stated.
For once I thought that the framers of our Constitution had committed an irretrievable mistake by ignoring the interests of the Union and the State Govern ments and enumerating such circumstances in the second proviso to Article 311(2) of the Constitution.
But then I was mistaken.
The interests of the public undertakings appear to be more important than those of the Governments.
May be they are super Governments.
By claiming the privilege not to enumerate even the broad guidelines as contained in Article 311(2), the managements of the undertakings are indeed wearing a supercrown.
The posture adopted by them is all the more obdurate and untenable in law when they ask the court to read down the rule, and read in it circumstances under which the power can be used, but maintain that they will under no circumstances mend it nor should they be asked to do it, by incorporating in it those very circumstances.
With this prologue to the controversy, I may now examine the contentions advanced before us.
It is contended that it is necessary to retain the rule in its present ambiguous form because it is not possible to envisage in advance all the circumstances which may arise necessitating its use.
When we asked the learned counsel for the manage ments whether there were any circumstances which would not be governed by the broad guidelines given in the second proviso to subclause (2) of Article 311 of the Constitution, and why at least such intelligible guidelines should not be incorporated in the rule, we received no reply.
We could appreciate the embarrassment of the counsel, and as stated earlier.
there lies the nub of the matter.
What this Court in the various decisions has struck down is a similar rule in its present naked form without any guideline whatsoever, broad or 276 otherwise.
It was never the argument on behalf of the em ployees nor indeed is it to day before us that all the possible circumstances in which the rule may be used should be enumerated in it.
Their argument has been that at least the broad circumstances under which its exercise may become necessary should be incorporated to avoid an arbitrary use or rather the abuse of power, and to guarantee the security of employment.
That argument has been accepted by this Court in the past by holding that such a rule is violative of the Constitution and was not necessary to safeguard the inter ests of the undertakings or the interests of the public.
The decisions which appear to take an inconsistent view show on close analysis that either they were not dealing with the validity of the rule or were rendered when the dimensions of both Articles 14 and 21 were not expanded as they have been subsequently.
In the year 1990, it is not necessary for me to discuss in detail the authorities which have widened the horizons of Article 14 of the Constitution.
Some of these precedents are directly on the point in as much as the validity of similar service rules was considered there.
It is enough if I summarise the position of law as it obtains to day.
There is need to minimise the scope of the arbitrary use of power in all walks of life.
It is inadvisable to depend on the good sense of the individuals, however high placed they may be.
It is all the more improper and undesirable to expose the precious rights like the rights of life, liberty and property to the vagaries of the individual whims and fancies.
It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness does not go with the posts, however high they may be.
There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational.
History does not support it and reality does not warrant it.
In particular, in a society pledged to uphold the rule of law, it would be both unwise and impoli tic to leave any aspect of its life to be governed by dis cretion when it can conveniently and easily be covered by the rule of law.
The employment under the public undertakings is a public employment and a public property.
It is not only the under takings but also the society which has a stake in their proper and efficient working.
Both discipline and devotion are necessary for efficiency.
To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimsical.
With capricious service conditions, both discipline and devotion are endan 277 gered, and efficiency is impaired.
The right to life includes right to livelihood.
The right to livelihood therefore cannot hang on to the fancies of individuals in authority.
The employment is not a bounty from them nor can its survival be at their mercy.
Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental.
Fundamental rights can ill afford to be con signed to the limbo of undefined premises and uncertain applications.
That will be a mockery of them.
Both the society and the individual employees, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible.
The arbi trary rules, such as the one under discussion, which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.
These are the conclusions which flow from Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi & Anr., ; ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; The Manager, Government Branch Press & Anr.
vs D.B. Felliappa; , ; Managing Director, Uttar Pra desh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpay ee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Limited, ; ; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors.
vs Bombay Municipal Corporation & Ors.
etc., [1985] Supp. 2 SCR 51; Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 13 1; Central Inland Water Trans port Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr.
, ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors., ; ; N.C. Dalwadi vs State of Gujarat, ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp.
SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc.
vs Union of India & Ors., 7.
Since, before us the rule in question which admitted ly did not lay down explicit guidelines for its use was sought to be defended only on two grounds, viz., that the power conferred by it is to be exercised only by high au thorities and that it is capable of being read down to imply circumstances under which alone it can be used, I need deal only with the said grounds.
278 8.
The "high authority" theory so called has already been adverted to earlier.
Beyond the self deluding and self asserting righteous presumption, there is nothing to support it.
This theory undoubtedly weighed with some au thorities for some time in the past.
But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it.
Even while Shah, J. in his dissent ing opinion in Moti Ram Deka etc.
vs General Manager, N.E.P. Railways, Maligaon, Pandu, etc.
; , had given vent to it, Das Gupta, J. in his concurring judgment but dealing with the same point of unguided provisions of Rule 148(3) of the Railway Establishment Code, had not supported that view and had struck down the rule as being violative of Article 14 of the Constitution.
The majority did not deal with this point at all and struck down the Rule as being void on account of the discrimination it introduced between railway servants and other government servants.
The reliance placed on the decision in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; to support the above theory is also according to me not correct.
As has been pointed out there, the Commission of Inquiry Act, 1952, the validity of which was challenged on the ground of unguided powers to institute inquiries, was not violative of Article 14 because the long title and Section 3 of the Act had contained sufficient guidelines for exercise of the power.
Section 3 has stated that the appro priate government can appoint a Commission of Inquiry only for the purpose of making inquiry into any definite matter of public importance.
It is in the context of this guideline in the Act, that it is further stated there that even that power is to be exercised by the government and not any petty official.
Hence a bare possibility that the power may be abused cannot per se invalidate the Act itself.
The proposi tion of law stated there is to be read as a whole and not in its truncated form.
The authority does not lay down the proposition that even in the absence of guidelines, the conferment of power is valid merely because the power is to be exercised by a high official.
It must further be remem bered that in this case, the contention was that although the appropriate government was given power to appoint Com mission of Inquiry into any definite matter of public impor tance, the delegation of power was excessive since it was left to the government to decide for itself in each case what constituted such matter.
The court repelled the argu ment by pointing out that "definite matter of public impor tance" constituted sufficient guideline to the government.
It was not, therefore, a case of no guideline but of the absence of details of the guideline.
279 Of similar nature is the reliance placed on the decision in The Collector of Customs, Madras vs Nathella Sampathu Chetty & Anr., ; for the proposition that the possibility of the abuse of the powers is no ground for declaring the provision to be unreasonable or void.
The relevant observations are made while repelling the conten tion there that the burden thrown under provisions of Sec tion 178A of the on the possessor of the goods to show that they were not smuggled was violative of Article 19(1)(f) and (g) of the Constitution.
The obser vations are as follows: "The possibility of abuse of a statute otherwise valid does not impart to it any element of invalidity.
The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being adminis tered in a reasonable manner.
The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
If so judged it passes the test of reasonable ness, possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid and similarly if the law properly interpreted and tested in the light of the requirements set out in Part III of the Consti tution does not pass the test it cannot be pronounced valid merely because it is administered in a manner which might not conflict with the constitutional requirements.
In saying this we are not to be understood as laying down that a law which might operate harshly but still be constitutionally valid should be operated always with harshness or that reasonableness and justness ought not to guide the actual administration of such laws.
" The statute there was saved by the provisions of Article 19(6) of the Constitution and was otherwise valid.
It was not a case of a provision which was constitutionally invalid being saved by recourse to the spacious assumption of its reasonable exercise in individual cases.
In Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; , it was a case of an employee of a private company who was given a discharge simpliciter.
This Court following its earlier decisions on the point observed that in several cases, contract of employment or Standing Orders authorise an industrial employer to terminate the employee 's service by giving one month 's notice or salary of one month in lieu of notice and normally an employer may, in a proper 280 case be entitled to exercise the power.
But where such order gives rise to an industrial dispute, the form of the order would not be decisive and the industrial adjudicator would be entitled to probe it to find out whether it is mala fide or is made in colourable exercise of the power.
Being a private employment, the power so conferred was not as sailed on the ground that it violated Article 14 of the Constitution.
I fail to understand the reliance placed on this authority to support the appellants ' case before us.
The other authorities relied on behalf of the appellants have similarly no relevance to the point.
In Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; , the Slum Clearance Act which was challenged there contained enough guidelines for the exer cise of the power.
In Municipal Corporation of Greater Bombay vs P.S. Malvenkar & Ors., ; , Order 26 of the Standing Orders and Service Regulations which was in question there required reasons to be given for effecting termination simpliciter of an employee.
In Organo Chemical Industries & Anr.
vs Union of India & Ors.
, ; , Section 143 of the Provident Fund Act which was challenged was held to be valid since the Act contained enough guide lines for imposing penal damages.
In Champaklal Chimanlal Shah vs The Union of India, , Rule 5 of the Central Civil Services (Temporary Services) Rules, 1949 was challenged on the ground that it discriminated between temporary and permanent employees.
There was no challenge to the absolute power given by the said rule to terminate the services of temporary employees.
In Ram Gopal Chaturve di vs State of Madhya Pradesh; , , it was a case of termination of a temporary Government servant 's services.
In Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; , the challenge was to the termina tion of services on the ground that it was done in colour able exercise of power under Regulation 48 of the Air India Employees ' Service Regulations.
The said regulation was not challenged on the ground that it gave unchannelised and unguided power of terminating the services of employees.
In Hira Nath Mishra & Ors.
vs The Principal, Rajendra Medical College, Ranchi and Anr.
, , it was the case of the expulsior of students from college for two academic sessions pursuant to the order passed by the Principal of that college.
The expulsion was effected following a confi dential complaint received from 36 girl students residing in the girls ' hostels alleging that the students in question d entered the compound of the girls ' hostels at belated night and walked without clothes on them.
The students were heard but the evidence of the girls was not recorded in their presence.
281 The Court held that under the circumstances the requirements of natural justice were fulfilled since the principles of natural justice were not inflexible and differed in differ ent circumstances.
I have not been able to appreciate the relevance of this decision to the point in issue.
I may now deal with the second contention vehemently urged on behalf of the appellants.
The contention was that if it is possible to save a legislation by reading it down to read in it words, expressions or provisions, it should not be struck down.
In order to save the present rule, it was urged on behalf of the appellants that the Court should read in it circumstances under which alone it can be used.
What precise circumstances should be read in it, however, was not stated by the learned counsel.
I am afraid that the doctrine of reading down a statute has been wrongly pressed into service in the present case.
The authorities relied upon by the learned counsel for the appellants not only do not help the appellants but go against their case.
It would be better if I first deal with the authorities cited at the Bar for they will also bring out the correct meaning and application of the said doctrine as well as its limitations.
In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc.
, [19411 FCR 12 what fell for consideration was whether the said two Act which were the Central pieces of legislation operated to regulate succession to agricultural land in the then Governors ' Provinces.
Admittedly, under the scheme of the then Government of India Act, 1935, after April 1, 1937, the Central Legislature was precluded from dealing with the subjects numerated in List II of the 7th Schedule so far as the Governors ' Provinces were concerned.
Laws with respect to the "devolution of agricultural land" could be enacted only by the Provincial Legislatures (Entry No. 21 of List II) and wills, intestacy and succession, save as regards agricultural land appeared as Entry No. 7 of List III, i.e., the Concurrent List.
Hence, it was obvious that the said Acts enacted as they were by the Central Legisla ture could not have dealt with succession to agricultural land so far as the Governors ' Provinces were concerned.
It is in these circumstances that the Federal Court read the two Acts of 1937 and 1938 as being not operative to regulate succession to agricultural land in the Governors ' Provinces but operative to regulate devolution by survivorship of property other than agricultural land.
It will thus be obvious that the limited purpose for which the doctrine of reading down was called into play in that case was to ex clude from the purview of the Act a subject which was not within the competence of the legislature which had enacted it.
282 In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors.
, ; the expression "decree for recovery of pos session" in Section 18(1) of the West Bengal Premises Rent Control (Temporary Provisions) Act (XVII of 1950) fell for consideration, and the controversy was whether it included also an order for recovery of possession made under Section 43 of the Presidency Small Cause Court Act, 1882 and hence a person against whom an order under the latter provision was made was not entitled to claim relief under the former provision.
In that connection the Court observed as follows: "It must always be borne in mind, as said by Lord Halsbury in Commissioner for Special Purposes of Income Tax vs Pem sel, LR 189 1 AC 53 1 at p. 549, that it is not competent to any Court to proceed upon the assumption that the Legisla ture has made a mistake.
The Court must proceed on the footing that the Legislature intended what it has said.
Even if there is some defect in the phraseology used by the Legislature the Court cannot, as pointed out in Crawford vs Spooner; , ; 4 MIA 179; aid the Legislature 's defective phrasing of an Act or add and amend or, by con struction, make up deficiencies which are left in the Act.
Even where there is a casus omissus, it is, as said by Lord Russel of Killowen in Hansraj Gupta vs Official Liquidator of Dehra Dun Mussoorie Electric Tramway Co. Ltd., [1933] LR 60 IA 13; AIR 1953 PC 63 for others than the Courts to remedy the defect.
In our view it is not right to give to the word "decree" a meaning other than its ordinary accepted meaning and we are bound to say, in spite of our profound respect for the opinions of the learned Judges who decided them, that the several cases relied on by the respondent were not correctly decided." In R.M.D. Chamarbaugwalla vs The Union of India, ; , more or less a similar situation arose.
The Parlia ment had enacted the to provide for the control and regulation of the prize competitions, and Section 2 of the Act had defined "Prize Competitions" to mean "any competition (whether called a crossword prize competition, a missing word competition, a picture prize competition or by any other name), in which prizes are offered for the solution of any puzzle based upon the build ing up, arrangement, combination or permutation of letters, words or figures".
The validity of.the restrictions imposed by the Act was challenged as going beyond Article 19(6) of the Constitution.
The Court took a recourse to the 283 doctrine of reading down and held that the definition of prize competition given in Section 2(d) of the Act had in view only such competitions as were of gambling nature and no others.
The Court further held there that in interpreting an enactment the Court should ascertain the intention of the legislature not merely from a literal meaning of the words used but also from such matters as the history of the legis lation, its purpose and the mischief which it seeks to suppress.
In Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 SCR 769, the challenge was to the constitutional validity of Section 124A of the Indian Penal Code.
Two views were before this Court with regard to the ambit of the said section.
One which held that words, deeds or writings constituted the offence of sedition under the said section only when they had the intention or tendency to disturb public tranquility, to create public disturbance or to promote disorder.
The other view was that it was not an essential ingredient of the offence of sedition under the said section that the words, deeds or writings should be intended to or be likely to incite public disorder.
The latter view of the section would have rendered it unconstitutional.
It is in these circumstances that this Court held that the former view ' should be taken which would render the said section consti tutional.
The Court in that connection also further held that keeping in mind the reasons for the introduction of the said section and the history of sedition the former view was the correct interpretation of the ambit of the said section.
In R.L. Arora vs State of Uttar Pradesh & Ors.
, ; , the validity of Sections 40 and 41 of the Land Acquisition Act, 1894, and of Section 7 of the Amending Act, was similarly upheld by placing on them construction which would render them constitutional.
The relevant provisions were construed to mean that where land is acquired for the construction of a building or work which subserves the public purpose of the industry or work in which a company is engaged or is about to be engaged, it can be said that the land was acquired for a public purpose.
In Jagdish Pandey vs The Chancellor, University of Bihar & Anr.
; , Section 4 of the Bihar State Uni versities (University of Bihar, Bhagalpur and Ranchi) (Amendment) Act 13 of 1962 was called in question as being violative of Article 14 of the Constitution on the ground that the said section did not make any provision for giving the teacher a hearing before passing the order thereunder.
By that section, every appointment, dismissal etc.
of any teacher of a college affiliated to the University (but not belonging to 284 the State) made on or after 27th November, 1961 and before 1st March, 1962 was to be subject to such order as the Chancellor of the University may on the recommendation of the University Service Commission established under Section 48 of the said Act pass with respect thereto.
The Court held that the said section was not invalid on the ground of unchannelised power given to the Chancellor because it never authorised the Chancellor to scrutinise the relevant ap pointments for satisfying himself that they were in accord ance with University Act and its Statutes etc.
The Court further held that although the said section did not make a provision for giving the teacher a hearing before passing order thereunder, such hearing must be read in the said section which the Commission had to give according to the principles of natural justice before making its recommenda tions to the Chancellor.
In Shri Umed vs Raj Singh & Ors., ; , one of the questions which fell for consideration was whether the expression "to withdraw or not to withdraw from being a candidate" referred to the stage of withdrawal of candida ture under Section 37 and whether it applied to a situation where a contesting candidate announced that he does not wish to contest the election or declared his intention to sit down after the last date for withdrawal of candidature under Section 37 had passed.
Over ruling its earlier decision in Mohd. Yunus Salim 's case AIR 1974 SC 12 18, the Court held that the function of the Court is to gather the intention of the legislature from the words used by it, and it would not be right for the Court to attribute an intention to the legislature which though not justified by the language used by it, accords with what the Court conceives to be reason and good sense and then bend the language of the enactment so as to carry out such presumed intention of the legisla ture.
For the Court to do so would be to overstep its lim its.
The Court also held that the words used by the legisla ture must be construed according to their plain natural meaning, and in order to ascertain the true intention of the legislature, the Court must not only look at the words used by the legislature but should also have regard to the con text and the setting in which they occur.
The word "context" has to be construed in a wide sense to mean all the provi sions of the Act which bear upon the same subject matter and these provisions have to be read as a whole and in their entirety each throwing light and illumining the meaning of the other.
In Sunil Batra etc.
vs Delhi Administration & Ors., it was held that under Section 30(2)of the which provided that a prisoner under sentence of death shall be confined in a 285 cell apart from all other prisoners, did not mean that he has to be confined cellularly or separately from the rest of the prisoners so as to put him in a solitary confinement.
The said expression had a restricted meaning and it only meant that such a prisoner has to be kept in a separate cell but one which is not away from the other cells.
Thus, the said expression, viz. "shall be confined in a cell apart from all other prisoners" in the said provision was read down to exclude solitary confinement.
In Excel Wear etc.
vs Union of India & Ors.
, ; , one of the questions before this Court was whether the Court could read in Section 25 O (2) of the that it was incumbent on the authority to give reasons in his order for refusing permission to close down the undertaking.
The Court answered it in the negative.
Although in the discussion that follows explicit reasons for the same are not found, it is legitimate to presume that the Court did not accept the said contention because of the clear and explicit language of the said section.
In Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , the majority judgment has discussed the limitations of the doctrine of reading down which is rele vant for our purpose.
In that case, it was contended on behalf of the State that Article 31C should be read down so as to save it from the challenge of unconstitutionality and it was urged that it would be legitimate to read into that Article the intendment that only such laws would be immu nised from the challenge under Article 14 and 19 as did not damage or destroy the basic structure of the Constitution.
The Court opined that "to do so in that case would involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently." According to the Court, "the device of reading down is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed.
One must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment . . . .
If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissi ble to read down the amplitude of that power so as to make it limited.
The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature.
We suppose that in the history of the constitu tional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends.
In fact, to accept the argument that we should read down Article 31C, so as to make it 286 conform to the ratio of the majority decision in Kesavananda Bharati, is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31, 3 lB and 31C are grouped.
Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it seems to us impossible to hold that we should still save Article 3 iC from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose." The Court then dealt with the argument of the learned Additional Solicitor General who contended that it was still open to the Court under Article 3 IC of the Constitution to decide whether the law enacted pursuant to it secured any of the Directive Principles of the State Policy and whether the object of the Directive Principles could not be secured without encroaching upon the Fundamental Rights and the extent to which encroachment was necessary and whether such encroachment violated the basic structure of the Constitu tion.
The Court opined that this argument was open to the same criticism to which the argument of Attorney General was open and that "it would be sheer adventurism of a most extraordinary nature to undertake the kind of judicial enquiry which according to the learned Additional Solicitor General, the courts are free to undertake." The Court fur ther held that in the very nature of things it was difficult for a court to determine whether a particular law gave effect to a particular policy and whether a law was adequate enough to give effect to that policy.
It was pointed out by the Court that it was not possible for the Court to set aside the law so enacted as invalid merely because in the opinion of the Court, the law was not adequate enough to give effect to that policy.
The Court further pointed out that "the only question open to judicial review was whether there was a direct and reasonable nexus between the impugned law and the provisions of the Directive Principles.
The reasonableness was to be examined with regard to such nexus and not with regard to the impugned law.
Hence, it was not open to the Court to undertake the kind of enquiry suggested by the Additional Solicitor General.
That would involve an extensive judicial review which was impermissible in law." The Court then pointed out that where the express words of the statute are clear and intended to give power without limitation, the statute cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content.
The Court opined that provisions such as these provide a 287 striking illustration of the limitations of the doctrine of reading down.
In Union of India & Anr.
vs Tulsiram Patel etc.
; , the majority judgment asserts that when the statute expressly excludes the rule of audi alteram partem, there is no scope for reintroducing it by a side door to provide the enquiry which has been expressly prohibited.
In Elliott Ashton Welsh, II vs United States, ; ; 26 L. ed.
2nd 308 while making useful observations on the doctrine of reading down and of recasting the statute, in his concurring opinion Harlan, J. stated as follows: "When the plain thrust of a legislative enactment can only be circumvented by distortion to avert an inevita ble constitutional collision, it is only by exalting form over substance that one can justify this veering off the path that has been plainly marked by the statute.
Such a course betrays extreme skepticism as to constitutionality, and, in this instance, reflects a groping to preserve the conscientious objector exemption at all cost.
I cannot subscribe to a wholly emasculated con struction of a statute to avoid facing a latent constitu tional question, in purported fidelity to the salutary doctrine of avoiding unnecessary resolution of constitution al issues, a principle to which I fully adhere.
It is, of course, desirable to salvage by construction legislative enactments whenever there is good reason to believe that Congress did not intend to legislate consequences that are unconstitutional, but it is not permissible, in my judgment, to take a lateral step that robs legislation of all meaning in order to avert the collision between its plainly intended purpose and the commands of the Constitution.
It must be remembered that although this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute . or judicially rewriting it.
To put the matter another way, this Court will not consider the abstract question of whether Congress might have enacted a valid statute but instead must ask whether the statute that Con gress did enact will 288 permissibly bear a construction rendering it free from constitutional defects.
The issue comes sharply into focus in Mr. Justice Cardozo 's statement for the Court in Moore Ice Cream Co. vs Rose; , ,379; 77 L ed.
1245, 1270: 'A statute must be construed, if fairly possi ble, so as to avoid not only the conclusion that it is unconstitutional, but also grave doubts upon that score. ' .
But avoidance of a difficulty will not be pressed to the point of disingenuous evasion.
Here the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power.
The problem must be faced and answered.
" If an important congressional policy is to be perpetuated by recasting unconstitutional legislation, as the prevailing opinion has done here, the analytically sound approach is to accept responsibility for this decision.
Its justification cannot be by resort to legislative intent, as that term is usually employed, but by a different kind of legislative intent, namely the presumed grant of power to the courts to decide, whether it more nearly accords with Congress ' wishes to eliminate its policy altogether or extend it in order to render what Congress plainly did intend, constitutional.
It is thus clear that the doctrine of reading down or of recasting the statute can be applied in limited situa tions.
It is essentially used, firstly, for saving a statute from being struck down on account of its unconstitutionali ty.
It is an extention of the principle that when two inter pretations are possible one rendering it constitutional and the other making it unconstitutional, the former should be preferred.
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its violation of any of the provisions of the Constitu tion.
The second situation which summons its aid is where the provisions of the statute are vague and ambiguous and it is possible to gather the intentions of the legislature from the object of the statute, the context in which the provi sion occurs and the purpose for which it is made.
However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord 289 with good reason and conscience.
In such circumstances, it is not possible for the Court to remake the statute.
Its only duty is to strike it down and leave it to the legisla ture if it so desires, to amend it.
What is further, if the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided.
One of the situations further where the doctrine can never be called into play is where the statute requires an extensive additions and deletions.
Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so.
Judged in the context of the above principles I am of the view that the doctrine cannot be availed of for saving the present regulation In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Transport Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950 (hereinafter referred to as the "Act").
The object of the Act is to provide for the establishment and the regulation of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi.
There is nothing either in the object of the service regulations of which the present regulation is a part or in the object of the Act which has a bearing on the said Regulation 9(b).
If anything, the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertak ing.
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation.
Secondly, the language of the regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permissible to read in it any meaning other than what is clearly sought to be conveyed by it.
Thirdly, the context of the said regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees.
Sub clause (a) of the said Regulation 9 mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice.
Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of establishment or in circumstances other than those mentioned in subclause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employee 's services.
The intention of the rule making authority, therefore, is more than clear.
It 290 was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee.
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision.
What is more, the kind of recasting which is suggested on behalf of the appellants would not only distort the intention of the rule making authority but would also require extensive amendment to it of a very vague nature.
The appellants suggest firstly that we should read into the regulation a provision that the concerned employee would be given a hearing.
The suggestion itself begs the question: Hearing for what? Is he to be heard with regard to his misconduct? If so, it will require that he should first be intimated of the misconduct of which he is guilty.
But that kind of a situation is taken care of by sub clause (a) of the said regulation.
There is, therefore, no need of a separate provision for the same.
If, on the other hand, the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing.
The reading in the rule of a mere provision of a hearing is, therefore, meaningless.
The other suggestion made on behalf of the appellants is still more objectionable.
The suggestion was that we should read in the rule all circumstances where it is not possible or necessary to hold an enquiry.
1 thought that such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311(2).
In fact, one of the public undertakings viz., Indian Airlines has come out with such regulation being amended Regulation 13 of its Employ ees ' Service Regulations, and the same has been placed on record by them.
What is necessary to note in this connection is that the reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do.
1 know of no authority which supports such wide reading down of any provision of the statute or rule/regulation.
For all these reasons the doctrine of reading down is according to me singularly inapplicable to the present case and the arguments in sup port of the same have to be rejected.
I am, therefore, of the view that there is no sub stance in this appeal.
I would rather that the long departed rule rests in peace at least now.
Hence I dismiss Civil Appeal No. 2876/86 with costs.
1 allow Civil Appeal No. 1115 of 1976 and agree with the order proposed to be passed therein by the learned Chief Justice.
291 The rest of the civil appeals, and Special Leave Peti tion (Civil) No. 7612 of 1987 be referred to the Division Bench for disposal in accordance with the opinion expressed in Civil Appeal No. 2876 of 1986 hereinabove.
The applica tion for intervention are allowed.
K. RAMASWAMY, J: 1.
These batch cases concern, a refer ence.
the correctness of the ratio rendered in Central Inland Water Transport Company Limited vs Brojonath Ganguly, = (for short Brojo Nath).
The facts in C.A. No. 2886/86 lie in a short compass and sufficient for deciding the controversy are stated thus: 2.
The Delhi Transport Corporation, a statutory body terminated the services of its three permanent employees, the Conductor (R. 2), Asstt.
Traffic Incharge (R. 3), and the Driver (R. 4) for their alleged inefficiency, by exer cising the power of Regulation 9(b) of Delhi Road Transport Authority (Conditions of appointment and Services) Regula tion, 1952 (for short "the Regulation") framed under section 53 of the Delhi Road Transport Act, 1950 read with Delhi Transport (Amendment) Act, 1971 (for short "the Act").
The first respondent union assailed the validity of the Regula tion which the High Court of Delhi struck it down as offend ing Articles 14 and 16 of the Constitution.
The High Court solely relied on the ratio in Brojo Nath whose correctness is the subject of the reference: My learned brother, My Lord the Chief Justice extensively stated the argument of the counsel on either side.
Therefore, to avoid needless burden on this judgment, I consider it redundant to reiterate them once over.
Regulation 9(b) of the Regulations read thus: Termi nation of Services: "Whether the termination is made due to reduction of establishment or in circumstances other than those mentioned in (a) above, one.
month 's notice or pay in lieu thereof will be given to all categories of employees" as is similar to Rule 9 of the Rules in Brojo Nath 's case (supra) which this Court declared to be Henry VIII clause, conferring an absolute, arbitrary and unguided power upon that Corporation and was held to be ultra vires of the provisions of the Constitution and was void under section 23 of the .
As stated earlier, the correctness thereof is the primary question in these appeals.
Sri Ashok Desai, the learned Solicitor General vehe mently contended that, under ordinary law of "master and servant" the 292 Corporation is empowered by the Contract of Service to terminate the services of its employees in terms thereof.
The declaration in Brojo Nath 's case that such a contract is void, under section 23 of the or opposed to public policy offending the Fundamental Rights and the Directive Principles, is not sound in law.
He contends that as a master the Corporation has unbridled right to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employ ees.
The termination, if is found to be wrongful, the only remedy available to the employees is to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case.
In support thereof, he cited passages from Chitti on Contract, Halsbury 's Laws of England and the ratio in Union of India vs Tulsiram PateI, [1985] Supp.
2 SCR 131 = AI He also placed strong reliance on Industrial Law and the decisions of this Court cited by my learned brother, the Chief Justice.
Alternatively he contended that the relevant regulations would be read down so as to be consistent with articles 14 and 16(1) read with article 19(1)(g) of the Constitution and the authority invested with such power could in an appropriate case, report to terminate the services of an employee expeditiously without recourse to an elaborated enquiry and opportunity of hear ing.
The latter contention of reading down the relevant rules received support from the learned Attorney General Sri Soli J. Sorabjee and other counsel appearing for the employ ers.
M/s. M.K. Ramamurthi, R.K. Garg, and P.P. Rao, learned counsel appearing for the employees resisted these conten tions.
The main controversy centres round the question whether the employer, Statutory Corporation or instrumental ity or other authority under article 12 of the Constitution has unbridled power to terminate the services of a permanent employee by issue of notice or pay in lieu thereof without inquiry or opportunity, in exercise of the power in terms of contract which include statutory Rules or Regulations or instructions having force of law.
It is undoubted that under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provisions for termination of service by notice, in terms thereof, it can be so determined and if the contract finds no provisions to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice.
Where no notice or a reasonable notice was issued, before terminating the contract, the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages.
But this common law principle could be applied to the employees, appointed by a Statutory Corporation or authority or an instrumentality within 293 the meaning of Article 12 of the Constitution is the square question.
It is not disputed that Delhi Road Transport Corporation is a Statutory Corporation under the Act and the Regulations are statutory and its employees are entitled to the fundamental Rights enshrined in Part III of the Consti tution.
It is well settled law by a heed role of decisions of this Court that the Corporation or a Statutory Authority or an instrumentality or other authority under article 12 of the Constitution is not free, like an ordinary master (a private employer), to terminate the services of its employ ees at its whim or caprices or vagary.
It is bound by the Act and the Regulation and the paramount law of the land, the Constitution.
Nature of the Power Statutory Authority to terminate the services of its employees.
In Sukhdev Singh vs Bhagatram, ; = ; , the Constitution Bench of this Court put a nail in the coffin of the play of the private master 's power to hire and fire his employees and held that Regula tions or Rules made under a Statute apply uniformly to everyone or to all members of the same group or class.
They impose obligations on the statutory authorities who cannot deviate from the conditions of service and any deviation will be enforced through legal sanction of declaration by Courts to invalidate the actions in violation of the Rules or Regulations.
The statutory bodies have no free hand in framing the terms or conditions of service of their employ ees.
The Regulations bind both the authorities and also the public.
The powers of the statutory bodies are derived, controlled and restricted by the Statutes which create them and the Rules and Regulations framed thereunder.
The Stat ute, thereby fetters on the freedom of contract.
Accordingly declaration was granted that dismissal or removal of an employee by statutory Corporation in contravention of statu tory provision as void.
Mathew, J. in a separate but concur rent judgment held that a Public Corporation being the creation of a Statute is subject to statutory limitations as a State itself.
The preconditions of this Part II viz., that the corporation is created by Statute and the existence of power in the corporation is to invade a statutory right of the individual.
Therefore, the governing power must be subject to fundamental statutory limitations.
The need to subject the power centres to the control of the Constitution requires an expansion of concept of State action.
The duty of State is affirmative duty seeing that all essentials of life are made available to all persons.
The task of State today is to make the achievement of good life both by remov ing obstacles in the path of such achievement and by assist ing individual in realis 294 ing his ideal of self perfection.
The employment under public corporation is a public employment and, therefore, the employee should have the protection which appurtains to public employment.
(emphasis supplied).
The Court must, therefore, adopt the attitude that declara tion is a normal remedy for a wrongful dismissal in case of public employees which can be refused in exceptional circum stances.
The remedy of declaration should be a remedy made an instrument to provide reinstatement in public sector.
This principle was extended to numerous instances where the termination of services of the employees of a statutory corporation was affected in violation of the principles of natural justice or in transgression of the statutory rules etc.
In U.P. State Warehousing Corporation vs N.V. Vajpayee, at p 780 F to G and 783G to 784A this Court held that statutory body cannot terminate the services of its employees without due enquiry held in accordance with the principles of natural justice.
The persons in public employment are entitled to the protection of Articles 14 and 16 of the Constitution, when the service was arbitrarily terminated.
The question, therefore, is whether the statuto ry corporations are entitled to be invested with absolute freedom to terminate the services of its employees in terms of the contract of service.
In Ramana vs International Airport Authority of India, ; = (1979) SC.
p. 1628 this Court held that expression of welfare and social service functions necessitates the State to assume control over natural and economic resources and large scale natural and commercial activities.
For the attainment of socio economic justice, there is vast and notable increase of frequency with which ordinary citizens come into relationship of direct encoun ters with the State.
The Government in a welfare state is the regulator and dispenser of social services and provider of large number of benefits, including jobs etc.
Thousands of people are employed in Central/State Government Services and also under local authorities.
The Government, therefore, cannot act arbitrarily.
It does not stand in the same posi tion as a private individual.
In a democratic Government by rule of law, the executive Government or any of its officers cannot held to be possessed of arbitrary power over the interests of the individuals.
Every action of the Government must be informed with reason and should be free from arbi trariness.
That is the very essence of rule of law.
It was further held: "It was, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of 295 giving jobs or entering into contracts . . the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard of norm which, is not arbitrary, irrational or irrelevant.
The power of discretion of the Government in the matter of grant of largess including award of jobs, . . . . . must be conditioned and structured by rational relevant and non discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action or the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.
" This statement of law, though was made in the context of contractual relations, it is a general law with width and amplitude which permeates the entire spectrum of actions, legislative as well as executive.
The Constitution is the permanent law of the land and its preamble is an integral part thereof.
It assures Social and Economic Justice and also accords equality of opportuni ty and status as well as equality before law assuring digni ty of the individual.
The Constitution Forty Second Amend ment Act introduced "Socialism" in the Preamble and made explicit of what is latent in the Constitutional Scheme.
Article 14 accords equal protection of law and equality before law.
Article 16(1) provides right to an appointment or employment to an office or post under the State.
Article 19(1)(g) assures right to occupation or avocation.
article 21 assures right to life and any deprivation is as per the procedure established by law.
In General Manager, Southern Railway vs Rangachari, [1962] S.C.R. page 586 it was held that matters relating to employment would include salary, increments, leave, gratuity, pension, age of superannuation etc.
Similarly, in respect of appointments, such matters would include all the terms and conditions of service per taining to the said office.
All those matters are included in the expression "matters relating to employment or ap pointment" within the meaning of article 16(1) of the Constitu tion.
This was reiterated in State of M.P.v.
Shardul Singh, [19701 3 S.C.R. page 302 at 305 306 that conditions of service include holding of posts right from the time of appointment till his retirement beyond it like pension etc.
The middle class, lower middle class and lower classes ' educated 296 youths generally, if not mainly, depend on employment or appointment to an office or posts under the States which include corporations, statutory body or instrumentality under article 12 of the Constitution as source to their liveli hood and means to improve their intellectual excellence and liner facets of life individually and collectively as a member of the society so that himself and his dependents are economically sound, educationally advanced and socially dignified so that the nation constantly rises to standards of higher level in an egalitarian social order under rule of law as is obligated under article 51A(J ).
Right to life scope of 9.
The right to life, a basic human right assured by article 21 of the Constitution comprehends something more than mere animal existence i.e. dignity of the individual.
Field J. in Munn vs Illinois, ; and 154 held that by the term "life" as here used, something more is meant than mere animal existence.
The inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed.
The deprivation not only of life but of . . if it a efficacy be not lettered away by Judicial decision.
In Kharak Singh vs State of U.P., [1964] 1 SCR 332 this Court approved the definition of life given by Field J. in his dissenting opinion.
In Olga Tellis vs Bombay Munici pal Corporation, [1985] 2 Suppl.
SCR page 51 at 79 this Court further laid that an equally important facet of the right to life is the right to livelihood because no person can live without the means of livelihood.
If the right to livelihood is not treated as a part of the Constitutional right to life, the easiest way of depriving a person of his right to life would be to deprive him of his means of live lihood to the point of abrogation . .
That, which alone can make it possible to live, leave aside which makes life liveable, must be deemed to be an integral component of the right to life . .
The motive force which propels their desertion of their hearths and homes in the village is the struggle for survival, that is the struggle for life.
So unimpeachable is the nexus between life and the means of livelihood.
Right to life does not only mean physicaI exist ence but includes basic human dignity, vide Menaka Gandhi vs Union of India, [1978] 2 SCR 621 John Stuart Mill in his 'Consideration of Representative Govt. ' said years ago that "the power of the State is to promote virtue and intelli gence of the people".
In State of Maharashtra vs Chunder Bhan, = ; Chinnappa Reddy, J. held that public employment opportunity is a national wealth in which all citizens are equally entitled to share and Varadarajan, J. held that public employment is the property of the nation which has to be shared equally.
This rule 297 was laid when rule 15(1)(ii)(b ') of B.C.S. Rules to pay subsistence allowance during period of suspension @ Rs. 1 per month pending departmental enquiry was challenged and declared the rule as ultra vires by operation of articles 14, 16, 21 and 311(2).
The right to public employment and its concomitant right to livelihood, thus, receive their succour and nourishment under the canopy of the protective umbrella of articles 14, 16(1), 19(1)(g) and 21.
Could statutory law arbitrarily take away or abridged or abrogated it? In Board of Trustees, Port of Bombay vs Dilip Kumar, ; = ; this Court held that the expression "life" does not merely connote animal existence or a continued drudgery through life, the expression life has a much wider meaning.
Where, therefore, the, outcome of a departmental enquiry is likely to affect reputation or livelihood of a person, some of the liner graces of human civilisation which makes life worth living would be jeopardised and the same can be put in jeopardy only by law which inheres fair procedure.
In Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors., ; it was held that the standing order 31 which confers arbitrary, uncanalised and drastic power on the Manager to dismiss an employee without enquiry, apart from being in violation of basic requirement of natu ral justice, is such a drastic nature as to effect the livelihood and put a stigma on the character of the workman.
In Francis Corallie vs U.T. of Delhi, ; = ; this Court held that "it is for the Court to decide, in exercise of its constitutional power of judicial review, whether the deprivation of life or personal liberty in a given case is by procedure which is reasonable, fair and just and fair treatment".
The tests of reason and jus tice cannot be abstract nor can be divorced from the actual ities of life and the needs of the Society.
The tests ap plied must be pragmatic and purposive lest they cease to be reasonable.
Reasonableness must be meaningful and effica cious in content as well as in form.
The procedure provided in Rule 9(b) or allied rules, therefore, must not be just, fair and reasonable so as to be in conformity with articles 14 and 21 is the cry of the case.
The position of the public employee is whether status: The distinguishing feature of public employment is status.
In Roshanlal Tandon vs Union of India, ; at 195 196 the Constitution Bench held that the legal position of a Government servant is more one of status than of contract.
The hall mark of status 298 is the attachment to a legal relationship of rights and duties imposed by, the public law and not by mere agreement of the parties.
The employment of the Government servant and his terms of service are governed by statute or statutory rules.
Once he is appointed to the post or office, the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties but by Statute or Statutory Rules.
The relationship between the Government and its servants is not like an ordinary contract of service between a master and servant.
The legal relationship is in the nature of status.
The duties of statute are fixed by the law and in the enforce ment of the duties society has an interest.
Status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agree ment between the parties concerned.
In Calcutta Dock Labour Board vs Jarfar Imam, it was held that the statutory scheme of employment confers on the worker a status.
An unlawful act is an interference with status.
This view was followed in Sirsi Municipality vs Cecelia Kom Francis Tellis, ; Beg, J. (as he then was) held that the principles applicable to the relation of a Private Master and servant unregulated by statute, could not apply to the cases of a public statutory body exercising powers of punishment lettered or limited by statute and relevant rules of procedure.
This Court in a recent decision extended all the benefits of pay scales to all the Central Government Corporate Sector employees.
It is, thus, I hold that the employees of the corporations, statutory authority or instrumentality under article 12 have statutory status as a member of its employees.
The rights and obligations are governed by the relevant statutory provisions and the em ployer and employee are equally bound by that statutory provisions.
Nature of the right of a permanent employee to a post In Purushottam Lal Dhingra vs Union of India, ; at 84 1 843 it was held that the appointment to a perma nent post may be substantive or on probation or on officiat ing basis.
A substantive appointment to a permanent post in a public service confers normally substantive right to the post and he becomes entitled to hold a lien on the post.
He is entitled to continue in office till he attains the age of superannuation as per rules or is dismissed or removed from service for inefficiency, misconduct or negligence or any other disqualification in accordance with the procedure prescribed in the rules, and fair and reasonable opportunity of being heard or on compulsory retirement or in certain circumstances, subject to the conditions like re employment on abolition of post.
In Motiram Daka vs General Manager, [1964] 5 299 SCR 683 at 718 721=AIR 1964 SC 600 at 608 & 609 majority of seven Judges ' Bench held that a permanent post carries a definite rate of pay without a limit of time and a servant who substantively holds a permanent post has a title to hold the post to which he is substantively appointed, and that in terms, means that a permanent servant has a right to hold the post until, of course, he reaches superannuation or until he is compulsorily retired under the relevant rule.
If for any other reason that right is invaded and he is asked to leave the service the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of penalty and amounts to removal.
In other words, termination of service of a permanent servant, otherwise than on superannuation of compulsory retirement, must per se amount to his removal and so, by Rule 148(3) or Rule 149(3) of Rly.
Establishment Rules if such a termination is brought about, the rule clearly contravenes article 311(2) and must be held to be invalid.
A permanent employment assures security of tenure which is essential for the efficiency and incorruptibility of public administration.
In Guruder Singh Sidhu vs State of Pepsu, ; another Constitu tion Bench held that for efficient administration of the State, it is absolutely essential that permanent public servant should enjoy a sense of security of tenure.
The safeguard which article 311(2) affords is no more than this that in case it is intended to dismiss or remove or reduce them in rank, a reasonable opportunity should be given to them of showing cause against the action proposed to be taken in regard to them.
In Motiram Daka 's case (supra) it was further held that in a modern democratic State, the efficiency and incorruptibility of public administration is of such importance that it is essential to afford to civil servants adequate protection against capricious action from their superior authority.
If a permanent civil servant is guilty of misconduct, he should no doubt be proceeded against promptly under the relevant disciplinary rules, subject, of course, to the safeguard prescribed by article 311(2); but in regard to honest, straight forward and effi cient permanent civil servants, it is of utmost importance, even from the point of view of the State, that they should enjoy a sense of security which alone can make them inde pendent and truly efficient.
The sword of damocles hanging over the heads of permanent railway servants in the form of Rule 148(3) or Rule 149(3) would inevitably create a sense of insecurity in the minds of such servants and would invest appropriate authorities with very wide powers which may conceivably be abused.
Thereby this Court laid emphasis that a permanent employee has a right or lien on the post he holds until his tenure of service reaches superannuation so as to earn pension at the evening of his life unless it is determined as 300 per law.
An assurance of security of service to a public employee is an essential requisite for efficiency and incor ruptibility of public administration.
It is also an assur ance to take independent drive and initiative in the dis charge of the public duties to alongate the goals of social justice set down in the Constitution.
This Court in Daily Rated Casual Labour vs Union of India, 1 SCC 122 at 130 131 further held that the right to work, the right to free choice of employment, the right to just and favourable conditions of work, the right to protection against unemployment etc., and the right to security of work are some of the rights which have to be ensured by appropriate legislative and executive measures.
It is true that all these rights cannot be extend ed simultaneously.
But they do indicate the socialist goal.
The degree of achievement in this direction depends upon the economic resources, willingness of the people to produce and more than all the existence of industrial peace throughout the country.
Of those rights the question of security of work is of most importance.
If a person does not have the feeling that he belongs to an organisation engaged in pro duction he will not put forward his best effort to produce more.
(emphasis supplied) That sense of belonging arises only when he feels that he will not be turned out of employ ment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contrib ute to the maximisation of production.
It must, therefore, be held that a permanent employ ee of a statutory authority, corporation or instrumentality under article 12 has a lien on the post till he attains super annuation or compulsorily retired or service is duly termi nated in accordance with the procedure established by law.
Security of tenure ensures the benefit of pension on retire ment.
Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty.
He/ she has a right to security of tenure which is essential to inculcate a sense of belonging to the serv ice or organisation and involvement for maximum production or efficient service.
It is also a valuable right which is to be duly put an end to only as per valid law.
How to angulate the effect of termination of service Law is a social engineering to remove the existing irabal ance and 301 to further the progress, serving the needs of the Socialist Democratic Bharat under rule of law.
The prevailing social conditions and actualities of life are to be taken into account to adjudging whether the impugned legislation would subserve the purpose of the society.
The arbitrary, unbrid dled and naked power of wide discretion to dismiss a perma nent employee without any guidelines or procedure would tend to defeat the constitutional purpose of equality and allied purposes referred to above.
Courts would take note of actu alities of life that persons actuated to corrupt practices are capable, to maneuver with higher echolons in diverse ways and also camouflage their activities by becoming syco phants or chronies to the superior officers.
Sincere, honest and devoted subordinate officer unlikely to lick the boots of the corrupt superior officer.
They develop a sense of self pride for their honesty, integrity and apathy and inertia towards the corrupt and tent to undermine or show signs of disrespect or disregard towards them.
Thereby, they not only become inconvenient to the corrupt officer but also stand an impediment to the on going smooth sipbony of cor ruption at a grave risk to their prospects in career or even to their tenure of office.
The term efficiency is an elusive and relative one to the adept capable to be applied in diverse circumstances.
if a superior officer develops likes towards sycophant, tough corrupt, he would tolerate him and found him to be efficient and pay encomiums and corruption in such eases stand no impediment.
When he finds a sincere, devoted and honest officer to be inconvenient, it is easy to cast him/her off by writing confidential with delightfully vague language imputing to be 'not upto the mark ', 'wanting public relations ' etc.
Yet times they may be termed to be "security risk" (to their activities).
Thus they spoil the career of the honest, sincere and devoted officers.
In stances either way are gallore in this regard.
Therefore, one would be circumspect, pragmatic and realistic to these actualities of life while angulating constitutional validity of wide arbitrary, uncanalised and unbriddled discretionary power of dismissal vested in an appropriate authority either by a statute or a statutory rule.
Vesting arbitrary power would be a feeding ground for nepotism and insolence; in stead of subserving the constitutional purpose, it would defeat the very object, in particular, when the tribe of officers of honesty, integrity and devotion are struggling under despondence to continue to maintain honesty, integrity and devotion to the duty, in particular, when moral values and ethical standards are fast corroding in all walks of life including public services as well.
It is but the need and imperative of the society to pat on the back of those band of honest, hard working officers of integrity and devotion to duty.
It is the society 's interest to accord such officers security of service and avenues of promotion.
302 That apart, the haunting fear of dismissal from service at the vagary of the concerned officer would dry up all springs of idealism of the employee and in the process coarsens the conscience and degrades his spirit.
The nobler impulses of minds and the higher values of life would not co exist with fear.
When fear haunts a man, happiness van ishes.
Where fear is, justice cannot be, where fear is, freedom cannot be.
There is always a carving in the human for satisfaction of the needs of the spirit, by arming by certain freedom for some basic values without which life is not worth living.
It is only when the satisfaction of the physical needs and the demands of the spirit coexists, there will be true efflorescence of the human personality and the free exercise of individual faculties.
Therefore, when the Constitution assures dignity of the individual and the right to livelihood the exercise of the power by the executive should be cushioned with adequate safeguards for the rights of the employees against any arbitrary and capracicous use of those powers.
Contract of service must be consistent with the Constitu tion.
From the above perspective vis a vis constitutional, social goals and rights of the citizens assured in the preamble, Parts III & IV i.e. the trinity, the question whether the statutory corporation or the instrumentality or the authority under article 12 of the Constitution is validly empowered to terminate the services of a permanent employee in terms of the contract of employment or rules without conducting an enquiry or an opportunity of show cause of proposed order of termination of the service.
The operating in British India was extended to the merged States in 1949 & 1950 except to the State of Jammu & Kashmir.
Therefore, after Bharat attained independ ence on August 15, 1947, the is applica ble to all States except Jammu & Kashmir.
By operation of Article 372 of the Constitution, the continues to be in operation subject to the provisions of the Constitution.
The is an amending as well as consolidating Act as held in Ramdas Vithaldas Durbar vs
section Amerchand & Co., 43 Indian Appeals 164.
Thereby common law principles applicable in England, if they are inconsist ent with or derogation to the provisions of the or the Constitution to that extent they stand excluded.
Any law, muchless the provisions of Contract Act, are inconsistent with the fundamental rights which guaran teed in Part III of the Constitution, by operation of Arti cles 13 of the Constitution, are void.
Section 2(h) of the defines "an agreement" including an agreement of service and becomes a Contract only when it is enforceable by 303 law.
If it is not enforceable it would be void by reason of section 2(g) thereof.
The question, therefore, is whether the contract of service or Regulation 9(b) in derogation to the Fundamental Rights guaranteed in of the Consti tution is valid in law and would be enforceable.
Contract whether changeable with changing times.
The law of contract, like the legal system itself, involves a balance between competing sets of values.
Freedom of contract emphasises the need of stability, certainty and predictability.
But, important as is values are, they are not absolute, and there comes a point where they "face a serious challenge" against them must be set the values of protecting the weak, oppressed and the thoughtless from imposition and oppressed.
Naturally, at a particular time, one set of value tends to be emphasised at the expense of the other as the time changes the values get changed and the old values are under replacement and new values take their due place.
Though certainty and predictability in ordinary commercial contract law is emphasised and insisted upon the need for progress of the society and to removing the disa bilities faced by the citizens and their relations when encounter with the State or its instrumentalities are in conflict with the assured constitutional rights demand new values and begin to assert themselves, for no civilised system of law can accept the implications of absolute sanc tity of contractual obligations and of their immutability.
In paragraph 4 of Chitty on Contracts (25th Edition, Volume I) it is stated that "freedom of contract is a rea sonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed and no injury is done to the economic interest of the commu nity at large.
In Anson 's Law of Contract at p. 6 & 7 stated the scope of freedom of contract in the changing circumstances thus: "Today the position is seen in a very different light.
Freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the econom ic interests of the community at large.
In the more compli cated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction.
It is now realised that economic equality often does not exists in any real sense, and that individual interests have to be 304 made to subserve those of the community hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract and the law today interferes at numerous points with the freedom of the par ties to make what contract they like.
The relation between employers and employed, for example, have been regulated by statutes designed to ensure that the employees condition of work are safe, that he is properly protected against redun dancy and that he knows his terms of service.
The public has been protected against economic pressure by such measures as the Rent Acts, the supply of goods (implied terms) at, the consumer Credit Act and other similar enactments.
These legislative provisions will override any contrary terms which the parties may make for themselves.
Further, the legislature has intervened in the Restrictive Trade Practice Act 1956 and the Fair Trading Act, 1973 to promote competi tion in industry and to safeguard the interests of consum ers.
This intervention is specially necessary today when most contracts entered by ordinary people are not the result of individual negotiation.
It is not possible for a private person to settle the terms of his agreement with a British Railways Board or with a local electricity authority.
The standard form ' contract is the rule.
He must either accept the terms of this contract in toto, or go without.
Since, however, it is not feasible to deprive onself of such necessary services, the individual is compelled to accept on those terms.
In view of this fact, it is quite clear that freedom of contract is now largely an illusion.
The trinity of the Constitution assure to every citizen Social and Economic Justice, Equality of Status and of opportunity with dignity of the person.
The State is to strive to minimise the inequality in income and eliminate inequality in status between individuals or groups of peo ple.
The State has intervened with the freedom of contract and interposed by making statutory law like Rent Acts, Debt Relief Acts, Tenancy Acts, Social Welfare and Industrial Laws and Statutory Rules prescribing conditions of service and a host of other laws.
All these Acts and Rules are made to further the social solidarity and as a step towards establishing an egalitaran socialist order.
This Court, as a court of constitutional conscience enjoined and a jealously to project and uphold new values in establishing the egali tarian social order.
As a court of constitutional function ary exercising equity juris 305 diction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscienable rules or conditions when the citizen is really unable to meet on equal terms with the State.
It is to find whether the citizen, when entered into contracts or service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appropriate declaration.
Therefore, though certainty is an important value in normal commercial contract law, it is not an absolute and immutable one but is subject to change in the changing social condi tions.
In Brojonath 's case, Madan, J., elaborately consid ered the development of law relating to unfair or unreasona ble terms of the contract or clauses thereof in extenso and it is unnecessary for me to traverse the same grounds once over.
The learned Judge also considered the arbitrary, unfair and unbridled power on the envil of distributive justice or justness or fairness of the procedure envisaged therein.
The relevant case law in that regard was dealt with in extenso in the light of the development of law in the Supreme Court of United States of America and the House of Lords in England and in the continental countries.
To avoid needless burden on the judgment, I do not repeat the same reasoning.
I entirely agree with the reasoning and the conclusions reached therein on all these aspects.
Whether State can impose unconstitutional Conditions.
The problem also would be broached from the angle whether the State can impose unconstitutional conditions as part of the contract or statute or rule etc.
In 1959 60 73 Harvard Law Review, in the Note under the Caption 'Unconsti tutional Condition ' at page 1595 96 it is postulated that the State is devoid of power to impose unconstitutional conditions in the contract that the power to withhold lar gess has been asserted by the State in four areas i.e., (1) regulating the right to engage in certain activities; (2) Administration of Government welfare programme; (3) Govern ment employment; and (4) Procurement of contracts.
It was further adumberated at pages 1602 1603 thus: "The sovereign 's constitutional authority to choose those with whom it will contract for goods and services is in effect a power to withhold the benefits to be deprived from economic dealings with the government.
As government 306 activity in the economic sphere increases, the contracting power enables the government to control many hitherto unreg ulated activities of contracting parties through the imposi tion of conditions.
Thus, regarding the government as a private entrepreneur threatens to impair constitutional rights . .
The Government, unlike a private individual, is limited in its ability to contract by the Constitution.
The federal contracting power is based upon the Constitu tion 's authorisation of these acts 'necessary and proper ' to the carrying out of the functions which it allocates to the national government, Unless the objectives sought by terms and conditions in government contracts requiring the surren der of rights are constitutionally authorised, the condi tions must fall as ultra vires exercise of power.
" Again at page 1603, it is further emphasised thus: "When conditions limit the economic benefits to be derived from dealings with the government to those who forego the exercise of constitutional rights, the exclusion of those retaining their rights from participation in the enjoyment of these benefits may be a violative of the prohibition, implicit in the due process clause of fifth amendment and explicit in the equal protection clause of the fourteenth amendment against unreasonable discrimination in the Govern mental bestow of advantages.
Finally, disabling those exer cising certain rights from participating in the advantages to be derived from contractual relations with the government may be a form of penalty lacking in due process.
To avoid invalidation for any of the above reasons, it must be shown that the conditions imposed are necessary to secure the legitimate objectives of the contract ensure its effective use, or protect society from the potential harm which may result from the contractual relationship between the govern ment and the individual.
Professor Guido Calabresi of Yale University Law School in his "Retroactivity, Paramount power and Contractu al Changes" ( 196 1 62) 71 Yale Law Journal P. 119 1 at 1196) stated that the Government can make contracts that are necessary and proper for carrying out any of the specific clauses of the Constitution or power to spend for general welfare.
The Federal Government has no power, inherent or sovereign, other than those specifically or explicitly granted to it by 307 the Constitution.
At page 1197, it is further stated thus: "The Government acts according to due process standards for the due process clause is quite up to that task without the rule.
Alterations of Government contracts are not desirable in a free country even when they do not constitute a 'tak ing ' of property or impinge on questions of fundamental fairness of the type comprehended in due process.
The gov ernment may make changes, but only if war or commerce re quire them and not on the broader and more ephemeral grounds that the general welfare would be served by the change.
Any other rule would allow the Government to which almost at will.
These principles were accepted and followed by the Andhra Pradesh High Court in V. Raghunadha Rao vs State of Andhra Pradesh, dealing with A.P. Stand ard specification Clauses 11, 29, 59, 62(b) and 73 and declared some clauses to be ultra vires of Articles 14, 19(1)(g) and 21 of the Constitution and Sections 23 and 27 of the Contract Act.
In Brojonath 's case (supra) after elaborate consid eration of the doctrine of "reasonableness or fairness" of the terms and conditions of the contract vis a vis the relative bargaining power of the contracting parties this Court laid down that the principles deductable from the discussion made therein is in consonance with right or reason intended to secure socio economic justice and con forms to mandate of the equality clause in Article 14.
The principle laid was that courts will not enforce and will, when called upon to do so, strike down an unfair and unrea sonable contact or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power . .
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them.
It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscienable a clause in that contract or form or rules may be.
This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal or where both parties are businessmen and the contract is a commercial transaction.
308 22.
In today 's complex world of giant corporations with their vast infra structural organisations and with the State through its instrumentalities and agencies has been entering into almost every branch of industry and commerce and field of service, there can be myriad situations which result in unfair and unreasonable bargains between parties possess wholly disproportionate and unequal bargaining power.
These cases can neither be enumerated nor fully illustrated.
The court must judge each case on its own facts and circum stances.
Public policy whether changeable.
This Court also angulated the question from the perspective of public policy or contract being opposed to public policy.
The phrases "public policy", "opposed to public policy", or "contrary to public policy" are incapable of precise definition.
It is valued to meet the public good or the public interest.
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances.
New concepts take place of old one.
The transactions which were considered at one time as against public policy were held by the courts to be in public interest and were found to be enforceable.
Therefore, this Court held in Brojonath 's case that "there has been no well recognised head of public policy, the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from inventing a new head of public." Lord Wright in his legal Essays and Addresses Vol.
III p. 76 and 78 stated that public policy like any other branch of the common law ought to be and I think is, governed by the judicial use of precedents . .
If it is said that rules of public policy have to be moulded to suit new condi tions of a changing world, that is true, but the same is true with the principles of the cannon law generally; Lord Lindley held in Janson vs Driefontein Mines Ltd., [1902] A.C.p. 484 and 507 that "a contract or other branch which is against public policy i.e. against the general interest of the country is illegal.
In Anson 's Law of Contract, 24th Edition by A.G. Guest at p. 335 stated the scope of variability of public policy attune to the needs of the day and the march of law thus: "At the present time, however, there is an increasing recog nition of the positive function of the Courts in matters 309 of public policy: 'The law relating to public policy cannot remain immutable.
It must change with the passage of time.
The wind of change blows upon it '.
Some aspects of public policy are more susceptible to change than others, during the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules.
The principles applicable to agreements in restraint of trade, for example, have on a number of occasions been modified or extended to accord with prevailing economic conditions, and this process still continues.
In law of Contract by G.H. Treitei, 7th Edition at p, 366 on the topic 'scope of the public policy ' it is stated thus: "Public policy is a variable notion, depending on changing manners, morals and economic conditions.
In theory, this flexibility of the doctrine of public policy could provide a judge with an excuse for invalidating any contract which he violently disliked.
On the other hand, the law does adapt itself to change in economic and social conditions, as can be seen particularly from the development of the rules as to contracts in restraint of public policy has often been recognised judicially.
Thus Lord Haldane has said; "What the law recognises as contrary to public policy turns out to vary greatly from time to time.
" And Lord Denning has put a similar point of view. "with a good man in the saddle, the unruly horse can be kept in control.
It can jump over obsta cles.
" The present attitude of the Courts represents a compromise between the flexibility inherent in the notion of public policy and the need for certainty in commercial affairs.
From this perspective, it must be held that in the absence of specific head of public policy which covers a case, then the court must in consonance with public con science and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy.
The rules which stem from the public policy must of necessity be laid to further the progress of the society in particular when social change is to bring about an egalitarian social order through rule of law.
In deciding a case which may not be covered by authority courts have before them the beacon light of the trinity of the Constitu tion and the play of legal light and shade must lead on the path of justice social, 310 economical and political.
Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution.
Public policy can be drawn from the Constitution.
Sutherland, in his Statutes and Statutory Construc tion Third Edition Vol.
3 paragraph 5904 at page 13 1 132 has stated that the most reliable source of public policy is to be found in the federal and state constitutions.
Since constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capaci ty to meet changing conditions, constitutional policy pro vides a valuable aid in determining the legitimate bound aries of statutory meaning.
Thus public policy having its inception in constitutions may accomplish either a restrict ed or extended interpretation of the literal expression a statute.
A statute is always presumed to be constitu tional and where necessary a constitutional meaning will be inferred to preserve validity.
Likewise, where a statute tends to extend or preserve a constitutional principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statu tory aim or objective.
Article 14 sheds the light to public policy to curb arbi trariness.
26A. In Basheshar Nath vs The Commissioner of Income Tax & Anr., [1959] Suppl.
1 SCR 528 S.R. Das, CJ., held that Article 14 is founded on a sound public policy recognised and valued in all States and it admonishes the State when it disregards the obligations imposed upon the State.
26B. In E.P. Royappa vs State of Tamil Nadu & Ant., ; Bhagwati.
J. (as he then was) held that Article 14 is the genus while Article 16 is a specie.
Arti cle 16 gives effect to the doctrine of equality in all matters relating to public employment.
The basic principle which.
therefore, informs both Articles 14 and 16 is equali ty and inhibition against discrimination.
"Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed, cabined and confined" within traditional and doctrinaire limits.
From a positivistic point of view.
equality is antithetic to arbitrariness.
In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and ca price of an absolute monarch.
Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore 311 violative of Article 14, and if it affects any matter relat ing to public employment, it is also violative of Article 16.
Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
In Menaka Gandhi 's case it was further held that the principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non arbitrariness pervades Article 14 like a brooding omnipresence.
In Rama na 's case it was held that it is merely a judicial formula for determining whether the legislative or.
executive action in question is arbitrary and therefore constituting denial of equality.
If the classification is not reasonable and does not satisfy the two conditions namely, rational rela tion and nexus the impugned legislative or executive action would plainly be arbitrary and the guarantees of equality under Article 14 would be breached.
Wherever, therefore, there is arbitrariness in State action whether it be of legislature or of the executive or of an "authority" under Article 12, Article 14, "immediately springs into action and strikes down such State action.
" In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the constitution.
In Volga Tellies 'Case it was held that the Constitu tion is not only paramount law of the land but also it is a source of sustenance of all laws.
Its provisions are con ceived in public interest and are intended to serve public purpose.
Therefore, when the provisions of an Act or Regula tions or Rules are assailed as arbitrary, unjust, unreasona ble, unconstitutional, public law element makes it incumbent to consider the validity there 'of on the envil of inter play of articles 14 ', 16(1), 19(1)(g) and 21 and of the inevitable effect of the impugned provision on the rights of a citizen and to find whether they are constitutionally valid.
Interplay of articles 14, 16(1), 19(1)(g) & 21 as guarantors of public employment as a source of right to livelihood.
It is well settled constitutional law that different Articles in the Chapter on Fundamental Rights and the Direc tive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlap ping with the subject matter of what is to be protected by its various provisions particularly the Fundamental Rights.
By the Full Court in R.C. Cooper vs Union of India, ; it was held that the law must not impair the guarantee of any 312 of the fundamental rights in Part III.
The law authorising to impose reasonable restrictions under Article 19(1) must be intended to advance the larger public interest.
Under the Constitution, protection against impairment of the guarantee of the fundamental rights is determined by the nature of the right, interest of the aggrieved party and the degree of harm resulting from the state action.
Impairment of the right of the individual and not the object of the State in taking the impugned action is the measure of protection.
To concentrate merely on the power of the State and the object of the State action in exercising that power is, therefore, to ignore the true intent of the constitution.
The nature and content of the protection of the fundamental rights is measured not by the operation of the State action upon the rights of the individual but by its objects.
The validity of the State action must be adjudged in the light of its opera tion upon the rights of the individuals or groups of the individual in all their dimensions.
It is not the object of the authority making the law imparing the right of the citizen nor the form of action taken that determines the protection he can claim; it is the effect of the law and of the action upon the right which attract the jurisdiction of the court to grant relief.
In Minerva Mills Ltd. vs Union of India, ; the fundamental rights and directive principles are held to be the conscience of the Constitution and disregard of either would upset the equibalance built up therein.
In Menaka Gandhi 's case, it was held that different articles in the chapter of Fundamental Rights of the Consti tution must be read as an.
integral whole, with possible overlapping of the subject matter of what is sought to be protected by its various provisions particularly by articles relating to fundamental rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at many points.
They are all parts of an integrated scheme in the Constitution.
Their waters must mix to constitute that grand flow of unimpeded and impartial justice; social, economic and political, and of equality of status and opportunity which imply absence of unreasonable or unfair discrimination between individuals or groups or classes.
The fundamental rights protected by Part III of the constitution, out of which Articles 14, 19 and 21 are the most frequently invoked to test the validity of executive as well as legislative actions when these actions are subjected to judicial scrutiny.
Fundamental Rights are necessary means to develop one 's own personality and to carve out one 's own life in the manner one likes best, subject to reasonable restrictions imposed in the paramount interest of the Society and to a just, fair and reasonable procedure.
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test.
It is already seen that the right to a public employ 313 ment is a constitutional right under article 16(1).
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules, regulations or instructions having statutory flavour made thereunder, But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion, Article 21 guarantees the_ right to live which in cludes right to livelihood, to a many the assured tenure of service is the source, the deprivation thereof must be in accordance with the procedure prescribed by law conformable to the mandates of Articles 14 and 21 as be fair, just and reasonable but not fancyful oppressive or at vagary.
The need for the fairness, justness or reason ableness of the procedure was elaborately considered in Menaka Gandhi 's case (supra) and it hardly needs reiteration.
Principles of natural justice in Part of Article 14.
The Menaka Gandhi 's case is also an authority for the proposition that the principles of natural justice is an integral part of the guarantee of equality assured by Arti cle 14 of the Constitution.
In Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Suppl.
2 SCR 13 1 at 233, this Court held that the principles of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equali ty which is the subject matter of that Article.
Shortly put, the syllogism runs thus: "Violation of a rule of natural justice results in arbi trariness which is the same as discrimination; where dis crimination is the result of the State action, it is a violation of article 14, therefore, a violation of a principle of natural justice by a State action is a violation of Art 14.
Article 14, however; is not the sole repository of the principles of natural justice.
What it does is to guarantee that any law or State action violating them will be struck down.
The principles of natural justice, however, apply not only to the legislation and State action but also where any tribunal, authority or body of men, not coming within the definition of 'State ' in article 12, is charged with the duty of deciding a matter.
In such a case, the principles of natural justice require that it must decide such a matter fairly and impartially.
" 314 In Moti Ram Deka 's case this Court already held that "the rule making authority contemplated by Article 309 cannot be validly exercised so as to curtail or affect the rights guaranteed to public servants under article 311(2).
Article 311(2) is intended to afford a sense of scrutiny to public servants who are substantively appointed to a permanent post and one of the principle benefits which they are entitled to expect is the benefit of pension after rendering public service for the period prescribed by the Rules.
It would, we think, not be legitimate to contend that the right to earn a pension to which a servant substantively appointed to a permanent post is entitled can be curtailed by Rules framed under article 309 so as to make the said right either ineffec tive or illusory.
Once the scope of article 311(1) and (2) is duly determined, it must be held that no rule framed under article 309 can trespass on the rights guaranteed by article 311.
This position is of basic importance and must be borne in mind in dealing with the controversy in question.
In A.K. Kraipak & Ors etc.
vs Union of India & Ors., this Court held that Rules of natural justice aims at securing justice or to prevent injustice.
They operate only in the areas not covered by any law valid ly made.
In Union of India vs Col. J.N. Sinha and Anr., [197 1] 1 SCR 791 it was held that principles of natural justice do not supplant the law but supplement it.
If a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision of the principles of natural justice.
In that case this Court held that principles of natural justice cannot be read into Fundamental Rule and no opportunity need be given before compulsorily retiring an employee as that implication does not arise by reason of express statutory language.
The principle of natural justice embodied as an integral part of equality clause.
Article 14 is the general principle while article 311(2) is a special provision applica ble to all civil services under the State.
Article 311(2) embodies the principles of natural justice but proviso to Clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given circumstances enumerated in three clauses of the proviso to article 311(2) of the Constitution.
Article 14 read with articles 16(1) and 311 are to be harmoniously inter preted that the proviso to article 311(2) excludes the applica tion of the principles of natural justice as an exception; and the applicability of article 311(2) must, therefore, be circumscribed to the civil services and to be construed accordingly.
In respect of all other 315 employees covered by article 12 of the Constitution the dynamic role of article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition, unless the statutory rules themselves, consistent with the mandate of articles 14, 16, 19 & 21 provide, expressly such an exception.
Article 19(1)(g) empowers every citizen right to avoca tion or profession etc., which includes right to be contin ued in employment under the State unless the tenure is validly terminated consistent with the scheme enshrined in the fundamental rights of the Constitution.
Therefore, if any procedure is provided for deprivation of the right to employment or right to the continued employment till the age of superannuation as is a source to right to livelihood, such a procedure must be just, fair and reasonable.
This Court in Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors.
vs Union of India & Ors.
, ; at 60 61 held that article 19(1)(g) confers a broad and general right which is available to all persons to do works of any partic ular kind and of their choice.
Therefore, whenever there is arbitrariness in state action whether it be of the legisla ture or of the Executive or of an authority under article 12, articles 14 and 21 spring into action and strikes down such an action.
The concept of reasonableness and nonarbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitu tion.
Therefore, the provision of the statute, the regula tion or the rule which empowers an employer to terminate the services of an employee whose service is of an indefinite period till he attains the age of superannuation, by serving a notice of pay in lieu thereof must be conformable to the mandates of articles 14, 19(1)(g) and 21 of the Constitution.
Otherwise per se it would be void.
In Motiram Deka 's case, Gajendragadkhar, J , (as he then was) after invalidating the rules 149(3) and 148(3) under article 311(2) which impari materia Rule 9(b) of the Regulation also considered their validity in the light of article 14 and held thus: "Therefore, we are satisfied that the challenge to the validity of the impugned Rules on the ground that they contravene article 14 must also succeed.
" This was on the test of reasonable classification as the principle then was applied.
Subba Rao, J., (as he then was) in a separate but concurrent judgment, apart from.
invali dating the rule under Article 311(2) also held that the Rule infringed Article 14 as well, though there is no elaborate discussion in that regard.
But, Das Gupta, J., considered 316 elaborately on this aspect and held: "Applying the principle laid down in the above case to the present rule, I find on the scrutiny of the Rule that it does not lay down any principle or policy for guiding the exercise of discretion by the authority who will terminate the service in the matter of selection or classification.
Arbitrary and uncontrolled power is left in the authority to select at its will any person against whom action will be taken.
The Rule, thus enables the authority concerned to discriminate between two railway servants to both of whom R. 148(3) equally applied by taking action in one case and not taking it in the other.
In the exercise of the discretion by the authority the rule has therefore to be struck down as contravening the requirements of article 14 of the Constitu tion.
Even in Tulsiram Patel 's case (supra) this Court declared that it must satisfy the test of justness, fairness and reasonableness of the procedure prescribed.
But the proviso to article 311(2) was upheld for the reason that the Constitution itself made proviso an exception to the prin ciple of audi alteram partem engrafted in article 311(2) of the Constitution.
As a fact, it expressed thus: "As the making of such laws and the framing of such rules are subject to the provisions of the Constitution, if any such act or rules violates any of the provisions of the Constitution, it would be void.
Thus, as held in Moti Ram Deka 's case ; if any such act or rule tres passes on the rights guaranteed to government servants by article 311, it would be void.
Similarly, such acts and rules cannot abridge or restrict the pleasure of the President or the Governor of a State exercisable under article 3 10(1) further than what the Constitution has expressly done.
In the same way, such Act or rule would be void if it violates any fundamental right guaranteed by part III of the Consti tution.
" Gurdev Singh 's case declares the rules that empowered to order compulsory retirement of the Government employee after putting ten years of service as ultra vires.
In S.S. Muley vs
J.R.D. Tata, my learned brother Sawant, J. (as he then was) held that Regulation 48 which empowered the employer uncanalised, unrestricted and arbi trary power to terminate the service of an employee with notice or pay in lieu thereof without any opportunity of 317 hearing as violative of principles of natural justice under article 14 of the Constitution.
In Superintendent of Post Office vs
K. Vasayya, [1984] 3 Andhra Pradesh Law Journal 9 the respondent Vasayya was denied of the appointment as a Clerk on the ground that the Confidential Reports submitted by the Police disclosed adverse comments on the conduct of the respondent.
When the appointment was denied on that basis it was held that though the selection to a public office is a privilege and no vested right has been accrued till the candidate is appoint ed, in the context of fair play in action subserving the mandate of article 14 held at p. 45 thus: "Often times, convenience and justice are not on speaking terms.
It is the actual administration of law and not only the manner in which it is done that reflects the action of the State in assuring the equal protection to a citizen.
In adopting the procedure, as held by Frankfurther, J. in Joint Anti Facist Refugee Commission vs Mc.
Grath, 34 ; that a conclusion satisfies one 's private conscience does not attest its reliability.
The validity and moral authority of a conclusion largely depends on the mode by which it was reached.
Secrecy is not congenial to truth.
Seeking and self righteousness gives too slander an assurance of right ness.
No better instrument has been devised for arriving at the truth than to give a person in jeopardy of a serious loss, a notice of the case against him and an opportunity to meet it, nor has a better way been found for generating the feeling so important to a popular Government that justice has been done.
" Bradley, J. in United States vs Samuel D. singleton; , has held that: "No State shall make or enforce any law which abrogate the privileges or immunities of citizens of the United States.
" In Ramana 's case (supra), it has been held that: is indeed unthinkable that in a democracy governed by the rule of law, the executive Govt.
or any of its offi cers should possess arbitrary power over the interests of the individual . . 318 The procedure adopted should match with what justice de mands.
History shows that it is always subtle and insidious encroachments made ostensibly for a good cause that imper ceptibly but surely erode the foundations of liberty.
" Doughlas, J. in Joint Anti Facist Refugee Commission 's case (supra) held that: "This is a Government of laws not of men.
The powers being used are the powers of the Government over the reputation and fortunes of citizens.
In situations far less severe or important than those a party is told the nature of the charge against him." Harry W. Jones in his "Rule of law and Welfare State", at 146 stated that: "What is needed then is to make the welfare state itself a source of new "rights" and to surround the "rights" in public benefaction with legal safeguards both procedural and substantive comparable to those enjoyed by the traditional right of property in our law.
" Accordingly it was held that prior opportunity of hearing before denying appointment is a mandate of article 14 of the Constitution.
In West Bengal Electricity Board & Ors.
vs D.B. Ghosh & Ors., [1985] 2 SCR 1014 in similar circumstances, it was held that the regulation as "Herry VIII Clause as ultra vires of article 14 of the Constitution.
The same principle was reiterated in Brojonath 's case.
In Workman of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; the standing order that empowers the manager to dispense with the enquiry and to dismiss an employee without any obligation to record reasons was held to be drastic power but directed to amend the standing orders consistent with proviso to article 311(2) of the Constitution.
This Court in O.P. Bhandari vs Indian Tourism Development Corpn.
Ltd. & Ors., ; struck down the similar rule on the same doctrine of 'hire and fire ' and that it is impermissible under the constitu tion of the scheme to sustain the doctrine of 'hire and fire '.
In Chandrabhan 's case, Rule 15(1)(ii)(b) of Bombay Service Rule was held to be void.
In A.P.S.R.T. Corpn.
vs 319 Labour Court, AIR (1980) A.P. 132 a Full Bench of Andhra Pradesh High Court held that the legislature is not compe tent to make law abridging the right to work.
In R.M.D. Chamarbaugwalla vs State of Punjab, ; it was held that any Act violating fundamental rights is void.
In Kanhialal vs District Judge & Ors., this Court held that termination of the service of a tempo rary employee without affording opportunity is penal in character and violates article 311(2) and was void.
In M.K. Agarwal v, Gurgaon Gramin Bank & Ors., [1987] Suppl.
643 this Court struck down regulation 10(2)(a) of the Gurg aon Gramin Bank (Staff) Services Rules, 1980.
In this light it is not open to the State to contend that "look here; though Constitution enjoins and admonishes us saying that it is no longer open to the State to make law or rule violating the rights created under articles 14 and 21, the citizen, with a view to secure public employment from us had contracted out of the constitutional rights and agreed to abide by rules including the termination of his/her services at any time at our will without notice or opportunity even for misconduct, negligence, inefficiency, corruption or rank nepotism, so we are free to impose the said punishment.
" Even in the case of minority institutions, when the employ ees are dismissed on the principle of hire and fire, this Court held it to be impermissible vide All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employ ees ' Union & Anr.
vs Christian Medical College, Veilore Association & Ors., ; & 562.
In Moti Ram Deka 's case this Court held that rules 148(3) and 149(3) trespassed upon the rights guaranteed to government servants by article 311(2) and would be void.
In Kameshwar Prasad vs State of Bihar, [1962] Suppl.
3 SCR 369.
Rule 4A of the Bihar Government Servants ' Conduct Rules, 1956, in so far as it prohibited any form of demon stration was struck down by this Court as being violative of sub clauses (a) and (b) of clause (1) of article 19.
In O.K. Ghosh vs EZX Joseph, [1963] Suppl.
1 SCR 789 this Court 'struck down Rule 4A of the Central Civil Services (Conduct Rules), 1955, on the ground that it violated sub clause (c) of clause (1) of article 19 of the Constitution and that por tion of Rule 4A which prohibited participation in any demon stration as being violative of sub clauses (a) and (b) of clause (1) of Article 19.
It must, therefore, be hold that any act or provision therein, Rules or Regulations or 320 instructions having statutory force violating fundamental rights under Articles 14, 16(1), 19(1)(g) and 21 are void.
Thus it could be hold that article 14 read with 16(1) accords right to an equality or an equal treatment consist ent with the principles of natural justice.
Any law made or action taken by the employer, corporate statutory or instru mentality under Article 12 must act fairly, justly and reasonably.
Right to fair treatment is an essential inbuilt of natural justice.
Exercise of unbridled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively judiciously and without prejudice.
Wider the discretion, the greater the chances of abuse.
Absolute discretion is destructive of freedom.
than of man 's other inventions.
Absolute discretion marks the beginning of the end of the liberty.
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment.
The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice.
The provisions of a statute, regulations or rules that empower an employer or the 'management to dismiss, remove or reduce in rank of an employee, must be consistent with just, rea sonable and fair procedure.
It would, further, be held that right to public employment which includes right to continued public employment till the employee is superannuated as per rules or compulsorily retired or duly terminated in accord ance with the procedure established by law is an integral part of right to livelihood which in turn is an integral facet of right to life assured by article 21 of the Constitu tion.
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure.
In other words an employee in a public employment also must not be arbitrarily unjustly and unrea sonably be deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure.
Otherwise any law or rule in violation thereof is void.
Need for harmony between social interest and individual right 34.
Undoubtedly efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services.
Disci pline in that regard among the employees is its essential facet and has to be maintained.
The society is vitally interested in the due discharge of the duties by the govern ment employees or 321 employees of corporate bodies 'or statutory authorities or instrumentalities under article 12 of the Constitution.
As held in Tulsiram Patel 's case the public are vitally interested in the efficiency and integrity of the public service.
The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes.
The employees are charged with public duty and they should perform their public duties with deep sense of responsibility.
The collective responsi bility of all the officers from top most to the lowest maximises the efficient public administration.
They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully, honestly with full dedication and utmost devotion to duty for the progress of the country.
Equally the employees must also have a feeling that they have security of tenure.
They should also have an involvement on their part in the organi sation or institution, corporation, etc.
They need assurance of service and they need protection.
The public interest and the public good demand, that those who discharge their duties honestly, efficiently and with a sense of devotion and dedication to duty should receive adequate protection and security of tenure.
Equally inefficient, dishonest and corrupt or who became security risk should be weeded out so that successful functioning of the industry or manufacture of the goods or rendering or services would be available at the maximum level to the society and society thereby re ceives optimum benefit from the public money expanded on them as salary and other perks.
Therefore, when a situation envisaged under statute or statutory rule or regulation or instructions having statutory force to remove or dismiss an employee the question arises whether they need at least minimum protection of fair play in action.
34A. In Vasayya 's case when a similar contention was raised I have stated at p. 47 in Para 130 & 13 1 that.
The Audi alteram partem rule must be flexible; malleable and an adaptable concept to adjust and harmonise the need for speed and obligation to act fairly.
When the rights of the Government are widely stressed, the rights of the person are often threatened, when the latter are ever emphasised Government becomes weak to keep order.
Therefore, the rule can be tailored and the measure of its application cut short in reasonable proportion to the exigencies of the situation.
The administrative agency can develop a technique of deci sion worthy being called "ethos of adjudication".
Meaningful statutory standards, realistic procedural requirements and discriminatory techniques of judicial review are among the tools to control the discretionary 322 power.
It makes no difference whether the occasion for the exercise of power is personal default or act of policy.
Good administration demands fair consultation in each case and this the law can and should enforce.
The insistence of the observance of fundamental fairness in the procedure becomes a balancing balm to alleviate apprehension of arbitrary decision by the executive Government while assuring opportu nity to disabuse the prima facie impression formed against the person to usher in a era of largest good to largest number of people with proper checks and balances between needs of the State and the rights of the individual.
The brooding omni benevolence and omnicompetency of the need for expediency and claim for justness interplay ethos of fair adjudication in action.
34B. Therefore, it is no well tuned solace to say that in a court of law at the fag end of the currier or after superannuation in the interregnum which often over takes the litigation, that the employee would be meted out with jus tice (a grave uncertainty and exposing to frustrating pro crastination of judicial process and expenses and social humiliation).
Before depriving an employee of the means of livelihood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must, therefore, be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasona ble restrictions under article 19(5).
Conferment of power on a high rank officer is not always an assurance, in particular when the moral standards are generally degenerated that the power would be exercised objectively, reasonably, conscien tiously, fairly and justly without inbuilt protection to an employee.
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls.
Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need con sistent with the constitutional scheme.
Statutory Construction: 35.
Statutory construction raises a presumption that an Act or a provision therein a constitutionally valid unless it appears to be ultra vires or invalid.
The legislature, subject to the provisions of the Constitution, has undoubt edly unlimited powers to make law.
In fairness to the learned Attorney General, he agrees that the impugned provi sions are per se invalid.
But he attempted to salvage them by resorting to the doctrine of reading down.
323 Reading a provision down when permissible.
The question emerges whether the doctrine of reading down would be applied to avoid a void law vesting with arbitrary power with a naked hire and fire draconian rule.
It is difficult to give acceptance to extreme contention raised by Sri Garg and Sri Rama Murthy that the Courts cannot in the process of interpretation of the Statute would not make law but leave it to the legislature for necessary amendments.
In an appropriate case Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the freezes.
But the object is to alongate the purpose of the Act.
In this regard 1 respectfully agree with my learned brother, my Lord the Chief Justice, on the prin ciple of statutory construction.
The question is whether Legislature intended to confer absolute power or would it be construed in such a way that would supplant the law but not supplement law made by the Legislature.
35A. Natural construction.
The golden rule of statutory construction is that the words and phrases or sentences should be construed according to the intent of legislature that passed the Act.
All the provisions should be read together.
If the words of the statutes are in themselves precise and unambiguous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense.
But if any doubt arises from the terms employed by the legislature, it has always been held a safe means of collecting the inten tion, to call in aid the ground and cause of making the statute, and to have the recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intend to redress.
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that word or phrase in its context.
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature then it is proper to look for some other possible meaning then the court cannot go fur ther.
Craie 's Statute Law, Seventh Edition in Chapter 5, at page 64 it is stated that where the words of an Act are clear, there is no need for applying any of the principles of interpretation which are merely presumptions in cases of ambiguity in the statute.
The safer and more correct course of dealing with the question of construction is to take 324 the words themselves and arrive, if possible, at their meaning without in the first place refer to cases.
Where an ambiguity arises to supposed intention of the legislature, one of the statutory constructions, the court profounded is the doctrine.
of reading down.
Lord Reid in Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 (as also extracted by Cross Statutory Interpretation, Butterworths ' Edition, 1976 at page 43 in preposition 3) has stated thus: "the judge may read in words which he considers to be neces sarily implied by words which are already in the statute and he has a limited power to add to, alter or ignore statutory words in order to prevent a provision from being unintelli gible, absured or totally unreasonable, unworkable, or totally irre concileabIe with the rest of the statute.
" At page 92 of the Cross Statutory Interpretation, the author has stated that "The power to add to, alter or ignore statutory words is an extremely limited one.
Generally speaking it can only be exercised where there has been a demonstrable mistake on the part of the draftsman or where the consequence of applying the words in their ordinary, 6r discernible secondary, meaning would be utterly unreasona ble.
Even then the mistake may be thought to be beyond correction by the court, or the tenor of the statute may be such as to preclude the addition of words to avoid an unrea sonable result.
" Therefore, the Doctrine of Reading Down is an internal aid to construe the word or phrase in statute to give reasonable meaning, but not to detract distort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality 35C.
This Court in Saints High School, Hyderabad vs Govt.
of A.P.; , held that: "this Court has in several cases adopted the reading down the provisions of the Statute.
The reading down of a provi sion of a statute puts into operation the principle that so far as is reasonably possible to do so, the legislation should be construed as being within its power.
It is the principle effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond relevant legislative power, the Court would construe it in a more limited sense so as to keep it within the power.
" 325 Similarly restricted meaning was ascribed by Maxwell in his Interpretation of the Statutes XII Edn.
at p. 109 under the caption "Restriction of operation" that sometimes to keep the Act within the limits of its scope and not to disturb the existing law beyond what the object requires, it is construed as operative between certain purposes only even though the language expresses no such circumspection of field of operation.
It is, thus, clear that the object of reading down is to keep the operation of the statute within the purpose of the Act and consitutionally valid.
In this regard it is equally of necessity to remind ourselves as held by this Court in Minerva Mills ' case that when the effect of article 31 was asked to be read down so as to save it from unconstitu tionality this Court held that it is not permissible to read down the statutory provisions when the avowed purpose is to confer power on an authority without any limitation whatever and that at p. 259D and G it was held that the principle of reading down cannot be used to distort when words of width are used even advertantly.
In Elliott Ashton Welsh, II vs United States.
; (26 Lawyer 's Edition 2nd, 308 at 327) Herfan, J. at 327 held that "when the plain thrust of a legislative enactment can only be circumvented by distortion to avert constitutional collision, it can only by exalting form over substance that one can justify veering of the path that has been plainly marked by the Statute.
Such a course betrays extreme skepticism as to constitutionality and in this instance reflects a groping to preserve conscientious objecter exemption at all costs I cannot subscribe wholly to emasculated construction of a statute to avoid facing con stitutional question in purported fidelity to the statutory doctrine of avoiding unnecessary resolution of constitution al issues.
" 36A. In Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45 this Court has refused to rewrite legislation to make up omissions of the Legislature.
In Moti Ram Deka 's case when Rule 148(3) and Rule 149(3) of the Railway Establishment Code were sought to be sus tained on the 'principle of reading down ', this court held thus: "There is one more point which still remains to be consid ered and that is the point of construction.
The learned Addl.
Solicitor General argued that in construing the im pugned R. 148(3) as well as R. 149(3), we ought to take into account the fact that the Rule as amended has been so 326 framed as to avoid conflict with or non compliance of, the provisions of article 311(2), and so, he suggests that we should adopt that interpretation of the Rule which would be consistent with article 311(2).
The argument is that the termi nation of services permissible under the impugned rules really proceeds on administrative grounds or considerations of exigencies of service.
If, for instance, the post held by a permanent servant is abolished, or the whole of the cadre to which the post belonged is brought to an end and the railway servant 's services are terminated in consequence, that cannot amount his removal because the termination of his service is not based on any consideration personal to the servant.
In support of this argument, the Addl.
Solici tor General wants us to test the provision contained in the latter portion of the impugned rules.
We are not impressed by this argument.
What are not impressed by this argument.
What the latter portion of the impugned Rules provide is that in case a railway servant is dealt with under that portion, no notice need be served on him.
The first part of the Rules can reasonably and legitimately take in all cases and may be used even in respect of cases falling under the latter category, provided, of course, notice for the speci fied period or salary in lieu of such notice is given to the railway servant.
There is no doubt that on a fair construc tion, the impugned Rules authorise the Railway Administra tion to terminate the services of all the permanent servants to whom the Rules apply merely on giving notice for the specified period or on payment of salary in lieu thereof and that clearly amounts to the removal of the servant in ques tion.
Therefore, we are satisfied that the impugned rules are invalid inasmuch as they are inconsistent with the provisions contained in article 311(2).
The termination of the permanent servant 's tenure which is authorised by the said Rules is no more and no less than their removal from serv ice, and so, article 311(2) must come into play in respect of such cases.
That being so, the Rule which does not require compliance with the procedure prescribed by article 311(2) must be struck down as invalid.
I am, therefore, inclined to hold that the Courts though, have no power to amend the law by process of inter pretation, but do have power to mend it so as to be in confirmity with the intendment of the legislature.
Doctrine of reading down is one of the principles of 327 interpretation of statute in that process.
But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save from uncon stitutionality or to confer jurisdiction on the legislature.
Similarly it cannot be taken aid of to emasculate the pre cise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Constitution and to direct the authorities to record reasons, unknown or unintended procedure, in the manner argued by the learned counsel for the appellants.
At the cost of repetition it is to reiterate that when the authority intends to take disciplinary action for imposing penalty of dismissal, removal or reduction in rank of an employee, an elaborate procedure has been provided in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity.
Residuary power has been avowedly conferred in Regulation 9(b) with wide discretion on the appropriate authority to take actions on similar set of facts but without any guidelines or procedure at the absolute discretion of the same authority.
The language of Regulation 9(b) is not capable of two interpretations.
This power appears to be in addition to the normal power in Regulation 15.
Thereby the legislative intention is manifest that it intended to confer such draconian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenterhook under constant pressure of uncertainty, precarious tenure at all times right from the date of appointment till date of superannuation.
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the serv ice arbitrarily and capriciously.
Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee without following the principle of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee.
It is well settled rule of statutory construction that when two interpretations are possible one which would preserve and save constitutionality of a particular Statute, would be preferred to the other that would render it unconstitutional and void.
When the language is clear, unambiguous and specific and it does not lead to the constructions, it is not permissible to read into those provisions something which is not intended.
It is undoubtedly true as rightly contended by 328 Mr. Ashok Desai, the learned Solicitor General that the power to take appropriate and expeditious action to meet the exigencies of weeding out inefficient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority.
Any action taken without any modicum of reasonable procedure and prior oppor tunity always generates an unquenchable feeling that unfair treatment was meted out to the aggrieved employee.
To pre vent miscarriage of justice or to arrest a nursing grievance that arbitrary, whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstances as adumbrated in proviso to article 311(2) of the Constitution.
If an individual action is taken as per the procedure on its own facts its legality may be tested.
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fair ness and reasonableness envisaged under articles 14 and 21 of the Constitution.
In this context it is important to empha sise that the absence of arbitrary power is the first essen tial of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
(See Dicey "Law of the Constitution" 10th Edn., Introduction cx).
"Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick; , "then it has freed man from the unlimited discretion of some rules . . where discre tion is absolute, man has always suffered".
It is in this sense that the rule of law may be said to be the sworn enemy of caprice.
Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes "means should discretion guided by law.
It must be governed by rule, not by humour; it must not be arbitrary, vague and fanciful," as followed in this Court in S.G. Jaisinghani vs Union of India.
, ; 40.
In an appropriate case where there is no sufficient evidence available to inflict by way of disciplinary meas ure, penalty of dismissal or removal from service and to meet such a situation, it is not as if that the authority is lacking any power to make Rules or regulations to give a notice of opportunity with the grounds or the material on records on 329 which it proposed to take action, consider the objections and record reasons on the basis of which it had taken action and communicate the same.
However scanty the material may be, it must form foundation.
This minimal procedure should be made part of the procedure lest the exercise of the power is capable of abuse for good as well as for whimsical or capricious purposes for reasons best known to the authority and not germane for the purpose for which the power was conferred.
The action based on recording reasoning without communication would always be viewed with suspicion.
There fore, 1 hold that conferment of power with wide discretion without any guidelines, without any just, fair or reasonable procedure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
Doctrine of reading down cannot be extended to such a situation.
It is undoubted that in In re Hindu Women 's Right to Property Act, involve the interpretation of single word "property" in the context to legislative compe tency but that cannot be extended to the facts of these cases.
R.M.D. Charnarbaugwalla 's case is of severability and of a single word competition.
The interpretation therein also cannot be extended to the facts of these cases.
Even the case of K.N. Singh vs State of Bihar, [19621 Suppl.
2 SCR 769 involve interpretation of Section 124(A) I.P.C. in the context of freedom of speech enshrined under article 19(1)(a) of the Constitution.
The interpretation was put as to subserve the freedom under article 19(1)(a).
R.L. Arora vs State of U.P.; , does not involve of the doctrine of reading down so as to cut down the scope of Fundamental Right.
Similarly Jagdish Pandey vs Chancellor of the Bihar, 1 also does not concern with application of doctrine of reading down so as to sacrifice the principle of natural justice which are considered as essential part of rule of law.
In Amritsar Municipality vs State of Punjab; , the court ascertained the intention of the Legislature and interpreted the Act con sistent with the said intention.
Sunil Batra vs Delhi Admn.
, ; is also a decision where it was found that the intention of the Legislature was not to confer arbitrary power.
N.C. Dalwadi vs State of Gujarat, is also a case giving reasonable interpretation of the inten tion of the provisions of the Statute and is not capable of the meaning.
In Charanlal Sahu vs Union of India, [1989] Suppl.
Scale (1) at p. 61 on which strong reliance was placed by both the learned Attorney General and Solicitor General, is a case capable of two interpretations to Sec. 4.
The decisions cited by Shri Ashok Desai i.e. Delhi Transport 330 Undertaking vs Balbir Saran Goel, ; ; Air India Corporation vs Rebellow, ; ; Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; concern the industrial Iaw wherein the validity of rules on the touch stone of the reasonableness, fairness or justness was not considered.
The prevailing doctrine of reasonable classification and nexus had their play to uphold the validity of the provisions.
It is undoubtedly true as contended by Sri Bhasin, learned counsel for the intervener, that it is open to the authorities to terminate the services of a temporary employ ee without holding an enquiry.
But in view of the match of law made, viz., that it is not the form of the action but the substance of the order is to be looked into, it is open to the Court to lift the veil and pierce the impugned action to find whether the impugned action is the foundation to impose punishment or is only a motive.
A larger Bench of seven Judges of this Court in Shamsher Singh vs State of Punjab, elaborately considered the question and laid down the rule in this regard.
The play of fair play is to secure justice procedural as well as substantive.
The substance of the order, the effect thereof is to be looked into.
Whether no misconduct spurns the action or whether the services of a probationer is terminated without imputation of misconduct is the test.
Termination simpliciter, either due to loss of confidence or unsuitability to the post may be a relevant factor to terminate the services of a proba tioner.
But it must be hedged with a bonafide over all consideration of the previous conduct without trained with either mala fide or colourable exercise of power or for extraneous considerations.
Such actions were upheld by this Court.
The action must be done honestly with due care and prudence.
In view of the march of law made by article 14, in particular after Maneka Gandhi 's case, it is too late in the day to contend that the competent authority would be vested with wide discretionary power without any proper guidelines or the procedure.
The further contention that the preamble, the other rules and the circumstances could be taken aid of in reading down the provisions of the impugned rules or the regulations is also of no assistance when it is found that the legislative intention is unmistakably clear, unambiguous and specific.
Thus considered, I have no hesitation to conclude that the impugned regulation 9(b) of the Regula tions are arbitrary, unjust, unfair and unreasonable offend ing articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
It is also opposite to the public policy and thereby is void under Section 23 of the .
331 44.
It is made clear that, as suggested by this Court in Hindustan Steel Case that it is for concerned to make appro priate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consist ent with the constitutional scheme.
The correctness of the decision in Tulsiram Patel 's case though was doubted in Ram Chunder vs Union of India, it is unneces sary to go into that question.
For the purpose of this case it is sufficient to hold that proviso to article 311(2) itself is a constitutional provision which excluded the applicabil ity of article 311(2) as an exception for stated grounds.
It must be remembered that the authority taking action under either of the clauses (b) or (c) to proviso are enjoined to record reasons, though the reasons are not subject to judi cial scrutiny, but to find the basis of which or the ground on which or the circumstances under which they are satisfied to resort to the exercise of the power under either of the two relevant clauses to proviso to article 311(2) of the Con stitution.
Recording reasons itself is a safeguard for preventing to take arbitrary or unjust action.
That ratio cannot be made applicable to the statutory rules.
Accordingly I hold that the ratio in Brojonath 's case was correctly laid and requires no reconsideration and the cases are to be decided in the light of the law laid above.
From the light shed by the path I tread, I express my deep regrets for my inability to agree with my learned brother, the Hon 'ble Chief Justice on the applicability of the doctrine of reading down to sustain the offending provi sions.
I agree with my brothren B.C. Ray and P.B. Sawant, JJ.
with their reasoning and conclusions in addition to what I have laid earlier.
The appeal is accordingly dismissed, but without costs.
Similarly Civil Appeal No. 1115 of 1976 is allowed and the monetary relief granted is reasonable, but parties are directed to bear their own costs.
Rest of the matters will be disposed of by the Division Bench in the light of the above law.
In view of the majority judgment, Civil Appeal No. 2876 of 1986 (Delhi Transport Corporation vs D.T.C. Mazdoor Con gress) is dismissed.
Civil Appeal No. 11 15 of 1976 (Satnam Singh vs Zilla Parishad Ferozepur & Ant., is allowed and the other cases snail be placed before a division bench for final disposal.
C.A. 2876/86 is dismissed N.P.V. &C.A. 1115/76 isallowed.
| IN-Abs | Respondents No. 2 to 4, regular employees of the appel lant Delhi Transport Corporation, were served with termina tion notices under Regulation 9(b) of the Delhi Road Trans port Authority (Conditions of Appointment & Service) Regula tions, 1952 by the appellant Corporation on the ground that they became inefficient in their work and started inciting other members not to perform their duties.
The three respondents and their Union, respondent No. 1 filed writ petition in High Court, challenging the constitu tional validity of Regulation 9(b), which gave the manage ment right to terminate the services of an employee by giving one month 's notice or pay in lieu thereof.
The Divi sion Bench of the High Court struck down the Regulation, holding that the Regulation gave absolute, unbridled and arbitrary powers to the management to terminate the services of any permanent or temporary employee, and such power was violative of Article 14 of the Constitution.
Hence, the Corporation filed the appeal before this Court, by special leave.
The validity of similar provisions in Para 522 of the Shastri Award, rule 1(i) of the District Board Rules 1926, Part V, Regulation 13 of Indian Airlines Employees ' Service Regulations, Regulation 48 of Air India Employees ' Service Regulations and also the clause in the contract of appoint ment in respect of employees of Zilla Parishad and the New India Assurance Company, also came up for consideration in the connected appeals and applications filed before this Court.
It was contended on behalf of the Delhi Transport Corpo ration that there was sufficient guideline in Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution, that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power was exercised only for that purpose, that even a term like 'public interest ' could be sufficient guidance in the matter of retirement of a government employee, and such a provision could be read into a statute even when it was not otherwise expressly there, that it was well settled that the Court would sustain the presumption of constitutionality by con sidering matters of common knowledge and to assume every state of facts which could be conceived and could even read down the section, if it became necessary to uphold the validity of the provision, that the underlying 144 rationale of this rule of interpretation, or the doctrine of reading down of a statute being that when a legislature, whose powers were not unlimited, enacted a statute, it was aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requisite limitations and conditions to immunise it from the virus of unconstitutionality, that since every legislature intended to act within its powers, in a limited Government, the legislature would attempt to function within its limited powers and it would not be expected to have intended to transgress its limits, that the guidelines for the exercise of the power of termination simpliciter under Regulation 9(b) could be found in the statutory provisions of the 1950 Act under which the regulations had been framed, the pream ble; Sections 19, 20 and 53, the context of Regulation 9(b) read with Regulations 9(a) and 15, that even for the exer cise of this power, reasons could be recorded although they need not be communicated which would ensure a check on the arbitrary exercise of power and effective judicial review in a given case, ensuring efficient running of services and in public interest and the regulations in question were paral lel to, but not identical with, the exceptions carved out under proviso to Article 311(2), that even the power of termination simipliciter under Regulation 9(b) could only be exercised in circumstances other than those in Regulation 9(a), i.e. not where the foundation of the order was 'mis conduct ', the exercise of such power could only be for purposes germane and relevant to the statute, that the principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma and the principles of natural justice were not incapa ble of exclusion in a given situation, if importing the right to be heard has the effect of paralysing the adminis trative process or the need for promptitude or the urgency of the situation so demands, natural justice could be avoided; that the words "where it is not reasonably prac ticable to hold an enquiry" may be imported into the regula tion, that where termination took place by the exclusion of audi alteram partem rule in circumstances which were circum scribed and coupled with the safeguard of recording of reasons which were germane and relevant, then the termina tion would not render the regulation unreasonable or arbi trary, and if the regulation was read in this manner it could not be said that the power was uncanalised or unguid ed, that under ordinary law of "master and servant" the Corporation was empowered by the Contract of Service to terminate the services of its employees in terms thereof; the Declaration in Brojo Nath 's case that such a contract was void under section 23 of the Indian Contract Act or opposed to public policy offending the Fundamental Rights and the Directive Principles was not sound in law; as a master, the Corporation had unbridled right 145 to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employees, and if the termination, was found to be wrongful, the only remedy available to the employees was to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case.
On behalf of the workmen/intervenors, it was submitted that provision of any rule that service would be liable to termination on notice for the period prescribed therein contravened Article 14 of the Constitution, as arbitrary and uncontrolled power was left in the authority to select at its will any person against whom action would be taken; that Articles 14, 19 and 21 were inter related and Article 21 did not exclude Article 19 and even if there was a law providing a procedure for depriving a person of personal liberty and there was, consequently no infringement of fundamental right conferred by Article 21, such law in so far as it abridged or took away any fundamental right under Article 19 would have to meet the challenge of that Article, that violation of principle of natural justice by State action was viola tion of Article 14 which could be excluded only in excep tional circumstances, and, therefore, a clause which autho rised the employer to terminate the services of an employee, whose contract of service was for indefinite period or till the age of retirement, by serving notice, and which did not contain any guidance for the exercise of the power and without recording reasons for such termination, violated the fundamental rights guaranteed under Articles 14, 19(1)(g) and 21 and principles of natural justice and was void under Section 2(g) of the , and unforce able under Section 2(hi; that since audi alteram partem was a requirement of Article 14.
and conferment of arbitrary power itself was contrary to Article 14, the rule in ques tion could not be sustained as valid; that the Constitution al guarantees under Articles 14 and 21 were for all persons and there could be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws applied and those who were outside their purview, and the law applicable to the former could only add to and not detract from the rights guaranteed by Part 111 of the Constitution; that the power to terminate the services of a person employed to serve indefinitely or till the age of retirement could be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Article 14, 19(1)(g) and 21 and unless the exceptional circumstances were spelt out, the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, particularly because, the requirement of audi alteram partem which was a part of the guarantee of 146 Article 14 was sought to be excluded, and there could be no guidance available in the body of the law itself, since the purpose for which an undertaking was established and the provisions dealing with the same in the law could provide no guidance regarding exceptional circumstances under which alone the power could be exercised, that the question in volved, in the instant cases was not the exercise of power which an employer possessed to terminate the services of his employee, but the extent of that power; that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, could not be rendered constitutional by reading the require ment of recording reasons and confining it to cases where it was not reasonably practicable to hold an enquiry and read ing it down further as being applicable to only exceptional cases would not be permissible construction and proper; that the Regulation conferred arbitrary power of leaving it to the DTC Management to pick and choose, either to hold an enquiry or terminate the services for the same misconduct and there was nothing in the provisions of the Act or the regulations from which the Management could find any guid ance and, therefore, in order to conform to the constitu tional guarantees contained in Articles 14, 19(1)(g) and 21, the regulation would have to make a distinction between cases where services were sought to be terminated for mis conduct and cases of termination on grounds other than what would constitute misconduct; that regulation 9(b) deliber ately conferred wide power of termination of service without giving reasonable opportunity to an employee even if he was regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry, thus, the intention of the regulation making au thority was clear and unambiguous; the provision was not capable of two interpretations, and consequently, the ques tion of reading down did not arise, and reading down in the instant cases involved not interpretation of any single word in regulation 9(b) but adding a whole clause to it, which amounted to rewriting the provisions, which courts had refused to make up for the omission of the legislature, and would inevitably drain out Article 14 of its vitality, and the right to equality which was regarded as a basic feature of the Constitution, and subject permanent employees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution, that unless the provision of the Constitution itself excluded the principles of natural justice, they continued to be applicable as an integral part of the right to equality guaranteed by the Constitution, that as the employees of the DTC were not Government employees, Article 311(2) was not applicable, and Article 14 fully applied to them, including the principles of natural justice.
147 On behalf of the Indian Airlines Corporation and the Air India, which filed intervention applications, it was submit ted that there had been distinction between the discharge simpliciter and dismissal from service by way of punishment, that the effect of the judgments of this Court in the Cen tral Inland Water 's case and West Bengal 's case was to take away the right of the employer to terminate the services of an employee by way of discharge simpliciter, that this Court had recognised the existence of the inherent right of an employer to terminate the services of an employee in terms of the contract of employment and also under the various labour enactments, that a plain reading of the amended Regulation 13 of the Indian Airlines Employees ' Regulations and a cumulative reading of the amended regulations 48 and 44 of the Air India Employees Service Regulations clearly established that the vice, if any, of arbitrariness had been completely removed and that the power to terminate had been vested with the Board of Directors, and not with any indi vidual, and sufficient guidelines made available to the Board to exercise the restricted and limited power available to the employer under these regulations.
On behalf of another intervenor, New India Assurance Co., it was submitted that the Central Inland Water 's case was erroneous, insofar as it made complete negation of power of the employer to terminate and rendered the termination illegal even where the employer had made all the necessary investigation and had given hearing to the employee con cerned before making the order, and took in even private employment; therefore, the judgment of this Court should be read down and made applicable prospectively.
In Civil Appeal No. 4073 of 1986 it was contended on behalf of the Bank employee whose services were terminated under para 522 of the Shastri Award, that mere failure of the employee to mention the loan taken by him from another branch of the Bank, which was repaid subsequently, had deprived him of his livelihood, and his services were termi nated without charge of 'misconduct ' and without an enquiry, and paragraph 522 of the Shastri Award gave no indication as to on what conditions this arbitrary uncontrolled power could be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts, and that this provision provided for "insecurity of tenure" for lakhs of permanent employees; Articles 14, 19(1)(g) and 21 and the integrated protection of these Fundamental Rights excluded the "doctrine of pleasure" and insisted on security of tenure "during good behaviour", and the right to livelihood could not be rendered precari 148 ous or reduced to a "glorious 'uncertainty", that no princi ple of interpretation permitted reading down a provision so as to make it into a different provision altogether differ ent from what was intended by the legislature or its dele gate, and there could not be any reading down which was contrary to the principles of interpretation; that if two provisions existed, firstly to remove from service after holding an enquiry on a charge of 'misconduct ' and secondly, without serving a charge sheet or holding an enquiry, all provisions for holding enquiry would be rendered otiose and would be reduced to a mere redundancy, that the Court had a duty to correct wrongs even if orders had been made which were later found to be violative of any fundamental right and to recall its orders to avoid injustice; that substan tive provision of para 522 could not be controlled or cur tailed effectively so as to confine its operation within narrow constitutional limits; that it was not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogated uncon trolled unconstitutional powers, which were neither neces sary nor germane for supposed efficiency of services in the Banks as a business enterprise, and that in a system gov erned by rule of law, discretion when conferred upon execu tive authorities must be confined within clearly defined limits.
In Civil Appeal No. I 115 of 1976, the appellant employ ee of the Zila Parishad contended that his services were terminated on account of the vindictiveness of some of the employees of the respondent, and without enquiry.
The em ployer submitted that the termination order was passed on the basis of the condition in the mutually agreed terms of contract of appointment, and resolution passed by the Board, and that Rule 1(i) of District Board Rules, 1926, Part V gave right to both the parties to terminate the employment on one month 's notice.
On the questions (i) whether Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, was arbitrary, illegal, discriminatory and violative of audi alteram partem and so constitutionally invalid and void; and (ii) whether the Regulation could be interpreted and read down in such a manner as to hold that it was not discriminatory, or arbi trary and did not confer unbriddled and uncanalised power on the authority to terminate the service of an employee, including a permanent employee, without any reason whatsoev er.
Dismissing Civil Appeal No. 2876 of 1986 (appeal by the Delhi Transport Corporation), allowing Civil Appeal No. 1115 of 1976, and directing other matters to be placed before a Division Bench, in ac 149 cordance with the majority decision (per Ray, Sharma, Sawant and K. Ramaswamy, JJ.) this Court, HELD: Per Ray, J.: 1.
I Regulation 9(b) of the Delhi Road Transport Author ity (Conditions of Appointment and Service) Regulations, 1952 which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the orders is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution.
There is no guide line in the Regulations or in the Delhi Road Transport Authority Act, 1950 as to when or in which cases and circum stances this power of termination by giving notice or pay in lieu thereof can be exercised.
[264G, 285C] 1.2 Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part 111 as well as to conform to the directive principles in Part IV of the Constitution.
In other words, the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of the Constitution.
Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
[264H, 265A B] 1.3 The 'audi alteram partem ' rule which, in essence, enforces the equality clause in Article 14 of the Constitu tion is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been ex pressly excluded by the Act or Regulation or Rule which is not the case here.
Rules of natural justice do no supplant but supplement the Rules and Regulations.
Moreover, the Rule of Law, which permeates the Constitution of India, demands that it has to be observed both substantially and procedurally.
Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.
[265D E] Regulation 9(b) does not expressly exclude the application of the 150 'audi alteram parterm ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made.
[265F] 1.4 Considering from all these aspects Regulation 9(b) is illegal and void, as it is arbitrary, discriminatory and without any guidelines for exercise of the power.
It confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the princi ples of natural justice.
It is also void under Section 23 of the Contract Act, as being opposed to public policy and also ultra vires of Article 14 of the Constitution.
[265E, 265B C, 266G] Moti Ram Deka Etc.
vs General Manager, NEF Railways, Maligaon.
Pandu, Etc., ; ; Parshotam Lal Dhingra vs Union of India, ; ; Shyam Lal vs The State of Uttar Pradesh and Anr., ; ; Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; ; Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; ; State of Orissa vs Dr. (Miss) Binapani Devi & Ors., ; ; A.K. Kraipak of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; Air India Corporation vs V.A. Rebello & Ant., AIR 1972 S.C. 1343; The Workmen of Sudder Office Cinnamara vs The Manage ment, ; Tata Oil Mills Co. Ltd. vs Work men & Anr.; , ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; E.P. Royappa vs State of Tamil Nadu and Anr. ; ; Municipal Corporation of Greater Bombay vs Malvenkar & Ors., ; ; Manohar P. Kharkher and Anr.
vs Raghuraj & Anr., ; 1.
Michael & Anr.
vs Johnaton Pumps India Ltd., ; ; Sukhdev Singh & Ors.
vs Bhagat Ram Sardar Singh Raghu vanshi & Anr.; , ; S.S. Muley vs J.R.D. Tata & Ors., ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh and Ors., [1985] 3 SCC 116; Workmen Of Hindustan Steel Ltd. and Anr.
vs Hindustan Steel Ltd. and Ors., ; ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors.
, ; ; Central Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr., and Delhi Transport Undertaking vs Balbir Saran Goel, ; , referred to.
2.1 An Act can be declared to be valid wherein any term has been 151 used which per se seems to be without jurisdiction, but can be read ' down in order to make it constitutionally valid by separating and excluding the part which is invalid or by interpreting the word in such a fashion as to make it con stitutionally valid and within jurisdiction of the legisla ture which passed the said enactment, by reading down the provisions of the Act.
This however, does not under any circumstances, mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulations that it confers arbitrary uncana lised, unbridled unrestricted power to terminate the serv ices of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, it can be read down to save the said provision from constitutional invalidity, by bring ing or adding words in the said legislation, such as saying that it implies that reasons for the order of termination have to be recorded.
[271C F] 2.2 In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambiguous meaning that it can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity.
Therefore, it is impossible to hold by reading down the provisions of Regula tion 9(b) framed under section 53 of the Delhi Road Trans port Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the principles of natural justice and equality as envisaged in Article 14 of the Constitution of India.
[271F H, 272A] Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131; Roshan Lal Tandon vs Union of India, ; ; Commissioner of Sales Tax, Madhya Pradesh, Indore & Ors.
vs Radhakrishan & Ors.
, ; ; In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 213 of the Government of India Act, 1935, ; R.M.D. Chamarbaugwalla vs The Union of India; , ; R.L. Arora vs State of Uttar Pradesh & Ors.
, ; and The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp.
2 SCR 127, Jagaish Pandey vs The Chancellor of Bihar & Anr.
, ; , referred to.
H.N. Seervai: Constitutional Law of India, Third Edi tion, p. 119, referred to.
152 Per Sharma, J. 1.1 The rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the management cannot have unrestricted and unqualified power of terminating the services of the employ ees.
In the interest of efficiency of the public bodies, however, they should have the authority to terminate the employment of undesirable, inefficient, corrupt, indolent and disobedient employees, but it must be exercised fairly, objectively and independently; and the occasion for the exercise must be delimited with precision and clarity.
Further, there should be adequate reason for the use of such a power, and a decision in this regard has to be taken in a manner which should show fairness, avoid arbitrariness and evoke credibility.
And this is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation.
An element of uncertainty is likely to lead to grave and undesirable consequences.
Clarity and precision are.
therefore, essential for the guidelines.
[272D F] 1.2 Regulation 9(b) of the Delhi Road Transport Authori ty (Condition of Appointment and Service) Regulation, 1952 cannot, therefore.
be upheld for lack of adequate and appro priate guidelines.
[272G] Per Saw,ant, J. 1.1.
There is need to minimise the scope of the arbi trary use of power in all walks of life.
It is inadvisable to depend on the good sense of the individuals.
however high placed they may be.
It is all the more improper and undesirable to expose the precious rights like the rights of life.
liberty and property to the vagaries of the individual whims and fancies.
It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness do not go with the posts, however high they may be.
There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational.
History does not support it and reality does not warrant it.
In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law.
[276E F] 1.2 Beyond the self deluding and self asserting right eous presumption, there is nothing to support the 'high authority ' theory.
This 153 theory undoubtedly weighed with some authorities for some time in the past.
But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it.
[278A B] 1.3 The employment under the public undertakings is a public employment and a public property.
It is not only the undertakings but also the society which has a stake in their proper and efficient working.
Both discipline and devotion are necessary for efficiency.
To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimiscal.
With capricious service conditions, both discipline and devotion are endangered, and efficiency is impaired.
[276G H, 277A] 1.4 The right to life includes right to livelihood.
The right to livelihood, therefore, cannot hang on to the fan cies of individuals in authority.
The employment is not a bounty from them nor can its survival be at their mercy.
Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental.
Fundamental rights can ill afford to be consigned to the limb of undefined premises and uncertain applications.
That will be a mockery of them.
[277B] 1.5 Both the society and the individual employed, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible.
The arbi trary rules which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.
[277C] Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghu vanshi & Anr.
; , ; Maneka Gandhi vs Union of India, ; The Manager, Government Branch Press & Ant.
vs D.R. Belliappa, ; ; The Manag ing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Ltd., ; ; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors.
vs Bombay Municipal Corpora tion & Ors.
, [1985] Supp. 2 SCR 51; Union of India & Anr.
vs Tulsiram Patel& Ors., [1985] Supp. 2 SCR 131; Cen tral Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr.
, ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors. ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 154 SCC 611; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp.
SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc.
vs Union of India & Ors., , referred to.
2.1 The doctrine of reading down or of recasting the statute can be applied in limited situations.
It is essen tially used, firstly, for saving a statute from being struck down on account of its unconstitutionality.
It is an exten sion of the principle that when two interpretations are possible one rendering it constitutional and the other making it constitutional the former should be preferred.
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its viola tion of any of the provisions of the Constitution.
The second situation which summons its aid is where the provi sions of the statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made.
However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord with good reason and conscience.
In such circumstances, it is not possible for the Court to remake the statute.
Its only duty is to strike it down and leave it to the legislature if it so desires, to amend it.
If the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided.
The doctrine can never be called into play where the statute requires extensive additions and deletions.
Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so.
[288F H, 289A B] Re Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc., ; Nalinakhya Bysack vs Shyam Sunder Halder & Ors.
, ; ; R.M.D. Chamarbaugwalla vs The Union of India, ; ; Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 SCR 769; R.L Arora vs State of Uttar Pradesh & Ors., ; ; Jagdish Pandey vs The Chancellor, University of Bihar & Anr., [1968] I SCR 231; Shri Umed vs Raj Singh & Ors., [1975] I SCR 918; Mohd. Yunus Salim 's case; , ; Sunil Batra etc.
vs Delhi Adminis tration & Ors.; , ; Excel Wear etc.
vs Union of India & Ors.
, ; ; Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; ; Union of India & Anr. etc.
vs Tulsiram Patel etc.
; , and Elliott Ashton Welsh, 11 vs United States; , ; 308, referred to.
155 2.2 Therefore, the doctrine of reading down cannot be availed of for saving the regulation in the instant case.
In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Trans port Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950, whose object is to provide for the establishment and the regula tion of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi.
There is nothing either in the object of the service regula tions or in the object of the Act which has a bearing on Regulation 9(b).
If anything the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertaking.
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation.
Secondly, the language of regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permis sible to read in it any meaning other than what is clearly sought to be conveyed by it.
Thirdly, the context of the regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees.
Sub clause (a) of the Regulation mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice.
Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of estab lishment or in circumstances other than those mentioned in sub clause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employ ee 's services.
The intention of the rule making authority, therefore, is more than clear.
It was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee.
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision.
[289C H, 290A] 2.3 Moreover, reading in the rule circumstances under which alone the rule can be used, and reading it down to read in it words or expressions or provisions in order to save the legislation would not only distort the intention of the rule making authority but would also require extensive amendment of a very vague nature to it.
The reading in the regulation of a provision that the concerned employees should be given a hearing with regard to his mis conduct will require that be should first be intimated of the mis conduct of which he is guilty.
But 156 that kind of a situation is taken care of by sub clause (a) of the said regulation.
There is.
therefore.
no need of a separate prevision for the same.
on the other hand.
the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing.
The Court cannot read in the rule all circumstances where it is not possible or necessary to hold an enquiry.
Such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311( 2).
The reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do.
There is no authority which supports such wide reading down of any provision of the statute or rule/regulation.
Therefore the doctrine of reading down is singularly inapplicable to the present case.
[281B, 290B, 291A F] 3.
Clause (b) of Regulation 9 contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract.
[274E] Per Ramaswamy.
J 1. 1.1 The question of security of work is of most impor tance.
If a person does not have the feeling that he belongs to an organisation engaged in promotion.
he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
Therefore, as far as possible security of work should be assured the employees so that they may contribute to the maximisation of production.
[300D E] Daily Rated Casual Labour vs Union of India, at 130 131, referred to.
1.2 A permanent employee of a statutory authority, corporation or instrumentality under Article 12 has a lien on the post till he attained superannuation or compulsorily retired or service is duly terminated in accordance with the procedure established by law.
Security of tenure enures the benefit of pension on retirement.
Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty.
He/She has a right to security of tenure which is essential to inculcate a sense of belonging to the service or organisation and in volvement for maximum production or efficient 157 service.
It is also a valuable right which is to be duly put an end to only as per valid law.
[300A G] Roshan Lal Tandon vs Union of India, ; at 195 196; Calcutta Dock Labour Board vs Jarfar Imam, and Sirsi Municipality vs Cecelia Kom Francis Tal lis; , , referred to.
1.3 The right to life, a basic human right, assured by Article 21 of the Constitution comprehends some thing more than mere animal existence; it does not only mean physical existence, but includes basic human dignity.
The right to public employment and its concomitant right to livelihood receive their succour and nourishment under the canopy of the protective umbrella of Articles 14, 16(1), 19(1)(g) and 21.
[296A, 297B] Munn vs Illinois, ; and 154, referred to.
Kharak Singh vs State of U.P., [1964] 1 SCR 332; Olga Tellis vs Bombay Municipal Corporation, [1985] 2 Suppl.
SCR page 51 at 79; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; State of Maharashtra vs Chander Bhan, and Board of Trustees, Port of Bombay vs Dilip Kumar; , , referred to.
1.4 The arbitrary, unbridled and naked power of wide discretion to dismiss a permanent employee without any guidelines or procedure would tend to defeat the constitu tional purpose of equality and allied purposes.
Therefore, when the Constitution assures dignity of the individual and the right to livelihood, the exercise of power by the execu tive should be combined with adequate safeguards for the rights of the employees against any arbitrary and capricious use of those powers.
Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors.; , and Francis Corallie vs
U.T. of Delhi; , = ; , referred to.
1.5 It is well settled constitutional law that different Articles the Chapter on Fundamental Rights and the Directive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlapping with the subject matter of what is to be protected by its various provisions, particularly the Fundamental Rights.
The fundamental rights, protected by Part III of the constitu tion, out of which Articles 14.
19 and 21 are the most frequently 158 invoked to test the validity of executive as well as legis lative actions when these actions are subjected to judicial scrutiny, are necessary means to develop one 's own person ality and to carve out one 's own life in the manner one likes best subject to reasonable restrictions imposed in the paramount interest of the society and to a just.
fair and reasonable procedure.
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test.
Thus, the right to a public employ ment is a constitutional right under Article 16(1).
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules.
regulations or instructions having statutory flavour made thereunder.
But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion.
Article 21 guarantees the right to live which includes right to livelihood.
to many.
assured tenure of service is the source.
[311G; 312G H, 313A B] R.C. Cooper vs Union of India, ; ; Minerva Mills Ltd. vs Union of India, and Union of India & Ant.
vs Tulsiram Patel & 0rs. [1985] Suppl.
2 SCR 131 at 233 referred to.
1.6 Article 14 is the general principle while article 311(2) is a special provision applicable to all civil serv ices under the State.
Article 311(2) embodies the principles of natural justice but proviso to clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given cir cumstances enumerated in these clauses of the proviso to article 311(2) of the Constitution.
Article 14 read with Arti cles 16(1) and 311 are to be harmoniously interpreted that the proviso to article 311(2) excludes the application of the principles of natural justice as an exception; and the applicability of Article 311(2) must, therefore, be circum scribed to the civil services and to be construed according ly.
In respect of all other employees covered by Article 12 of the Constitution the dynamic role of Article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition.
unless the statutory rules them selves, consistent with the mandate of Articles 14.16.19 and 21 provide, expressly, such an exception.
[317F H, 315A] Union of India & Ant.
vs Tulsiram Patel & Ors., [1985] Suppl.
2 SCR 131 at 233; A.K. Kraipak & Ors. etc.
vs Union of India & Ors., and Union of India vs Col J.N. Sinha & Ors., [1971] 1 SCR 791, referred to.
159 1.7 Article 19(1)(g) empowers every citizen right to avocation or profession etc., which includes right to be continued in employment under the State unless the tenure is validly terminated and consistent with the scheme enshrined in the fundamental rights of the Constitution.
Whenever there is arbitrariness in State action whether it be of the Legislature or of the Executive or of an authority under Article 12.
Articles 14 and 21 spring into action and strike down such an action.
The concept of reasonableness and non arbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitution.
[315B D] 1.8 Thus, Article 14 read with 16(1) accords right to an equality or an equal treatment consistent with principles of natural justice.
Any law made or action taken by the employ er, corporate statutory or instrumentality under Article 12 must act fairly and reasonably.
Right.
to fair treatment is an essential inbuilt of natural justice.
Exercise of unbri dled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively, judiciously and with out prejudice.
Wider the discretion, the greater the chances of abuse.
Absolute discretion is destructive of freedom than of man 's inventions.
Absolute discretion marks the beginning of the end of the liberty.
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment.
The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice.
[320B D] 1.9 The right to public employment which includes right to continued public employment till the employee is superan nuated as per rules or compulsorily retired or duly termi nated in accordance with the procedure established by law is an integral part of right to livelihood which in turn is an integral part of right to life assured by article 21 of the Constitution.
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure and conformable to the mandate of Articles 14 and 21.
In other words, an employee in a public employment also must not be arbitrarily, unjustly or unreasonably deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure.
Otherwise any law or rule in violation thereof is void.
[320E F] A.K. Kraipak & Ors. etc.
vs Union of India & Ors.
, ; Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; 160 Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors.
vs Union of India & Ors.
, ; at 60 61; S.S. Muley vs J.R.D. Tata, ; Superin tendent of Post Office vs K. Vasayya, [1984] 3 Andhra Pra desh law Journal 9; West Bengal Electricity Board & Ors. vs D.B. Ghosh & Orb '., [1985] 2 SCR 1014; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; O.P. Bhandari vs Indian Tourism Development Corp. Ltd. & Ors.
, ; ; A.P.S.R.T. Corp. vs Labour Court, AIR 1980 A.P. 132; R.M.D. Chamarbaugwalla vs State of Punjab, ; ; Kanhialal vs District Judge & Ors., ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., ; All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employees ' Union & Anr.
vs Christian Medical College Veilore Association & Ors., ; & 562; Kameshwar Prasad vs State of Bihar, [1962] Suppl.
3 SCR 369 and O.K. Ghosh vs EZX Joseph, [1963] Supp. 1 SCR 789, referred to.
United States vs Samuel D. singleton; , , referred 1.10 Undoubtedly, efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services.
Disci pline in that regard amongst the employees is its essential facet and bas to be maintained.
The society is vitally interested in the due discharge of the duties by the govern ment employees or employees of corporate bodies or statutory authorities or instrumentalities under article 12 of the Con stitution.
The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes.
The employees are charged with public duty and they should perform their public duties with deep sense of responsibili ty.
The collective responsibility of all the officers from top most to the lowest maximises the efficient public admin istration.
They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully honestly with full dedication and utmost devotion to duty.
Equally the employees must also have a feeling that they have security of tenure.
They should also have an involvement on their part in the organisation or institution, corporation, etc.
They need assurance of serv ice and protection.
The public interest and the public good demands that those who discharge their duties honestly, efficiently and 161 with a sense of devotion and dedication to duty should receive adequate protection and security of tenure.
There fore, before depriving an employee of the means of liveli hood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasonable restrictions under article 19(5).
[320G H, 321A D, 322D] 1.11 Conferment of power on a high rank officer is not always an assurance, in particular, when the moral standards are generally degenerated, that the power would be exercised objectively, reasonably, conscientiously, fairly and justly without inbuilt protection to an employee.
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls.
Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need consistent with the constitutional scheme.
[322D E] 1.12 Regulation 9(b) of the Delhi Road Transport (Condi tions of Appointment and Service) Regulations, 1952, is arbitrary, unjust, unfair and unreasonable offending Arti cles 14, 16(1), 19(1)(g) and 21 of the Constitution.
It is also opposite to the public policy and thereby is void under Section 23 of the .
[330G] 1.13 Under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provision for termination of service by notice, in terms thereof, it can be so determined and if the con tract finds no provision to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice.
Where no notice or a reasonable notice was issued.
before terminating the contract.
the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages.
It is not disputed that the Delhi Road Transport Corporation is a statutory Corporation under the Delhi Road Transport Act and the Regulations are statutory and its employees are entitled to the fundamental rights enshrined in Part 111 of the Constitution.
The Corporation or an instrumentality or other authority under Article 12 is not free, like an ordinary master (a private employer) to terminate the services of its employees at its whim or caprices or vagary.
It is bound by the Act and the Regulation and paramount law of the land, the Constitution.
[292G H; 293A B] 1.14 Any law, much less the provisions of Contract Act, which are inconsistent with the fundamental rights guaran teed in Part III of 162 the Constitution, are void by operation of Article 13 of the Constitution.
The law of contract, like the legal system itself, involves a balance between competing sets of values.
Freedom of contract emphasises the need for stability.
certainty and predictability.
But, important as values are.
they are not absolute, and there comes a point when they face a serious challenge. 'This Court, as a court of consti tutional conscience enjoined and is jealously to project and uphold new values in establishing the egalitarian social order.
As a court of constitutional functionary exercising equity jurisdiction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscionable rules or conditions when the citizen is really unable to meet on equal terms with the State.
It is to find whether the citi zen, when entered into contracts of service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appro priate declaration.
[302G, 303B, 304H, 305A B] Central Inland Water Transport Company Limited vs Brojo nath Ganguly, 1986 SC 1571, affirmed.
Ramdas Vithaldas Durbar vs section Amarchand & 60., 43 Indian Appeals.
164 and V. Raghunadha Rao vs State of Andhra Pra desh, , referred to.
Anson 's Law of Contract, p. 6 and 7 and Professor Guido Calabresi of Yale University Law School "Refractivity, Paramount power and Contractual Changes", 1961 62 71 Yale Law Journal, P 1191, referred to.
2.1 The golden rule of statutory construction is that the words and phrases or sentences should be interpreted according to the intent of the legislature that passed the Act.
All the provisions should be read together.
If the words of the statutes are in themselves precise and unambig uous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense.
But if any doubt arises from the terms employed by the legislature, it is always safe means of collecting the intention, to call in aid the ground and cause of making the statute, and have recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intends to redress.
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that 163 word or phrase in its context.
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature, then it is proper to look for some other possible meaning and the court cannot go further.
[323D G] 2.2 The Doctrine of Reading Down is, therefore, an internal aid to construe the word or phrase in a statute to give reasonable meaning, but not to detract, disort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality.
Thus, the object of reading down is to keep the operation of the statute within the purpose of the Act and constitutionally valid.
[324E, 325B] 2.3 It cannot be accepted that the Courts, in the proc ess of interpretation of the Statute, would not make law but leave it to the legislature for necessary amendments.
In an appropriate case, Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the creezes.
The object is to elongate the purpose of the Act.
[323B] 2.4 The Courts, though, have no power to amend the law by process of interpretation, but do have power to mend it so as to be in conformity with the intendment of the legis lature.
Doctrine of reading down is one of the principles of interpretation of statute in that process.
But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save it from unconstitutionality or to confer jurisdiction on the legis lature.
Similarly it cannot be taken aid of to emasculate the precise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Consti tution and to direct the authorities to record reasons, unknown or unintended procedure.
[326H, 327A B] Elliott Ashton Walsh, H vs United States, ; ; Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45; United States vs Wunderlick, ; S.C. Jaisinghani vs Union of India, ; ; In re Hindu Women 's Right to Property Act, ; K.N. Singh vs State of Bihar, [1962] Suppl. 2 SCR 769; R.L. Arora vs State of U.P., ; ; Jagdish Pandev vs Chan cellor of the Bihar, ; Amritsar Municipality vs State of Punjab, ; ;Sunil Batra vs Delhi Admn., ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 164 SCC 611; Charanlal Sahu vs Union of India, [1989] Suppl.
Scale 1 at p. 61; Delhi Transport Undertaking vs Balbir Saran Goel, ; Air India Corporation vs Rebellow; , and Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; , re ferred to.
Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 and Saints High School, Hyderabad vs Govt.
of A. P., ; , re ferred to.
Craies Statute Law, 7th Ed.
V, P. 64.
2.5 The language of Regulation 9(b) is not capable of two interpretations.
This power is in addition to the normal power in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity.
Thereby the legislative intention is manifest that it intended to confer such draco nian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenter hook under constant pressure of uncer tainty, precarious tenure at all times right from the date of appointment till date of superannuation.
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the service arbitrarily and capri ciously.
Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee with out following the principles of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee.
[327E G] 2.6 No doubt, the power to take appropriate and expedi tious action to meet the exigencies of weeding out ineffi cient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority but any action taken without any modicum of reasonable procedure and prior opportunity always generates an un quenchable feeling that unfair treatment was meted out to the aggrieved employee.
To prevent miscarriage of justice or to arrest a nursing grievance that arbitrary whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstance as adumbrated in proviso to article 311(2) of the Constitution.
If an individual action is taken as per the procedure on its own facts its legality may be tested.
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fairness and reasonable 165 ness envisaged under articles 14 and 21 of the Constitution.
Therefore, conferment of power with wide discretion without any guidelines, without any just, fair or reasonable proce dure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
Doctrine of reading down cannot be extended to such a situation.
[328A C, 329B C] 2.7 In view of the march of law, made by Article 14 it is too late in the day to contend that the competent author ity would be vested with wide discretionary power without any proper guidelines or the procedure.
When it is found that the legislative intention is unmistakably clear, unam biguous and specific, the preamble, the other rules and the circumstances could not be taken aid of in reading down the provisions of the rules or the regulations of the constitu tional scheme.
[330F G] 3.1 The phrases "public policy", opposed to public policy, or "contrary to public policy" are incapable of precise definition.
It is valued to meet the public good or the public interest.
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances.
Therefore, in the absence of specific head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy.
The rules which stem from the public policy must of necessity be laid to further the progress of the society, in particular when social change is to bring about an egalitar ian social order through rule of law.
In deciding a case which may not be covered by authority, courts have before them the beacon light of the trinity of the Constitution viz., the preamble, Part III and Part IV and the play of legal light and shade must lead on the path of justice social, economic and political.
Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution.
[308C D, 309G H, 310A] 3.2 Since Constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capacity to meet changing conditions, con stitutional policy provides a valuable aid in determining the legitimate boundaries of statutory meaning.
Thus public policy having its inception in Constitutions may accomplish either a restricted or extended interpretation of the liter al expression of a statute.
A statute is always presumed to be constitutional and where necessary, a constitutional meaning will be inferred to preserve validity.
Likewise, where a statute tends to extend or preserve a constitutional 166 principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statutory aim or objective.
Therefore, when the provi sions of an Act or Regulations or Rules are assailed as arbitrary, unjust, unreasonable, unconstitutional, public law element makes it incumbent to consider the validity thereof on the anvil of inter play of articles 14, 16(1), 19(1)(g) and 21 and of the inevitable effect of the provi sion challenged on the rights of a citizen and to find whether they are constitutionally valid.
[310C D, 311E] 4.
The absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
[328D E] 5.
No doubt, it is open to the authorities to terminate the services of a temporary employee without holding an enquiry.
But in view of the march of law made, viz., that it is not the form of the action but the substance of the order which is to be looked into, it is open to the Court to lift the veil and pierce the action challenged to find whether the said action is the foundation to impose punishment or is only a motive.
The play of fair play is to secure justice procedural as well as substantive.
The substance of the order, the effect thereof is to be looked into.
[330C D] Shamsher Singh vs State of Punjab, , re ferred to.
It is for concerned authorities to make appropriate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consistent with the constitutional scheme.
[331A] Workmen of Hindustan Steel Ltd. vs Hindustan Steel Ltd. & Ors.
; , , referred to.
Ram Chander vs Union of India, , referred to.
The ratio in Brojonath 's case was correctly laid down and requires no reconsideration.
[331D] 167 Central Inland Water Transport Company Limited vs Brojo nath Ganguly, , affirmed.
Per Mukharji, CJ., (Contra) 1.
The constitutionality of the conferment of power to terminate services of a permanent employee without holding an enquiry is sustained by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies.
It should be done objectively, the reasons should be recorded, and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution.
The reasons though recorded, need not be communicated, it is only for the purpose of running of the institution.
There should be factors which hamper running of the institution without the termination of the employment of the employee concerned at the particular time, either because he is a surplus or inefficient, disobedient and dangerous.
[235C E] 2.1 The philosophy of the Indian Constitution, as it has evolved, from precedent to precedent, has broadened the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employment.
This is the basic concept of the evolu tion from the different angles of law of master and servant or in the evolution of employer and employee relationship.
It is true that the law has traveled in different channels, government servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations.
However, the basic and fundamental question to be judged is, in what manner and to what extent, the employees of either of semi Government or statutory corporations or public undertakings who enjoy the rights, privileges, limitations and inhibitions of institu tions who come within the ambit of Article 12 of the Consti tution could be affected in their security of tenure by the employers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted.
[229D G] 2.2 Efficiency of the administration of these undertak ings is very vital and relevant consideration.
Production must continue, services must be maintained and run.
Efficacy of the services can be manned only by the disciplined em ployees or workers.
Discipline. decency and 168 order will have to be maintained.
Employees should have sense of participation and involvement and necessarily sense of security in semipermanent or quasi permanent or permanent employment.
There must be scope for encouragement for good work.
In what manner and in what measure, this should be planned and ensured within the framework of the Constitution and, power mingled with obligations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitu tion.
[230A C] 2.3 Arbitrary, whimsical or discriminatory action can flow or follow in some cases by the preponderance of these powers to terminate.
The tact that the power is entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse.
At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency.
Yet discipline has to be maintained, efficiency of the institution has to be ensured.
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern.
It is not always possible to have enquiry because disclosure is diffi cult; evidence is hesitant and difficult, often impossible.
In those circumstances, the approach to the location of power, possession and exercise of which is essential for efficient running of the industries or services, has to be a matter both of balancing and adjustment, on which one can wager the salivation of rights and liberties of the employ ees concerned and the future of the industries or the serv ices involved.
[330D F] 2.4 The power to terminate the employment of permanent employment must be there.
Efficiency and expediency and the necessity of running an industry or service make it impera tive to have these powers.
Power must, therefore, be with authorities to take decision quickly, objectively and inde pendently.
Power must be assumed with certain conditions of duty.
The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions of exercise of such powers.
The manner in which such exercise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power.
All these are essential to ensure that power is fairly exercised and there is fair play in action.
Reasons good and sound, must control the exercise of power.
[230G H, 231A] Thus, for the running of the industry or the service, effi ciently, 169 quickly and in a better manner or to avoid dead locks or inefficiency or friction, the vesting of the power in cir cumstances must be such that it will evoke credibility and confidence.
Notice of hearing and opportunity in the form of an enquiry may or may not be given, yet arbitrariness and discrimination and acting whimsically must be avoided.
These powers must, therefore, be so read that the powers can be exercised on reasons, which should be recorded, though need not always be communicated, and must be by authorities who are high ranking or senior enough and competent and are expected to act fairly, objectively and independently.
The occasion for the use of power must be clearly circumscribed in the above limits.
These must also circumscribe that the need for exercise of those powers without holding a detailed or prolonged enquiry is there.
[231E, F G] Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116; Moti Ram Deka vs North East Frontier Railway, ; S.S. Muley vs J.R.D. Tata, ; Manohar P. Kharkhar vs Raghuraj, ; Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Anr., ; Sukhdev Singh vs Bhagatram Sardar Singh Raghuvanshi, ; ; Union of India & Anr.
vs Tulsi Ram PateI, [1985] Suppl.
2 SCR 131 at p. 166; Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130; L. Michael & Anr.
vs M/s Johnston Pumps India Ltd.; , at 498; Delhi Transport Corporation Undertaking vs Balbir Saran Goel, ; at 764; Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; ; Municipal Corpo ration of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006; Roshan Lal Tandon vs Union of India, ; at 195 D E; Champak Lal Chiman Lal Shah vs The Union of India, at 204; Ram Gopal Chaturvedi vs State of M.P., ; at 475; Gheru Lal Parekh vs Mahadeodas Maiva & Others, [1959] Supp. 2 SCR 406 at 440; O.P. Bhandari vs I.T.D.C. & Ors., ; ; The Hindu Women 's Rights to Property Act, ; Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61; Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102; A.V. Nachane & Anr.
vs Union of India & Anr.
, ; ; India Tobacco Co. Ltd. vs The Commercial Tax Officer, Bhavanipore & Ors., at 657; A.L. Kalra vs The Project and Equipment Corpora tion of India Ltd.; , at 664; Bandhua Mukti Morcha vs Union of India & Ors., [1984] 2 170 SCR 79 at 101; Hindustan Antibiotics Ltd. vs The Workmen & Ors.
, ; at 669; The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825; Commissioner of Sales Tax, Madhya Pradesh vs Radhakrishan & Ors., (supra); Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593; U.P. State Electricity Board vs Hari Shankar Jain, ; A.R. Antulay vs R.S. Nayak and Anr., ; ; S.G. Jaisinghani vs Union of India and Ors., ; at p. 718 19 and Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 SCR 1, referred to.
A. Schroeder Music Publishing Co. Ltd. vs Macaulay, (formerly Instone), , referred to.
Chitty on Contract, 46th Edition Vol.
II, p. 808 or 25th Edition Vol.
II p. 712 paragraph and Halsbury 's Law of England, 4th Edition Vol.
No. 16 paras 607 and 608, referred to.
3.1 Courts have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the per sons involved in the exercise of those powers and, there fore, should be attributed those powers on conditions which will only make these legal or valid.
Our law making bodies are not law unto themselves and cannot create or make all laws.
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid.
Such powers conferred must conform to the constitu tional inhibitions.
[232C D] 3.2 Legislation, both statutory and constitutional, is enacted from experience of evils.
But its general language should not necessarily be confined to the form that the evil had taken place.
Time works changes, brings into existence new conditions and purposes and new awareness of limita tions.
Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth.
This is particularly true of the constitutional construc tions.
Constitutions are not ephemeral enactments designed to meet passing occasions, but designed to approach immor tality as nearly as human institutions can approach it.
In the application of a Constitutional limitation or inhibi tion, the interpretation cannot be only of 'what has been ' but of 'what may be '.
Therefore.
in the interpretation of the provisions of an Act, where two constructions are possi ble, the one which leads towards constitutionality of the legislation would be preferred to that which has the effect of 171 destroying it.
If the Courts do not read the conferment of power in the aforesaid manner, the power is liable to be struck down as bad.
[233B D] 3.3 The Court must proceed on the premise that the law making authority intended to make a valid law to confer power validly or which will be valid.
The freedom therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid.
This is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed inten tion of the legislature or the implied purpose of the legis lation.
[234G H; 235A] 3.4 It has been said that if the legislature has mani fested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
This cannot be agreed to.
Our legis latures are limited by the constitutional inhibitions and it is made, that the Court should read their Acts and enact ments with the attribute that they know their limits and could not have intended to violate the Constitution.
It is true that the Court should be loath to read down where there are clear, unambiguous and positive terms in a legislation and should proceed with a straight forward method of strik ing down such legislations.
But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the Constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly.
[236H, 237A B] 3.5 The plain thrust of legislative enactment has to be found out in the inarticulate expressions and in the silence of the legislation.
In doing so, to say what the legislature did not specifically say is not distortion to avert any constitutional collision.
[237E] In the language of the relevant provisions of the instant cases, there is no intention of the legislature to flout the constitutional limitations.
[237E] Elliot Ashto Welsh 11 vs United States; , , 26 Ed.
308, referred to.
3.6 It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended.
Legislature had not 172 intended arbitrary or uncontrolled or whimsical power.
Indeed it considered.
This is not the proper way to read that power in the Regulation 9(b).
Para 522 of the Shastri Award, read properly, must be circumscribed with the condi tions indicated above as a necessary corollary or conse quence of that power.
It is also not reading to the legisla ture conditions which were not there in the second proviso to Article 311(2) of the Constitution.
[237H, 238A B] Union of India & Anr.
vs Tulsiram Patel, [1985] Supp.
2 SCR 131, relied on.
No doubt, absolute powers cannot be regulated without essential legislative policy, but in the instant cases properly read, absolute power was not there.
Power that was only constitutionally valid, that power can be presumed to have been given and if that presumption is made, conditions indicated above inevitably attach.
But these conditions are necessary corollary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and efficient running of the industry.
[238C, E] 3.7 In the circumstances power must be there, the power must be read down in the manner and to the extent indicated above, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be either by virtue of the silence of the provi sion indicating the contingencies of termination or by virtue of constitutional inhibitions.
That reading would not violate the theory that judges should not make laws.
[238F G] Shri Ram Krishna Dalmia vs Justice Tandolkar, ; at 299; Jyoti Prasad vs The Administrator for the Union Territory of Delhi, ; at 139; Union of India vs Col. J.N. Sinha & Anr., ; at 461; N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619; Commissioner of Sales Tax, M.P., Indore & Ors.
vs Radhakrishan & Ors.
, ; at 257; Olga Tellis & Ors. etc.
vs Bombay Municipal Corporation & Ors., [1985] Suppl.
2 SCR 51 at 89; R.M.D. Chamarbaugwalla vs Union of India; , at p. 935 and 938; Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769; R.L. Arora vs State of Uttar Pradesh, ; ; Jagdish Pandev vs The Chancellor, University of Bihar & Anr., ; , at pages 236 237; Sunil Batra vs Delhi Administration & Ors., ; ; Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; ; Charan Lal Sahu & Ors.
vs Union of India, , at 173 pages 53 and 54, paras 101 as well as p. 61 para 114; Shah & Co. vs State of Maharashtra, ; at 477 78; M. Pentiah and Ors.
vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc.
vs A. Rajappa & Ors., ; ; Minerva Mills Ltd.& Ors., vs Union of India & Ors.
, ; , at p. 239 and 259; Elliott Ashton Welsh, 11 vs United States, 26 Lawyers ' Edition 2nd, 308 at 327; Malinakhva Bysack vs Shyam Sunder Haldar & Ors., ; , at p. 544 545 and Municipal Committee, Amritsar & Anr.
vs State of Punjab & ors.
; , , referred to.
United States of America vs Edward A.
Rumely, 97 Law yers Edition 770 at 775; Reg.
vs Sadiers Co., ; , 460 and 463; Framamus vs Film Artists Association, at 542 and Seaford Court Estates, , referred to.
H.M. Seervaid 'Constitutional Law of India ', 3rd Edn.
1 pages 119 120 and Lord Denning: "The discipline of Law", at p. 12, referred to.
3.8 Termination simpliciter under Regulation 9(b) of the Regulation 1952, Delhi Road Transport Authority (Conditions of Appointment and Services) or similar powers can be exer cised only in circumstances other than those in Regulation 9(a).
The exercise of such powers can only be for purposes germane and relevant to the statute, viz., the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, or where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, or there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee etc., etc.
Therefore, each case of conferment of power involved should be judged on the aforesaid basis.
[236E G] 3.9 Having regard to the finality of the position of law and having regard to the theory that parties have ad justed their rights on the understanding of the law as it was, justice of the situation would be met if pending liti gations are examined and disposed of in the light of afore said principles.
Where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues 174 are pending, but previous terminations, where no lis is pending, will not be reopened.
To that extent, the law will be prospective.
[239D F] 4.
This Court.
under Article 141 of the Constitution, is enjoined to declare law.
The expression 'declared ' is wider than the words 'found or made '.
To declare is to announce opinion.
Indeed, the latter involves the process.
while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as a law.
The law de clared by this Court is the law of the land.
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful instrument of justice placed in the hands of the highest judiciary of this country.
Therefore.
there should be a more active and creative role for the courts in declaring what the law is.
[240E G] 1.
C. Golaknath & Ors.
vs State of Punjab & Anr.
, ; @ 811,813/84, referred to.
|
ivil Appeal No. 1372 of 1980.
From the Judgment and Order dated the 19.5.
1980 of the Punjab and Haryana High Court in C.W.P. No. 1378 of 1973.
G.L. Sanghi, Vivek Gambhir, Dhruv Mehta, S.K. Gambhir and Surender Karnail for the Appellants.
C.M. Nayar for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This appeal by special leave arises from the Judgment of the Punjab & Haryana High Court in Civil Writ Petition No. 1378 of 1973.
The appellants in the writ peti tion challenged the constitutionality of the East Punjab Molasses (Control) Amendment (hereinafter referred to as the "Amendment Act, 1973") on the ground that the said amendment had not re ceived the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved by the impugned amendment.
The Amendment Act.
1973 amended the provisions of the East Punjab Molasses (Control) Act.
1948 (East Punjab Act No. 11 of 1948) (hereinafter referred to as the "Principal Act").
as it stood at the relevant time.
The Principal Act had been earlier amended in 1950.
1964 and 1968.
It was subsequently amended in 1976.
The appellants have.
however.
challenged only the Amendment Act, 1973 and have significantly not challenged the earlier or subsequent amendments.
Rejecting the appellants ' contentions.
the High Court observed: .
We have very carefully gone through the petition and we have asked the learned counsel for the petitioners to point out any averment from the petition.
to show that the petitioners were dealing with molasses which were not covered under the definition of molasses given in the unamended Act.
but arc covered within the definition of molasses under the Amending Act.
No such averment has been made . .
The grievance of the petitioners that they have been made subject to the provisions of the Act in view of the Amending Act. thus does not stand substantiated from the averments made in the petition .
The appellants admitted before the High Court that, apart from the Principal Act, as enacted in 1948.
being an 'existing law '.
and therefore beyond challenge.
none of its provisions could be regarded as an unreasonable restriction on the freedom of trade.
commerce and intercourse.
The appellants, however. contended that the impugned provisions inserted in 1973 were null and void for the reason that the restrictions so introduced had not received the previous sanction of the President.
Section 2 of the Principal Act was amended in 1973 to define 'molasses ' as well as 'khandsari unit '.
By this amendment, a new definition of 'molasses ' was substituted in the place of the original definition [See Clause (c)].
Clause (f) of Section 2 was added to define a 'khandsari unit '.
502 Section 3 of the Principal 'Act empowered the Controller to "direct the owner or occupier of a sugar factory or any other person" to furnish returns of the stock of molasses in his possession.
This Section was amended in 1973 to bring a khandsari unit or distillery within the statutory ambit.
Section 3(A) had been added in 1964.
to empower the Control ler to direct the owner or occupier of a sugar factory or distillery, or any other person permitted to store and preserve molasses, to construct tanks for the storage of molasses.
This Section was amended in 1973 to bring a khand sari unit within its ambit.
Section 4 of the Principal Act says that no person shall, without a permit issued by the Controller, move molasses by road, rail, river or by any other means or sell or otherwise dispose of molasses to any person other than the Government or a person licensed by the Government in this regard.
It also authorises the Controller to direct the owner or occupier of a sugar factory to supply molasses of specified quantity and quality to such persons as the Con troller may direct.
This section was amended in 1964 to provide that no person shall store or preserve molasses without the Controller 's permit.
It was further amended in 1973 to bring a khandsari unit within the ambit of the controller 's power to direct supply of molasses.
Section 5 of the Principal Act empowers the Government to regulate prices from time to time and prescribes the manner in which molasses has to be graded, marketed, packed or stored for sale.
It was amended in 1976 in certain re spects which are not material.
Section 6 provides for the imposition of penalty in the event of contravention of any provision of the Act.
The Section was substituted in 1964 for the original Section.
It was amended in 1973 in certain respects.
Section 7 of the Principal Act refers to liability for breaches by corporation or company.
This Section has not undergone any change.
Section 8 of the Principal Act provid ed that no court should take cognizance of any offence punishable under the Act except on a report made by the Controller.
This section was substituted in 1964 to provide for the exercise of supervision and control by the Control ler over sugar factories through subordinates.
It was amend ed in 1973 by including a khandsari unit within its ambit.
Section 9 of the Principal Act provided for power of entry and seizure.
It was substituted in 1973 by a new section with certain changes which are immaterial.
Section 10 of the Principal Act provided for the procedure of seizure.
It was substituted by a new section in 1973, but the changes are not material.
Section 11 deals with the delegation of pow ers.
It has not undergone any change.
Section 12 of the Principal Act deals with the power of the Govern 503 ment to exempt any area or person from the provisions of the Act.
This Section was amended in 1973 to empower the Govern ment to exempt any kind of molasses from the provisions of the Act.
Section 13 of the Principal Act deals with the rule making power of the Government.
It was amended in 1973 to include khandsari unit or distillery within the scope of that Section.
These are the changes made in the Principal Act.
The substantial change introduced by the Amendment Act, 1973 is in the substituted definition of 'molasses ' so as to include within its meaning mother liquor produced in the final stage of manufacture of sugar or khandsari sugar.
The appellants being dealers in khandsari molasses are stated to be aggrieved by the expanded definition of 'mo lasses '.
'Molasses ' was defined under the unamended Section 2(c) of the Principal Act as follows: "2(c) 'Molasses ' means the heavy, dark coloured residual syrup drained away in the final stage of the manufacture of sugar by vacuum pans or in open pans in sugar factories either from sugarcane or by refining gur; when such syrup has a density of not less than 75 degrees brix and a for mentable sugar content (expresent as reducing sugars) 19 per cent. ' ' This definition was substituted by the Amendment Act, 1973 as follows: "2(c) 'molasses ' means the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar, by vacuum pans or in open pans, from sugarcane or gur, with or without the aid of power.
" The new definition of 'molasses ' under the amendment provi sion specifically refers to khandsari sugar, apart from sugar, while the unamended section 2(c) referred only to sugar.
Section 2(f), as introduced by the Amendment Act, 1973 defines 'khandsari unit ' as follows: "2(f) 'khandsari unit ' means any premises, including the land, godowns or out houses appurtenant thereto, wherein, or in any part of which a manufacturing process con 504 nected with the production of khandsari sugar from sugar cane or gur in open pans is carried on with or without the aid of power.
" The 'occupier of a khandsari unit ' is defined as "a person who has control over the affairs of a khandsari unit".
The definition of sugar factory ' has not undergone any change, and it reads as follows: "2(d) 'sugar factory ' means any premises, including the land, godowns or outhouses appurtenant thereto, whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans or in open pans is being carried on or is ordinarily so carried on, with the aid of power.
" The main object of the Amendment Act, 1973 is to clarify that the Principal Act applies in equal measure to a khand sari unit as it does to any other sugar factory.
The contention is that the provisions of the Amendment Act, 1973.
though not in themselves unreasonable restric tions, nevertheless bring the appellants under greater statutory control, and are, therefore.
invalid for want of previous sanction of the President in terms of the proviso to Article 304(b).
This challenge.
as seen above, has been rejected by the High Court for the reason that the appel lants ' business has been in equal measure controlled by the Principal Act itself.
The appellants being dealers in mo lasses.
the new definition of the term "molasses", which includes "khandsari sugar", does not subject their business to any greater control.
The appellants ' counsel.
Mr. G.L. Sanghi contends that the provisions of the Amendment Act.
1973 impose direct and immediate restrictions upon the appellants ' trade.
They are a burden on trade and they deter the appellants from trad ing.
They directly affect the freedom of trade and commerce.
They are not merely regulatory for the purpose of facilitat ing the free flow of trade and commerce.
They are restric tions hampering trade.
They may be justifiable as reasonable restrictions, but being restrictions unsupported by previous sanction of the President, they are nevertheless invalid.
Mr. C.M. Nayar, appearing for the respondents, on the other 505 hand.
contends that the impugned provisions of the Amendment Act, 1973 are regulatory measures enacted to facilitate trade and they do not come within the ban of the proviso to clause (b) of Article 304.
These provisions do not require the previous sanction of the President in terms of the proviso to Article 304(b).
Counsel on both sides.
in support of the respective contentions.
refer to the principle stated by this Court in Ariabari Tea Co., Ltd. vs State of Assam & Ors., ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 and State 0f Bihar & Ors.
vs Harihar Prasad Debuka & Ors. ; and other cases.
[1967] (21 SCR 361; [1971] (11 SCC 59; [1986](1) SCR 939;[1989] (31 SCC 211;[1990] (31 SCC 87; ; ; [1970] (11 SCR 400; [1955] (11 SCR 380; SCC 541.
It is not and cannot be.
disputed that if the impugned provisions are not merely regulatory with a view to facili tating trade.
but are in quality and substance restrictive.
though reasonable as restrictions can be.
and if they in effect constitute a hinderance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President.
The question, however is the Principal Act.
being an "existing law" and, therefore, beyond challenge.
do the impugned provisions.
introduced in 1973.
being additional provisions.
enlarge in substance and quality the scope and ambit of the Principal Act.
thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the provi so to clause (b) of Article 304? In other words. does the Amendment Act.1973.
restrict the appellants ' business to a greater extent or is it merely clarificatory in so far as.
at any rate.
the appellants are concerned? The point then really is.
has the amendment made the Act more stringent in so for as the appellants are concerned? If the answer is negative.
as the High Court has held.
the appellants are not aggrieved.
and cannot therefore.
success fully challenge the Amendment Act.
Referring to the principle of contemporanea exposition.
Mr. Sanghi says that the Act.
as it stood before the amend ment.
was not understood to apply to khandsari unit.
and consequently to the business of the appellants.
and it became applicable only as a result of the amendment.
We do not agree that this submission is right.
The High 506 Court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them.
The High Court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure.
This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari.
Even if it is true that persons who dealt with the statute under stood its provisions in a restricted sense, such mistaken construction of the statute did not bind the Court, so as to prevent it from giving it its true construction.
(see the observation of Lord Blackburn in The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670), as quoted in National & Grindlays Bank Ltd. vs The Municipal Corporation of Greater Bombay, ; We are of the view that the reasoning of the High Court was correct.
The Principal Act being an 'existing law ' within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarifica tory, the previous sanction of the President was not re quired.
See the principle stated in Syed Ahmad Aga vs State of Mysore, We do not, however, ex press any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic.
The appeal is dismissed with costs throughout.
P.S.S. Appeal dismissed.
| IN-Abs | The East Punjab Molasses Control (Amendment) Act, 1973 substituted the definition of "molasses" in section 2(c) of the East Punjab Molasses (Control) Act, 1948 to mean "the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar".
The unamended section 2(c) had hitherto referred only to sugar.
Consequent changes were also made in other provisions of the Principal Act to give effect to the amendment.
The appellants dealers in khandsari molasses aggrieved by the expanded definition of molasses challenged the con stitutionality of the Amendment Act, 1973 on the ground that it had imposed direct and immediate restrictions upon their trade and commerce unsupported by the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved solely by reason of the amendment on the view that their business had been in equal measure controlled by the Principal Act itself.
In this appeal by special leave, the appellants reiter ated their contentions advanced before the High Court.
For the respondents it was contended that the provisions of the Amendment Act, 1973 were regulatory measures enacted to facilitate trade and therefore they did not come within the ban of the proviso to clause (b) of Article 304 to require the previous sanction of the President.
500 Dismissing the appeal, the Court, HELD: 1.
The main object of the Amendment Act, 1973 was to clarify that the Principal Act applies in equal measure to a khandsari unit as it does to any other sugar factory.
It was always well understood in trade that khandsari sugar was also sugar and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khand sari.
The Act did not become applicable to the appellants only as a result of the amendment.
Even though persons who dealt with the statute may have understood its provisions in a restricted sense, such mistaken construction of the stat ute did not bind the Court so as to prevent it from giving it its true construction.
[316A C] The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670 and National & Grindlays Bank Ltd. vs The Munic ipal Corporalion of Greater Bombay; , , re ferred to. 2.
The Principal Act being an "existing law" within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act being clarificatory, the previous sanction of the President was not required.
[316D E] Syed Ahmad Aga vs Stale of Mysore, , referred to.
|
ivil Appeal No. 1213 of 1979.
583 From the Judgment and Order dated 24.4.
1978 of the Gujarat High Court in L.P.A. No. 97 of 1978.
Appellant in person.
H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellant, D.M. Bharati, challenges the validity of an order dated 30.9.
1976 passed by the Deputy Municipal Commissioner of the Municipal Corporation of the City of Ahmedabad.
By the said order, the Deputy Municipal Commissioner, consequent on the staff of the Municipal Corporation working in the Town Planning Estab lishment having to be absorbed in the Municipal Corporation, "reverted" the appellant from the post of junior draftsman in the Establishment and appointed him to act in the post of a tracer in the Town Development Department of the Corpora tion.
The High Court rejected his writ petition and hence the present appeal.
It is necessary to state the relevant facts.
The appel lant had been appointed as a tracer in the Estate Department of the Municipal Corporation on 26.6.
1955 and worked there till 18th February, 1957.
It appears that the Government appointed a Town Planning Officer under the provisions of section 31 of the Bombay Town Planning Act.
The Town Planning Officer had to be supplied with an establishment.
The establishment of the Town Planning Officer was admitted ly temporary.
An arrangement was entered into between the two authorities that the arbitrator in the planning office could select such persons from the Corporation for his establishment as he thought fit.
The Town Planning Officer demanded the services of the appellant and he was appointed as a tracer in the Town Planning Establishment on 22.2. 1957.
It is not clear whether the appellant went therein by way of transfer or by way of deputation as the original order dated 22.2.
1957 is not available with us.
However, the High Court and the appellant have proceeded on the footing that the appellant was deputed from the Municipal Corporation to the Town Planning Establishment.
Sometime later, the post of a junior draftsman fell vacant in the Town Planning Establishment.
The appellant tells us that he was asked to take charge of that post on 4.12.
It appears that Mr. Yevla (Respondent No. 6 in the W.P.) was posted to fill in that vacancy but, 584 on 21.4.
1960, his appointment was cancelled and the appel lant was appointed as junior draftsman in the Town Planning Establishment w.e.f.
The appellant tells us that he had also been subsequently recommended for appointment to the post of Surveyor cum Draftsman, which was a higher post and which had fallen vacant on 28.2.
But before this proposal could materialise the appellant was suspended on 5th December, 1962 by the Corporation and was removed from service on 13.5.64.
The Industrial Court granted approval to the removal of the appellant from service but made certain observations suggesting that he may be re appointed to the said post.
The appellant filed a writ petition against the order of the industrial court.
The High Court eventually, set aside the order of the industrial court on 1.2.
1969 and remanded the matter for fresh disposal to the industrial court.
The Municipal Corporation preferred S.L.P. 48/71 in this Court which was dismissed on 27.1.71.
The industrial court re heard the matter pursuant to the order of the High Court and declined approval to the order of removal of the appellant from service with the result that the order of removal dated 13.5.64 stood vacated and an order was passed on 3.3.71 by the Municipal Commissioner that the appellant was reappointed as a junior draftsman in the Town Planning Establishment.
In the meantime, on 16.8.
1965, consequent on the recom mendations of the industrial court, the appellant was ap pointed as junior draftsman in the Estates Department of the Municipal Corporation where he had been previously working.
This purported to be a fresh appointment and so the appel lant made a representation that he should be appointed in this post according to his seniority.
No orders were passed on this representation except a direction that the appellant should join service within a week of receipt of the memo and then represent his case for seniority, if he so desired.
Thereupon the appellant accepted the order re appointing him as junior draftsman in the Estates Department and took charge of his office.
The order of the High Court has found that the appellant was relieved from service on 1.10.1967 because of retrenchment.
When the above proceedings in the case of the appellant were taking place respondents 6 to 11 were directly selected as junior draftsmen by the Staff Selection Committee and promoted to the said post.
The appellant did not appear before the Staff Selection Committee perhaps because of the various proceedings above referred to, as a result of which he was under suspension from 5.12. 1962 to 13.5.
1964, when he was removed and then again till 16.8.65, when he was re 585 appointed as a draftsman.
Once the proceedings against the appellant came to a close, the Municipal Commissioner passed order on 3.3. 1971, cancelling the order dated 13.5.
1964 removing the appellant from service.
He was re appointed as a junior draftsman in the Town Planning establishment.
Subsequently, however, the Town Planning Establishment was abolished, and the appellant was served with the order dated 30.9.
1976, by which he was reverted to the services of the Municipal Corporation.
On such reverter, however, as we have seen, he was posted as a tracer and not as a junior drafts man.
The appellant filed an appeal against the said order before the Standing Committee but his appeal was rejected on 15.3.
1977 on the ground that in the Corporation direct recruits were already working as junior draftsmen, and that there was no post of junior draftsman vacant in the Corpora tion, to which the appellant could be appointed.
The appel lant thereupon filed a writ petition and, as already stated, he was unsuccessful therein and hence this present appeal.
The appellant 's contention before the High Court was two fold.
The first contention was that since he had been ap pointed as junior draftsman in the Town Planning establish ment by the order dated 21.4.
1960, he could not be repatri ated as a tracer in the Municipal Corporation, that is, to a lower post.
It was also contended that the order dated 30.9.
1976 has been passed by the Deputy Municipal Commissioner, who is a person lower in rank than the person who appointed him, namely, the Municipal Commissioner and that, therefore, the order dated 30.9.76 was passed by an officer without jurisdiction.
These two arguments have been reiterated before us also.
So far as the second contention is concerned it may at once be pointed out that if the order dated 30.9.76 is an order of reversion by way punishment, the appellant 's contention may be correct in view of the provi sions contained in sections 53 and 56 of the Bombay Provin cial Municipal Corporation Act.
However, if the order dated 30.9.76 has merely given effect to the abolition of the Town Planning establishment and restored the appellant to the post he can properly hold in the Municipal Corporation then no element of reversion would be involved and the Deputy Commissioner would be quite competent to pass the order in question.
The only question therefore that survives for consideration is regarding the validity of an order dated 30.9.76 in so far as it purported to appoint the appellant as a tracer in the Municipal Corporation instead of as a junior draftsman.
We may mention here that a point was also made that the appellant should not have been appointed as an "acting" tracer but it has been explained by the Corporation that it was a verbal inaccuracy and that the appointment 586 of the appellant in the Municipal Corporation is not an acting but a substantive one.
This point, therefore, does not survive.
We shall proceed on the assumption that the appellant went to the Town Planning establishment (which was a tempo rary one) by way of deputation from the Municipal Corpora tion.
There is some controversy as to whether the appellant was properly promoted as junior draftsman in the Town Plan ning establishment.
There is a suggestion that both the demand by the Town Planning establishment for the services of the appellant as well as his promotion therein were not acceptable to the Corporation and that they were the conse quence of undue favour shown to the appellant by the Arbi trator who was the appointing authority.
We do not think it is necessary to go into this controversy here because it is quite clear that the appellant 's promotion as junior drafts man and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpo ration and joined the Town Planning establishment he was a tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e., as tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post, that benefit cannot be denied to him.
In the present case, unfortunately, what happened was that when junior draftsmen were recruited by the Municipal Corporation in 1959 60 and in 1963 64, persons were selected and ap pointed to the said posts through the machinery of a Staff Selection Committee.
The appellant submits that he had been wrongly overlooked and that the respondents had been wrongly promoted as junior draftsmen.
He points out that, under the regulations, junior draftsmen had to be appointed by promo tion on the basis of seniority cure fitness and that the question of Staff Selection Committee did not at all arise.
According to him, the procedure for selecting by Staff Selection Committee would not come into force when the recruitment was restricted to persons in the municipal service.
In the present case, however, all the persons, who were appointed as junior draftsmen during the appellant 's absence were from the municipal service.
The appointment should, therefore, have been made directly by promotion without the intervening machinery of the Staff Selection Committee and the appellant being the seniormost tracer should have been appointed as junior draftsman in preference to respondents 6 to 11.
There are considerable difficulties in accepting this case of the appellant.
In the first place, what he is really attempting is to challenge 587 the appointments of respondents 6 to 11, which had been made in 1963 64, by a writ petition filed in 1978, more than a decade after the above selections and appointments had been made It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had disapproved the appellant 's removal from service by the order dated 13.5.
At least in 1971.
when the order was passed restoring him to the position of junior draftsman in the Town Planning establishment, he could and should have taken steps to obtain his "pro forma" promotion in the parent department.
The appellant says he was making some representations but this was not enough.
The fact is that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the writ petition or atleast upto 1.10.1976, when he made a represen tation against the order of reversion.
Quite apart from the above consideration, there is no material before us to show that the appointments of respond ents 6 to 11 were made irregularly and that the constitution of a Staff Selection Committee for selecting junior drafts men did not conform to the regulations and the provisions of the Bombay Provincial Municipal Corporations Act.
The Corpo ration has stated that they have been directly recruited.
The High Court has pointed out that the relevant regulation gave a discretion to the Commissioner to make the appoint ments by promotion or by direct recruitment.
section 54(2) of the Municipal Act, on which the petitioner relies, no doubt dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found as a fact at more than one place in the judgment that the respondents 6 to 11 had been directly selected as junior draftsmen after proper scrutiny by the Staff Selection Committee.
Even the appel lant stated before us that there was a circular among the municipal employees in regard to these appointments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appro priate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and not forward his claim for promotion as junior draftsman by virtue of his 588 seniority.
That he failed to do at the crucial time.
It may be that this was because he had certain difficulties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no imme diate steps to claim his rights in the parent department.
He was apparently satisfied with his restoration as junior draftsmen in the Town Planning establishment.
We are in agreement with the High Court that, having regard to the circumstances of the appointment of respondents 6 to 11, he was not entitled to any promotion in preference to them and that he cannot claim appointment as junior draftsman when there was no such post in 1976 to which he could be appoint ed.
It is not his case that any posts of junior draftsmen became vacant after his reversion to the parent department to which he could have been promoted.
The appellant contends that the fact that his eligibili ty for appointment as a junior draftsman in the parent department had been accepted by the order dated 16.8.1965 referred to earlier.
It is also pointed out that subsequent ly a question arose of the seniority as between the appel lant and one Kavadia.
This was gone into and the Municipal Corporation accepted the position that the appellant pos sessed qualifications required for the post of junior draftsman and that he was senior to Mr. Kavadia.
This was sometime in 1966.
We, however, find that this aspect of the matter does not help the appellant because the order dated 16.8.
1965 was passed in pursuance of the recommendation of the industrial court, while approving the appellant 's remov al, that he may be reconsidered for appointment.
In view of this order of the industrial court, the appellant had to be given a posting and since he had been discharged from serv ice when he was a junior draftsman, orders were passed appointing him as junior draftsman.
This again was made as an order of fresh appointment and the appellant 's represen tation that he should be given seniority was not accepted, rightly, for the reason mentioned above.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparent ly, no challenge to this order.
Moreover, these orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of seniority be tween appellant and Kavadia in 1966 do not help the appel lant 's case.
Learned counsel for the Municipal Corporation submitted to us that the appellant had not joined his post as a tracer in compliance 589 with the order dated 30.9.76 and that by now he has also reached the age of superannuation.
We are not here concerned in this appeal with the consequences of "non acceptance" of the order dated 30.9.76 by the appellant.
We are only con cerned with the question whether the appellant was rightly appointed as tracer on his reverter to the Municipal Corpo ration and that question we have answered in the affirma tive.
We do not express any opinion on the questions raised by the learned counsel for the respondent.
In the circumstances, we are of the opinion that there are no grounds to interfere with the order of the High Court.
We, therefore, dismiss this appeal but, in the cir cumstances, we make no order as to costs.
G.N. Appeal dis missed.
| IN-Abs | The appellant was appointed as a Tracer in the Municipal Corporation in 1955.
with the appointment of a Town Planning Officer in 1957.
the appellant came to be appointed as a Tracer in the Town Planning Establishment.
Later, the post of Junior Draftsman fell vacant in the Town Planning Estab lishment.
Respondent No. 6 was posted to fill the vacancy.
However, his appointment was cancelled shortly thereafter and the appellant was appointed as Junior Draftsman with effect from 4.12.
The next higher post of Surveyor cum Draftsman fell vacant in 1962.
Meanwhile, the appellant was suspended.
The Industrial Court granted approval for his removal from service, but suggested that he may be reappointed.
Accord ingly.
the appellant was appointed afresh as junior Drafts man in the Estates Department of the Municipal Corporation where he was previously working.
Aggrieved, the appellant filed a writ Petition before the High Court.
Setting aside the order.
the High Court remanded the matter to the Industrial Court for fresh dis posal.
The Special Leave Petition preferred by the employer, viz., the Municipal Corporation against the High Court 's order was dismissed.
The Industrial Court reheard the matter and declined approval for the removal of the appellant from service.
The appellant was reappointed as Junior Draftsman in the Town Planning Establishment which was abolished subsequently, and he was reverted to the service of the Municipal Corporation as a Tracer, and not as a Junior Draftsman.
The appellant filed an appeal against the said order.
but it was rejected on the ground that direct recruits were already working as Junior Draftsmen and that there was no vacancy against which the appellant could be appointed.
581 The appellant moved the High Court by way of a Writ petition.
contending that since he had been appointed as junior Draftsman in the Town Planning Establishment, he could not be repatriated to a lower post, viz. Tracer in the Municipal Corporation.
It was also contended that the Deputy Municipal Commissioner, was a person lower in rank than the appointing authority viz., the Municipal Commis sioner and hence the order passed by him was without juris diction.
The High Court proceeded on the footing that the appel lant was on deputation from Municipal Corporation to the Town Planning Establishment and dismissed the writ Petition.
The appellant has preferred this appeal against the High Court 's order dismissing his Writ Petition.
Dismissing the appeal, this Court.
HELD: 1.
I The appellant 's promotion as junior Draftsman and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpora tion and joined the Town Planning Establishment he was a Tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e. as Tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post.
that benefit cannot be denied to him.
1.2 The order dated 16.8.
1965 was passed in pursuance of the recommendation of the Industrial Court, while approv ing the appellant 's removal, that he may be reconsidered for appointment.
In view of this order of the Industrial Court, the appellant had to be given a posting and since he had been discharged from service when he was a Junior Draftsman.
orders were passed appointing him as junior Draftsman.
This again was made as an order of fresh appointment and the appellant 's representation that he should be given seniority was rightly not accepted.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparently, no chal lenge to this order.
Moreover, theses orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of his seniority in 1966 are of no relevance to the present case.
2.1 What the appellant is really attempting is to challenge the 582 appointments of Respondents 6 to 11, which had been made in 1963 64, by a Writ Petition filed in 1978, more than a decade after the above selections and appointments had been made.
It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had and disapproved the appellant 's removal from service by the order dated 13.5.1964.
Atleast in 1971, when the order was passed re storing him to the position of Junior Draftsman in the Town Planning Establishment, he could and should have taken steps to Obtain his "pro forma" promotion in the parent depart ment.
The fact remains that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the Writ Petition or atleast upto 1.10.1976, when he made a representation against the order of reversion.
2.2 section 54(2) of the Municipal Act, dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found that respondents 6 to 11 had been directly selected as Junior Draftsmen after proper scrutiny by the Staff Selection Committee.
Admittedly there was a circular among the Municipal employees in regard to these appoint ments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appropriate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and put forward his claim for promotion as Junior Draftsman by virtue of his seniority.
That he tailed to do at the crucial time.
It may be that this was because he had certain diffi culties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no immediate steps to claim his rights in the parent depart ment.
He.was apparently satisfied with his restoration as Junior Draftsman in the Town Planning Establishment.
Having regard to the circumstances of the appointment of respond ents 6 to 11, the appellant was not entitled to any promo tion in preference to them and he cannot claim appointment as Junior Draftsman when there was no such post in 1976 to which he could he appointed.
|
tion (Civil) No. 112 of 1990 etc.
(Under Article 32 of the Constitution of India.) P.S. Poti.
E.M.S. Anam, V.J. Francis and M.N. PopIi for the Petitioners.
T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambi ar.
K.R. Kurup.
section Balakrishanan, Vijay Kumar, T.T. Kunhi Kannan.
section Vasudevan and P.K. Manohar for the Respond ents.
564 The Judgment of the Court was delivered by AHMADI, J.
In special leave petitions, leave granted.
An autonomous body called the Kerala Water and Waste Water Authority was constituted with effect from 1st April, 1984 under Section 3(1) of the Kerala Water and Waste Water Ordinance, 1984 (No, 14 of 1984) which Ordinance was brought into force w.e.f.
1st March, 1984.
This ordinance was re placed by similar Ordinances issued from time to time, the last being Ordinance No. 27 of 1986 which was in turn re placed by the Kerala Water Supply and Sewerage Act, 1986 (Act No. 14 of 1986), (hereinafter called 'the Act '); Sec tion 1(3) whereof provides that it shall be deemed to have come into force on 1st March, 1984.
This Act, besides pro viding for the establishment of an autonomous authority to be called the Kerala Water Authority, makes provision for the development and regulation of water supply and waste water collection and disposal and for matters connected therewith.
There is no dispute that the functions which were carried on by the Public Health Engineering Department (PHED) were transferred to the autonomous body on the enact ment of the Ordinance No. 14 of 1984.
After the enactment of the Act, every person working in the PHED became the employ ee of the Kerala Water Authority (for short 'the Authority ') by virtue of Section 19(1) of the Act, which reads as under: "Transfer of employees to the Authority Save as otherwise provided in this section, every person who was employed in the Public Health Engineering Department of the Government shall, on and from the appointed day become an employee of the Authority and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions, and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if this Act had not come into force and shall continue to do so until his employment in the Authority is terminated or until his remuneration or other terms and conditions of service are revised or altered by the Authority under or in pursuance of any law or in accordance with any provision which for the time being governs his service: Provided that nothing contained in this sub section shall apply to an employee in the cadres of the Administrative ? 565 Officers, Financial Assistants Divisional Accounts, Typists and Stenographers, who, by notice in writing given to the Government and the Authority within such time as the Govern ment may, by general or special order, specify, intimates his intention of not becoming an employee of the Authority: Provided further than an employee referred to in the preced ing proviso shall continue to be an employee under the Government and shall be provided elsewhere in any post or other service under the Government.
" Sub sections (3) and (6) of Section 19 make it clear that such transfer of service shall not entitle the employee to claim any compensation under the nor shall it amount to retrenchment or abolition of post under any extant rule, regulation or order applicable to Government servants.
Thus, the erstwhile staff of the PHED was by the thrust of Section 19(1) transferred on the establishment of the Authority.
This would naturally concern those persons only who were in the employment of the PHED before the establishment of the Authority w.e.f.
1st April, 1984.
The staff members employed by the Authority after its constitution were naturally appointed under the provisions of the concerned statute.
Since the Act has retrospective effect, reference may be made to Section 8(1) of the Act which reads thus: "Appointment of officers and staff Subject to the provi sions of sub section (2), the Authority may appoint for the purpose of enabling it to carry out its powers, duties and functions under this Act, a Secretary and such other offi cers and staff as may be required against posts duly sanc tioned by it: Provided that the Authority shall obtain the previous ap proval of the Government for the creation of post above the rank of the Executive Engineer.
" By virtue of Section 8(3), except as provided by sub sec tions (1) & (2), the appointment and conditions of service of the officers and employees of the Authority are to be governed by rules made by the Government from time to time.
Although the Act is deemed to have come into force w.e.f.
1st March.
1984, Section 69 became effective 566 from the date of publication of the Act in the Gazette i.e. 4th August, 1986.
That section reads as follows: "Amendment of Act 19 of 1970 With effect from the date of publication of this Act in the Gazette, the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 (19 of 1970) shall have effect subject to the following amendment, namely: in clause (a) of Section 2, the words and figures "or the Kerala Water Authority" established under section 3 of the Kerala Water Supply and Sewerage Act 1986;", shall be added at the end.
" Even though Act 19 of 1970 stood so amended by the force of Section 69, actual effect could be given after issuance of Notification No. G.O. (MS) No. 38/88/P & ARD dated 30th July, 1988 on which date item (LIII) was added to the rele vant rules as "Amendment of the Rules In the Kerala Public Service Com mission (consultation by Corporation and Companies) Rules, 1971, in Clause (d) of rule 2, after item (LII), the follow ing item shall be added, namely: (LIII) The Kerala Water Authority.
" This amendment was considered necessary with a view to bringing the Authority within the purview of PSC so that it may seek the advice of that body on matters relating to the methods of recruitment of its employees, etc.
From the above discussion it becomes clear that the employees of the Authority can be divided into four distinct groups, viz., (i) those who were in the employment of PHED before the constitution of the Authority and were trans ferred to the Authority (ii) those whom the Authority em ployed between 1st April.
1984 and 4th August, 1986 (iii) those who were appointed between 4th August, 1986 and 30th July, 1988 and (iv) those who were appointed after 30th July, 1988.
The petitioners in this batch of matters are serving in different capacities, such as, cleaners, pump operators, draftsmen, drivers, etc.
They claim that they were appointed through the Employment Ex 567 change between 1981 and 1988.
They contend that they have been compelled to approach this Court as their services are likely to be terminated as has been done in the case of a few of their colleagues.
They contend that till the issuance of the notification dated 30th July.
1988 amending the concerned PSC rule (amendment extracted earlier) there was no question of the Authority consulting the PSC and there fore, appointments made prior to that date cannot be termed as irregular or unauthorised and cannot be determined on that ground.
They contend that as in a few cases the High Court of Kerala failed to appreciate this true legal posi tion and refused to grant relief to employees whose services were threatened, the Managing Director of the Authority issued instructions to his subordinates to terminate the services of similarly placed employees, thereby compelling the present petitioners to approach this Court so that all such employees are uniformly governed by this Court 's order.
They point out that in Civil Appeals Nos. 472 to 478 of 1988 arising from the High Court decision.
and Writ Petitions (Civil) Nos. 857 and 1135 of 1987, this Court passed the following order on 1st February, 1988: "Special leave granted.
Heard counsel for the parties.
We are of the view that in the facts and circumstances of these cases the services of such of the appellants as pos sess the requisite qualifications should be regulated in accordance with the Kerala Public Service Commission (Addi tional functions as respects certain Corporations and Compa nies) Act, 1970 and until such regularisation is made, no appointment on similar posts from outside be made.
If there be any excess employees now in service employment, it will be open to the Authority to terminate their services on condition that as and when vacancies arise, they shall first be considered for appointment keeping the direction indicat ed above in view.
Recruitments in future will, however, be in accordance with the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 and the Kerala Water Supply and Sewerage Act, 1986.
" Thereafter in another batch of special leave petitions Nos. 4385 to 4387 of 1988 this Court passed the following order on 24th March, 1988: 568 "Heard learned counsel for parties.
The only direction which we can give in the facts and circumstances of the case will be in case after all those who have been regularly selected by the Public Service Commission are appointed and thereaf ter any vacancies are left, the same should be given to those who, like the petitioners, have already been in serv ice taking into consideration their seniority.
Every step should be taken by the Water Authorities to regularise the services of such people who can be appointed under our direction as indicated above.
There will be no further direction in this case.
The other person who may be thrown out of employment on account of the direction of the Water Authority which is impugned before us, may appear before the Public Service Commission in the next examination, The State of Kerala has informed us that age bar would be waived.
The petitions are disposed of accordingly.
" The Authority treated these orders as confined to the work men who had filed the proceedings and did not extend the ratio to others similarly placed.
Not only that, the Author ity, contend the petitioners, placed different interpreta tions on the aforesaid orders and continued to terminate the services of the employees.
Another group of writ petitions Nos.
525,527,528, and 503 of 1988 came up before this Court on 28th November, 1988 when this Court passed the following Order: "Mr. Krishna Murthy Iyer appearing for the Kerala Water Authority states that the claims of the petitioners can be divided into three categories, namely (1) those who had been employed by Public Health Engineering Department before the Kerala Water Authority was constituted, (2) those who get employed between 1.4.1984 and 1986 and (3) the persons appointed after 1986.
The Kerala Water Authority is given three months ' time to examine the individual cases of these groups and take its decision accordingly.
We direct the Authority to place its conclusions before the Court before giving effect to them.
Status quo as on today will continue until further orders.
" The grievance of the petitioners is that no action was taken by the Authority within the time allowed nor has it taken any action till today to implement the said order.
The petitioners also contend that the employees are compelled to knock at the doors of different courts as the Authority continues to terminate the services of the employees 569 not with standing the aforequoted orders passed by this Court.
Mr. P.S. Poti, the learned counsel for the petition ers, therefore, made a fervent appeal that this Court should pass an order laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that these low income group employees are not required to knock at the doors of differ ent courts to protect themselves from the threatened arbi trary action of the Authority terminating their services.
In other words he wants this Court to formulate a scheme for the regularisation of the services of all similarly placed employees which would put an end to all pending cases and future cases which are bound to arise if the Authority continues its present policy.
The claims made by the employees in this group of cases is contested mainly on the plea that their tenure and serv ice conditions were regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service Rules, 1958 (hereinafter called `the Rules ') which were statutory in character and were, therefore, binding on the Authority as well as the employees.
It is contended that the employees belonging to different categories were appointed on different dates by the PHED prior to 1st April, 1984 under this rule and, therefore, their services could only be regulated thereun der.
After the autonomous Authority was constituted w.e.f.
1st April, 1984 on the enactment of Ordinance 14 of 1984, the Authority passed a Resolution No. 8 on 25th April, 1984 adopting the aforesaid Rules and hence all appointments made after 1st April, 1984 also came to governed by Rule 9(a)(i) of the Rules till Section 69 of the Act came into force w.e.f.
4th August, 1986 and not 30th July, 1988 when the relevant rule was amended by the introduction of item (LIII) referred to earlier.
Appointments made after 4th August, 1986 are clearly subject to the requirement of Section 69 of the Act and the Authority cannot act in contravention there of.
Had it not been for Court orders restraining the Author ity from terminating their services, the services of all those who were governed by Rule 9(a)(i) would have been terminated on the expiry of 180 days.
The text of that rule may be noticed at this stage: "Where it is necessary in the public interest, owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the appointing authority may appoint a person, otherwise than in accordance with the said rules, temporarily.
" 570 The first proviso is not relevant for our purpose but reli ance was placed on the second proviso which reads as under: "Provided further that a person appointed under this clause by direct recruitment to a post other than teaching post and a post covered by the proviso to clause (iii) of rule 10(b)] shall not be allowed to continue in such post for a period exceeding three months." (i.e. one hundred eighty days) The rule further requires that a person appointed under clause (i) should be replaced as soon as possible by a member of the service or an approved candidate qualified to hold the post under the said rules.
Such replacement must take place in the order of seniority based on length of temporary service in the unit.
It is, therefore, the case of the Authority that appointments made under this rule were purely temporary, not to exceed three months, and had to be terminated on the expiry of the said period and it was not open to the Authority to continue their services even by reappointment unless fresh candidates were not available for reappointment through employment exchange.
Therefore, had it not been for the restraint orders issued by different Courts, the Authority contends it was under an obligation to act in conformity with the above rules.
However, as regards those who had joined service prior to 1st April.
1984 in different categories, the Authority passed a resolution on 30th January, 1987 to the following effect: "Resolved to recommend the Government the regularisation of the service of the employees recruited in the erstwhile PHED and still working in the Kerala Water Authority.
" The Government, it seems, has not taken any decision in this behalf as yet.
Since the counter filed on behalf of the State Government is silent on this point we inquired of the learned counsel for the State to clarify the position.
We were told that since the Authority was an autonomous body it was free to regularise the services of such employees, if it so desired, without the concurrence of the State Government.
While admitting the fact that appointments were made from the lists submitted by various District Employment Officers, the Authority contends that as the appointments were gov erned by Rule 9(a)(i) they could not ensure beyond three months and the termination of their employment did not fall within the ambit of `retrenchment ' as understood under the 571 .
In any case even otherwise the application of that law is specifically excluded by Section 19(3) of the Act and hence the benefit of that law cannot be extended to the employees of the Authority.
The contention that the action of the Authority to terminate the services is violative of Article 14 is repelled on the plea that acting in conformity with a statutory Rule 9(a)(i) can never be branded as arbitrary.
Lastly it is contended that the Authority was not directed to apply this Court 's orders passed in some of the proceedings referred to earlier to all similarly situated employees as the Court 's orders were based on `the fact and circumstances of these cases ' and were not intended to be of general application.
With refer ence to the order of 24th March, 1988 it is said that the Authority has moved a review application which is pending.
The Authority contends that as there is no infringement of any fundamental right, the writ petitions brought under Article 32 of the Constitution cannot be sustained.
The above is the stand taken by the Authority.
The State Govern ment has by and large supported this stand and, therefore, we need not restate the contentions raised in their counter.
The respondents, therefore, contend that the employees are not entitled to any relief whatsoever and the appeals/peti tions deserve to be dismissed with costs.
The question of regularisation in service must be exam ined keeping in mind the historical as well as the constitu tional perspectives.
During the colonial rule industrial growth in the country was tardy and most of the large sized industries were controlled by British interests.
These establishments employed Indian labour on wages far below the sustenance levels.
Men, women and even children were required to work for long hours in thoroughly unhygien ic conditions.
Because of large scale unemployment there was a surplus labour market which the employers could and did exploit.
This virtually forced the labour to accept employ ment on terms unilaterally dictated by the employers.
The relationship between the employer and the employee being purely contractual, the hire and fire rule governed.
Those were the days of laissez faire when contractual rights were placed above human rights.
The concepts of dignity of labour and fair remuneration for work done were wholly alien.
The workers had to work in appalling conditions and at low wages with no job security.
After we attained independence the pace of industrial growth accelerated.
Our Constitution makers were aware of the hardships and insecurity faced by the working classes.
The Preamble of our Constitution obligates the State to secure to all its citizens social and economic justice, besides political justice.
By the 42nd Amendment, the Pream 572 ble of the Constitution was amended to say that ours will be a socialistic democracy.
In furtherance of these promises certain fundamental rights were engrafted in Part 111 of the Constitution.
The Constitution guarantees `equality ', abhors discrimination, prohibits and penalises forced labour in any form whatsoever and extends protection against exploitation of labour including child labour.
After extending these guarantees, amongst others, the Constitution makers proceed ed to chart out the course for the governance of the country in Part IV of the Constitution entitled `Directive Princi ples of State Policy '.
These principles reflect the hopes and aspirations of the people.
Although the provisions of this part are not enforceable by any court, the principles laid down therein are nevertheless fundamental in the gover nance Of the country and the State is under an obligation to apply them in making laws.
The principles laid down therein.
therefore, define the Objectives and goals which the State must endeavour to achieve over a period of time.
Therefore, whenever the State is required to make laws It must do so consistently with these principles with a view to secur ing social and economic freedom so essential for the estab lishment of an egalitarian society.
This part, therefore, mandates that the State shall strive to promote the welfare of the people by minimising the inequalities in income and eliminating inequalities in status, facilities and opportu nities; by directing its policy towards securing, amongst others, the distribution of the material resources of the community to subserve the common good; by so operating the economic system as not to result in concentration of wealth; and by making effective provision for securing the right to work as also to public assistance in cases of unemployment, albeit within the limits of its economic capacities.
There are certain other provisions which enjoin on the State certain duties, e.g. securing to all workers work, a living wage, just and humane conditions of work, a decent standard of life.
participation in management, etc., which are aimed at improving the lot of the working classes.
Thus the Pream ble promises socio economic justice, the fundamental rights confer certain justiciable socio economic rights and the Directive Principles fix the socio economic goals which the State must strive to attain.
These three together constitute the core and conscience of the Constitution.
India is a developing country.
It has a vast surplus labour market.
Large scale unemployment offers a matching opportunity to the employer to exploit the needy.
Under such market conditions the employer can dictate.
I his terms of employment taking advantage of the absence of the bargaining power in the other.
The unorganised job seeker is left with no option but to accept employment on take it or 573 leave it terms offered by the employer.
Such terms of em ployment offer no job security and the employee is left to the mercy of the employer.
Employers have betrayed an in creasing tendency to employ temporary hands even on regular and permanent jobs with a view to circumventing the protec tion offered to the working classes under the benevolent legislations enacted from time to time, One such device adopted is to get the work done through contract labour, It is in this backdrop that we must Consider the request for regularisation in service.
Before we deal with the case on hand it would be advan tageous to refer to some of the decision bearing on the question of regularisation.
In Smt.
P.K. Narayani & Ors.
vs State of Kerala & Ors,, the petition ers who had been serving as employees of the State of Kerala or its public sector undertakings for the past few years challenged the action of the employer in terminating their services to make room for the candidates selected by the Kerala Public Service Commission.
This Court directed that the petitioners and all others similarly placed should be allowed to appear at the next examination that the Public Service Commission may hold without raising the age bar; till then the petitioners and others may be continued in service provided there are vacancies.
This, clarified the Court, will not confer any right on the employees to contin ue in service or of being selected by the Commission other wise than in accordance with the extant rules and regula tions.
These directions were given to resolve what this Court described as `a human problem which has more than one facet ', Again in Dr. A.K. Jain & Ors.
v, Union of India & Ors., ; the services of ad hoc Assistant Medical Officers who were initially appointed for six months but were continued for periods ranging upto four years, were sought to be terminated to accommodate the candidates se lected by the Union Public Service Commission.
The petition ers claimed that their services should be regularised and their seniority should be fixed from the date of their initial entry in service as ad hoc appointees.
In the coun ter, the Union of India contended that `ad hoc ' appointments were made by the General Managers of the Zonal Railways to tide over temporary shortages of doctors and their tenures were extended till regular selection was made by the UPSC and appointments were made by the President of India.
Since the appointing authority was the President of India such ad hoc appointments by the General Managers of the Zonal Rail ways could not be regularised.
It was further contended that the ad hoc appointees were granted age relaxation and were asked to appear at two special selections based on interview alone held by the 574 UPSC in 1982 and 1985.
The petitioners were those ad hoc appointees who had either failed to avail of the special benefit of selection or had appeared and failed to qualify.
In the circumstances it was contended that they could not be regularised in service.
Notwithstanding the same this Court directed regularisation of services of all doctors appointed upto October 1, 1984 in consultation with UPSC on the evalu ation of their work and conduct based on the confidential reports in respect of the period subsequent to October 1, 1982.
Such regularisation was to be from the dates from which they were continuously working.
The services of those not regularised were allowed to be terminated.
The petitions of those appointed after October 1, 1984 were however dis missed.
In the case of Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., this Court, while dealing with the question of their absorption, referred to the State 's obligations (referred to as an individual 's rights) under Part IV of the Constitution and observed as under: "Of those rights the question of security of work is of utmost importance.
If a person does not have the feeling that he belongs to an organization engaged in production he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contribute to the maximisation of produc tion.
It is again for this reason that managements and the governmental agencies in particular should not allow workers to remain as casual labourers or temporary employees for an unreasonable long period of time." This Court emphasised that unless a sense of belonging arises, the worker will not give his best and consequently production will suffer which in turn will result in economic loss to the nation.
This Court, therefore, directed the department to prepare a scheme on a rational basis for absorbing those who have worked for a continuous period of one year.
575 Tested on the above and keeping in mind the constitu tional philosophy adverted to earlier, we may now proceed to consider the main plank of the contention raised by the Authority.
But before we do so we may dispose of the non controversial part of the case.
From the pleadings in this case one thing that clearly emerges is that the Authority had taken a decision on 30th January, 1987 to regularise the services of those who were employed by the erstwhile PHED and whose services stood transferred to the Authority by the thrust of the statute.
According to the resolution extracted earlier, the Authority recommended to the State Government that the services of the employees recruited in the erstwhile PHED and who continued to work on the establishment of the Authority should be regularised.
The learned counsel for the State Government contended that since these employees were now borne on the establishment of the Authority on the statutory transfer of their services, it was for the Authority to regularise their services, and it was quite unnecessary to make a recommenda tion to the State Government in that behalf.
To put it differently, the stand of the State Government through its counsel is that the question of regularisation of the serv ices of ex PHED employees now borne on the establishment of the Authority is exclusively within the purview of the Authority and the State Government has no role to play.
That means it was wholly unnecessary on the part of the Authority to make the recommendation it made by the resolution of 30th January, 1987 to the State Government for the regularisation of the ex PHED employees serving on its establishment on that date.
To us the position, therefore, appears crystal clear that it is for the Authority and the Authority alone to regularise the services of such employees without waiting for a nod from the State Government.
The sphinx like silence on the part of the State Government for now over three years from the date of the resolution is indeed disturbing and betrays total lack of concern for this pressing human prob lem.
The second batch of workers comprise those who were appointed between 1st April.
1984 and 4th August, 1986 by the Authority itself.
Under section 8(1) of the Act the power to appoint the Secretary and other officers and staff members vests in the Authority.
Only when a post above the rank of an Executive Engineer is to be created that the sanction of the State Government becomes necessary under the proviso.
Sub section (2) to which sub section (1) is subject expects the Authority to seek the previous sanction of the Government if it desires to employ a servant of the Central or State Government on deputation and not otherwise.
It is, therefore, clear beyond any manner of doubt 576 that the power to appoint the staff members with whom we are concerned, solely vests in the Authority.
Since the Act is brought into force w.e.f.
1st March, 1984 the question of regularisation of the services of staff members appointed after that date must be examined with reference to the power found in section 8(1) of the Act.
However, the contention of the Authority is based on Rule 9(a)(i) of the Rules, which it claims to have adopted under Resolution No. 8 dated 25th April.
The Authority contends that by the thrust of this rule the appointments were limited to 180 days only and since the said rules had statutory flavour the Authority was bound to act in accordance therewith.
We have extracted the relevant part of this rule earlier.
since these rules were framed in exercise of power conferred by the proviso to Article 309 of the Constitution they are undoubtedly statu tory in character but Mr. Poti was right in his contention that they do not retain that character in their application to the staff members of the Authority since they have been adopted by the Authority under a resolution.
These rules would undoubtedly be statutory in character in their appli cation to the members of the Kerala Subordinate services for whom they were enacted but when any other authority adopts them by a resolution for regulating the services of its staff, the rules do not continue to remain statutory in their application to the staff of that Authority.
They are like any other administrative rules which do not have statu tory force.
It was not contended, as indeed it could not That these rules derive statutory force from section 64 or 65 of the Act.
Section 64 confers the rule making power on the State while section 65 empowers the Authority to make regulations with the previous approval of the Government.
It is nobody 's case that these rules were adopted after obtain ing the previous approval of the Government.
If that be so.
we must accept Mr. Poti 's submission that these rule their application to the staff members of the Authority appointed after 1 st. April, 1984 have no statutory flavour or force.
Now to the text of Rule 9(a)(i) of the Rules.
It empowers the appointing authority to appoint a person temporarily otherwise than in accordance with the rule if (i) it is necessary in public interest and (ii) where an emergency has arisen to fill any particular post which has fallen vacant, immediately.
In the present case it is diffi cult to say that all appointments made after 1st April, 1984 were required to be filled immediately because of an emergency of the type contemplated by the said rule.
On the contrary it seems appointments were routinely made in purported exercise of power conferred by this rule.
The proviso on which reliance is placed , which we have extract ed earlier.
merely states that ordinarily such appointments will be of those persons who 577 possess the requisite qualifications for the post.
If any person who does not possess the requisite qualifications is appointed under the said clause, he will be liable to be replaced by a qualified person.
Clause (iii) of Rule 9 states that a person appointed under clause (i) shall, as soon as possible, be replaced by a member of the service or an approved candidate qualified to hold the post.
Clause (e) of Rule 9, however, provided for regularisation of service of any person appointed under clause (i) of sub rule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules.
This is a clear indication that in the past the Government also considered it just and fair to regularise the services of those who had been in continuous service for two years prior to the cut off date.
The spirit underlying this treat ment clearly shows that the Government did not consider it just, fair or reasonable to terminate the services of those who were in employment for a period of two or more years prior to the cut off date.
This approach is quite consistent with the spirit of the rule which was intended to be invoked to serve emergent situations which could not brook delay.
Such appointments were intended to be stop gap temporary appointments to serve the stated purpose and not long term ones.
The rule was not intended to fill a large number of posts in the service but only those which could not be kept vacant till regular appointments were made in accordance with the rules.
But once the appointments continued for long, the services had to be regularised if the incumbent possessed the requisite qualifications as was done by sub rule (e).
Such an approach alone would be consistent with the constitutional philosophy adverted to earlier.
Even otherwise, the rule must be so interpreted, if the language of the rule permits, as will advance this philosophy of the Constitution.
If the rule is so interpreted it seems clear to us that employees who have been working on the establish ment since long, and who possess the requisite qualifica tions for the job as obtaining on the date of their employ ment, must be allowed to continue on their jobs and their services should be regularised.
It is unfair and unreasona ble to remove people who have been rendering service since sometime as such removal has serious consequences.
The family of the employee which has settled down and accommo dated its needs to the emoluments received by the bread winner, will face economic ruination if the job is suddenly taken away.
Besides, the precious period of early life devoted in the service of the establishment will be wholly wasted and the incumbent may be rendered `age barred ' for securing a job elsewhere.
It is indeed unfair to use him, generate hope and a feeling of security in him attune his family to live within his earnings and then suddenly to throw him out of job.
Such behaviour would be an 578 affront to the concept of job security and would run counter to the constitutional philosophy, particularly the concept of right to work in Article 41 of the Constitution.
There fore, if we interpret Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
The third and fourth batches concern workers who were appointed between 4th August, 1986 and 30th July, 1988 and after 30th July, 1988, respectively.
Their appointments would be governed by Section 69 which became effective from 4th August, 1986.
By virtue of this section the Kerala Public Service (Additional Functions as respect certain Corporations and Companies) Act, 1970 (19 of 1970) came to be amended with effect from 4th August, 1968 on which date it came to be published in the Gazette.
Thereby in clause (a) of section 2 the "Kerala Water Authority" came to be added.
In law, therefore, the need to consult the PSC had arisen.
True it is that the consequential notification amending the 1971 Rules was issued on 30th July, 1988.
But on that account we do not think it would be proper to treat them differently.
We think it advisable to treat them as forming a single batch since the need to consult the PSC had arisen on Section 69 coming into effect from 4th August, 1986.
In the result we allow these appeals and writ petitions and make the rule absolute as under: "(1) The Authority will with immediate effect regularise the services of all ex PHED employees as per its Resolution of 30th January, 1987 without waiting for State Government approval.
(2) The services of workers employed by the Authority be tween 1st April, 1984 and 4th August, 1986 will be regula rised with immediate effect if they possess the requisite qualifications for the post prescribed on the date of ap pointment of the concerned worker.
(3) The services of workers appointed after 4th August, 1984 and possessing the requisite qualifications should be regu lated in accordance with Act 19 of 1970 provided they have put in continuous service of not less than one year, artifi cial breaks, if any, 579 to be ignored.
The Kerala Service Public Service Commission will take immediate steps to regularise their services as a separate block.
In so doing the Kerala Public Service Com mission will take the age bar as waived.
(4) The Kerala Public Service Commission will consid er the question of regularisation of the services of workers who possess the requisite qualifications but have put in less than one year 's service, separately.
In doing so the Kerala Public Service Commission will take the age bar as waived.
If they are found fit they will be placed on the list along with the newly recruited candidates in the order of their respective merits.
The Kerala Public Service Com mission will be free to rearrange the list accordingly.
Thereafter fresh appointments will issue depending on the total number of posts available.
If the posts are inade quate, those presently in employment will make room for the selected candidates but their names will remain on the list and they will be entitled to appointment as and when their turn arrives in regular course.
The list will enure for such period as is permissible under the extant rules.
(5) The Authority will be at liberty to deal with the serv ices of the workers who do not possess the requisite quali fications as may be it considered appropriate in accordance with law.
(6) Those workers whose services have been terminated in violation of this Court 's order in respect of which Contempt Petition No. 156 of 1990 is taken out shall be entitled to the benefit of this order as if they continue in service and the case of each worker will be governed by the clause applicable to him depending on the category to which he belongs and if he is found eligible for regularisation he will be restored to service and assigned his proper place.
This order will regulate the services not only of the par ties to the present petitions but also all others similarly situated including those who may be parties to other pro ceedings pending in different Courts.
If further directions are required in the matter of working out of the above order the High Court of Kerala may be approached for the same.
All the aforestated proceedings are disposed of accordingly with no order as to costs.
Y. Lal Appeals and petitions allowed.
| IN-Abs | Consequent upon the establishment of Kerala Water Au thority under the Kerala Water Supply and Sewerage Act, 1986, all the functions which were till then carried on by the Public Health Engineering Department (PHED) were trans ferred to the said Authority.
Contemporaneously with that every person working in the PHED became the employee of the Kerala Water Authority by virtue of Section 19(1) of the Act.
Though the said Act was given retrospective operation w.e.f.
1st March 1984, Section 69 thereof came into force from the date of publication of the Act in the Gazettee viz., 4.8.1986; actual effect could be given w.e.f. 30.7. 1988 on which date the necessary notification was issued where by the rule was amended and the Authority came within the purview of the Public Service Commission.
Thus the employees of the Authority fell into four different groups viz., (i) those who were in the employment of PHED before the constitution of the Authority and were transferred to the Authority, (ii) those whom the Authority employed be tween 1st April, 1984 and 4th August 1986, (iii) those who were appointed between 4th August 1986 and 30th July 1988, and (iv) those who were appointed after 30th July 1988.
The Authority it seems terminated the services of various em ployees.
The petitioners apprehending termination of their serv ices by the Authority filed petitions contending inter alia that they were recruited through the Employment Exchange and till the issuance of the notification dated 30.7.1988, amending the concerned PSC rule, there was no question of the Authority consulting the PSC and therefore, appointments made prior to that date could not be termed as irregular or unauthorised and could not be determined on that ground.
It is asserted by them that the High Court refused to grant relief to those employees whose services were threatened and despite favourable orders passed by this Court in cases that came before it, the Authority continued to terminate the services of employees similarly placed treating those 563 orders as having been passed in respect of only those em ployees who were before the Court.
It is, therefore, urged by them that this Court should pass orders laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that the low income employees are not required to knock at the doors of different courts for protection against the threatened arbitrary action of the Authority terminating their services.
The Authority has contested the cases on the plea that all the appointments made before or after April 1, 1984 were governed by Rule 9(a)(i) of the Rules till Section 69 came into force w.e.f. 4.8.1986 and 30.7.1988 when it was amended.
Appointments made after 4.8.1986 are clearly sub ject to the requirement of Section 69 of the Act and the Authority cannot act in contravention thereof.
Services of all those who were governed by Rule 9(a)(i) will have to be determinated on the expiry of 180 days.
Allowing the appeals as also writ petitions, this Court, HELD: Interpreting Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
[388A B] P.K. Narayani & Ors.
vs State of Kerala and Ors.
, ; Dr. A.K. Jain & Ors.
vs Union of India and Ors.
, ; ; Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India and Ors., , referred to.
|
ivil Appeal No. 2840 of 1982.
From the Judgment and Order dated 5.12.
1979 of the Allahabad High Court in Second Appeal No. 82 of 1972.
R.K. Garg and H.K.Puri for the Appellant.
Satish Chandra, Pramod Swarup and A.K. Srivastava for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
In this appeal by grant of special leave, directed against judgment of the Allahabad High Court in second appeal arising out of a suit for arrears of rent and ejectment, the question is if the High Court committed any error of law in allowing the second appeal on the ground that the two courts below had erroneously held that finding recorded in an appeal, filed by one of the defendants who was sued as tenant in an earlier suit, could not operate as res judicata between plaintiff and respondents who were defendants nos.
2 and 3 in that suit.
Unfortunately for appellant equity may or may not be in his favour as his father too acted shrewdly while purchasing house of daughter in law 's father but law is certainly not in his favour.
How dispute arose between parties, who are closely related, is quite interesting.
Shiv Charan Das and Har Charan Das (respondents nos.
1 99 and 3 in this appeal) are first cousins.
Ravindra Kumar (respondent No. 2) is son of Shiv Charan.
His sister was married to son of Ganga Prasad who purchased the only house of Shiv Charan and Ravindra Kumar with condition of repur chase by sellers after five years.
He permitted them to remain in possession, but got a rent note executed by Har Charan.
Purpose of this became apparent later as immediately after expiry of five years when the house was not repur chased Ganga Prasad (referred hereinafter as plaintiff) filed suit for ejectment and arrears of rent against Har Charan, Shiv Charan and Ravindra (hereinafter referred as defendants nos.
1, 2 and 3) claiming that defendant No. 1 was in arrears of rent and defendant No. 2 and 3 were his sub tenants.
The suit was contested by defendants nos.
2 and 3 only.
The Trial Court decreed the suit for arrears of rent against defendant No. 1.
It was held that defendant No. 2 and 3 were not sub tenants.
Therefore suit for ejectment was dismissed.
The plaintiff submitted to this finding.
Ag grieved by the decree for arrears of rent defendant No. 1 filed appeal which was dismissed.
But the appellate court while observing that any evidence led by defendant nos.
2 and 3 could not be read against defendant No. 1 observed that it appeared that they being closely related to defend ant No. 1 were in possession on his behalf.
This furnished occasion for plaintiff to file second suit against three defendants with this change that defendants nos.
2 and 3 were claimed to be licensees of defendant No. 1.
The Trial Court relying on earlier judgment decreed suit for arrears of rent against defendant No. 1 and for ejectment against defendants nos.2 and 3 as they were licensees.
Both defend ant No. 1 separately and defendants nos.
2 and 3 jointly filed two appeals but without any success.
Both the sets approached the High Court also by way of separate appeals.
The appeal of defendant No. 1 came up for hearing earlier but it was dismissed.
The appeal of defendant nos.
2 and 3 came up for hearing before another Hon 'ble Judge who allowed it and held that the finding recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata and the suit for ejectment was dismissed.
It is the correctness of this finding that has been assailed in this Court.
Although long arguments were advanced but in our opinion the only question that arises for consideration is if the finding recorded in the appeal filed by defendant No. 1 in which it was held that defendants nos.
2 and 3 were in possession on his behalf was binding on them in the subse quent suit filed by the plaintiff.
In that suit issue No. 2 was if 100 defendant No. 2 and defendant No. 3 were sub tenants.
And issue No. 5 was if they were liable to be ejected.
The Trial Court while discussing these two issues held that there was no question of sub tenancy of these persons as despite sale there was never a break in their possession.
It was further held that they were not sub tenants nor they claimed to be in possession through defendant No. 1.
Therefore they were not liable to ejectment.
Against this finding plaintiff did not file any appeal.
The finding therefore between the plaintiff and defendants nos.
2 and 3 became final and binding.
The appeal was filed by defendant No. 1 as he was aggrieved by the decree of arrears of rent.
In that appeal it was observed that the evidence led by defendant nos.
2 and 3 could not be read against him.
But the Court while dismissing his appeal and upholding the decree of Trial Court observed that since they were close relations it appears that even though rent note was executed by defendant No. 1 the possession of defendants nos.
2 and 3 was on his behalf.
This finding could not be taken advantage of by the plaintiff for more than one reason.
This observation was unnecessary as the appeal was dismissed.
One could under stand if the appeal would have been allowed and the liabili ty for payment of rent would have been fastened on defendant No. 2 and 3 as they were in possession.
But since appeal was dismissed the order of Trial Court that liability to pay rent was of defendant No. 1 stood affirmed.
Therefore it was an observation which was not only off the mark but unneces sary.
It could not accordingly operate as res judicata between defendant No. 1 and defendants nos.
2 and 3 as much less between plaintiff and defendant nos.
2 and 3.
One of the tests to ascertain if a finding operates as res judicata is if the party aggrieved could challenge it.
Since the dismissal of appeal or the, appellate decree was not against defendants nos.
2 and 3 they could not challenge it by way of appeal.
Even assuming that defendant No. 1 could chal lenge the finding that liability of rent was of defendants nos.
2 and 3 as they were in possession he did not file any written statement in the Trial Court raising any dispute between himself and defendants nos.
2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither pleading nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
Reliance by the appellant on Keshardeo Chamria vs Radha Kissen Chamria, ; , is of no assistance as it only lays down the binding effect of a decision in a subsequent suit.
For the reasons stated above this appeal fails and is dismissed.
There shall be no order as to costs.
T.N.A. Appeal dis missed.
| IN-Abs | The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years.
He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1.
After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants.
The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants.
Defendant No. 1 filed an appeal against the decree for arrears of rent.
The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related.
Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1.
The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3.
Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed.
Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata.
Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3.
Hence this appeal.
Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it.
Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal.
Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
[100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable.
|
ivil Appeal No. 2674 of 1977.
From the Judgment and Order dated 19.8.1977 of the Andhra Pradesh High Court in Writ Appeal No. 527 of 1976.
Dr. K. Parasaran, Mr. A.D.N. Rao and A. Subba Rao for the Appellants.
C. Sitaramiah, T.S. Krishnamurthy Iyer, G. Prabhakar, A.T.M. Sampath and P.N. Ramalingam for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Whether possession of a lessee who ac quires interest of one of the co lessors, before expiration of period of lease, is litigious or lawful? Litigious and lawful possession are concepts of varying legal shades deriving their colour from the setting in which they emerge.
Epithet used itself indicates the field in which they operate.
The one pertains to dispute in which possession may be conterminous with physical or de facto control, only, whereas the domain of other is control with some legal basis.
The former may be uncertain in character and may even be without any basis or interest but the latter is rounded on some rule, sanction or excuse.
Dictionarily 'litigious ' means "disputed" Concise Oxford Dictionary or "disputable" Concise Oxford Dictionary" or "marked by inten tion to quarrel" Webster Third New International Dictionary, "inviting controversy" Webster Third New International Dictionary, "relating to or marked by litigation" Webster Third New International Dictionary, "that which is the subject of law suit".
Black 's Law Dictionary.
Lawful on the other hand is defined as, "legal, warranted or authorised by the law.
" Black 's Law Dictionary.
Jurisprudentially a person in physical control or de facto possession may have an interest but no right to continue whereas a person in pos session, de jure, actually or constructively has the right to use, enjoy, destroy or alienate property.
"Rights are interest protected or recognised by law.
But every interest may not be so.
Its violation may not be wrong.
Many interest exist de facto and not de jure; they receive no recognition or protection from any rule or right".
Solmond on jurispru dence.
With this brief preface it may now be determined if posses sion of 11 appellant who had entered into an agreement of sale with one of co lessors of his interest, and has been found by High Court to have entered into his shoes, was lawful for pur poses of rule 11 framed under Andhra Pradesh Cinemas (Regu lation) Act 1955 which required a licensee either for grant or renewal of license to file all necessary record or ' certified copies with the application, "relating to his lawful possession thereof", if he was not the owner.
That the appellant has been running cinema not as owner but after obtaining lease in 1950 of 2038 2/3 sq.
out of 7000 sq.
from the then Zamindar is not in dispute.
Nor it is in dispute that ownership of land changed twice since then and the last purchaser in July 1974 were one V. Venkatarathnam (in brief V.V. since deceased) his son and grandson who formed a private partnership V.V. Estates in September 1975 and objected to renewal of appellant 's license in December 1975 as the Estate did not intend to renew the lease in favour of appellant which was to expire on 31st March 1976.
But problem arose when on 24th March V.V. entered into an agreement of sale with appellant to sell his entire share which was one half for consideration of Rs. 14,000 cash and partnership of 1/8th in appellants ' cinema business.
He further executed lease of remaining half on next day in favour of appellant as managing partner of the Estate and withdrew the objection, filed before licensing authority for renewal of appellant 's license, unconditionally.
Dispute however arose as V.V. 's son on his behalf and on behalf of his nephew refuted authority of his father to grant lease as he had already withdrawn his authority to act on their behalf on 22nd March.
Therefore the question arose about nature of appellant 's possession.
The High Court found that even though it was not open to the son to remove his father from position of managing partner yet V.V. could not lease out the property on his behalf as the partnership deed did not invest him with such authority.
And so far the agreement of sale was concerned it was ineffective to make him owner.
Consequently the possession of appellant was not lawful as he was neither lessee nor owner.
True the appellant was neither owner nor lessee.
Yet was his possession forbidden in law? Was there no excuse for his possession? The error committed by High Court was to equate lawful with legal.
Legal and lawful, normally, convey same sense and are usually interchangeable.
What is legal is lawful.
But what is lawful may be so without being formally legal.
"The principle distinction between the terms 'lawful ' and 'legal ' is that former contemplates the substance of law, the latter the form of law.
To say of an act that it is lawful implies that it is authorised, Sanctioned or at any rate not forbidden by law".
12 Black 's Law Dictionary.
Same thought about lawful has been brought out by Pollock and Wright by explaining that "Lawful Possession" means a legal possession which is also rightful or at least excusable.
Pollock and Wright Possession in the Common Law.
Thus that which is not stricto legalo may yet be lawful.
It should not be forbidden by law.
In fact legal is associated with provisions in the Act, rules etc.
whereas lawful visualises all that is not illegal against law or even permissible.
Lawful is wider in connotation than legal.
Although provision in specific Relief Act empowering a person or tenant to recover possession if he has been evict ed forcibly by the Landlord, may be juridical and not lawful or a tenant holding over is not in lawful possession unless landlord agrees or acquiesces expressly or impliedly but that does not alter the legal position about possession of a person not legal yet not without interest.
The provision in specific Relief Act is rounded more on public policy than on jurisprudence.
But concept of lawful as opposed or in con tradistinction to litigious assumes different dimension.
M.C. Chockalingam vs M. Manichavasagam, ; is of no help as it was concerned with possession which could not be said to be warranted or authorised by law.
Distinc tion between nature of possession of a lessee after expiry of period of lease can better be explained by resorting to few illustrations.
For instance a lessee may before expiry of lease acquire entire lessor 's interest resulting in "drowning" or "sinking" of inferior right into superior right.
That is right of one merges into another.
It has been statutorily recognised by Section 111(d) of Transfer of Property Act.
Similarly a tenant after expiry of period of lease may be holding over and the lessor may acquiesce in his continuance expressly or impliedly.
That is from conduct of lessor the tenant 's possession may stand converted into lawful.
The other may be where lessor may not agree to renew the lease nor he may acquiesce in his continuance.
Such a lessee cannot claim any right or interest.
His possession is neither legal nor lawful.
Such was the Chockalingam 's case (supra).
The Court held that continuance of lessee 's posses sion after expiry of period of lease was not lawful for purposes of renewal of licence under Madras Cinema Regula tion Act 1955 obviously because lessee was left with no interest which could furnish any excuse or give it even colour of being legal.
Yet another illustration may be, not very common where, lessee acquires some interest in part of the undivided property as in present case.
Can it be said in such a case on ratio of Chockalingam 's authority that possession of such lessee or to be more specific of appellant was unwarranted or contrary to law: Share of V.V. in 7,000 sq.
was half.
He had agreed to sell his half interest.
V.V. was joint owner with his son and grandson.
He had "both single possession and a single 13 joint right to possess" Pollock and Wright.
Whether such joint owner could transfer his share even when he was not in exclusive possession and what would be effect of such trans fer need not be gone into as title suit is pending between parties but when a person having physical control acquires an interest to hold or continue by virtue of an agreement of sale it cannot be said that he had no interest and his possession was forbidden by law.
The High Court lost sight of the fact that by virtue of the transaction entered be tween V.V. and appellant which was not challenged by him nor any cloud was cast over it by creating any subsequent inter est the appellant may not have become owner but he could certainly claim that he was in lawful possession.
In law he was entitled to file suit for specific performance if there was any threat to his right or interest by V.V.
Such right or interest could not be termed as litigious.
It was at least not without any excuse or forbidden by law.
In words and Phrases Permanent Edition Vol.
25A, 2nd reprint 1976 a somewhat similar situation was described as not litigious: "Where client conveyed undivided half interest in land to attorney in consideration of attorney 's rendering services and paying court costs, giving irrevocable power of attorney to sue, settle, or compromise, attorney received good title as third person purchasing upon faith of public records, precluding reformation as against attorney, on the strength of an instrument recorded after deed to attorney and client claimed title, as against contention that attorney acquired a "litigious right".
For reasons stated above this appeal succeeds and is allowed.
The order of High Court and the licensing authority are set aside.
The licensing authority is further directed to consider renewal of license of the cinema in accordance with law treating licensee to be in lawful possession.
Since suit has been filed between parties in respect of title it is clarified that any observation made above shall not be treated as binding or deciding right of parties except to the limited extent that appellant shall be treated to be in lawful possession for renewal of license subject to final adjudication in suit, which shall now proceed as, probably, the proceedings had been stayed.
It shall be disposed of expeditiously.
The appellant shall be entitled to its costs in this Court and High Court.
P.S.S. Appeal allowed.
| IN-Abs | Rule 11 of the A.P. Cinema (Regulation) Rules, 1970 flamed under the A.P. Cinemas (Regulation) Act, 1955, as it stood at the relevant time, required a licensee either for grant or renewal of license to file evidence of his lawful possession of the site.
The appellant firm had been running a cinema since 1950 on a piece of land leased by the then zamindar.
The said lease was to expire on March 31, 1976.
In the meantime the ownership of the land changed hands.
In 1975, when the appellant sought renewal of the license the estate partner ship, consisting of father, son and grandson objected on the ground that it did not intend to renew the lease.
However, on March 24, 1976 one of the co lessors, the father, entered into an agreement of sale with the appellant to sell his entire share which was one half for a consideration.
He also executed lease of the remaining half the next day in favour of the appellant as the managing partner of the estate.
and withdrew the objection filed before the licensing authority unconditionally.
A question arose about the nature of appellant 's posses sion.
The High Court found that the co lessor could not lease out the property on his behalf as the partnership deed did not invest him with such an authority, and that the agreement of sale was ineffective to make him the owner.
Consequently, the possession of appellant was not lawful as last was neither a lessee nor an owner.
Allowing the appeal, the Court, 9 HELD: 1.
When a person having physical control acquires an interest to hold or continue by virtue of an agreement of sale it cannot be said that he had no interest and his possession was forbidden by law.
In the instant case, by virtue of the transaction entered between the co lessor and the appellant which was not challenged by him nor any cloud was cast over it by creating any subsequent interest the appellant may not have become owner but could certainly claim lawful possession.
In law last was entitled to file suit for specific performance if there was any threat to its right or interest by the co lessor.
Such right or interest could not be termed as litigious.
[13A C] 2.
A lessee may before expiry of lease acquire entire lessor 's interest resulting in drowning or sinking of infe rior right into superior right.
That is right of one merges into another.
It has been statutorily recognised by section III(d) of the Transfer of Property Act.
Similarly, a tenant after expiry of period of lease may be holding over and the lessor may acquiesce in his continuance expressly or im pliedly.
That is from conduct of lessor the tenant 's posses sion may stand converted into lawful.
But where the lessor does not agree to renew the lease nor he acquiesce in his continuance a lessee cannot claim any right or interest.
His possession is neither legal nor lawful.
In the instant case, the appellant had acquired some interest in part of the undivided property by virtue of the agreement.
It may not be a lessee, but its possession was not without any excuse or forbidden by law.
[12D G] 3.
The High Court erred in equating lawful with legal.
What is legal is lawful.
But what is lawful may be so with out being formally legal.
That which is not stricto legalo may yet be lawful.
It should not be forbidden by law.
Al though provision in Specific Relief Act empowering a person or tenant to recover possession if he has been evicted forcibly by the landlord, may be juridical and not lawful or a tenant holding over is not in lawful possession unless landlord agrees or acquiesces expressly or impliedly but that does not alter the legal position about possession of a person not legal yet not without interest.
The provision in Specific Relief Act is rounded more on public policy than on jurisprudence.
[11G; 12A C] 4.
The licensing authority is directed to consider renewal of license in accordance with law treating licensee to be in lawful possession.
[13F] M.C. Chockalingam vs M. Manichavasagam, ; distinguished. 10
|
vil Appeal No. 2211 (NT) of 1988 etc.
From the Judgment and Order dated 7.10.1986 of the Madhya Pradesh High Court in M.P. No. 1861 of 1983.
594 Prithvi Raj, R.B. Mishra, Uma Nath Singh, S.K. Gambhir, Vivek Gambhir, Satish K. Agnihotri, Ashok Singh and Mrs. V.D. Khanna for the Appellants.
Harish N. Salve, Ms. Lira Goswami and D.N. Misra for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
The Civil Appeal and S.L.P. 12054/87 are by the State of Madhya Pradesh (M.P.).
The respondents in these two matters and the petitioners in the other five Special Leave Petitions are certain concerns in M.P. assess able to sales tax (hereinafter compendiously referred to as the assesses ').
All these matters can be conveniently dis posed of by a common judgment as they raise a common issue.
The assesses ' claim for exemption from sales tax for certain periods in question was accepted by the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail (a case where the exemption sought for was originally granted but subsequently revoked).
However, subsequently, a Full Bench of the High Court, in the case of Jagadamba Industries, disapproved the view taken by the Division Bench in the G.S. Dhall & Flour Mills case and, following the Full Bench, the writ petitions filed by certain other assesses were dismissed by the High Court.
The State is aggrieved by the judgment in the first two cases and the assesses by the High Court 's decision in the other cases.
Hence these appeals and special leave petitions.
Before dealing with the appeals on merits, an important circumstance needs to be referred to, which is this: The judgment of the Full Bench in the case of Jagadamba Indus tries was itself the subject matter of Special Leave Peti tions in this Court but those petitions (S.L.P. Nos. 15688 90/87) were dismissed, at the stage of admission, on 9.2.
1988, with the observations: "We are in agreement with the views expressed by the High Court.
The Special Leave Peti tions are dismissed".
In view of this, the State submits that C.A. 22 11/87 should be allowed and that the assesses ' S.L.Ps. should be dismissed in limine.
On the other hand, counsel for the assesses seek to distinguish the Jagadamba case by contending that this Court had refused leave against the Full Bench judgment on account of certain special facts which were considered sufficient to disentwine the assesses in those 595 cases from claiming the exemption.
They contend that, in view of this and the fact that the G.S. Dhall & Flour Mills case is in appeal before we may grant leave in the S.L.Ps.
and dispose of all the appeals on merits.
We accept this plea and grant leave in the S.L.Ps.
condoning a delay in the filing of S.L.P. 12054/87.
We shall, however, touch upon the above aspect of the matter in the course of our judgment.
The issue raised is, at first blush, a simple one.
section 12 of the M.P. Sales Tax Act (hereinafter referred to as `the Act ') enables the State Government to grant exemption from the levy of sales tax in certain circumstances.
It says: 12.
Saving: (1) The State Government may, by notification, and subject to such restrictions and condi tions as may be specified therein, exempt, whether prospec tively or retrospectively, in whole or in part (i) any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification; (ii) any dealer or class of dealers from any provision of the Act for such period as may be specified in the notifica tion.
(2) Any notification issued under this section may be re scinded before the expiry of the period for which it was to have remained in force and on such rescission such notifica tion shall cease to be in force.
A notification rescinding an earlier notification shall have prospective effect.
" In exercise of this power, the State Government issued the following notification on 23/26.10.1981 which it is neces sary to extract in full here along with its Annexure.
It reads: "In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) the State Government hereby exempts the class of dealers specified in column (1) of the Schedule below who have set up industry in any of the districts of Madhya Pradesh specified in the annexure to this notification and have commenced production after 1st April, 1981, from pay ment of tax under the said Act for the period specified in column (2), subject to the restrictions and conditions specified in column (3) of the said schedule: 596 Class of dealers Period Restrictions and conditions subject to which exemption has been granted 1 2 3 1.
dealers who Two years The dealer specified in (a) hold a certifi from the column (1) shall continue cate of regis date of to furnish the pres tration under The commence cribed returns under the M.P. General Sales ment of M.P. General Sales Tax Tax Act, 1958: production Act, 1958 and shall pro duce before the assessing (b) are registered authority at the time of small scale indus his assessment a certifi trial units with cate issued by the Direc the Industries Dep tor of Industries, Madhya artment of Govt.
of Pradesh or any officer au M.P., and thorised by him for the purpose, certifying that (c) have set up ind such dealer is eligible to ustry in any of the claim the exemption and districts specified that he has not opted for in part I of the the scheme of deferring Annexure the payment of tax under the rules framed for this purposes.
Dealer who do (a) hold certifi (a) 3 years cate of registra in case of an tion under the industry loca M.P. General Sales ted in a district Tax Act, 1958 specified in `A ' (No.2 of 1959); of part II of the Annexure.
(b) are registered (b) 4 years, in the as Small scale Ind case of an industry ustrial units with located in category the Industries De `B ' of Part II of partment of Govt.
of of the Annexure; M.P. or are regis and tered with the Di rector General of Technical Develop ment as an indus trial unit or are registered 597 as industrial units by any authority duly empowered to do so by the State Govt.
or Cen tral Govt.
or hold a licence under the In dustries (Development & Regulation) Act 1951 (No.65 of 1951); and (c) have set up indus (c) 5 years, in do try in any of the dis the case of an tricts specified in industry located part II of the Anne in a district spe xure.
cified in category `C ' of part II of the Annexure; from the date of commen cement of production.
Dealers who (a) hold certificate (a) 3 years in The dealer speci of registration under the case of an fied in column (1) the M.P.General Sales Industry loca shall produce be Tax 1958 (No.2 of ted in any of fore the assessing 1959); the tehsils of authority at the a district spe time of his assess fied in part I ment a certificate of the Annexure; issued by the Direc tor of Industries, Madhya Pradesh or any (b) are registered (b) 5 years in officer authorised by as industrial units the case of an him for the purpose with the Director industry located of certifying that General of Technical in any of the the dealer is eligi Development or by any tehsils of a ble to claim such authority duly em a district spe exemption under the powered to do so by cified in cate scheme of the Indus State or Central gory `A ' of Part tries.
Department Government or hold II of the Anne being a first dealer licence under the xure; to have commenced Industries (Develop production in the ment and Regula industry set up by him in the tehsils referred to in col umn (2) and that such dealer has not opted for the scheme of deferring the pay ment of tax under the rules framed for this purpose.
598 tion) Act, 1951 (No.65 of 1951) have fixed a capital in vestment between Rs.1 crore and Rs.10 crores and; (c) are the first to (c) 7 years in set up the industry the case of an in any tehsil of the industry loca district of Madhya ted in any of Pradesh specified in the tehsils of the Annexure.
a district spe cified in cate gory `B ' of Part II of the Anne xure; (d) 3 years in the case of an industry located in any of the tehsils to a district specified in category `C ' of Part II of the Annexure; from the date of commencement of production.
ANNEXURE Part I 1.
Indore 2.
Ujjain 3.
Bhopal 4.
Jabalpur 5.
Gwalior 6.
Durg Part II Category `A ' 1.
Bilaspur 2.
Raipur 3.
Dewas 4.
Handsaur 5.
Morena 6.
Vidisha 7.
Hoshangabad 8.
Ratlam 9.
Khandwa 10.
Satna 11.
Shahdol 599 Category `B ' 1.
Geoni 2.
Balaghat 3.
Betul 4.
Raigharh 5.
Guna 6.
Chindwara 7.
Damoh 8.
Sagar 9.
Narsimhpur 10.
Senor 11.
Rajmandgoo Category `C ' 1.
Panna 2.
Sidhi 3.
Rewa 4.
Chhatarpur 5.
Tikamgarh 6.
Khargone 7.
Surguja 8.Mandla 9.
Bhind 10.
Shivpuri 11.
Datia 12.
Raisen 13.
Shajapur 14.
Dhar 15.
Rajgarh 16.
Jhooua 17.
Bastar It is not in dispute that the assessees before us fulfil the qualifications mentioned in the notification.
However, when they approached the Director of Industries for the certificate of exemption envisaged under column (3) of the notification, it was denied to them on the ground that the industries run by them are "traditional industries" which were not eligible for exemption.
The assessees went to Court contending that this was totally unjustified.
They said, the concept of "traditional industries" was one unspecified in the notification.
The authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assessees an exemption they were entitled to under the notification.
It is this contention that was accepted in the G.S. Dhall and Flour Mills case.
The State had relied on the provisions of the M.P. (Deferment of Payment of Tax) Rules, 1983, notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from/deferment of payment of sales tax".
The High Court took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notifica tion of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statu tory notification.
This judgment was delivered on 7.10.1986 by Sohani, C.J. and Faizanuddin, J.
The Full Bench, in its judgment of 2.11.1987 took a different view.
It has, in effect, attached importance to the rules and instructions referred to above and relied considerably on the history of the 600 sales tax levy in the State as furnishing a proper and necessary background in which the terms of the notification of 23.10.1981 have to be read and interpreted.
This history has, therefore, to be set out now in order to appreciate the validity of the conclusions of the Full Bench.
Before doing this, it may be mentioned that the Full Bench comprised of Ojha C.J., Faizanuddin, J. and Adhikari, J.
In fact, the judgment was written by Faizanuddin, J. who has explained in detail the reasons for his change in view.
It may also be mentioned, as a matter of record, that, subsequent to the decision of the Division Bench in G.S. Dhall and Flour Mills, the State Government appears to have issued a notifi cation on 3.7. 1987, intended obviously to overcome the effect of the said decision.
We shall refer to this later in this judgment.
Now, to turn to the history relied on by the Full Bench, we start with a "scheme for the grant of subsidy/interest free loan to new industries set up in Madhya Pradesh".
The scheme was to be effective from 15.9.69 and till the end of the Fourth Five Year Plan period (1970) "or such further period as may be extended by the State Government from time to time".
It would appear that the scheme was being adminis tered informally under executive instructions even beyond 1970.
Though certain "rules" appear to have been framed for the first time on 30.8.73, these rules, it would seem, were not statutory but were only in the nature of executive instructions.
We shall, however, refer to them as "rules".
Rule 3 was clear as to the persons eligible to avail of it.
It read: "Rule 3 "It shall be applicable to all new industrial units except traditional industries like oil mill, flour mill, dall mill, rice mill, ginning and printing factories, who set up in Madhya Pradesh, provided further that such appli cants register themselves with the department after 15.9.69 but before 31.3.74 and in case of SSI units go into produc tion within a period of one year and in case of Large and Medium Industries go into production within 3 years of their date of registration provided further that in case of delay in going into production the period of availability of subsidy or concession will be reduced by the period of delay in going into production.
This will come into force from 1.4.74.
Note: Small Scale Industries who are already registered with the department need not register separately for this concession.
" 601 It would also appear that the districts of the State were divided into two categories advanced and backward and the latter into three categories `A ', `B ', `C '.
The amount and period of the subsidy/loan depended upon this classification and was elaborately set out in para 8 which need not be extracted here.
A note added to para 8 had this to say: Note: (1) Unit who is otherwise entitled to subsidy may on his request be considered for grant of interest free loan to the extent of entitlement of the subsidy.
(2) No unit available concession under the scheme will be allowed to change the location of the whole or any part of the industrial unit or effect any substantial part of its total fixed capital investment within a period of five year after its going in to production.
(3) In case the ownership of a new unit changed during the period of availability of this concession, the new owner would be entitled to this concession for the balance period.
(4) A closed unit, which is re started by an entrepre neur will not be considered to be a new unit for the purpose of this concession.
" Another set of "rules" came into force with effect from 1.4.1977 and superseded the earlier rules.
These were on more or less the same lines as the earlier ones and were to apply to "new industrial units", and "existing industrial units", as defined in rules 2(a) and (b), on fulfillment of certain terms and conditions but industries enumerated in rule 3 were specifically excluded from the purview of the definition.
Rule 3 made it clear that the rules shall not be applicable to "the following traditional industries".
The list of such industries, in addition to those mentioned in the earlier set of rules (excluding roller flour mills and solvent extraction plants in oil mills), took in also saw mills, ice factories and "such other industries as may be notified by the Government from time to time".
The period and extent of the subsidy/ loan here again depended upon the district advanced or backward, and in the latter category `A ' or `B ' or `C ' in which the industry was set up Rule 7 is of some relevance and may be set out: "7.
An industrial unit eligible for this concession will apply 602 to the Asst.
Director of Industries of the district con cerned for verification of the date of going into commercial production and other particulars of new industrial unit or substantial expansion in respect of which the concession is sought.
The Asst.
Director of Industries will make verifica tion in accordance with rules 5(1) and send within 15 days of the receipt of the application his report to the sanc tioning authorities, Dy.
Director of Industries or Director of Industries indicating the date of going into commercial production of the unit.
A copy will be furnished to the applicant.
" The form of the certificate to be issued by the office of the Director of Industries read thus: "No. Date The particulars furnished by M/s . . . . . . have been checked and verified from records including those of consumption of power and raw materials and output of finished products.
The date of commencement of commercial production by the industrial unit is The date from which the unit has exceeded, on a sustained basis production over the licensed or installed capacity of the unit is . . . Asst.
Director of Industries" It appears that the Government had announced "conces sions" regarding the payment of sales tax by new industrial units including pioneer units going into production after 1 4 1981 not only under the notification dated 23/10/81 but also under other notifications dated 1 5 82 and 29 6 82.
Two of these notifications are on record before us.
It is, however, unnecessary to extract them here.
It is sufficient to set out their purport, quoting from the "instructions" of 12 1 83, referred to a little later: "According to the first notification, the new industrial units are exempted from the payment of sales tax.
This notification covered sales tax payable by them on the products manufactured by them.
It entitled them to exemption 603 from payment of purchase tax on purchase made by them from unregistered dealers.
According to the second notification an industrial unit making purchases of its raw material from a registered dealer is exempted from payment of sales tax on the raw materials so purchased by him from the registered dealer.
In other words, registered dealers selling raw materials to a new industrial unit are not required to charge any sales tax from the new industrial unit on sales made by them to such unit.
The third notification exempts the goods manufactured by the new industrial units from the levy of sales tax even when these goods are sold by the dealers who have purchased these goods from the new indus trial units.
In other words, by issue of this notification, the goods manufactured by the new industrial units are fully exempted from the payment of sales tax right upto the stage they reach the consumer.
These three notifications only deal with the grant of exemption from payment of sales tax under the M.P. General Sales Tax Act.
that is to say from the payment of the State Sales Tax.
The fourth notification exempts the new industrial units from payment of the Central Sales Tax on the sale of goods manufactured by them in the course of interstate trade or commerce.
This notification has exempted the new units from payment of sales tax w.e.f. 1 7 82.
" In view of these notifications, the Government considered it necessary to issue certain instructions "for the grant of certificate of eligibility to new industrial units claiming exemption from/deferment of payment of sales tax" on 12 1 1983.
These instructions also proceed on the same lines as the earlier ones.
"Traditional" industries, as listed in para 5. are said to be outside the purview of the scheme.
Para 5 enumerated the following as "traditional industries": flour mills (excluding roller flour mills), oil mills (excluding solvent extraction plants, dall mills.
saw mills, rice mills, printing presses of all types, cotton ginning and pressing factories, in factories and such other indus tries as may be notified from time to time.
It also stated (a) that "industrial units undertaking expansion/modifica tion or diversification will not be eligible for these concessions, (b) that a closed unit revived by the entrepre neur will not be considered as a new unit for the purpose of availing of these concession and (c) that units claiming interest free loans as an existing unit will not be eligible for these concessions.
A certificate of eligibility had to be obtained in the prescribed manner 604 and this procedure was made more elaborate.
District Level Committees and a State Level Committee were constituted for this purpose and they took a decision on the application of the unit read with the comments thereon by the Director of Industries, though the certificate was actually issued by the Director of Industries or the General Manager of the District Industries Centre in a prescribed form.
The Full Bench, after considering the scheme and in structions of the Government discussed above, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the conces sions granted earlier.
The 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes.
The Court observed: "It appears that the mode of concessions granted by the aforesaid instructions involved some inconvenience to the industrial units and duplication of procedure inasmuch as the industrial unit had to first collect the sales tax and the tax so collected and paid along with the returns were later on refunded to the industrial unit in the shape of subsidy.
To avoid the duplication of procedure the State Government thought it fit to altogether exempt the industri al units from payment of sales tax or defer the payment of sales tax.
" The Court observed.
vis a vis the various instructions referred to above: "12 . .
These instructions also contain a complete procedure for application and grant of eligibility certifi cate by the Industries Department.
Thus it is clear from these instructions that the question of grant of eligibility certificate by the Industries Department is not an empty formality but before granting the certificate the Industries Department has to see whether all the requirements as con tained in the instructions are fulfilled and complied with or not.
All the Government Instructions discussed above, issued from time to time right from 1973 onwards till 1983 (Annex ure R I, II and III) clearly indicate not only the consist ent Government policy in the matter of grant of 605 Sales Tax concessions to the New Industrial Units but also the consistent practice that has been followed throughout whereby these concessions were not at any time made avail able to the Traditional Industries like Flour Mills and Dall Mills etc.
Not a single instance is available to show that any of these concessions were ever made available to any Traditional Industries.
It may be pointed out that all these facts and the Government policy as also all the aforesaid Government Instructions on the subject were not placed before the Division Bench which heard and decided Misc.
Petition No. 1861 of 1983 (G. section Dall Mills vs State of M.P.).
However, after the decision of M.P. No. 1861/83 the State Government while issuing a Notification No. 351 dated 21st October, 1986 under section 12 of the Act, a photostat copy of which has been filed on record of M.P. No. 2710/87 (See at page 94 of the paper book) exempting the Industrial Units specified therein from payment of tax under section 6 and 7 AA of the Act again specifically provided in clause (xiii) of the said Notification that the said exemption shall not be available to the Industrial Units enumerated therein including Flour Mills and Dall Mills etc.
" It was true, the Court agreed, that a notification has generally to be construed on its plain language.
But, here: "as pointed out earlier, column 3 of the 1981 Notification (Annexure B) does not contain any guidelines or a procedure in the matter of grant of eligibility certificate or refusal thereof by the Industries Department and as the grant or refusal of such certificate cannot be an empty formality and, therefore, in order to avoid the possibility of arbi trariness and injustice to any one the State Government was justified in issuing executive instructions laying down the guidelines and procedure for the same.
" The Full Bench, therefore, observed: "16.
From what has been stated and discussed above it is clear that at no point of time any concession or exemption from.
payment of sales tax was ever given to the Traditional Industries and not a single example to that effect is avail able.
The State Government while issuing instruction from 606 time to time have been specifically excluding the Tradition al Industries.
Thus the executive authorities and the high est agency and its officers charged with the duty for the administration and enforcement of the said Notification are not only conversant with the underlying policy of the Gov ernment but they are also intimately acquainted with the economic significance of the tax in question and exemption thereof.
The interpretation of the Government regarding the construction of 1981 Notification read with the instructions (Annexure R. I, II and III) excluding the Traditional Indus tries, which has been consistently followed and acted upon accordingly for a period over a decade cannot be given a go by but has to be accepted.
In view of the above discussion the impugned Notifica tion dated 4 7 1987 (Annexure G) is hardly of any conse quence.
More or less it is a clarification of 1981 Notifica tion and not rescission of any grant.
" The contention that "instructions" could not override the effect of the statutory notification was repelled by the Court on the ground that the validity and effectiveness of the instructions can be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification.
An argument based on the doctrine of promissory estoppel was also rejected as "the petitioners were well aware of the fact that the exemption was not available to their new units and they had not established their units because of the exemption".
The Court explained the position thus: "20.
In this behalf firstly it may be pointed out that all the petitioners had established their Industrial Units after the Government issued the executive instructions (Annexure R. III) dated 12 1 1983, of which clause 5(b) specifically speaks that the concessions will not be available to Tradi tional Industries like Flour Mills and Dall Mills etc.
To say that the petitioners were not aware of these executive instructions would be incorrect because clause 6 of these instructions contemplates that New Industrial Units desirous of availing the said concessions shall have to apply in Form I accompanied with a declaration in Form II appended to the said Instructions and the petitioners applied in Form I with declaration in Form II (See Annexure D, D/I and D/2 in M.P. No. 2710/87).
Further these 607 applications for exemption were made by the petitioners only after the order dated 7 10 1986 was passed in G.S. Flour Mills vs State (M.P.) No. 1861 of 1983) which shows that the petitioners were aware of the fact that they were not entitled to exemption and it was only after the aforesaid decisions that they considered to apply for exemption.
This fact is further fortified from the conduct of the petition ers themselves as they continued to submit returns right from 1983 onwards and continued to pay the tax as assessed against them without taking any steps to claim exemption.
In this behalf paragraphs 8 and 9 of the petitions are self explanatory.
Thus having regard to all these facts, the.
question of application of principle of promissory estoppel in the present case does not arise and the petitions deserve to be dismissed.
" Sri Harish Salve, appearing for the G.S. Dhall & Flour Mills, apart from pleading that the view taken in this case is the correct one and not that enunciated by the Full Bench, also raised an alternative contention on the footing that, at best, the notification of 1981 was ambiguous and lent itself to two plausible interpretations.
Assuming that there was initially some ambiguity regarding the applicabil ity of the Notification of 23.10.81 to traditional indus tries, it had been dispelled by the instructions of 12, 1.83.
Once these instructions were published, any assessee setting up a traditional industry took a calculated risk on the issue as to whether the Notification should be confined, on proper interpretation, only to non traditional industries and could not rely on the doctrine of equitable estoppel.
Pointing out that the assesses in the Full Bench case were persons who had set up their industry after 12.1.83, Sri Salve argued that the dismissal of the Special Leave Peti tion against the Full Bench judgment will not affect his case as this assessee had set up its industry, admittedly, before 12.1.
The position is similar in the case of Mohan.
Ismail.
Learned counsel, therefore, submitted that, even if the 1983 instructions were rightly held by the High Court to have validly supplemented the terms of the 1981 Notification, they can have no application to the two earli er cases which had to be decided solely on the terms of the 1981 Notification.
To answer these contentions, one has to look first at the statutory instruments in this case viz. section 12 of the Act and the notification thereunder.
section 12(1)(i), with which we are concerned, lays down four requirements for the grant of exemption from the provisions of the Act: 608 (i) that any exemption to be granted under the section has to be by a notification; (ii) that the notification may exempt any class of dealers or any goods or class of goods from the payment of tax under the Act in whole or in part but only for a definite period to be specified in the notification; (iii) that the exemption will be subject to such restric tions and conditions as may be specified in the notifica tion; (iv) that such exemption could be prospective or retrospec tive.
We are concerned here with the scope of the second and third requirements mentioned above.
So far as the class of dealers entitled to the exemption are concerned, the notifi cation spells out the following requisites: (i) they must belong to one of the classes Of dealers speci fied in column No. (1) of the schedule; (ii) they must have set up industry in any of the districts of Madhya Pradesh specified in the annexure; (iii) they must have commenced production after 1.4.
The period of exemption is also specified in the notifica tion.
So far as the "restrictions and conditions" subject to which the exemption has been granted, they are, as per column No. (3) of the Schedule: (a) that the dealer should continue to furnish the pre scribed returns under the Sales Tax Act; and (b) that they should produce, at the time of their assessment, a certifi cate from the Director of Industries certifying that such dealer is eligible to claim exemption and has not opted for the "scheme of deferring the payment of tax under the rules framed for the purpose".
It is not anybody 's case that the assesses before us did not fall within the class of dealers specified in column (1) or that they did not comply with (a) above or that they had opted for the scheme of deferment of tax.
This being so, the assesses claim that they are eligible for the exemption under the notification and that the Director of Industries should have granted them a certificate to this effect.
It is the denial of 609 this certificate which has brought the assesses to Court.
The question for consideration is whether the Director of Industries can refuse the exemption certificate on a consid eration not specified in the notification.
Prima facie, No. All the conditions for exemption have to be.
and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those condi tions are fulfilled; he cannot travel beyond the terms of the notification.
He can see whether the dealer falls under the description in column (1), whether he has set up a new industry in M.P. State, whether he has commenced production after 1.4.1981 and whether has opted for the deferment scheme.
The condition about the dealer filing returns regu larly would seem to be one under the purview of the sales Tax Officer rather than one under that of the Director of industries.
If these conditions are fulfilled, the exemption certificate will have to be granted.
That seems the straight and simple interpretation of the notification.
But, it is said for the State, this is not the intend ment or effect of the notification.
It is said that the argument overlooks the reference in column (3) to the grant of an eligibility certificate by the Director of Industries.
This is one of the important conditions for the grant of this exemption.
It is pointed out, in this context, that there had been in force in the State, for several years past, a scheme of subsidy/loan.
That scheme was also depend ant on a certificate of the Director of Industries but that certificate could be denied to "traditional industries".
It is argued that, since the notification does not set out the conditions on which, and the procedure in accordance with which the Director of Industries is to issue the eligibility certificate, that earlier scheme and procedure should be read into the notification.
Sri Salve objected to this reading of the notification, infer alia, on the ground that the earlier scheme and the exemption now proposed are total ly different in their object and scope and that, while the former scheme was intended as an incentive to any one who set up a new industry in the State so that "traditional" industries did not get any benefit, the notification presently under consideration was issued with the object of industrialising the backward areas of the State and so it was immaterial what type of industry went in there and whether the industry proposed to be set up was a "tradition al" one or not.
This contention does not appear to be quite correct.
It has been pointed earlier that even the earlier schemes provided for graded incentives for industrialisation effective for varying periods depending upon the backward ness or otherwise of the district in which the industry was proposed to be set up.
But, even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemp tion, it does not necessarily follows that the 610 units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated.
Indeed, there were four new concessions introduced in 1981 82 and there is no mate rial which would justify these being tied down to the param eters of the earlier schemes.
No factual foundation has been laid to establish the hypothesis that the exemption con ferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier.
There are other difficulties in reading the provisions of the earlier schemes into the notification.
In the first place, the earlier schemes spe cifically provided that "traditional industries" were out side their purview.
The language of the notification, which is a piece of subsequent legislation, is silent about this.
This is itself indicative of a legislative intent to widen the scope of relief and grant exemption to traditional industries as well: vide, G.P. Singh: Interpretation of Statutes, 4th Edition, pp. 767 8.
The omission to specifi cally exclude "traditional industries" as was done in the earlier schemes the notification gains added significance in view of section 12 which specifically requires that all condi tions and restrictions governing an exemption should be specified in the notification.
Secondly, the attempt of the State to read a further condition into the notification excluding "traditional industries" from the exemption is based on the words which require that the Director of Indus tries should grant a certificate (a) that the dealer is entitled to claim the exemption and (b) that he has not opted for the scheme of deferring the payment of tax under the rules framed for the purpose.
But these words do not carry the State 's case further, for what the Director of Industries has to do is to certify that the applicant is entitled to the exemption on the terms and conditions set out in the notification and not on the basis of any further requirements not so set out.
The notification does not authorise him to say that, though the applicant fulfills the terms of the notification, he will not grant the eligibility certificate because, under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries".
He could not grant an eligibility certifi cate under the earlier schemes because the instructions which outlined the scheme specifically excluded traditional industries.
Actually, even under the earlier schemes, nei ther the application form nor the form of certificate, which have been extracted earlier, make any reference to the assessee concerned not being a `traditional industry '.
Be that as it may, for granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else.
To say that, when the notifica tion requires an eligibility certificate from the Director it means a certificate on the terms prescribed under the earlier scheme is to read into 611 the notification something which is not there.
Thirdly, the interpretation advocate by the State really narrows down the class of dealers entitled to the exemption as set down in column (1) of the notification.
It amounts to substituting, for the word "dealers" in column 1 of the notification the words "dealers other than those carrying on traditional industries".
Such an interpretation also virtually amounts to allowing certain executive instructions issued in a different context to cut down the scope of a statutory notification.
This cannot clearly be done.
Lastly, a perusal of the earlier schemes would show that the concept of "traditional industries" is a vague one.
The nomenclature of these industries has varied from time to time.
The note in the 1977, and the definition in the 1983, instructions show the eligibility under the earlier schemes was denied not only to "traditional industries" but also certain other industries such as revived or reconstructed industries.
We may also mention in this context a notification of 21.10.1986 referred to by the High Court outlining exemp tions under Ss. 6 and 7AA.
It excludes, from exemption, in addition to saw mills, flour mills etc.
(which the State calls traditional industries) various other industries (total numbering 26) specified in cl.
(xiii) thereof.
This changing definition of eligibility for exemption also shows that there was no common or identical group of beneficiaries intended under the various instructions or notifications and that each set of instructions or notification issued from time to time defined only the categories exempted from its purview and nothing else.
The exemption list under one was not meant to be carried over into another.
We are, there fore, of opinion that it is not permissible to restrict the scope of the notification in the manner suggested.
We may point out that, in construing the notification thus, we are only giving effect to a well settled rule that may be illustrated by a reference to the decision in Hansraj Gordhandas vs H.H. Dave, In that case notifications had been issued under section 8 of the granting exemption to (a) "cotton fabrics produced by any cooperative society formed of owners of cotton powerlooms . ." and (b) "cotton fabrics pro duced on powerlooms owned by any cooperative society or owned by or allotted to the members of the society . . ".
The appellant had sought exemption from excise duty under these notifications in respect of cotton fabrics which had been got manufactured by him on the powerlooms belonging to a cooperative society in pursuance of an agreement entered into with it.
The excise authorities rejected the claim on the ground that the exemption under the notifications could be claimed only when the cotton fabrics were manufactured by a cooperative so 612 ciety for itself.
Upholding the assessee 's claim, this Court observed: "It was contended on behalf of the respondent that the object of granting exemption was to encourage the forma tion of co operative societies which not only produced cotton fabrics but which also consisted of members.
not only owning but having actually operated not more than four power looms during the three years immediately preceding their having joined the society.
The policy was that instead of each such member operating his looms on his own.
he should combine with others by forming a society which.
through the cooperative effort should produce cloth.
The intention was that the goods produced for which exemption could be claimed must be goods produced on its own behalf by the society.
We are unable to accept the contention put forward on behalf of the respondents as correct.
On a true construction of the language of the notifications.
dated July 31, 1959 and April 30.
1960 it is clear that all that is required for claiming exemption is that the cotton fab rics must be produced on power looms owned by the coopera tive society.
There is no further requirement under the two notifications that the cotton fabrics must be produced by the Cooperative Society on the power looms "for itself".
It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words.
The entire matter is governed wholly by the language of the notification.
If the tax payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority.
If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom.
the matter is different, but that is not the case here.
In this connection we may refer to the observations of Lord Watson in Salomon vs Salomon & Co., ; , 38: "Intention of the legislature is a common but very slippery phrase, which, popularly understood may signi fy anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant although there has been an omission to enact it.
In a Court of Law or Equity, what the Legislature intended to be 613 done or "not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication.
" It is an application of this principle that a statutory notification may not be extended so as to meet a casus omissus.
As appears in the judgment of the Privy Council in Crawford vs Spooner, " .
We cannot aid the legislature 's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there.
" Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power looms by constituting themselves into Cooperative Societies.
But the operation of the notifica tions has to be judged not by the object which the rulemak ing authority had in mind but by the words which it has employed to effectuate the legislative intent.
" In our view, this principle applies here squarely.
Indeed, even granting that the notification may be inter preted having regard to the past history and the possible intention of the Government while issuing the notification, the position of the assesses here is much stronger for, while in the reported case the State was trying only to effectuate the clear object of the notification, here it is not at all clear, for the reasons discussed above, that the State intended the exemption to be confined only to the cases covered by the subsidy/loan schemes prevalent earlier.
The 1981 notification does not expressly, or (for the rea sons discussed above) even by necessary implication, exclude "traditional" industries from its scope.
Sri Salve contends that, even if a lenient view is taken and a more liberal construction is sought to be placed on the notification, the best that could be said for the State would be that the notification was ambiguous.
One could either say that the previous procedure and requirements prevalent for obtaining an exemption certificate were in tended to be incorporated by the words requiring such a certificate (as suggested for the appellant or one could say, with equal plausibi 614 lity, that the exemption certificate is to be based only on the conditions and requirements mentioned in the notifica tion (as contended for by the assesses).
In such a state of law, he contends, one can have regard to the conduct of the parties and how they understood the notification.
His argu ment is that the State, by its conduct, had held out to the assessee that it would also be eligible for the exemption.
In this context, he drew our attention to the following circumstance: (1) The M.P. Audhyogik Vikas Nigam, a State instrumen tality, which was administering the notification issued, in November 1981, a pamphlet setting out the various incentives the State was offering for new industries proposed to be set up in the State.
As to "exemption from sales tax", the pamphlet stated that "new industrial units coming into production after 1.4.81" will be entitled to an exemption for a period depending upon the district where it is set up or could alternatively exercise an option to defer payment of sales tax by a period of 10 years.
It did not mention anywhere that the industry should not be a traditional industry.
(2) The Nigam allotted a plot of land of the extent of 1 acre to enable the assessee to establish its unit in the Industrial Area.
Mandideep, Dt.
Raisen.
(3) Other incentives as to power, interest and capital subsidy were extended to the assessee.
Thus, says counsel, the State "lured" the assessee to set up a unit in the record time of ten months and with a substantial capital outlay of over Rs. 10 lakhs in a backward area.
These incen tives were meant to be coextensive with the concession regarding sales tax.
He contends that these representations and acts are sufficient to found a claim of "equitable estoppe" against the State.
We are unable to accept this argument.
The respondents have stated in their counter affidavit that the Nigam had acted in error and misconstrued the notification and was not acting under the authority of the Government in issuing the pamphlet.
The other conces sions extended to the assessee pertained to the setting up of a small scale industry in the State and were unrelated to the exemption from sales tax.
In our opinion, there is force in these submissions.
The circumstances and material relied on by the assessee do not spell out any clear promise of exemption from sales tax even for traditional industries.
The notifications or guidelines under which the other facil ities were granted have not been 615 placed before us and no material is available on record to correlate them to the sales tax exemption or to show that all these were inextricably connected so as to form part of a single "relief packet".
We, therefore, reject this conten tion of Sri Salve.
However, on the interpretation of the notification.
we accept the contention of the assesses that the notification does not warrant denial of exemption solely on the ground that the applicant is having a "traditional industry".
We have indicated earlier that the assesses whose writ petitions were disposed of by the Full Bench had set up their industries after 12.1.
1983 by which time elaborate instructions had been issued to explain the State 's point of view, The question is whether this makes a difference.
We think not.
Even the 1983 document is not a statutory instru ment neither a notification nor a rule framed under the statute.
The Full Bench has considered those instructions to be conclusive on two grounds on the doctrine of contempora nea exposition and on the principle that executive instruc tions can always be issued to supplement statutory instru ments so as to fill up areas on which the latter are silent.
In our opinion, neither of these grounds is tenable.
It is true that the principle of contemporanea exposition is in voked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner.
This doctrine has been explained and applied in a numbers of cases of this Court (e.g. See Varghese vs L.T.O., ; , in addition to the cases referred to by the Full Bench).
As pointed out by Sri Salve, its applicability in the construction of recent statutes.
and that too in the first few years of their enforcement, has been doubted.
vide: Doypack Systems P. Ltd. vs Union of India.
; , para 61.
But, this apart, the principle will not be applicable here for two reasons.
In the first place, the instructions of 1983 do not anywhere "expound" the terms of the notification.
They do not give any indication that the state had applied its mind to the precise terms of the notification or their interpretation.
They do not explain or clarify that, though the notification is silent, it has been intended that the limitations of the previous schemes should be read into it.
Secondly, the cases referred to will show that the doctrine applies in cases where the plea is that, though the language of the statute may appear to be wide enough to seem applicable against the subject in particular situations, the State itself which was the progenitor of the statute had not understood it in that way.
But, to apply the doctrine to widen the are bit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its 616 ipsi dixit.
That, certainly, is not, and cannot be, the scope of the doctrine.
The doctrine can be applied to limit the State to its own narrower interpretation in favour of the subject but not to claim its interpretation in its own favour as conclusive.
The second ground on which the Full Bench has sought to invoke the instructions is also not correct.
Executive instructions can supplement a statute or cover areas to which the statute does not extend.
But they cannot run contrary to statutory provisions or whittle down their effect.
The Full Bench seems to think that, unless the instructions are brought in, the notifications would have been in danger of abuse for want of proper guidelines as to the grant of exemption certificates.
It is suggested that the notification contemplates rules to be issued for the purpose and that, since no rules had been issued, Directors of Industries were left with no parameters for the issue of exemption certificates and might act capriciously or arbi trarily in granting or refusing certificates.
The instruc tions, it is said, have been issued to fill in this lacuna and are hence valid.
There are two misconceptions in this line of reasoning.
The first is that.
though the last few words in column (3) of the notification are capable of a wider meaning, it would appear that these words govern only the immediately preceding words; rules envisaged are not in relation to the grant of exemption certificates and condi tions therefore but in respect of the circumstances in which the assesses can exercise the option between exemption and deferment of sales tax.
This view derives support from the instructions of 1983.
As pointed out earlier, the instruc tions first set out the scope of the various notifications as granting exemption from sales tax; the instructions thereafter proceed to say: "The grant of exemption from the payment of sales tax is contingent upon the issue of a certificate of eligi bility to the new industrial units.
This certificate of eligibility is required to be issued by the Director of Industries or an officer authorised by him for this purpose.
In so Jar as the grant of concessions relating to the exemption from payment of sales tax is concerned, no further notifications are required to be issued.
For ena bling the new industrial units to avail of the second con cession viz., that of deferment of payment of sales tax, a scheme is being issued separately.
For availing of the benefit of the deferment of concession too, a certificate of eligibility is required to be obtained by the industrial unit.
However.
617 pending the issue of the scheme, the grant of certificate of eligibility should not be held up." (underlining ours) Incidentally, we may point out, the first part of the para does not clarify that the eligibility certificate is not to be granted to "traditional industries".
But, so far as the present point is concerned, it is categorically stated that no further notifications are required to be issued and that they are needed only to define the scheme for deferment of tax.
Indeed, rules were framed in order to implement the deferment scheme which came into force with effect from 1 4 1983.
We shall refer a little later to these rules.
Secondly, there is no warrant for assuming that the notifi cation envisages conditions for the issue of the eligibility certificate other than those specified by itself.
There is nothing in the language of the notification to suggest that anything further is needed to enable the Director of Indus tries to grant the exemption.
Without the guidelines, the requirement for an exemption certificate would not become an "empty formality" as suggested by the Full Bench.
The Direc tor of Industries has to issue the same after satisfying himself that the applicant industry falls within the terms of the notification in the following respects (a) that the assessee is one of the class of dealers set out in column ( 1); (b) that he has set up an industry in the State; (c) that it has been set up in one of the districts set out in the annexure and the category to which it belongs; (d) that the industry has commenced production after 1 4 81; (e) that the assessee has not opted for the deferment scheme.
These conditions are many and detailed and do not leave anything to the discretion of the Director of Industries.
We fail to understand what need there was to lay down any elaborate procedure therefore.
Even if there was, and the earlier procedure by way of application form, declaration form and form of certificate were to be adapted, that proce dure, by itself, did not, as pointed out earlier, contain any reference to the assessee being a traditional industry or otherwise.
To assume first that the conditions specified in the notification are not exhaustive or suffi 618 cient and may lead to abuse of power by executive authori ties unless canalised by procedural guidelines and then to say that such a conclusion is borne out by the mere refer ence to a certificate being granted by the Director of Industries because, under some earlier schemes, such certif icate was being granted on a restricted basis, does not appear to be sound logic.
We are, therefore, of opinion that the notification is quite clear and leaves no area of vacuum which needs to be supplemented by guidelines.
Thirdly, if we read the last part of the entry in column (3) of the notifi cation as envisaging rules to be framed for the grant of the eligibility certificate, no such rules were flamed.
Only instructions were issued.
These instructions say that even an assessee, who fulfills all the requirements of the noti fication, will not be eligible for exemption unless he fulfills one more condition outside the notification.
They travel beyond and counter to the notification.
They restrict the scope of exemption under the notification.
They deny exemption to a person who qualifies for it under the statu tory notification.
Indeed, there is force in the contention that if the statutory notification is construed as permit ting the State by rules or executive instructions to pre scribe other conditions for exemption, whether new or based on past practice, it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive.
This, certainly, they cannot do.
A further development which has been relied on by the State but does not really seem to help its case may now be referred to.
State Act 25 of 1982 inserted section 22 D in the Act in the following terms: "22 D. Special provisions relating to deferred payment of tax by Industrial Units Notwithstanding anything contained in any other provisions of this Act, a registered dealer, who is (a) registered as a small scale industrial unit with Indus trial Department of the Government of Madhya Pradesh;or (b) registered with the Director General of Technical Devel opment as an industrial unit; or (c) registered as an industrial unit by any authority duly empowered to do so by the Government of Madhya Pradesh or the Central Government; or (d) holding a licence under the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951).
619 and who in each case has or may set up a new industrial unit in any district of Madhya PradeSh if eligible for grant of the facility of deferred payment of tax under the scheme providing for grant of incentive to enterpreneurs for set ting up new industrial units in the state as the State Government may make in this behalf may make deferred payment subject to such restrictions and conditions as may be speci fied in such scheme.
" Thereafter, the State Government framed the M.P. Deferment of Payment of Tax Rules, 1983 which were gazetted of 1.9.83 but with retrospective effect from 1.4. 1981 (that is, even anterior to the date of the notification).
Rules 3, 4 and 14 are relevant and may be set out here.
"3. Eligibility for grant of Facility of Deferred payment of tax (1) A new industrial unit other than a unit specified in rule 14 which is covered by any of the categories speci fied in section 22D and of the Act and which is engaged in the manufacture and sale of any goods shall qualify for deferred payment of the tax payable by it provided it is eligible for grant of the concession of exemption from payment of tax in terms of notification No. A 3 41 81 (35) ST V, dated the 23rd October, 1981 and No. A 3 41 81(31) ST V, dated the 29th June, 1982 as amended from time to time subject to the provisions of the act.
The period pertaining to which the tax which the new industrial unit can defer will be the same for which it could have obtained the con cession of the exemption from payment of tax, i.e., the period pertaining to which the tax can be deferred will be the period shown in column (2) of the said notification.
(2) The new industrial unit shall be eligible to defer only the payment of tax which is due from it under the Act.
Application for Scheme of deferred payment and grant of certificate of eligibility (1) A new industrial unit opting for the scheme of deferred payment of tax shall apply for and obtain a certificate of eligibility in accordance with the instructions issued by State Government in the Commerce and Industries Department for the said purpose.
An applica tion in writing shall be submitted within forty five days of the publication of these rules or of commencement of the production whichever is later.
In the application form the 620 new industrial unit shall indicate that it has opted for scheme of deferred payment of tax.
The option once exercised shall be irrevocable.
The form of the application as well as the certificate of eligibility shall be as specified in the said instructions.
The application shall be made to the General Manager, District Industries Centre of the district where the new industrial unit is or is proposed to be locat ed and shall be processed further in accordance with the said instructions.
The certificate of eligibility in respect of large and medium scale units shall issued by the Director of Industries (Government of Madhya Pradesh) and in respect of small scale units by the said General Manager, and shall carry a specific and district number given by the said officer.
(2) A copy of the certificate of eligibility shall be for warded by the officer issuing the certificate to the appro priate Sales Tax Officer, i.e. the Sales Tax Officer in whose circle the industrial unit is registered as a dealer.
The Sales Tax Officer receiving the copy of the certificate of eligibility shall maintain a record of the same in such form as may be directed by the Commissioner and shall not enforce recovery of the tax payment whereof has been shown to have been deferred in the certificate of eligibility.
(3) The new industrial unit shall be entitled to defer the payment of the tax for a period of ten years.
This entitle ment shall be available only on receipt of the certificate of eligibility to it under sub rule (1).
The certificate of eligibility shall show the duration for which the payment of the tax has been deferred.
The year in which the tax per taining to any accounting year of the industrial unit is required to be paid consequent upon deferment of tax shall also be shown in the certificate of eligibility.
The entire tax assessed pertaining to any accounting year shall be payable by the industrial unit in lump sum on the expiration of duration of deferment and payment of such tax shall be made within thirty days of the date on which the period of ten years from the end of the relevant accounting year expires.
Non availability of facility of deferred payments The result of the scheme of deferred payment of tax shall not be available to the following new industrial units, namely: 621 (A) (1) flour mills (Excluding Roller Flour Mills); (2) Oil mills (excluding Solvent Extraction Plants); (3) dall mills; (4) saw mills; rice mills; (6) printing presses of all types; (7) cotton ginning and pressing factories; (8) ice factories; (9) such other industries as may be notified by Government from time to time.
(B) industrial units undertaking expansion, modernisation or diversification; (C) a closed unit revived by an entrepreneur; (D) units claiming interest free loans as an existing unit establishing a new unit; (E) an industrial unit set up by transferring or shifting or dismenting an existing industry.
A note was also published in the Gazette explaining the background of the rules.
It reads thus: "NOTE EXPLAINING THE BACKGROUND OF THE SCHEME OF DEFERRED PAYMENTS TAX The Government of Madhya Pradesh, with a view to accelerat ing the pace of industrialisation have announced concessions regarding the payment of tax under the Madhya Pradesh Gener al Sales Tax Act, 1958 and the by new industrial units going into production after 1st April, 1981 which contemplate (a) total exemption from payment of tax whether State or Central by new industrial units going into production after 1st April, 1981 for varying periods depending upon the district in which the new industrial unit is set up; 622 (b) deferment of the payment of tax in lieu of the above said exemption for a period of ten years.
To give effect to the concession of exemption from payment of tax, the Government in the Separate Revenue Department have already issued the following notifications: (i) F. No. A3 41 81(35) ST V, dated 23rd October, 1981.
(ii)F. No. A3 41 81 (25) ST V, dated 1st May, 1982.
(iii) F. No A3 41 81(24) ST.
V, 1st May, 1982.
(iv) F. No. A3 41 81 (31) ST V, dated 29th June, 1982.
With a view to enabling those new industrial units who opt for the alternative concession of deferment of payment of tax, a special provision in the shape of section 22 D has been inserted in the Madhya Pradesh General Sales Tax Act, 1958 with effect from 1st April, 1981, according to which the facility of deferring the payment of tax which become available subject to the provisions of the scheme providing for the grant of incentives for setting up the new industri al Units; The aforesaid rules have therefore been framed to formulate the scheme of deferred payment of tax.
" It might appear, at first sight, that since the relief by way of deferment of tax is only in the nature of an alterna tive to the provision for exemption and the former is not available to traditional industries because of rule 14 above, the same should be the position in regard to the exemption provision also.
There are, however, several diffi culties in accepting this suggestion.
In the first place, the rules relate to tax deferment and not tax exemption.
It is open to the State Government, particularly in view of section 22D, to frame such scheme for the purpose as it may deem fit.
The provision for exemption, however, needs to be spelt out, under section 12, in a statutory notification.
Secondly if, as is being urged on behalf of the State, it is explicit even on the terms of the notification that traditional industries are excluded, it is not necessary for the rules of deferment to specifically provide that they will not be available to the industries listed in rule 14 particularly when rule 4 has incorporated the requirement of an eligibil ity certificate in accordance with 623 the previous instructions for the said purpose.
Thirdly rule 14 excludes from the scheme not merely "traditional indus tries" covered by para (A) but also industrial units (which may not be `traditional industries ') falling under paras (B) to (E).
Fourthly, the rules are not inconsistent with the interpretation that, while all industries fulfilling the terms of the notification can claim exemption under it, only some of those units, which do not fall under rule 14, can opt for the alternative of determent.
We are, therefore, of opinion that even the retrospective promulgation of these rules provide no assistance in the interpretation of the notification.
A reference has now to be made to the notification of 3/7/87 amending the 1981 notification with retrospective effect so as to exclude what may be described in brief as `traditional industries ' though, like rule 14 of the defer ment rules, the exclusion extends even to certain other non traditional units operating in certain situations.
Though this notification purports to be retrospective, it cannot be given such effect for a simple reason.
We have held that the 1981 notification clearly envisages no exclu sion of any industry which fulfills the terms of the notifi cation from availing of the exemption granted under it.
In view of this interpretation, the 1987 amendment has the effect of rescinding the exemption granted by the 1981 notification in respect of the industries mentioned by it.
section 12 is clear that, while a notification under it can be prospective or retrospective, only prospective operation can be given to a notification rescinding an exemption granted earlier.
In the interpretation we have placed on the notifi cation, the 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospective: it enacts the rescission of the earlier exemption and, hence, can operate only prospec tively.
It cannot take away the exemption conferred by the earlier notification.
We would like to add that we agree with the view of the Full Bench that, if the notification is interpreted as done by it or even hold it to be ambiguous, there is no scope for the assessee to invoke the doctrine of promissory estoppel.
We have already dealt with this aspect in regard to the cases in which the State has appealed.
In the other cases covered by the Full Bench decision, the mere fact that an exemption was initially granted and then revoked would be insufficient to found the claim of estoppel particularly when it has been found that the assesses started production after 12.1.
1983 and claimed exemption very much later.
But since, in our view, the terms of the notification are clear and envisage no denial of exemption to traditional indus tries, this question does not survive.
624 Before we conclude, we have to refer to one aspect which we have touched upon at the very beginning of the judgment and that is the dismissal, in limine, of the Special Leave Petition filed in this Court by the petitioners before the Full Bench.
It has been pointed out that the above petition was dismissed notwithstanding that the Special Leave Peti tion in the case of G.S. Dhall & Flour Mills was also then pending for admission.
It would perhaps have been better if both the S.L.Ps. had been taken up and dealt with together.
However, the S.L.P. against the Full Bench was dismissed and, two of us having been members of the Bench that dis missed it, we may observe that Sri Salve is perhaps right in saying that it was the content of paras 20 and 21 of the Full Bench judgment that persuaded this Court to dismiss the S.L.P. there against.
The Full Bench has there pointed out that even if it could be said that two interpretations of the notification were equally plausible.
the assesses in those cases had set up the industries after the explicit instructions of 12.1.
1983 were made public and thus took a deliberate risk and had only themselves to thank.
Neverthe less, the fact is that the view taken by us on the scope of the notification runs counter to the Full Bench decision which must be treated as overruled.
For the above reasons, we have come to the conclusion that the G.S. Dhall and Flour Mills case laid down the correct law and not the Full Bench.
We would like to add that we are not quite happy to arrive at this decision.
It does seem likely that the State Government had not intended the exemption to be availed of by certain categories of industries.
But it has failed to achieve this purpose on account of the wide language in which it couched the exemp tion notification.
We find ourselves unable, for the reasons discussed above, to discover any valid legal basis on which the exemption clearly granted can be withheld from the assesses here.
We, therefore, dismiss the appeals of the State and allow the appeals preferred by the assesses and hold them entitled to the exemption under the 1981 notifica tion.
We, however, make no order regarding costs.
R.S.S. Appeals filed by State dismissed and other appeals allowed.
| IN-Abs | In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 the State Govern ment issued a notification dated 23.10.1981 exempting the specified class of dealers who had set up industry in any of the specified districts of Madhya Pradesh and had commenced production after 1st April, 1981 from payment of tax under the said Act for a specified period subject to certain restrictions and conditions.
However, when the assesses approached the Director of Industries for the certificate of exemption, it was denied to them on the ground that the industries run by them were "traditional industries" which were not eligible for exemption.
The assesses went to the court and urged that the con cept of "traditional industries" was one unspecified in the notification, and that the authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assesses an exemption they were entitled to under the notification.
The State on the other hand, relied on the provisions of the M.P. (Deferment of payment of Tax) Rules, 1983.
notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from or deferment of payment of sales tax".
The assessee 's claim for exemption from sales tax was accepted by the Division Bench of the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail.
The Division Bench took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notification of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statutory notification.
591 Subsequent to the decision of the Division Bench, the State Government issued a notification on 3.7.1987, intended obviously to overcome the effect of the said decision.
Subsequently, however, a Full Bench of the High Court, in the case of Jagadamba Industries disapproved the view taken by the Division Bench in G.S. Dhall case.
The Full Bench attached importance to the rules and instructions referred to above and relied considerably on his history of the sales tax levy in the State as furnishing proper and necessary background in which the terms of the notification of 23.10.1981 had to be read and interpreted.
The Full Bench, after considering the scheme and in structions of the Government, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the concessions granted earlier, and that the 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes.
The contention that "instructions" could not override the effect of the statutory notification was repelled by the Full Bench on the ground that the validity and effectiveness of the instructions could be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification.
The Full Bench considered the 1983 instructions to be conclusive on two grounds on the doctrine of contemporanea exposition and on the principle that executive instructions could always be issued to supplement statutory instruments so as to fill up areas on which the latter were silent.
The State, aggrieved by the judgment of the Division Bench in the two cases, and the assessee by the judgment of the Full Bench in the other case, have filed the appeals and Special Leave Petitions.
Before this Court the parties reiterated their submis sions in support of either of the two judgments.
The main submission on behalf of the State was that, since the 1981 notification did not set out the conditions on which, and the procedure in accordance with which the Director of Industries was to issue the eligibility certificate, the earlier scheme of subsidy/loan and its procedure should be read into the notification for this purpose.
This contention was contested by the assesses inter alia on the ground that the earlier scheme and the exemption now 592 proposed were totally different in their object and scope.
Dismissing the appeals of the State, and allowing the appeals preferred by the assesses, this Court while observ ing that the Division Bench laid down the correct law and not the Full Bench, HELD: (1) The 1981 notification does not expressly, or even by necessary implication, exclude "traditional" indus tries from its scope.
(2) Prima facie, the Director of Industries cannot refuse the exemption on a consideration not specified in the notification.
All the conditions for exemption have to be, and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those conditions are fulfilled; he cannot travel beyond the terms of the notification.
(3) Even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemption, it does not neces sarily follow that the units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated.
(4) No factual foundation has been laid to establish the hypothesis that the exemption conferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier.
(5) The notification does not authorise the Director of Industries to say that, though the applicant fulfill the terms of the notification.
he will not grant the eligibility certificate because,Under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries".
For granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else.
Changing definition of eligibility for exemption also shows that there was no common or identical group of benefi ciaries intended under the various instructions or notifica tions and that each set of instructions or notification issued from time to time defined only the categories exempt ed from its purview and nothing else.
The exemption list under one was not meant to be carried over into another.
Hans Gordon Dan v .H.H.
Dave, referred to.
593 (7) The 1983 document is not a statutory instrument neither a notification nor a rule framed under the statute.
(8) It is true that the principle of contemporanea exposition is invoked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner.
But. to apply the doctrine to widen the ambit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its ipsi dixit.
That, certainly, is not, and cannot be the scope of the doctrine.
The doctrine can be applied to limit the State to its own narrower interpretation to favour of the subject but not to claim its interpretation in its own favour as conclusive.
Varghese vs 1.
T.O.; , and Doypack Sys tems P. Ltd. vs Union of India, ; , referred to.
(9) Executive instructions can supplement a statute or cover areas to which the statute does not extend.
But they cannot run contrary to statutory provisions or whittle down their effect.
(10) There is nothing in the language of the notifica tion to suggest that anything further is needed to enable the Director of Industries to grant the exemption.
Without the guidelines, the requirement for an exemption certificate would not become an "empty formality".
(11) If the statutory notification is construed as permitting the State by rules or executive instructions to prescribe other conditions for exemption, whether new or based on past practice.
it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive.
This, certainly, they cannot do.
(12) The 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospectively; it enacts the rescission of the earlier exemption and, hence, can operate only pro spectively.
It cannot take away the exemption conferred by the earlier notification.
|
Criminal Appeal No. 195 of 1984.
From the Judgment and Order dated 30.11.
1982 of the Punjab & Haryana High Court in Crl.
Appeal No. 425 D.B./1982.
O.P. Soni, Ms. Kamlesh Datta and S.K. Sabharwal for the Appellant.
664 U.R. Lalit and Uma Datta for the Respondents.
Mahabir Singh for the State of Haryana.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The respondents Puran and Tara Chand along with Ved, Balwan, Dhapan, Jagdish and Lal Chand were tried before the Additional Sessions Judge, Sonepat, for the murder of one Partap Singh and causing injuries to others.
The learned Judge by judgment dated 18.5.
1972 convicted these respondents for offences under section 302, I.P.C., and sections 323,325 read with 149, I.P.C. They were sen tenced to undergo imprisonment for life and ordered to pay a sum of Rs.500 each under section 302, I.P.C., R.I. for one year under section 148, I.P.C., R.I. for one year under section 325 and R.I. for six months under section 323, I.P.C.
The other accused were convicted for the minor of fences and released on probation under sections 360/36.1, Cr.
P.C. The respondents appealed against the conviction and sentence.
The High Court by the impugned judgment dated 30.11.
1982 disposed of the appeal thus: "Admittedly there was no prior enmity between the parties.
The quarrel arose out of a very insignificant matter like the burning of dry sugarcane leaves on the common boundary of the fields of the two parties.
The ensuing altercation would probably have been forgotten had Partap Singh deceased not died.
Even when there is an altercation arising out of a minor incident there is some tendency on the part of the prosecution witness to exaggerate matters.
The three eye witnesses have of course fully supported the prosecution case but the investigating officer recorded statement of one Paras Ram at the time of making the inquest report which gives a somewhat different version.
The learned trial judge has himself found that the object of the unlawful assembly was not to commit the murder of the deceased.
It is precise ly for this reason that five accused persons have been released on probation and only two accused, i.e., Puran and Tara Chand appellants, have been convicted under section 302, I.P.C. We do not propose to go into the details of the controversy and in the peculiar circumstances of this case convert the conviction of Puran and Tara Chand appellants into one under section 304.
Part1, 1.
P.C., on the basis that in view of the statement made by 665 Paras Ram at the time when the investigating officer made the inquest report a somewhat different version was given.
This Paras Ram was not produced as a witness by the prosecu tion.
Since there was no prior enmity between the parties, we order that sentence already undergone by Puran and Tara Chand appellants will meet the ends of justice.
They are, however, ordered to pay a fine of Rs. 12,000 each.
In de fault of payment of this fine, the defaulter is ordered to undergo rigorous imprisonment for five years.
The sentences of imprisonment imposed upon Puran and Tara Chand appellants on other counts are also reduced to that already undergone by them.
The total fine, if realised, shall be paid to the next heirs of Partap Singh deceased as compensation." (emphasis supplied) The High Court has, by this Cryptic order, acquitted re spondents of the major charge under section 302, I.P.C., and recorded their conviction under section 304 Part I reducing the sentence of life imprisonment to a term of imprisonment already undergone while enhancing the sentence of fine.
The State has not preferred any appeal against the order of acquittal or reduction of sentence.
The respondents.
it appears, have accepted the judgment.
Sham Sunder, the de facto complainant, however, being aggrieved approached this Court under Article 136 of the Constitution.
This Court has granted special leave to appeal.
The High Court, exercising power under section 386, Cr. P.C., in an appeal from a conviction may reverse the finding and sentence and acquit the accused or alter the finding maintaining the sentence or with or without altering the finding after the nature or the extent or the nature and extent of the sentence but not so as to enhance the same.
The powers of the High Court in dealing with the evidence are as wide as that of the trial Court.
As the final court of facts, the High Court has also duty to examine the evi dence and arrive at its own conclusion on the entire materi al on record as to the guilt or otherwise of the appellants before it.
It is true that the High Court is entitled to reappraise the evidence in the case.
It is also true that under Article 136.
the Supreme Court does not ordinarily reappraise the evidence for itself for determining whether or not the High Court has come to a correct conclusion on facts but where the High Court has completely missed 666 the real point requiring determination and has also on erroneous grounds discredited the evidence and has further failed to consider the fact that on account of long standing enmity between the parties, there is a tendency to involve innocent persons and to exaggerate and lead pre judged evidence in regard to the occurrence, the Supreme Court would be justified in going into the evidence for the pur pose of satisfying itself that the grave injustice has not resulted in the case.
We have extracted the material portion of the judgment of the High Court to indicate that the line of approach adopted by the High Court is wholly wrong.
There is no discussion of the evidence much less any reasoning.
The respondents herein along with five others had been found guilty by the trial court accepting the testimony of the two eye witnesses and other material evidence on record.
A brief resume of the facts is necessary.
Lal Chand and Tara Chand are brothers.
Ved Singh, Puran, Balwan and Ishwar are the sons of Tara Chand and Dhapan is his wife.
Jagdish is the son of Lal Chand.
Partap and Bhim Singh are brothers.
Sham Sunder is the son of Bhim Singh.
Roshan is the son of Partap.
Tara Chand owns sugarcane field adjoining the wheat field of Partap.
On 10.3.
1981 in the morning, Ved Singh burned sugarcane patties causing damage to the wheat crop.
The protest raised by Roshan was not heeded.
Bhim Singh arrived at the scene and altercation 'ensued.
Partap later raised protest before Tara Chand.
His grievance was not redressed.
At about 6.00 P.M. Partap raised the protest before Puran who also turned down the same.
Shortly thereaf ter Puran and the other members of his family including his wife, brother and their children all numbering about eight reached in front of the house of Partap.
They were armed and attacked Partap.
The allegation is that the respondents Tara Chand and Puran had attacked Partap with jailies, first they gave jailies blows from the prong side in the chest and when Partap fell down, they gave jailies blows like lathi on his head, back and shoulder.
Partap died on his way to the hospital.
It is further alleged that in the course of the incident Lal Chand and Jagdish caused injuries to Roshan; Ishwar caused injuries to Dhapan wife of Partap; Puran, Ved, Balwan caused injuries to Sham Sunder.
It has come out in evidence that Ved, Dhapan, Lal Chand, Puran and Ishwar also received injuries in the course of the incident.
Sham Sunder and Roshan are the two eye witnesses, be sides Smt.
Dhapan the wife of deceased Partap.
There had been no independent witness.
Sham Sunder and Roshan said that they had caused 667 injuries to the members of the opposite party in self de fence.
They do not however state in what circumstances they had to use force.
The evidence does not disclose the genesis of the occurrence; how it developed and culminated in fatal injuries to Partap.
There had been no enmity between the two groups.
The immediate provocation for the quarrel is the damage to the wheat crops.
It is admitted that Partap raised his protest right from the morning till the arrival of Puran who was employee of the Medical College, Rohtak.
The prose cution has, it appears, given a twist when they say that at 6.00 P.M. Partap met Puran who turned down his request and went home and after 15 minutes all the members of his family including the womenfolk reached the house of Partap and started the assault.
It is significant to note that the women and even the minor children of both families were present and received injuries recording their presence at the place.
It would therefore appear that it was a continu ous transaction and when Partap persistently raises the protest and started abusing Puran, other members of his household had come out.
The quarrel had taken a serious turn and in the course of further development fatal injuries had been caused to Partap.
The plea of the respondents was that they did not cause any injury, that there was a Panchayat where a large crowd assembled and there had been brick batting and altercation.
The plea of private defence was not specifically set up.
However, if there are material in evidence to indicate that the incident could not have hap pened in the manner spoken to by the eye witnesses and in all probability the respondents had used the force exercis ing the right of private defence, then accused are entitled to the benefit thereof.
Whether the respondents have in such circumstances exceeded their right and are justified in causing death, has necessarily to be considered.
In the absence of a full discussion of the evidence by the High Court, we have been constrained to consider the materials on record.
We have seen that there is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
We have seen that most of the accused have sustained injuries and in explaining the same, the prosecution witnesses have not come forward with a truthful account.
We are led to draw the inference that in the melee and ensued on account of the aggressive attitude of Partap, the respondents and other members of the family participated and used the force against Partap and his associates in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indi 668 cate that injuries sufficient in the ordinary course of nature to cause death had been inflicted intentionally.
In such circumstances.
, the act of the respondents squarely falls under section 304 Part I, EP.C. While we agree with the conclusion arrived at by the High Court, we record that the High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erro neous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
We, however, maintain the conviction under section 304 Part I, I.P.C.
The High Court has reduced the sentence to the term of imprisonment already undergone while enhancing the fine.
It is pointed out that the respondents have undergone only imprisonment for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particular reason has been given by the High Court for awarding such sentence.
The court in fixing the punishment for any particular crime should take into consid eration the nature of the offence, the circumstances in which it was committed and the degree of deliberation shown by the offender.
The measure of punishment should be propor tionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
We are of opinion that to meet the ends of justice, the sentence has to be enhanced.
In the result, we maintain the conviction of the re spondents but enhance the sentence to one of rigorous im prisonment for a period of five years.
The respondents should surrender to the bail to undergo the unexpired por tion of the sentence.
The fine, if paid, shall be refunded to the respondents 1 and 2.
The appeal is disposed of as above.
G.N. Appeal disposed Of.
| IN-Abs | Respondent 1 is the son of Respondent No. 2.
Including Respondent No. 1 Respondent No. 2 had 4 sons.
Respondent No. 2 owned a sugarcane field adjoining the wheat field of one P. One of the sons of Respondent 2 had burnt sugarcane patties causing damage to the wheat crop of P, against which P protested before the respondents.
The protest was turned down.
Shortly thereafter the respondent and the family members reached the house of P. They were all armed.
Re spondents attacked P and he fell down.
On the way to hospi tal P died.
Most of the accused as well as the family mem bers of P sustained injuries.
On a complaint, F.I.R. was registered.
After investigation, Prosecution filed a case before the Additional Sessions Judge.
Two eye witnesses were produced by the prosecution.
They were relatives of the deceased and there was no independent witness.
The Additional District Judge convicted the respondent for offences under sections 302 IPC and 323, 325 read with 149 IPC.
Both were sentenced to imprisonment for life and a fine Rs.500 each under section 302 IPC.
They were also sentenced to rigorous imprisonment ranging from six months to one year for the other offences.
The other accused were convicted for minor offences and released on probation.
The respondent appealed against the conviction and sentence.
The High Court acquitted the respondents of the major charge under section 302 IPC and recorded the conviction under section 304 Part I reducing the sentence of life imprison ment to the term already undergone, and enhanced the sen tence of fine.
No appeal was preferred by the State.
Howev er, the complaint filed an appeal by special leave.
663 Disposing the appeal, this Court, HELD 1.
There is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
Most of the accused have sustained injuries and in explaining the same, the prosecution wit nesses have not come forward with a truthful account.
In the melee that ensued on account of the aggressive attitude of the respondents and other members of the family who partici pated and used force against P and his associates.
in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indicate that they were sufficient in the ordinary course of nature to cause death and had been inflicted intentionally.
In such circum stances, the act of the respondents squarely fails under section 304 Part I, IPC.
The High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erroneous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
However.
the conviction under section 304 Part I, IPC is maintained.
The High CoUrt has reduced the sentence to the term of imprisonment already undergone, and enhanced the fine.
The respondents have undergone imprisonment only for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particu lar reason has been given by the High Court for awarding such sentence.
The Court in fixing the punishment for any particular crime should take into consideration the nature of the offence, the circumstances in which it was committed, and the degree of deliberation shown by the offender.
The measure of punishment should be proportionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
The sentence is enhanced to one of rigorous imprisonment for a period of five years.
|
ivil Appeal No. 4460 Of 1988.
From the Order dated 15.4.
1988 of the Customs Excise and Gold (Control) Appellate Tribunal New Delhi in Appeal No. E/Appeal No. 2225 of 1986 A. 3 V. Sreedharan, V.J. Francis and N.M. Popli for the Appel lant.
Ashok H. Desai, Solicitor General, Dalip Tandon and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This is an appeal under section 35L of the .
The appeal is di rected against the order dated 15.4.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.
The appellant is the manufacturer of Hacksaw blades and Bandsaw Blades failing under Tariff Item No. 51 A(iv) of the Central Excise Tariff.
The appellant filed a classification list as per Rule 173B of the Central Excise Rules 1944 on 26.3.1985 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effec tive rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The aggregate value of the clearance in the preceding year i.e. 1984 85 did not exceed Rs.75 lakhs.
In the case of first clearance upto an aggregate value not exceeding Rs.7.5 lakhs, the effective rates of duty is nil and in the case of next clearance of Rs.7.5 lakhs, the duty is 3.75% Ad valorem.
The Assistant Collector of Central Excise, Hyderabad, approved the Tariff rate 15% Ad valorem on 3.6.1985 instead of the above effective rates as the appellant did not claim the exemption as per Notification No.85/85 CE dated 17.3.1985 due to ignorance.
A revised classification list with the effective rates in respect of the products with retrospective effect from 26.3.1985 was filed on 31.10.1985.
The revised classification list was approved.
The appellant claimed that they had paid excess Rs.2,55,172.55 from 1.4.1985 to 31.8.1985 as excise duty.
They made an application for refund as per rule under sec tion 11B of the on 30.10.1985.
The Assistant Collector of Central Excise by his order dated 13.12.1985 sanctioned the refund claim only partly.
For the period from 1.4.1985 to 27.4.1985, the refund claim was rejected on the ground that the same was time barred.
The Assistant Collector held that the refund claim for the period 1.4.1985 to 27.4.1985 was time barred for the reason that under section 11B, the 'relevant date ' for preferring the claim for a case such as that of the appellant was the date of payment of duty and, according to him, the duty had been paid by adjustment in the personal ledger account as and when goods were removed.
The plea of the appellant is that mere debiting in the personal ledger account should not be taken as the starting point for 4 limitation and the relevant date should be the date on which RT 12 Returns which are filed on a monthly basis are as sessed.
The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
The further appeal to the Tribunal was also unsuccessful.
The question that arises for decision in the appeal is as to the starting point of limitation for filing an appli cation under section 11B of the .
Section 11B so far as it is material reads as under: "11B. Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation For the purposes of this section (B) "relevant date" means, (a) to (d) . . . . . . . . (e) in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty.
" The appellant 's contention before the authorities was that the date of assessment would be the date of payment of duty within the meaning of clause (f) above.
We agree with the learned Solicitor General that this argument is not tenable.
Where an assessee maintains a personal ledger account, duty is paid by way of debit therein and goes to reduce the amount of deposit paid by the assessee.
It is 5 not a mere adjustment entry; it is effective payment.
Before us, however, learned counsel for the assessee has raised an alternative contention.
According to the appellant it is clause (e) which is applicable in the case whereas the contention of the respondent is that clause (f) is attract ed.
To understand this argument, it is necessary to refer to 'Self removal ' procedure under which the appellant cleared the goods.
Chapter VII A of the Rules relates to removal of excise goods on determination of duty by producers, manufacturers of private warehouse licensees.
Under Rule 173B, every assessee shall file with the Proper Officer for approval a list in prescribed form showing full description of all excisable goods or products manufactured, the rate of duty leviable on such goods and such other particulars as the Collector may direct.
The Proper Officer shall, after such enquiry as he deems fit, approve the list with such modifi cations as are considered necessary and return one copy of the approved list to the assessee who shall unless otherwise directed by the Proper Officer determine the duty payable on the goods intended to be removed in accordance with such list.
All clearance shall be made only after the approval of the list by the Proper Officer.
Sub rule (2 A) of Rule 173B provides as under: "(2 A) All clearances shall, subject to the provisions of rule 173CC, be made only after the approval of the list by the proper officer.
If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under rule 9B for provisional assess ment of the goods.
" Where the assessee disputes rate of duty approved by the Proper Officer in respect of goods, he may have to give an intimation to that effect to such officer and to pay duty under protest at the rate approved by such officer.
When the dispute about the rate of duty has been finalised or for any other reason affecting rates of duty, a modification of the rate or rates of duty is necessitated, the Proper Officer shall make such modification and inform the assessee accord ingly.
Under Rule 173C, the assessee shall file with the Proper Officer a price list in prescribed form.
Prior ap proval of the price list by the 6 Proper Officer is necessary in the specified cases.
Here also, sub rule (5) of rule 173C provides: "(5) Subject to the provisions of rule 173CC, an assessee specified in sub rule (2) shall not clear any goods from a factory, warehouse or other approved place of storage unless the price list has been approved by the proper officer.
In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or for any other rea sons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assessee or of his own accord allow such asses see to avail himself of the procedure prescribed under rule 9B for provisional assessment of the goods." Under Rule 173CC, assessee may remove goods in certain cases pending approval by the Proper Officer of the classi fication or price list.
Rule 173F provides that where the assessee has complied with the provisions of Rules 173B, 173D, and where applicable 173C, 173CC, he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as other wise expressly provided, remove such goods unless he has paid the duty as determined.
Under Rule 173G, every assessee shall keep an account current with the Collector.
This rule lays down the procedure which is to be followed by the assessee for payment of duty.
According to sub rule (3) of Rule 173G, within five days after the close of each month every assessee shall file with the Proper Officer a monthly return in the prescribed form showing the quantity of the excisable goods manufactured, duty paid on such quantity and other particulars.
The Proper Officer makes an assessment as provided under Rule 1731 on the basis of the information contained in the return and after such further enquiry as he may consider necessary assess the duty due on the goods removed and the assessment is completed.
The duty determined and paid by the assessee under Rule 173F shall be adjusted against the duty assessed and where the duty so assessed is more than the duty determined and paid, the assessee shall pay the deficiency by making a debit in the current account within 10 days of the receipt of copy of the return and where such duty is less, the assessee shall take credit in the account current for the excess.
This is the scheme for the payment of duty for clearance of goods by the manufacturers.
This procedure is known as self removal procedure.
There will be no time bar for refund if the duty is paid under 7 protest.
The period of 6 months is prescribed in other cases.
As we have already seen, section 1 1B says that the period of 6 months "in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof".
In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985.
From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure pre scribed under Rule 9B for provisional assessment of the goods.
In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
This is the procedure prescribed under Rule 9B except for the circum stance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time.
In these circumstances, the clearances of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11B will be attracted.
In this case the RT 12 Returns for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11B will operate.
In the present case the refund application had been filed on the 30th of October, 1985.
It cannot, therefore, said to be time barred.
We, therefore, accept this contention of the appellant.
The appeal has therefore to be allowed holding the appellant is entitled to the full amount and there is no bar of limi tation as found by the Tribunal.
We, therefore, allow the appeal.
In the facts and circumstances of the case there will be no order as to costs.
T.N.A. Appeal allowed.
| IN-Abs | The appellant was manufacturing Hacksaw blades and Bandsaw falling under Tariff Item No. 51 A(iv) of the Cen tral Excise Tariff.
On 26.3.1985 they filed a classification list as per Rule 173 B of the Central Excise Rules, 1944 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The Assistant Collector of Central Excise ap proved the classification list on 3.6.1985.
On 31.10.1985 the appellant filed a revised classification list with the effective rates of its products with retrospective effect from 26.3.1985 which was also approved by the Assistant Collector of Central Excise.
On 30.10.1985 the appellant made an application under section 11B of the for refund of excise duty claiming that they had paid excess excise duty from 1.4.1985 to 31.8.1985.
By its order dated 13.12.1985 the Assistant Collector of Central Excise allowed the claim only partly but rejected the claim for the period from 1.4.1985 to 27.4.1985 on the ground that the claim was barred under section 11B of the Act because the 'relevant date ' for preferring the claim for the appellant was the date of payment of duty and the duty had been paid by adjustment in the personal ledger account as and when goods were removed; The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
Appellant 's further appeal to the Customs Excise and Gold (Control) Appellate Tribunal was also unsuccessful.
In appeal to this Court under section 35L of the it was contended on behalf of the appellant (i) that mere debiting in the personal ledger account should not be taken as the 2 starting point for limitation and the, relevant date should be the date on which ART 12 Returns, which were filed on a monthly basis, were assessed: and (ii) that clause (e) of Explanation to Section 11 (B) was applicable to the case.
Allowing the appeal, this Court, HELD: 1.
The scheme for payment of duty of goods under which the appellant was clearing his goods is known as 'self removal ' procedure.
There will be no time bar for refund if the duty is paid under protest.
The period of 6 months is prescribed in other cases.
[6H; 7A] 2.
In the instant case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.85.
From provisions of Rules 173B, 173C and 173CC of the Central Excise Rules, 1944 it is clear that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in accordance with the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of goods.
Between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11 B will be attracted.
The RT 12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11 B will operate.
The refund application having been filed on 30th October, 1985 cannot, therefore, said to be time barred.
[7B D; E F]
|
Appeal No. 119 of 1955.
Appeal from the judgment and order dated June 16, 1953, of the Punjab High Court in Civil Reference No. 1 of 1953.
A. V. Viswanatha Sastri and Naunit Lal, for the appellant.
H. N. Sanyal, Additional Solicitor General of India, R. Gopalakrishnan, R. H. Dhebar and D. Gupta, for the respondent.
November 24.
The Judgment of the Court was delivered by SARKAR, J.
The appellant is a company carrying on business as a distiller of country liquor.
It was incorporated in May 1945 and was in fact a previously existing company called the Amritsar Distillery Co. Ltd. reconstructed under the provisions of the Company 's Act.
The appellant carried on the same business as its predecessor, namely, sale of the produce of its distillery to licensed wholesalers.
The wholesalers in their turn sold the liquor to licensed retailers from whom the actual consumers made their purchases.
The entire trade was largely controlled by Government regulations.
After the war started the demand for country liquor increased but difficulty was felt in finding bottles in which the liquor was to be sold.
In order to relieve the scarcity of bottles the Government devised in 1940 a scheme called the buy back scheme.
The scheme in substance was that a distiller on a sale of liquor became entitled to charge a wholesaler a price for the bottles in which the liquor was supplied at rates fixed by the Government which he was bound to repay to the wholesaler on the latter returning the bottles.
The 685 same arrangement, but with prices calculated at different rates was made for the liquor sold in bottles by a wholesaler to a retailer and by a retailer to the consumers.
Apparently it was conceived that the price fixed under the scheme would be found to be higher than the price which the bottles would fetch in the open market and the arrangement for the refund of the price would therefore encourage the return of the bottles from the consumers through the intermediaries ultimately to the distiller.
The price refundable was later increased perhaps because the previous price did not fully achieve the desired result of the bottles finding their way back to the distillers.
Sometime in 1944, the Amritsar Distillery Co. Ltd. which then was in existence, insisted on the wholesalers paying to it in addition to the price of the bottles fixed under the buy back scheme, certain amounts described as security deposits and calculated at varying rates per bottle according to sizes for the bottles in which the liquor was supplied to them promising to pay back for each bottle returned at the rate ' applicable to it and further promising to pay back the entire amount paid on a transaction when 90 per cent.
of the bottles covered by it had been returned.
The company while it was in existence realised these additional sums and so did the appellant after it took over the business.
The object of demanding and taking these additional sums was obviously to provide additional inducement for the return of the bottles to the distiller so that its trade in selling the produce of its distillery might not be hampered for want of bottles.
No time limit had been fixed within which the bottles had to be returned in order to entitle a wholesaler to the refund, nor does it appear that a refund had ever been refused.
The price of the bottles received by the appellant under the buy back scheme was entered by it in its general trading account while the additional sum received for them was entered in the general ledger under the heading " Empty Bottles Return Security Deposit Account ".
It is not disputed that for the accounting periods with which this case is concerned, the additional amounts had been taken 686 without Government 's sanction and entirely as a condition imposed by the appellant itself for the sale of its liquor.
The appellant was assessed to income tax on the balance of the amounts of these additional sums left after the refunds made there out.
It had also been assessed to business profits tax and excess profits tax on the same balance.
Its appeals against the orders of assessment to these taxes to the Appellate Assistant Commissioner and thereafter to the Tribunal failed.
It then obtained an order referring a certain question arising out of the assessments for decision by the High Court of Punjab.
The question originally suggested was reframed and in its final form reads thus: Whether on the facts and circumstances of the case the collections by the assessee company described in its accounts as " empty bottle return security deposits" were income assessable under section 10 of the Income tax Act? The High Court answered the question in the affirmative.
The present appeal is against that decision which related to all the three varieties of taxes for which the appellant had been made liable.
We are concerned in this appeal only with the additional sums demanded and received by the appellant and described as security deposit and not with the price of bottles which also it took under government sanction.
The question is whether these amounts called security deposits were.
trading receipts.
Now, as already stated, the appellant 's trade consisted in selling in bottles liquor produced in its distillery to wholesalers.
The sale was made on these terms: In each transaction of sale the appellant took from the wholesaler the price of the liquor, a certain sum fixed by the government, as price of the bottles in which the liquor was supplied and a further sum described as security deposit for the return of the bottles.
The moneys taken as price of the bottles were returned as and when the bottles were returned.
The moneys described as security deposit were also returned as and when the bottles were returned with only this difference that in this case the entire sum taken in one 687 transaction was refunded when 90 per cent.
of the bottles covered by it had been returned, though the remaining 10 per cent.
had not been returned.
Such being the nature of the appellant 's trade and the manner in which it was conducted, these additional sums appear to us to be its trading receipts.
Mr. Vishwanatha Sastri appearing on behalf of the appellant first contended that on these facts the amounts could not be regarded as price and that therefore they were not trading receipts.
He said that the price of the bottles was separately fixed and the amount taken as deposit was different from and exclusive of, it.
This contention is founded on the use of the word price in the buy back scheme in connection with the rates which the distiller was entitled to charge a wholesaler for the bottles.
It seems to us that this contention lays undue emphasis on that word.
We think that the High Court took substantially a correct view of the matter when it said that in realising these amounts " the company was really charging an extra price for the bottles ".
It is clear to us that the trade consisted of sale of bottled liquor and the consideration for the sale was constituted by several amounts respectively called, the price of the liquor, the price of the bottles and the security deposit.
Unless all these sums were paid the appellant would not have sold the liquor.
So the amount which was called security deposit was actually a part of the consideration for the sale and therefore part of the price of what was sold.
Nor does it make any difference that the price of the bottles was entered in the general trading account while the so called deposit was entered in a separate ledger termed " empty bottles return deposit account ", for, what was a consideration for the sale cannot cease to be so by being written up in the books in a particular manner.
Again the fact that the money paid as price of the bottles was repaid as and when the bottles were returned while the other moneys were repaid in full when 90 per cent.
of the bottles were returned does not affect the question for ,none of these sums ceased to be parts of the consideration because it had been agreed that they would be 688 refunded in different manners.
It is not contended that the fact that the additional sums might have to be refunded showed that they were not part of the price.
It could not be so contended because what was expressly said to be the price of bottles and admitted to be price was also refundable.
If so, then a slightly different method providing for their refund cannot by itself prevent these additional sums from being Price.
Now, if these additional sums were not part of the price, what were they ? Mr. Sastri said that they were deposits securing the return of the bottles.
According to him if they were such security deposits, they were not trading receipts.
Again we are unable to agree.
There could be no security given for the return of the bottles unless there was a right to their return for if there was no such right, there would be nothing to secure.
Now we find no trace of such a right in the statement of the care.
The wholesalers were clearly under no obligation to return the bottles.
The only thing that Mr. Sastri could point out for establishing such an obligation was the use of the words " security de posit ".
We are unable to hold that these words alone are sufficient to create an obligation in the wholesalers to return the bottles which they had bought.
If it had been intended to impose an obligation on the wholesalers to return the bottles, these would not have been sold to them at all and a bargain would have been expressly made for the return of the bottles and the security deposit would then have been sensible and secured their return.
The fact that there was no time limit fixed for the return of the bottles to obtain the refund also indicates that there was no obligation to return the bottles.
The substance of the bargain clearly was that the appellant having sold the bottles agreed to take them back and repay all the amounts paid in respect of them.
For this part of the case Mr. Sastri relied on Davies vs The Shell Company of China Ltd. (1), but we do not think that case assists at all.
What had happened there was that the Shell Company had appointed a large number of agents in China to sell its products (1) 689 and had taken from each agent a deposit to secure itself against the risk of default by the agent duly to PI account for the sale proceeds.
The deposits were made in Chinese dollars and later converted into sterling.
When the Company closed its business in China it reconverted the deposits into Chinese dollars and refunded to the agents the deposits made by them.
Owing to a favourable exchange for the conversion of sterling into dollars, the Company made a profit and it was sought to assess this profit to income tax.
It was held that the profit could not be taxed, for the deposits out of which it was made were really not trading receipts at all.
Jenkins, L. J., observed at p. 157: " Mr. Grant described the agents ' deposits as part of the Company 's trading structure, not trade receipts but anterior to the stage of trade receipts, and I think that is a fair description of them.
It seems to me that it would be an abuse of language to describe one of these agents, after he had made a deposit, as a trade creditor of the Company; he is a creditor of the Company in respect of the deposit, not on account of any goods supplied or services rendered by him in the course of its trade, but simply by virtue of the fact that he has been appointed an agent of the Company with a view to him trading on its behalf, and as a condition of his appointment has deposited with or, in other words, lent to the company the amount of his stipulated deposit.
" lie also said at p. 156: it If the agent 's deposit had in truth been a payment in advance to be applied by the Company in discharging the sums from time to time due from the agent in respect of petroleum products transferred to the agent and sold by him the case might well be different and might well fall within the ratio deciding of Landes Bros. vs Simpson (1) and Imperial Tobacco Co. vs Kelly (2).
But that is not the character of the deposits here in question.
The intention manifested by the terms of the agreement is that the deposit should be (1) (2) 87 690 retained by the Company, carrying interest for the benefit of the depositor throughout the terms of the agency.
It is to be available during the period of the agency for making good the agent 's defaults in the event of any default by him ; but otherwise it remains, as I see it, simply as a loan owing by the Company to the agent and repayable on the termination of the agency ".
It would therefore appear that the deposits in that case were held not to be trading receipts because they had not been made as part of a trading transaction.
It was held that they had been received anterior to the commencement of the trading transactions and really formed the trading structure of the Company.
The character of the amounts with which we are Concerned is entirely different.
They were parts of the trading transactions themselves and very essential parts: the appellant would not sell liquor unless these amounts were paid and the trade of the appellant was to make profit out of these sales.
The fact that in certain circumstances these amounts had to be repaid did not alter their nature as trading receipts.
We have already said that it is not disputed that what was expressly termed as price of bottles was a trading receipt though these had to be repaid in almost similar circumstances.
We may point out that it had not been said in Shell Company case(1) that the deposits were not trading receipts for the reason that they might have to be refunded; the reason for the decision was otherwise as we have earlier pointed out, namely, that they were no part of the trading transactions.
We therefore think that the deposits dealt with in the Shell Company case were entirely of a different nature and that case does not help.
Mr. Sanyal was prepared to argue that even if the amounts were securities deposited for the return of the bottles, they would still be trading receipts, for they were part of the trading transactions and the return of the bottles was necessary to enable the appellant to carry on its trade, namely, to sell liquor in them.
As we have held that the amounts had not been paid as security for the return of the bottles, we do not (1) 691 consider it necessary to pronounce upon thiscontention.
We might also refer to the observationsmade in Imperial Tobacco Co. vs Kelly(1) mentioned in the Shell Company case (2) and set out below.
There the Company in the course of its trading activity used to purchase tobacco in America and for that purpose had to acquire American dollars.
It so happened that after it had acquired a certain amount of dollars for making the purchases, it was prevented from buying tobacco in America by Government orders passed due to outbreak of war.
While the dollars lay with the Company, they appreciated in value and later the Treasury acquired the dollars and paid the Company for them in sterling at the then current rate of exchange, as a result of which payment the Company made a profit.
It was hold that the profit was a trading receipt of the Company.
Lord Greene said at p. 300: " The purchase of the dollars was the first step in carrying out an intended commercial transaction, namely, the purchase of tobacco leaf.
The dollars were bought in contemplation of that and nothing else ".
He also observed that the dollars " were an essential part of a contemplated commercial operation ".
It seems to us that the amounts with which this case is concerned, were paid and were refundable as an integral part of a commercial transaction, namely, the sale of liquor in bottles by the appellant to a wholesaler.
The case nearest to the present one is, in our view, that decided by this Court in K. M. section Lakshmanier & Sons vs Commissioner of Income tax and Excess Profits Tax, Madras (3).
There the appellants, who were the assessees, were merchants carrying on business as the sole selling agents for yarn manufactured by the Madura Mills Co. Ltd. They sold the yarn to their constituents and in the relevant accounting period the sales were made under three successive arrangements each of which covered a part of it.
Under each arrangement, the assessees were paid a certain initial (1) (2) (3) ; 692 sum by their customers.
The question was as to the nature of these initial payments.
Under the first arrangement " the appellants had two accounts for each constituent, namely, ' a contract deposit account ' and ' a current yarn account ', crediting the moneys received from the customers in the former account and transferring them to the yarn account in adjustment of the price of the bales supplied then and there, that is, as and when deliveries were made under a contract either in instalment or in full ".
It was held that the amounts received from the customers under this arrangement were taxable as they were merely advance payments of the price and could riot therefore be regarded as borrowed money.
This was clearly so because under this arrangement cash was deposited by a purchaser in respect of a contract of purchase at the time it was made and was to be applied when the goods had been delivered by the appellant under that contract towards the price payable in respect of them, such price not being payable in any other manner.
The arrangement for the second part of the accounting period was that the payment made by a constituent at the time of the making of a contract was taken as " Contracts advance fixed deposit " and it was refunded when the goods under the contract had been supplied and the price in respect thereof paid in full irrespective of the earlier payment.
With respect to the payment initially made under this arrangement Patanjali Sastri, C. J., said at p. 1067 : ". we are of opinion that, having regard to the terms of the arrangement then in force, they partake more of the nature of trading receipts than of security deposits.
It will be seen that the amounts received were treated as advance payments in relation to each " contract number " and though the agreement provided for the payment of the price in full by the customer and for the deposit being returned to him on the completion of delivery under the contract, the transaction is one providing in substance and effect for the adjustment of the mutual obligations on the completion of the contract.
We hold accordingly that 693 the sums received during this period cannot be regarded as borrowed money. .
It seems to us that the amounts involved in the present case were exactly of the nature of the deposits made in the second period in Lakshmanier & Sons ' case (1).
There, as here, as soon as a transaction of sale was made the seller received certain moneys in respect of it.
It is true that in Lakshmanier & Sons ' case the transaction was a contract to sell goods in future whereas in the present case the transaction was a sale completed by delivery of the goods and receipt of the consideration.
But that cannot change the nature of the payment.
In Lakshmanier & Sons ' case, the payment initially made was refundable after the price had been paid; in the present case the contract is to refund the amount on the return of the bottles already sold.
In each case therefore the payment was made as part of a trading transaction and in each case it was refundable on certain events happening.
In each case again the payment was described as a deposit.
As in that case, so in the present case, the payment cannot be taken to have been made by way of a security deposit.
We must therefore on the authority of Laskhmanier & Sons ' case, hold the amounts in the present case to have been trading receipts.
It was Mr. Sastri 's effort to bring the case within the arrangement that prevailed in the third part of the accounting period in Laskhmanier & Sons ' case, the initial payments made during which were held to be loans.
But we think that he has not succeeded in this.
The payments during the third period were made under the following arrangements: " Instead of calling for amounts from you towards 'Security Deposit ' due to bales for which we are entering into forward contracts with you and returning the same to you from the said deposit then and there, as we are doing now, and in order to make it feasible, we have decided to demand from you a certain sum towards Security Deposit and keep the same with us so long as our business connections under forward contracts will continue with you." Under this arrangement a certain (1)[1953] S.C.R. 1057.
694 sum was kept in deposit once and for all and there.
after Lakshmanier & Sons commenced to enter into the trading transactions, namely, forward contracts for sale of yarn with the constituents who deposited the money.
The sum so deposited was to be refunded with interest at three per cent.
per annum at the end of the business connection between the parties, if necessary, after retaining there out any amount due on the contracts made with the constituent which, the latter was at the termination of the business found not to have paid.
Patanjali Sastri, C. J., observed at p. 1063 in regard to the deposits made under this arrangement: "The amount deposited by a customer was no longer to have any relation to the price fixed for the goods to be delivered under a forward contract either in instalments or otherwise.
Such price was to be paid by the customer in full against delivery in respect of each contract without, any adjustment out of the deposit, which was to be held by the appellants as security for the due performance of his contracts by the customer so long as his dealings with the appellants by way of forward contract continued, the appel lants paying interest at 3 per cent.
in the meanwhile, and having, as appears from the course of dealings between the parties ' the use of the money for their own business.
It was only at the end of the " business connection " with the appellants that an adjustment was to be made towards any possible liability arising out of the customer 's default.
Apart from such a contingency arising, the appellants undertook to repay an equivalent amount at the termination of the dealings.
The transaction had thus all the essential elements of a contract of loan, and we accordingly hold that the deposits received under the final arrangement constitute borrowed money ".
Having observed that the description of the payment made by the customer as a deposit made no difference for a deposit included as a loan, the learned Chief Justice further said at p. 1064: " The fact that one of the conditions is that it is to be adjusted against a claim arising out of a possible 695 default of the depositor cannot alter the character of the transaction.
Nor can the fact that the purpose for which the deposit is made is to provide a security for the due performance of a collateral contract invest the deposit with a different character.
It remains a loan of which the repayment in full is conditioned by the due fulfilment of.
the obligations under, the collateral contract ".
In coming to the view that he did with regard to the arrangement prevailing in the third period, the learned Chief Justice referred ' with approval to the case of Davies vs Shell Company of China(1) which we have earlier mentioned.
Now it seems to us that the reasons on which the learned Chief Justice based his conclusion that the deposits during the third period were loans do not apply to the present case.
In the present case, unlike in Lakshmanier & Sons ' case, the amount paid has a relation to the price of the goods sold ; it is part of that price as we have earlier said.
It was a condition of each transaction of sale by the appellant.
It was refundable to the wholesaler as soon as he returned the bottles in which the liquor had been supplied to him in the transaction in respect of which the deposit had been made.
The deposit in the present case was really not a security at all ; it did not secure to the appellant anything.
Unlike Lakshmanier & Sons ' case, in the present case a deposit was made every time a transaction took place and it was refundable under the terms of that transaction independently of other deposits under other transactions.
In Lakshmanier & Sons ' case, the deposit was in the nature of the assee 's trading structure and anterior to the trading operations, as were the deposits considered in Shell Company case(1).
In the case in hand the deposit was part of each trading transaction.
It was re.
fundable under the terms of the contract relating to a trading transaction under which it had been made; it was not made under an independent contract nor was its refund conditioned by a collateral contract, as happened in Lakshmanier & Sons ' case.
(1) 696 We therefore think that the present case is governed by the arrangement covering the second period and: not the third period mentioned in Lakshmanier & Sons case (1), and, come to the conclusion that the amounts with which we are concerned were trading receipts.
Mr. Sastri also referred us to Morley vs Pattersall and contended that the amounts with which we are concerned, were of the same kind as those consideredin that case and were not income.
It seems to us that there is no similarity between the two cases at all.
Tattersall was a firm who sold horses of its constituents on their behalf and received the price which it was liable to pay them.
It so happened that in the course of years various customers did not come and demand the amounts due to them.
Initially Tattersall showed those amounts in its accounts as liabilities which they really were.
Later it thought that it would never have to pay back these amounts and thereupon transferred them to the credit of its partners.
The Revenue sought to tax the amounts so transferred as Tattersall 's income.
The question was whether the amounts upon transfer became Tattersall 's income.
It was never contended that the amounts when received as price of the constituent 's horses sold were Tattersall 's income and the only contention was that they became income upon being transferred to the credit of the partners.
It was held that the amounts had not by being entered on the credit side, become income of the firm.
Sir Wilfrid Greene said at p. 65 : " Mr. Hill 's argument was to the effect that, although they were not trading receipts at the moment of receipt, they had at that moment the potentiality of becoming trading receipts.
That proposition involves a view of Income Tax Law in which I can discover no merit except that of novelty.
" Then again he said: " It seems to me that the quality and nature of a receipt for Income Tax purposes is fixed once and for all when it is received.
What the partners did in (1) ; (2) 697 this case, as I have said, was to decide among themselves that what they had previously regarded as a liability of the firm they would not, for practical reasons, regard as a liability; but that does not mean that at that moment they received something, nor does it mean that at that moment they imprinted upon some existing asset a quality different from what it had possessed before.
There was no existing asset at all at that time.
" All that this case decided was that moneys which were not when received, income and as to this there was no question could never later become income.
With such a case we are not concerned.
The case turned on the fact that the moneys received by Tattersall were never its moneys; they had been received on behalf of others and that receipt only created a liability towards them.
Now it seems to us quite impossible to say that the amounts with which we are concerned were not the appellant 's moneys in the sense that the constituent 's moneys in the hands of Tattersall were not its.
The amounts in this case were not received on account of any one but the appellant.
No doubt these moneys might have to be refunded if certain things happened which however might never happen, but that did not make them the moneys of those who might become entitled to the refund.
Mr. Sastri referred us to the observations of Sir Wilfrid Greene, M. R., in Morley vs Tattersall (1) at p. 65 to the effect that, " The money which was received was money which had not got any profit making quality about it; it was money which, in a business sense, was a client 's money and nobody else 's" and contended that the amounts involved in the presentcase were of the same nature.
We are unable to agree.
If we are right in our view that the amounts were trading receipts, it follows that they must have a profit making quality about them.
Their payment was insisted upon as a condition upon which alone the liquor would be supplied with an agreement that they would.
be repaid oil the return of the bottles.
They (1)(1938) 88 698 were part of the transactions of sale of liquor which produced the profit and therefore they had a profit making quality.
Again, a wholesaler was quite free to return the bottles or not as he liked and if he did not return them, the appellant had no liability to refund.
It would then keep the moneys as its own and they would then certainly be profit.
The moneys when paid were the moneys of the appellant and were thereafter in no sense the moneys of the persons who paid them.
Having given the matter our anxious consideration which the difficulties involved in it require, we think that the correct view to take is that the amounts paid to the appellant and described as " Empty Bottles Return Security Deposit " were trading receipts and therefore income of the appellant assessable to tax.
We agree with the High Court that the question framed for decision in this case, should be answered in the affirmative.
In the result the appeal fails and is dismissed.
The appellant will pay the costs in this Court.
Appeal dismissed.
| IN-Abs | The appellant, a distiller of country liquor, carried on the business of selling liquor to licensed wholesalers.
Due to shortage of bottles during the war a scheme was evolved, where under the distiller could charge a wholesaler a price for the bottles in which liquor was supplied at rates fixed by the Government, which lie was bound to repay to the wholesaler on his returning the bottles.
In addition to this the appellant took a further sum from the wholesalers described as 'security deposit ' for the return of the bottles.
Like the price of the bottles these moneys were also repaid as and when the bottles were returned with this difference that the entire sum was refunded only when go% of the bottles covered by it had been returned.
The appellant was assessed to income tax on the balance of the amounts of these additional sums left after the refunds made there out.
Held, that the amounts paid to the appellant and described as 'security deposit ' were trading receipts and therefore income of the appellant assessable to tax.
These amounts were paid as an integral part of the commercial transaction of the sale of liquor in bottles and represented an extra price charged for the bottles.
They were not security deposits as there was nothing to secure, there being no right to the return of the bottles.
684 K. M. section Lakshmanier & Sons vs Commissioner of Income tax and Excess Profits Tax, Madras, ; , followed.
Davies vs The Shell Company of China Ltd., (1951) Tax Cas. 133; and Morley vs Tattersall, , distinguished.
Imperial Tobacco Co. vs Kelly, , referred to.
|
ivil Appeal No.4718 of 1990.
From the Judgment and Order dated 24.8.1988 of the Punjab and Haryana High Court in C.W.P. No. 7136 of 1985.
Dr. Rajeev Dhawan and Arun K. Sinha for the Appellant.
K.G. Bhagat, B.S. Malik and Ms. Galshan for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leave granted.
This appeal is from the Judgment and Order dated August 24, 1988 of the Punjab and Haryana High Court dismissing the appellant 's writ petition for quashing the order of the Financial Commissioner Punjab dated 9.2.1988 declaring the second respondent to be eligible for allotment of the lands in dispute under Rule 34C of the Displaced Persons Compensa tion and Rehabilitation Rules 1955 (hereinafter referred to as the rules ') framed under the Displaced Person Compensa tion and Rehabilitation Act, 1954 (hereinafter referred to as 'the Act ').
The land in dispute (hereinafter referred to as the land ') bearing Khasra Nos.
17/8/1, 8/2, and 8/4 admeasuring 7 Kanals 4 Marlas in the Revenue Estate of Shanzada Nangal, Gurdaspur, was owned by one Vinod Kumar.
The second respond ent claimed to have been in its cultivating possession in the years 1953 54, 1956 57.
In 1957 58 and 1958 59 he was recorded as a sub lessee under one Budha Singh lessee on annual rent of Rs.100.
In 1958 the lease in favour of Budha Singh was cancelled with information to him by the Rehabili tation Department whereupon the second respondent 's right as sub lessee came to an end.
Consequently the second respond ent was no longer recorded as lessee or sub lessee after 1958 59.
In 1961 the second respondent applied to the Settlement Authority for allotment of the land under Rule 34C of the rules claiming as a sublessee.
His application was rejected by the Managing Officer vide his Order dated 25.11.1962 and the second respondent having not filed any appeal or revi sion therefrom the order became final and binding on him.
The Rehabilitation Authorities having decided to dispose of the land an open auction was conducted on 11.8.1967 and the appellant, a retired army Subedar and also a displaced person from West Pakistan offered the highest bid of Rs.9,500 (Rupee nine thousand five hundred) which was ac cepted.
The sale certificate was duly issued by 18 the Rehabilitation Department 'to the appellant with effect from September 15, 1969.
Without resorting to any appeal against the aforesaid Order dated 25.11.1962 refusing allot ment of the land, the respondent made a second attempt for allotment under Rule 34C of the rules by making another application which too was rejected by the Settlement Officer by order dated July 24, 1969 wherefrom the second respondent moved a revision application before the Chief Settlement Commissioner who remanded the case by Order dated July 29, 1970 to the Managing Officer for fresh decision but the latter rejected that application also on 22.3.1973.
The second respondent 's appeal therefrom to the Settlement Commissioner was also rejected by Order dated 13.5.1973 as the second respondent could not prove his continuous culti vating possession as a sub lessee under Budha Singh, from 1.1.1956 till termination of the latter 's lease.
The second respondent thereafter instituted a suit on August 22, 1973 in the Court of Subordinate Judge, Gurdaspur against Budha Singh for declaration of his continuous pos session of the land.
However, neither the appellant who purchased the land in auction nor the Rehabilitation Depart ment which cancelled Budha Singh 's lease was impleaded.
Budha Singh having supported the case, a decree declaring the second respondent to have been in continuous possession was passed.
The second respondent this time filed a revision from the appellate order of the Settlement Commissioner dated 13.5.1973 before the Chief Settlement Commissioner who by his Order dated 5.11.1976 remanded the case to the Managing Officer for fresh decision.
The Managing Officer vide his order dated 6.1.1978 this time allotted the land to the second respondent under Rule 34C of the rules.
The appel lant 's appeal therefrom to the Settlement Commissioner was dismissed vide order dated 6.6.1978 but his revision there from was allowed and the allotment order in favour of second respondent was quashed by the Chief Settlement Commissioner vide his Order dated 11.1.1979.
The Chief Settlement Commis sioner declared the appellant to be the auction purchaser and therefore the true owner of the land.
The second , respondent 's revision therefrom was also rejected by the Financial Commissioner on 23.10.1979.
Thus all the authori ties in the successive rounds found the facts against the second respondent.
The second respondent then filed a writ petition challeng ing the Financial Commissioner 's order dated 23.10.1979 and the High Court, contrary to all the aforesaid findings of fact, remanded the case, by 19 its order dated 7.1.83 to the Financial Commissioner for fresh decision in the light of the decree of the civil court dated 17.11.1973, which the High Court at the same time declared to have been a collusive one, obtained by second respondent in collusion with Budha Singh.
The Financial Commissioner on remand by the High Court has now held vide Order dated 9.2.1988 that the second respondent is eligible for allotment of the land under Rule 34C of the rules and accordingly allotted the land in his favour quashing the auction sale made in favour of the appellant on 11.8.1967 holding that being a sub lessee in continuous possession since 1.1.1956, the second respondent had a superior claim to allotment of the land and, therefore, the auction sale to the appellant was null and void.
The appellant 's writ peti tion challenging that Order having been dismissed in limine by the High Court vide impugned Judgment dated 24.8.1988, he appeals.
Rule 34C included in Chapter V of the rules provides: Allotment of agricultural lands of the value of Rs.10,000 or less.
Where any land to which this Chapter applies has been leased to a displaced person and such land consists of one or more khasras and is valued at Rs.10,000 or less, the land shall be allotted to the lessee: Provided that where any such land or any part thereof has been sub leased to a displaced person and the sublessee has been in occupation of such land or part there of continuously from the first January 1956 such land or part thereof as the case may be, shall be allotted to such sublessee." Mr. Rajeev Dhawan, the learned counsel for the appel lant, submits, inter alia, that after Budha Singh 's lease was cancelled in 1958.
the second respondent 's status as sub lessee ceased and thereafter he was neither a sub lessee nor bid he pay any rent for the land and, in fact, he was a trespasser and not entitled to allotment under Rule 34C of the rules; that his first application was rightly rejected and he having never preferred any appeal or revision there from, the order became final and binding on him, and he was, therefore, not entitled to make the second application.
After the land was already sold in auction to the appellant on 1.8.67, counsel submits, the land ceased to be evacuee property and the second respondent 's second application was not maintainable, and the appellant was declared as auction purchaser on 15.8.1969 and the sale certificate issued to him was with effect from 15.9.1969.
20 Mr. K.G. Bhagat, the learned counsel for the respondent, submits that the decision on his first application for allotment was not communicated to him till he made his second application for allotment and that as a sub lessee he had the right to apply for allotment and that his right has now been rightly recognised and the land allotted to him though his second application was also rejected on 24.7.
It appears that though the land was sold in auction to the appellant under Rule 34H on 11.8.1967, perhaps because of the pendency of the second application of the second respondent, the appellant was not declared as auction pur chaser during the pendency of that application and only after it was rejected on 24.7.1969, the appellant was de clared purchaser on 15.8.1969.
It also appears that after the second respondent 's revision petition against the order rejecting his second application for allotment was remanded by the Chief Settlement Commissioner to the Managing Officer for fresh decision and the latter rejected that application also holding that the second respondent failed to prove his continuous possession of the disputed land as sublessee as required under Rule 34C; and the appeal therefrom was also rejected on 13.5.1973, the Certificate of sale was issued to the appellant on 23.6.1973 with effect from 15.9.1969.
Thus, the matter should have finally ended at that stage.
The second respondent 's suit against Budha Singh leading to the decree declaring that the second respondent was in continuous possession of the disputed land was, argues Mr. Dhawan, not maintainable and the decree was rightly held to have been collusive, but Mr. Bhagat submits that the High Court was wrong in holding so.
Mr. Dhawan 's submission that the sale in favour of the appellant culminating in issue of the sale certificate in his favour had the effect of taking away the land from the pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open for the Rehabilitation authorities to deal with the same appears to be sound.
Rule 34H of the rules reads: "34H. Manner of disposal of land not allotted.
Any land to which this Chapter applies which is not allotted under this Chapter, shall be disposed of in the manner provided in Chapter XIV." 21 Chapter XIV of the rules prescribes the procedure for sale of property in the compensation pool.
Rule 90 pre scribes the procedure for sale of property by public auc tion.
Sub rule 15 of Rule 90 provides for issue of sale certificate and for sending a certified copy of the sale certificate by the Managing Officer to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the property to which the certificate relates is situated.
Rule 92 prescribes the procedure for setting aside the sale.
In Bishan Paul vs Mothu Ram, reported in AIR 1965 SC 1994, it has been held that Rules 90 and 92 show that there are distinct stages in the auction sale of property in the compensation pool, namely, (1) the fail of the hammer and the declaration of the highest bid, (2) the approval of the highest bid by the Settlement Commissioner or Officer ap pointed by him, (3) payment of the full price after this approval, (4) grant of certificate, and (5) Registration of the certificate.
That is the intention behind the rules.
The new form of the sale certificate requires a mention that the purchaser had been declared the purchaser of the said property with effect from the certificate date.
The title, however, would not be abeyance till the certificate was issued but would be based on the confirmation of the sale.
The intention behind the rules appears to be that title shall pass when the full price is realised and this is now clear from the new form of the certificate, and title must be deemed to have passed and the certificate must relate back to the date when the sale became absolute.
The appel lant, therefore, must be held to have obtained title to the land on the date of confirmation of the sale.
That is why the Sale Certificate in the instant case was expressly stated to be with effect from 25.9.1969.
Rule 92 provides: "92.
Procedure for setting aside a sale. (1) Where a person desires that the sale of any property made under rule 90 or 91 should be set aside because of any alleged irregularity or fraud in the conduct of the sale (including in the case of a sale by public auction in the notice of the sale) he may make an application to that effect to the Settlement Commissioner or any officer, authorised by him in this behalf to approve the acceptance of the bid or tender, as the case may be.
(2) Every application for setting aside a sale under this rule shall be made 22 (a) where the sale is made by public auction within seven days from the date of the acceptance of the bid; (b) where the sale is made by inviting tenders, within seven days from the date when the tenders were opened.
XX XX XX XX XX XX XX XX XX XX Under Sub rule (4), notwithstanding anything contained in Rule 92, the Settlement Commissioner may, of his own motion, set aside any sale under this Chapter if he is satisfied that any material irregularity or fraud which was resulted in a substantial injury to any person has been committed in the conduct of the sale.
In the instant case we have not been shown any application for setting aside of the auction sale and the sale certificate in favour of the appellant made according to rules.
Nor have we been shown that the Settlement Commissioner of his own motion had set aside the sale being satisfied that any material irregularity or fraud which had resulted in a substantial injury to any person had been committed in the conduct of the sale.
Section 14 of the Act provides for constitution of the compensation pool.
Section 15 of the Act exempts the proper ty in compensation pool from processes of courts.
Section 20 of the Act empowers the Managing Officer or managing corpo ration to transfer any property within the compensation pool (a) by sale of such property to a displaced person or any association of displaced person whether incorporated or not, or to any other person, whether the property sold by public auction or otherwise.
Under sub section (2) of that section every Managing Officer or managing corporation selling any immovable property by public auction under sub section (1) shall be deemed to be a Revenue Officer within the meaning of sub section (4) of section 89 of the Indian .
Under section 27 of the Act save as otherwise expressly provided in the Act every order made by any officer or authority under the Act, including a managing corporation, shall be final and shall not be called in question in any court by way of appeal or revision or in any original suit, application or execution proceeding.
The jurisdiction of the Civil Court was therefore barred in the matter of the sale.
It is true that where the special tribu nal or authority acts ultra vires or illegally, the Civil Court has by virtue of section 9 of the Civil Procedure Code power to interfere and set matters right.
As was laid down by the Judicial Committee of the Privy 23 Council in Secretary of State vs Mask and Co., AIR 1940 PC 105, if the provisions of the Statute have not been complied with or the Statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure, the Civil Courts have jurisdiction to examine those cases.
This rule was reiterated by the Supreme Court in State of Kerala vs M/s. N. Ramaswami Iyer and Sons, AIR 1966 SC 1938.
In the instant case the second respondent 's civil suit against Budha Singh for declaration of possession was not against any order passed by any officer under the Act.
That decree, even if it was not declared collusive could not have collat erally affected the auction sale order.
Mr. Dhawan is, therefore, right in his submission that the appellant, a displaced person, having bona fide pur chased the land in public auction for Rs.9,500 and having paid that amount with the sincere hope of his rehabilita tion, has been subjected to expensive protracted litigation for the last 22 years during which he has earned nothing out of the land while the second respondent had until the im pugned orders, been enjoying the usufruct of the land and this is because of the State not honouring its own final commitment made in the sale certificate in favour of the appellant.
Mr. Bhagat answers that the second respondent was in possession, in 1956, and till the cancellation of Budha Singh 's lease in 1958, and thereafter.
He was admittedly a sub lessee of Budha Singh till 1958 and then was a sub tenant holding over on the date he applied for allotment in 196 1.
The decision rejecting his first application having not been communicated to him he made his second application which was also wrongly rejected by the Chief Settlement Officer; and the Financial Commissioner ultimately on remand from the High Court, on the basis of the second respondent 's possession of the land, rightly set aside the order of the Chief Settlement Commissioner dated 11.1.1979 and allotted the land to the second respondent declaring him to be sub lessee for the period after 1958 setting aside the sale made by the Rehabilitation Department made in favour of the appellant and that the High Court by the impugned Order dated 24.8.88 rightly dismissed the appellant 's writ appli cation in limine.
Mr. Bhagat also persuades us to consider that the second respondent, also a displaced person, had been demanding justice for the last 22 years and has finally succeeded in obtaining the allotment and he ought not to be deprived of the same.
Sri Dhawan attacks the order of the Financial Commissioner on the ground that he had no material before him other than what was there before his predecessor on 23.10.1979, except the judgment in the civil suit, which for obvious reasons, cannot be taken 24 into account Mr. Dhawan emphasises that, it having been repeatedly held earlier that continuous cultivating posses sion of the second respondent was not proved, there was no basis for the Financial Commissioner in his order dated 9.2.
1988 to have observed that "a favourable presumption regard ing continuity of his possession during the intervening period that is from kharif 1961 to rabi 1964 ought to have been drawn and benefit of doubt given" to the second re spondent, in spite of the absence of Girdawari for the year 1961 62 and 1962 63 and mutilations in the entries of Girda wari for 1963 64.
In a sense.
, he is no doubt correct but the previous order of 23.10.1979 having been set aside by the High Court, it was open to the Financial Commissioner consider the matter afresh.
Doing so, he has found that since the possession of the second respondent from 1953 to 1961 and again in 1964 65 and 1965 66 was borne out from the records, the absence of the records for 1961 62 ad 1962 63 and their illegibility due to mutilation for 1963 64 and 1964 65 should not be held against him and that his continu ous possession since 1962 can be presumed entitling him to an allotment under section 34C.
This was a conclusion on facts, which the High Court has declined to interfere with.
Thus, we have a peculiar position in this case.
While Mr. Dhawan is right in saying that the appellant, as a bona fide purchaser of the land for value at public auction, should be put in the same position in which he would have been had his auction purchase as evidenced by the Sale Certificate been effective from the date of purchase, Mr. Bhagat appears to be justified in saying that it would not be just and proper to deprive the second respondent who was inducted by Budha Singh as a sub lessee and who has contin ued in possession of the land till date, of the fruits of his protracted litigation culminating in allotment of the land to him.
The difficulty in the present case has arisen because the State confirmed the sale in favour of the appel lant in 1969 and issued a sale certificate to him in 1973 without waiting for the final outcome of the second respond ent 's revision application to the Chief Settlement Commis sioner and further proceedings consequent thereon.
The odd situation, creating equities in favour of both the parties, that has thus resulted in the present case is due to the fault of the appellant or the second respondent.
It could have been avoided if the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application.
It is true that the second respondent could have taken steps to challenge the auction in favour of the appellant but, perhaps misguidedly, he was concentrating on getting an allotment under section 34C for which he cannot be 25 wholly blamed.
Whatever that may be, the final position is that both parties have had to suffer and indulge in lengthy litigation .
Under the above circumstances we feel that while this Court is to administer justice according to law there may be scope for doing justice and equity between the parties.
In such a situation we remember what the Institute of Justin ian, De Justitia Et Jure, in 'Liber Primus ' Tit.
I said: "Justice est constans et perpetua voluntas jus suum cuique tribuendi.
" Justice is the constant and perpetual wish to render every one his due. "Jurisprudentia est divinarum atgue humanarum rerum notitia, justi atgue injusti scientia." Jurisprudence is the knowledge of the things divine and human; the science of the just and the unjust.
The divine is that which right reason commends.
The human is a|so in the contents of the law.
As Max Rumelin said, in the Struggle to govern Law, "Justice is rivaled by equity.
" The dilemma that equity is to be better than justice and yet not quite opposed to justice, but rather a kind of justice has troubled us.
Gustav Radbruch clarifies the mutual relation between two kinds of justice, namely, commutative and dis tributive.
We may call "just" either the application or observance of law, or that law itself. "The former kind of justice, especially the justice of the Judge true to the law," according to him, "might better be called righteous ness.
" Here "we are concerned not with justice which is measured by positive law, but rather with that by which positive law is measured.
" Justice in this sense means equality.
Aristotle 's doctrine of justice or equality is called by him commutative justice which requires at least two persons while distribute justice requires at least three.
Relative equality in treating different persons while granting relief according to need, or reward and punishment according to merit and guilt is the essence of distributive justice.
While in commutative justice the two persons con front each other as co equals.
three or more persons are necessary in distributive justice in which one, who imposes burdens upon or grants advantages to the others, is superior to them.
"Therefore, it presupposes an act of distributive justice which has granted to those concerned, equality of rights, equal capacity to act, equal status." (The Legal Philosophies of Lask, Radbruch and Dabin P. 74) According to Radbruch, "distributive justice is the prototype of justice.
In it we have found the idea of justice, toward which the concept of law must be oriented.
" Law offers and protects and conditions necessary for the life of man and his perfection.
In the words of Cardozo, "What we are seek ing is not merely the justice that one receives when his rights and status are determined by the law as it is, what we are seeking is 1 justice to which law in its making should 26 conform.
" The sense of justice will be stable when it is firmly guided by the 'pragma ' of objective and subjective interests.
In the instant case the Financial Commissioner is a party.
What we find in the instant case is that the Rehabil itation authorities acting under the Act and the Rules decided the competing claims of the appellant as well as the second respondent as to the land.
If the Rehabilitation authorities can provide an equal extent of land with equal benefits to both the parties justice, may appear to be done but that being uncertain, the availability of land being limited, this Court can only look towards equity for solu tion.
Considering the facts of the instant case including the extent of the land and the purposes of the Act and the Rules, and the reality that the land must have become scarce and much more valuable now than in 1967, we feel that the ends of justice on the facts of the present case require that the impugned Orders be set aside and the land be caused to be divided by the Financial Commissioner into two equal halves and one half be given possession of to the appellant by dint of his auction purchase and the other half be allot ted and given possession of to the second respondent under Rule 34C of the rules.
We order accordingly.
We direct the Financial Commissioner or the Chief Settlement Commissioner, after notice to the appellant and the second respondent, to divide the land forthwith into two qual halves and deliver possession of the appellant 's moiety to him.
They should carry out the above directions within three months from the date of receipt of this order.
The parties shall cooperate in carrying out of the directions and we hope that they will be able to live in peace thereafter.
The appeal is disposed of accordingly.
Under the facts and the circumstances of the case, we make no order as to costs.
A copy of the Judgment may be forwarded forthwith to the Financial Commissioner.
S.B. Appeal allowed.
| IN-Abs | The appellant, a retired army subedar and also a dis placed person from west Pakistan purchased the Land in public auction conducted by The Rehabilitation Department, by offering the highest bid of Rs.9,500.
The laud in dispute measured 7 Kanals & 4 Marlas and was owned by one Vinod Kumar.
Having paid the purchase money with the sincere hope of his rehabilitation, he had to be in protracted litigation for 22 years during which he earned nothing out of the land because the State did not honour its final commitment made in the sale certificate in favour of the appellant.
The State confirmed the sale in favour of the appellant in 1969 but issued sale certificate on 23 June, 1973 being effective from September 15, 1969 without waiting for the final out come of the second respondent 's revision application to the Chief Settlement Commissioner, and further consequent pro ceedings thereon.
It was submitted by the second respondent that the said land was in his cultivatory possession since 1956 and as per public records he was sub lessee under Budha Singh Lessee, and the Lease in favour of Budha Singh was cancelled in 1958 by the Rehabilitation Department and thereafter he became a sub tenant holding over on the date he applied for allotment in 1961, under Rule 34C of the Rules.
The decision rejecting his first application was not communicated to him.
So he made his second application which was rejected by The Chief Settlement Officer vide his order dated July 24th, 1969.
Then he moved a revision application before the Chief Set tlement Commissioner who remanded the case to the Managing Officer for fresh decision by his order dated July 29, 1970.
The second respondent 's second application was rejected on March 22, 1973.
The second appeal to the Settlement Commis sioner was also rejected on May 13, 1973 as he could not prove his continuous cultivator) possession as a sub lessee under Budha Singh from January 1956 till the termination of the latter 's lease.
Thereafter second 15 respondent instituted a suit against Budha Singh for decla ration of his continuous possession of the land and got a decree in his favour as being in continuous possession of the land.
The second respondent again filed a revision against the appellate order of the Settlement Commissioner, which was remanded to the Managing officer and he got land allotted under Rule 34C of the Rules vide order dated January 6th, 1978.
The appellant 's appeal therefrom was dismissed by the Settlement Commissioner, but in his revision application therefrom, the allotment order in favour of the second respondent was quashed by the Chief Settlement Commissioner vide his order dated January 1, 1979 declaring the appellant to be the auction purchaser and therefore the true owner of the Land.
The second respondent 's revision was rejected by the Financial Commissioner on Oct. 23, 1979.
Thus all au thorities in the successive rounds found the facts against the second respondent.
Therefore, the second respondent filed a writ petition challenging the Financial Commissioner 's order in the High Court.
High Court remanded the case to the Financial Commis sioner for fresh decision on January 7, 1983.
The Financial Commissioner vide his order February 2, 1988 held that the second respondent was eligible for allotment of land under rule 34C of the rules, holding that being a sub lessee in continuous possession since January 1, 1956, and thereafter he had a superior claim to the allotment of the land and quashed the auction sale made in favour of the appellant on August 11, 1967.
The Financial Commissioner found that since 1953 to 1961 the second respondent was in possession of the land and again in 1964 65, 65 66 the records also bore out this fact.
The absence of records for 1961 62, 62 63 due to their illegibility due to mutilation should not be held against him and his continuous possession since 1962 can be presumed entitling him to an allotment under Rule 34 C of the Rules.
This was a conclusion on facts which the High Court declined to interfere with and dismissed the appellant 's writ peti tion in limine on August 24, 1988.
Allowing the Appeal, the Court, HELD: In the instant case, the appellant as a bone fide purchaser of the disputed land for value at public auction under Rule 34H of the rules on August 11, 1967 should have been put in the same position which he would have been, had his auction purchase as evidenced by the 16 Sale Certificate been effective from the date of purchase.
Rule 90 of the Rules prescribes the procedure for sale of property by public auction.
Sub rule 15 of Rule 90 provides for issue of sale certificate and Rule 92 prescribes the procedure for setting aside the sale.
but once the sale certificate was issued in favour of the appellant, he became the true owner and it had the effect of taking away the land from pool of evacuee properties and thereafter so long that was not cancelled according to law, it was not open to the Rehabilitation Department to deal with the sale.
The diffi culty in the present case has arisen because the State confirmed the sale in favour of the appellant in 1969, whereas it issued sale certificate to him on June 23,1973 with effect from September 15, 1969 without waiting for the final outcome of the second respondent 's revision applica tion to the Chief Settlement Commissioner & further proceed ings thereafter.
Thus the odd situation resulted in creating equities favour of both the parties with no fault of the appellant or the second respondent.
If the State had held over the auction until the second respondent 's application had been finally disposed of or had held the auction subject to the result of the application, the second respondent could have challenged the auction in favour of the appellant but perhaps misguidedly he was concentrating on getting an allotment under section 34C.
So both the parties had to suffer and indulge in lengthy protracted litigation for 22 years.
Had the Rehabilitation authorities acting under the Act and the Rules decided the competing claims of the appel lant as well as the second respondent as to the disputed land and provided an equal extent of land with equal bene fits to both the parties justice may appear to be done but that being uncertain the availability of land being limited.
the court can only look towards equity for solution.
The dilemma that equity is to be better than justice and yet not quite opposed to justice but rather a kind of justice and the distinction between commutative justice and distributive justice discussed.
[24E; F I I; 23G H; 26B; 25C] Passages from justinian, gustav Radbrach, Aristotle and Cardozo referred to.
Considering the facts, the extent of land and the pur poses of the Act and the Rules and the reality that land must have become scarce and much more expensive than in 1967 to meet the ends of justice on the basis of facts, the Court directed that the disputed land be divided by the Financial Commissioner into two equal halves and one half and one half be given possession of to the appellant by dint of his being auction purchaser and the other half be allotted and given possession of to the second respondent under Rule 34C of the Rules.
This order be carried out accordingly within three months.
[26C D] 17
|
ition No. 706 of 1990.
(Under Article 32 of the Constitution of India).
Dr. L.M. Singhvi, Dr. Y.S. Chitale, R.K. Garg, R.N. Trivedi, Addl.
Advocate General for the State of U.P,, Mrs. Swaran Mahajan.
Mrs. Geetanjali Mohan, Ms. Anuradha Mahajan.
Sunil Gupta, R. Venkataramani, S.M. Garg, Suresh Harkauli.
Sushil Harkauli, Sunil Gupta, A.S. Pundir, Suresh Kumar Misra, Mahesh Shrivastava, H.D. Pathak, Vishnu Mathur and Mrs. Shobha Dikshit for the appearing parties.
The Judgment of the Court was delivered by VERMA, J.
This judgment disposes of a bunch of matters comprising of some writ petitions under Article 32 of the Constitution of India and special leave petitions under Article 136 of the Constitution of India, all of which involve for decision certain common questions.
The special leave petitions are directed against a common judgment of the Allahabad High Court dismissing some writ petitions in which the same questions were raised.
In view of the deci sion of the High Court rejecting those contentions, the writ petitions were filed in this Court directly for the same purpose.
By one stroke, seemingly resorting to the Spoils System alien to our constitutional scheme, the Government of State of Uttar Pradesh has terminated by a general order the appointments of all Government Counsel (Civil, Criminal, Revenue) in all the districts of the State of U.P.w.e.f.
1990 and directed preparation of fresh panels to make appointments in place of the existing incumbents.
This has been done by Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990, terminating all the existing appointments w.e.f.
1990, irrespective of the fact whether the term of the incumbent had expired or was subsisting.
The validity of this State action is challenged in these matters after the challenge has been rejected by the Allahabad High Court.
They have all been heard together since the common question 631 in all of them is the validity of the Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990 issued by the Govern ment of State of Uttar Pradesh.
Leave is granted in the Special Leave Petitions and the appeals are also heard on merits along with the Writ Peti tions.
Broadly, two questions arise for decision by us in this bunch of matters.
These are: Is the impugned circular amena ble to judicial review?; and if so, is it liable to be quashed as violative of Article 14 of the Constitution of India, being arbitrary? The challenge in all these matters is to validity of G.O. No. D 284 Seven Law Ministry dated 6th February, 1990, from Shri A.K. Singh, Joint Legal Remembrancer, Justice (Law Ministry) Section, Government of Uttar Pradesh, to all the District Magistrates of Uttar Pradesh with copy to all the District Judges of the State for information and necessary action.
The main question for decision in these matters being the validity of this circular, it would be appropriate to quote the same in extenso.
It reads as under: "Subject:RENEWAL OF TENURE OF ALL THE EXISTING GOVERNMENT COUNSEL, CALLING OF NEW PANELS FOR NEW APPOINTMENT.
XXXX I have been directed to inform you on the subject mentioned above that the Administration has taken a decision to extend the tenure of all the Government Counsel, who are presently working, till 28th February, 1990 only and to immediately receive new panels from the District Magistrates for new appointments in their places.
I, therefore, have been directed to state that all the Government Counsel, presently engaged for the work of Civil/Revenue/Criminal (including Anti Dacoity) and Urban Ceiling may be permitted to work till 28.2.1990 only and for appointments in their place, Administration may send the new panels, after preparing the same in following manner: 1.
Separate single panal in each of the Civil side, Revenue 632 side, Criminal side (including Anti Dacoity) and Urban ceiling side fixed for 12 districts, and separate single panel in each of the courts, functioning at District and Tehsil Headquarters, may be prepared.
It may be enlisted therein the names of the work zone, number of courts related to it, the number of sanctioned posts for Government Counsel and recommended names of the Counsel in terms of their seniority.
It may be clearly mentioned in the panel which counsel belong to Scheduled Caste, Scheduled Tribes, Back ward Caste and Minority group.
The panels prepared for civil, revenue and urban ceiling side may contain the recommendations of names only three times of the presently sanctioned posts.
In the criminal side, five times of the names of the present sanctioned posts may be recommended.
The attested copies of Bio Data of the Counsel recommended, attested details of their work during last two years, certificate of registration as an Advocate, certifi cate of birth and the attested copies of certificates of educational qualifications may also be sent.
The names of any such counsel, who has practice experience for less than 7 years, or who has more than 60 years of age as on 1.1.
1990, or the person who is already working at a salaried Government or nonGovernmental posts, a full time lecturer in a college, Notary, Marriage Officer, Executive Qazi or State, may not be included in the panels.
However, on resignation from the present post, they can be included in the panel.
For preparation of new panel, a general notice which enlists the application, age, conditions of appointment and the last date for submission of Bio Data, may be prepared.
This notice may be put on the Notice Boards of the Local Bar Associations, and in the offices of District Magistrate, District Judge, Zonal Commissioner, S.D.M. and Munsif Magis trate.
633 8.
It will be a condition for appointment as a Government Counsel that he will not be permitted to do private prac tice.
He will be entitled to plead, with permission from the Administration, only the cases of State Government and Central Government, State Company Council, Local Bodies, Autonomous Institution and Authorities.
He will be paid only the monthly remuneration fixed by the Administration and no fee will be paid according to the valuation of the case/appeal.
No extra fee will also be paid for any other work/consultation.
It may also be clarified that appointment of a Government Counsel will be different from the Govern ment employees and no facilities to Government employees will be applicable to them.
The appointment of Government Counsel will be done in the form of business engagement and the State Government will be entitled to terminate engage ment at any time, without giving reasons for it.
The Bio Data and other desired papers, if received from the counsel within the prescribed date, may be examined minutely, as a special drive and after getting approval from the District Judge/Munsif Magistrate/SDM, as the case may be, the names may be recommended in the panel as per senior ity position.
The details of last two years work, along with the attested copies of the certificates and information desired in the enclosed format,`Ka ' and `Kha ' may be sent to the Administration along with the panel.
I have also been directed to state that the appointments made on or after January, 1990, shall not be affected by the above mentioned policy decision and the same shall continue for the prescribed period.
I have also been directed to clarify that the panels received prior to release of this Government Order, on the basis of which, no appointments or.
renewal has been made or which are still pending, may be understood as cancelled.
I have also been directed to request you that the new panels may be prepared in accordance with the above direc tion on top priority basis, `and the same may be ensured to be sent to the undersigned in a confidential 634 envelope through a special messenger by 25th February, 1990.
sd/ (A.K. Singh) Joint Legal Remembrancer" By the above quoted circular letter dated 6.2.
1990, the decision of the State Government to terminate the engagement of all the Government Counsel engaged throughout the State of U.P. for civil/ revenue/criminal (including anti dacoity) and urban ceiling work on and from 28.2. 1990 and to make appointments in their place on the basis of new panel pre pared for the purpose was communicated to all the District Magistrates in the State.
Admittedly, this circular was made applicable to all the Government Counsel throughout the State at the district level, howsoever designated such as district Government Counsel, Additional District Government Counsel, etc.
There is no dispute that the circular related to and applied equally to all the Government Counsel throughout the State irrespective of their tenure whose appointments were terminated w.e.f. 28.2.1990 for being replaced by new appointees.
The circular applied equally to not only those Government Counsel whose tenure had already expired or whose tenure was to expire before 28.2.
1990, but also to those whose tenure, as a result of their earlier appointment, was to extend beyond 28.2.
1990, as well as those who were entitled to be considered for renewal of the tenure on expiry of their earlier tenure.
The Challenge in these matters is not only by some individuals who were adversely affected by the said circular but also by Associa tion of District Government Counsel.
Since the impact of the circular is on all Government Counsel engaged at the dis trict level throughout the State, the challenge is really in representative capacity on behalf of all of them and this is how the challenge has been met on behalf of the State of U.P. in reply.
It is common ground that the decision of these matters will govern the appointment of all Government Counsel throughout the State of U.P.at the district level, in all branches, irrespective of the name or designation given to the appointment such as District Government Coun sel, Additional District Government Counsel, etc.
Several arguments were advanced by the learned counsel on both sides relating to the nature of these appointments about which there is a serious contest between the parties.
In the present case, it is not necessary for us to consider at length the exact nature of these appoint 635 ments which is material only for indicating the extent of security of tenure of the appointee to these offices since in our opinion the main attack to the impugned circular on the ground of arbitrariness can be upheld even assuming the security of tenure of the appointees to be minimal as claimed for and on behalf of the State of U.P.
We shall, therefore, only refer to the rival contentions regarding the nature of appointments and then proceed on the basis of the minimum status attaching to these appointments to examine whether the ground of arbitrariness is available and viti ates the circular.
According to the learned Additional Advocate General of the State of U.P., the relationship of the appointees to these offices of Government Counsel in the districts is purely contractual depending on the terms of the contract and is in the nature of an engagement of a Counsel by a private party who can be changed at any time at the will of the litigant, with there being no right in the Counsel to insist on continuance of the engagement.
The learned Addi tional Advocate General contended that for this reason, the relationship being purely contractual, which cannot be continued against the will of either party, there is no scope for the argument that the State does not have the right to change the Government Counsel at its will.
It is common ground that the appointment, termination and renewal of tenure of all Government Counsel in the districts is governed by certain provisions contained in the Legal Remem brancer 's Manual, in addition to Section 24 of the Code of Criminal Procedure, 1973, applicable in the case of public prosecutors.
The learned Additional Advocate General did not dispute that if Article 14 of the Constitution of India is attracted to this case like all State actions, the impugned circular would be liable to be quashed if it suffers from the vice of arbitrariness.
However, his argument is that there is no such vice.
In the ultimate analysis, it is the challenge of arbitrariness which the circular must withstand in order to survive.
This really is the main point involved for decision by us in the present case.
The nature of appointment of the Government Counsel in the districts on the civil, criminal and revenue sides was hotly debated during the hearing.
It was urged on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government is not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel cannot be equated with the termination by a private litigant of his Counsel 's engage ment, which is purely contractual, with 636 out any public element attaching to it.
It was urged that appointment of public prosecutors has a statutory status also in view of such appointments being required to be made in accordance with Section 24 of the Code of Criminal Proce dure, 1973.
Reliance was also placed on certain provisions of the Legal Remembrancer 's Manual, which admittedly govern and regulate the appointment of all Government Counsel in the districts as well as the termination of their appoint ment and renewal of their tenures.
It was contended that the relationship between the Government and the Government Counsel is therefore, not purely contractual in nature as in the case of a private litigant and his counsel.
An attempt was also made to urge that the appointment of Government Counsel is in the nature of a public employment with the attendant security of tenure of office and the necessary concomitants attaching to it.
On the other hand, the learned Additional Advocate General appearing for the State of U.P. contended that the relationship between the Government and the Government Counsel is purely contractual like that of a private litigant and his counsel which enables the Govern ment to change its counsel at any time as may be done by a private litigant in the event of loss of confidence between them.
He contended that there is no element of public em ployment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure are merely to provide for making a suit able choice.
We shall briefly refer to some provisions which admittedly regulate and govern such appointments, termi nation and renewal of tenure of the appointees.
Chapter I of the Legal Remembrancer 's Manual, 1975 Ed., contains the interpretations and Para 1.01 says that the L.R. Manual is the authoritative compilation of the Govern ment orders and instructions for the conduct of legal af fairs of the State Government.
Para 1.06 enumerates the Law Officers of the Government which includes the District Government Counsel (Civil, Revenue, Criminal) along with many others such as Judicial Secretary and Legislative Secretary.
it is obvious that all of them including D.G.Cs. are described as holders of some `office ' of the State Govt.
Chapter VII contains the necessary provisions relating to District Government Counsel.
Part A therein deals with appointment and conditions of engagement of the District Government Counsel.
Para 7.02 deals with the power of Gov ernment to appoint Government Counsel in the districts which requires the Government to appoint District Government Counsel (Civil, Revenue, Criminal) and also, wherever necessary, in the interest of efficient and expeditious disposal of business, to appoint Additional or/and Assistant District Government Counsel to assist the District 637 Government Counsel (Criminal) or (Civil) in discharge of his duties: Subordinate District Government Counsel for the conduct of civil cases in outlying towns of a district; and Assistant District Government Counsel in outlying towns of the district for the conduct of criminal or civil cases or both.
Para 7.03 provides for applications and qualifications for appointment to these offices or posts.
The District Officer is required to consider all the applications re ceived in consultation with the District Judge, giving due weight to the claim of the existing incumbents, if any, and to submit in order of preference the names of legal practi tioners, together with the opinion of the District Judge on the suitability and merits of each candidate.
The process of selection expressly involves the District Judge and gives due weight to his opinion for the obvious reason that the District Judge is expected to know best the comparative merits of the candidates for such appointments.
Para 7.04 requires the Legal Remembrancer to submit the recommenda tions of the District Officer along with his own opinion for the orders of the Government Para 7.06 provides for ap pointment and renewal, para 7.08 for renewal of term ,red para for maintenance of character roll of the appointees.
Para 7.07 forbids the D.G.C. so long as he holds the `post ' from participating in political activity like all other Government officers and unlike a lawyer engaged by a private part vs These provisions read as under: "7.06.
Appointment and renewal (1) The legal practitioner finally selected by the Government may be appointed District Government Counsel for one year from the date of his taking over charge.
(2) At the end of the aforesaid period, the Dis trict Officer after consulting the District judge shall submit a report On his work and conduct to the Legal Remem brancer together with the statement of work done in Form No. 9.
Should his work or conduct be found to be unsatisfac tory the matter shall be reported to the Government for orders.
If the report in respect of his work and conduct is satisfactory, he may be furnished with a deed engagement in Form No. 1 for a term not exceeding three years.
On his first engagement a copy of Form No. 2 shall be supplied to him and he shall complete and return it the Legal Remem brancer for record.
(3) The appointment of any legal practitioner as a District Government Counsel is only professional engage 638 ment terminable at will on either side and is not appoint ment to a post under the Government.
Accordingly the Govern ment reserves the power to terminate the appointment of any District Government Counsel at any time without assigning any cause.
7.07 Political Activity The District Government Counsel shall not participate in political activities so long they work as such; otherwise they shall incur a dis qualification to hold the post.
7.08 Renewal of term (1) at least three months before the expiry of the term of a District Government Counsel, the District Officer shall after consulting the District Judge and considering his past record of work, conduct and age, report to the Legal Remembrancer, together with the statement of work done by him in Form No. 9 whether in his opinion the term of appointment of such counsel should be renewed or not.
A copy of the opinion of the District Judge should also be sent along with the recommen dations of the District Officer.
(2) Where recommendation for the extension of the term of a District Government Counsel is made for a speci fied period only, the reasons therefore shall also be stated by the District Officer.
(3) While forwarding his recommendation for renewal of the term of a District Government Counsel (i) the District Judge shall give an estimate of the quality of the Counsels 's work from the Judicial standpoint, keeping in view the different aspects of a lawyer 's capacity as it is manifested before him in conducting State cases, and specially his professional conduct; (ii) the District Officer shall give his report about the suitability of the District Government Counsel from the administrative point of view, his public reputation in general, his character, integrity and professional conduct.
639 (4) If the Government agrees with the recommendations of the District Officer for the renewal of the term of the Government Counsel, it may pass orders for reappointing him for a period not exceeding three years.
(5) If the Government decides not to re appoint a Gov ernment Counsel, the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03.
(6) The procedure prescribed in this para shall be followed on the expiry of every successive period of renewed appointment of a District Government Counsel.
Note The renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the Counsel.
Character roll (1) The District Officer and the District Judge shall, before the end of every year and also while leaving the district on transfer, place on record his opinion on the capacity and work of the District Government Counsel.
The District Judge shall before recording such opinion obtain a report about the work and: conduct of the District Government Counsel from the presiding officers of the courts, where they are generally required to practise.
Similarly, the District Officer shall before recording such opinion obtain a report from the Superintendent of Police regarding the counsel 's capacity for prosecution of cases and assistance rendered to the investigating agency.
The record, which shall be confidential, shall be maintained by the District Officer.
Every adverse entry shall be communi cated to the District Government Counsel concerned by the District Officer, with the prior approval of the Government.
(2) The character roll of every District Government Counsel shall also be maintained by the Government in Judi cial (Legal Advice) Section.
For this purpose, the District Officer shall forward to the Legal Remembrancer a copy of all the confidential reports, recorded by him and the Dis trict Judge on the work and conduct of the District Govern ment Counsel by the first week of May every year 640 for being incorporated in the character roll, maintained by the Government.
(3) The District Officer shall forward a copy of all the confidential reports, referred to in para 7.09(2) in respect of District Government Counsel (Criminal) to Home (Police) Section of Secretariat also for information.
(4) Any shortcomings on the part of the District Government Counsel shall at once be brought to the notice of the Legal Remembrancer.
" These provisions show that the initial appointment is for a period of one year during which the work and conduct of the appointee is watched to adjudge his suitability and a report is required to be submitted at the end thereof by the District Officer after consulting the District Judge and on the same being found satisfactory, his engagement is made for a term not exceeding three years.
Before expiry of the term of three years, the case of the incumbent is to be considered on the basis of his work, conduct and age for renewal and the Government is required to decide the ques tion of his reappointment for a period not exceeding three years on the basis of the report of the District Officer and the opinion of the District Judge.
If the Government agrees with their recommendations, the term of the existing incum bent is renewed for a period not exceeding three years.
It is only if the Government decides not to reappoint a Govern ment Counsel ' that the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03.
this procedure is to be followed on the expiry of every successive period of renewed appointment of District Government Counsel.
The age factor mentioned in para 7.08 has to be read with the footnote to it, which says that `the renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the counsel '.
Para 7.09 provides for maintenance of the character roll in which the District Officer and the District Judge are required to record their opinion on the capacity and work of the District Government Counsel.
Clause 3 of para 7.06, regarding termination of the appointment, would be considered later while dealing with an other argument of the learned Additional Advocate General.
Part B of Chapter VII lays down `Duties ' of D.G.Cs.
The above provisions in the L.R. Manual clearly show that the Government Counsel in the districts are treated as Law Officers of the 641 State who are holders of an `office ' or `post '.
The afore said provisions in Chapter VII relating to appointment and conditions of engagement of District Government Counsel show that the appointments are to be made and ordinarily renewed on objective assessment of suitability of the person based on the opinion of the District Officer and the District Judge; and character roll is maintained for keeping a record of the suitability of the appointee to enable an objective assessment for the purpose of his continuance as a Law Officer in the district.
There arc provisions to bar private practice and participation in political activity by D.G.Cs.
Apart from clause 3 of para 7.06 to which we shall advert a little later, these provisions clearly indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of ap pointment.
Suitability of the appointee being the prime criterion for any such appointment, it is obvious that appointment of the best amongst those available, is the object sought to be achieved by these provisions, which, even otherwise, should be the paramount consideration in discharge of this governmental function aimed at promoting public interest.
All Govt.
Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '.
The learned Additional Advocate General contended that clause 3 of para 7.06 says that the appointment of a Dis trict Government Counsel is only professional engagement terminable at will on either side and not appointment to a post under the Government; and the Government has the power to terminate the appointment at any time `without assigning any cause '.
He contended that this power to terminate the appointment at any time without assigning any cause and the clear statement that the appointment is only professional engagement terminable at will on either side is sufficient to indicate that the relationship is the same as that of a private client and his counsel.
In our opinion, this provi sion has to be read not in isolation, but in the context in which it appears and along with the connected provisions, already referred.
The expression `professional engagement ' is used therein to distinguish it from `appointment to a post under the Government ' in the strict sense.
This, howev er, does not necessarily mean that a person who is not a Government servant holding a post under the Government does not hold any public office and the engagement is purely private with no public element attaching to it.
This part of 642 clause 3 of para 7.06 means only this and no more.
The other part of clause 3 which enables the Government to terminate the appointment `at any time without assigning any cause ' can also not be considered in the manner, suggested by the learned Additional Advocate General.
The expression `at any time ' merely means that the termination may be made even during the subsistence of the term of appointment and `wit hout assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated.
However, `without assigning any cause ' is not to be equated with `without existence of any cause '.
It merely means that the reason for which the termination is made need not to be assigned or communicated to the appointee.
It was held in Liberty Oil Mills and Others vs Union of India and Others, ; that the expression `without assigning any reason ' implies that the decision has to be communicated, but reasons for the decision have not to be stated; but the reasons must exist, otherwise, the decision would be arbi trary.
The non assigning of reasons or the non communication thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy.
Clause 3 of para 7.06 must, therefore, be understood to mean that the appointment of a District Government Counsel is not to be equated with appointment to a post under the Government in the strict sense, which does not necessarily mean that it results in denuding the office of its public character; and that the appointment may be terminated even during currency of the term by only communicating the decision of termina tion without communicating the reasons which led to the termination.
It does not mean that the appointment is at the sweet will of the Government which can be terminated at any time, even without the existence of any cogent reason during the subsistence of the term.
The construction, suggested on behalf of the State of U.P. of this provision, if accepted, would amount to conceding arbitrary power of termination to the Government, which by itself is sufficient to reject the contention and thereby save it from any attack to its valid ity.
We may now refer to some provisions of the Code of Criminal Procedure, 1973, relating to Public Prosecutors.
Section 24 provides for appointment of Public Prosecutors in the High Courts and the districts by the Central Government or the State Government.
We are here concerned only with the appointment of Public Prosecutors by the State Government in the districts.
Sub section 3 of Section 24 says that for every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecu 643 tors for the district.
Sub section 4 requires the District Magistrate to prepare a panel of names of persons considered fit for such appointments, in consultation with the Session Judge.
Sub section 5 contains an embargo against appointment of any person as the Public Prosecutor or Additional Public Prosecutor for the district by the State Government unless his name appears in the panel prepared under sub section 4.
Sub section 6 provides for such appointments, where in a State there exists a regular Cadre of Prosecuting Officers but if no suitable person is available in such cadre, then the appointment has to be made from the panel prepared under sub section 4.
Sub section 7 says that a person shall be eligible for such appointment only after he has been in practice as an advocate for not less than seven years.
Section 25 deals with the appointment of Assistant Public Prosecutors in the district for conducting prosecution in the Courts of Magistrate.
In the case of Public Prosecutors also known as District Government Counsel (Criminal), there can be no doubt about the statutory element attaching to such appointments by virtue of these provisions in the Code of Criminal Procedure, 1973.
In this context, Section 321 of the Code of Criminal Procedure, 1973. is also significant.
Section 321 permits withdrawal from prosecution by the Public Prosecutor or Assistant Public Prosecutor in charge of a case, with the consent of the Court, at any time before the judgment is pronounced.
This power of the Public Prose cutor in charge of the case is derived from statute and the guiding consideration for it, must be the interest of admin istration of justice.
There can be no doubt that this func tion of the Public Prosecutor relates to a public purpose entrusting him with the responsibility of so acting only in the interest of administration of justice.
In the case of Public Prosecutors, this additional public element flowing from statutory provisions in the Code of Criminal Procedure, undoubtedly.
invest the Public Prosecutors with the at tribute of holder of a public office which cannot be whit tled down by the assertion that their engagement is purely professional between a client and his lawyer with no public element attaching to it.
A brief reference to some decisions of this Court, in which the character of engagement of a Government Counsel was considered.
may be made.
In Mahadeo vs Shantibhai and Ors., it was held that a lawyer engaged by the Railway Administration during the continuance of the engagement was holding an `office of profit '.
The engagement of the Railway Counsel was similar to that of the Government Counsel in the present case.
It was pointed out that by `office ' is meant the right and duty to exercise an employ ment or a position of authority and trust to which certain duties are attached; 644 and such an engagement satisfied that test.
Even though the decision was rendered in the context of disqualification under the Election Law by holding an `office of profit ', yet it is useful for appreciating the nature of such an engage ment or appointment of a counsel by the Government.
In Mundrika Prasad Sinha vs State of Bihar, [1980] 1 SCR 759.
the nature of appointment of Government Pleaders came up for consideration and it was said that the office of a Govern ment Pleader.
as defined in Section 2(7) of the Code of Civil Procedure.1908 is a public office.
Krishna Iyer.
J. in that decision, also pointed out that the `Government under our Constitution shall not play with law offices on political or other impertinent consideration as it may affect the legality of the action and subvert the rule of law itself '.
In that decision.
an earlier Madras decision was quoted with approval.
wherein.
it was clearly held that the duties of the Government Pleader are of a public nature and that the office of a Government Pleader is a public office.
The relevant extract is as under: .
A Government pleader is more than an advocate for a litigant.
He holds a public office.
We recall with approval the observations a Division Bench of the Madras High Court made in Ramachandran vs Alagiriswami, AIR 1961 Madras 460 and regard the view there.
expressed about a Government Pleader 's office.
as broadly correct even in the Bihar set up. ". the duties of the Government Pleader.
Madras are duties of a public nature.
Besides.
as already explained the public are genuinely concerned with the manner in which Government Pleader discharges his duties because.
if he handles his cases badly.
they have ultimately to foot the bill .
XXXXX XXXXX XXXXX consider that the most useful test to be applied to determine the question is that laid down by Erie, J. in ; The three criteria are.
source of the office, the tenure and the duties.
I have applied that test and I am of opinion that the conclusion that the office is a public office is irresistible." Similarly.
in Mukul Dalai and Others vs Union of India and Others. ; it was held that the `office of the Public Prosecutor is 645 a public one ' and `the primacy given to the Public Prosecu tor under the Scheme of the Code (Cr.P.C.) has a social purpose '.
It is useful in this context to refer to the decision in Malloch vs Aberdeen Corporation.
That was d case of dismissal of an employee of a public authority whose appointment during the authority 's pleasure.
Examining the scope of judicial review.
Lord Wilberforce said: "The appellant 's challenge to the action taken by the re spondents raises a question in my opinion.
of administrative law.
The respondents are a public authority.
the appellant holds a public position fortified by statute.
The considera tions which determine whether he has been validly removed from that position go beyond the mere contract of employ ment, though no doubt including it.
They are.
in my opinion.
to be tested broadly on arguments of public policy and not to be resolved on narrow verbal distinctions The appellant is entitled to complain if.
whether in procedure or in substance, essential requirements, appropriate to his situa tion in the public service under the respondents, have not been observed and.
in case of non observance.
to come to the courts for redress.
XXXXX XXXXX XXXXX . . So.
while the courts will necessarily respect the right.
for good reasons of public policy.
to dismiss without assigned reasons.
this should not.
in my opinion, prevent them from examining the framework and context of the employment to see whether elementary rights are conferred on him expressly or by necessary implication.
and how tar these extend . are.
therefore.
unable to accept the argument of the learned Additional Advocate General that the appointment of District Government Counsel by the State Government is only a professional engagement like that between a private client and his lawyer, or that it is purely contractual with no public element attaching to it.
which may be terminated at an), time at the sweet will of the Government excluding judicial review.
We have already indicated the presence of public element attached to the `office ' or `post ' of Dis trict Government Counsel of every category covered by the impugned circular.
This is 646 sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review.
The scope of judicial review permissible in the present case, does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irrationali ty, once Article 14 is attracted, is sufficient to invali date the impugned circular as indicated later.
We need not, therefore, deal at length with the scope of judicial review permissible in such cases since several nuances of that ticklish question do not arise for consideration in the present case.
Even otherwise and sans the public element so obvious in these appointments, the appointment and its concomitants viewed as purely contractual matters after the appointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action.
This aspect is dealt with hereafter.
Even apart from the premise that the `office ' or `post ' of D.G.Cs. has a public element which alone is sufficient to attract the power of judicial review for testing validity of the impugned circular on the anvil of Article 14, we are also clearly of the view that this power is available even without that element on the premise that after the initial appointment.
the matter is purely contractual.
Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exer cise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applica ble to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by re quirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition.
It is not as if the requirements of Article 14 and contractual obligations are alien concepts.
which cannot co exist.
The Preamble of the Constitution of India resolves to secure to all its citizens Justice, social.
economic and political; and Equality of status and opportunity.
Every State action must be aimed at achieving 647 this goal.
Part IV of the Constitution contains `Directives Principles of State Policy which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action to realise the vision in the Preamble.
This being the philoso phy of the Constitution, can it be said that it contemplates exclusion of Article 14 non arbitrariness which is basic to rule of law from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble.
In our opinion.
it would be alien to the Constitutional Scheme to accept the argument of exclusion of Article 14 in contractual matters.
The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion.
This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.
There is an obvious difference in the contracts between private parties and contracts to which the State is a party, Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest.
The impact of every State action is also on public interest.
This factor alone is sufficient to import at least the minimal require ments of public law obligations and impress with this char acter the contracts made by the State or its instrumentali ty.
It is a different matter that the scope of judicial review in respect of disputes failing within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes.
However, to the extent, chal lenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic require ments of Article 14.
To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition there to.
An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 648 of non arbitrariness at the hands of the State in any of its actions.
Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved per sons.
The State cannot be attributed the sprit personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the con tract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it.
It is really the nature of its personality as State which is significant and must characterize all its actions, in what ever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act.
The re quirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters.
There is a basic difference between the acts of the State which must invariably be in public inter est and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest.
Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regu lating the conduct of the State activity.
In Wade 's Administrative Law, 6th Ed., after indicating that `the powers of public authorities are essentially different from those of private persons ', it has been suc cinctly stated at p. 400 401 as under: .
The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good.
There is nothing paradoxical in the imposition of such legal limits.
It would indeed be paradoxical if they were not imposed.
Not is this principle an oddity of British or 649 American law: it is equally prominent in French law.
Nor is it a special restriction which fetters only local authori ties: it applies no less to ministers of the Crown.
Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial.
It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute.
Plainly this can have no application in public law.
For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion.
The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal.
It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere.
(emphasis supplied) The view, we are taking is, therefore, in consonance with the current thought in this field.
We have no doubt that the scope of judicial review may vary with reference to the type of matter involved, but the fact that the action is reviewa ble, irrespective of the sphere in which it is exercised, cannot be doubted.
A useful treatment of the subject is to be found in (1990) 106 L.Q.R. at pages 277 to 292 in an article `Judi cial Review and Contractual Powers of Public Authorities '.
The conclusion drawn in the article on the basis of recent English decisions is that `public law principles designed to protect the citizens should apply because of the public nature of the body, and they may have some role in protect ing the public interest '.
The trend now is towards judicial re,dew of contractual powers and the other activities of the Government.
Reference is made also to the recent decision of the Court of Appeal in Jones vs Swansea City Council, [1990] 1 W.L.R. 54, where the Court 's clear inclination to the view that contractual powers should generally be reviewable is indicated, even though the Court of Appeal faltered at the last step and refrained from saying so.
It is significant to note that emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body 650 exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '.
The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy.
This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mele private activity to be excluded from public view or scrutiny.
Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest.
Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests.
As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest.
This is equally true of all actions even in the field of contract.
Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good.
With the diversification of State activity in a Wel fare State requiring the State to discharge its wide ranging functions even through its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions re quired to be non arbitrary and justified on the touchstone of Article 14.
Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters.
We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.
It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in 651 contractual matters, fails to satisfy the test of reasona bleness, it would be unconstitutional.
See Ramana Dayaram Shetty vs The International Airport Authority of India and Ors., ; and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir & Anr., ; In Col. A.S. Sangwan vs Union of India and Ors., [1980] Supp.
SCC 559, while the discretion to change the policy in exer cise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria.
The wide sweep of Article 14 and the requirement of every State action qualifying for its validi ty on this touch stone, irrespective of the field of activi ty of the State, has long been settled.
Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose.
In M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay,[1989] 3 SCC 293, the matter was re examined in relation to an instrumentality of the State for applicability of Article 14 to all its actions.
Referring to the earlier decisions of this Court and examining the argu ment for applicability of Article 14, even in contractual matters, Sabyasachi Mukharji, J. (as the learned Chief Justice then was), speaking for himself and Kania, J., reiterated that `every action of the State or an instrumen tality of the State must be informed by reason . actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Con stitution. ' Ranganathan, J. did not express `any opinion on this point but agreed with the conclusion of the other learned Judges on the facts of the case.
It is obvious that the conclusion on the facts of the case could not be reached by Ranganathan, J. without examining them and this could be done only on the basis that it was permissible to make the judicial review.
Thus, Ranganathan, J. also applied that, principle without saying so.
In view of the wide ranging and, in essence, all pervading sphere of State activity in discharge of its, welfare functions, the question assumes considerable importance and cannot be shelved.
The basic requirement of Article 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule.
of law.
Non arbitrariness, in substance, is only fair play in action.
We have no doubt that this obvious requirement must be satis fied by every action of the State or its instrumentality in order to 652 satisfy the test Of validity.
it is this aspect which has been considered at length by Sabyasachi Mukharji, j. (as the learned Chief justice then was) in M/s Dwarkadas Marfatia 's case (supra) even though, that was a case of statutory exemption granted under the Rent Act to an instrumentality of the State and it was in that context that the exercise of power to terminate the contractual tenancy was examined.
All the same, without going into the question whether the obligation of the in strumentality to act in pursuance of public purpose, was a public law purpose or private law purpose, it was held that the obligation to act in pursuance of public purpose was alone sufficient to attract Article 14.
It was held that there was an implied obligation in respect of the dealings with the tenants/occupants of the authority to act in public interest/purpose.
It was emphasised that every state action has to be for a public purpose and must promote public benefit.
Referring to some earlier decisions, it was reiter ated that all State actions `whatever their mien ' are amena ble to constitutional limitations, the alternative being to permit them `to flourish as an imperium in imperio '.
It was pointed out that `governmental policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards ', if it suffers from this vice.
It was stated that every State action must be reasonable and in public interest and an infraction of that duty is amenable to judicial review.
The extent of permissible judicial review was indicated by saying that `actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose '.
It is sufficient to quote from the judg ment of Mukharji, 3.
(as the learned Chief Justice then was) the following extract: " . .
Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down.
Every action of the executive authority must be subject to rule of law and must be informed by reason.
So, whatever be the activity of the public authority, it should meet the test of Article 14 . (emphasis supplied) This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenan cy which alone applied by virtue of the exemption granted under the Rent Act excluding the applicability of the provi sions thereof.
653 In another recent decision in Mahabir Auto Stores & Ors.
vs Indian Oil Corporation & Ors., J.T. , it was held that Article 14 was attracted even where the ag grieved person did not have the benefit of either a contrac tual or a statutory right.
The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct.
it was held by the learned Chief justice that the impugned act of the Indian Oil Corpo ration was an administrative decision and could be impeached on the ground that it was arbitrary or violative of Article 14 of the Constitution.
It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that `fairness in such actions should be perceptible, if not transparent '.
If Article 14 was applied even without the benefit of a contract of deal ership, the position cannot be worse with the added benefit of a contract.
With respect, we concur with the view about the impact of Article 14 of the Constitution on every State action as indicated by the learned Chief Justice in these two recent decisions.
No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion.
However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable.
If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged.
The scope of judicial review is limited as indicated in Dwarkadas Marfatia 's case (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more.
The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases.
it is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case.
As indicated by Di plock, L.J., in Council of Civil Service Unions vs Minister for the Civil Service, ; , the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety.
In the case of arbitrariness, the defect of irrationality is obvious.
654 In our opinion, the wide sweep of Article 14 undoubtedly takes within its fold the impugned circular issued by the State of U.P. in exercise of its executive power, irrespec tive of the precise nature of appointment of the Government Counsel in the districts and the other rights, contractual or statutory, which the appointees may have.
It is for this reason that we base our decision on the ground that inde pendent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Article 14 of the Constitution and if it is shown to be arbitrary, it must be struck down.
However, we have referred to certain provisions relating to initial appointment, termination or renewal of tenure to indicate that the action is controlled at least by settled guide lines, followed by the State of U.P., for a long time.
This too is relevant for deciding the question of arbitrariness alleged in the present case.
It is now too well settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Consti tution and basic to the rule of law, the system which gov erns us.
Arbitrariness is the very negation of the rule of law.
Satisfaction of this basic test in every State action is sine qua lion tO its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract.
This distinction between the State and a private individual in the field of contract has to be borne in the mind.
The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined.
The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circum stances of a given case.
An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasona bleness.
Where a mode is prescribed for doing an act and there is no impediment in following that procedure, perform ance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness.
Every State action must be informed by reason and it follows that an act unin formed by reason, is arbitrary.
Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being.
It is trite that be you ever so high, the laws are above you '.
This is what men in power must remember, always.
655 Almost a quarter century back, this Court in S.G. Jais inghani vs Union of India and Ors., ; , at p. 7 18 19, indicated the test of arbitrariness and the pit falls to be avoided in all State actions to prevent that vice, in a passage as under: "In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
(See Dicey "Law of the Constitution" Tenth Edn.
, Introduction cx).
"Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick, (*), "when it has freed man from the unlimited discretion of some ruler .
Where discretion is absolute, man has always suffered".
It is in this sense that the rule of law may be said to be the sworn enemy of caprice.
Discre tion, as Lord Mansfield stated it in classic terms in the case of John Wilker (*), "means sound discretion guided by law.
It must be governed by rule, not humour: it must not be arbitrary, vague and fanciful." After Jaisinghani 's case (supra), long strides have been taken in several well known decisions of this Court expand ing the scope of judicial review in such matters.
It has been emphasized time and again that arbitrariness is anathe ma to State action in every sphere and wherever the vice percolates, this Court would not be impeded by technicali ties to trace it and strike it down.
This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India.
It is, therefore, obvious that irre spective of the nature of appointment of the Government Counsel in the districts in the State of U.P. and the secu rity of tenure being even minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable.
656 No doubt, it is for the person alleging arbitrariness who has to prove it.
This can be done by showing in the first instance that the impugned State action is uninformed by reason inasmuch as there is no discernible principle on which it is based or it is Contrary to the prescribed mode of exercise of the power or is unreasonable.
If this is shown, then the burden is shifted to the State to repel the attack by disclosing the material and reasons which led to the action being taken in order to show that it was an informed decision Which was reasonable.
If after a prima facie case of arbitrarineSs is made out, the State is unable to show that the decision is an informed action which is reasonable, the State action must perish as arbitrary.
In the present case.
the initial burden on the petition ers/appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State, even those whose tenure in office had not expired.
Such a drastic action could be justified only on the basis of some extraordinary ground equally applicable to all Government Counsel in the dis tricts throughout the State which is reasonable.
No such reason appears in the circular.
The impugned circular itself does not indicate the compelling reason, if any, for the drastic step of replacing all the Government Counsel in every branch at the district level throughout the State of U.P., irrespective of the fact whether the tenure of the incumbent had expired or not.
The learned Additional Advocate General stated that the circular was issued because the existing panels were made in 1985, 1986 and 1987 and were considered to be not too proximate in point of time in the year 1990 for being continued.
The reason, if any, for considering such en bloc change neces sary has not been disclosed either in the circular or at the hearing in addition to what is said in para 29 of the coun ter affidavit of A.K. Singh, which is referred later.
On behalf of the petitiOners/appellants, it was alleged that the en masse change at the district level throughout the State of U.P. was made only for political reasons on account of the recent change in the State Government.
We deem it unnecessary to go into this question for want of any specif ic material either way.
Moreover, the arbitrariness, if any, of such an act, would be equally applicable irrespective of the change in the Government, which, if at all, would only strengthen the argument in case arbitrariness is proved otherwise.
The only reason given 657 in the counter affidavit of A.K. Singh, Joint Secretary & Joint Legal Rememberancer, Government of U.P., is in para 29 thereof which reads as under: "That the contents of para 38 of the writ petition are not admitted.
It is denied that the government took the present decision with a political motive and in an arbitrary manner.
It is also submitted that the decision to terminate the prOfessional engagement has been taken in order to stream line the conduct of the government cases and effective prosecution thereof.
" It is difficult to appreciate this as a reasonable basis for the drastic and sweeping action throughout the State, particularly when the provisions in the Legal Remembrancer 's Manual referred earlier provide ordinarily for renewal of the tenure Of the appointees.
To say the least.
the contents of para 29 of this counter affidavit Which alone are relied on to disclose the reasons for the circular are beautifully vague and convey nothing of substance and cannot furnish any tangible support to the impugned circular.
It was stated by the learned Additional Advocate General that many of the old incumbents were to be re appointed even after this exercise and, therefore, a wholesale change was not to be made.
If at all.
this submission discloses a further infirmity in the impugned circular.
If it be true that many of the existing appointees were to be continued by giving them fresh ap pointments.
the action of first terminating their appoint ment and then giving them fresh appointment is.
to say the least, Uninformed by reason and does not even fail within the scope of the disclosed reason `to streamline the conduct of government cases and effective prosecution thereof '.
It is obvious that at least in respect of all such appointees who are to be continued by giving them fresh appointments, the act of terminating their appointment in one stroke, was without application of mind by anyone to the question wheth er a change was at all needed in their case.
It would be too much to assume that every Government Counsel in all the districts of the State of U.P. was required to be replaced in order to streamline the conduct of government cases and indeed.
that is not even the case of the State which itself says that many of them were to be re appointed.
Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State of U.P. is itself eloquent of the arbitrariness writ large on the face of the circular.
It is obvious that issuance of the impugned circular 658 was not governed by any rule but by the whim or fancy of someone totally unaware of the requirements of rule of law, neatly spelled out in the case of John Wilkes, more than two centuries back and quoted with approval by this Court almost a quarter century earlier in Jaisinghani 's case (supra).
We have considered it necessary to re emphasize this aspect and reiterate what has been said so often by this Court only because we find that some per sons entrusted with the task of governance appear to be unaware of the fact that the exercise of discretion they have must be governed by rule, not by humour, whim, caprice or fancy or personal predilections.
It also disturbs us to find that the Legal Remembrancer 's Department of the State of U .P. which has the duty to correctly advise the State Government in such matters.
overlooked the obvious and failed to discharge its bounden duty of correctly advising the State Government in matters of law.
We would like to believe that the impugned circular was issued for want of proper legal advice in this behalf instead of any ulterior motive suggested by the petitioners/appellants.
Conferment of the power together with the discretion which goes with it to enable proper exercise of the power is coupled with the duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred, which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual.
All persons entrusted with any such power have to bear in mind its necessary concomitant which alone justified con ferment of power under the rule of law.
This was apparently lost sight of in the present case while issuing the impugned circular.
Arbitrariness is writ large in the impugned circular dated 6.2.
1990 issued by the State of Uttar Pradesh.
It gives the impression that this action was taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs.
as bounty to be distributed by the appoint ing authority at its sweet will.
Such a change even by a private party is made keeping in view his own interest when he finds that the existing lawyer is not suitable for the assignment and.
therefore.
without making the change he incurs the risk of some loss.
In the case of the State it is the public interest which should be the prime guiding con sideration to judge the suitability of the appointee but it appears that the impugned State action was taken in the present case with only one object in view, that is, to terminate all existing appointments irrespective of the subsistance or expiry of the tenure or suitability of the existing incumbents.
659 Viewed in any manner, the impugned circular dated 6.2.90 is arbitrary.
It terminates all the appointments of Govern ment Counsel in the districts of the State of Uttar Pradesh by an omnibus order, even though these appointments were all individual.
No common reason applicable to all of them justifying their termination in one stroke on a reasonable ground has been shown.
The submission on behalf of the State of Uttar Pradesh at the hearing that many of them were likely to be re appointed is by itself ample proof of the fact that there was total non application of mind to the individual cases before issuing the general order terminat ing all the appointments.
This was done in spite of the clear provisions in the L.R. Manual laying down detailed procedure for appointment, termination and renewal of tenure and the requirement to first consider the existing incumbent for renewal of his tenure and to take steps for a fresh appointment in his place only if the existing incumbent is not found suitable in comparison to more suitable persons available for appointment at the time of renewal.
In the case of existing appointees.
a decision has to be first reached about their non suitability for renewal before deciding to take steps for making fresh appointments to replace them.
None of these steps were taken and no material has been produced to show that any existing incumbent was found unsuitable for the office on objective assessment before the decision to replace all by fresh appointees was taken.
The prescribed procedure laid down in the L.R. Manual which has to regulate exercise of this power was totally ignored.
In short, nothing worthwhile has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary.
The impugned circular must, therefore, perish on the ground of arbitrariness which is an available ground for judicial review in such a situation.
In view of the above conclusion, all the existing ap pointees to the posts of Government Counsel in the districts throughout the State of U.P., by whatever name called, governed by the impugned circular dated 6.2.
1990, who were in position at the time of issuance of the circular, must continue in office and be dealt with in accordance with the procedure laid down in the L.R. Manual.
Those Government Counsel, whose term had then expired or was to expire there after, would be considered for renewal of their tenure in the manner prescribed and steps for preparation of a fresh panel to replace them would be taken only if they are found unsuitable for renewal of their term as a result of an informed decision in the manner prescribed.
The power of termination of any appointment during the subsistence of the term available to the State Government shall also be avail able for exercise only in the manner indicated, wherever considered necessary.
660 In short, the status quo ante as on 28.2.
1990, on which date the impugned circular dated 6.2.
1990 was made effec tive, will be restored and be maintained till change in any appointment is found necessary and is made in the manner prescribed.
The fresh appointments, if any, made by the State Government in implementation of the impugned circular dated 6.2. 1990, being subject to the validity of the circu lar and the result of these matters, would stand superseded in this manner.
The State Government will implement this direction within two weeks of the date of this order.
In our view, bringing the State activity in contractual matters also within the purview of judicial review is inevi table and is a logical corollary to the stage already reached in the decisions of this Court so far.
Having fortu nately reached this point, we should not now turn back or take a turn in a different direction or merely stop there.
In our opinion, two recent decisions in M/s Dwarkadas Marfa tia and Sons, (supra) and Mahabir Auto Stores & Ors., (supra) also lead in the same direction without saying so in clear terms.
This appears to be also the trend of the recent English decisions.
It is in consonance with our commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power.
We would much rather be wrong in saying so rather than be wrong in not saying so.
Non arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reason and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power.
In view of the conclusion reached by us and the above direction restoring status quo ante as on 28.2.1990, we have not gone into individual matters brought before us.
Some argument was advanced from both sides in W.P. No. 706 of 1990 (Km.
Shrilekha Vidyarthi vs State of U.P. & Ors.), wherein the fact of renewal of petitioner 's tenure is dis puted.
It is unnecessary for us to go into that question also since the order, we are making, governs the case of all Government Counsel in the districts throughout the State of U.P. including that of the petitioner in this writ petition.
The subsequent rights of this petitioner also would be governed in the manner indicated above.
If and when such a situation arises, it would be open to the parties to have the dispute, if any, adjudicated wherein the question of renewal of tenure, claimed by the petitioner, can also be gone into.
661 Consequently, these appeals and writ petitions are allowed.
The impugned circular G.O. No. D 284 Seven Law ministry dated 6.2.
1990, issued by the Government of State of U.P., is quashed resulting in resto ration of status quo ante as on 28.2.
1990, the date from which this circular was made effective.
No costs.
R.S.S. Petitions and appeals allowed.
| IN-Abs | The writ petitioners/appellants had been appointed as Government Counsel (Civil, Criminal, Revenue) by the State of U.P.
By its circular dated 6.2.1990 the State terminated the appointment of all Government Counsel with effect from 28.2.
1990 irrespective of the fact whether the term of the incumbent had expired or was subsisting.
At the same time the Government directed preparation of fresh panels to make appointments in place of existing incumbents.
The appellants challenged the validity of this State action, which was rejected by the High Court.
Before this Court it was contended inter alia on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government was not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel could not be equated with the termination by a private litigant of his Counsel 's engagement, which was purely contractual.
without any public element attaching to it.
On behalf of the State it was urged that: (i) the rela tionship of the appointees to these offices of Government Counsel in the districts was purely contractual depending on the terms of the contract and was in the nature of an en gagement of a Counsel by a private party who could be changed at any time at the will of the litigant, with there being no right in the counsel to insist on continuance of the engagement; (ii) there was no element of public employ ment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure were merely to provide for making a suitable choice; (iii) the appointment of a District Government Counsel was only professional engagement terminable at will on either side and not appointment to a post under the Government, and the Government had 626 the power to terminate the appointment at any time `without assigning any cause ' and hence this circular did not suffer from the vice of arbitrariness.
Allowing the writ petitions and the appeals, this Court, HELD: (1) The provisions in the Legal Remembrancer 's Manual clearly show that the Government Counsel in the districts are treated as law Officers of the State who are holders of an `office ' or `post '.
These provisions further indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of appointment.
(2) All Government Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '.
(3) Clause 3 of para 7.06 of the L.R. Manual which enables the Government to terminate the appointment `at any time without assigning any cause ' merely means that the termination may be made even during the subsistence of the term of appointment, and the expression `without assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated.
(4) The non assigning of reasons or the non communica tion thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy.
Liberty Oil Mills vs Union of India, ; , referred to.
(5) In the case of Public Prosecutors, the public ele ment flowing from statutory provisions in the Code of Crimi nal Procedure, undoubtedly, invest the Public Prosecutors with the attribute of holder of a public office `which cannot be whittled down by the assertion that their ' engage ment is purely professional between a client and his lawyer with no public element attaching to it.
627 Mahadeo vs Shantibhai, ; Mundrika Prasad Sinha vs State of Bihar, [1980] 1 S.C.R. 759; Mukul Dalaiand Others vs Union of India and Others, ; and Malloch vs Aberdeen Corporation, , referred to.
(6) The presence of public element attached to the `office ' or `post ' of District Government Counsel of every category covered by the impugned circular is sufficient to attract Article 14 of the Constitution and bring the ques tion of validity of the impugned circular within the scope of judicial review.
(7) The scope of judicial review permissible in the present case does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irration ality once Article 14 is attracted, is sufficient to invali date the impugned circular.
(8) Even otherwise and sans the public element so obvi ous in these appointments, the appointment and its concomi tants viewed as purely contractual matters after the ap pointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action.
(9) The personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition.
It is not as if the require ments of Article 14 and contractual obligations are alien concepts, which cannot co exist.
(10) The scope and permissible grounds of judicial review in such matters, and the relief which may be avail able are different matters but that does not justify the view of its total exclusion.
This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form con tracts between unequals.
(11) To the extent challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14.
628 (12) It is significant to note that emphasis now is on review ability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '.
Jones vs Swansea City Counsel, [1990] 1 W.L.R. 54, referred to.
(13) It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconsti tutional.
Ramana Dayaram Shetty vs The International Airport Authority of India, ; ; Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir, ; and Col. A.S. Sangwan vs Union of India, [1980] Supp.
SCC 559, referred to.
(14) The basic requirement of Article 14 is fairness in action by the State and it is difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule of law.
Non arbitrariness, in substance, is only fair play in ac tion.
This obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity.
M/s Dwarkadas Marlaria and Sons vs Board of Trustees of the Port of Bombay, ; and Mahabir Auto Stores (15) There is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion.
However, where no plausible reason or principle is indicated nor is it dis cernible and the State action, therefore, appears to be exfacie arbitrary, the initial burden to prove the arbi trariness is discharged shifting onus on the State to justi fy its action as fair and reasonable.
(16) The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases.
It is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is success fully repelled by 629 showing that the act which was done was fair and reasonable in the facts and circumstances of the case.
Council of Civil Service Union vs Minister for the Civil Service, ; (17) Arbitrariness is the very negation of the rule of law.
Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect.
the State cannot claim comparison with a private individual even in the field of contract.
(18) Every State action must be informed by reason and it follows, that an act uninformed by reason, is arbitrary.
Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being.
(19) Irrespective of the nature of appointment of the Government Counsel in the districts in the State of U.P and the security of tenure being minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable.
S.G. Jaisinghani vs Union of India, ; (20) In the present case.
the initial burden on the petitioners appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State.
even those whose tenure in office had not expired.
(21) Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State is itself eloquent of the arbitrariness writ large on the face of the circular.
John Wilkes 's case (22) Arbitrariness is writ large in the impugned circu lar issued by the State of Uttar Pradesh.
It gives the impression that this action was 630 taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs.
as bounty to be distributed by the appointing authority at its sweet will.
Nothing worth while has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary.
|
: Criminal Appeal Nos.
259 64 of 1987.
From the Judgment and Order dated 20.4.
1987 of the Designated Court, Ahmedabad in Terrorist Criminal Case No. 3 of 1985 with Terrorist Criminal Case Nos. 13 of 1985 and 6 of 1986.
T.U. Mehta, A.S, Quereshi, Salman Khurshid, S.H. Kureshi, Mrs. Vimla Sinha, Ifshad Ahmed, Imtiaz Ahmed, Gopal Singh and S.M. Qureshi for the Appellants.
P.S. Poti, M.N. Shroff, Anip Sachthey, Bimal Roy, Kai lash Vasdev, Ms. A. Subhashini, Chava Badri Nath Babu, Girish Chandra, Biman Jad and Ashish Verma for the Respond ents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Tragic trauma of ghastly, in human and beastly behaviour of one community against another depicted for weeks and weeks, in this criminal appeal, forcefully, at times, emotionally still hangs heavily.
What a tragedy? Eight human lives roasted alive.
Five in waiting for gal lows.
Neighbours residing peacefully for generations sharing common happiness and sorrow even playing cricket together suddenly went mad.
Blood thirsty for each other.
Burning, looting and killing became order of the day.
Even ladies attempted to prevent fire brigade from extinguishing fire.
How pathetic and sad.
Still sadder was the manner in which the machinery of law moved.
From accusation in the charge sheet that accused were part of unlawful assembly of 1500 to 2(100 the number came down to 150 to 200 in evidence and the charge was framed against sixty three under Terrorist and Disruptive Activities (Prevention) Act, 1985 (in brief TADA Act) and various offences including Section 302 under Indian Penal Code.
Even from that fifty six were acquitted either because there was no evidence, and if there was evidence against some it was not sufficient to warrant their conviction.
What an affront to fundamental rights and human dignity.
Liberty and freedom of these persons was in chains for more than a year.
For no reason.
One even died in confinement.
All this generated a little emotion during submissions.
But sentiments or emotions, howsoever, strong are neither relevant nor have any place in a court of law.
Acquittal or conviction depends on proof 111 or otherwise of the criminological chain which invariably comprises of why, where, when, how and who.
Each knot of the chain has to be proved, beyond shadow of doubt to bring home the guilt.
Any crack or loosening in it weakens the prosecu tion.
Each link, must be so consistent that the, only con clusion which must follow is that the accused is guilty.
Although guilty should not escape.
But on reliable evidence truthful witnesses and honest and fair investigation.
No free man should be amerced by framing or to assuage feelings as it is fatal to human dignity and destructive of social, ethical and legal norm.
Heniousness of crime or cruelty in its execution howsoever abhorring and hateful cannot reflect in deciding the guilt.
Misgiving, also, prevailed about appreciation of evi dence.
Without adverting to submissions suffice it to men tion that credibility of witnesses has to be measured with same yardstick, whether, it is an ordinary crime or a crime emanating due to communal frenzy.
Law does not make any distinction either in leading of evidence or in its assess ment.
Rule is one and only one namely, if depositions are honest and true: Whether the witnesses, who claim to have seen the incident in this case, withstand this test is the issue? But before that some legal and general questions touching upon veracity of prosecution version may be dis posed of.
Trial under TADA Act was assailed, both, because of the Act being ultra vires of the fundamental right guaranteed under Constitution and absence of circumstances justifying its extension to the State of Gujarat.
For the latter no foundation was laid therefore it was not permitted to be raised.
And the former is awaiting adjudication before Constitution Bench from where this appeal was got delinked.
Invoking of provisions of TADA Act, in communal riot, was attacked and it was submitted that a combined reading of Sections 3 and 4 with explanation indicated that the Legis lative intention was to confine the applicability of the Act to secessionist or insurgency activities against the State and not to ordinary crimes for which provisions exist in the Penal Code.
Since the Constitution Bench is already ceased of the matter we are of the opinion that these aspects too can, well be raised there.
From acquittal of thirty seven accused for lack of evidence even though they were arrested in rounding off operation by the military, after cordoning off the area immediately after the incident, it was vehemently argued that it demonstrated that prosecution was not fair and there was deliberated attempt to rope in appellants who were well to do persons of the community not because they had any hand in 112 the crime but for extraneous reasons.
It was emphasised that if persons arrested on the spot residing in the same locali ty could not be identified nor any evidence could be pro duced against them then it was clear that the case against the appellants was also not trustworthy and they were impli cated either because of enemity or for oblique motive.
Although the argument did appear to be attractive on the first flush but it was dispelled soon by the learned counsel appearing for the State who submitted that the mistake in charge sheeting those accused along with appellant was bloated out of proportion.
According to him the incident for which the appellants have been convicted and sentenced was part of a different transaction, although it took place on the same day, than the incident in which thirty seven per sons were rounded off.
The learned counsel explained with help of Colonel Sudhakar PW 21 's statement and, in our opinion, rightly, that these arrests were made in conse quence of action taken by the military, on a different mob, as it included many ladies who did not form part of earlier mob, while attempting to bring situation under control after the incident.
Therefore, it is not possible to draw any adverse inference against prosecution on this score.
Time, place, background and manner in which dastardly crime was committed on 9th June, 1985 in broad daylight at 2.30 p.m. was by and large not in dispute.
What started as agitation in February 1985 against government policy of reservation, in the State of Ahmedabad, turned into communal riots between Hindus and Muslims in March, 1985 which went on, continuously, for long spell resulting in enormous loss of life and property of both the communities.
Situation deteriorated so much that military had to be called and stationed in sensitive areas, in April, 1985, including Dhabgarwad, a large area with Hindus and Muslims residing at places side by side and others exclusively.
In March 1985 riot of shocking magnitude had taken place in this area resulting in mass exodus of Dabgars, a Hindu community, who earned their livelihood by manufacturing musical instruments such as drums and also umbrellas and kites.
When calm was partially restored, due to the military being stationed, some of them returned and some used to visit their houses in day time to look after their property or business.
Maniben, a dabgar, whose one of the daughters had married a muslim but was having strained relations with him, continued to live in her house either because she had no other place to go or she was confident that she shall not be harmed.
Howev er despite stationing of military incidents went on whenever or wherever least opportunity was available with the result that curfew was clamped, continuously, in the area from 7th June, 1985.
As ill luck would have it the military stationed in 113 the area left for some other place at about 1.30 p.m. on 9th June, 1985.
Taking advantage of the vulnerability, due to absence of military.
members of minority community converged from two sides and when they intermingled in the corner somewhere near the house of Maniben or electric power sub station they indulged in most cowardly and shameful act of pushing open the door of her house setting fire to it and then chaining it from outside resulting in death of the lady, her two daughters.
four grand children and son of a neighbour.
Next house set ablaze was of Navin and then many others.
Prosecution version can thus be divided in three parts one, entry of mob from two sides one from Magadom Pole and other kalupur Panchpatti shouting 'kill ' 'cut ' pelting stones, throwing acid bulbs and flambeaus on houses of Hindus while approaching towards Nani Ali Pole.
The second was meeting of the two groups on the corner of Nani Ali Pole and then pushing open the door of Maniben 's house by five appellants armed with burning flambeau, iron pipe, stick, kerosene and bottle of petrol sprinkling of kerosene or petrol inside the house setting it ablaze then coming out of the house closing and shutting the door and chaining it from outside.
The third was entry of appellants thereafter in the house of Navin setting it on fire and then entering in Nani Ali Pole with other members of mob and attacking houses of Kantilal, Kalidas and others.
To prove it the prosecution examined twenty two witness es which were grouped by the trial judge in seven '.
One and the main group consisted of Navin PW 1, Ambalal PW 8, Rati lal PW 9, and Kalidas PW 13.
These were the witnesses who were 'said to have collected at the house of Ambalal from where they witnessed the occurrence and the participation of the appellants in it.
The second group consisted of Kalidas PW 7, Ramanlal PW 10, Manchharam PW 12, who were said to have witnessed the incident from the house of Kalidas Chha ganlal.
The third group consisted of Arun Kumar PW I 1, Jaswantlal PW 14, Dilip Kumar PW 17 and Sanmukhbhai PW 20, who were witnesses who are said to have arrived on hearing the shouts and commotion and witnessed the occurrence from near Dabgarwad Police gate.
The other groups comprised of official witnesses.
No witness was examined from any of the house situated on either side of road from where the two mobs entered or from any of the houses ,situated on the route through which the.
mob passed before it reached/the comer of Nani Ali Pole to establish identity of accused.
Mod which entered from Magadom Pole side was admitted by 114 Ambalal to have passed from,the front of his house.
But he stated that he could not recognise anyone out of them.
Appellants according to prosecution were in the mob which came from Kalupur Panchpatti.
From the place from where the mob entered and to the corner of Nani Ali Pole the mob had to pass from a long route which is inhabited by houses on both sides but not one witness was produced from any of these house nor it was clearly brought out that inmates of all these houses were of minority community only.
For the second group of witnesses who according to prosecution, saw the occurrence from the house top of Kanti Lal the Judge himself found that they were not in a position to see the road in front of house of Navin nor they were in a position to see the road in front of house of Maniben.
He, therefore, observed that so far evidence of these witnesses in respect of attack by the mob on house of Maniben and Navin was concerned it could be relevant only generally that they set fire to the house.
That is they could not be taken to be witnesses to prove that appellants broke open the door of Maniben 's house or set fire to it or chained it from outside.
Nor is the evidence of third group of witnesses helpful as they had collected near the gate of police outpost.
Distance between the gate and place of incident appears to be not less than 200 to 250 feet.
Moreover they collected after the house of Maniben was set on fire.
And it was admitted by PW 1, 8, 9 and 13 that the house of Navin, Kantilal, Ambalal could not be seen from police outpost.
Their testimony thus cannot be taken into account for prov ing second part of the incident which resulted in death of inmates of Maniben 's house.
Fate of the appellants, therefore, hangs on credibility of first group of witnesses.
For its better appreciation it is necessary to set out topography of the place of the incident.
From the map it is clear that the house of Maniben alongwith cluster of six other houses in surrounded on all sides by lanes and roads.
Immediately above her house is house of Navin in North.
Then there are two houses, parallel to each other, in south of her house.
There are three more houses one after the other, in south.
On west side of these is lane.
So is a lane in north side after which there is electric sub station.
On the left of substation there is gap and then there is one house and in its north is the house of Kantilal.
On the east of Maniben 's house is the Dabgarwad road which runs somewhat in semi circle running from Kalupur Panchpatti situated in extreme south east towards west, taking turn from near Dabgarwad Police outpost in the South moving up towards 115 north east in angle tilting slightly from somewhere near cluster of houses round Maniben 's house and then proceeding towards Daryapur.
House of Ambalal from where first set of witnesses had seen the occurrence is on this road from where the road tilts.
It was admitted by PW 1 that house of Amba lal was obliquely situated.
That is clear from the map as well.
If from the two ends of the house, south and north facing the road straight lines are drawn towards west they shall pass through the lane in front of Navin 's house and power station respectively.
Navin PW 1 whose house is situ ated in north of Maniben 's house admitted that electric sub station was in front of Ambalal 's house.
Rati Lal PW 9 stated that on one side of the road was his house and on other of Ambalal.
The house of Ambalal was thus above Mani ben 's house towards north east.
To bring home the guilt the prosecution was required to prove the presence of witnesses, possibility of seeing the incident by them and identification of the appellants.
Importance of first arose as due to riots in March 1985 there was mass exodus of Hindus from Dabgatwad.
Therefore presence of these witnesses was attempted to be challenged as curfew having been imposed from 7th June and Col. Sudha kar, PW 21, incharge of Military stationed, in the area, having stated that no passes were issued to anyone it was not probable that any of the witnesses who claim to have seen the occurrence could have been present.
But it appears to be devoid of any merit in view of unimpeachable testimony of the witnesses that they were present in their houses either because they had come earlier after restoration of partial calm or they had come on the day of occurrence to see their business and they were not prevented by the police even if they did not have any pass.
The Judge had examined this aspect in detail and found from various circumstances, namely, restoration of partial calm due to presence of military personnel, death of eight persons in Maniben 's house including children, rescuing of many persons trapped in the house of Kalidas Chhagan which too was set on fire, admission by accused in their statements under section 313 Criminal Procedure Code etc.
that presence of these witness es could not be doubted.
Further if the Dabgads had not returned and the area was deserted then where was the occa sion for the mob to indulge in this vendetta.
But mere presence of witnesses was not sufficient.
More important was if they saw the incident.
It assumed impor tance due to two reasons one because entire set of witnesses saw the incident from house of Ambalal which was situated upwards on the road towards north east as compared to the house of Maniben, and second that each 116 of the witnesses including Ambalal admitted that the exteri or of Maniben 's or even Navin 's house could not be seen from interior of the house.
From the location of Ambalal 's house it is clear that one could see front of Maniben 's house only if he stood in front of it with face towards west south.
But that is not the prosecution case.
In fact prosecution is silent on this aspect.
There is no whisper of the place from where the incident was seen by the witnesses.
Was it front of house of Ambalal or inside or roof.
Prosecution did not make any effort to remove this defect, obviously, because the investigation itself suffered from this flaw.
Although the defence, also, did not make any attempt to get it clari fied, may be as a part of clever design as to from where these witnesses saw the occurrence but the disadvantage, if any is of prosecution.
As stated earlier, this was very relevant as every witness admitted that from interior of Ambalal 's house the front of neither Maniben 's nor Navin 's house could be seen.
Evidence thus regarding possibility of seeing the appellant from house of Ambalal is very shaky.
The prosecution left an important lacuna.
Unfortunately, each witness ' not only stated that he saw the appellants but they went on to describe with remarkable similarity in detail the article which each accused had in his hand: What is surprising is that accused had come from Kalupur side therefore they could not have been seen prior to their arrival near electric sub station before which everyone had entered house of Ambalal yet it is they and they alone who could be identified from the entire mob.
PW 1 admitted that when he rushed from his house in fear the mob of Kalupur side was 40 or 50 feet away.
He also admitted that he saw these accused for the first time from the house of Ambalal from a distance of 20 feet.
No subsequent witness tried to explain it.
Others had reached admittedly prior to Navin.
Therefore, they could not have had occassion to see the Kalupur mob and if they saw then it must have been at a longer distance.
Statement of PW 9, therefore, that the appellants were leading the mob is very difficult to be accepted.
And if they saw for the first time from house of Ambalal, as stated by Navin and not improved upon by others, then it is very difficult to accept that they could have identified these appellants.
PW 1 further admitted that if anyone stood with his face towards house of Maniben his then his back only could be visible from Ambalal 's house.
That is clear from map as well.
Therefore identification of accused from out of the mob even if they were known from before becomes highly doubtful.
Out of persons who had collected at house of Ambalal only four were examined.
It was admitted by every witness that the last to enter 117 the house were Navin and his father.
Time of entry as given by witnesses was before mixing of the mob at the corner except Ambalal who stated that he came after the mob had collected.
But that appears to be improbable as he was so scared that he ran with his father without even closing door of his house.
And if he would have come out when mob had collected then it is difficult to believe that he would have been spared when his house too was burnt.
Navin was the first witness to be examined.
He stated, categorically, that when he entered the house of Ambalal it was closed from inside.
It was attempted to be improved upon by Ambalal who stated that he kept the door ajar.
But apart from normal human behaviour to close the door, for protection in the background of incident of March and fear generated by shout of 'kill ', and 'cut ', the other witnesses PW 9 and PW 13 too stated that the door was closed after entry of Navin.
In any case the incident having taken place after entry of Navin and the door having been closed thereafter or even ajar or half closed it was necessary for prosecution to establish how did the witnesses see the occurrence when they admitted that the exterior of Maniben 's house or even of Navin could not be seen from inside of Ambalal 's house.
The deficiency in prosecution version was attempted to be explained by the judge by adverting to evidence of PW 13 that Ambalal was opening and closing the door every now and then, therefore there was nothing improbable in witnesses having seen the occurrence.
But the approach was, both, faulty and illegal.
The conclusion by picking up isolated sentence without adverting to other parts of his statement where he admitted that after entry, of all, the doors of the house were closed, and, he was able to identify the appellants when they were effecting entry in house of Maniben and that he did not identify anyone out of the mob till he entered the house of Ambalal was contrary to rule of appreciation of evidence.
Reading the whole statement together makes it consistent with evidence of other witnesses and leaves no room for doubt that opening and closing the door was resort ed to let in the persons who were reaching house of Ambalal due to fear of mob.
And the exercise of opening and closing being over after entry of Navin seeing the mob or identify ing the accused in process of opening and closing was out of question.
The finding of the judge, thus, that 'it is not as if that once the door of the house of Ambalal was closed it was never opened again at any time before these persons escaped from the house of Ambalal . .
Therefore, even though the house of Ambalal is slightly obliquely situated as compared to the house of Maniben, it would not at all be difficult for these witnesses who had hid themselves in the house of Ambalal to have correctly identified the accused ', is not based on appreciation of evidence but on imagination.
118 Thus prosecution version suffered from serious infirmi ty.
Its failure to bring on record evidence which could establish the possibility or even probability of the witness seeing the occurrence demolishes the whole structure.
Since it was admitted to all the P.W.s that the exterior of Mani ben 's house could not be seen from interior of Ambalal 's house the prosecution could succeed in establishing its case only if it could prove that witnesses even then could have seen the occurrence.
The only possibility of seeing the occurrence could be either from the road or standing in front of Ambalal 's shop or if there was any source from inside house of Ambalal.
Evidence is lacking for either.
Possibility of the first two alternative from where incident could have been seen is out of question.
Witnesses were so terrified due to incident of March 1985 that they could not remain outside.
PW 1 was so afraid that he rushed with his father without even closing door of his house.
And if he would have come out when mob had reached house of Maniben was stated by Ambalal then there would have been every possibility of his being attacked.
PW 9 and 13 too were afraid and rushed to Ambalal 's house.
Every time these witnesses reached the door was opened and after entry it was closed.
Last man to enter was Navin Chandra.
No witness has stated that it was opened thereafter even once to look outside.
How did then these witnesses see pushing open of Maniben 's door by appellants, setting fire to her house and chaining from outside.
It was for prosecution to explain.
It could not be taken for granted merely because each witness repeated that they knew the appellant from childhood and each of them was armed with articles mentioned in their hand.
Ambala1 did state that the door of his shop had seven planks joined by hinges.
But the prosecution stopped there.
It did not dare to come out with the case that the witnesses saw from the crevices.
Therefore the prosecution version suffered from a lacuna which was fatal.
The doubt thus created if the witnesses saw the occurrence at a11 is strengthened by subsequent conduct and behaviour of these witnesses.
The prosecution version was that the moment the mob moved from house of Maniben to house of Navin Chandra towards Nani Ali Pole side the witness came out of Ambalal 's house and dashed towards police gate where large number of persons had collected.
But strangely not one of them told it to anyone present there or even to police personnel that Maniben 's house was burnt by appellants.
It was against normal human behaviour as all the appellants were known from before.
The incident had taken place due to communal frenzy.
It is, therefore, difficult to believe that once these witnesses reached Dabgarwad Police gate they would not have shouted at top of their voice that the appellants known as Lallewallas had killed Maniben.
What is further surprising is that they did not disclose the 119 names even to Manchharam whose son had been burnt alive in house of Maniben, nor to anyone in the hospital and kept their mouth sealed till 11th June 1985 and opened it for the first time in the Police Station when their statement was recorded giving graphic description step by step.
Not only that the PW 9 and 13 broke down in cross examination and admitted that they had not seen the appellants setting fire to the house of either Maniben or Navin.
They were saying so by inference as they had seen smoke coming from the houses.
Thus witnesses and circumstances both are against prosecu tion version.
Although there are contradiction on material aspects in statement of these witnesses and arguments were addressed on late recording of evidence, failure to produce the Chief Fire Officer, to establish if house was chained 'from outside, delay in preparation of panchnama of Mani ben 's house etc.
but we consider it unnecessary to discuss them as the prosecution, in our opinion, failed to prove beyond shadow of doubt that the dreadful crime was committed by appellants.
There is thus no option but to acquit these accused.
We, however, hope that our order shall bring good sense to members of both the communities residing in Dabgar wad and make them realise the disaster which such senseless riots result in and they shall in future take steps to avoid recurrence of such incidents and try to resort to the atmos phere that prevailed before March 1985.
For the reasons stated above all these appeals succeed and are allowed.
Reference No. 1 of 1987 for confirmation of death sentence is discharged.
The conviction and sentences of appellants herein under section 3(2)(i) of Terrorist and Disruptive Activities (Prevention) Act, 1985 read with section 34 of the Indian Penal Code, 302 Indian Penal Code read with sections 34,436/149, 449, 143 and 148 of Indian Penal Code are set aside.
The conviction and sentence of Haroon S/o Kalubhai Laliwala, under section 3(2)(ii) of the TADA Act 1985 is also set aside.
The appellants shall be set at liberty forthwith unless they are required in any other connection.
R.S.S. Appeals allowed.
| IN-Abs | The agitation that started in February 1985 against government policy of reservation in the State of Gujarat turned into communal riots of shocking magnitude between Hindus and Muslims in March 1985, and resulted in mass exodus of Dabgars, a Hindu community, from their houses in the affected locality.
When calm was partially restored, some of them returned.
Maniben one of the deceased however continued to live in her house with other members of her family.
On 9th June, 1985, due to absence of military which had been stationed there, members of minority community con verged from two sides and indulged in most cowardly and shameful act of pushing open the door of Maniben 's house, setting fire to it, and then chaining it from outside re sulting in death of the lady, her two daughters, four grand children and son of a neighbour.
Next house set ablaze was of Navin and then many others.
Charge was framed against sixty three under Terrorist and Disruptive Activities (Prevention) Act, 1985 and various offences including section 302, Indian Penal Code.
Fifty six were acquitted by the Trial Judge.
Those convicted have come up in appeal.
At the same time, a reference has been made for confirmation of death sentence.
Allowing the appeals and acquitting the accused and discharging reference.
this Court, HELD: (1) Sentiments or emotions, howsoever strong, are neither 109 relevant nor have any place in a court of law.
Acquittal or conviction depends on proof or otherwise of the criminologi cal chain which invariably comprises of why, where, when, how and who.
Each knot of the chain has to be proved, beyond shadow of doubt to bring home the guilt.
Any crack or loos ening in it weakens the prosecution.
Each link must be so consistent that the only conclusion which must follow is that the accused is guilty.
Heinousness of crime or cruelty in its execution howsoever abhorring and hateful cannot reflect in deciding the guilt.
[110H; 111A B] (2) Credibility of witnesses has to be measured with same yardstick, whether it is an ordinary crime or a crime emanating due to communal frenzy.
Law does not make any distinction either in leading of evidence or in its assess ment.
[111C] (3) To bring home the guilt the prosecution was required to prove the presence of witnesses, possibility of seeing the incident by them and identification of the appellants.
[115C] (4) From the location of Ambalal 's house it is clear that one could see front of Maniben 's house only if he stood in front of it with face towards west south.
But that is not the prosecution case.
In fact prosecution is silent on this aspect.
There is no whisper of the place from where the incident was seen by the witnesses.
Was it front of house of Ambalal or inside or roof? This was very relevant as every witness admitted that from interior of Ambalal 's house the front of neither Maniben 's nor Navin 's house could be seen.
Evidence thus regarding possibility of seeing the appellants from house of Ambalal is very shaky.
The prosecution left an important lacuna.
[116A C] (5) Indentification of accused from out of the mob even if they were known from before becomes highly doubtful.
[116G] (6) The finding of the Judge that even though the house of Ambalal is slightly obliquely situated as compared to the house of Maniben, it would not at all be difficult for the witnesses who had hid themselves in the house of Ambalal to have correctly identified the accused, is not based on appreciation of evidence but on imagination.
[117G H] (7) The prosecution version suffered from serious in firmity.
Its failure to bring on record evidence which could establish the possibility or even probability of the witness seeing the occurrence demolishes the whole structure.
[118A] 110
|
uld be open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, hacked by supporting reasons, before the State Government in the form of representations within four weeks from the date of this order; that the State Government would dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the Central Government; that in arriving at its decisions, it will be open to the State Government to take into account the dis cussions and findings of the Rao Report in the light of this judgment; that the State Government should also keep in mind that no leases to any of the parties (other than OMC and IDCOL) could be granted unless either the areas so proposed to be leased out are deserved and thrown open to appellants from the public or unless the Central Government, after considering the recommendations of the State Government, for reasons to be recorded in writing considers a relaxation in favour of any of the parties necessary and justified.
[96B E] & CIVIL APPELLATE JURISDICTION: Civil Miscellaneous Peti tion Nos.
16435 37 of 1987.
IN Writ Petition No. 14116 of 1984.
(Under Article 32 of the Constitution of India).
WITH Special Leave Petition (C) Nos.
5163/88 with 8574 of 1989 read with I.A. No. 1/89.
K. Parsaran, Dr. L.M. Singhvi, G. Ramaswamy, V.C. Maha jan, Harish N. Salve, Rajan Mahapatra, Ms. Lira Goswami, section Sukumaran, C. Mukhopadhyay, A. Subba Rao, A.D.N. Rao, P.K. Mehta, Ms. Mona Mehta, Girish Chandra, S.C. Patel, T. Sriku mar, p. 36 Parmeshwaran, Bishamber Lal Khanna and M.C. Bhandare for the appearing parties.
S.C. Roy, Advocate General and A.K. Panda for the State of Orissa.
The Judgment of the Court was delivered by RANGANATHAN, J.
THE "DRAMATIS PERSONAE" All these matters are in the nature of off shoots of a basic controversy raised in W.P. No. 14116/84 which was "disposed of" by the orders of this Court dated 30.4.87 and 6.10.87.
The parties are now seeking certain clarifications and directions in relation to the orders passed by this Court in the above writ petition.
There have been several subsequent developments having an impact on the issue origi nally brought to this Court in the Writ Petition (W.P.) and, at present, the matter has become very complicated and involves the interests of a large number of parties.
To give a cogent narration of the necessary facts, it is best to start with an enumeration of the various parties with whom we are concerned in the matters which are being disposed of by this judgment.
The writ petition as well as the connected matters arise out of applications for grant of rights for the mining of chrome ore or Chromite in the State of Orissa.
Chrome ore is one of the minerals specified in the First and Second Sched ules to, and not a "minor mineral" within the meaning of section 3(f) of, the Mines and Minerals (Development and Regulation) Act, 1957.
The right to grant mining rights in respect of this mineral is vested in the State Government, subject, as we shall see later, on control by the Union of India.
The State of Orissa (S.G.) and the Union of India (C.G.) are, therefore, the primary respondents in this litigation.
On the other side are ranged a number o[ applicants for the mining rights we have referred to above.
These are: (1) Indian Metals and Ferro Alloys Limited (IMFA); (2) Ferro Alloys Corporation Limited (FACOR); (3) Orissa Cements Limited (OCL); (4) Orissa Industries Limited (ORIND); 37 (5) Orissa Mining Corporation (OMC); (6) Industrial Development Corporation of Orissa Ltd. (IDCOL); and (7) Shri Mantosh Aikath.
Of the above, the first four are companies in the private sector, the next two are public sector corporations owned substantially by the State of Orissa and the last, a private individual.
THE PRESENT CONTROVERSY The principal question for decision before us is as to whether all or any of the various parties referred to above are entitled to obtain leases for the mining of chrome ore (hereinafter referred to as MLs) and, if so, to what extent.
In particular, we are concerned with an area consisting of five blocks referred to in para 8 of the W.P. to which reference will be made later.
The controversy primarily turns round applications made in respect of these blocks by IMFA, FACOR, AIKAT and OCL.
ORIND also lays claim to mining rights in respect of a portion of these blocks.
It has filed a special leave petition which is separately numbered as S.L.P. No. 8574 of 1989 and is directed against an order dated 7.4.89 passed by the Orissa Government rejecting an application made by the company on 5th July, 1971.
FACOR has also preferred S.L.P. No. 5163 of 1988 from an order of the High Court of Orissa dated 11.11.1987 dismissing a writ petition filed against an order of rejection by the S.G. of an application made by it on 18.7.1977 for grant of a ML which was confirmed by the C.G.
As already mentioned, this Court 'disposed ' of W.P. No. 14116/ 1984 by its order of 30.4.87.
We shall have to con sider this and several other orders passed by this Court in the course of the hearing more closely but a brief reference may be made here to the resultant effect thereof.
When this Court found that there were a large number of applications for MLs over varying extents of land in the areas in ques tion, this Court decided that the respective merits of the applications ' could not be gone into by this Court but that they should be considered by a responsible officer of the C.G.
Accordingly, by the orders above referred to, this Court referred the entire controversy to the Secretary to the Government of India in the Ministry of Mines (Shri B.K. Rao, "Rao", for short) for a detailed consideration of the claims of the various parties.
When the matter went to Rao, OMC and IDCOL also 38 put forward claims that the public sector units in the State of Orissa were entitled to the grant of mining rights in the State to the exclusion of all private parties inasmuch as there was a reservation in their favour by an appropriate notification issued by the State Government.
The other parties objected to the intervention of the OMC and IDCOL at, what they alleged was, a belated stage of the proceed ings.
However, on applications made by OMC and IDCOL, this Court directed that the claims of these two public sector undertakings would also be examined by Rao.
Eventually Rao, after considering the claims of all parties, reduced his conclusions in the form of a report dated 1st February, 1988.
in his report, Rao accepted the claim of reservation made on behalf of the OMC and the IDCOL.
Nevertheless it appears that, bearing in mind certain interim orders passed by this Court in the various applications made to it during the pendency of the writ petitions, Rao came to the conclu sion that only three of the parties other than the two public sector undertakings should be granted leases to the extent mentioned by him.
Broadly speaking, Rao accepted partially the claims of IMFA, FACOR and AIKATH.
He rejected the claims made by ORIND and OCL.
He accepted the claim of the public sector undertakings but he recommended for them leases in respect of only the balance of the lands left, after fulfilling the claims of the others which he had accepted.
Applications have now been filed before us which, inter alia, seek directions on Rao 's report.
There has been a good deal of contest before us as to the precise legal character of the report submitted by Rao.
One suggestion is that Rao was nothing more than a commissioner appointed by the Court to examine the claims of the various parties and to submit a detailed report thereon.
It is submitted that this report having been received we should pass such orders thereon as we may consider appropriate.
A second approach suggested is that the Rao report should be taken to be the decision of the Central Government, which it is now for the State Gov ernment to implement, leaving it open to any aggrieved party to take such appropriate proceedings as may be available to them in law for successfully challenging the findings reached by Rao.
A third line of argument which has been addressed before us, particularly by the State of Orissa, the OMC and the IDCOL, is that Dr. Rao 's report suffers from a fundamental defect in that he has completely ignored the reservation made by the State Government in favour of the public sector.
According to them, Rao was not right in suggesting the grant of leases to any of the other parties and should have simply left it to the State to exploit the mines in public sector, including inter alia, the OMC and IDCOL.
A fourth 39 stance taken up by the State Government may also be men tioned here, The learned Advocate General for the State made a statement before us that, without prejudice to a conten tion that the Rao report suffered from the fundamental defect referred to above, the State Government was prepared to abide by the findings of Rao provided this Court decides to accept the same in toto without any modifications.
He clarified that this is not because they think the Rao report is ' correct.
On the other hand they have got several objec tions to the validity and correctness of Dr. Rao 's report.
However, having regard to the interim orders passed by this Court and having regard to the fact that what Rao has done is virtually to implement various orders passed by this Court during the pendency of the writ petition, the State Government, without prejudice to its contentions in relation to the Rao report, is prepared to abide by it.
However, the learned Advocate General said, the State Government wish to make it clear that if, for some reason, this Court does not accept the Rao Report in toto, then the State Government would like to put forward their contentions against the report of Dr. Rao.
In that event the State Government should be given the liberty to attack Dr. Rao 's report and urge all contentions that are open to it in respect of the grant of mining leases relating to chrome ore in the State of Orissa.
The above stance understandably, is not acceptable to OCL and ORIND or, indeed, even to OMC and IDCOL who have got nothing at the hands of Rao.
IMFA and FACOR are substantial ly satisfied with the report given by Dr. Rao (except for certain minor contentions which they are prepared to give up for the present, with liberty to make representations to the State Government) but they also wish to make it clear that, in case the Rao report is not to be accepted by this Court, they would also like to put forward all their contentions so that their case may not go by default.
In that event, in particular, they would like to attack the reservation plea urged by the S.G., OMC and IDCOL both as belated as well as on merits.
AIKATH 's submission is that he is a small opera tor who discovered the mines and that Rao 's recommendation for the grant of a ML in his favour in respect of a small extent of land should not be disturbed by us.
We have only broadly set out here the attitudes of the various parties to the Rao report and shall discuss their contentions later in detail.
In the light of these various contentions, we have to determine the legal character of the Rao report and decide whether the findings of Rao are to be given effect to in toro or are to be modified and, if so, in what respects.
Before dealing with these questions and even setting out the details of the claims of the various parties and the material they placed 40 before Rao to substantiate their claims, it will be useful to survey the relevant statutory provisions relating to the grant of mineral concessions of the nature we are concerned with here.
This we shall at once proceed to do.
THE RELEVANT STATUTORY PROVISIONS (a) Constitution: Article 297 of the Constitution of India unequivocally declares that 'all lands, minerals and other things of value underlying the ocean . . shall vest in the Union and be held for the purposes of the Union '.
Arti cle 298 defines the extent of the executive power of the Union and of each State thus: "298.
Power to carry on trade, etc.
The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament." The Union and the States have both been vested with powers to legislate in respect of mining rights under the Seventh Schedule to the Constitution.
The respective rights of the Union and the States in this regard are contained in the following entries in the said Schedule: List 1, Entry 54 Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in public interest.
41 List H, Entry 23 Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and develop ment under the control of the Union.
(b) Act: In exercise of the above powers, the Union legisla ture has enacted the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as 'the Act ').
The Act has been substantially amended and several drastic changes introduced in 1986 with a view, inter alia, to prevent unscientific mining, remove bottle necks and promote speedy development of mineral based industries.
We are concerned only with the provisions relating to the grant of mining leases and we may proceed to consider the same.
section 2 of the Act contains the declaration referred to in Entry 54 referred to above.
It reads: "2.
Declaration as to expediency of Union control It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided.
" With this declaration, the Act proceeds to circumscribe the extent to which the regulation of mining rights in the States should be subject to the control of the Union.
We may now proceed to refer to the relevant provisions of the Act in relation to minerals like "chrome ore", which may be described, for convenience, as "major minerals".
section 4 of the Act provides as follows: "No person shall undertake any prospecting or mining opera tion in any area except under and in accordance with the terms and conditions of a prospecting licence or as the case may be, a mining lease granted under this Act and the rules made thereunder.
(2) No prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder.
" Sections 10 and 11 outline the procedure for obtaining a prospecting 42 licence (PL) or a mining lease (ML).
They read thus: "10.
Application for prospecting licences or mining leases: (1) An application for a prospecting licence or a mining lease in respect of any land in which the minerals vest in the Government shall be made to the State Government con cerned in the prescribed form and shall be accompanied by the prescribed fee.
(2) Where an application is received under sub section 1 there shall be sent to applicant an acknowledgement of its form.
(3) On receipt of an application under this section, the State Government may, having regard to the provisions of this Act and any rules made thereunder, grant or refuse to grant the licence or lease.
Preferential right of certain person: (1)Where a pros pecting licence has been granted in respect of any land, the licensee shall have a preferential right for obtaining the mining lease in respect of the said land over any other per son: XXX XXX XXX (2) Subject to the provisions of sub section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a prefer ential right for the grant of the licence or lease as the case may be over an applicant whose application was received later: Provided that where any such applications are received on the same day, the State Government, after taking into consideration the matters specified in subsection (3), may grant the prospecting licence or mining lease, as the case may be, to such one of the applicants as it may deem fit.
(3) The matters referred to in sub section (2) are the following: 43 (a) any special knowledge of, on experience in, prospecting operations or mining operations as the case may be possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; (d) such other matters as may be prescribed.
(4) Notwithstanding anything contained in sub section (2) but subject to the provisions of sub section (1), the State Government may for any special reasons to be recorded and with the previous approval of the Central Government.
grant a prospecting licence or a mining lease to an applicant whose application was received later in preference to an applicant whose application was received earlier.
" We may next to refer to section 17A which has been inserted in the Act by the 1986 amendment.
It reads thus: section 17 A: Reservation of area for purposes of conservation (1) The Central Government, with a view to conserving any mineral and after consultation with the State Government may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the Official Gazette.
specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.
(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government compa ny or corporation owned or controlled by it or by the Cen tral Government and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.
(3) Where in exercise of the powers conferred by subsection (2) the State Government undertakes prospecting 44 or mining operations in any area in which the minerals vest in a private person, it shall be liable to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease.
section 19 of the Act declares that any prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect.
section 30 confers revisional powers on the C.G.
It reads: "The Central Government may, of its own motion or on appli cation made within the prescribed time by an aggrieved party, revise any order made by the State Government or other authority in exercise of the powers conferred on it by or under this Act.
" These are the provisions of the Act relevant for our pur poses.
(c) Rules: Turning now to the rules framed under the Act which also have a material bearing on the present issues, they are contained in Chapter IV of the Mineral Concessions Rules, 1960 which deals with the grant of mining leases in respect of land the minerals in which vest the Government.
Rule 22 outlines the procedure in respect of applications for MLs.
It requires the application to be made in a pre scribed form and accompanied by a fee of Rs.500 and certain documents and particulars.
Rules 24 and 26 ' prescribe the procedure for disposal of such applications.
Sub rules (1) and (3) of rule 24 are relevant for our present purposes and are extracted below: "24.
Disposal of application for mining lease: (1) An appli cation for the grant of a mining lease shall be disposed within twelve months from the date of its receipt.
XXX XXX XXX (3) If any application is not disposed of within the period specified in sub rule (1), it shall be deemed to have been refused.
XXX XXX XXX 45 Under rule 26, the S.G. may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for.
Rule 31 prescribes that where an order for grant of a lease is made, a lease deed has to be executed within a period of six months of the order or such further period as the S.G. may allow in this behalf.
Failure to do this, if attributable to any default on the part of the appellant, could entail the revocation of the lease.
The lease shall commence from the date of the lease deed.
We next turn to rule 54 which deals with applications for revision to the C.G.
It reads, in so far as is relevant for our purposes: "54.
Application for revision: (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within three months of the date of communication of the order to him, apply to the Central Government in triplicate in Form N, for revision of the order.
The appli cation should be accompanied by a treasury receipt showing that a fee or ' Rs.500 has been paid into a Government treas ury or in any branch of the State Bank of India doing the treasury business to the credit of Central Government under the head of account '128 Mines and Minerals Mines Depart ment Minerals Concession Fees and Royalty ': Provided that any such application may be entertained after the said period of three months, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time.
xxx xxx xxx (4) On receipt of the application and the copies thereof, the Central Government shall send a copy of the application to each of the parties impleaded under sub rule (2), speci fying a date on or before ' which he may make his representa tions, if any, against the revision application.
Explanation: For the purposes of this rule, where a State 46 Government has failed to dispose of an application for the grant of renewal of a prospecting licence or a mining lease within the period specified in respect thereof in these rules, the State Government shall be deemed to have made an order refusing the grant or renewal of such licence or lease on the date on which such period expires.
Rule 55 provides that the C.G., after getting the comments of the S.G. and other parties on the application and after giving each of them an opportunity to put forward their comments on the stand taken by the others, "may confirm, modify or set aside the order (of the S.G.) or pass such other order in relation thereto" as it "may deem just and proper".
Three more rules need to be set out which deal with the topic of reservation.
Rules 58, 59 and 60, before 1980, were in the following terms: "58.
Availability of areas for regrant to be notified (1) No area which was previously held or which is being held under prospecting licence or a mining lease so the case may be or in respect of which the order granting licence or lease has been revoked under sub rule (1) of the rule 15 or sub rule (1) of rule 31, shall be available for grant un less (a) an entry to the effect is made in the register referred to in sub rule (2) of rule 21 or sub rule (2) of rule 40, as the case may be, in ink; and (b) the date from which the area shall be available for grant is notified in the Official Gazette at least thirty days in advance.
(2) The Central Government may, for reasons to be recorded in writing, relax the provision of sub rule (1) in any special case.
Availability of certain areas for grant to be notified In the case of any land which is otherwise avail able for the grant of a prospecting licencor a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose, the State Government, shall, as soon as such land becomes again avail able for the grant of prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in rule 58.
47 60.
Premature applications Applications for the grant of a prospecting licence or a mining lease in respect of the areas in which (a) no notification has been issued under rule58 or rule59; or (b) if any such notification has been issued the period specified in the notification has not expired.
Shall be deemed to be premature and shall not be entertained and the fee, if any, paid in respect of any such application shall be refunded." G.S.R. 146 dated 16th January, 1980 substantially amended these rules.
After this amendment, Rule 58 reads: "58.
Reservation of areas for exploitation in the public sector, etc.
: The State Government may, by notification in the Official Gazette, reserve any area for exploitation by the Government, a Corporation established by any Central, State or Provincial Act or a Government company within the meaning of Section 6 17 of the ( 1 of 1956)".
Rule 59 is relevant only in part.
It reads: "59.
Availability of area for regrant to be notified: (1) No area XXX XXX XXX (e) which has been [reserved by the State Government] Sub stituted for the words "reserved by the Government" by G.S.R. 86(E) w.e.f. 10.2.87 under Rule 58, [or u/s 17A) These words were inserted by G.S.R. 146(E) dated 16.1.80 w.e.f. 2.2.80 shall be available for grant unless (i) an entry to the effect that the area is available for grant is made in the register referred to in sub rule (2) of Rule 21 or sub rule (2) of Rule 40 as the case may be, in ink; and (ii) the availability of the area for grant is notified in the Official Gazette and specifying a date (being a date not 48 earlier than thirty days from the date of the publication of such notification in the Official Gazette) from which such area shall be available for grant: XXX XXX XXX (2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub rule (1) in any special case.
Rule 60 deals with "premature applications".
It reads: 60.
Premature applications: Applications for the grant of a prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under Rule 59 shall if, (a) no notification has been issued under that rule: or (b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained, and the application fee thereon, if any paid, shall be refunded.
The above are the relevant rules governing application for, and grant of, leases, revision petitions and reservation of areas in the light of which the issues in the present case have to be considered.
We shall now proceed to give the details of the various applications for MLs preferred by the parties before us.
ML APPLICATIONS OF THE PARTIES Though it was the IMFA which came to this Court with a writ petition, there were a number of other applications for grant of MLs pending before the State Government.
The broad details of these applications are set out below: 1.
IMFA (a) Previous Histor),: IMFA made five applications for grant of mining lease in respect of five blocks of land as per the following details (which are hereinafter referred to as items 1 to 5 respectively): 49 Area Date of Area Village & District No. Applica applied for tion 1.
1.7.1981 634.359 Ghotarangia and other villages 8.7.1981 hects.
(Dhankanal Distt.
) 2. 23.6.1981 142.000 Ostapal Village, SukhindaTehsil hects.
(Cuttack Distt. ) 3.
6.7.1981 108.860 Kamarada and padar villages hects.
(Cuttack Distt. ) 4.
9.9.1981 37.008 Ostapal and Gurjang villages, Sukhinda 10.9.1981 hects.
Tehsil (Cuttack Distt.) 5. 24.11.
1981 147.693 Ostapal and Gurjang villages, Sukhinda hects.
Tehsil (Cuttack Distt. ) The S.G. did not dispose of these applications within the prescribed period of twelve months.
They were, there fore, deemed to have been rejected under rule 24(3).
IMFA applied to the C.G. for the revision of these deemed rejec tion orders of the S.G.
The C.G. set aside the deemed rejec tion orders and directed the S.G. to dispose of the matter on merits within a period of 200 days.
However, the S.G. did not take any action on the applications of the IMFA within the period of 200 days.
IMFA made a representation to the Central Government but the Central Government gave no relief on the ground that it had become functus officio and had no jurisdiction to issue further directions to the State Gov ernment.
Thereupon IMFA filed Writ Petition No.14116 of 1984 in this Court.
IMFA alleged, that while its applications were kept pending, the S.G. had granted leases in favour of FACOR and thus discriminated against IMFA.
It prayed for the issue of a writ of mandamus to the S.G. to grant leases to IMFA also.
(b) Subsequent developments: This Court, on 27.9.84 passed an order (extracted later) directing the S.G. to consider IMFA 's applications by 23.10.84 and restraining it from granting MLS to any one else in the meanwhile.
FACOR moved for a recall of this order.
The Court passed an inter im order on 18.10.84 holding over the implementation of the earlier order in regard to grant of lease to IMFA and call ing for the records.
However, it appears, on 21.11.84, the S.G. had agreed to grant a ML in favour of AIKATH in respect of 140 acres out of 147.69 hectares covered by item No. 5 above.
On 26.12.84, the S.G. filed a counter affidavit pointing out: (a) that there was a reservation of the 50 areas for the public sector and (b) that except item 1, the areas covered by the other applications overlapped areas covered by earlier applications of OMC IDCOL and others.
Nevertheless, it was stated, on due consideration in the light of the observations of this Court, the S.G. had tenta tively decided to grant a ML to IMFA in respect of 634.359 hectares in item 1.
On 27.11.84, IMFA stated that it was not interested in item 1 which, according to it contained only low grade ore and was not commercially viable unless IMFA was given, at the same time, areas bearing high quality ore which could be blended with the low grade ore.
It stated that it was willing to accept M.L. in respect of items 2, 3 and either item 4 or half of item 5.
On 2.1.85.
the S.G. passed formal orders rejecting IMFA 's application in respect of items 2 to 5 of the list.
This was on the ground, so far as item 2 was concerned, that the area fell within the reserved areas, that there were prior applications of OMC & FACOR in respect of the areas and that the S.G. had already agreed to lease out item 1 to IMFA.
On 15.2.85, the S.G. informed IMFA that, on reconsideration it had recommended grant of MLs to it in respect of 139.37 hectares (out of 142 hectares of item 2) and the entire area of item 3.
On 18.2.85, the S.G. submitted in court that it had already agreed to grant 140 acres in item 5 to AIKATH and the rest to FACOR as per compromises in the writ proceedings pending in the Orissa High Court.
The compromise with AIKATH had been placed before.
and accepted by the Orissa High Court on 4.12.84 but the final terms and conditions were proposed on 18.2.85 and, accepted on 19.2.85.
In respect of FACOR also, the compromise agreeing to lease to it 596 acres (out of which 180 acres were covered by item 5 of IMFA 's applica tion) had been filed in the Orissa High Court only on 18.2.85.
The validity of these allotments was challenged by IMFA before this Court.
Without going into the merits or ' this controversy, this Court on 28.2.85. passed an order directing the S.G. to grant a lease to IMFA in respect of item 3 in full and 26.62 hectares in item 4.
(This order was objected to by FACOR and on 8.5.85 the Court passed an order directing the grant of a lease to FACOR over 180 acres in item 5).
IMFA says that it has not been given physical possession of the areas granted to it except to an extent of a small area of 2 hectares.
The net result is that out of the five items applied for by IMFA: (i) item 1 has been given but surrendered, (ii) the S.G. is agreeable to give 139.37 acres out of 142 acres of item 2; (iii) this Court has directed the grant to IMFA of item 3; (iv) in item 4, this Court has directed the grant to IMFA of 26.62 out of 37.008 hectares of item 4: and (v) In item 5, the S.G. has agreed to lease our 140 acres to AIKATH and 180 acres to FACOR.
FACOR (a)Earlier History: FACOR 'S applications for mining leases for chrome ore were made on various dates between 1974 and 1978.
Relevant particulars in respect of the said applications are set out in the following table: Sl.
Village Extent Date of Date of final Particulars No. appli final order of of the pro cation disposal of ceedings in revision app High Court 1.
Ostapal 142,000 8.7.74 29/76 12.3.76 OJC 67 of 79 Distt.
hects.
315/78 3.7.78 12.1.79 Cuttack or 359 acres 2.
Chingudi 749.32 8.7.74 21/76 21.4.76 OJC 66 of 79 pal Distt.
hects.
278/78 30.5.78 12.1.79 3.
Samole 248.447 6.8.74 182/77 29.8.77 OJC 72 of 79 Distt.
hects.
15.1.79 Dhankanal (618 acres) 4.
Bangur 40.47 22.6.77 432/78 17.8.78 OJC 1309 of Distt.
hects.
80 21.1.80 Keonjhar (100 acres) 5.
Ostapal & 312.42 7.6.78 528/79 21.9.79 OJC 2036 of Gurjang hects.
579/80 26.9.80 31.8.81 Distt.
Cuttack 6.
Kamarda 108 6.10.78 17/80 1.1.80 OJC 1028 of Distt.
hects.
513/82 29.10.82 11.5.83 All the six applications made by FACOR were rejected by the S.G.
Against the revision orders of the C.G. affirming the orders of the S.G. FACOR filed writ petitions in the High Court of Orissa and these writ petitions are pending dispos al there [except the one re: item 4 which was dismissed by the High Court on 11.11.87 and is the subject matter of S.L.P. (C) 5163 of 1988 before us.
In this sense, the appli cations of FACOR were alive and awaiting disposal when IMFA filed W. P. 14 116 of 1984 in this Court.
52 (b) Subsequent developments: As we shall mention later.
FACOR had obtained leases over 486 acres at Barua in Keonjhar district and 280 acres at Kathpal over Dhankanal district in 1971 72.
The above applications were rejected and the writ petitions filed against the rejections were pending in the Orissa High Court when the writ petition was filed.
It has been stated that the S.G. had entered into a compromise with FACOR on 18.2.85 agreeing to grant a mining lease in its favour in respect of 596 acres out of 772 acres applied under item No. 5 above on condition that FACOR gave up its claim in respect of the balance of the area of 702 acres as well as the claim made in the other five applica tions.
It may be added that on 18.5.85 this Court passed an interim order directing that FACOR be given a lease in respect of 180 acres out of the 596 acres covered by the compromise dated 18.2.85.
A lease was accordingly executed by the S.G. in favour of FACOR on 16.8.85 after obtaining the approval of the C.G. to the lease under section 5(2) of the Act (before its amendment in 1986) as well as to the relaxa tion under rule 59(1) of the Rules.
The net result, there fore.
is that, though FACOR made six applications, it had agreed to give up all of them in lieu of a ML for 596 acres out of item 5 out of which a lease in respect of 180 acres has already been obtained and is being exploited by FACOR.
MANTOSH AIKATH (a) Previous History: This gentleman had obtained a lease from the Raja Sri Pitamber Bhupati Harichandan Mohapa tra, the proprietor of Sukhinda Estate on 17.10.52 (regis tered on 28.10.52) for a period of 20 years in respect of 640 acres situated in village Gurjang in Cuttack District.
On 12.1.53 the State Government (in whom the estate of the former Zamindar had come to vest w.e.f.
27.11.52 under the Orissa Estates Abolition Act) issued a notice terminating the lease.
Mr. AIKATH made representations against the termination.
It is said that, ultimately, a compromise was reached between him and the S.G. whereunder it was agreed that a lease in respect of half of the area covered by the original lease deed on the southern side could be retained by him.
Thereupon, it is said, he filed a formal application on 25.5.54 for a mining lease in respect of 320 acres.
But this was rejected on the ground that the S.G. preferred to exploit the area in public sector.
A revision petition to the C.G. was rejected on 9.2.72.
Mr. AIKATH filed a writ petition in the High Court of Orissa impleading the C.G. and the S.G. as parties.
The Orissa High Court on 18.4.1984 set aside the order of the C.G. and directed the C.G. to dispose of Mr. 53 AIKATH 'S application afresh.
The C.G., in turn, set aside the order of the S.G. on 3.8.78 and directed the S.G. to decide the application of the party afresh, after taking into account the plea of the party that the area could not be reserved for exploitation in the public sector.
However, no orders were passed by the S.G.
The petitioner, therefore.
again filed a revision application before the C.G. which passed orders on 12.12.79 directing the State Government to pass a speaking order and dispose of the application on merits.
The S.G. by an order dated 17.1.80, rejected the application.
Mr. AIKATH filed a writ petition in the High Court and this was pending when W.P. 14116/84 was filed here by IMFA.
(b) Subsequent Development: On 21.11.84, AIKATH and 'the S.G. entered into a compromise under which the former was to be granted a lease in respect of 140 acres situated on the eastern side of the 320 acres referred to earlier.
This compromise was accepted by the High Court of Orissa on 4.12.84.
Thereafter the S.G. offered a lease of 140 acres on certain terms and conditions and these were accepted by AIKATH on 19.2.85.
This was reported by the S.G. to this Court but no orders were passed by this Court, and no ML has been executed, in favour of AIKATH.
It may be mentioned that one of the areas applied for by IMFA on 24.11.81 covered the area which.
according to AIKATH, had been in his possession all along.
ORISSA INDUSTRIES LIMITED (ORIND) (a) Previous History. ' ORIND made an application for mining lease on 5.7.71.
It applied for mining leases over an area of 1129.25 hectares in the villages of Telangi, Patna.
Ostapal, and Gurjang in District Cuttack.
This application was rejected by the S.G. on 23.10.73 on the ground that the area was reserved for exploitation in the public sector.
It is stated that subsequently on a representation made by ORIND on 15.12.73, the S.G. recommended to the C.G. that a lease in favour of ORIND may be granted in respect of 749.82 out of 1129.25 hectares applied for.
However.
this recommen dation was withdrawn (as will be discussed later).
The C.G., by an order dated 23.2.77, directed the S.G. to pass a speaking order on the application but the S.G. did not comply with this direction.
The company, therefore, filed writ petition.
O.J.C. 1585/198 1 in the High Court of Oris sa.
This writ petition was pending when W.P. 14116/84 was filed here.
It may be here mentioned that one of the contentions of ORIND 54 before us is that it had also applied on 5.7.71 lot a lease of mining rights in respect of 446.38 hectares in village Sukrangi in Distt.
Cuttack.
That had been rejected but a revision petition had been filed before the C.G. against the said rejection.
The S.G. it is said.
while Lending its comments on 26.2.74 to the C.G. on the ORIND 's revision petition.
had reiterated that their revision petition may be rejected as S.G. had already decided to grant ORIND a lease of 749.82 out of the area of 1129.25 hectares applied for by it.
(b) Subsequent developments: It is stated that the S.G. has subsequently withdrawn its recommendations for the area of hectares.
The S.G. rejected ORIND 's application for 1129.25 hectares by an order dated 7.4.89.
The contents of the order are discussed later It concludes: In view of the above facts and pendency of Writ Petition No. 14116 of 1984 before the Hon 'ble Supreme Court of India.
it is not possible for the S.G. at this stage to pass any order on the mining lease application dated 5.7.
1971 of ORIND and.
accordingly the said application is disposed of.
ORIND has preferred S.L.P. No. 8574/89 from this order of the S.G. So far as the other application of ORIND is con cerned.
no information has been given to us as to what orders.
if any.
the C.G. has passed on ORIND 'S revision or as to what steps the applicant has taken subsequently.
ORISSA CEMENT LIMITED (OCL) (a) Previous History: The company 's grievance is that it has been filing applications for mining rights in respect of chrome ore right from the year 1961 but none of the applications have been considered by the State Government on the plea that the areas applied for had been reserved for exploitation in the public sector.
Further applications were made by OCL in respect of following areas: 55 SI.
Date Area Date of Orders Orders Remarks No. of and Revis passed passed Appeal Village sion of by the by the appli State Central cation, Govt.
, if any.
if any.
1. 2. 3.
11.5.70 354,505 3.5.71 5.2.71 3.6.72 This area Hectare, The area was free, Gurjang is reser previously & Telan ved by held by gi, P.S. the State Aikath for Sukinda Govt.
for 320 Acrs.
Distt. exploita The State Cuttack tion in Govt.
has public now gran sector.
ted i.e. in the year 1985 as per compromise petition filed be fore High Court Ori ssa.
M/s. Aikath 140 Acs.
Factor 180 Acs.
Same application filed again 2. 8.5.74 354,505 Deemed 23,277 Rejected Although Hectares Rejec M/s.
Facor 's Gurjang tion application & on 7.6.78 Ostapal was much Distt.
after our Cuttack application they were granted M/L by S.G.vide No.6844 dated 24.5.85 In fairness S/G should have given us this area.
As per deci sion taken by them earlier, 50% of the area should be released to us keep 56 ing in view the principles of natural justice, as recommended by State Govt.
vide in their letter No17410 dated 26.2.74, to centre for 142 Acrs.
to Orissa Cement.
15.5.70 226.22 1.5.72 10.2.71 1.6.72 Although Ferro Hecta on the Alloys Corpo res same ration have no Boula plea, unit in Orissa & Soso reser but have a Distt.
ved manufacturing Keonjher for state unitin Andhra exploita the Central tion Govt.
passed orders as un der in 1971 72 over an area of 187.03 hects.
against strong opposi tion by State Govt.
: "Whereas the Central Govt.
in exercise of the powers conferred by Rule 58(2) of the N.C. Rules 1960 relaxed the provision of rule 58(1) as a special case for the reason that the appli cants having establis 57 hed a big fac tory for manu facturing Fer ro Chrome ore, provision has to be made for procurement of raw materials for the proper running of the factory".
Based on the said decision a fresh revi sion petition was filed on 6.4.73 but the C.G. it rejec ted on30.11.74 although the S.G.recommen ded: vide letter No.17410 NG dated26.2.1974 for approval for grant of 142 Acrs.
to O.C.L. Same application filed again 4.
10.4.74 226.22 No 6.6.75 29.8.75 The Please see re Hectares Orders Central marks in Sl(3) Boula were Govt.
set 142 Ac.
could Keonjhar passed aside the have been gra as re the deemed nted.
This quired rejection application by sta and reman was filed pur tute.
ded the suant to the matter back Notification to the S.G. issued by the for consi S.G. throwing deration.
open for re grant 58 The State vide No.38/73 Govt.
on dated 5.3.74.
25.9.1975 The State Govt rejected latter changed the appln.
their decision on the plea for working in that the public sector, area over contrary to laps other the decision lease area.
pronounced by Our earlier Supreme Court appln.
as referred to 15.3.70 in AIR.
1976 was rejec Delhi.
ted but was granted to Keeping in some other view principle party i.e. of justice, FerroAlloys 50% of this Corporation area should be for a redu released to ced area.
Orissa Cement.
11.5.70 388.498 22.10.70 23.10.70 7.4.72 C.G. rejected Hectares as above the applica Shrhranqi tion on the & plea they did Tailangi, not like to P.S. interfere with Sukinda.
the decision District taken by the Cuttack.
S.G. for keep ing the area reserved for exploitation in public sector.
Same application filed again 6.
8.5.74 388.498 Deemed 23.2.77 3.6.77 The M/s Sirajudin Hectares rej delay was was holding Sukrangi ection explained the area of & but rejec 100 Ac.
under Tailangi ted becau M.L. for 20 Distt.
se of delay years from cuttack.
8.8.85 which expired in 1975.
59 Renewal has been refused, Sirajudin being a trader (However M/s Sirajudin & Co., has gone in writ to Orissa High Court, which is still pen ding) OMC has been granted lease over 382.709 Hects.
8.5.74 7 Sq.
Deemed 6.6.75 8.6.76 The This could miles rejec Central Govt.have been Kala tion set aside granted to us ran the deemed but M/s.
OMS is gista rejection working which & Ka and reman can be taken liapani ded to S.G. out from them Distt.
The S.G. to grant the Cuttack.
rejected our property to us appln.
but OMC was just granted a permitted to free area work on ad hoc of 3 sq.km.
basis.
to OMC, who are holding a lease from more than 70 sq Kms.
approx.
and hardly working 15/20 sq.
in different ML areas granted to M/s. OMC.
23.10.82 20.072 Dee 14.11.83 The C.G. set hec med aside the tares re order of area jec tion 60 Bangura deemed rejec etc.
tion on Distt.
23.12.83.
No Keonjhar final order has been passed by the S.G. 9.
23.10.82 549,1098 Dee 14.11.83 29.12.83 as This has Hectares med above been gran Kalia rej ted to M/s. pani & ec OMC.
Gurjang tion etc.
23.10.82 365.467 Dee 14.11.82 19.12.83 This area Hecta med as above pertains res re to Sl.1&2 Ostopal jec therefore & Gur tion the jang, remarks etc.
stated Distt.
therein Cuttack.
stand.
23.10.82 16.087 Dee 14.11.83 19.12.83 As The S.G. Hecta med above.
rejected res rej it on Bangu ec 27 6 1985 ra, tion.
on the P.S. ground Soso that the Distt.
area over Keonjhar laps in full with the area previously held by Sirajudin & Co. Re newal was refused by StateGovt.
21.1.83 29.477 Deemed 28.3.84 Against Hectares rejec The C.G. this rejec of 72.64 tion remanded tion we Acs.
the mat filed re Sajana ter back vision on garh P.S. to 2.9.85 before C.G 61 Nilgiri S.G. Therefore it Distt.
is free.
It Balascre.
No should be orders granted to us have On similar been grounds the passed.
S.G. has granted.
28.6.85 558.74 No orders acres or passed by 226.14 S.G. des hectares pite C.G. 's Asurbandha orders on Distt.
revision kanal 14.
27.1.86 356.70 No orders hectares passed by in Namla S.G. Revi bhanga sion peti in Karma tion filed khya nagar before C.G. Distt.
on 18.3.87 Dhankanal The previous history as well as the latter developments are indicated in the above columns.
It will be seen, there from that the first seven and the eleventh applications of OCL were duly disposed of before the present litigation started and the party 's grievance is that, in respect of some of them, leases have been granted to others like IMFA, FACOR, AIKATH & OMC.
The others are pending before the S.G. after a remand by the C.G. or, in revision, before the C.G.
The thirteenth and fourteenth applications are pending before the S.G. and C.G. respectively.
ORISSA MINING CORPORATION LIMITED (OMC) OMC is a State Government undertaking.
It submitted an application for an area of 725.21 hectares in village Chin gripal on 30.6.82.
62 Though this area was within the area of 1460 sq.
re served for exploitation of chromium ore in public sector as per the State Government notification dated 3.8.77, its application remained un disposed of and was deemed to be rejected on the expiry of the statutory period of one year.
The C.G., by an order dated 10.10.83, on a revision filed by OMC, directed the S.G. to dispose of the application within 200 days.
The S.G., however, did not grant OMC any lease but, instead, granted ML to IMFA on 14.3.85 in respect of 26.62 hectares which was well within the area applied for by OMC.
OMC has also made an application for mining rights regarding 108.86 hectares in Kamrarda Balipada villages and 220.15 hectares in Gurjang village which has not been grant ed.
In the result, the OMC has not been granted by mining lease despite its claim that the area in question has been reserved for exploitation in public sector though IMFA has been given ML in respect of 26.62 acres out of the area covered by these applications.
However.
from the details given earlier pertaining to OCL, it will be seen that OMC has been permitted to exploit about 382.709 Hectares in one area on an ad hoc basis and has leases over about 70 sq.
and 3 sq.
in other areas.
INDUSTRIAL DEVELOPMENT CORPORATION OF ORISSA LIMITED (IDCOL) This company submitted two applications on 11.1.83 before the S.G. for grant of mining leases for chromium ore over an area of 740.67 hectares in village Patna Chingiripal and 171.73 hectares in village Gurjang.
The applications were not disposed of by the S.G. within the specified time.
The C.G. set aside the deemed refusal and directed the application to be disposed of but no decision has been taken by the S.G., apparently on the ground that the entire dis pute regarding grant of mining rights for chromium ore is pending in this Court in W.P. 14116/84.
ORDERS PASSED BY THIS COURT It is now necessary to refer to the various interim orders passed by this Court in this matter because some of the parties have made a grievance that, though their claims for leases were pending at various levels, IMFA and FACOR have been able to obtain from this Court orders directing the grant of leases to them and that this procedure was wholly unjustified.
To start with, it must be mentioned, the C.G., the S.G. and certain officers of the C.G. and S.G. were impleaded as respondents 1 to 6 in the Writ Petition with FACOR as the 7th respon 63 dent.
In the writ petition IMFA referred to its applications in respect of five blocks of land detailed in para 8 of the writ petition and alleged that, while the petitioner 's application for a lease in respect of the five blocks re ferred to earlier remained pending for more than a year for consideration in pursuance of the C.G. 's directions for its disposal, the S.G. had granted mining leases for chrome ore in favour of FACOR which, according to the petitioner, was similarly placed.
In view of this allegation, this Court passed a detailed and stiff interim order on 27.9.84 in the following words after hearing the counsel for the petition ers and the standing counsel to the S.G.: "Mr. R.K. Mehta, learned counsel appears on behalf of Respondents Nos.
4 to 6 pursuant to the notice served upon him as Standing Counsel for those respondents, and he asks for time in order to enable him to obtain instructions from those respondents and to file a counter affidavit for these respondents.
We would, therefore, adjourn the Writ Petition to 30.10.84.
But in the meanwhile we would direct respondents Nos. 4 to 6 not to grant to anyone else other than the petitioners mining lease for chromite ore in re spect of the areas applied for by the petitioners and form ing the subject matter of applications made by them as set out in paragraph 8 of the Writ Petition.
Since the project which is being set up by the petitioners is a very important export oriented project for which the necessary permission has already been granted by the Govt.
of India and the Consortium of Foreign Banks has already agreed to finance the Project and it is a project which will earn considerable foreign exchange for the country and provide employment to a large number of workmen, we would direct the 4th respondent to consider and decide the application of the petitioners set out in paragraph 8 of the Writ Petition on or before 23. 10.84 after giving an opportunity to the petitioners of being heard in the matter.
We have no doubt that the 4th respondent will keep in view the nature and importance of the project and its foreign exchange earning capacity, as also its potential for providing job employment to a large number of workmen in the State of Orissa while considering and deciding the applications of the petitioners.
The 4th respondent will also take into account the fact that similar mining leases have been given to the 7th respondent and prima facie there does not appear to be any reason for denying the same facility to the petitioners, for 64 otherwise the action of the 4th respondent may be liable to be condemned as discriminatory and arbitrary and moreover the 4th respondent cannot over look the fact that if mining lease as applied for are not granted, the petitioners will have to import chromite and that will be a drain on the foreign exchange resources of the country.
There are matters where national interest alone must count.
It is indeed surprising that though the Central Govt.
directed the 4th respondent to dispose of the application of the petitioners more than a year ago, the 4th respondent has not yet chosen to dispose of the applications.
We would direct the 4th respondent to carry out the direction given by us and dis pose of the applications of I.the.
,petitioners in the light of the observations contained in this order on or before 23.10.84.
The decision taken by the State Govt.
on the application shall contain the reasons and will be communi cated to the petitioners and also placed before this Court along with the Counter affidavit.
The previous order made by us in regard to the production of files will stand and the files shall be produced at the next hearing of the Writ Petition.
The Writ Petition stands adjourned to 30/10/84.
On coming to know of this order, FACOR had the matter men tioned and, after hearing the arguments of its counsel, the Court passed an order on 18.10.84, the material portion of which reads as under: "On the application of Mr. Kapil Sibbal, learned counsel appearing on behalf of the 7th respondent, we direct that no decision shall be taken on the applications of the petitioner until 30.10.84 unless a decision has already been taken.
In the event the decision has already been taken it shall not be implemented until then.
The files relating to the applications of the petitioner and the 7th respondent for mining leases in respect of chromite ore shall be sent to the Registry of this Court forthwith in a sealed cover along with a responsible officer of the State Government so as to reach the Registry of this Court by 2 p.m. on Satur day, 20th October, 1984.
" A little later, Mr. Aikath was impleaded as respondent No. 8 and, pending the filing of a counter affidavit by him, the Court passed the following order on 28.2.
1985: 65 " . .
We would direct the State Government to give to the petitioners within 15 days from today the leases in respect of the areas of item No. 3 and 26.62 hectares area out of item No. 4 set out in para 8 of the writ petition . so far as the remaining controversy is concerned, we shall dispose it of on 2.4.85 after hearing the parties.
" The State Government will make an application to the Union of India within 5 days from today for the approval of the leases and the Union of India shall grant approval to them within 10 days".
By the next date of hearing viz. 8/5/85, ORIND entered into the fray and was ordered to be made respondent No. 9 in the writ petition.
Pending further affidavits by the parties, the Court gave another direction in the following terms: " . . the State Government will give to respondent No. 7 within 3 weeks from today lease in respect of 180 acres in item No. 5set out in paragraph 8 of the writ peti tion excluding the area which the State Government propose to give to respondent No. 8.
This order. is without preju dice to the rights and contentions of the parties . .
The State will make an application to the Union of India within a week from today for the approval of the lease and the Union of India will grant its approval within a period of 2 weeks from that date".
Then comes the order dated 30.4.87 by which the writ peti tion was disposed of.
It needs to be set out in full: "After hearing counsel appearing for the parties we consider that the proper order to be passed is to direct the parties who have applied for grant of mining leases to file representations before the Secretary Ministry of Mines and Steel, Department of Mines, Government of India within ten days from today setting out their claims in respect of the areas covered by their respective applications.
We direct that the Secretary; Department of Mines shall consider the claims of the various parties in respect of the areas cov ered by their application in the light of the observations contained in the orders already passed by the Court; namely; the Order dated 27th September, 1984 and 66 8th May 1985 after duly taking into consideration the re quirements of the manufacturing industries concerned and decide about the question of grant of mining leases after giving an opportunity of being heard to the parties con cerned.
Final orders in the matters should be passed by the Secretary within a period of six weeks from today.
It is made clear that the memoranda of compromise said to have been filed in the High.
Court of Orissa will be treated as not binding either on the parties or on the State Government and the whole question will be treated as being fully open for fresh consideration and determination by the Secretary Department of Mines, Government of India.
The status quo as obtaining at present with regard to the carting out of the mining operations over the areas will continue until the representations are disposed of by the Secretary pursuant to this order within six weeks from today.
As already indicated the entire matter will be fully open for consideration by the Secretary and the orders passed by this Court should not be treated as final in regard to the allocation of the areas to the different claimants.
The fact that certain writ petitions are pending before the High Court of Orissa will not in any way hamper the effective carrying out of this order.
It is needless to add that the disposal of the matter by the Secretary should be by a reasoned order.
The writ petition is disposed of on the above terms.
" Sometime later, IMFA moved an application for clarification of the Court 's order dated 30.4.87.
On this the following order was passed on 6.10. 1987: "There are several claimants for the grant of mining leases in different parts of Orissa.
This question has come up from time to time before this Court.
The first relevant order was the one dated the 28th February, 1985.
Therein a bench consisting of P.N. Bhagwati, J. (as he then was) and V. Balakrishna Eradi, J. directed the State Govern ment to give to the petitioners M/S Indian Metal & Ferro Alloys Ltd. within 15 days from today the leases in respect of the full areas of Item No. 3 and 26.62 hectares area out or ' Item No. 4 as set out in paragraph 8 of the Writ Peti tion.
This Court further directed so far as the remaining controversy was concerned that the same shall be disposed of later on 67 by giving certain other consequential directions as the petitioners might seek which it is not necessary to refer ' here.
It was directed that the State Government was to make an application to the Union of India within 5 days from the date of the order for the approval of the leases by the Union of India and which should grant approval within ten days therefrom.
Thereafter it appears that on 8.5.85 another order was passed by the same bench of this Court wherein it was di rected that the Orissa Industries Ltd. should be joined as respondent No. 9 in the Writ Petition and respondent No. 9 would file counter affidavit and directions were also given for filing rejoinder, if any.
It was directed that "pending hearing and final disposal of the writ petition the State Government would give to the respondent No. 7 within three weeks from today, lease in respect of 180 acres in Item No. 5, set out in paragraph 8 of the writ petition the State excluding the area which the State Government proposed to give to respondent No. 8.
" It was stated that this order was made without prejudice to the rights and contentions of the parties directions were given for hearing of the writ peti tions.
Finally the order with which we are directly concerned with is the order dated the 30th April, 1987 which was passed by a bench consisting of Hon 'ble V. Balakrishna Eradi, J. and one of us G.L. Oza, J. The said order is set out in paragraph 2 of the C.M.P. Nos. 16435 37/87.
It is not necessary to set out in detail the order.
It may be noted that the Court directed that the proper order to be passed was to direct the parties who had applied for grant of mining |eases to file representations before the Secretary, Ministry of Mines and Steel, Department of Mines; Government of India within ten days from that date setting out their claims in respect of the areas covered by their respective applications.
This Court directed the Secretary Department of Mines to consider the claim of the various parties in respect of the areas covered by their applications in the light of the observations contained in the orders already passed by this Court, namely, the orders dated the 22nd September, 1984 and the 8th May, 1985 after duly taking into consideration the requirements of the manufacturing Indus tries concer 68 ned and decide about the question of grant of Mining Leases after giving an opportunity of being heard to the parties concerned.
Thereafter, the present applications have been made by different claimants seeking for directions for being added for consideration by the Secretary subject to their existing rights under the existing leases and grant of future leases.
Mr. Kapil Sibbal, counsel appearing for the respondent No. 7 and Dr. Gauri Shankar counsel appearing for the applicant submitted that there are existing leases in their favour which cannot be entertained (sic) by any order passed by the Secretary and they are entitled to work out their full rights.
On the other hand the Orissa Mining Corporation as well as Industrial Development Corporation Orissa are also claiming for grant of Mining leases includ ing respondent No. 8 who is alleged to have found out the mines.
In our opinion the proper order would be to pass order in terms of the order passed by this Court on 30.4.87.
The claims of the.different claimants including Mr. Sibal 's clients as well as Dr. Gauri Shankar 's should be considered in accordance with law by the Secretary in making his con siderations.
The Secretary should bear in mind the previous orders made in their favour and the previous leases and the rights, if any, granted therefrom and their consequences.
Similarly the public benefit and public interest involved and proper exploitation of the mines should be borne in mind.
Bearing these facts it is directed that the Secretary should arrive at a just, equitable and objective decision and send a report to this Court within three months on receipt of the copy of the order within a fortnight from today.
The Secretary should only consider the applications of those who had existing leases applications at the time when the order of 30.4.87 was made and not of those who had no existing leases applications on 30.4.87.
The copy of the report to be made shall be supplied to the parties.
" It is in pursuance of this order Rao has heard the parties and submitted the report which has now been placed before us for further directions.
OTHER PENDING APPLICATIONS It is necessary, to clear the ground, to refer to a number of applications made by the various parties subse quent to the order of this Court dated 30.5.87: 69 (i) By C.M.P. No. 13347/87, FACOR pointed out that a lease in respect of 180 acres (being part of item 5) had been granted to it by the S.G. on 13.8.85 in pursuance of this Court 's order dated 8/5/85.
It claimed that it had made substantial investments, engaged a huge labour force and started mining in this area.
It was disturbed by the fact that OMC and IDCOL had suddenly entered into the picture and claimed before Rao that they were entitled to leases on the basis of reservations.
According to the applicant, only the parties to the writ petition could be heard by Rao and OMC and IDCOL should not be permitted to join the proceedings before Rao and allowed to disturb the leases directed to the given to it and IMFA by the orders dated 28.2.85 and 8.5.85.
A second point taken in the application was this: "13.
That it is submitted that the order dated 30.4.87 does not make it clear as to under what statutory authority the Secretary to the,Government of India shall dispose of the representations made by the various parties to the writ petition.
This matter requires to be clarified by this Hon 'ble Court".
This application was opposed by the OMC and the IDCOL.
The Court, by its order dated 6.10.87, rejected the first re quest and allowed OMC and IDCOL to participate in the pro ceedings before Rao; it was directed that the claims of all parties whose applications for lease were subsisting on 30.4.87 should be heard by Rao.
It was, however, clarified that in arriving at his conclusions, the Secretary should bear in mind the previous orders made in favour of IMFA and FACOR, the previous leases and rights granted to them and their consequences.
The second aspect to which the applica tion referred was, however, not clarified.
(ii) A second application of FACOR (C.M.P. 22588/77) was directed primarily at the IMFA.
It was submitted here that the order dated 28/2/85 needed to be recalled and FACOR allowed to put forward claims in respect of the areas di rected to be leased out to IMFA as IMFA had not at all been operating its export oriented unit (EOU) since 1984 and was attempting to divert the ore to its domestic units whereas FACOR was the one that was operating an EOU and needed all the ore it could get.
No notice was issued on this applica tion apparently as all the claims had already been referred to Rao.
(iii) In August 1987, IMFA moved C.M.P. 21578/1987.
This was in the nature of a counter to C.M.P. 13347/87 moved by FACOR.
This 70 application also prayed that the consideration before the Rao Committee should be confined to the parties to the writ petition.
IMFA also took this occasion to request that the area of 180 hectares leased out to FACOR by the order dated 3/5/85 should be treated as provisional and taken into account in the allotment to be decided on by Rao.
FACOR tiled a reply.
No orders have, however, been passed on the petition.
again.
apparently since all the claims were before Rao.
(iv)C.MP.
9284/88 was filed by OCL to quash the "order" of 1.2.88 passed by Rao which has totally rejected the claims of OCL.
No orders on this petition have been passed so far but this will now have to be disposed of in the light of the conclusions we may reach in regard to OCL 's claims on the merits and no separate orders need to be passed thereon.
(v) I.A. 1/89 was filed by ORIND challenging the cor rectness of Rao 's findings and praying that, pending dispos al of W.P. 14116/84 which according to it stands undisposed of despite the orders dated 30/4/87 and 6/10/87 the S.G., OMC, Tisco.
Sirajuddin & Co. and Mysore Minerals (the re spondents to the application) should be directed to supply to ORIND 3000 M/T of chrome ore per month.
No orders have been passed on this application so far but, since the writ petition itself is now being disposed of, no interim orders as prayed for in this application are at all called for.
STATUTORY INADEQUACIES 1) Delay and Ineffectiveness: Now the first thing that strikes one on perusing the course of the proceedings in the case is the extremely unsatisfactory and impractical proce dure followed under the Act in regard to the grant of mining leases for important minerals like chrome ore.
The statute envisages that the application should be made to the S.G. and disposed of by it within a prescribed period.
But the course of events in the case and other reported cases show that this time limit is observed more in breach than in observance.
Anticipating this possibility, the rules provide that, if an application is not disposed of within the statu tory period, it shall be deemed to have been refused.
So far so good, as at least, the applicant can, on the expiry of the period, have recourse to a higher authority.
The remedy provided to the aggrieved applicant is to file a revision application before the C.G. under section 30 of the Act for revision of the order within three months thereafter.
Rule 55 enables the C.G., after hearing all necessary parties, to "confirm, modify or set aside the order or pass such other order in relation to 71 thereto as the Central Government may deem just and proper".
A note under rule 55 also says that "during the pendency of a revision application the State Government should not take any action in respect of the area, which is the subject matter of the revision petition as the matter becomes sub judice".
Having regard to the wide powers thus conferred.
one would except the C.G. to dispose of the application on merits, either granting the lease in whole or in part or rejecting it.
But, curiously, in most of the cases which come up before Courts as also in this case, the C.G. seems reluctant to pass any order except to set aside the "deemed refusal" and direct the S.G. to dispose of the application afresh within a specified period.
That was the order passed, for example, in IMFA 's case the time given being 200 days.
But the S.G. does not seem to pay any heed to this direction and no order is passed within a reasonable period.
Well, one would think a second approach to the C.G. may be helpful.
IMFA tried it but got back a reply to say that the C.G. was helpless in the matter.
The original order in revision has stated: "should the State Government fail to pass order on the petitioner 's application he may seek redress in an appropriate Court of Law, if so advised" and the subsequent application was rejected by the C.G. on the ground that the C.G. becomes functus officio when it passes the order in revision and has no jurisdiction to revise it.
So all that the applicant can do is to wait for some time and then file a writ petition.
Even if the writ petition were to be heard quickly all that the Court can do is to direct the S.G. to dispose of the application expeditiously.
This is an ex tremely cumbrous and ineffective procedure in which several years pass but the application stands still.
Thus, for e.g., ORIND made an application in 1971 and is yet to know what the fate of its application would be.
It puzzles 'us why the C.S., even in the first instance, could not dispose of the application on merits in the light of the report received from the S.G. and after hearing concerned parties.
(2) Proliferation of applications: Another problem created by the passage of time is the entry of new parties in the fray.
We shall later point out that, though section 11 tries to enunciate a simple general principle of "first come; first served" in practice, priority of an application in point of time does not conclude the issue.
In this case itself.
for instance: during the period ORIND 's application of 1971 has been under consideration before various authorities and in the writ petition filed in Orissa High Court, several other competitors have come into the picture.
The statutory provi sion is not clear as to which of the applications in respect of any particular area, are to be considered together.
If ORIND 's application of 1971 for example: were to be 72 considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand: if all the applications pending for disposal at the time ORIND 's appli cation is to be granted or rejected are to be considered.
the result would be totally different.
Since the interests of the nation require that no lease for mining rights should be granted without all applications therefore at any point of time being considered and the best among them chosen or the areas distributed among such of them as are most effi cient and capable; the latter is the only reasonable and practical procedure.
That is why this Court, in its order dated 30.4.87: laid down we think rightly that all appli cations pending for consideration as on 30.4.87 should be considered by Rao.
(3) Procedure for consideration of applications: A further confusion created in this case is due to the fact that leases of different areas in different villages and dis tricts have been applied for.
No attempt has been made to locate, with reference to any compact block of land; who exactly are the competitors and whether there are areas in respect of which there is no competition at all.
It will be seen later how this has caused difficulty in the present case.
But what we wish to point out here is that the statute must lay down clearer guidelines and procedure.
Having regard to the new avenues for vast industrial development in the country, the more workable procedure would be for the S.G. to call for applications in respect of specified blocks by a particular date and deal with them together: other later entrants not being permitted in the field.
Otherwise only confusion will result, as here.
There was a time when the S.G. looked to private enterprises for mineral develop ment in its territory.
Even now, it has been stated that 87% of the State territory containing chromite is under lease to one industrial house.
Of late, however, competition has crept in.
The S.G. has its own public sector corporations and various entrepreneurs are interested in having mining leases for their purposes.
It is, therefore: vital that there should be a better and detailed analysis, district wise and area wise and that a schedule for consideration of applications in respect of definite areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applica tions.
These are aspects which call for careful considera tion and appropriate statutory amendments.
IS section 11(2) CONCLUSIVE? Now, to turn to the contentions urged before us: Dr. Singhvi, who 73 appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in section 11 (2); that, subject only to the provision contained in section 11(1) which had no application here, the earliest applicant was entitled to have a prefer ential right for the grant of a lease; and that a considera tion of the comparative merits of other applicants can arise only in a case where applications have been received on the same day.
It is no doubt true that section 11(2) of the Act read in isolation gives such an impression which, in reality, is a misleading one.
We think that the sooner such an impres sion is corrected by a statutory amendment the better it would be for all concerned.
On a reading of section 11 as a whole one will realise that the provisions of sub section(4) completely override those of sub section (2).
This sub section preserves to the S.G. a right to grant a lease to an applicant out of turn subject to two conditions: (a) record ing of special reasons and (b) previous approval of the C.G.
It is manifest, therefore, that the S.G. is not bound to dispose of applications only on a "first come, first served" basis.
It will be easily appreciated that this should indeed be so for the interests of national mineral development clearly require in the case of major minerals.
that the mining lease should be given to that applicant who can exploit it most efficiently.
A grant of ML in order of time will not achieve this result.
In the context of his submission pleading for priority on the basis of the time sequence Dr. Singhvi referred to certain observations in the decisions reported as Ferro Alloys Corporation of India vs Union, I.L.R. 1977 Delhi 189 at p. 196 and as Mysore Cements Ltd. vs Union, A.I.R. at p. 15 1.
we do not think these decisions help him.
In the former case; an application by FACOR for a lease was rejected on the ground that an earlier application was being accepted.
FACOR contended this was wrong that the S.G. could not have refused to look into its application merely because another applicant had a preferential right under section 11(2) and that its application as well as that of the earlier applicant should have been considered together.
It is in the situation that the Court observed that rule 11 primarily embodies the general principle of "fist come first served" and an out ofturn consideration under section 11(4.) was an exception for which a strong case had to be made out.
The petitioner could not have a grievance if the general principle was followed.
So also, in the latter case an earlier application having been accepted and a lease granted, the consideration of a later application was held to be uncalled for.
These decisions cannot be treated as authorities for the proposition that the S.G. is bound to grant an earlier application as soon as it is received 74 and cannot wait for other applications and consider them all together and grant a later one 'if the circumstances set out in rule 11(4) are fulfilled.
That apart it has to be remem bered that the S.G. did reject ORIND 's application by an order dated 23.10.
This order was set aside in the C.G. on 20.2.
1977 and the S.G. directed to consider it afresh.
The S.G. did not comply with this order and so a writ petition was filed by ORIND which was pending when this writ petition was" filed.
Subsequently the High Court on 9.2.89 directed the S.G. to consider and ,dispose of ORIND 's application on merits.
The S.G. on ' 7.4.89 dismissed ORIND 's application on the ground that the issue is before us and hence the S.L.P. against the order of rejection of the S.G.
Even assuming that we accept the S.L.P. filed by ORIND that will only entitle ORIND to have its application reconsidered for grant along with such other applications as may be pending as on the date of such reconsideration.
In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them it would not be correct to say that as the S.G. 's order of 29.10.1973 has been set aside ORIND 's application should be restored for reconsideration on the basis of the situation that prevailed as on 29.10.
1973 and that therefore it has to be straight away granted as there was no other application pending on that date before the S.G.
In matters like this subsequent applications cannot be ignored and a rule of thumb applied.
We are unable to accept the submission of Dr. Singhvi that the application of ORIND being the earliest in point of time should have been accepted and that we should direct accord ingly.
As to how far the requirements of section 11(4) are ful filled in the present case that is an aspect which will be considered later.
PROMISSORY ESTOPPEL It will be convenient here also to deal with another argument raised by Dr. Singhvi based on grounds of promisso ry estoppel.
Dr. Singhvi points out that when ORIND applied to the C.G. for revision of the order of rejection of its application on 23.10.73 the S.G. on 26.2.74 wrote to the C.G. as follows: M/s Orissa Industries Limited made 'representation to the State Government on ' 15.12.
1973 for reconsidering grant of lease to serve the captive requirements of their refractory plant.
They also brought to the notice of the State Government an export order of refractories of sizeable value of about Rs.2 crores received from National 75 Iranian Steel Mills.
Teheran Chromite, being essential raw material for manufacture of refractories they pressed for grant of Mining Lease.
After careful consideration of the representation, the State Government have revised the policy of reserving the chromite area only for exploitation in public sector and have decided for grant of chromite to serve the captive requirements of industry within the State should be given first priority.
Accordingly, it is proposed to grant the mining lease for chromite over the available areas subject to revision of the previous order of the State Government by Government of India u/s 30 of the Mines & Minerals (Regulation & Development) Act, 1957 and u/s 5(2) of the said Act.
Steps are being separately taken to exclude this area from the operation of reservation notification for exploitation of chromite in the public sector.
In the interest of the local industries.
the State Govt.
do not intend to throw open the area after releasing from reservation.
Approval of Government of India would also be necessary for not throwing open the area in the relaxa tion of the rule 58 of the Mineral Concession Rules 1960.
Out of 1129.25 hectares applied for, an area of 379.93 hectares is covered by overlapping of applied leases or applications including an area of 142 hectares which is being separately recommended to Government of India for grant of Mining lease in favour of M/s Orissa Cement Limit ed.
As such the net area available for grant of mining lease is therefore.
749.32 hectares.
The State Government having rejected the application of the party in Government Proceeding No. 1043 dated 23.10.
1973 are got obtain to revise their own order by granting Mineral Concession as instructed in your department letter No. MV I(445)/61 dated 5.1.72.
The case is therefore.
recom mended to Government of India for grant of Mining Lease over an area of 749.32 hects.
in favour of M/s Orissa Industries Limited revising the above order of the State Government u/s 30 of the .
As chromite ore is specified mineral under the first schedule of the Act approval of Government of India is also requested u/s 5(2) of the Act.
I would therefore, request you to kindly obtain and communicate orders of Government of India on revision u/s 30 of Mines & Minerals (Regulation & Development) Act, 1957 and approval u/s 5(2) of the said Act and in relaxation of Rule 58 of the Mineral Concession Rules.
1960 for grant of Mining Lease for chromite over an area of 749.32 hectares in Cuttack District in favour of Orissa Industries Limited.
" Simultaneously, it is pointed out, the S.G., while sending its comments to the C.G. on the contents of another revision application filed by ORIND against the rejection of its application (also dated 5.7.71) for a lease of 446.38 hec tares in village Sukrangi of Cuttack District, had this to say: "Recently in State Government letter No. 1747MG dated 26.2.74 chromite bearing area to the extent of 749.32 hectares in Cuttack district has been recommended to Govern ment of India for grant in favour of M/s Orissa Industries Ltd. The need of M/s Orissa Industries Ltd. will be met from this.
It is the responsibility of the party to obtain raw materials for its factory and the State Government cannot take such responsibility as contended by the petitioner.
The party is at liberty to purchase the chrome ore from Orissa Mining Corporation.
XXX XXX XXX The State Government have already recommended an area in favour of M/s Orissa Industries Ltd. to the Govt.
of India to meet the requirements of their industry.
The State Government have already decided to grant the area applied for by M/s Orissa Industries Ltd. in their M.L. application under revision to M/s Orissa Mining Corporation Ltd. who are now working the area as an agent of the State Government.
Hence the question of granting this area to M/s Orissa Industries Ltd. does not arise.
" Also, on 5.3.74 the S.G. published a notification dereserv ing the said 749.32 hectares (said to have been earlier reserved for exploitation in the public sector by a notifi cation of 3.7.
1962).
Dr. Singhvi submitted on the strength of this correspondence and notification that the S.G. having sought to justify its rejection of ORIND 's application for 77 446.38 acres on the ground that the company 's application for 749.32 hectares was being recommended after dereserva tion, it was not open to the S.G. now to take up a different stand and that ORIND 's application for 1229.25 hectares now under consideration should have been granted at least to the extent of 744.32 hectares the dereservation and lease in favour of ORIND, of which had been recommended by the S.G. itself as early as 1974.
In support of this contention, learned counsel relied on the observations made in a series of decisions of this Court: Kanai Lal Sur vs Paramnidhi Sadhukhan, ; M/s Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh and Ors.
, ; ; Gujarat State Financial Corporation vs M/s Lotus Hotels Pvt. Ltd., ; Surya Narain Yadav & Ors.
vs Bihar State Electricity Board & Ors., [1985] Suppl.
1 S.C.R. 605; Union of India & Ors.
vs Godfrey Phi lips India Ltd., [1985] Suppl.
3 SCR 123 and Mahabir Auto Stores & Ors.
vs Indian Oil Corporation & Ors., [1990] J.T. 1 S.C. 363.
This argument is interesting but overlooks certain very important relevant circumstances.
As mentioned earlier, ORIND 's revision petition was disposed of by the C.G. on 23.2.
This order contains no reference to the S.G. 's letter of 26.2.74; on the contrary, it proceeds on the footing that no comments had been received from the S.G.
Possibly this is because the letter of 26.2.74 was not in the form of comments on the ORIND 's revision application but was in the form of the S.G. 's recommendations on ORIND 's representation to it dated 15.12.73, although it does sug gest that the C.G. could set aside the order of 23.10.73 and direct the grant of a lease to ORIND in respect of 749.32 hectares.
Be that as it may, the C.G. did not accept the recommendation of the S.G.
Indeed, we find on record that, having regard to a letter of the C.G. dated 15.5.74, the S.G. sent a letter dated 17.7.74 withdrawing the earlier recommendation made by it on 26.2.74 for the allotment of 749.32 acres to ORIND.
In view of this letter, the C.G. simply set aside the order of 23.10.73 on the ground that it was not a speaking order and directed the S.G. to dispose of ORIND 's application within 100 days in the light of the letter of the C.G. dated 15.5.74.
Interestingly, this letter had been written in reply to a proposal from the S.G. that the exploitation of chromite had to be entrusted to the public sector.
Accepting this suggestion, the letter pro ceeded to lay down certain broad priorities on the basis of which leases could be granted and certain other directions in respect of research and development.
The position, there fore, is that the C.G. did not accept the S.G. 's recommenda tions regarding the grant of a lease to ORIND in respect of 749.32 hectares out of the 1129.25 78 hectares applied for.
There was, however, delay in the disposal of the application by the S.G.
When the S.G. took up consideration of the matter once again it took note of three circumstances to reject the application of ORIND.
These were: (i) One of the directions in the C.G. 's letter of 15.5.74 was that "no lease of lumpy ore for metallurgical and re fractory grade be granted to private sector unless mining undertakings of the State or Central Government are not interested in the exploitation of ore in these leaseholds" and the requirement of ORIND was for lumpy chromite ore; (ii) Two notifications had been issued on 28.4.77 and 3.8.77 reserving certain areas for exploitation by the public sector.
The former dealt specifically with the 749.32 hec tares which had been proposed for allocation to ORIND in the letter of the S.G. dated 26.2.74.
The latter covered a huge area of 1460 sq. km.
in various districts of the State; (iii) The claims of all applicants had been considered by Rao and Rao had come to the conclusion that no mining leases need be given to ORIND.
We shall consider later the claim of ORIND on merits.
But, for the present, we only wish to point out that no grounds have been made out which could support a plea of promissory estoppel.
The grant of a lease to ORIND had to be approved by the C.G.
The C.G. never approved of it.
The mere fact that the S.G., at one stage, recommended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the C.G. 's directives.
Perhaps, the highest that ORIND can claim is that, since this lease of 749.32 acres has not come through, the SG 's order rejecting its application in respect of 446.38 hectares deserves to be considered.
But that area is not the subject matter of the present S.L.P. by ORIND.
Moreover, ORIND has not placed before us any information as to what happened to the revi sion petition filed by it against the rejection of the application in respect of 446.38 hectares of the further proceedings, if any, in relation thereto.
We express no opinion as to ORIND 's entitlement to a lease on that appli cation in case it does not succeed in its claim here in respect of 749.32 hectares.
It will be open to ORIND to pursue such remedies in respect thereof as it may be advised and as may be available to it in law.
79 THE RESERVATION POLICY The principal obstacle in the way of ORIND as well as the other private parties getting any leases was put up by the S.G., OMC and IDCOL.
They claimed that none of the private applications could at all be considered because the entire area in all the districts under consideration is reserved for exploitation in the public sector by the noti fication dated 3.8.77 earlier referred to.
All the private parties have therefore joined hands to fight the case of reservation claimed by the S.G., OMC and IDCOL.
We have indicated earlier that the S.G. expressed its preparedness to accept the Rao report and to this extent waive the claim of reservation.
Interestingly, the OMC and IDCOL have en tered caveat here and claimed that as public sector corpora tions they could claim, independently of the S.G. 's stand, that the leases should be given only to them and that the Rao report recommending leases to IMFA, FACOR and AIKATH should not be accepted by us.
The relevant provisions of the Act and the rules have been extracted by us earlier.
Previously, rule 58 did not enable the S.G. to reserve any area in the State for exploi tation in the public sector.
The existence and validity of such a power of reservation was upheld in Kotiah Naidu vs State of A.P., A.I.R. 1959 A.P. 185 and Amritlal Nathubhai Shah vs Union, A.I.R. 1973 Guj. 117, the latter of which was approved by this Court in ; pointed out earlier, rule 58 has been amended in 1980 to confer such a power on the S.G.).
It is also not in dispute that a notification of reservation was made on 3.8.77.
The S.G., OMC and IDCOL are, therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the S.G. or a public sector corpora tion [rule 59(1), proviso] unless the availability for grant is renotified in accordance with law [rule 59(1)(e)] or the C.G. decides to relax the provisions of rule 59(1) [rule 59(2) ].
None of those contingencies have occurred since except as is indicated later in this judgment.
There is, therefore, no answer to the plea of reservation put forward by the S.G., OMC and IDCOL.
The private applicants seek to get over this difficulty in several ways.
In the first place, they all vociferously urge that this plea has been taken by the S.G. belatedly, that the OMC and IDCOL have come into the picture very late and that this plea should not be allowed to be raised at this stage.
The learned Advocate General for the State of Orissa has pointed out, we think rightly, that there is no substance 80 this grievance.
The objection regarding reservation was raised by the S.G. at the very first opportunity it had, in a preliminary counter affidavit filed by it in the writ petition dated 29.10.1984.
The counteraffidavit mentioned about the reservation in no uncertain terms and a copy of the relevant page of the Orissa Gazette dated 12.8.77 which contained the reservation notification dated 3.8.77 was also annexed to the counter affidavit.
Reference was also made to the statutory provisions and judicial decisions.
The claim was reiterated, when ORIND joined the proceedings, in a reply filed by the State to the counter affidavit filed by ORIND on 22.8.85; this reply affidavit refers to the letter of the C.G. dated 15.5.74 and the notification of reserva tion dated 28.4.77 pertaining to the 749.32 acres in respect of which ORIND had made an application.
In a further coun ter affidavit dated 24.11.89 filed "in reply to the addi tional submissions dated 17.10.89 filed on behalf of ORIND", the notification of 3.8.
1977 has also been referred to.
OMC and IDCOL had submitted their applications for lease but no orders had been passed thereon.
When they came to know that the applications of IMFA and FACOR were considered by this Court and certain interim orders passed, they approached Rao to consider their applications as well.
This request was opposed by the other parties whereon OMC and IDCOL sought and obtained the directions of this Court that their appli cations should also be considered by Rao.
Before Rao, they supported the S.G. plea of reservation.
In the circumstances Set out above, it is difficult to accept the contention of the various private applicants that the plea as to reserva tion should not be entertained at all on the ground of delay and 1aches.
It is then argued that though the S.G. may have formally notified a reservation, it has not been very serious about this and has always been willing to consider private appli cations for leases.
In support of this contention, reliance is placed on the following circumstances: (a) On 26.2.74, the S.G. has clearly expressed its willingness to dereserve the area of 749.32 acres and, indeed, followed it up on 5.3.74 with a notification of dereservation.
(b) Though the S.G. claims that reservation is neces sary to meet the S.G. 's requirements because 81% of chromite ore rich lands already stand leased out to a private party (TISCO), the S.G. proceeded to renew the grant in favour of that party.
(c) The S.G. has been willing enough to lease out lands to private parties: (i) The S.G. has granted leases to FACOR on 81 9.2.72, 7.10.72 and 12.11.76 in respect of 157.05 hects. 133.31 hects.
and 72.84 hects.
respectively in Bokhla, Kathpal and Ostapal villages.
(ii) it has entered into an agreement with AIKATH to grant a lease in respect of a part of the land applied for by him in item 8; (iii) it has agreed to lease out item 3 and 26.62 hectares out of item 4 in favour of IMFA; (iv) it agreed to lease out 180 acres in item 5 in favour of I FACOR.
(d) Even at this final stage of hearing of the writ petition.
the Advocate General of the State has conceded that the S.G. is prepared to abide by the Rao report i.e. the S.G. is willing to grant leases to IMFA, FACOR and AIKATH but not to OCC or ORIND.
This is patently discrimina tory.
We do not, however, think that these circumstances establish that the State is not serious about its plea of reservation.
So far as item (a) is concerned.
we have al ready pointed out that this was the initial attitude of the Government but this policy was changed in pursuance of the C.G. 's letter dated 15.5.74 and its order on ORIND 's revi sion application.
The S.G. itself had, in fact, withdrawn the recommendations made on 26.2.74 by its letter of 17.7.74.
The thought of dereservation had therefore been given up by the S.G. in July '74 itself though the notifica tion of dereservation was superseded only in 1977.
In regard to items (b) & (c), the position is that the lease of 1976 was after the dereservation of 5.3.74.
The leases to FACOR in 1972 (the details of which are not available before us) are stated to have been granted after obtaining C.G. 's order for relaxation.
The full circumstances in which the lease in favour of TISCO was renewed are not before us but perhaps such renewal was dictated by the nature of the industry run by TISCO and its importance for the economy of the State and the country.
These apart, the Court approved of the grant of leases to IMFA and FACOR.
So far as (d) is concerned, the learned Advocate General of Orissa has made it clear that the S.G. does not accept the Rao report in so far as it ignores its claim of reservation.
The concession made only is that since the Rao Committee, in recommending grant of leases to IMFA and FACOR is only giving effect to a fait accompli in pursuance of the interim directions of this Court, they are willing to abide by it.
It will therefore be clear that, except for two or three instances, where leases have been granted by the S.G. on its own, the S.G. has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector.
The rules permit the C.G. to relax the rigid requirements of reservation in individual cases after re cording special reasons.
We are 82 not here called upon to decide whether the relaxations made in the above eases were in accordance with the rules or not.
It is sufficient to say here that these exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties before us that the policy of reser vation is merely being raised as a formal defence and has never been seriously implemented by the S.G. Dr. Singhvi also raised a plea of arbitrariness and mala fide to challenge the reservation policy.
He urges on the first count that it was not open to the S.G. to go on shift ing its reservation policy from time to time without ade quate reasons, Such conduct was also vitiated, he said, as amounting to malice in law and referred in this context to the observations of this Court in Venkataraman vs Union, ; We do not think this contention has any substance.
Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country 's development cannot be gainsaid.
The S.G. rightly decided upon a policy of reservation in 1967 and this was kept up till 1974.
In February 1974 the S.G. was in favour of freer issue of mining leases but gave up this policy in pursuance of the C.G. 's letter of 15.5.74.
Reser vation was, therefore, clamped in 1977 again.
Applications could still be considered to see how far a relaxation was permissible having regard to the nature of the applicant 's needs, the purpose for which the lease was asked for, the nature of the ore sought to be exploited, the relative needs of the State, the availability of a public sector undertak ings to carry out the mining more efficiently and other relevant considerations.
There is no material on record to substantiate a plea that the S.G. has been acting arbitrari ly or mala fide in its policy formulations in this regard.
Our conclusion that the areas in question before us were all duly reserved for public sector exploitation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the C.G. to relax the reservation for recorded reasons.
Nor does this mean, as contended for by OMC and IDCOL, that they should get the leases asked for by them.
This is so for two reasons.
In the first place, the reservation is of a general nature and does not directly confer any rights on OMC or IDCOL.
This reservation is of two types.
Under section 17A(1), inserted in 1986, the C.G. may after consulting the S.G. just reserve any area not covered by a PL or a ML with a view to conserving any mineral.
Apparently, the idea of such reservation is that the miner als in this area will not be exploited at all, neither by private parties nor in the public sector.
It is not neces sary to consider whether any area so 83 reserved can be exploited in the public sector as we are not here concerned with the scope of such reservation, there having been no notification under section 17A(1) after 1986 and after consultation with the S.G.
The second type of reserva tion was provided for in rule 58 of the rules which have already been extracted earlier in this judgment.
This reser vation could have been made by the S.G. (without any neces sity for approval by the C.G. ) and was intended to reserve areas for exploitation, broadly speaking, in the public sector.
The notification itself might specify the Govern ment, Corporation or Company that was to exploit the areas or may be just general, on the lines of the rule itself.
Under rule 59(1), once a notification under rule 58 is made, the area so reserved shall not be available for grant unless the two requirements of sub rule (e) are satisfied: viz. an entry in a register and a Gazette notification that the area is available for grant.
It is not quite clear whether the notification of 5.3.74 complied with these requirements but it is perhaps unnecessary to go into this question because the reservation of the areas was again notified in 1977.
These notifications are general.
They only say that the areas are reserved for exploitation in the public sector.
Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the Government itself is for the Government to determine de hors the statute and the rules.
There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector.
If, there fore the claim of reservation in 1977 in favour of the public sector is upheld absolutely, and if we do not agree with the findings of Rao that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it to the S.G. to consider whether any portion of the land thus reserved should be given by it to these two corporations.
Here; of course, there are no competitive applications from organisa tions in the public sector controlled either by the S.G. or the C.G., but even if there were, it would be open to the S.G. to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the C.G. or S.G. Both the Corporations are admittedly instrumen talities of the S.G. and the decision of the S.G. is binding on them.
We are of the view that, if the S.G. decides not to grant a lease in respect of the reserved area to an instru mentality of the S.G., that instrumentality has no right to insist that a ML should be granted to it.
It is open to the S.G. to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule.
It is true that if, eventually, the S.G. decides to grant a lease to one or other of them in respect of such land, the instru mentality whose application is rejected may be aggrieved .by the 84 choice of another for the lease.
In particular, where there is competition between an instrumentality of the C.G. and one of the S.G. or between instrumentalities of the C.G. inter se or between the instrumentalities of the S.G. inter se, a question may well arise how far an unsuccessful in strumentality can challenge the choice made by the S.G.
But we need not enter into these controversies here.
The ques tion we are concerned with here is whether OMC or IDCOL car, object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector.
We think the answer must be in the negative in view of the statutory provisions.
For the S.G. could always denotify the reservation and make the area available for grant to private parties.
Or, short of actually dere serving a notified area, persuade the C.G. to relax the restrictions of rule 59(1) in any particular case.
It is.
therefore.
open to the S.G. to grant private leases even in respect of areas covered by a notification of the S.G. and this cannot be challenged by any instrumentality in the public sector.
Before leaving this point, we may only refer to the position after 1986.
Central Act 37 of 1986 inserted sub section (2) which empowers the State Government to reserve ureas for exploitation in the public sector.
This provision differs from that in rule 5, ', in some important respects (i) the reservation requires the approval of the C.G.; (ii) the reservation can only be of areas not actually held under a PL or ML; (iii) the reservation can only be for exploitation by a Government company or a public sector corporation (owned or controlled by the S.G. or C.G. ) but not for exploitation by the Government as such.
Obviously, section 17A(2) and rules 58 could not stand together as section 17A empowers the S.G. to reserve only with the approv al of the C.G. while rule 58 contained no such restriction.
There was also a slight difference in their wording.
Perhaps because of this rule 58 has been omitted by an amendment of 1988 (G.S.R. 449E of 1988) made effective from 13.4.88.
Rule 59, however, contemplates a relaxation of the reservation only by the C.G.
By an amendment of 1987 effective on 10.2.
1987, (G.S.R. 86 E of 87) the words "reserved by the State Government" were substituted for the words "reserved by the 85 Government" in rule 59(1(e).
Later, rule 59(1) has been amended the insertion of the words "or under section 17 A of the Act" after the words "under rule 58" in clause (e) as well as in the second proviso.
The result appears to be this ' (i) After 13.4.88, certainly, the S.G. cannot notify any reservations without the approval of the C.G., as rule 58 has been deleted.
Presumably, the position is the same even before this date and as soon as Act 37 of 1986 came into force.
(ii) However, it is open to the S.G. to denotify a reservation made by it under rule 58 or section 17A. Presumably, dereservation of an area reserved by the S.G. after the 1986 amendment can be done only with the approval of ,the C.G. for it would be anomalous to hold that a reservation by the S.G. needs the C.G. 's approval but not the dereservation.
Anyhow, it is clear that relaxation in respect of reserved areas can be permitted only by the C.G. (iii) It is only the C.G. that can make a reservation with a view to conserve minerals generally but this has to be done with the concurrence of the S.G.
We are concerned in this case with reservations made by the S.G. under rule 58 before 1986 which, there is no reason to doubt, continue in force even after the introduction of section 17A.
These, as pointed out above, can be dereserved by th S.G. but a relaxation can be done by the C.G. only.
We shall consider later whether this power of the C.G. can be or has been or should be exercised in this case.
It is sufficient to observe here that the reservations notified in 1977 do not necessarily vitiate the grant of leases to private parties.
STATUS OF RAO REPORT We now come to the question regarding the status of, and the weight to be attached to, the Rao report.
The writ petition and other proceedings before us were directed against the S.G. 's failure to pass favourable orders on the applications of various parties.
Normally, in such a case, this Court would either have directed the S.G. to consider the applications afresh and pass appropriate orders or left it to the parties to file revision petitions before the C.G. against the S.G. 's orders.
Here, as described earlier, the various parties came up before 86 this Court one after the other and some of them had their writ petitions pending in the Orissa High Court.
This Court, therefore, decided that the best course would be to consoli date all the applications that were pending on 30.4.87 for the consideration of the C.G. so that a satisfactory deci sion could be arrived at after an examination of the rela tive merits of the various applicants.
This Court did not specify the statutory provision under which this was to be done but it is apparent that it was intended to be an exer cise of the power of the C.G. under section 30, though this aspect was not clarified when FACOR draw attention to it in C.M.P. 13347/87.
We have no difficulty in construing the Rao report as a decision on the claims of the various parties before it, though, having regard to the terms of the order of this Court dated 6.10.87, it has been styled as a report.
The objections to this conclusion are three fold and they are dealt with below: First, it is pointed out that revisions to the C.G. under section 30 can be validly dealt with only by a "tribunal" and not by a single officer.
We find that the procedure indicated is not dictated by the statute or the rules.
It is only a forum outlined in an office order more as a matter of internal regulation than as a rigid rule of procedure.
We have seen one of these orders dated 10.7.
It consti tutes three Single Bench Tribunals each consisting of a designated Joint Secretary in the Department of Mines and three Divisional Bench Tribunals each comprising of a desig nated Joint Secretary in the Department of Mines and a designated Joint Secretary in the Department of Legal Af fairs in the Ministry of Law and Justice.
The instructions are: "To the extent possible, cases in which parties have not asked for personal hearing should be disposed of by Single Bench Tribunals unless the member feels that some complicated legal issue is involved requiring advice of the member from the Law Ministry.
The cases where personal hearing has been requested by parties, the Single Member Tribunals will decide whether to dispose of the cases after grant of hearing by himself or whether the hearing should be held by Division Bench Tribu nal.
" It will thus be seen that even regular revision petitions under section 30 can be validly disposed of solely by a Joint Secretary in the Department of Mines unless he considers it necessary, either because a personal hearing is asked for or because some complicated legal issue is involved, to 87 invoke the aid of a Joint Secretary in the Law Ministry.
Here, there is no regular revision petition except perhaps in one case; the disposal is by the Secretary to the Depart ment of Mines; he has been specially authorised to deal with the matter by this Court; and no legal issued at all are involved.
We, therefore, see nO irregularity or defect in the procedure forged by this Court for a speedy and effec tive disposal of the claims before the Court.
Secondly, it is said that though the order of 30.4.1987 directs the secretary to dispose of the representations by a reasoned final order, the subsequent order of 6.10.87 asks him to sent a report to this Court.
We do not think there is any inconsistency between the two orders.
Even the order of 6.10.87 requires the Secretary to arrive at a just, equita ble and objective decision.
He has been asked to send a report of his decision to the Court, with copies to the parties, only in order that, if any of the parties are aggrieved by his decision, their grievances may be consid ered by this Court in this W.P. itself, instead of driving the parties to a fresh course of litigation.
Thirdly, it is submitted that Rao 's hands were more or less tied by the various observations and directions of this Court thus preventing him from coming to independant conclu sions of his own.
This criticism is unfounded and also belied by the contents of the report.
This Court had made it clear that Rao should not consider himself bound by the memoranda of compromise filed in the High Court of Orissa (with AIKATH and FACOR) or the orders passed by this Court in regard to the allocation of areas (to IMFA and FACOR) though necessarily he had to "bear in mind the previous orders made in their [IMFA and FACOR] favour and the previ ous leases and the rights, if any, granted therefrom and their consequences".
He was also asked to bear in mind the public benefit and public interest involved and also the need for the proper exploitation of the mines.
In fact also we find that although Rao has approved the grants made in favour of IMFA and FACOR by the S.G. (which, he remarks, were perhaps based on the observations made by this Court).
he has clearly reached his conclusions on these independent ly.
In fact, he has set out a basis for justifying the grants to IMFA and FACOR.
It is also clear that there were no Court orders that could have influenced his decisions on the claims of the other parties.
This objection is, there fore, not at all tenable.
OMC, IDCOL, OCL and ORIND complain, indeed, that Rao has been completely overwhelmed by the weight of the observa tions and the leases granted by the S.G. pursuant to interim orders of this 88 Court.
They have gone to the length of criticising, and, indeed, challenging, the validity of these interim orders which had been passed without notice to any of them.
They have invoked, in support, several passages from the decision of this Court in Antulay vs Nayak, ; We think these criticisms are unfounded.
This Court had only directed the grant of two leases pending disposal of the writ petition.
At the time these directions were made, only IMFA, FACOR and AIKATH were before the Court.
IMFA had pointed out that FACOR had been given certain leases al though its earlier applications were pending before the C.G.
The S.G. submitted to the Court that a lease in respect of item 1 had been granted to FACOR, that item 5 had already been agreed to be leased in favour of AIKATH and FACOR and that it was willing to grant a ML in respect of item 3 and 26.62 acres out of item 4 to IMFA.
It was in view of this that the Court passed the order.
Similarly, the ML directed to be granted to FACOR was also in consequence of the S.G. 's acquiescence therein.
It is, therefore, incorrect to characterise these orders as erroneous or unjustified.
They were fully within the scope of the writ petition and were passed after hearing the parties before the Court.
No doubt, OCC, ORIND, OMC and IDCOL were not there then.
After they put in their appearance, this Court made it clear that while the earlier orders, the observations therein and the leases granted in pursuance thereof should be kept in mind, Rao would not be bound by them but would be free to arrive at his conclusion.
We, therefore, do not see any grounds for the criticisms put forward by these parties in regard to the interim orders passed by the Court.
For the above reasons, we are of opinion that, though styled a report, the findings given by Rao are in the nature of a decision of the C.G. on the claims of the various parties.
We, therefore, proceed to consider the Rao report on its merits.
MERITS OF THE RAO REPORT This takes us then to the merits of the various claims put forward before Rao and his decision thereon.
For our present purposes, we think we can consider the Rao report in two parts: (a) his endorsement of the S.G. 's decision to grant ML to IMFA, FACOR and AIKATH: (b) the rejection by him of the claims put forward by the above three parties for leases in respect or areas over the above what 89 has been allotted to them as well as the rejection of the claims of the other parties.
So far as the first aspect is concerned, we think that Rao 's decision, that the leases that have been granted already in favour of IMFA, FACOR be confirmed, should be upheld.
In our view, these should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 59(2).
It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affidavits filed herein.
We are also of opinion that the Rao 's decision regarding the grant of a lease to AIKATH (not yet implemented) should also be upheld.
In these three cases, we think, the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the MLs actually granted.
We shall just summarise these reasons which have also been taken note of by Rao.
(a) ML to AIKATH, IMFA, FACOR 1.
AIKATH is admittedly an individual who discovered chromite ore in the State.
He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over.
Again, as against a lease of 640 acres which he had once obtained and started operating upon, the S.G. has finally approved of a lease in respect of only 140 acres.
AIKATH had been actually working some mines from 1.5.53.
His original grant had been approved before the area was reserved on 3.7.62.
If the S.G. considers these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the Orissa High Court, there are no grounds to interfere with the decision of the S.G. 2.
So far as FACOR is concerned, the requirements for their plant in Andhra Pradesh were met by the ML granted to them in 1971 72 at Kathpal and Boula, thus recognising their claim for a ML to meet part of their requirements of ore.
Their present needs were in connection with their plant at Randia in Balasore District which required about 1,20,000 tons per annum of ore.
The compromise entered into with FACOR agreeing to grant a ML for an area 72.84 hectares having a potential of about 2.4 million tons would cater to 50% of its needs on a 20 year time frame making allowances for wastage in recovery.
IMFA needs 50,000 tons per annum for their plant at Therbauli and 120,000 tons in respect of a plant at Chandwar run by a subsidiary.
While the reserve potential of 26.62 hectares allotted to IMFA out of item 4 is roughly 0.8 million tons the reserve potentials of 108.86 acres given out of area 3 and of another 17.02 hectares in Balasor District given for the plant of the subsidiary were yet to be assessed.
Nevertheless.
it was expected that they would cater to the needs of IMFA more or less to the same extent that the ML in favour of FACOR catered to its needs.
It is true that a relaxation under rule 59(2) has to be made by the C.G.
The orders of grant do recite the approval of the C.G. in this regard.
An objection has been taken that the C.G. granted the approval not after applying its mind to the matter but merely because this Court had directed it to do so.
We do not think this contention can be accepted.
Apparently, when the S.G. agreed to lease out the areas to IMFA and FACOR it was pointed out that this could not be given effect to without the C.G. 's approval.
This Court thereupon directed that the S.G. should seek such approval.
The direction to the C.G. is only that its approval should be given within the particular time limit set out therein.
It cannot be construed, reasonably, as a direction compel ling the C.G. to grant approval whether it agreed with the S.G .
's decision or not.
We would.
therefore, reject this contention and treat the grants to IMFA anti FACOR as made in exercise of the power of relaxation u/s 59(2 ).
Once again, we would like to observe that, though there is no specific recording of reasons by the S.G. or C.G. inasmuch as these leases came to be granted by way of com promise, it is a fair inference that the compromise propos als were prompted by the, at least partial, acceptance of the claims put forward by these parties.
Since the grant of leases to these three parties can be attributed to the relaxation of the reservation rule in particular cases, the finding of Rao that these leases may be confirmed deserves acceptance.
We have to add a few words in respect of AIKATH.
Though the S.G. and AIKATH had entered into a compromise as early as 4.12.
1984, no lease has yet been granted in his favour perhaps as the C.G. has had no occasion to consider the matter earlier.
We do not think that any useful purpose will be served by remitting the matter and asking the S.G. to seek the formal approval of the C.G. therefore.
The decision of Rao itself can be taken as containing the approval of the C.G. in this regard.
We would, therefore, uphold Rao 's decision 91 and direct the S.G. to execute, at as early as possible,a ML in favour of AIKATH in respect of the 140 acs.
agreed to be leased to him under the compromise dated 4.12.84.
(b) OTHER CLAIMS It is asserted on behalf of OCL and ORIND that, if there are factors justifying the relaxation of reservation in favour of IMFA and FACOR there are equally valid factors justifying a like relaxation in favour of these two compa nies as well.
The operative part of the Rao report in regard to the claims of these two parties reads thus: "For the requirement of the other parties viz.
M/s Orissa Industries Ltd., M/s Orissa Cements Ltd., manufactur ing refractories, their requirements of chrome ore are relatively less and that too, consisting mostly of hard lumpy ore.
The potential for hard lumpy ore in the areas under consideration is relatively less, since most of it is located in the areas which have already been leased out to TISCO who are also one of the larger producers of hard lumpy ore and are capable of meeting the needs of other industries also.
The occurrence of chrome ore is such.
that hard lumpy ore, lumpy friable ore and fine ore occur together and in varying proportion.
The refractory manufacturers require ments are such that if they want to get hard lumpy ore from the areas under consideration, they will have to necessarily become traders of the other grades which will be in higher proportion.
They have been carrying on their business for the past several years without any captive mines.
Hence.
it is felt that their requirements can be adequately met by the other producers of chrome ore, including hard lumpy ore.
Hard lumpy ore will be available from other producers of chrome ore to meet their requirements, including the Orissa Mining Corporation and no captive mining leases need be given to them, in the areas under consideration." XXX XXX XXX The Refractory industries viz. the Orissa Industries Ltd. and M/s Orissa Cements Ltd. for their level of production 92 and their need for hard lumpy ore, captive mines in the areas under consideration do not optimally meet their re quirements and there is enough lumpy ore in the State from other sources.
" Rao 's line of reasoning is criticised by OCL and ORIND.
Sri Bhandare, on behalf of OCL, urges, inter alia: (a) The company 's refractory plant is in need of at least 35,000 to 40,000 MT of ore per annum (not 15000 MT as worked out by Rao) and for securing a regular uninterrupted supply, it needs a captive mine badly; instead it is thrown at the mercy of traders like TISCO or Sirajuddin & Co. or the OMC who are unable to supply the quantities of ore needed by OCL.
(b) The company which has a vital mineral based industry has not been granted even a single ML for which it had been applying from 1961 to 1986 whereas traders like Mohanty and Sirajuddin have been granted leases.
(c) Besides supply of refractories for domestic consumption OCL has also a vast export market and has earned huge foreign exchange by exports to countries like Pakistan, Bangladesh, Korea, Kenya, etc.
(d) The company has also employed about 3000 workers who are adivasis or who belong to the Scheduled Castes and Scheduled Tribes.
(e) The industrial licence granted to OCL by the C.G. envisages that the OCL should secure PL and ML from the S.G. for its needs of ore.
(f) The S.G. had made on 25.1.72 a grant of a ML to OCL over an area of 187.02 hectares with the approval of the C.G.
The S.G. had indeed recommended the grant of ML to OCL.
(g) It is also stated that in certain informal meet ings held recently, the S.G. has expressed itself in favour of granting ML in favour of the OCL.
Likewise, on behalf of ORIND, it has been urged that Rao has erred in thinking that the need of the company was of lumpy ore which 93 could be adequately met by procuring the ore from private parties and that it would not be necessary to grant a mining lease for meeting its requirements.
It is submitted, in particular, that (i) ORIND 's requirements are not small as suggested by the SG but come to a minimum of 25,000 MT per annum and would indeed go up to 65,000 MT with the setting up of a ferroalloys plant for which steps are being taken; (ii) the reasoning that ORIND has been functioning without a captive source all along and hence could continue to do so is bad logic and also a misleading argument which overlooks that ORIND has been put to great difficulty in obtaining even 8,000 to 10,000 MT (about one half of its needs) in driblets from various sources being at their mercy in regard to quantity, price and other vagaries.
Even OMC has been capricious in its supplies of ore in that it has agreed to supply 25,000 MT to OCL against their needs of 15,000 MT only whereas it is willing to supply only 9,000 MT only to ORIND against its present requirements of 20,000 MT.
(iii) the assumption that ORIND needs only lumpy ore is not correct.
Actually more than 60 to 65% of the ore used by ORIND is friable ore.
(iv) ORIND also/deserves grant of ML on other grounds of national and public significance.
It supplies basic refrac tories not only to core and strategic domestic industries but also exports them outside India and the exports made by it, being value added and involving proportionately less consumption of ore, earn much more foreign exchange than the exports of IMFA & FACOR.
The want of a captive source of supply has gravely prejudiced the commissioning of ORIND 's first benefaction plant for refractories.
It also employs a strong labour force and thus provides opportunities for large scale employment.
(v) if MLs can be granted to AIKATH, IMFA, FACOR, ORIND also deserves one.
OMC has been allotted huge areas which remain idle and unexploited and a predominant portion of its ore is supplied to the metallurgical industry not leaving much for the refractory industry.
(vi) atleast the area marked as Area No. 7 in the plan filed 94 by ORIND should be allotted to it.
We have briefly summarised the claims of ORIND & OCL.
It is unnecessary to discuss these contentions at length as we cannot but help feeling that the claims of OCL and ORIND have been rejected summarily by Rao without an advertence to the various considerations urged by them.
In our opinion, this part of Rao 's decision has to be set aside as being too cryptic and unsustainable.
Pursuant to this conclusion, it is open to us to direct these claims to be considered afresh by the C.G. We, however, think it more expedient that the claims of the OCL and ORIND should be restored, for detailed consideration in all their several aspects, before the S.G., as the 'S.G. has had no opportunity to consider the various aspects pointed out and as this course will also provide one opportunity to the claimants to approach the C.G. again, if dissatisfied with the S.G. 's decision to consider whether, despite the reservation, some relaxation can be made also in favour of these two companies.
The learned Advocate General for Orissa criticised the conclusion of Rao conceding the right of industries set up in the State, even of FACOR and IMFA, to captive mines for meeting their requirements.
We are inclined to think he is right in saying that merely because an industry is allowed to be set up in the State by grant of an industrial licence and/or certain other conces sions, it does not follow that it becomes entitled to a captive mine to cater to its needs.
We, however, express no concluded opinion on this issue ' which does not arise for our consideration.
The SG has to take into account various factors and aspects (some of which have also been referred to in the interim order of this Court dated 27.9.84) before granting a ML to an individual concern carving out an excep tion to its reservation policy.
This it has done in respect of IMFA and FACOR for certain special reasons which have been elaborated upon earlier.
Whether it would do so also in favour of OCL and ORIND is for the State to consider.
We express no opinion on these claims and leave it for the consideration of the SG and C.G.
It would have been noticed that the applications of these two companies have not been considered in this light earlier.
We, therefore, restore the applications of OCL and ORIND for the consideration of the S.G.
The learned Advocate General of Orissa also submitted that Special Leave Petition No. 8574/89 filed by ORIND from the order of the S.G. is not maintainable.
He urged that the S.G., in disposing of applications for ML, is not function ing as "tribunal" and he cited the decisions in Shivji vs Union; , and Indo China Steam Navigation Co. vs Jasjit Singh; , in support.
We do not 95 consider it necessary to go into this issue.
The S.G. has, by the impugned order, rejected ORIND 's application, inter alia, on the ground that, in view of the pendency of W.P. 14116/84 before this Court, it could not at that stage pass any order on the application.
It would, therefore, be open to ORIND to ask the S.G. to reconsider the application in the light of our present order.
We see no necessity f6r insisting on such a formal request and would, therefore, direct the S.G. to consider ORIND 's application afresh in the light of this judgment.
So far as OMC & IDCOL are concerned, Rao has "recommend ed" that the areas of items I & 2, left after the grants to IMFA and FACOR.
be given on lease to OMC.
We have seen that there are huge areas of mineral bearing lands which have been reserved for the public sector.
Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the SG is willing to relax the rule of reservation.
We do not think the OMC or IDCOL have any voice in requiring that the SG should keep certain extents of land reserved and should not grant any ML at all in favour of an), private party.
The interests of these corporations are safe in the hands 01 ' the S.G. and the allocation of MLs to these organisations is a matter of discretion with the S.G. Strictly speaking,, therefore.
no question of any application by them for ML need arise at all.
But, when made, their applications arc considered by the S.G. and, on revision by the C.G. as a matter of form.
To this extent, they have a statutory remedy but, beyond this.
we think they cannot go.
We are of opinion that their interests are safe with the S.G. and need no directions from us.
Even IMFA and FACOR urge that their claims to further leases deserve consideration.
Rao has already adjudicated upon their claims and "recommended" leases to them to the extent indicated.
If they apply to the S.G. for more leases.
it is open to the S.G. to consider whether they deserve any further leases and if so, to what extent.
more reserved areas could be released in their favour.
The learned Advocate General for the State emphasised that the State is also interested in its industrial develop ment and the national economy and that, while reserving substantial areas for public sector exploitation, the State has a well formulated policy in respect of grant of private leases which has been placed before Rao.
He also submits that, even if grant of a ML in favour of a particular party is not found feasible, the State will do its best to ensure that the ore mined in the 96 State is equitably distributed so as to meet the legitimate needs of all industries operating in the State.
We have no doubt that the S.G. will keep.
all relevant aspects urged by the parties in reaching their decision on the matters re manded to it by us.
In the circumstances, we accept and confirm Rao 's recom mendation for grant of MLs to IMFA, FACOR and AIKATH, to the extent indicated by him.
We set aside his rejection of the claims of OCL and ORIND.
We leave it open to all the parties to place their claims, or further claims, as the case may be, in regard to the areas applied for by them on or before 30.4.1987, backed by supporting reasons, before the S.G. in the form of representations within four weeks from the date of this order.
The S.G., we hope, will dispose of these applications within the statutory period failing which the parties will have their remedy under the statute by way of revision to the C.G.
In arriving at its decisions, it will be open to the S.G. to take into account the discussions and findings of the Rao report in the light of this judgment.
The S.G. should also keep in mind that no leases to any of the parties (other than OMC & IDCOL) can be granted unless either the areas so proposed to be leased out are dereserved and thrown open to applications from the public or unless the C.G., after considering the recommendations of the S.G., for reasons to be recorded in writing, considers a relaxa tion in favour of any of the parties necessary and justi fied.
Before we conclude, we should like to place on record our appreciation of the detailed and excellent report given by Dr. Rao.
He has brought together all the relevant data and analysed the various claims put forward before him; a detailed note on chromite deposits in the State of Orissa prepared by the Chief Mining Geologist of the Indian Bureau of Mines has also been made an Annexure to the report.
The report and its annexures are bound to be of immense help and value to the S.G. and C.G. in arriving at their decisions not only on the various applications but also in regard to their future policy in the matter of grant of chromite leases and of the supply of chromite to the needy applicants in an equitable manner.
W.P. No. 14116/87 and the other applications are dis posed of in the above terms.
There will be no order as to costs.
G.N. Petitions disposed of.
| IN-Abs | In these matters, the petitioners viz., four companies in the private sector, two public sector corporations owned substantially by a State Government, and a private individu al sought clarifications and directions in relation to the orders passed by this Hon 'ble Court on 30.4.87 and 6.10.87 on the Writ Petition.
All these petitions arose out of applications for grant of right for the mining of chrome ore or chromite in the State of Orissa.
Since chrome ore is one of the minerals specified in the first and second schedules to, and not a 'minor mineral ' within the meaning of Section 3(f) of the Mines and Minerals (Development and Regulation) Act, 1957, the right to grant the mining right in respect of this mineral is vested in the State Government subject to the control by Union of India, and as such they are respond ents in these matters.
While disposing of the matters, this Court referred the entire controversy to the Secretary to Government of India in the Ministry of Mines, viz., Mr. Rao, for a detailed consideration of the claims made by the parties.
Before Mr. Rao, the two public sector undertakings also put forward their claims that the public sector units in the State were entitled to the grant of mining rights in the State to the exclusion of all private parties in as much as there was a reservation in their favour by an appropriate notification issued by the State Government.
The other parties raised objection on the ground that the claims were made at a belated stage of the proceedings.
On applications made by the Public Sector Undertakings, this Court directed that their claims would also be examined by Rao. 28 In his report dated 1.2.1988 Rao accepted the claim of reservation made by the two Public Sector Undertakings, viz., Orissa Mining Corporation (OMC) and Industrial Devel opment Corporation of Orissa Ltd. (IDCOL).
He also partially accepted the claims of the three private parties.
viz., Indian Metals and Ferro Alloys Limited (IMFA); Ferro Alloys Corporation Limited (FACOR); and Aikath and rejected the claims of the other two private parties viz., Orissa Cements Ltd. (OCL) and Orissa Industries Ltd. (ORIND).
Though he accepted the claim of the two public sector undertakings, he recommended for them leases in respect of only the balance of the lands left, after fulfilling the claim of the others which he had accepted.
The present petitions biter alia sought directions on the report of Rao.
It was contended that Rao was nothing more than a Commissioner appointed by this Court to examine the various parties and hence this Court should pass appro priate orders on his report.
Various contentions were ad vanced by the petitioners as well as respondents as regards the legal character of the Rao Report and of giving effect to it either in toto or with modifications in certain re spects.
Reservation in favour of Public Sector Undertakings was challenged by the private parties.
Plea of Promissory Estoppel was also raised on behalf of some of the petition ers.
Disposing of the matters, this Court, HELD: 1.
The statute must lay down clearer guidelines and procedure.
Having regard to the new avenues for vast industrial development in the country, a more workable procedure would be for the State Government to call for applications in respect of specified blocks by a particular date and deal with them together, other later entrants not being permitted in the field.
Otherwise only confusion will result, as here.
There was a time when the State Government looked to private enterprises for mineral development in its territory.
Of late, however, competition has crept in.
The State Government has its own public sector corporations and various enterpreneurs are interested in having mining leases for their purposes.
It is, therefore, vital that there should be a better and detailed analysis, district wise and area wise and that a schedule for consideration of applica tions in respect of define areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applications.
These are aspects which call for careful consideration and appropriate amendments to the Mines and Minerals (Development and Regu lation) Act, 1957 and the Rules made thereunder.
[72D G] 29 2.
Chromite ore is an important major mineral and the importance of its conservation and proper utilisation for our country 's development cannot be gainsaid.
The State Government rightly decided upon a policy of reservation in 1967 and this was kept up till 1974.
In February 1974 the State Government was in favour of free issue of mining leases but gave up this policy in pursuance of the Central Government 's letter of 15.5.74.
Reservation was, therefore, clamped in 1977 again.
Applications could still be consid ered to see how far a relaxation was permissible having regard to the nature of the applicant 's needs, the purpose for which the lease was asked for, the nature of the ore sought to be exploited, the relative needs of the State, the availability of a public undertaking to carry out the mining more efficiently and other relevant considerations.
There is no material on record to substantiate the plea that the State Government has been acting arbitrarily or mala fide in its policy formulations in this regard.
[82C E] Venkataraman vs Union, ; , referred to.
Rao 's decision, that the leases that have been grant ed already in favour of IMFA, FACOR be confirmed, should be upheld.
These should be treated as leases legitimately granted to them in exercise of the powers of relaxation under rule 59(2).
It is true that the orders granting the leases do not elaborately record the reasons but they were passed in the context of this litigation and have to be considered in the light of the affidavits and counter affi davits filed herein.
Rao 's decision regarding the grant of a lease to AIKATH (not yet implemented) should also be upheld.
In these three cases, the records disclose sufficiently the reasons on the basis of which the leases have been decided upon and are adequate to justify the mining leases actually granted. ]89B D] 4.
The claims of OCL and ORIND have been rejected sum marily by Rao without an advertence to the various consider ation urged by them.
This part of Rao 's decision has to be set aside as being too cryptic and unsustainable.
Pursuant to this conclusion, it is directed that these claims be considered afresh by the Central Government.
It would be more expedient if the claims of OCL and ORIND are restored, for detailed consideration in all their several aspects, before the State Government, as the State Government has had no opportunity to consider the various aspects pointed out and as this course will also provide an opportunity to the claimants to approach the Central Government again, if dissatisfied with the State Government 's decision to consid er whether, despite the reservation, some relaxation can be made also in 30 Favour of these two companies The State Government has to take into account various factors and aspects before grant ing a mining lease to an individual concern carving out an exception to its reservation policy.
It has done this in respect of IMFA and FACOR for certain special reasons re corded by it.
Whether it would do so also in favour of OCL and ORIND is for the State to consider.
It would be noticed that the applications of these two companies have not been considered in this light earlier The applications of OCL and ORIND are restored for the consideration of the State Government.
[94B G] 5.
The State Government has rejected ORIND 's applica tion, inter alia, on the ground that, in view of the penden cy of the Writ Petition before this Court, it could not at that stage pass any order on the application.
It would, therefore, be open to ORIND to ask the State Government to reconsider the application in the light of the present order.
There is no necessity for insisting on such a formal request and therefore, the State Government is directed to consider ORIND 's application afresh in the light of this judgment.
[95A B] 6.
So far as OMC and IDCOL are concerned, Rao has recomamended that the areas left after the grants to IMFA and FACOR, be given on lease to OMC.
There were huge areas of mineral bearing lands which have been reserved for the public sector.
Its interests do not clash or come into conflict with those of private applicants which can only claim a right to the extent the State Government is willing to relax the rule of reservation.
This Court does not think OMC or IDCOL have any voice in requiring that the State Government should keep certain extent of land reserved and should not grant any mining lease at all in favour of any private party.
The interests of these corporations are safe in the hands of the State Government and the allocation of mining leases to these organisations is a matter of discre tion with the State Government strictly speaking, therefore, no question of any application by them for mining lease need arise at all.
But, when made, their applications are consid ered by the State Government and, on revision by the Central Government as a matter of form.
To this extent, they have a statutory remedy.
[95C El 7.
When the State Government agreed to lease out the areas to MFA and FACOR it was pointed out that this could not be given effect to without the Central Government 's approval.
This Court thereupon directed that the State Government should seek such approval.
The direction to the Central Government is only that its approval should be given within the particular time limit set out therein It cannot be 31 construed, reasonably, as a direction compelling the Central Government to grant approval whether it agreed with the State Government 's decision or not.
Thus the grant of mining leases to IMFA and FACOR are to be treated as having been made in exercise of the power of relaxation under Rule 59(2).
Though there is no specific recording of reasons by the State Government or Central Government inasmuch as these leases came to be granted by way of compromise, it is a fair inference that the compromise proposals were prompted by the, at least partial, acceptance of the claim put forward by these parties.
Since the grant of leases to these parties can be attributed to the relaxation of the reservation rule in particular cases, the finding of Rao that these leases may be confirmed deserves acceptance.
[90C F] 8.1 AIKATH is admittedly an individual who discovered chromite ore in the State.
He had secured a lease as early as in 1952 though that lease was annulled by the State when it took over.
Again, as against a lease of 640 acres which he had once obtained and started operating upon, the State Government has finally approved of a lease in respect of only 140 acres.
AIKATH had been actually working some mines from 1.5.53.
His original grant had been approved before the areas was reserved on 3.7.62.
If the State Government con siders these to be weighty considerations and entered into a compromise with him for a lease of 140 acres and this has also been recorded by the High Court, these are no grounds to interfere with that decision of the State Government.
[89D F] 8.2 Though the State Government and AIKATH had entered into a compromise as early as 4.12.1984, no lease has yet been granted in his favour perhaps as the Central Government has had no occasion to consider the matter earlier.
However, no useful purpose would be served by remitting the matter and asking the State Government to seek the formal approval of the Central Government therefore.
The decision of Rao itself can be taken as containing the approval of the Cen tral Government in this regard and is thus upheld.
The State Government is ' directed to execute, at as early a date as possible, a mining lease in Favour of AIKATH in respect of the 140 acres agreed to be leased to him under the compro mise dated 4.12.1984.
[90G H; 91A] 9.
Although Rao has approved the grants made in favour of IMFA and FACOR by the State Government (which, he re marks, were perhaps based on the observations made by this Court), he has clearly reached his conclusions on these independently.
In fact, he has set out a basis for justify ing the grants of IMFA and FACOR.
It is also clear that 32 there were no Court orders that could have influenced his decisions on the claims of the other parties.
[87F G] 10.1 In the context of the scheme of the Act and the importance of a lease being granted to one or more of the better qualified candidates where there are a number of them, it would not be correct to say that, as the State Government 's order of 29.10.1973 has been set aside, ORIND 's application should be restored for reconsideration on the basis of the situation that prevailed as on 29.10.1973 and that, therefore, it has to be straightaway granted as there was no other application pending on that date before the State Government.
In matters ,like this, subsequent applica tions cannot be ignored and a rule of thumb applied.
[74C E] 10.2 Though section 11 tries to enunciate a simple general principle of "first come, first served", in practice, prior ity of an application in point of time does not conclude the issue.
In this case itself, for instance, during the period ORIND 's application of 1971 has been under consideration before various authorities and in the writ petition filed in the High Court, several other competitors have come into the picture.
The statutory provision is not clear as to which of the applications in respect of any particular area, are to be considered together.
If ORIND 's application of 1971 were to be considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand, all the applications pending for disposal at the time ORIND 's application is to be granted or rejected are to be consid ered, the result would be totally different.
Since the interest of the nation require that no lease for mining rights should be granted without all applicants therefore at any point of time being considered and the best among them chosen or the area distributed among such of them as are most efficient and capable, the latter is the only reasona ble and practical procedure.
That is why this Court, in its order dated 30.4.87, laid down that all applications pending for consideration as on 30.4.87 should be considered by Rao.
[71G H; 72A B] Ferro Alloys Corporation of India vs Union, ILR 1977 Delhi 189 and Mysore Cements Ltd. vs Union, AIR , distinguished.
11.1 Previously, rule 58 did not enable the State Gov ernment to reserve any area in the State for exploitation in the public sector.
The existence and validity of such a power of reservation was upheld by this Court.
Rule 58 has been amended in 1980 to confer such a power on the State Government.
It is also not in dispute that a notification of reservation was made on 3.8.77.
The State Government, OMC and IDCOL are, 33 therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the State Government or a public sector corporation unless the availability for grant is renotified in accord ance with law (rule 59(1)(e) or the Central Government decides to relax the provisions of rule 59(1).
[79D F] Amritlal Nathubhai Shah and Ors.
vs Union of India and Anr.
; , relied on.
Kotiah Naidu vs State of A.P., AIR 1959 AP 185 and Amritlal Nathubhai Shah vs Union, AIR 1973 Gujarat 117, referred to. 11.2 In the present matters, except for two or three instances.
where leases have been granted by the State Government on its own, the State Government has generally and consistently adhered to its stand that the chromite bearing lands are reserved for exploitation in the public sector.
The rules permit the Central Government to relax the rigid requirements of reservation in individual cases after recording special reasons.
Such exceptional and isolated instances of lease are not sufficient to sustain the plea of the parties that the policy of reservation is merely being raised as a formal defence and has never been seriously implemented by the State Government.
[81G H; 82A B] 11.3 The conclusion that the areas in question before this Court were all duly reserved for public sector exploi tation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed out earlier, it is open to the Central Government to relax the reservation for recorded reasons.
Nor does this mean that the public sector undertakings should get the leases asked for by them.
This is so for two reasons.
In the first place, the reservation is of a general nature and does not directly confer any rights on the Public Sector Under takings.
This reservation is of two types.
Under section 17A(1), inserted in 1986, the Central Government may after consult ing the State Government just reserve any area not covered by a Private Lease or a Mining Lease with a view to conserv ing any mineral.
Apparently, the idea of such reservations is that the minerals in this area will not be exploited at all, neither by private parties nor in the public sector.
The second type of reservation was provided for in rule 58 and such reservation could have been made by the State Government (without any necessity for approval by the Cen tral Government) and was intended to reserve areas for exploitation, broadly speaking, in the public sector.
The notification itself might specify the Government Corporation or Company that was to exploit the areas or may be just general, on the 34 lines of the rule itself.
Whether such areas are to be leased out to OMC or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the government itself is for the Government to determine de hors the statute and the rules.
There is nothing in either of them which gives a right to OMC or IDCOL to insist that the leases should be given only to them and to no one else in the public sector.
There are no competitive applica tions from organisations in the public sector controlled either by the State Government or the Central Government, but even if there were, it would be open to the State Gov ernment to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the Central Government or State Government.
, Both the Corpora tions are admittedly instrumentalities of the State Govern ment and the decision of the State Government is binding on them.
If the State Government decides not to grant a lease in respect of the reserved area to an instrumentality of the State Government, that instrumentality has no right to insist that a Mining Lease should be granted to it.
It is open to the State Government to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule.
It is true that if, eventually, the State Government decides to grant a lease to one or other of them in respect of such land, the instrumentality whose application is rejected may be aggrieved by the choice of another for the lease.
The question whether OMC or IDCOL can object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector, has to be answered in the negative in view of the statutory provisions.
For the State Government could always denotify the reservation and make the areas available for grant to private parties.
Or, short of actually deserv ing a notified area, persuade the Central government to relax the restrictions of rule 59(1) in any particular case.
It is, therefore, open to the State Government to grant private leases even in respect of areas covered by a notifi cation of the State Government and this cannot be challenged by any instrumentality in the public sector.
[82F H; 83A H; 84A C] 12.
In these matters, no grounds have been made out which could support a plea of promissory estoppel.
The grant of a lease to ORIND had to be approved by the Central Gov ernment.
The Central Government never approved of it.
The mere fact that the State Government, at one stage, recom mended the grant cannot stand in the way of their disposing of the application of ORIND in the light of the Central Government 's directives.
[78E F] Kanai Lal Sur vs Paramnidhi Sadhukhan, ; M/s 35 Motilal Padampat Sugar Mills Co. (P) Ltd. vs State of Uttar Pradesh and Ors., ; ; Gujarat State Financial Corporation vs M/s Lotus Hotels Pvt. Ltd., ; Surya Narain Yadav & Or,5.
vs Bihar State Electricity Board Godfrey Philips India Ltd., [1985] Suppl.
3 SCR 123 and Mahabir Auto Stores & Ors.
vs Indian Oil Corporation Ors., [1990] JT I SC 363, referred to.
|
Criminal Appeal No. 168 of 1979.
From the Judgment and Order dated 29.9.1978 of the Madhya Pradesh High Court in Criminal Appeal No. 1094 of 1976.
U.R. Lalit, S.S. Khanduja, Y.P. Dhingra and B.K. Satija for the Appellants.
Uma Nath Singh 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 of the High Court of Madhya Pradesh confirming the conviction of the appellants for the offences under sections 147 and 302/149, I.P.C., and sen tence to undergo imprisonment for life.
The appellants and four persons acquitted by the trial court were tried for the murder of one Hanuwa.
The prosecution alleged that motivated by group rivalry the accused persons attacked Hanuwa with tabbals and lathis on July 11, 1975 at about 8. 30 A.M.
The occurrence happened on the track across the field leading to village Mungeli.
Hanuwa accompanied by his mother Baiyanbai and sister Birjhbai was on his way to Mungeli to supply milk.
When he reached Ghotora near Nayagaon village.
the accused persons advanced towards him and mounted attack.
As a result of the injuries sustained, Hanuwa died on the 104 spot.
When Baiyanbai tried to intervene, she too was as saulted, Baiyanbai lodged the first information report at 12.00 noon the same day against these appellants and others who were finally chargesheeted.
Baiyanbai (PW 1) and Birjhbai (PW 5) were the two eye witnesses who unfolded the prosecution case.
Mangal (PW 4) and Dilashbai (PW 6) deposed to having seen appellants Baran, Bhagau, Karan and Parsadi armed with lathis and tabbals hurriedly going towards the place of occurrence ahead of the deceased at a short distance.
The medical evidence disclosed that Hanuwa sustained in all seven in juries: two incised wound on the scalp resulting in multiple fracture of the parietal bone and tear of right lobe of the brain: two confusions and three bruises on the forearm, right upper arm scapular region and buttock.
Injuries sus tained by PW 1 was incised wound in between right thumb and index finger which could be caused with any sharp object.
The plea of the accused was that they were falsely implicat ed due to enmity.
The learned Sessions Judge accepted the prosecution evidence and convicted these appellants finding that they were members of an unlawful assembly and death of Hanuwa was caused by the members in prosecution of the common object of the assembly.
Arjun, Bhikam, Nanku and Parethan were given the benefit of doubt in view of the discrepancies in mentioning their names and they were ac quitted.
The High Court on appeal agreed with the findings of the trial court and confirmed the conviction and sen tence.
The conviction of the appellants is assailed before us mainly on the ground that the two eye witnesses in the case are close relations of the deceased deeply interested in involving the appellants on account of the enmity and their evidence was required to be scrutinised with great care and caution and the trial court as well as the High Court failed to exercise the necessary caution with the result conviction has been wrongly recorded leading to miscarriage of justice.
According to the appellants ' learned counsel, the evidence of the eye witnesses read along with the medical evidence renders the prosecution case highly improbable and doubtful about the presence and participation of the appellants in the assault.
It is submitted that the tendency to involve innocent persons by merely mentioning their names is dis cernible and in the absence of independent corroboration the conviction based on the testimony of PW 1 and PW 5 is unwarranted.
We have considered these arguments in the light of the material evidence analysed and discussed by the courts below.
We find that the conviction of the appellants is principally based on the evidence of 105 PW 1 and PW 5, the mother and sister of the deceased.
Though their evidence is not to be discarded as interested, the necessary caution has to be observed in accepting the evidence of these witnesses.
It is an accepted proposition that in the case of group rivalries and enmities.
there is a general tendency to rope in as many persons as possible as having participated in the assault.
"The courts have, there fore, to be very careful and if after a close scrutiny of the evidence, the reasonable doubt arises with regard to the participation of any of those who have been roped in, the court would be obliged to give the benefit of doubt to them", vide Baldev Singh vs State of Bihar, AIR 1972 SC 464.
This Court has in several decisions pointed out that "where there is enmity between the two factions then there is a tendency on the part of the aggrieved victim to give an exaggerated version and to rope in even innocent members of the opposite faction in a criminal case and that therefore the Court has in all such cases to sift the evidence with care and convict only those persons against whom the prose cution witnesses can be safely relied upon without raising any element of doubt", vide Raghubir Singh vs State of U.P., AIR 1971 SC 2 156.
On a perusal of the judgment of the High Court, we find that the necessary caution had not been observed in the approach to the evidence.
The occurrence happened on a narrow track.
The deceased Hanuwa was going ahead of his mother and his sister was still behind.
The witnesses noticed the assailants only when they approached the deceased.
The evidence is not clear that the assailants were seen by Baiyanbai or Birjhbai hiding behind the bushes and emerging from the hiding place.
Th witnesses stated that the accused persons surrounded the victim and each one of them assaulted him with the weapon they had.
PW 1 stated that some of the assailants had given more than one blow and Parsadi assaulted her when she tried to intervene.
If a group of more than 15 persons encircled the victim and simultaneously attacked him with tabbals and lathis without any resistance or any intervention, there would have been certainly corresponding injuries of the concerted attack on the person of the victim.
We have re ferred to the medical evidence which shows that besides the two incised wounds on the scalp which proved fatal Hanuwa had only five minor injuries on his person.
PWs 1 and 5 did not state who caused the head injuries.
They have not at tempted to attribute any one of the injuries to any particu lar assailant.
The evidence is in general terms.
Even in the first information report, PW 1 only stated that the persons named therein attacked Hanuwa with tabbals and lathis and caused his death.
In a melee where several people are giving blows at one and the same time it will be impossible to particularize the blows.
If any wit 106 ness attempts to do it, his veracity is doubtful.
But it cannot be forgotten that it is simpler to make an omnibus statement that all the accused assaulted with their weapons because that obviates close cross examination.
Therefore, the nature of the injuries sustained by the victim assumes importance.
The nature of the injury sustained in spite of the assertion of the concerted attack with lathis and tab bals by several assailants numbering over 15 renders the evidence doubtful about the participation of such a large number of persons.
When the several blows with lathis and tabbals could produce only seven injuries on the person of the deceased, Hanuwa, the necessary inference is that not more than seven persons might have participated in deliver ing the blows.
Therefore, the presence of more than seven persons is doubtful.
This aspect of the case has not been given due weight by the High Court while appreciating the evidence in the case.
"Where an occurrence takes place involving rival fac tions it is but inevitable that the evidence would be of a partisan nature.
In such a situation to reject the entire evidence on the sole ground that it is interested is to shut one 's eyes to the realities of the rural life in our coun try.
It has to be borne in mind that in such situation easy tendency to involve as many persons of the opposite faction as possible by merely naming them as having been seen in the melee is a tendency which is more often discernible and has to be eschewed and, therefore, the evidence has to be exam ined with utmost care and caution and the Court has to adopt a workable test for being assured about the role attributed to every accused" vide Muthu Naicker vs State of Tamil Nadu, We have therefore to see whether the testimony of PW I and PW 5 as against all or any of the appellants before us finds corroboration with the material on record.
The trial court had acquitted four persons for the reason that their names had been left out in the narration at some stage or the other.
PW 1 before giving the first information had deliberations with her son PW 3.
The finding of the trial court is that in narrating the incidence to him, PW 1 had omitted to mention the names of Arjun and Bhikam.
Before Court, PW 1 did not implicate Nanku.
The name of Parethan does not find a place in the F.I.R. It is for these reasons the trial court acquitted them.
On such acquittal, it is clear that there had been conscious effort to rope in inno cent persons by merely naming them.
Therefore, the apparent conflict between the medical evidence and the eye witness 's account could not have been overlooked.
We are of the opin ion that the High Court has not observed the necessary caution in accepting the evidence in 107 general terms to uphold the conviction of all the appel lants.
We are thus constrained to consider whether there is any evidence from independent sources to lend assurance to the version of PWs I and 5 regarding the participation of any of these appellants.
We have indicated that the presence of at least seven persons at the scene is probable having regard to the nature of the injuries and the manner of the attack.
It is also clear from the manner in which the incident happened that the assailants acted in prosecution of the common object to cause the death of the victim.
We have no doubt in our mind that more than five persons have actually participated in the crime.
We have clear evidence regarding the identity of only four persons.
Appellants Baran, Karan, Bhagau and Parsadi had been located by PW 4 and PW 6, two independent witnesses, in the locality just before the incident.
This evidence lends assurance to the testimony of PW I and PW 5 regarding their participation in the crime.
We are of the view that the conviction of these four persons i.e. Baran, Karan, Bhagau and Parsadi has been rightly sustained.
However, regarding the rest of the appellants, there is scope of genuine doubt and we are obliged to give the benefit of doubt to them.
We accordingly set aside the conviction and sentence of the appellants.
namely, Budhwa, Chandu.
Kushwa, Bhuwan, Rajaram.
Nanda, Chatur, Hari Gannu, Pardeshi and Dukhiram and they are acquitted of the charges.
Their bail bonds stand cancelled.
The appeal is dismissed so far as Parsadi, Baran, Bhagau and Karan are concerned.
These appellants shall surrender to suffer the unexpired portion of the sentence.
The appeal is disposed of as above.
P.S.S. Appeal dis posed of.
| IN-Abs | The appellants were convicted for offence under Ss. 147, 149 and 302 IPC for murdering a villager.
The prosecution case was that motivated by group rivalry the accused persons numbering over fifteen attacked the deceased with tabbals and lathis while he accompanied by his mother, PW 1, and sister, PW 5, was on his way to a nearby village to supply milk.
As a result of the injuries sustained the deceased died on the spot.
When PW 1 tried to intervene, site too was assaulted.
She lodged the FIR thereafter the same day against the appellants others.
At the trial PW 4 and PW 6 deposed to having seen appel lants Baran, Bhagau, Karan and Parsadi armed with lathis and tabbals hurriedly going towards the place of occurrence ahead of the deceased at a short distance.
The medical evidence disclosed that the deceased had sustained in all seven injuries, two incised wounds on the scalp, two contu sions and three bruises.
The trial court found that the appellants were members of an unlawful assembly and death of the deceased was caused by them in prosecution of a common object.
The High Court on appeal agreed with the findings of the trial court.
In the appeal by special leave, it was contended for the appellants that the courts below had failed to exercise the necessary care and caution that was required in scrutinising the evidence of the two eye witnesses who were close rela tions of the deceased and deeply interested in involving the appellants on account of enmity, and that in the absence of independent corroboration the conviction based on the testi mony of these witnesses was unwarranted.
Disposing of the appeal, the Court, 102 HELD: 1.1 It is an accepted proposition that in the case of group rivalries and enmities, there is a general tendency to involve as many persons of the opposite faction as possi ble by merely naming them as having participated in the assault.
The court, therefore, has in all such cases to sift the evidence with utmost care and caution and convict only those persons against whom the prosecution witnesses can be safely relied upon without raising any element of doubt.
[107C D] Baldev Singh vs State of Bihar, AIR 1972 SC 464; Raghu bir Singh vs State of U.P., AIR 1971 SC 2156 and Muthu Naicker vs State of Tamil Nadu, , referred to.
1.2 The conviction of the appellants was principally based on the evidence of PW 1 and PW 5, the mother and sister of the deceased.
Though their evidence was not to be discarded as interested, necessary caution should have been observed in accepting the same in upholding the conviction of all the appellants.
[104H; 105A] 2.1 In a melee, as in the instant case, where several people are giving blows at one and the same time it will be impossible to particularize the blows.
If any witness at tempts to do it, his veracity is doubtful.
But, it is sim pler to make an omnibus statement that all the accused assaulted with their weapons because that obviates close crossexamination.
Therefore, the nature of injuries sus tained by the victim assumes importance.
[105H; 106A] 2.2 PWs 1 and 5 stated that the accused persons sur rounded the victim and each one of them assaulted him with the weapon they had.
PW 1 stated that some of the assailants had given more than one blow, They did not state who caused the head injuries.
They have not attempted to attribute any one of the injuries to any particular assailant.
The evi dence was in general terms.
If a group of more than fifteen persons had encircled the victim and simultaneously attacked him with tabbals and lathis without any resistance or any intervention, there would have been certainly corresponding injuries of the concerted attack on the person of the vic tim.
The medical evidence shows that besides the two incised wounds on the scalp which proved fatal the deceased had only five minor injuries on his person.
[105E G] 2.3 When the several blows with lathis and tabbals could produce only seven injuries on the person of the deceased the necessary inference would be that not more than seven persons might have participated in delivering the blows.
therefore, the presence of more than seven 103 persons is doubtful.
This aspect of the case has not been given due weight by the High Court while appreciating the evidence.
[105H; 106A C] 3.1 The manner in which the incident happened also makes it clear that the assailants acted in prosecution of the common object to cause the death of the victim.
There is no doubt that more than five persons had actually participated in the crime.
There is clear evidence regarding the identity of only four persons.
Appellants Baran, Karan, Bhagau and Parsadi had been located by PW 4 and PW 6, two independent witnesses, in the locality just before the incident.
This evidence lends assurance to the testimony of PW 1 and PW 5 regarding their participation in the crime.
[107B C ] 3.2 The conviction of these four persons has, therefore, been rightly sustained.
Regarding the rest of the appellants there is scope of genuine doubt.
Their conviction and sen tence are accordingly set aside.
[107D]
|
vil Appeal Nos.
4843 44 of 1990.
From the Judgment and Order dated 28.10.1988 of the Rajasthan High Court in D.B. Civil W.P.
No 966of 1986 and 121 of 1985.
Dr. L.M Singhvi, P. Agarwal, S.K. Jain, Sahid Rizvi and D.K. Singh for the Appellant.
N.S. Hegde, Additional Solicitor General, J.D. Jain, R. Mohan, R.A. Perumal, Hemant Sharma, Ms. A. Subhashini and Ms. Sushma Suri for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted in all the cases.
Pursuant to the resolution passed by certain State Legislatures including that of Rajasthan under clause 1 of Article 252 of the Constitution, Parliament enacted The Water (Prevention & Control of Pollution) Act,1974 (Act VI of 1974), (hereinafter called the '1974 Act '), to provide for the prevention and control of water pollution, the maintaining or restoring of wholesomeness of water, the establishment 123 of Boards for the prevention and control of water pollution, the conferring on and assigning to such Boards powers and functions relating thereto and for matters connected there with. 'Pollution ', as defined in section 2(e), means "such contamination of water or such alteration of physical, chemical or biological properties of water or such discharge of any sewage or trade effluent or of any other liquid, gaseous or solid substance into water as may, or is likely to, create a nuisance or render such water harmful or inju rious to public health or safety, or to domestic, commer cial, industrial, agricultural or other legitimate uses, or to the life and health of animals or plants or of acquatic organisms".
"Sewage effluent" according to section 2(g) means "effluent from any sewerage system or sewage disposal works and includes sullage from open drains".
"Trade efflu ent" according to Section 2(k) includes "any liquid, gaseous or solid substance which is discharged from any premises used for carrying on any trade or industry, other than domestic sewage".
Section 3, 4 and 13 provide for the con stitution of a Central Board, a State Board and a Joint Board, respectively.
Section 16 enumerates the functions of the Central Board constitution for promoting cleanliness of streams and wells in different areas of the State.
Section 17 sets out the functions of the State Board which, amongst others, include preparing a comprehensive programme for the prevention, control or abatement of pollution of streams and wells in the State and for securing its execution; inspec tion of sewage or trade effluents, works and plants for the treatment of sewage and trade effluents: evolving methods for treatment of sewage and trade effluents and for the disposal thereof and laying down standards of treatment of sewage and trade effluents to be discharged into any partic ular stream.
Sections 21 and 22 confer power on the State Board or any officer empowered by it to take for the purpose of analysis samples of water from any stream or well or samples of any sewage or trade effluent which is passing from any plant or vessel or from any other place into any stream or well and to send the samples for analysis to the Laboratory established or recognised for that purpose by the concerned Board.
Section 24 prohibits the use of any stream or well for the disposal of polluting matters.
Section 25 imposes restrictions on new outlets and new discharges.
Section 25(1) reads as under: "Subject to the provisions of this section, no person shall, without the previous consent of the State Board, bring into use any new or altered outlet for the discharge of sewage or trade effluent into a stream or well, or begin to make any new discharge of sewage or trade effluent into a stream or well.
" 124 Under these provisions the application for consent has to be made to the State Board in the prescribed form containing the particulars relating to the proposed construction, installation or operation of any treatment or disposal system or of any extension or addition thereto.
Sub section (7), which is relevant for our purpose, reads as under: "The consent referred to in sub section (1) shall, unless given or refused earlier, be deemed to have been given unconditionally on the expiry of a period of four months of the making of an application in this behalf complete in all respects to the State Board.
" Section 26 provides that persons discharging sewage or trade effluent into a stream or well before the commencement of the Act shall apply for consent within a period of three months of the constitution of the State Board.
If the State Board refuses to grant consent or withdraws consent already granted an appeal is provided to the appellate authority.
Section 29 confers revisional powers on the State Government to call for the records of any case where an order has been made by the State Board under Sections 25, 26 and 27 for the purpose of satisfying itself as to the legality or propriety of any such order.
Failure to comply with the requirements of the statute is punishable under Chapter VII.
Thus, this law aims at prevention and control of water pollution.
On 7th December.
1977, the President gave his assent to the Water (Prevention and Control of Pollution) Cess act,1977(Act No. XXXVI of 1977), (hereinafter referred to as 'the 1977 Act ').
This Act was enacted to provide for the levy and collection of a cess on water consumed by persons carrying on certain industries, with a view to augment the resources of the statutory Boards for the prevention and control of water pollution.
Section 2(c) defines "specified industry" to mean "any industry specified in Schedule I".
Power (Thermal & Diesel) Generating Industry is included at item No. 14 in Schedule I to the Act.
Section 3 which is the charging section inter alia provides that there shall be levied and collected a cess for the purposes of the 1974 Act and utilisation thereunder.
The Cess under sub section (1) is made payable by every person carrying on any specified industry to be calculated on the basis of water actually consumed for any of the purposes specified in column 1 of Schedule II, at such rate not exceeding the rate specified in the corresponding entry in column 2 thereof.
Schedule II enumerates in column 1 the purposes for which water is consumed and sets out the maximum rate of cess therefore in column 2.
The rare of cess for industrial cooling is three fourths of a paisa, per 125 kilolitre, while it is one paisa per kilolitre for domestic purpose.
Where water gets polluted and the pollutants are easily bio degradable, the rate is 2 paise per kilolitre but where the pollutants are not easily bio degradable and are toxic, the rate is two and a half paise per kilolitre.
It is obvious that the rate of cess depends on the degree of pollution.
It may also be noticed at this stage that the cess is to be calculated on the basis of the water 'con sumed ' for any of the purposes specified in column 1 of Schedule II at the rate set out in the notification issued by the Central Government not exceeding the rates specified in column 2 of the said schedule.
Section 4 provides for affixing of meters for the purposes of measuring and record ing the quantity of water consumed.
Section 5 requires every person carrying on any specified industry and every local authority, liable to pay the cess under section 3, to fur nish returns in such forms and at such intervals containing such particulars as may be prescribed to the officer or authority appointed therefore.
The officer or authority to whom the return has been furnished under section 5 is charged with the duty to make an inquiry as to the particu lars stated in the return and then pass an assessment order stating the amount of cess payable by the concerned person or local authority, as the case may be.
Section 14 pre scribes a penalty for failure to file a return and section 11 provides a penalty for failure to pay the cess within 'the specified time.
Any person or local authority aggrieved by an order of assessment made under section 6 or by an order imposing penalty under section 11, may file an appeal under section 13 within the prescribed time.
Section 7 provides for a rebate if the cess is payable.
It reads as under: "Where any person or local authority, liable to pay the cess under this Act, instals any plant for the treatment of sewage or trade effluent, such person or local authority shall from such date as may be prescribed, be entitled to rebate of seventy per cent of the cess payable by such person or, as the case may be, local authority.
" The expressions 'sewage ' and 'trade effluents ' having not been defined would have the same meanings respectively assigned to them under the 1974 Act.
Section 17 empowers the Central Government to make rules for carrying out the pur poses of the Act.
Under that section, the Central Government made the Water (Prevention & Control of Pollution) Cess Rules, 1978, (hereinafter called 'the Rules ').
Rule 6 there of deals with rebate.
Under that rule where a consumer instals any plant for the treatment of sewage or trade effluent such consumer becomes entitled to the rebate under section 7 on or from the expiry of 15 days from the 126 date on which such plant is successfully commissioned and so long as it functions successfully.
The appellant, the Rajasthan State Electricity Board constituted ' in 1957 under section 5 of the , established a Thermal Power Station on the bank of River Chambal in Kota for generating energy.
It admittedly consumes water from the river for Condensor Cooling.
The water drawn from the river is filtered and thereafter passes through an enclosed pipeline over the condensor unit for cooling the condensor, After the water is used for cooling, it is treated as a trade effluent in the neutralisation plant installed by the appellant at consider able expense with a view to preserving the wholesomeness of water before it is discharged into the river.
After conden sor cooling, the water passes through an enclosed under ground steel pipeline of the length of about 478 meters upto the seal pit.
On reaching the seal pit the water is pumped to a height of about 22 feet from where it is made to fall into an open channel and is then carried in that channel to a distance of about 150 feet before it plunges into the river.
In this manner the water at the seal pit comes in contact with air.
Its temperature is reduced firstly by the 22 feet fall into the open channel and thereafter by cover ing a distance of about 150 feet before getting merged in the river or stream.
The temperature is thus brought down to below 40 deg.
C, the standard prescribed under the Minimum National Acceptable Standards published by the State Board.
The appellant had also installed a 0.4 MGD plant for treat ment of sewage.
Both these plants, contends the appellant, are working satisfactorily.
The appellant submitted monthly returns of the water consumed from river Chambal for its Thermal Station, units 1 and 2, for the period from July, 1983 to January, 1984 and February, 1984 to June 1984.
The Assessing Authority, re spondent No. 2, assessed the cess at Rs. 13, 13,710 for the first period and Rs.9,42,013 for the subsequent period.
No rebate was allowed under section 7 of the 1977 Act on the ground that the so called neutralisation plant was not a plant for the treatment of sewage or trade effluents within the meaning of the said provision.
Nothing was said about the plant for the treatment of sewage.
The appellant filed an appeal under section 13 in respect of the cess claimed for the period from July, 1983 to January, 1984.
The appel late authority dismissed the appeal holding that the cess was correctly assessed and the appellant was not entitled to rebate.
In respect of the assessment for the period from February, 1984 to June, 1984 the appellant submitted a review petition which was rejected by respondent No. 2.
The appellant then preferred an appeal but the 127 same was dismissed as barred by limitation.
The appellant preferred separate Writ Petitions Nos.
12 1/85 and 966/86 in the High Court challenging the two assessment orders.
In the former writ petition the High Court granted interim stay against the recovery of the disputed cess amount to the extent of seventy percent till the disposal of the writ petition.
In the second writ petition since the appellant had already paid the amount of cess, the application for stay did not survive but for future assessment orders, it directed the appellant to pay thirty percent regularly and the remaining seventy percent with interest at 15% per annum in the event the challenge failed.
Both the aforesaid writ petitions were finally disposed of by a Division Bench on 28th October.
1988 which dismissed them holding that the cess was correctly assessed and the appellant was not enti tled to rebate.
In taking this view the Division Bench came to the conclusion that there was no material on record to show that the appellant had applied for consent of the State Board to instal a plant either under section 25 or section 26 of the 1974 Act nor was there evidence to show that such consent was given.
It, therefore, opined that the authori ties below had rightly concluded that the benefit of rebate under section 7 was not admissible to the appellant.
While dismissing the writ petitions the Division Bench, however, observed as under: "Anyhow if the consent after the period of assessment in dispute has either been obtained for discharge of effluent etc., or can be deemed to have been obtained and if the treatment plants are working satisfactorily, the petitioner shall be entitled to rebate according to the provisions of rules for that period.
" It follows therefrom that the Division Bench refused to grant rebate to the extent of seventy per cent for want of consent under section 25 or 26 of the 1974 Act.
Feeling aggrieved by the Judgment and order passed by the Division Bench of the High Court, the appellant pre ferred special leave petitions (Civil) Nos. 1429 and 2157 of 1989 challenging the dismissal of the said two writ peti tions.
During the pendency of these proceedings several assessment orders came to be made for the subsequent periods upto may, 1989 for the water consumed at the appellant 's Thermal Units.
The Assessing Authority also refused to grant rebate, The appellant preferred appeals against the assess ment orders passed from time to time but to no avail.
In stead of approaching the High Court the appellant has filed Special Leave Petitions Nos. 3223, 3262, 128 3272, 4599 and 4600 of 1990 in this Court against the said assessment orders as well as the refusal to grant rebate on the ground that similar questions were involved in the earlier two special leave petitions which were pending in this Court.
We have granted special leave in all cases under Article 136 of the Constitution and we now proceed to dis pose them of by this common Judgment.
Dr. Singhvi, the learned counsel for the appellant con tended that the 1977 Act was an independent piece of legis lation and was not, what he called, 'the pari materia or parasite legislation ' to the 1974 Act, and hence once it is shown that the appellant had installed a plant for the treatment of a trade effluent within the meaning of section 7 of the 1977 Act read with rule 6 of the Rules, the appel lant was entitled to rebate regardless of whether or not the appellant had secured the consent of the State Board under section 25(1) of the 1974 Act.
He contended that the State Board 's consent became necessary only if an outlet new or altered was sought to be used for the discharge of sewage or trade effluent in the stream and not otherwise.
In the present case, contended Dr. Singhvi, the appellant had put up an independent sewage plant for the treatment of sewage and an independent neutralisation plant for the treatment of water discharged from the condensor cooling plant of the Thermal Station.
So far as the former is concerned the consumption of water is negligible; the bulk consumption takes place at the condensor cooling plant from where water is discharged after use at a temperature far above the standard of 40 C, which if discharged into the stream with out treatment would be harmful and injurious to acquatic organisms in the stream.
That is why the neutralisation plant was necessary to bring down the temperature of water to 40C or below before its actual discharge in the stream.
At the point where this water merges into the stream its temperature is below 40 C and therefore it ceases to be a contaminated trade effluent.
Since the outlet is used for the discharge of this water which is no more polluted it cannot be said that it is used for the discharge of a trade effluent within the meaning of section 25(1) of the 1974 Act.
According to Dr. Singhvi the enactment being essential ly for the prevention, control and abatement of pollution of streams and wells.
the duty to ensure the purity of streams and wells is cast on the State Board and for the effective performance of the same, section 25( 1) ' provides for previ ous consent if any new or altered outlet is intended to be brought use for the discharge of sewage or trade effluent.
But no such previous consent would be necessary if uncontam inated water is sought to be discharged into the stream.
In other words according to Dr. Singhvi the expression 'trade effluent ' in section 2(k) must be read 129 in the context of the purpose and object of the law and the mischief it seeks to curb.
Yet, by way of abundant caution, the appellant applied for the grant of consent under section 25/26 of the 1974 Act by the letter dated 9th April, 1984 for the neutralisation plant and by the letter dated I2th April, 1984 for the sewage plant meant for the colony of workmen situate within the power Station.
Under sub section (7) section 25 since the State Board neither granted nor refused consent within the period of four months from the receipt of the applications, it must be deemed to have been granted unconditionally on the expiry of the said period.
Lastly, he pointed out that during the pendency of the two writ petitions in the High Court, the Secretary of the State Board granted the required consent and conveyed it by his letter No. F. 5(B I4)RSEB/Tech/86/11472 dated 24th March, 1988.
Therefore, when the Division Bench of the High Court disposed of both the writ petitions the consent of the State Board under section 25(1) was already granted and hence the High Court was not right in making the observations it made in paragraphs 7 and 9 of the impugned judgment.
We may clarify that in the present appeals we are not concerned with the legality and validity of the levy of cess.
Dr. Singhvi, however, stated that the appellant re served the right to challenge the validity of the 1977 Act, if the interpretation placed by the authorities below on the true scope and meaning of section 7 read with rule 6 is found to be correct.
We may state that since we are not required to go into the question of Parliament 's competence to enact the 1977 Act, we do not propose to delve into this aspect of the matter.
Now, on a plain reading of sub section (1) of section 25 it becomes clear that the previous consent of the State Board is necessary where any new or altered outlet is pro posed to be used for the discharge of sewage or trade efflu ent into a stream or well.
If what is discharged in the stream or well is not a pollutted 'trade effluent ' (section 2(k)) or a 'sewage effluent ' (section 2(g)), can there be any question of seeking the previous consent of the State Board? The appellant has a separate sewage plant.
Since the bulk of the water is consumed at the condensor cooling plant and the same is recycled into the stream, the question is whether what is discharged in the stream can be said to be a trade effluent? Dr. Singhvi emphasised that the consent of the State Board would not be necessary under section 25(1) for the discharge of that recycled water, unless it is shown that what the appellant discharged in the stream or river was polluted water, According to Dr. Singhvi, the use of water at the condensor cooling plant merely raises the temperature of water above the tolerance limit 130 of 400 C. if the water is discharged in the river or stream before its temperature is reduced to 400 C or below, it may well be contended that within the broad meaning of the expression 'pollution ' in section 2(e), it was imperative for the appellant to obtain the previous consent of the State Board for making use of that outlet.
But if, on the other hand, it is shown that the temperature of water is brought down to the prescribed standard and the water is no more harmful or injurious to acquatic organisms in the river or stream i.e. is not polluted, the discharge of such water cannot be equated with discharge of a trade effluent.
This raises a mixed question of law and fact, viz., whether the recycled water returned to the stream in the same condition in which it was drawn with the temperature reduced to less than 400 C, can still be said to be a 'trade effluent ' requiring consent under Section 25( 1)? It may, in this context be mentioned that samples of the trade effluent were collected by the State Board for analysis on 24th May, 1984.
By letter dated 3rd December, 1984, the appellant requested the Assistant Engineer, State Board, to supply a copy of the analysis report which was refused by the letter dated 26th December, 1984.
The appellant was informed that the monitor ing results conducted by the Board .were not supplied to the concerned industries.
He added that the appellant could get the sample tested, if so desired, at the Board 's Laboratory on payment basis.
We think that if the Board was in posses sion of this vital information, it should have in all fair ness brought it on record rather than withhold it.
If that information was available on record Dr. Singhvi 's contention could have been met.
We are, however, not inclined to raise any adverse inference as was suggested.
We now come to the second limb of Dr. Singhvi 's submis sion.
According to him, section 7 of the 1977 Act is not dependent on the Board 's consent under section 25(1) of the 1974 Act.
In fact neither section 7 nor rule 6 speak about the same.
All that section 7 says is that any person or local authority which is liable to pay cess can claim rebate of 70% of the cess payable by him or it, if he or it has installed a plant for the treatment of sewage or trade effluent, as the case may be.
A plant has undoubtedly been installed for the treatment of sewage and no dispute in that behalf was raised before us.
However, as the bulk consump tion of water from the river is used at the condensor cool ing plant the question is whether the appellant can be said to have installed a plant for the treatment of a trade effluent.
The Appellate Authority took the view that a 150 ft. long channel meant for carrying the trade effluent cannot be described as a treatment plant.
The appellant contended that the treatment plant installed by it comprises of an 131 arrangement to lift the water to a height of 22 ft. and then drop it from that height into an open channel so that it cools down on coming in contact with the atmosphere and then flows towards and into the river.
It would appear that this arrangement was not specifically brought to the notice of the authorities below including the High Court and it seems the authorities decided the question of the existence of the treatment plant on the premise that it consisted of merely a single 150 ft. long channel.
However, this aspect has to be looked into.
The High Court has, however, taken the view that in the absence of consent under Section 25( 1 ), the appellant is not entitled to rebate.
We find it difficult to agree with this view.
Section 7 as well as Rule 6 do not envisage the Board 's consent under Section 25(1) of the 1974 Act as a sine qua non.
Under section 7 the consumer has only to show that he has installed a plant for the treatment of sewage or trade effluent and that it functioned successfully during the relevant period to earn rebate.
Section 25(1) operates in a different field and has nothing to do with a plant installed for the treatment of a trade effluent although the grant of consent to a new outlet can be conditional on the existence of a plaint for the satisfactory treatment of effluents to safeguard against pollution of the water in the stream.
The High Court refused the claim for rebate as it erroneously thought that the prior consent of the State Board was a must.
That is why in the concluding part of the Judgment it observed that if the consent is subsequently obtained or deemed to be obtained and the plant is working successfully, the appellant will be entitled to rebate.
Since we are of the view that the Board 's consent under Section 25(1) was not imperative, we think that that part of the High Court 's order cannot be sustained.
So far as the 1977 Act is concerned it would be neces sary to consider the true scope and meaning of section 7 and rule 6.
On a plain reading of the said provisions it would be necessary to decide (i) whether water discharged from the condensor cooling plant can be said to be a 'trade effluent ' by reason only of the fact of its temperature being above the prescribed standard, (ii) whether but for the treatment given to it as described by the appellant and set out above such water would have been discharged in the stream or river at a temperature above 40 deg.
C, and (iii) whether the ar rangement made by the appellant as set out above can, there fore, be described as a plant for the treatment of a trade effluent.
These and the related questions must be answered to effectively deal with the appellant 's claim for rebate.
The authorities below including the High Court have not applied their minds to these essential for deciding the question of grant or refusal of 132 rebate.
If it is found that the plant in question is one for the treatment of a trade effluent, the appellant would be entitled to rebate notwithstanding the absence of consent under section 25(1) of the 1974 Act.
We feel that the par ties did not focus their attention on these vital aspects and, therefore, failed to place on record the material essential for deciding the application for grant of rebate.
In the circumstances, we are left with no alternative but to remit the matter to the Assessing Authority with a direction to permit the appellant as well as the State Board to place on record such material as is considered relevant and there after give the parties an opportunity of being heard before deciding the matter.
The Assessing Authority should do so without being influenced by the previous orders of the authorities as well as the High Court.
In the meantime i.e. till the Assessing Authority decides the matter afresh, the appellant will continue to pay 30% of the cess amount and will file an undertaking in this Court within eight weeks from today to the effect that in the event the appellant is finally found liable to pay the balance of 70% the appellant will pay the same with interest at 15% per annum within six months from the final determination.
The appeals are allowed accordingly.
Having regard to the facts and circumstances of these cases, we make no order as to costs.
Y. Lal Appeals allowed.
| IN-Abs | The Water (Prevention & Control of Pollution) Act, 1974 was enacted inter alia to provide for the prevention and control of water pollution, the maintaining or restoring of wholesomeness of water, etc.
Section 25 of the said Act provides that no person shall without the consent of the State Board, bring into use any new or altered outlet for the discharge of sewage or trade effluent into a stream or well, or begin to make any new discharge of sewage or trade effluent into a stream or well.
Section 26 lays down that persons discharging sewage or trade effluent into a stream or well before the commencement of the Act shall apply for consent within a period of three months of the Constitution of State Board.
Thereafter the was enacted to provide for the levy and collection of cess on water consumed by persons carrying on certain industries, Power (Thermal & Diesel) Generating Industry was one such industry included at item No. 14 in Schedule I to the Act.
Section 3 of the 1977 Act provides that there shall be levied and collected a cess for the purposes of the 1974 Act and utilisation thereunder.
The cess under the Act is made payable by every person carrying on any specified industry and the same has to be calculated on the basis of the water actually consumed at rates speci fied in the Schedule.
Section 7 of the Act provides for rebate.
The appellant has established a Thermal Power Station on the bank of River Chambal for generating energy.
It consumes water from the river for condensor cooling.
After the water is used for cooling, it is treated as a trade effluent in the neutralisation plant before it is discharged into the river.
According to the appellant, the temperature, 121 after following the prescribed procedure, is brought down to below 40 C, when it is discharged into the river.
The appel lant had also installed a 0.4 MGD plant for treatment of sewage.
According to the appellant both these plants are working satisfactorily.
The appellant, as required by the rules, submitted monthly returns of the water consumed from the river for its Thermal Station for the period from July 1983 to January 1984 and February 1984 to June 1984.
The respondent authority.
assessed the cess at Rs.13,13,710 for the first period and Rs.9,42,013 for the subsequent period.
No rebate was allowed under Section 7 of the 1977 Act on the ground that the so called neutralisation plant was not a plant for the treatment of sewage or trade effluent within the meaning of the said provision.
The appellant filed an appeal under section 13, in respect of the cess claimed for the period July 1983 to January 1984, but the appellate authority dismissed the same holding that the cess was correctly assessed and that the appellant was not entitled to rebate.
As regards the period from February 1984 to June 1984.
the appellant submitted a review petition which was rejected by respondent No. 2.
Thereupon, the appellant filed separate writ petitions before the High Court challenging the assessment orders.
Both the writ petitions were dismissed by the High Court.
The High Court opined that there was nothing on record to show that the appellant had applied for consent of the State Board to install a plant either under section 25 or section 26 of the 1974 Act nor was there any evidence to show that such consent was given.
It accordingly held that the author ities under the Act had rightly disallowed the claim of rebate to the appellant under section 7.
Against the orders of the High Court as also against various assessment orders which were passed subsequent to the orders of the High Court the appellant has filed these appeals, after obtaining special leave.
Allowing the appeals, and remanding the cases to the Assessing Authority for fresh disposal, this Court HELD: A plant has undoubtedly been installed for the treatment of sewage and no dispute in that behalf was raised.
However, as the bulk consumption of water from the river is used at the condensor cooling plant the question is whether the appellant can be said to have installed a plant for the treatment of a trade effluent.
[130G] The Appellate Authority took the view that a 150 fl.
long channel meant for carrying the trade effluent cannot be described as treatment plant.
The appellant contended that the treatment plant installed 122 by it comprised of an arrangement to lift the water to a height of 2211.
and then drop it from that height into an open channel so that it cools down on coming in contact with the atmosphere and then flows towards and into the river.
[130H; 131A] Section 7 as well as Rule 6 do not envisage the Board 's consent under Section 25(1) of the 1974 Act as a sine clua non.
Under Section 7 the consumer has only to show that he has installed a plant for the treatment of sewage or trade effluent and that it functioned successfully during the relevant period to earn rebate.
Section 25(1) operates in a different field and has nothing to do with a plant installed for the treatment of a trade effluent although the grant of consent to a new outlet can be conditional on the existence of a plant for the satisfactory.
treatment of effluents to safeguard against pollution of the water in the stream.
[131C E] Since the Board 's consent under Section 25(1) was not imperative that part of the High Court 's order cannot be sustained.
[131E]
|
vil Appeal Nos.
4043 and 1370 of 1987.
221 From the Judgment and Order dated 20.11.1987 and 4.3.1987 of the Jammu & Kashmir High Court in L.P.A. No. 20/1987 and in Suit No. 235/86.
K. Parasaran, Ms. section Janani and Ms. Urmila Kapur for the Appellant in C.A. No. 4043/87.
P. Chidambaram, P.H. Parekh and Ms. Gitanjali Mathrani for the Appellants in C.A. No. 1370/87.
M. Beg, E.C. Agarwala, Atul Sharma, Vijay Pandita and Ms. Purnima for the Respondents in C.A. No. 4043/87.
E.C. Agarwala and Atul Sharma for the Respondents in C.A. No. 1370/87.
Ashok Mathur for the State of Jammu and Kashmir and Advocate General.
The Judgment of the Court was delivered by THOMMEN, J.
Civil Appeal No. 4043 of 1987.
The question which arises in this appeal is as regards the validity of clause (iii) of sub section (3) of Section 1 of the Jammu & Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as "the Act").
The challenge against the clause on the ground of its alleged violation of Article 14 of the Constitution was rejected by the High Court of Jammu & Kashmir.
The High Court, following its earlier decision in The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18, upheld the validity of the clause.
The impugned provision, as it stood at the relevant time, reads: "1(3) Notwithstanding anything contained in sub section (2), nothing in this Act shall apply to (ii) Omitted (iii) any tenancy in respect of any house.
or shop where the income of the tenant, whether accruing within or outside 222 the State, exceeds rupees 40,000 per annum; Explanation: the word 'income ' means 'net income. '" The appellant, the Delhi Cloth & General Mills Limited is the tenant of the building in question.
Its claim for the protection of the Act was disallowed by the courts below on the ground that clause (iii) of sub section (3) of Section 1, read with the Explanation, was attracted in respect of the appellant.
According to the appellant, the impugned clause is discriminatory and arbitrary because it draws an artificial distinction between tenants on the basis of their income.
Those tenants earning net income below Rs.40,000 per annum are fortunate enough to be protected by the beneficial provisions of the Act, while a person like the appellant whose annual net income is undoubtedly in excess of the statutory limit of Rs.40,000, is unreasonably and unfairly denied the protection of the Act.
This statutory discrimina tion, it is contended, places persons like the appellant at the mercy of the landlords who can easily evict them by recourse to the far less restrictive provisions of the and on the strength of their agreements of lease.
Counsel for the appellant submits that the impugned clause does not take into account the nature of the build ing, but only the income of the tenant.
The income of the landlord himself is irrelevant.
The protection of the Act is withheld or extended, dependent solely on the financial capacity of the tenant and without regard to the need of the landlord or the age or other conditions of the building or any other factor.
Treating tenants differently with refer ence to their annual income is not an intelligible classifi cation, for the income of a tenant may vary from year to year, depending upon the nature of his business and other factors.
This variation in income may expose him to eviction in a particular year when the business is prosperous but protects him from eviction when the business declines and income falls.
Furthermore, counsel says.
"income" is not a clear and precise concept.
Limiting it to net income does not make it clearer.
What are the permissible deductions to arrive at the "net", the Act does not say.
The Section is invalid because it is too broad or vague.
Any classification based on such vague differentia is unintelligible and, therefore, violative of Article 14.
In any view, counsel submits, the classification sought to be made between per sons falling on either side of the 223 specified income has no reasonable relation to the object sought to be achieved by the statute.
Counsel relies on the observation of this Court in Rattan Arya & Others vs State of Tamil Nadu & Another, ; declaring Section 30(ii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 as unconstitutional.
Counsel also relies upon the decision of this Court in Motor General Traders & Another vs State of Andhra Pradesh & Others, ; declaring Section 32(b) of the A.P. Buildings (Lease, Rent and Evic tion) Control Act, 1960 as unconstitutional.
These decisions, in our view, are easily distinguisha ble.
In Rattan Arya (supra) this Court stated that a dis tinction between residential buildings leased on rent not exceeding Rs.400 per month and all other buildings whether residential or non residential was an unreasonable classi fication.
There was no reason why non residential buildings leased on rent of Rs.400 per month or less should be treated differently from residential buildings of like rent or why in the case of residential buildings the limit should have been limited to Rs.400 per month.
To so restrict the protec tion of the Act was an unreasonable classification.
In the Motor General Traders (supra), this Court stated that to arbitrarily prescribe a cut off date, i.e., August 26, 1957, for denying the protection of the Act, without regard to the age of the building or to the extent of realisation of the investment by the owner was an unreasonable classification.
These decisions do not, in our view, support the contentions of the appellant.
On the other hand, a classification with reference to economic realities was upheld by this Court in Kerala Hotel & Restaurant Association & Ors.
vs State of Kerala & Ors., [1990] 1 JT SC 324.
This Court stated "those who can afford the costlier cooked food, being more affluent, would find the burden lighter.
This object cannot be faulted on princi ple and is, indeed, laudable".
Though that principle was stated in a different context, significantly this Court accepted a classification based on financial capacity.
The classic and oft repeated test to be applied when the constitutionality of legislation is questioned with refer ence to Article 14 of the Constitution is what is stated by this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, S.R. Das, CJ.
stated: "In order, however, to pass the test of permissible classi fication two conditions must be fulfilled, namely, (i) that the 224 classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that the differentia must have a rational relation to the object sought to be achieved by the statute in question.
" The object of the enactment in question is undoubtedly to protect the weaker section of tenants from.
unreasonable eviction and unfair rent.
The legislature, at the same time, did not desire to discourage persons from constructing buildings.
The twin legislative object is the protection of economically weaker tenants and encouragement of construc tion of buildings.
While protection is thus afforded to deserving tenants, construction of new buildings is encour aged by exempting buildings occupied by richer classes of tenants from the provisions of the Act.
While a building is covered by the Act when occupied by a tenant whose annual net income is less than the specified amount, the protection is withheld when the same building is occupied by a richer tenant whose annual net income is higher than the specified amount.
Where a building is occupied by more than one ten ant, the applicability of the Act to each of them would depend upon his net income.
It is the tenant that the legis lature intends to protect and not the landlord or his build ing.
The test adopted by the legislature for this purpose is with reference to the tenant 's net income, whether accruing inside or outside the State, as on the date of the land lord 's application for eviction as well as on the date of the decree for eviction.
The legislative object is, there fore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of accommodation, employment opportunity and economic prosperity.
This is a reasonable classification which does not suffer from the vice of being too vague or broad.
Classification based on income is well known to law.
Such classification has a reasonable relation to the twin legislative object mentioned above.
We see nothing unreason able or irrational or unworkable or vague or unfair or unjust in the classification adopted by the impugned provi sion.
Nor is there lack of clarity in the concept of "income" or "net income".
Income is money or other benefit periodi cally received.
It is profit or revenue and not capital.
It is a gain derived from capital or labour or both.
Net income is income obtained after deducting all expenses incurred for the purpose of earning the income.
It is income minus oper ating expenses.
The concept of net income is what it is 225 ordinarily understood to be in common parlance, and not necessarily limited by the technicalities of any fiscal enactment.
See in this connection the observation of the Jammu & Kashmir High Court in Banarasi Das vs Jagdish Raj Kohli, AIR 1960 J & K 5.
The legislature in its wisdom is presumed to understand and appreciate correctly the problems of the State and the needs of the people made manifest by experience.
Absent blatant, disregard of constitutional provisions, legislative innovation by social and economic experimentation must be permitted to continue without judicial interference.
The High Court, as stated earlier, followed its earlier decision on the construction of the Section in The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18.
In that case, speaking for the Division Bench, Anand, CJ.
stated as follows: "In our opinion, the challenge to vires of section 1(3)(iii) of the Act is not well founded.
Undoubtedly, the Act is a piece of social and beneficial legislation.
The Legislature knows and correctly appreciates the needs of its people.
In its supreme wisdom it denied the protection of the Act to ten ants whose annual income exceeds Rs.40,000.
Social legisla tion of this type is designed to protect the interest of a class of society who, because of their economic conditions, deserves such protection against their arbitrary eviction.
The legislation is intended to protect weaker and poorer classes of the tenants and there is, therefore, an intelli gible differentia between the tenants whose annual income is Rs.40,000 and those whose annual income is more than Rs.40,000.
In construing article 14, the aid whereof has been pressed into service by the learned counsel, the Court is not required to adopt a doctrinaire approach which would choke the beneficial legislation.
It is open to the legisla ture to recognise the degree of harm and while doing so it can always make reasonable classification.
Article 14 for bids class legislation but no reasonable classification.
With a view to pass the test of reasonable classification, there must exist intelligible differentia between persons or things grouped together from those who have been left out and there must be a reasonable nexus with the object to be achieved by the legislation.
Keeping in view the object which the legislation seeks to achieve, it can be safely said that there is reason 226 able nexus between the classification made by the legisla ture in the impugned section and the object sought to be achieved.
We also find that there is an intelligible differ entia between the tenants who are sought to be protected by the Act from those who are denied the protection of the Act.
We are in complete agreement with what has been stated by the learned Chief Justice.
Accordingly, we see no merit in this appeal.
It is dismissed with costs here and in the courts below.
Civil Appeal No. 1370 of 1987.
This appeal is brought by a nationalised bank.
In view of our judgment in Civil Appeal No. 4043 of 1987, ' we dis miss this appeal with costs here and in the High Court.
N.P.V. Appeals dis missed.
| IN-Abs | The appellant, a tenant, claimed protection of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966.
The courts below disallowed the claim, on the ground that clause (iii) of sub section (3) of Section 1, read with the Expla nation was attracted in respect of the appellant.
The appellant challenged the validity of clause (iii) of sub section (3) of Section 1 of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 before the High Court on the ground that it violated Article 14 of the Constitution.
The High Court, following its earlier decision in the J & K Bank Lid.
vs State of J & K & Another, AIR1987 J & K 18 upheld validity of the clause.
In the appeal before this Court, the appellant tenant contended (i) that the clause was discriminatory and arbi trary, because it drew an artificial distinction between tenants on the basis of their income, in that while those tenants earning net income below Rs.40,000 per annum were protected by the beneficial provisions of the Act, those with annual net income in excess of the statutory limit of Rs.40,000 were unreasonably and unfairly denied the protec tion and this statutory discrimination placed them at the mercy of the landlords, who could easily evict them by recourse to the far less restrictive provisions of the Transfer of 219 Property Act, 1882 and on the strength of their agreements of lease, (ii) that the clause did not take into account the nature of the building, or the need and income of the land lord or any other factor and withheld or extended protection solely on the financial capacity of the tenant, which could vary from year to year, depending upon the nature of his business and other factors, thus exposing the tenant to eviction when the business was prosperous, but protecting him when the business declined and income fell, (iii) that "income" was not a clear and precise concept; limiting it to net income did not make it clearer, and the Act did not indicate the permissible deductions for arriving at the "net" and (iv) that the Section was invalid because it was too broad or vague and any classification based on such vague differentia was unintelligible and, therefore, viola tive of Article 14; and in any view, the classification sought to be made between persons falling on either side of the specified income had no reasonable relation to the object sought to be achieved by the statute.
Dismissing the above appeal, and another similar appeal (Civil Appeal No. 1370 of 1987), this Court, HELD: 1.1 The object of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 is undoubtedly to protect the weaker section of tenants from unreasonable eviction and unfair rent.
At the same time, the legislature did not desire to discourage persons from constructing buildings.
Thus, while protection is afforded to deserving tenants, construction of new buildings is encouraged by exempting buildings occupied by richer classes of tenants from the provisions of the Act.
While a building is covered by the Act when occupied by a tenant whose annual net income is less than the specified amount, the protection is withheld when the same building is occupied by a richer tenant whose annual net income is higher than the specified amount.
Where a building is occupied by more than one tenant, the applica bility of the Act to each of them would depend upon his net income.
It is the tenant that the legislature intends to protect and not the landlord or his building.
The test adopted by the legislature for this purpose is with refer ence to the tenant 's net income, whether accruing inside or outside the State, as on the date of the landlord 's applica tion for eviction as well as on the date of the decree for eviction.
[224B E] 1.2 The legislative object is, therefore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of 220 accommodation, employment opportunity and economic prosperi ty.
This is a reasonable classification which does not suffer from the vice of being too vague or broad.
[224E F] 1.3 Classification based on income is well known to law.
Such classification has a reasonable relation to the twin legislative object of protecting economically weaker tenants and encouraging new constructions.
There is nothing unrea sonable or irrational or unworkable or vague or unfair or unjust in the classification adopted by Section 1(3)(iii) of the Act.
[224F; 22SD] 1.4 The legislature in its wisdom is presumed to under stand and appreciate correctly the problems of the State and the needs of the people made manifest by experience.
Absent blatant disregard of constitutional provisions, legislative innovation by social and economic experimentation must be permitted to continue without judicial interference.
[225B] The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18, approved.
Rattan Arya & Others vs State of Tamil Nadu & Another, ; and Motor General Traders & Another vs State of Andhra Pradesh & Others, ; , distin guished.
Kerala Hotel & Restaurant Association & Ors.
vs State of Kerala & Ors., [1990] 1 JT SC 324, relied on.
Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, ; , referred to. 2.
There is no lack of clarity in the concept of "in come" or net income.
Income is money or other benefit peri odically received.
It is profit or revenue and not capital.
It is a gain derived from capital or labour or both.
Net income is income obtained after deducting all expenses incurred for the purpose of earning the income.
It is income minus operating expenses.
The concept of net income is what it is ordinarily understood to be in common parlance, and not necessarily limited by the technicalities of any fiscal enactment.
[224G H] Banarasi Das vs Jagdish Raj Kohli, AIR 1960 J & K 5.
re ferred to.
|
vil Appeal No. 277 1 of 1981.
From the Judgment and Order dated 5.2.1980 of the Andhra Pradesh High Court in S .A.
No. 526 of 1977.
Jagdish K. Agarwal (N.P.) for the Appellant.
A Subba Rao for the Respondents.
KANIA, J. This is an appeal by special leave from the decision of a learned Single Judge of the Andhra Pradesh High Court in Second Appeal No. 526 of 1977.
As we are, with respect, in agreement with the conclu sions arrived at by the learned Single Judge of the High Court, we propose to set out only the bare facts essential for the purposes of our judgment.
The appellant was the plaintiff and the respondent was the defendant in Suit.
O.S. No. 789 of 1973 filed in the Court of the Third Assistant Judge, City Civil Court, Hyd erabad.
The appellant prayed for a decree for recovery of possession of the suit premises from the respondent and for mesne profits till the delivery of possession of the prem ises.
The case of the appellant was that she was the owner of the suit premises and the respondent was in the occupa tion of the said premises on payment of Rs.30 per month.
The respondent had been 215 irregular in the payment of the said rent and had been a source of perpetual nuisance.
It was on this ground that the eviction of the premises was sought by the appellant.
In his written statement the respondent took a preliminary objec tion that the City Civil Court had no jurisdiction to enter tain the suit as the suit fell within the jurisdiction of the Rent Controller at Hyderabad.
Two petitions had earlier been filed by the appellant before the Rent Controller for eviction of the respondent and the Rent Controller had rejected the same on the ground that the purported tenancy of the respondent was hit by section 3 of the A.P. Rent Control Act and hence, the eviction suit was not entertain able by the Court of Rent Controller.
This conclusion was arrived at on a plea to the said effect taken by the re spondent.
In the Court of learned Third Assistant Judge of the City Civil Court at Hyderabad the respondent took up the plea that the suit fell exclusively within the jurisdiction of the Rent Controller and hence the City Civil Court had no jurisdiction to entertain the suit.
Certain pleas were made regarding amendments in the law with which we are not con cerned in this appeal.
What is material to note for our purposes is that the learned Assistant Judge took the view that as the respondent had, before the Rent Controller, taken up the plea that it was not the Rent Controller but the City Civil Court which had the jurisdiction to entertain the eviction petition against him, and the said plea was upheld, it was not open to the respondent to take up the inconsistent plea before the City Civil Court that it was the Rent Controller and not the City Civil Court which had jurisdiction to entertain the proceedings.
It was held that the respondent could not be allowed to approbate and repro bate and that he was estopped by way of pleading to take up an inconsistent plea regarding jurisdiction.
On the basis of this conclusion, and other conclusions with which we are not concerned, the suit was decreed by the learned Assistant Judge in favour of the appellant.
The decision of the learned Assistant Judge was upheld in an appeal filed by the respondent in the Court of the learned Additional Chief Judge of the City Civil Court at Hyderabad.
On a second appeal preferred by the respondent, the learned Single Judge of the High Court took the view that in matters of jurisdiction the question of estoppel does not arise.
If the City Civil Court has no jurisdiction to entertain the suit, the doctrine of estoppel could not be invoked so as to confer jurisdiction on the Court of City Civil Court.
On the question of jurisdiction the learned Judge took the view that the City Civil Court had no jurisdiction to entertain the suit as it lay exclusively within the jurisdiction of the Rent Controller.
216 Learned counsel for the appellant submitted that the learned Judge of the High Court was in error,as the earlier decisions of the Rent Controller to the effect that it was the City Civil Court and not the Rent Controller who had the jurisdiction to entertain the suit for eviction filed by the appellant against the respondent, constituted res judicata between the parties on the question of jurisdiction.
It was submitted by him that, even if that decision was wrong, the issue of jurisdiction was finally decided between the par ties and that decision was that it was the Civil Court and not the Rent Controller that had the jurisdiction to enter tain and dispose of the suit for eviction.
He further sub mitted that the respondent could not be permitted to take inconsistent pleas as he was barred by the principles of estoppel from taking up the plea before the Civil Court that it was the Rent Controller who had the exclusive jurisdic tion to entertain the suit.
He placed reliance on a decision rendered by a Division Bench comprising two learned Judges of this Court in Avtar Singh and Others vs Jagjit Singh and Another, ; which took the view that the Civil Court 's decision regarding lack of jurisdiction will operate as res judicata in a subsequent suit.
In that case the Civil Court declined jurisdiction.
The Civil Court took the view that it had no jurisdiction to try the suit in question and directed the return of the plaint for representation to the appropriate Revenue Court.
When the claim was filed in the Revenue Court, the Court took the view that it had no juris diction to try the claim.
Thereupon, a suit was again insti tuted in the Civil Court for the lame relief.
This suit failed throughout on the ground of res judicata.
I?he High Court affirmed the dismissal and the Division Bench of this Court took the view that the High Court was right in taking the view hat the principles of res judicata were applicable to the issue of jurisdiction.
In our opinion, the contention of learned counsel for the appellant cannot be upheld.
We find that in Mathura Prasad Bajoo Jaiswal and Others vs Dossibai N.B. Jeejeebhoy; , at p. 836 a Bench comprising three learned Judges of this Court has taken the view that a decision on the question of jurisdiction of the court or a sure question of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit.
The Court observed: "It is true that in determining the application of the rule of res judicata the Court is not concerned with the correct ness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litiga tion between the same parties be regarded as finally decided and cannot be reopened.
A mixed question of law and fact determined 217 in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceed ing between the same parties.
But, where the decision is on a question of law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11 of the Code of Civil Procedure means the right litigated between the par ties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata, for a rule of proce dure cannot supersede the law of the land.
" The same view has been reiterated by a Bench comprising three learned Judges of this Court in Sushil Kumar Mehta vs Gobind Ram Bohra (dead) through his Lrs.; , We find that the decision of three learned Judges of this Court in Mathurn Prasad Bajoo Jaiswal and Others vs Dossibai N.S. Jeejeebhoy, has not been noticed at all by the Division Bench comprising two learned Judges of this Court which delivered the judgment in Avtar Singh and Others vs Jagjit Singh and Another, and hence, to the extent, that the judg ment in Avtar Singh 's case takes the view that the principle of res judicata is applicable to an erroneous decision on jurisdiction, it cannot be regarded as good law.
In our opinion a court which has no jurisdiction in law cannot be conferred with the jurisdiction by applying principles of res judicata.
It is well settled that there can be no estop pel on a pure question of law and in this case the question of jurisdiction is a pure question of law.
In our view, therefore, the High Court was, with re spect, right in its conclusions arrived at and the appeal must be dismissed.
The appeal is dismissed.
Looking to the facts and cir cumstances of the case there will be no order as to costs.
G.N. Appeal dis missed.
| IN-Abs | The Respondent landlord filed a suit under the Andhra Pradesh Rent Control Act for recovery of possession and for mesne profits.
The apPellant defendant raised a preliminary objection that the City Civil Court had no jurisdiction to entertain the suit.
In the two eviction petitions filed earlier by the appellant, the Respondent took the plea that since the alleged tenancy was hit by Section 3 of the A.P. Rent Control Act, eviction suit was not entertainable by the Rent Controller.
Decreeing the suit in favour of the appellant, the trial Court held that it was not oPen to the Respondent to take such inconsistent plea regarding jurisdiction; that he cannot be allowed to approbate and reprobate and he was estopped from doing so.
On apPeal by respondent, the deci sion was upheld by the First Appellate Court.
On a second apPeal preferred by the respondent, the High Court reversed the trial court 's order.
Aggrieved by the decision of the High Court, the appel lant preferred this apPeal, by special leave, contending that the principles of Res Judicata and estopPel were ap plicable.
Dismissing the apPeal, this Court, HELD: 1.
A court which has no jurisdiction in law cannot be conferred with the jurisdiction by applying principles of res judicata.
It is well settled that there can be no estop pel on a pure question of law.
[217F] 214 Mahtura Prasad Bajoo Jaiswal and Ors.
vs Dossibai N.B. Jeejeebhoy; , ; Sushil Kumar Mehta vs Gobind Ram Bohra (dead) thro ' his Lrs.; , ; relied on.
Avtar Singh and Ors.
vs Jagjit Singh and Anr., ; ; referred to.
In the instant case, the question of jurisdiction is a pure question of law.
The High Court was right in its conclusions that in matters of jurisdiction to entertain the suit, doctrine of estoppel could not be invoked; and that the City Civil Court had no jurisdiction to entertain the suit, as it lay exclusively within the jurisdiction of the Rent Controller.
[216A B]
|
ivil Appeal Nos.
1431 33(NT) of 1976.
Appeals by Certificate from the Judgment and Order dated 27.2.
1976 of the Ahmedabad High Court in Income Tax Refer ence Nos. 129 and 168 of 1974.
J.H. Parekh.
P.H. Parekh and Ms. Shalini Soni, for the Appellant.
S.C. Manchanda.
K.P. Bhatnagar and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by THOMMEN, J.
These appeals under certificate arise from the common judgment of the High Court of Gujarat in the Commissioner of Income Tax, Gujarat 111 vs Poonjabhai Vanma lidas.
The assessee is the same in all the cases.
The assessment years in question are 1964 65.
1965 66 and 1967 68.
In the relevant previous years.
the assessee received certain amounts and they were assessed under sec tion 41(4) of the Income Tax Act, 1961 (hereinafter referred to as the "1961 Act").
The contention of the assessee was that he was not assessable under section 41(4) of the 1961 Act because these amounts had been written off as bad debts in the year 1959 60 and his claim tot deduction, though initially disallowed by the Income Tax Officer.
was subse quently allowed by the Income Tax Appellate Tribunal in I.T.A. Nos.
673 676 (AHD) dated 12.7.
The business of the assessee had discontinued prior to the previous year in which any part of the amount was received, and consequently, it was contended.
these amounts when received were not assessable to income tax under section 41(4) of the 1961 Act as that section was not in pari materia with section 10(2)(xi) of the Income Tax Act, 1922 ( '1922 Act ') in terms of which the amounts had been written off as bad debts.
This contention was rejected by the Income Tax Officer and the amounts were brought to tax.
The orders of assessment were confirmed by the 209 Appellate Assistant Commissioner.
On further appeal by the assessee, the Tribunal held, accepting the assessee 's con tention, that the amounts could not be taxed under section 41(4) of the 1961 Act, for that section had no application to amounts written off in 1959 60 in terms of section 10(2)(xi) of the 1922 Act when it was in force.
On a refer ence, the High Court held that the amounts in question were includable in computing the taxable income of the assessee in respect of the relevant years under section 41(4) of the 1961 Act.
The questions referred were accordingly answered by the High Court against the assessee and in favour of the Revenue.
Hence the present appeals.
Section 10(2)(xi) of the 1922 Act reads: "10.
Business: (1) . . . . . . (2) Such profits or gains shall be computed after making the following allowances, namely: (xi) when the assessees 's accounts in respect of any part of his business, profession or vocation are not kept on the cash basis, such sum.
in respect of bad and doubtful debts, due to the assessee in respect of the part of his business, profession or vocation, and in the case of an assessee carrying on a banking or money lending business.
such sum in respect of loans made in the ordinary course of such business as the Income tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of assessee: Provided that if the amount ultimately recovered on any such debt or loan is greater than the difference between the whole debt or loan and the amount so allowed, the excess shall be deemed to be a profit of the year in which it is recovered and if less, the deficiency shall be deemed to be a business expense of that year; There is no dispute that the assessee 's accounts were not kept on cash basis.
There is also no dispute that the assessee 's business had discontinued prior to the year of recovery of the amounts in question, If the amounts had been received prior to the repeal of the 1922 Act the entire transaction would have been covered by the provisions of 210 section 10(2)(xi) of that Act, and the business having been discontinued prior to the relevant years of receipt, these amounts would not have been taxable.
See Commissioner of Income Tax, Madras vs Express Newspapers Ltd., But the amounts in question here were recovered after the coming into force of the 1961 Act which repealed the 1922 Act.
The question, therefore, is whether the amounts which had been written off in terms of section 10(2)(xi) of the 1922 Act, but subsequently received after the repeal of that provision.
could be brought to tax in terms of the relevant re enacted provisions.
Tax is sought to be levied under the 1961 Act in terms of section 41(4) which reads: "41.
Profits chargeable to tax . 4.
Where a deduction has been allowed in respect of a bad debt or part of debt under the provisions of clause (vii) of sub section (1) of section 36, then, if the amount subsequently recovered on any such debt or part is greater than the difference between the debt or part of debt and the amount so allowed, the excess shall be deemed to be profits and gains of business or profession, and accordingly charge able to income tax as the income of the previous year in which it is recovered, whether the business or profession in respect of which the deduction has been allowed is in exist ence in that year or not.
This sub section.
refers to the deduction allowed in respect of a bad debt under the provisions of section 36(1)(vii) of the 1961 Act which reads as follows: "36.
Other deductions (1).
The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 (vii) subject to the provisions of sub section (2), the amount of any debt, or part thereof, which is estab lished to have become a bad debt in the previous year: 211 Significantly sub section (4) of section 41 of the 1961 Act specifically states that tax is attracted whether or not the business or profession in respect of which the deductions had been allowed continued to be in existence in the year of receipt.
This is a fundamental deviation from the earlier provision contained in section 10(2)(xi) of the 1922 Act.
Furthermore, sub section (4) of section 41 specifically says that the deductions should have been allowed in respect of a bad debt under the provisions of section 36(1)(vii) in order to attract section 41(4).
The assessee, therefore, contends that the relevant provisions of the two enactments are not in pari materia, and what has been allowed as a deduction in terms of section 10(2)(xi) of the 1922 Act cannot be brought to tax under section 41(4) of the 1961 Act.
Any order made under section 10(2)(xi) of the 1922 Act under which a debt was written off would not attract tax on recovery of the whole or part of such amount unless the business itself continued to exist at the time of the recovery.
Furthermore, the assessee contends that sub section (4) of section 41 of the 1961 Act is at tracted only where the bad debt was written off in terms of section 36(1)(vii) of that Act, and not in terms of section 10(2)(xi) of the 1922 Act, the provisions of which are not in pari materia with either section 36(1)(vii) or section 41(4).
Rejecting the contentions of the assessee, the High Court held that there was no inconsistency between the relevant provisions of the two enactments and that section 24 of the was attracted as a result of which the order in terms of which the amounts had been written off was deemed to have been made under the re enacted provisions, as contained in section 36(1)(vii), and consequently the amounts recovered on any such debt were chargeable under section 41(4).
Section 25 of the , in so far as it is material.
reads: "24.
Continuation of orders, etc., issued under enactments repealed and re enacted Where any Central Act or Regulation is, after the commencement of this Act, repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule, form or bye?law, made or issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions re enacted, continue in force, and be deemed to have been made or issued under 212 the provisions so re enacted, unless and until it is super seded by any appointment, notification, order, scheme, rule, form or bye law made or issued under the provisions so re enacted . " The effect of section 24 of the , in so far as it is material, is that where the re pealed and re enacted provisions are not inconsistent with each other, any order made under the repealed provisions is deemed to be an order made under the reenacted provisions.
The question, therefore, is whether the provisions of the repealed section 10(2)(xi), under which the bad debts were written off as irrecoverable in the books of the assessee, are in terms re enacted by the repealing Act.
A comparative table furnished i.
The Law and Practice of Income Tax, Kanga and Palkiwala (Seventh Edition Volume II) shows that section 10(2)(xi) of the 1922 Act is equivalent to sections 36(1)(vii), 36(2) and 41(4) of the 196 1 Act.
The repealed section 10(2)(xi) is thus a composite section containing the ingredients of the re enancted sections 36(1)(vii), 36(2) and 41(4).
Consequently when a debt is written off by an order in terms of section 10(2)(xi) of the 1922 Act, the Income Tax Officer exercises the same power as he would have exercised on the enactment of section 36(1)(vii) of the 1961 Act.
These two provisions are, therefore, consistent with each other.
Section 36(1)(vii) is subject to the provisions of sub section (2) of that section.
Therefore, both sections 36(I)(vii) and 36(2) of the 1961 Act, being two of the ingredients of section 10(2)(xi) of the 1922 Act, must be read together with reference to an order under which debts had been written off.
Accordingly, in the light of section 24 of the , the relevant order made under section 10(2)(xi) of the 1922 Act with reference to which the debt in question had been written off, is deemed to be an order made under section 36(1)(vii) of the 1961 Act and such order is what is contemplated under section 41(4) of that Act.
Any amount which is recovered on any such debt is attracted by the provisions of section 41(4) of the 1961 Act and is, therefore, chargeable to tax in terms of that sub section to the extent of the 'excess ' specified therein.
The contentions of the assessee thus fail, and the appeals are accordingly dismissed.
No order as to costs.
P.S.S. Appeals dismissed.
| IN-Abs | Section 10(2)(xi) of the Income Tax Act, 1922 provided for deduction of bad and doubtful debts.
The proviso thereto laid down that if the amount ultimately recovered on any such debt was greater than the difference between the whole debt and the amount allowed the excess shall be deemed to be a profit of the year in which it was recovered.
These provi sions were re enacted in the Income Tax, Act, 1961 as section 36(1)(vii) provides, subject to the provisions of sub section
(2), for deduction of amount of any debt established to have become a bad debt in the previous year, whereas section 41(4) provides for bringing to tax amounts of such bad debts, if recovered subsequently, as the income of the previous year in which it was recovered, whether the business in respect of which the deduction had been allowed was in existence in that year or not.
Certain amounts which had been allowed to be written off as bad debts in terms of section 10(2)(xi) of the Income Tax Act, 1922 in the year 1959 60, but subsequently received by the assessee were sought to be brought to tax in the assessment years 1964 65, 1965 66 and 1967 68 under section 41(4) of the Income Tax Act, 1961.
The assessee 's business had discontin ued prior to the relevant years of recovery of the amounts.
The orders of assessment were confirmed by the Appellate Assistant Commissioner.
The Tribunal, however, held that the amounts could not be taxed under section 41(4) of the 1961 Act for that section had no application to amounts written off in 1959 60 in terms of section 10(2)(xi) of the 1922 Act when it was in force.
On a reference, the High Court held that the amounts in question were includable in computing the taxable income of the assessee in respect of the relevant years under section 41(4) of the 1961 Act.
It took the view that there was no incon sistency between the relevant provisions of the two enact ments and that section 24 of the was attracted as a result of which the order in terms of which the amounts 207 had been written off was deemed to have been made under the reenacted provisions, as contained in section 36(1)(vii).
In these appeals by certificate, it was contended for the appellant that the relevant provisions of the 1922 Act and 1961 Act were not in pari materia, that section 41(4) would be attracted only where the bad debt had been written off in terms of section 36(1)(vii), and that what has been allowed as a deduction in terms of section 10(2)(xi) of the 1922 Act could not on recovery be brought to tax under section 41(4) of the 1961 Act, unless the business itself had continued to exist at the time of recovery.
Dismissing the appeals, the Court, HELD: 1.
If the amounts had been received prior to the repeal of the 1922 Act the entire transaction would have been covered by the provisions of section 10(2)(xi) of the Act, and the business having been discontinued prior to the relevant years of receipt, these amounts would not have been taxable.
[209H; 210A] Commissioner of Income Tax, Madras vs Express Newspapers Ltd., referred to.
2.1 The effect of section 24 of the , in so far as it is material, is that where the re pealed and re enacted provisions are not inconsistent with each other, any order made under the repealed provisions would be deemed to be an order made under the re enacted provisions.
[212B] 2.2 Section 10(2)(xi) of the 1922 Act is equivalent to sections 36(1)(vii), 36(2) and 41(4) of the 1961 Act.
The repealed section 10(2)(xi) is thus a composite section containing the ingredients of the re enacted sections 36(1)(vii), 36(2) and 41(4).
Consequently, when a debt is written off by an order in terms of section 10(2)(xi) of the 1922 Act, the Income Tax Officer exercises the same power as he would have exercised on the enactment of section 36(1)(vii) of the 1961 Act.
These two provisions are, there fore, consistent with each other.
Section 36(1)(vii) is subject to the provisions of sub section (2) of that sec tion.
Therefore, both sections 36(1)(vii) and 36(2) of the 1961 Act, being two of the ingredients of section 10(2)(xi) of the 1922 Act, must be read together with reference to an order under which debts had been written off.
Accordingly, in the light of section 24 of the General Clause Act, 1897, the relevant order made under section 10(2)(xi) of the 1922 Act with reference to which the debt in question had been written off, would be 208 deemed to be an order made under section 36(1)(vii) of the 1961 Act and such order is what is contemplated under sec tion 41(4) of that Act.
Any amount which is recovered on any such debt is attracted by the provisions of section 41(4) of the 1961 Act and is, therefore, chargeable to tax in terms of that sub section to the extent of the 'excess ' specified therein.
[212C G]
|
ivil Appeal No. 3071 of 1988.
? 199 From the Judgment and Order dated 8.4.1988 of the Karna taka High Court in Writ Appeal No. 563 of 1988.
Narayana B. Shetye, D.N. Misra and O.C. Mathur for the Appellant.
S.R. Bhatt for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
The short question which arises in this appeal by special leave is whether the departmental enquiry entrusted to and conducted by a Bank official stands vitiat ed if the said official proceeds with the enquiry and con cludes the same after his superannuation.
during the penden cy of the enquiry? The High Court of Karnataka has held that such an enquiry is incompetent and without jurisdiction and, therefore, null and void.
The facts giving rise to this appeal, briefly stated, are as under: The respondent C. Bernard while serving as a Relieving Head Cashier in the K.G. Road Branch of the Bank in Banga lore city availed of 15 days leave from April 17, 1978 to May 1, 1978 and was allowed an advance of Rs.2,500 on April, 1978 under LFC to be adjusted later on his submitting the LFC Bill.
He submitted a bill for Rs.2,800 on May 5, 1978 along with a stamped cash receipt purported to have been issued by M/s. Shri Manju Travels of Bangalore and claimed reimbursement for the same.
The said bill was passed by the bank on May 15, 1978 but subsequent investigations revealed that the firm of M/s. Shri Manju Travels was a spurious one which indulged in issuing fake travel receipts.
Thereupon the respondent was served with a Memo dated August 1, 1978 by the Divisional office of the Bank calling for his expla nation.
A letter was also addressed on the same day to M/s. Shri Manju Travels, Bangalore requesting them to furnish the details of the persons who traveled and the amounts received by the said firm.
No reply was received from the said firm but the respondent sent a reply on August 10, 1978 which was not found to be satisfactory.
Some correspondence ensued between the respondent and the appellant in this connection but finally the respondent was served with the charge sheet dated October 12, 1978 which was followed by a departmental enquiry.
It is not necessary to go into the details in regard to proceedings at the departmental enquiry but it would be sufficient to state that the respondent participat ed in the departmental enquiry till it was completed by the enquiry officer Shri U.B. Menon.
200 Paragraph 9.14 of the Memorandum of Bi partite Settle ment dated October 19, 1966 empowers the Chief Executive Officer, etc., of he Bank to decide which officer(s) would be empowered to hold enquiry and take disciplinary action in the case of each office or establishment.
Accordingly Shri U.B. Menon, Special Officer, was appointed an Enquiry Offi cer under the Chief Executive Officer 's Order dated January 9, 1979, which reads as under: "Pursuant to the powers vested in the Executive Director by the Chairman and Managing Director of the Bank, as per his office Order dated 20th December, 1978, authorising him to appoint Enquiry Officers and Appellate Authorities under the provisions of Chapter 19 of the Bi partite Settlement dated 19th October, 1966, the undersigned is pleased to appoint Shri U.B. Menon, Special Officer, to work as an Enquiry Officer, to hold and conduct departmental enquiries against the members of the staff governed by the provisions of the Award and Bi partite Settlement, and to pass necessary orders under the provisions of Chapter 19 of the Bi partite Settlement dated 19th October, 1966.
" By a subsequent circular dated January 17, 1979 all offices of the Bank were informed about the appointment.
Shri U.B. Menon was intimated about the same by the Assistant General Manager 's letter dated January 23, 1979.
The said Enquiry Officer conducted the departmental enquiry against the respondent.
However, during the pendency of the departmental enquiry he retired from service on January 31, 1979.
Not withstanding his retirement he continued to function as an Enquiry Officer and concluded the enquiry against the re spondent by the end of 1979.
He then gave an opportunity to the respondent to be heard on the question of punishment and then passed the impugned order of discharge on January 14, 1980.
The respondent 's departmental appeal was also dis missed on June 17, 1980.
The respondent did not raise any objection against the continuance of the enquiry by the said Shri U.B. Menon at any time during the pendency and till the disposal of the departmental appeal preferred by him.
Suf fice it to say that he raised this objection for the first time in Writ Petition No. 18 140 of 1980 filed against the impugned order of discharge in the High Court.
A learned Single judge of the High Court by his order dated January 18, 1988 came to the conclusion that on the retirement of Shri U.B. Menon 'he was nobody in the hierarchy of authorities ' to impose 201 punishment on the respondent and hence the order imposing punishment was clearly incompetent and without jurisdiction.
The argument that since the impugned order of discharge got merged in the appellate order, the initial defect, if any, stood removed, was repelled by the learned Judge on the ground that 'as the original order was without jurisdiction or competence, there was nothing for the Appellate Authority to confirm '.
The learned Single Judge, therefore, allowed the writ petition, quashed the impugned order of punishment and directed that the respondent be paid all consequential benefits.
The appellant preferred a Letters Patent Appeal against the said order of the learned Single Judge.
The Division Bench of the High Court which heard the appeal dismissed it by a one line order: 'no ground for interfer ence is made out '.
It is against this order that the appel lant has approached this Court under article 136 of the Consti tution.
Shri Narain Shetye, the learned counsel for the appel lant strongly urged that the High, Court ought not to have permitted the respondent to question the competence or jurisdiction of Shri U.B. Menon to act as an Enquiry Officer as well as a Disciplinary Authority after his superannuation since he had participated in the enquiry throughout without a demur.
According to him, by conduct the respondent was estopped from raising such a contention for the first time in a writ petition, more so because he had submitted to the jurisdiction of Shri U.B. Menon and there was no prejudice caused on him on that account.
Lastly, he submitted that even otherwise the appellant could have appointed a non official as an Enquiry Officer and therefore his decision could be saved on the de facto doctrine.
Taking the last submission first we think that in the facts and circumstances of this case the de facto doctrine can have no application.
Under paragraph 19.14 of the by parties agreement the Chief Executive Officer was entitled to decide which officer should be empowered to hold an enquiry and take disciplinary action in the case of each office or establishment.
Under this paragraph only an offi cer of the bank could be empowered to hold an enquiry and take disciplinary action against a delinquent.
The names of officers so empowered were required to be published on the bank 's notice board.
Accordingly, Shri U.B. Menon was ap pointed an Enquiry Officer/Disciplinary Authority under paragraph 19.14 of the bi partite agreement while he was still in service.
It is indeed surprising that an officer who was due to retire within a few days only was chosen to act as an Enquiry Officer and Disciplinary Authority by the order dated January 9, 1979.
Shri U.B. Menon was intimated about his appoint 202 ment by the letter of January 23, r979, i.e., hardly a week before his superannuation on January 31, 1979.
After his retirement from service he proceeded with the enquiry and concluded it by the end of 1979.
The respondent was then served with a second show cause notice on the question of punishment and thereafter the impugned order of discharge was passed on January 14, 1980.
There is nothing on the record to show that any formal decision was taken by the appellant to continue the services of Shri U.B. Menon as an official of the bank.
Shri Shetty is right when he contends that an Enquiry Officer need not be an officer of the bank; even a third party can be appointed as Enquiry Officer to enquire into the conduct of an employee.
See: Saran Motors (P) Ltd. vs Vishwanath & Anr., But there can be no doubt that a non official cannot act as a Disci plinary Authority and pass an order of punishment against the delinquent employee.
It is for this reason that the learned Single Judge of the High Court observed that on retirement Shri U.B. Menon was nobody in the hierarchy of authorities to impose punishment on the delinquent.
He therefore, held that the order of punishment was clearly incompetent and without jurisdiction.
The learned counsel for the appellant submitted that since the initial appoint ment of Shri U.B. Menon was valid, his actions and decisions could not be invalidated by his subsequent retirement.
According to him he continued to function as an Enquiry Officer de facto and hence his actions and decisions were saved.
The de facto doctrine has two requisites, namely, (i) the possession of the office and the performance of the duties attached thereto, and (ii) colour of title, that is, apparent right to the office and acquiescence in the posses sion thereof by the public.
According to this doctrine the acts of officers de facto performed within the sphere of their assumed official authority, in the interest of the public or third parties and not for their own interest, are generally held valid and binding as if they were performed by de jure officers.
This doctrine dates back to the case of Abbe de Fontaine decided way back in 1431 to which reference was made by Sir Asutosh Mookerjee, 3.
in Pulin Behari Das vs King Emperor, [1911 12] 16 Calcutta Weekly Notes 1105 at 1120.
Mookerjee, J. held that as the complaint was made after complying with section 196, Criminal Procedure Code, by the order of or under authority from Local Government which was de facto, the proceedings were valid.
On the same principle it was further held that the Court of Sessions, assuming it was not the holder of a de jure office, was actually in possession of it under the colour of title which indicated the acquiescence of the public in its actions and hence its authority could not be collaterally impeached in the proceedings arising from the conviction of Pulin and his co accused.
Again, in Immedisetti Ramkrishnaiah Sons 203 vs State of Andhra Pradesh, AIR 1976 A.P. 193, the Govern ment nominated nine persons on a Market Committee which nomination was later set aside by the High Court.
However, before the High Court pronounced its judgment, the Market Committee had functioned as if it had been properly consti tuted.
Between the date of its constitution and the date of the High Court decision it had taken several decisions, issued notifications, etc., which were the subject matter of challenge on the ground that its constitution was ab initio bad in law.
Chinnappa Reddy, J. relying on the observations of Mookerjee, J., in Pulin 's case concluded that the acts of the Market Committee de facto performed within the scope of its assumed official authority, in the interest of the public or third persons and not for his own benefit are generally as valid and binding as if they were performed by a de jure Committee.
The Allahabad High Court in Jai Kumar vs State, [1968] All.
L.J. 877 upheld the judgments of the District Judges whose appointments were later struck down by this Court on the principle that the acts of officers defac to are not to be questioned because of the want of legal authority except by some direct proceeding instituted for the purpose by the State or by someone claiming the office de jure, or except when the person himself attempts to build up some right, or claim some privilege or benefit by reason of being the officer which he claims to be.
In all other cases, the acts of an officer de facto are valid and effec tual, while he is suffered to retain the office, as though he were an officer by right and the same legal consequences will flow from them for the protection of the public and of the third parties.
This Court in Gokaraju Rangaraju vs State of A.P., ; 1981 SC 1473 was required to consider the question of the effect of the declaration of this Court holding the appointment of an Additional Sessions Judge invalid on judgments pronounced by him prior to such declaration.
This Court observed that the defacto doctrine is rounded on good sense, sound policy and practical experi ence.
It is aimed at the prevention of public and private mischief and the protection of public and private interest.
It avoids endless confusion and needless chaos.
It, there fore, seems clear to us that the de facto doctrine can be invoked in cases where there is an appointment to office which is defective; but notwithstanding the defect to the title of the office, the decisions made by such a de facto officer clothed with the powers and functions of the office would be as efficacious as those made by a de jure officer.
The same would, however, not be true of a total intruder or usurper of office.
In our view, the submission of Shri Shetty based on the defacto doctrine is clearly misconceived.
Shri U.B. Menon can hardly be described as a person occupying or being in possession of an office to 204 which certain duties affecting the members of the general public can be said to be attached.
The de facto doctrine, as explained earlier, envisages that acts performed de facto by officers within the scope of their assumed official authori ty are to be regarded as binding as if they were performed by officers de jure.
While the de facto doctrine saves official acts done by an officer whose appointment is found to be defective the private parties to a litigation are precluded from challenging the appointment in any collateral proceedings.
But the doctrine does not come to the rescue of an intruder or usurper or a total stranger to the office.
Obviously the doctrine can have no application to the case of a person who is not the holder of an office but is merely a bank employee, for that matter an ex employee.
We, there fore, see no merit in this contention '.
True it is that the respondent did not attribute any bias or mala fides to the Enquiry Officer nor did he com plain that he was in any manner prejudiced on account of the said Enquiry Officer conducting he domestic enquiry but that will not cure the defect as to his compensence.
Where pun ishment is imposed by a person who has no authority do so the very foundation on which the edifice is built collapses and with and it fails the entire edifice.
It is a case more or less akin to a case tried by a court lacking in inherent jurisdiction.
We, are, therefore, of he opinion that absence of bias, prejudice or mala fides, is of no consequence so far as the question of competence is con cerned.
The cases which were cited at the bar (i) Delhi Cloth and General Mills Co., Ltd. vs Labour Court, Tis Hazari & Ors., and (ii) Saran Motors, (supra) also have no application to the special facts and circumstances of this case.
Shri Shetye next submitted that if a third party non official can validly be appointed an Enquiry Officer, though not Disciplinary Authority, his report upto the stage pre ceding the issuance of a second ,how cause notice could be saved because both sides to the proceedings had not raised any objection to the continuance of the enquiry by the said Enquiry Officer and therefore the High Court ought to have remitted the matter to the competent Disciplinary Authority to take a fresh decision based on the report of the Enquiry Officer.
To put it differently, according to the learned counsel for the appellant, the High Court should have re manded the matter with a direction that the competent Disci plinary Authority will proceed to dispose of the departmen tal enquiry from the stage of the report submitted by the Enquiry Officer.
We would have considered it necessary to examine this submission had the delinquent not retired in the meantime on August 21, 1986.
The High Court pronounced its Judgment thereafter 205 on January 18, 1988.
No useful purpose, therefore, can be served by adopting the procedure suggested by Shri Shetye as the respondent had admittedly retired from service in 1986 and if the order imposing punishment is quashed he would ordinarily have to be paid his wages etc., upto the date of his retirement.
We, therefore, do not think that, in the facts and circumstances of this case, the course suggested by Shri Shetye can be usefully adopted.
Lastly, Shri Shetye submitted that in any event the respondent succeeded in getting the order of punishment quashed on a mere technicality and that too on the conten tion belatedly raised before the High Court for the first time and, therefore, the High Court was in error in direct ing payment of all consequential benefits.
We think there is merit in this contention.
If the objection was raised at the earliest possible opportunity before the Enquiry Officer the appellant could have taken steps to remedy the situation by appointing a competent officer to enquire into the charges before the respondent 's retirement from service.
It is equally true that the penalty has not been quashed on mer its.
On the contrary, if one were to go by the charge le velled against the respondent and the reply thereto one may carry the impression that the respondent had made the claim on the basis of the fake receipt; whether the respondent himself was duped or not would be a different matter.
The fact, however, remains that the impugned order of punishment has to be quashed not because the merits of the case so demand but because the technical plea of incompetence suc ceeds.
In the circumstances, we think that the ends of justice would be met if instead of directing 'all consequen tial benefits ' the appellant is ordered to pay '50% of the consequential benefits ' to which the respondent would be entitled on superannuation.
For the above reasons, we are of the opinion that the High Court was right in quashing the impugned order of punishment but we think having regard to the special facts and circumstances pointed out earlier, it should not have ordered payment of 'all consequential bene fits ' flowing from the declaration that the impugned order was bad in law.
We, therefore, modify this part of the order by substituting the words fifty percent ' in place of the word 'all ' in the penultimate paragraph of the learned Single Judge 's order.
To put the matter beyond the pale of doubt we clarify that the respondent will be paid 50% of the consequential benefits and not all the consequential bene fits.
Except for this modification, the rest of the order of the High Court will stand.
The appeal will stand allowed to the above extent but, in the facts and circumstances of this case, we think the parties should be directed to bear their own costs.
T.N.A. Appeal allowed partly.
| IN-Abs | The respondent, a bank employee, was chargesheeted for claiming L.F.C. on the basis of fake travel receipts.
The Bank appointed one of its officers as Enquiry Officer as well as Disciplinary Authority who conducted the departmen tal enquiry against the respondent.
However, during the pendency of the enquiry the Enquiry Officer retired from service.
Notwithstanding his retirement from service he proceeded with the enquiry and concluded the same against the respondent.
The respondent participated in the enquiry without raising any objection against the continuance of the said Enquiry by the said Enquiry Officer.
After giving an opportunity to the respondent to be heard on the question of punishment the Enquiry Officer/Disciplinary Authority im posed the punishment of discharge.
The respondent fried a departmental appeal which was dismissed.
Thereafter, the respondent filed a writ petition in the High Court challeng ing the order of discharge on the ground that the order passed by the Enquiry Officer was without jurisdiction.
A single judge of the High Court allowed the Writ Peti tion, quashed the order of punishment with all consequential benefits to the respondent on the ground that after retire ment the Enquiry Officer was nobody in the hierarchy of authorities to impose punishment on the delinquent employee and hence his order imposing punishment was incompetent and without jurisdiction.
Against the order of the single judge the Bank preferred a Letter Patent Appeal before a Division Bench of the High Court which was dismissed.
197 In appeal to this Court it was contended on behalf of the appellant Bank; (i) that the decision of the Enquiry Officer could be saved on the basis of de facto doctrine because (a) his initial appointment being valid his actions and decisions could not be invalidated by his subsequent retirement since he continued to function as a de facto Enquiry Officer; (b) even otherwise the Bank could have appointed a non official as Enquiry Officer; (ii) that since the High Court quashed the punishment not on merits but on a mere technicality, it erred in directing payment of all consequential benefits to the respondent; and (iii) since the respondent submitted to the jurisdiction of the Enquiry Officer and there was no prejudice caused to him he was estopped from raising the contention as to the competence or jurisdiction of the Enquiry Officer for the first time in the Writ Petition.
Allowing the appeal in part, this Court, HELD: 1.
The de facto doctrine has to requisites, name ly, (i) the possession of the office and the performance of the duties attached thereto, and (ii) colour of title, that is, apparent right to the office and acquiescence in the possession thereof by the public.
According to this doctrine the acts of officers de facto performed within the sphere of their assumed official authority, in the interest of the public or third parties and not for their own interest, are generally held valid and binding as if they were performed by de jure officers.
This doctrine can be invoked in cases where there is an appointment to office which is defective; but notwithstanding the defect to the title of the office, the decisions made by such a de facto officer clothed with the powers and functions of the office would be as effica cious as those made by a de jure officer.
The same would, however, not be true of a total intruder or usurper of office.
The doctrine envisages that acts performed de facto by officers within the scope of their assumed official authority are to be regarded.
as binding as if they were performed by officers de jure.
While the de facto doctrine saves official acts done by an officer whose appointment is found to be defective the private parties to a litigation are precluded from challenging the appointment in any col lateral proceedings.
But the doctrine does not come to the rescue of an intruder or usurper or a total stranger to the office.
Obviously the doctrine can have no application to the case of a person who is not the holder of an office but is merely a bank employee, for that matter an ex employee.
[202E F; 203BF G; 204A C] 1.1 In the instant case, the Enquiry Officer can hardly be described as a person occupying or being in possession of an office to which certain duties affecting the members of the general public can be 198 said to be attached.
Therefore in the facts and circum stances of this case the de facto doctrine can have no application.
[203H; 204A; 201G] Pulin Behari Das vs King Emperor, [1911 12] 16 Cal.
Weekly Notes 1105; Immedisetti Ramkrishnaiah Sons vs State of Andhra Pradesh, A.I.R. 1976 A.P. 193; Jai Kumar vs State, [1968] All.
L.J. 877; Gokaraju Rangaraju vs State of A.P., ; ; referred to.
Abbe de Fountaine decided in 143 1; cited.
1.2 An Enquiry Officer need not be an officer of the bank: even a third party can be appointed an Enquiry Officer to enquire into the conduct of an employee.
But there can be no doubt that a non official cannot act as a Disciplinary Authority and pass an order of punishment against the delin quent employee.
Therefore, where punishment is imposed by a person who has no authority to do so the very foundation on which the edifice is built collapses and with and it fails the entire edifice.
It is a case more or less akin to a case tried by court lacking in inherent jurisdiction.
Absence of bias, prejudice or mala fides, is of no consequence so far as the question of competence of the Enquiry Officer is concerned.
[202B; 204D E] Saran Motors (P.) Ltd. vs Vishwanath & Anr., ; referred to.
Delhi Cloth and General Mills Co. Ltd. vs Labour Court, Tis Hazari & Ors., ; Held inapplicable.
In the instant case, the impugned order of punishment was quashed not because the merits of the case so demanded but because the technical plea of incompetence succeeded.
Therefore, the High Court was right in quashing the impugned order of punishment but having regard to the special facts and circumstances of the case, it should not have ordered payment of 'all consequential benefits ' flowing from the declaration that the impugned order was bad in law.
The order of the High Court is modified to the extent that the respondent will be paid 50% of the consequential benefits and not all the consequential benefits.
Except for this modification, the rest of the order of the High Court will stand.
[205E G]
|
s (Nos. 513, 566, 568, 570, 591,595, 596, 601, 616, 617, 623, 625, 631 and 632 of 1951) under article 32 of the Constitution for writs in the nature of habeas corpus.
The facts are stated in the judg ment.
Raghbir Singh (amicus curiae) for the petitioners in Petitions Nos.
513, 566, 568, 570.
595, 596, 609, 616, 617, 623,625 and 631.
A.S.R. Chari (amicus curiae) for the petitioner in Petition No. 591.
Shiv Charan Singh (amicus curiae) for the petitioner in Petition No. 632.
section M Sikri, Advocate General of the Punjab (Jindra Lal, with him) for the State of the Punjab.
January 25.
The Judgment of the Court was deliv ered by PATANJALI SASTRI C.J.
This is a petition under article 32 of the Constitution submitted through the Super intendent, Central Jail, Ambala, for the issue of a writ of habeas corpus for the release of the petitioner from custo dy.
On 5th July, 1950, the petitioner was arrested and detained under an order of the District Magistrate of Amrit sar in exercise of the powers conferred on him under section 3 of the , and the grounds of his detention were served on him as required by section 7 of the Act on 10th July, 1950.
The Act having been amended by the Preventive Detention (Amendment) Act, 1951, with effect from 22nd February, 1951, a fresh order No. 7853 ADSB, dated 17th May, 1951, was issued in the following terms : "Whereas the Governor of Punjab is satisfied with re spect to the person known as Naranjan Singh Nathawan, s/o Lehna Singh of village Chak Sikandar, 397 P.S. Ramdas, Amritsar District, that with a view to prevent ing him from acting in a manner prejudicial to the security of the State, it is necessary to make the following order: Now, therefore.
in exercise of the powers conferred by sub section (1) of section 3 and section 4 of the Preven tive Detention Act, 1950, as amended by the Preventive Detention (Amendment) Act, 1951, the Governor of Punjab hereby directs that the said Naranjan Singh Nathawan be committed to the custody of the Inspector General of Pris ons, Punjab, and detained in any jail of the State till 31st March, 1952, subject to such conditions as to maintenance, discipline and punishment for breaches of discipline as have been specified by general order or as contained in the Punjab Detenu Rules, 1950.
" This order was served on the petitioner on 23rd May, 1951, but no grounds in support of this order were served on him.
The petitioner thereupon presented this petition for his release contending that the aforesaid order was illegal inasmuch as (1) the grounds of detention communicated to him on 10th July, 1950, were "quite vague, false and imaginary" and (2) he was not furnished with the grounds on which the order dated 17th May, 1951, was based.
The petition was heard ex parte on 12th November, 1951, when this Court issued a rule nisi calling upon the respondent to show cause why the petitioner should not be released, and it was posted for final hearing on 23rd November, 1951.
Meanwhile, the State Government issued an order on 18th November, 1951.
revoking the order of detention dated 17th May, 1951, and on the same date the District Magistrate, Amritsar, issued yet another order for the detention of the petitioner under sections a and 4 of the amended Act; this last order along with the grounds on which it was based was served on the petitioner on 19th November, 1951.
Thereupon the petitioner submitted a supplemental peti tion to this Court on 28th November, 1951, challenging the validity of the last order on the ground 398 that "it was only a device to defeat the habeas corpus petition of the petitioner in which a rule had already been issued , and he put forward an additional ground of attack on the legality of the earlier order dated 17th may, 1951, namely, that it fixed the term of detention till 31st March, 1952, before obtaining the opinion of the Advisory Board as required by section 11 of the amended Act.
This ground was evidently based on the view expressed by this Court that the specification of the period of detention in the initial order of detention under section 3 of the amended Act before obtaining the opinion of the Advisory Board rendered the order illegal.
In the return to the rule showing cause filed on behalf of the respondent, the Under Secretary (Home) to the Govern ment explained the circumstances which led to the issue of the fresh order of detention dated 18th November, 1951.
After stating that the petitioner 's case was referred to and considered by the Advisory Board constituted under section 8 of the amended Act and that the Board reported on 30th May, 1951, that there was sufficient cause for the detention of the petitioner, the affidavit proceeded as follows: "That the Government was advised that the orders made under section 11 of the , as amended by the Preventive Detention (Amendment) Act, 1951, but carried out in the form of orders under section 3 of the said Act, should be followed by grounds of detention and, as this had not been done in most cases, the detentions were likely to be called in question.
The Government was further advised there were other technical defects which might render the detention of various detenus untenable.
In view of this, the Government decided that the cases of all dete nus should be reviewed by the District Magistrates con cerned.
Accordingly, the Punjab Government instructed the District Magistrates to review the cases and apply their minds afresh and emphasised that there must exist rational grounds with the detaining authority to justify the deten tion of a person and they were asked to report clearly in each case if the District 399 Magistrate concerned wanted the detenus to be detained.
The Punjab Government also reviewed some cases.
Accordingly all cases including the case of the petitioner were reviewed and in this case the District Magistrate was again satisfied that it was necessary that the detenu be detained with a view to prevent him from acting in a manner prejudicial to the security of the State and the maintenance of public order." And it concluded by stating "that the petitioner is detained now under the orders of the District Magistrate, Amritsar.
" The original and supplementary petitions came on in due course for hearing before Fazl Ali and Vivian Bose JJ.
on 17th December, 1951, when reliance was placed on behalf of t he petitioner on certain observations in an unreported decision of this Court in Petition No. 334 of 1951 (Naranjan Singh vs The State of Punjab) and it was claimed that in view of those observations and of the provisions of Part III of the Constitution, the decision in Basant Chandra Ghose vs King Emperor(1), on which the respondent relied.
was no longer good law.
The learned Judges thought that the matter should be considered by a Constitution bench and the case was accordingly placed before us.
It will be seen from the affidavit filed on behalf of the respondent that the case of the petitioner, along with his representation against the detention order of 17th May, 1951, was placed before the Advisory Board for its consider ation, and the Board reported on 30th May, 1951, that in its opinion there was sufficient cause for the detention of the petitioner.
It is said that, on the basis of that report, the Government decided that the petitioner should be de tained till 31st March, 1952, but while a properly framed order under section 11 should "confirm" the detention order and "continue" the detention for a specified period, the order of 17th May, 1951, was issued under a misapprehension in the form of an initial order under section 3 of the amended Act.
on the same grounds as before without any fresh communication thereof to the petitioner.
To (1) 52 400 avoid arguments based on possible defects of a technical and formal character, the said order was revoked under section 13, and on a review of the case by the District Magistrate, a fresh order of detention was issued under section 3 on 18th November, 1951, and this was followed by a formal communication of the same grounds as before as there could be no fresh grounds, the petitioner having throughout been under detention.
It is contended by the Advocate General of the Punjab that the decision reported in is clear authority in support of the validity of the aforesaid order.
On essentially similar facts the court laid down two propo sitions both of which have application here.
(1) Where an earlier order of detention is defective merely on formal grounds, there is nothing to preclude a proper order of detention being based on the pre existing grounds them selves, especially in cases in which the sufficiency of the grounds is not examinable by the courts, and (2) if at any time before the court directs the release of the detenu, a valid order directing his detention is produced, the court cannot direct his release merely on the ground that at some prior stage there was no valid cause for detention.
The question is not whether the later order validates the earli er detention but whether in the face of the later valid order the court can direct the release of the petitioner.
The learned Judges point out that the analogy of civil proceedings in which the rights of parties have ordinarily to be ascertained as on the date of the institution of the proceedings has no application to proceedings in the nature of habeas corpus where the court is concerned solely with the question whether the applicant is being lawfully de tained or not.
The petitioner 's learned counsel conceded that he could not challenge the correctness of the second proposition, but took exception to the first as being no longer tenable after the Indian Constitution came into force.
It was urged that article 22 lays down the procedure to be followed in cases of preventive detention and the said procedure must be strictly observed 401 as the only prospect of release by a court must be on the basis of technical or formal defects, a long line of deci sions having held that the scope of judicial review in matters of preventive detention is practically limited to an enquiry as to whether there has been strict compliance with the requirements of the law.
This is undoubtedly true and this Court had occasion in the recent case of Makhan Singh Tarsikka vs The State of Punjab (Petition No. 308 of 1951)(1) to observe "it cannot too often be emphasised that before a person is deprived of his personal liberty the procedure established by law must be strictly followed and must not be departed from to the disadvantage of the person affected".
This proposition, however, applied with equal force to cases of preventive detention before the commence ment of the Constitution, and it is difficult to see what difference the Constitution makes in regard to the position.
Indeed, the position is now made more clear by the express provisions of section 13 of the Act which provides that a detention order may at any time be revoked or modified and that such revocation shall not bar the making of a fresh detention order under section 3 against the same person.
Once it is conceded that in habeas corpus proceedings the court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the date of the institution of the proceeding, it is difficult to hold, in the absence of proof of bad faith, that the detaining authority cannot supersede an earlier order of detention challenged as illegal and make a fresh order wherever possible which is free from defects and duly complies with the requirements of the law in that behalf.
As regards the observations in Naranjan Singh 's case, we do not understand them as laying down any general proposi tion to the effect that no fresh order of detention could be made when once a petition challenging the validity of an earlier order has been filed in court.
The learned Judges appear to have inferred from the facts of that case that the later order was (1) Since reported as ; 402 not made bona fide on being satisfied that the petitioner 's detention was still necessary but it was "obviously to defeat the present petition".
The question of bad faith, if raised would certainly have to be decided with reference to the circumstances of each case, but the observations in one case cannot be regarded as a precedent in dealing with other cases.
We accordingly remit the case for further hearing.
This order will govern the other petitions where the same ques tion was raised.
Petitions remitted.
| IN-Abs | In the absence of bad faith the detaining authority can supersede an earlier order of detention which has been challenged as defective on merely formal grounds and make a fresh order wherever possible which is free from defects and duly complies with the requirements of the law in that behalf.
The question of bad faith, if raised, must be decided with reference to the circumstances of each case.
In habeas corpus proceedings the Court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the date of the institution of the proceedings.
396 Basanta Chandra Ghose vs King Emperor ([1945] F.C.R. 81) followed.
Naranjan Singh vs The State of Punjab unreported) explained.
Makhan Singh Tarsikka vs The State of Punjab ([1952] S.C.R. 368) referred to.
|
establishment of the Judge of Small Causes Court, Delhi, the name of Respondent No. 1 appears at Serial No. 9 whereas that of the appellant appears at Serial No. 19.
Both of hem satisfy the test of integrity.
The only claim the appellant can have 135 is on the principle of rotation as he is a graduate.
As that principle does apply to an appointment by promotion to the post in question, the claim of the appellant cannot be upheld.
[140F G] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 592 of 1982.
From the Judgment and Order dated 7.8.198 1 of the Delhi High Court in Civil Writ Petition No. 1003 of 1974.
Prithvi Raj and T.C. Sharma for the Appellant.
Dr. Arun Kumar and V.B. Saharya for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
On the retirement of one Jagan Nath Kohli, who was holding the post of Clerk of Court (Upper Division Clerk) in the grade of Rs. 130 300 (old Scale Rs.75 5 125), one post of Upper Division Clerk (U.D.C.)/English Clerk fell vacant in the office of the Judge, Small Causes Court, Delhi.
Five officials of that court, namely, the appellant and respondents nos.
1, 5, 6 & 7 asserted their claim to the said post.
The appellant, Chander Bhan, made his claim on the footing that he was a graduate and on the basis of the rule of rotation as embodied in Rule VI in Chapter XVIII A of the High Court Rules and Orders, Volume I referred to more particularly hereinafter.
Respondent No. 1, Hotilal Gupta, claimed the said post on the basis of his seniority.
We are not concerned with the claims of the other claimants because the contest before us is between the claims of the appellant and respondent No. 1.
The Judge, Small Causes Court in his order dated August 10, 1971, took the view that the appellant who is a graduate and has got 2 1/2 years office experience as Lower Division Clerk (L.D.C.), was an honest and efficient worker and was entitled to promotion in preference to respondent No. 1 because of the rule of rota tion.
The aggrieved parties filed an Administrative Appeal before the District & Sessions Judge, Delhi who passed his order dated July 17, 1973 and held that the rule of rotation did not apply to the establishment of the Judge, Small Causes Court.
He held that respondent No. 1 being the senior most official as Lower Division Clerk was entitled to the post of Upper Division Clerk and accordingly appointed respondent No. 1 as Upper Division Clerk against the said vacancy.
Being aggrieved, the appellant filed a departmental appeal against the said order to the High Court of Delhi which was heard by a learned 136 Judge on the Administrative Side of that Court who, by his order dated August 7. 1974.
accepted the appeal of the appellant and set aside the appointment of respondent No. 1.
He took the view that promotion in the office of the Judge, Small Causes Court, Delhi could only be made by the District and Sessions Judge, Delhi and that the vacancy should be filled in accordance with rule VI of the Rules framed by the erstwhile Punjab High Court, under section 35(3) of the punjab Courts Act, 1918, for subordinate services attached to Civil Courts other than the High Court (hereinafter referred to as 'the said rules ').
Respondent No. 1, Hotilal Gupta challenged the correct ness of the view taken by the learned Judge on the Adminis trative side by filing a writ petition being C.W. No. 1003 of 1974 in the Delhi High Court.
By an order dated 7th August, 198 1, the Division Bench of the Delhi High Court allowed the said writ petition, quashed the order dated 7th August, 1974, passed by the learned Single Judge and upheld the order of the District and Sessions Judge, Delhi appoint ing respondent No. 1 to the said post.
The Division Bench took the view that not only the initial appointments but also the appointments by promotion to the post of Upper Division Clerk in the office of the Judge, Small Causes Court were to be made by the Judge, Small Causes Court and not by the District and Sessions Judge, and held that the rule of rotation on the basis of which the appellant had been appointed to the said post by the order of the Single Judge on the Administrative Side was not applicable to the said appointment.
It is submitted by learned counsel for the appellant that the Division Bench of the High Court was in error in coming to the said conclusion.
It was submitted by him that although the first appointment to the post of Upper Division Clerk in the office of the Judge, Small Causes Court, Delhi is to be made by a Judge of Small Causes Court, promotion to that post could only be made by the District & Sessions Judge and the rule of rotation contained in the first proviso to Rule VI of the said Rules was applicable to the appointment by promotion.
order to consider the merit of the submission of learned counsel for the appellant, it is necessary to bear in mind the relevant provisions of law.
The relevant portion of section 35 of the Punjab Courts Act.
191S reads as follows: "(1) The ministerial officers of the District Courts and 137 Courts of Small Causes shall be appointed and may be sus pended or removed by the Judges of those Courts respective ly.
(2) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (3) Every appointment under this section shall be subject to such rules as the High Court may prescribed in this behalf, and in dealing with any matter under this section, a Judge of a Court of Small Causes shall act subject to the control of the District Court.
" The rules for subordinate services attached to Civil Courts other than the High Court were framed by the erst while Punjab High Court under section 35(4) of the Punjab Courts Act.
A perusal of Rule II of the said Rules dealing with classification, shows inter alia that Clerks of Court to Senior Subordinate Judges and Judges of Courts of Small Causes and English and Vernacular Clerks form a joint cadre.
Subrule (b) of Rule II of the said Rules inter alia provides that there shall be a separate cadre for each Revenue Dis trict and a separate cadre for each Court of Small Causes.
Rule III deals with qualifications and sub rule (2) of that Rule provides that no person shall be appointed to, or accepted as a candidate for, any clerical ministerial post, unless he has passed the Matriculation Examination of the Punjab University or an equivalent examination.
The material part of Rule 'IV runs as follows: "IV.
First appointments.
First appointment shall be made as follows: (1) By the District Judge: (a) Ministerial officers in his own court and in all courts controlled by the District Court other than Courts of Small Causes; .
(b) x x x (2) x x x (3) By the Judge of a Court of Small Causes: Ministerial Officers and menials in his own Court." . 138 Rule V deals with appointment and sub rule (1) of that Rule thereof runs as follows: "(1) Appointment to ministerial posts shall ordi narily be made either by open competition or by selection from a list of qualified candidates or apprentices accept ed by the District Judge.
Judge of a Small Causes Court,.
or Sub Judge to whom powers of appointment have been delegat ed, as the case may be.
Any departure from either of these methods should be reported to the High Court for confirma tion." Rule VI. which is of central importance in this appeal runs as follows: "VI.
Promotion (1) Appointments to the higher grades of the ministerial establishment should ordinarily be made by seniority from lower grades, provided that the official who would thus receive promotion possesses the prescribed educational qualifications and is otherwise fit to perform the duties to which he will be promoted, for which purpose tests may be imposed.
This rule does not apply to such posts as that of stenographer, for which special qualifications are needed; but preference should be given to officers with such qualifications who are already working in the lower grades: Provided that permanent vacancies in the 75 5 125 grade shall be filled by the District and Sessions Judges in the following rotation: (i) By selection on merit out of graduates who have at least two years ' experience in the work of the office, if there is no suitable graduate who fulfils this condition an 'outsider ' graduate may be appointed, but he must be one who normally resides within the jurisdiction of the District and Sessions Judge.
(ii) & (iii) By normal promotion in the office, i.e. the appointment of the next senior man whether graduate or non graduate subject to his fitness: Provided further that the rotation may be modified in 139 very exceptional cases when the direct appointment of a graduate would mean the ousting of a man who had been officiating quasi permanently in the post concerned for an appreciable period.
What is an appreciable period will depend on the circumstances of each case.
After such a modification.
the rotation should be restored as soon as possible.
(2) In making promotions preference may invariably be shown to officials who are known to be strictly honest.
No promotion should be given and no recommendation for promotion made in the case of an official who does not possess and maintain a reputation for strict integrity.
Effi ciency without honesty is not to be regarded as constitut ing a claim to promotion. ' A Notification dated October 28, 1953 was issued in exercise of the powers conferred by the proviso to Article 309 of the Constitution and in supersession of the Notifica tion issued earlier on February 17, 1941.
The said Notifica tion sets out that subject to such general rules as may be made by the Hon 'ble Judges of the Punjab High Court in that behalf appointments to the posts on the establishment of the Civil Courts at Delhi specified in Column (1) of the Sched ule thereto shall be made by the Authority specified in the corresponding entry in Column (2) of the said Schedule.
A perusal of the Schedule shows that appointments to the posts on establishments other than process serving and menial establishments in the Small Causes Court at Delhi are ' to be made by the Judge, Small Causes Court, Delhi.
It has been pointed out in the impugned judgment that the establishment of the District and Sessions Court and that of the Court of the Small Causes constitute separate cadres.
This is not disputed before us.
Hence, whenever a specific mention is made regarding a particular officer of an estab lishment in a rule, that particular rule would normally apply to that establishment alone and the powers conferred by that rule would be conferred on the officer mentioned in the rule.
Rule VI(1) speaks of appointments to the higher grades of the ministerial establishments and states that these appointments should ordinarily be made by seniority from lower grades provided that the official to be promoted possess the qualifications prescribed.
The first proviso to that rule goes on to say that the permanent vacancies in the original grade of Rs.75 5 125 shall be filled in by the District and Sessions Court by rotation as set out in the said sub rule (1) of Rule VI.
The first part of Rule VI deals with appointments by promotion to the higher grade of ministerial establishment.
Generally it must be 140 held applicable to the establishment of the District and Sessions Court as well as that of the Judge of the Small Causes Court.
This rule, however, does not deal specifically with the question as to who is the officer competent to promote.
In view of this, the proviso can only be construed as laying down that, where the power of appointment by promotion is vested in the District and Sessions Judge, in making appointments by promotion to fill in.the permanent vacancies in the said original grade of Rs.75 5 124, rule of rotation set out in the first proviso to clause (1) of Rule VI should ordinarily be followed.
It is not disputed that there is a separate Cadre for the Court of Small Causes.
Rule IV(3) shows that the first appointment of the ministe rial officers in the Court of Small Cause is to be made by the Judge of the Small Causes Court.
The notification dated October 28, 1953 referred to earlier provides that the appointments to the posts on establishment other than proc ess serving and menial in the Court of Small Causes are to be made by the Judge, SmaLl Causes Court, Delhi.
A reading of sub section (1) of the Punjab Courts Act and the rules and Notification discussed earlier makes it clear that appointments by promotion to the posts in the entire ministerial cadre other than in the process serving and menial establishments in the Court of Small Causes have to be made by the Judge, Court of Small Causes and the first proviso to Rule VI(1) prescribing the rule of rotation has no application to such appointments.
Moreover, it would be unreasonable to apply the principle of rotation to the Court of Small Causes where there is only one U.D.C.
The principle of rotation can be made applicable to the District & Ses sions Court because there are a number of posts of Upper Division Clerks.
It would be irrational to apply that prin ciple of rotation to the Court of Small Causes in which there is only one Upper Division Clerk/English Clerk.
In the seniority list of the establishment of the Judge of Small Causes Court, Delhi, the name of respondent No. 1 appears at Serial No. 9 whereas that of the appellant ap pears at Serial No. 19.
Both of them satisfy the test of integrity.
The only claim the appellant can have is on the principle of rotation as he is a graduate.
As that principle does not apply to an appointment by promotion to the post in question, the claim of the appellant cannot be upheld.
As we have already observed, none of the other respondents have pressed their claims in the High Court or here.
In the result, the appeal fails and is dismissed.
Looking to the facts and circumstances of the case there will be no order as to costs.
| IN-Abs | One post of Upper Division Clerk/English Clerk fell vacant in the Small Causes Court.
Appellant made his claim to the post on the footing that he was a graduate and on the basis of Rule of Rotation embodied in Rule VI of the High Court Rules and Orders, Volume 1, Respondent No. 1 made his claim on the basis of seniority.
The Judge, Small Causes Court took the view that the appellant was entitled to promotion in preference to Respondent No. 1 because of the rule of rotation.
On an Administrative Appeal, the District applicable to the establishment of Judge, Small Causes Court, and appointed Respondent No. 1 as Upper Division Clerk.
The Appellant preferred a departmental appeal which was heard by a Single Judge on the Administrative side of the High Court.
He took the view that the promotion in question could be made by the District & Sessions Judge, and should be in accordance with the rule of rotation.
Respondent No. 1 challenged the said decision by way of a Writ Petition.
The High Court allowed the Writ Petition and held that not only initial appointments but also ap pointments by promotion were to be made by the Judge, Small Causes Court and not by the District & Sessions Judge, and that the rule of rotation was not applicable.
Against the High Court 's decision, the appellant has preferred this appeal contending that the promotion in question could only be made by the District & Sessions Judge and that the rule of rotation was applicable even to the appointment by promotion.
Dismissing the appeal, this Court, HELD: 1.
Whenever a specific mention is made regarding a 134 particular officer of an establishment in a rule, that particular rule would normally apply to that establishment alone and the powers conferred by that rule would be con ferred on the officer mentioned in the rule.
Rule VI(1) of the High Court Rules speaks of appointments to the higher grades of the ministerial establishments and states that these appointments should ordinarily be made by seniority from lower grades provided that the officer to be promoted possesses the qualifications prescribed.
The first proviso to that rule goes on to say that the permanent vacancies in the original grade of Rs.75 5 125 shall be filled in by the District & Sessions Court by rotation as set out in the said sub rule (1) of Rule VI.
The 1st part of Rule VI deals with appointments by promotion to the higher grade of ministerial establishment.
Generally it must be held applicable to the establishment of the District & Sessions Court as well as that of the Judge, Small Causes Court.
This part, however, does not deal specifically with the question as to who is the officer competent to promote.
In view of this, the proviso can only be construed as laying down that, where the power of appointment by promotion is vested in the District & Sessions Judge, in making appointments by promotion to fill in the permanent vacancies in the said original grade of Rs.75 5 125, rule of rotation set out in the first provi so to clause (I) of Rule VI should ordinarily be followed.
It is not disputed that there is a separate Cadre for the Court of Small Causes.
Rule IV(3) shows that the first appointment of the ministerial officers in the Court of Small Causes is to be made by the Judge of the Small Causes Court.
[139F H; 140A C] 2.
A reading of sub section (1) of the Punjab Courts Act, 1918 the High Court Rules, and Notification issued makes it clear that appointments by promotion to the posts in the entire ministerial cadre other than those in the process serving and mental establishments in the Court of Small Causes have to be made by the Judge, Court of Small Causes and the first proviso to Rule VI(1) prescribing the rule of rotation has no application to such appointments.
Moreover, it would be unreasonable to apply the principle of rotation to the Court of Small Causes where there is only one U.D.C.
The principle of rotation can be made applicable to the District & Sessions Court because there are a number of posts of Upper Division Clerks.
It would be irrational to apply that principle of rotation to the Court of Small Causes in which there is only one Upper Division Clerk/English Clerk.
[140D E]
|
Civil Appeal No. 390 of 1979.
From the Order dated 14.2.1978 of the Central Govt.
at New Delhi in Revision Petition No. MB/133/77.
Anil B. Dewan, S.K. Dholakia, P.C. Kapur and P. Nara simhan for the Appellants.
Kapil Sibbal, Additional Solicitor General (NP), Ms. Nisha Bagchi.
Ms. Sushma Suri and C.V.S. Rao for the Re spondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
All these appeals involve a common ques tion as to whether the goods exported by the appellants are liable to export duty.
There are 67 appeals which relate to various batches of exports made by the appellants during the period from 4.3.76 to 14.2.82.
They will be disposed of by this Common order.
The goods exported by the appellants are blanched, roasted and salted peanuts packed in vacuum containers.
The appellants purchase groundnuts without shell in raw form various parts of Saurashtra in the State of Gujarat.
There after, they are sorted out into different sizes small, medium and big.
The medium and small sizes are separated.
Dust and husk are cleaned out and other foreign material removed.
The commodity then goes to a dry roaster where it is roasted at a 144 temperature of 150 deg.
This results in reduction of the moisture and destruction of enzymes to a considerable ex tent.
It is also stated that by this process any fungus or aflotoxin is removed.
After dry roasting, the product is cooled down with the aid of a blower so that the skin of the groundnuts become loose and the groundnut contracts.
There after, it goes through automatic blanching machines.
This separates the skin of the groundnut and on removal of the skin it becomes white.
Thereafter, the seeds are put on running tables and picked, according to uniform sizes, with the aid of an electric eye sorter.
The commodity thereafter goes to a frying section for being subjected to deep oil bath frying in an automatic fryer.
They are then subjected to anti oxident chemicals and thereafter sent through the blower for being cooled down.
The extra oil is sucked out.
They are then subjected to a glazing process and are given permeated chemicals and salt treatment and are packed in packets and tins.
The goods thus exported by the appellants are charged to duty under item 13 of the Second Schedule to the Indian Tariff Act 1934 and.
later, under item 20 of the Second Schedule to the .
The entry is the same under both enactments but the rate of duty is differ ent.
The entry reads: Item N0.
The first line of argument of the assessee was that the item 'groundnut kernel ' refers to groundnut seeds, the basic characteristic of which is the quality of germination.
It was submitted that, since the product exported by the assessee, though basically ground nuts, had been so processed and treated that it lost its quality of germination, it could no longer be described as 'groundnut kernel '.
The second line of argument put forward on behalf of the appellant was that the entry in the export tariff referred only to groundnut kernel used for oil ex traction.
It was pointed out that groundnut in shell as well as groundnut kernel can be said to be of two varieties one an edible variety and the other a variety used for oil extraction purposes.
While it is true that it is not a mutually exclusive classification in that perhaps all groundnut is capable of being eaten or of being 145 processed to yield oil, the submission was that these two varieties of groundnut kernels or groundnut in shell were two different trade commodities.
They had different charac teristics; they were meant for different markets.
; their end use was different; and their prices as well as mode of pricing were totally different.
Referring to entries in this regard in the BTN (British Trade Nomenclature), the Indian Import Tariff as well as the Indian Import Export Policy, it was contended on behalf of the appellant that the entry should be confined only to groudnut kernel of the oil yield ing variety and not the variety exported by the appellant, which could be more appropriately described as "processed food" rather than as groundnut kernel.
The appellant 's contention, initially put forward before the Assistant Collector of Customs in an application for refund, was rejected by the Collector of Customs, on appeal by the Central Board of Excise and Customs and, on further revision, by the Government of India under the then existing procedure.
So far as the subsequent periods of exports were concerned, the contentions of the appellant were considered and rejected by a Full Bench of the Customs, Excise Gold Control Appellate Tribunal.
The appellant preferred a Spe cial Leave Petition from the order of the Central Government in revision dated 14.2.1978, which was admitted and num bered as Civil Appeal No. 146 of 1979.
Against the other orders of the Tribunal, the appellant has preferred appeals to this Court under section 130 E of the .
On behalf of the appellants, a number of circumstances have been relied upon to justify the distinction sought to be made between groundnut kernel simpliciter and blanched and roasted groundnuts exported by the assessee.
It will be convenient to summarise the points made on behalf of the appellant here: (1) In the Indian Trade Classification (I.T.C.), which has been published by the Government of India for purposes of foreign trade, there is a bifurcation in the classification between the oil seeds and roasted nuts.
There are various revisions of this classification.
Upto 1st April, 1972, the I.T.C. classified oil seeds, oilnuts and oil kernels in Division 22.
The various items occurring under this Division were as follows: Code No. Description Unit of Quantity Group 221 Oil seeds, oilnuts and oil kernels 146 221.1 Groundnuts (Peanuts), green.
whether or not shelled (excluding flour and meal) 221.1001 Groundnut kernels.
H.P.S. 221.1002 Groundnut kernels
N.E.S. 221.1003 Groundnut in shell.
H.P.S. TONNE 221.1004 Groundnut in shell.
N.E.S.
As against the above in group No. 053 roasted nuts are specified as below: 053.9009 Others (roasted nuts including groundnuts) In a revised alphabetic index to the commodities, the relevant code numbers for various commodities pertaining to groundnuts are as follows: Commodity Code No. Groundnut in Shell HPS 221.1003 Groundnut in Shell NES 222.1004 Groundnut kernels HPS 222.1001 Groundnut kernels NES 222.1002 Groundnut oil, crude 423.4001 Groundnut oil purified 423.4002 Groundnut oil, deodorized 423.4003 Groundnut oil, hydrogenated 431.2001 Groundnut oil cake and meal 1081.3201 Groundnut roasted 058.9107 In the more recent classification heading No. 12.02 refers to groundnuts, not roasted or otherwise cooked, whether or not shelled 147 or broken.
The unit of quantity in which these goods are sold is tonne.
This chapter deals with various types of oil seeds like soya beans copra, linseed, rape or colza seeds, sunflower seeds, palm nuts and kernels and other oil seeds and oleaginous fruits.
On the other hand edible nuts come under heading 20.08, which reads thus: "Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere speci fied or included Nuts, ground nuts and other seeds, whether or not mixed together: Ground nuts Kg.
Other, including mixtures Cashew nut, roasted Kg.
Nuts, prepared or preserved Kg.
Other roasted nuts and seeds n .e.s.
" (2) A similar classification has also been made under the BTN.
Note i under this Chapter reads thus: 1.
It is to be taken not to apply to coconuts or other products of heading No. 08.01 or to olives (Chapter 7 or Chapter 20).
It does not, however, include olives (Chapter 7), coconuts (heading 08.01) or certain seeds and fruits from which oil may be extracted but which are primarily used for other purposes, e.g. walnuts and almonds (heading 08.05), apricot, peach and plum kernels (heading 12.08) and cocoa beans (heading 18.01)".
148 It is also stated that the heading covers, inter alia, ground nuts (except roasted ground nuts heading 20.06).
As against this heading 20.06, which deals with fruit otherwise prepared or preserved, whether or not containing added sugar or spirit, carries the following sub heading: (3) Almonds, ground nuts, areca (or betel) nuts and other nuts, dry roasted, oil roasted or fat roasted, whether or not containing or coated with vegetable oil, salt, flavours, spices or other additives.
(3) Even under the Customs Tariff, the first Schedule, which deals with import, contains a similar classification.
Chapter 12 and note 1 to the Chapter are the same as in BTN.
Item 12.01 reads oil seeds and oleaginous fruit, whole or broken (1)not elsewhere specified (2) Copra.
Chapter 20 deals with preparations of vegetables, fruit or other parts of plants.
It contains a note that the Chapter covers edible plants.
parts of plants and roots of plants conserved in syrup (for example, ginger) and roasted groundnuts.
This indi cates that the customers for two types of goods are totally different.
(5) 0n 14th July, 1976, the Government of India decided to ban with immediate effect export of HPS (Hand Picked Seeds) groundnuts (both in shell and kernel), which is canalised through Indian Oil and Oil Produce Exporters ' Association.
However, by an export trade notice dated 8.9.76, the Government of India clarified that the item "blanched and roasted groundnut kernels", does not fall within the purview of Exports Control Order, 1968 and its export is allowed without any licensing formalities.
(6) It has been pointed out that the Collector of Cus toms used to levy and recover an agricultural cess on the goods in question until the Government of India, by an order of 1976, held that the roasted and salted peanuts/groundnuts exported by the assessee were not liable to cess under the .
(7) It is pointed out that the packed roasted seeds exported by the appellants are more value added than raw groundnut kernel used 149 for other purposes.
The assessee 's product is packed in vacuum containers and sold in terms of kilograms, whereas other groundnuts are exported in bags or drums and sold in tomes.
It would not be correct to bring both of them under same classification for export purposes.
Relying on the above points of difference, Shri Divan and Dholakia, appearing on behalf of the appellant vehement ly contend that the entry in the export tariff should be given a restrictive interpretation.
Reliance is placed in this context on a judgment of the Madras High Court in Kalaivani Fabrics vs Collector, a direct decision on the present issue.
Reference is made also to the cases cited therein and, in particular, to the ruling of this Court in M/s. Healthways Dairy Products Co. vs Union of India & Ors., ; Shri Divan submits that if there is any ambiguity or doubt it should be re solved in favour of the assessee.
He contends that, while the taxing authorities, on whom the onus lies, have merely rested on the dictionary meaning of the .word 'groundnut kernel ', the assessee has placed a lot of material show that there are two different commercial varieties of groundnut kernel.
He submits that, in matters of export and import, the functional test is slowly replacing other tests, an approach clearly indicated by the classifications under the BTN, ITC and the import tariffs.
Shri Dholakia, appearing on behalf of the appellant in one of the appeals, very strongly urges that the commodity known as groundnut kernel consists of two entirely different varieties or classes particularly in matters of trade.
There is a sea of difference between the groundnut kernel which is exported as an oil producing variety and the roasted peanuts which are exported more or less as a 'processed food ' by the appellant.
The produce exported by the appellants has no oil content; it is incapa ble of being used for germinating purposes; its market, its unit of quantity of sale, itS price and even its exporters are totally different viewed from the commercial point of view, it is impossible to mix up these two varieties under one common heading and this could not have been the inten tion of the export tariff.
He, therefore, submits that the export tariff item should be restricted only to one of these varieties, namely, the oil seed variety or the germinating variety and should not be extended to the roasted items sold by the assessee.
Shri Dholakia also raised a point that the appellant 's factory was located in a free trade zone trod that, having regard to the various notifications of the Government of India, the Government was estopped from levying any export duty on its products.
The necessary facts to 150 found any such promissory estoppel have not been put forward or considered by any of the assessing or appellate authori ties.
We, therefore, decline to permit Shri Dholakia to raise this question at this belated stage.
On the other hand Ms. Nisha Bagchi, who argued the case on behalf of the Union of India very ably, submitted that the expressions 'groundnut kernel ' and 'groundnut shell ' used in the export entry were of the widest connotation.
She referred to the dictionary meanings of the word 'kernel ' and submitted that there is no justification whatsoever for restricting its meaning on the basis of the capacity to germinate or to yield oil.
In fact, she contended, the very fact that the export tariff avoids all these classifications and uses a wide expression, which is capable of taking in both the edible as well as the oil seed varieties of the groundnuts, supports her conten tion that, so far as export tariff is concerned, the legis lature intended no limitations whatsoever.
In support of her contention as to the wide meaning of the expression 'ground nut kernel ', she relied on certain observations of this Court in State vs Shanmagha Vils Cashewnut Factory, [1953] 4 S.T.C. 205 and of the Madras High Court in Binod Cashew Corporation vs Deputy Commercial Tax Officer, [1986] 61 S.T.C. 1.
She submitted that the interpretation sought to be placed on the entries in the export tariff by the appellant will carve away a substantial category of the goods de scribed in the wide tariff entry from its scope.
So far as agricultural cess is concerned, she pointed out, .rightly, that it was leviable only in respect of "seeds", an expres sion that imports a concept of a capacity to germinate, particularly, in an agricultural context.
Obviously, the groundnut kernel, roasted and salted, could not be described as 'seeds ' and therefore, the Government of India had rightly exempted them from agricultural cess.
According to counsel, the functional test may be attracted where there is a bifurcation or classification as in the tariff entries referred to on behalf of the appel lant but there is no justification to import any such test where the expression, as in this instance, is broad and unrestricted.
Referring to the exemption from export ban, learned counsel submitted that the very fact that it was considered necessary to exempt the blanched and roasted peanuts from the export ban indicates that otherwise they would have been included in the export ban.
Learned counsel took us through the 151 orders of the appellate authorities and the tribunal and submitted that they have taken a correct view in the matter which does not call for any interference.
She submitted that groundnut kernel remains groundnut kerneI even after roasting and frying.
The process, though described elaborately on behalf of the appellant, does not create a different product.
This, she pointed out, was the finding of the appellate authorities.
There is no justification, therefore counsel contended to read any limitation into the export entry.
Having considered the submissions of both parties, we are of opinion that the contention of the Revenue should prevail.
To our mind, there is no difficulty or ambiguity in the interpretation of the tariff entry.
Groundnut is a well known commodity which is available both in shell and as kernel.
In this context, 'kernel ' clearly means the grain, seed or the soft matter inside the shell, whatever the use or purpose to which it is put, eating or crushing for oil or sowing.
On behalf of the appellant, it is emphasised that the goods exported by the assessee and groundnut oil seeds are totally different commercial commod ities.
Even the acceptance of this argument does not carry the appellant 's case to the desired
Assuming that two different commercial commodities fail under the same entry, there is no reason why the entry should be restricted to only one of them.
It can and should cover both unless one can say that the commodity marketed by the appellant is not 'groundnut kernel '.
We are not convinced that the goods exported by the assessee have ceased to be groundnuts in the ordinary accep tation of the term or that they have become a different commodity, say, a processed food (indeed, there is no such classification in the tariff entry).
The decision in Diwan Chand (Chaman Lal, [1977] 39 STC 75 turned on the descrip tion of groundnuts in Schedule C of the Punjab Sales Tax Act as a species of oil seeds and it was held that parched groundnuts constituted a different commodity.
But the fact is that, though the raw groundnut kernel has undergone a drying.
roasting and frying process, its identity as ground nut is not lost.
Even in the market to which it is exported and where it is marketed, it is purchased only as groundnuts (or peanuts, as they are called in the U.S.A.).
May be there are two 152 different commodities but both are known only as 'ground nuts '.
The argument that the scope of the entry should be restricted because of the two fold classification existing elsewhere between groundnuts as "oil seeds" and groundnuts as "fruits, nuts and edible substances" does not appeal to us.
In the first place, it does not meet the argument that basically both items are only varieties of groundnuts and hence not taken out of the relevant entry.
Secondly, there is force in the argument of State counsel that the legisla ture has, deliberately, not adopted, for the purposes of the Second Schedule, the minute multiclassification of the First Schedule and allied classifications.
Unlike the Import Tariff, the BTN and the ITC, there is no sub classification ' attempted in the export entry.
The legislature must be presumed to know that, for import purposes, for instance, groundnuts are classified under different headings with differential rates of duty.
Those entries appear not else where but in the First Schedule of the very enactment which sets out the export tariff.
The First Schedule to the Indian Tariff Act refers to seeds, oil seeds and oil in section II and talk only of canned fruits and vegetables in section IV (dealing with products of food preparing industries).
The entries in the Customs Tariff relating to imports have already been touched upon.
If, in spite of such detailed classification elsewhere, the legislature decided to use a wider expression in the Second Schedule, the intention of the legislature must be given effect to.
Shri Dholakia submitted that while the need to restrict imports necessitated a detailed enumeration and precise classification, the export duty is levied only on a short list of items.
This may be so but this point of distinction is not enough to explain why, when an entry finds a place in the export tariff, it should not receive its normal interpretation but should receive one circumscribed by the entries in the import tariff or other classifications.
A point was also made by Sri Dholakia that, since the export duty is on the basis of tonnes and it is only the groundnut oil seed that is exported in units of tonnes, the entry should be confined to this commodity alone.
This, we are afraid, is a very precarious basis for the interpretation of the body of the entry.
In this context, we should also point out that no difficulty, anomaly or absurdity arising out of the computation of export duty in terms of tonnes on these goods was brought to the notice of the authorities at any stage.
It may perhaps have helped if material had been placed before the authorities as to the nature and magnitude of the exports of the two classes of groundnuts, their relative prices and the duty impact there on.
In the absence of any such material, we find it diffi cult to hold that the commodity in question should be excluded because of the mode of computation of duty 153 prescribed by the tariff entry.
Once it is realised both oil seeds and roasted ground nuts exported by the assessee are capable of being described as 'groundnut kernel ', which is what the entry talks of the various circumstances pointed out that they have different markets, that their end use is different, that one of them has been excepted from the export ban that their export is done under the auspices of different Export Promotion Coun cils all fall into place and reveal no inconsistency with, and have no bearing on, the interpretation to be placed on the entry.
For these reasons, we are of opinion that the stand of the Revenue has to be upheld and the decision of the Madras High Court in Kalaivani Fabrics (supra) overruled.
These appeals, therefore, fail and are dismissed.
We, however, make no order as to costs.
R.S.S. Appeals dis missed.
| IN-Abs | The appellants purchased groundnuts without shell in raw form, and after subjecting them to various processes and treatment, packed them in packets and tins which were then exported.
The goods were charged to duty under item 13 of the Second Schedule to the Indian Tariff Act 1934 and, later, under item 20 of the Second Schedule to the as 'groundnut kernel '.
The appellant however contended that the product exported by it was "processed peanuts", and since the product exported by the assessee, though basically groundnuts, had been so processed and treated that it lost its quality of germination, it could no longer be described as 'groundnut kernel '.
Another argument of the appellant was that groundnut kernel could be said to be of two varieties one an edible variety, and the other a variety used for oil extraction purposes, and that the tariff entry should be confined only to groundnut kernel of the oil yielding variety and not the variety exported by the assessee, which could be more appropriately described as "processed food" rather than as "groundnut kernel".
The appellant 's contentions were rejected by the Collec tor of Customs, on appeal by the Central Board of Excise and Customs and, on further revision, by the Government of India.
Subsequently, the contentions were rejected by a Full Bench of the Customs, Excise & Gold Control Appellate Tribu nal.
Before this Court, the appellants while reiterating the submissions made before the authorities below, contended that the entry in the export tariff should be given a re strictive interpretation and if there was any ambiguity or doubt it should be resolved in favour of the assessee.
It was further submitted that, in matters of export and import, the func 142 tional test was slowly replacing other tests.
On the other hand, it was contended on behalf of the Revenue that: i) the expressions 'groundnut kernel and 'groundnut shell ' used in the export entry were of widest connotation: (ii) there was no justification whatsoever for restricting the meaning of the word 'kernel ' on the basis of the capaci ty to germinate or to yield oil; (iii) the functional test may be attracted where there was a bifurcation or classifi cation as in the entries, but there was no justification to import any such test where the expression.
as in this in stance, was broad and unrestricted; and (iv) groundnut kernel remains groundnut kernel even after roasting and frying and the processing and treatment did not create a different product.
Dismissing the appeals, this Court.
HELD: (1) There is no difficulty or ambiguity in the interpretation of the tariff entry.
Groundnut is a well known commodity which is available both in shell and as kernel.
In this context, 'kernel ' clearly means the grain, seed or the soft matter inside the shell, whatever the use or purpose to which it is put, eating or crushing for oil or sowing.
The tariff entry covers all groundnut and there is no justification for confining it to the germinating or the oil seed variety alone.
[151C D] M/s Health ways Dairy Products Co. vs Union of India & Ors.,[1976] 2 SCC 887, referred to.
(2) Assuming that two different commercial commodities fall under the same entry, there is no reason why the entry should be restricted to only one of them.
It can and should cover both unless one can say that the commodity marketed by the appellant is not 'groundnut kernel '.
[151E] Diwan Chand Chainart Lal 's Case [1977] 39 STC 75, referred to.
Though the raw groundnut kernel has undergone a dry ing, roasting and frying process, its identity as groundnut is not lost.
Even in the market to which it is exported and where it is marketed, it is purchased as groundnuts.
[I51G] (4) The legislature must be presumed to know that, for import purposes, for instance, groundnuts are classified under different headings with differential rates of duty.
Those entries appear not elsewhere 143 but in the First Schedule of the very enactment which sets out the export tariff.
If, in spite of such detailed classi fication elsewhere, the legislature decided to use a wider expression in the Second Schedule.
the intention of the legislature must be given effect to.
[152C D] (5) Once it is realised that both oil seeds and roasted groundnuts exported by the assessee are capable of being described as 'groundnut kernel ', which is what the entry talks of, the various circumstances pointed out that they have different markets, that their end use is different, that one of them has been excepted from the export ban, that their export is done under the auspices of different Export Promotion Councils all fall into place and reveal no incon sistency with.
and have no bearing on, the interpretation to be placed on the entry.
[153B C] Kalaivani Fabrics vs Collector, , Over ruled.
|
ivil Appeal Nos.
1894, 1895 & 1896 of 1990.
From the Judgment and Order dated 9.2.1989 of the Punjab & Haryana High Court in Civil W.P. Nos.
1778, 1776 & 1777 of 1989.
528 Balbir Singh Wasu, N.S. Das Bahl for the Appellant.
Har Dev Singh and Ms. Madhu Moolchandani for the Re spondents.
The Judgment of the Court was delivered by KASLIWAL, J.
Special leave granted.
All these petitions by Special leave are disposed of by one single order as identical questions of law are involved and they are directed against the similar order of the High Court dated 9th February, 1989.
Short controversy raised in these cases is regarding the grant of benefits under amended Sections 23(1 A), 23(2) and 28 of the Land Acquisition Act, 1894 as amended by the Land Acquisition (Amendment) Act, 1984 (hereinafter referred to as the Amending Act).
The President Land Acquisition Tribu nal, Hoshiarpur (District Court) initially granted solatium at 15% on the compensation and interest at 6% per annum on the additional amount of compensation till the date of payment.
The claimants 'submitted an application for modifi cation of the award as regards solatium and interest in view of the Amending Act which came into force on 24th September, 1984.
The Land Acquisition Tribunal granted benefit of the Amending Act and modified the award by passing the following operative order which is subject matter of challenge in Special Leave Petition No. 9434 of 1989.
Similar orders have been passed in other two cases also.
"Accordingly, I modify the award to the extent that solatium shah be payable at the rate of 30% instead of 15% granted earlier.
Similarly, interest at the rate of 12% per annum is granted from the date of notification under Section 42 of the Punjab Town Improvement Act, 1922, till the date of award of the Collector, the date of possession of the land which ever is earlier.
Further interest is awarded at the rate of 9% per annum on the enhanced amount from the date of delivery of possession till the expiry of one year.
Thereaf ter interest is awarded at the rate of 15% per annum from the date of expiry of period of one year till payment.
The applicant shall be entitled to recover the solatium and interest as per the modification indicated above ' '.
529 Aggrieved against the above order, the Hoshiarpur Im provement Trust has come before this Court.
In order to decide the controversy, it would be neces sary to mention some important dates in each of the above cases.
In Special Leave Petition No. 9434 of 1989 the award was given by the Land Acquisition Collector on 6th January, 1979.
On a reference the award was given by the President Land Acquisition Tribunal, Hoshiarpur on 28th March, 1983.
The award was modified by the President Land Acquisition Tribunal by order dated 29th August, 1988.
The High Court dismissed the Writ Petition filed by the Improvement Trust on 9th February, 1989.
In Special Leave Petition No. 9521 of 1989 the award was given by the Land Acquisition Collector on 30th April, 1982.
On a reference the award was given by the President Land Acquisition Tribunal, Hoshiarpur on 29th August, 1985.
The President Land Acquisition Tribunal modified the award by order dated 29th August, 1988.
The Writ Petition filed by the Improvement Trust was dismissed by the High Court on 9th February, 1989.
In Special Leave Petition No. 10 130 of 1989 the award was given by the Land Acquisition Collector on 30th April, 1982.
On a reference the award was given by the President Land Acquisition Tribunal, Hoshiarpur on 29th August, 1985.
The award was modified by the President Land Acquisition Tribunal by order dated 14th September, 1988.
Writ Petition filed by the Improvement Trust was dismissed by the High Court on 9th February, 1989.
Learned Counsel appearing on behalf of the Improvement Trust contended that no benefit could have been given under Section 23(1 A) which was inserted by the Amending Act.
It was contended that in a recent decision given by this Court in Union of India & Ors.
vs Mr. Filip Tiago De Gama of Vedem Vasco De Gama, JT it has been held that the additional amount under Sec.
23(1 A) can only be allowed in those cases where proceedings for the acquisition of any land under the Principal Act were pending on the 30th day of April, 1982 (the date of introduction of the Land Acquisi tion (Amendment) Bill 1982 in the House of People), in which no award has been made by the Collector before that date.
If the Collector has made the award before that date then, the additional amount cannot be awarded.
Thus it was contended that the additional benefit of interest 530 at the rate of 12% per annum from the date of notification till the award made by the Collector or the date of taking over possession which ever is earlier, is liable to be set aside.
In order to appreciate the argument advanced by the Learned counsel appearing for the Improvement Trust, it would be necessary to give a background of some important events and decisions having a bearing on the question.
The Land Acquisition Act, 1894 (hereinafter referred to as the Principal Act) was sought to be amended and in this regard on 30th April, 1982, the Land Acquisition (Amendment) Bill, 1982 was introduced in Parliament.
On 24th September, 1984 it became law as the Land Acquisition (Amendment) Act, 68 of 1984, when it received assent of the President.
Before the amendment, Section 23(2) of the Principal Act provided for solatium at 15% on the market value, in consideration of the compulsory nature of the acquisition.
After amendment by Act 68 of 1984 solatium was raised to 30% on the market value under Section 23(2).
A Constitution Bench in Union of India & Another vs Raghubir Singh (dead) by L.rs.
; , , overruled; Bhag Singh vs Union Territory of Chandi garh; , and State of Punjab vs Mohinder Singh, held that the higher solatium at the rate of 30% would be given in cases of awards made by the Collector or the Court between 30th April, 1982 and 24th September, 1934.
In the cases before us the claimants have been rightly held entitled to solatium at 30% applying the ratio in the case of Union of India & Ors.
vs Raghubir Singh, (supra).
So far as the award of interest at the rate of 9% for the first year from the date of taking possession and 15% for the subsequent years is concerned, the claimants have been rightly held entitled to the same under Section 28 as stood amended by the Amending Act.
Now, the only controversy which remains to be considered is with regard to the additional benefit allowed by way of rate of interest at 12% per annum from the date of notifica tion issued under Section 42 of the Punjab Town Improvement Act, 1922, till the date of award of the Collector or the date of possession of the land which ever is earlier.
It is important to note that in the case of Union of India vs Raghubir Singh, (supra) the above question was neither called for consideration nor decided.
In Union of India & Ors.
vs Mr. Filip Tiago De Gama of Vedem Vasco De Gama, (supra) the above question directly came up for considera tion before this Court.
It was held that the above benefit has been provided under the amended Sections 23(i A) & 23(2).
531 The Legislature has given new starting point for operation of Section 23(1 A) for certain cases and it would be deter mined from Section 30(1)(a,) & (b) of the Transitional Provisions which read as follows: Section 30: Transitional Provisions: (1) The provision of Sub section (1 A) of Section 23 of the Principal Act, as inserted by clause (a) of Section 16 of this Act, shall apply, and shall be deemed to have applied, also to, and in relation to: (a) every proceeding for the acquisition of any land under the Principal Act pending on the 30th day of April, 1982 (the date of introduction of the Land Acquisition (Amend ment) Bill 1982 in the House of the People), in which no award has been made by the Collector before that date.
(b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the date of commencement of this Act".
It was observed in the above case that Section 30(1)(a) provides that additional amount provided under Sec.
23(1)(a) shall be applicable to acquisition proceedings pending before the Collector as on 30th April, 1982 in which he has not made the award before that date.
If the Collector has made the award before that date then that additional amount cannot be awarded.
We agree with the view taken in the above case.
Thus applying the above principle in the cases in hand before us it would be clear that in Special Leave Petition No. 9434 of 1989 the award was made by the Land Acquisition Collector on 6th January, 1979 i.e. long before 30th April, 1982 and as such the claimant in the above case is not entitled to the benefit of Section 23(1 A) as inserted in the Principle Act by the Amending Act.
So far as the other two Special Leave Petitions, namely, 9521/89 and 10130/89 are concerned, the awards have been made by the Land Acqui sition Collector on 30th April, 1982 itself but not before that date.
Section 30 the Transitional Provisions clearly provide that the provisions of Subsection (1 A) of Section 23 of the Principle Act, as inserted by Clause (a) of Sec tion 16 of this Act shall apply to every proceeding for the acquisition of any land under the Principle Act pending on 30th day of April, 1982 in which no award has been made by the Collector before 532 that date.
In the above two cases the award has not been made by the Collector before 30th day of April, 1982 but made on 30th April, 1982 itself and as such the claimants in these two cases become entitled to the benefit of Section 23(1 A).
As a result of the above discussion the civil appeals in S.L.P. (C) Nos.
952 1 of 1989 & 10 130 of 1989 stand dis missed.
So far as appeal in Special Leave Petition No. 9434 of 1989 is concerned, it is allowed in part and the order of the High Court as well as that of the President Land Acqui sition Tribunal is modified only to the extent that interest shall be allowed at the rate of 6% per annum instead of 12% per annum from the date of Notification under Section 42 of the Punjab Town Improvement Act, till the date of award of the Collector or the date of possession of the land which ever is earlier.
So far as other additional benefits granted by the President Land Acquisition Tribunal are concerned, the same would remain in tact.
In the facts and circum stances of the case there would be no order as to costs.
T.N.A. Appeal allowed partly.
| IN-Abs | The lands of the respondents were acquired for a scheme of the Appellant Improvement Trust.
The awards for compensa tion were made by the Collector on 6th January, 1979 and 30th April, 1982 and the reference was disposed of by the Land Acquisition Tribunal by its award dated 28th March, 1983 and 29th August, 1985 by granting solatium @ 15% on compensation and interest @ 6% on excess compensation.
In view of the Land Acquisition (Amendment) Act, 1984 the landowner claimants made an application to the Tribunal seeking enhanced solatium and interest under the amended provisions of Land Acquisition Act, 1894.
The Tribunal allowed the application by granting higher solatium, addi tional benefit of interest and interest on excess compensa tion.
The writ petitions filed by the Appellant Improvement Trust against the decision of the Tribunal were dismissed.
Hence these appeals by the Improvement Trust.
Allowing the appeal in part (C.A. No. 1894 of 1990) and dismissing the connected appeals, this Court, HELD: 1.
The benefit of higher solatium @ 30% under section 527 23(2) of the Land Acquisition Act, 1894 is applicable to cases of awards made by the Collector or the Court between 30th April, 1982 and 24th September, 1984.
In the instant case since the awards were made between the aforesaid dates the claimants have been rightly held entitled to enhanced solatium.
[530E] Union of India vs Raghubir Singh, ; , fol lowed.
Section 30(1)(a) of the Land Acquisition (Amendment) Act, 1984 clearly provides that the additional amount of interest provided under Section 23(1 A) of the Land Acquisi tion Act, 1894 shall be applicable to acquisition proceed ings pending before the Collector as on 30th April, 1982 in which he has not made the award before that date.
If the Collector has made the award before that date then addition al amount Cannot be awarded.
[531E] 2.1 The claimant in the Appeal (No. 1894 of 1990) is not entitled to additional benefit of interest under Section 23(1 A) because the award in this case was made long before 30th April, 1982.
But the claimant in the connected appeals are entitled to this benefit since in their cases the awards were made on 30th April, 1982 itself.
[531F; 532A] Union of India vs Raghubir Singh, , explained and held inapplicable.
Union of India vs Filip Tiago De Gama, J.T. 1989 4 S.C. 529, followed.
The award of interest on excess compensation is valid since the claimants were entitled to the same under section 28 as it stood amended by the Amending Act.
[530F] 4.
The order of the High Court and the Land Acquisition Tribunal in Civil Appeal No. 1894 of 1990 is therefore modified, only to the extent that interest shah be allowed at the rate of 6% per annum instead of 12% per annum.
The other additional benefits granted by the Tribunal shall remain in tact.
[532B C]
|
JURISDICTION: Civil Appeal No. 3412 13 of 1986.
From the Judgment and Order dated 19.4.85 of the Madhya Pradesh High Court in Misc.
Petition Nos. 259 and 503 of 1982.
157 Shanti Bhushan (N.P.), B. Dutta, S.K. Jain, Pradeep Aggarwal and Mrs. Pratibha Jain for the Appellants.
M.K. Ramamurthy, R.K. Garg, C.K. Ratnaparkhi, Arun Madan, S.K. Agnihotri and S.V. Deshpande for the Respond ents.
Respondent No. 15 In person.
The Judgment of the Court was delivered by OJHA, J.
These two civil appeals by special leave have been preferred against the common judgment of, the Madhya Pradesh High Court rendered in two writ petitions being Miscellaneous Petition No. 259 of 1982 and Miscellaneous Petition No 503 of 1982.
Certain persons after being select ed by the Public Service Commission were appointed as Sales tax Inspectors in the State of Madhya Pradesh.
They shall hereinafter for the sake of convenience be referred to as existing Sales tax Inspectors.
In another Department of the Government of Madhya Pradesh, there were certain persons who were working as Block Level Extension Officers.
The Government of Madhya Pradesh reorganised Blocks all over the State as a result whereof 50% of the posts of Block Level Extension Officers were rendered surplus.
A policy decision was taken by the State Government to absorb the surplus employees in equivalent post in other Government Depart ments.
A meeting was held on 30th September 1965 in the office room of the Secretary Planning and Development De partment for settling principles and procedure for absorp tion of such surplus personnel which was attended by the Secretaries of the various Department of the Government, Director of Panchayat and Social Welfare, Director of Indus tries and Director of Public Instruction.
In that meeting general principles and procedure for absorbing the surplus personnel were settled and it was inter alia agreed that; "(a) the surplus staff should be absorbed on equivalent posts and carrying the same pay scale as far as possible.
But if they are absorbed on posts carrying slightly lower pay scale, their present pay scale should be protected; (b) they should be treated as having been transferred from one post to another so that there may be no break in their service.
" A Committee consisting of the Commissioner of Sales Tax, the Addi 158 tional Commissioner of Sales Tax and the Deputy Commissioner of Sales Tax, Headquarters, held an interview of such sur plus Block Level Extension Officers who were to be absorbed as Sales tax Inspectors and as a result of that interview they were appointed to the post of Sales tax Inspectors.
These appointments seem to have been made on various dates between 13th February, 1967 and 28th September, 1970.
The Block Level Extension Officers who were so absorbed as Sales tax Inspectors shall hereinafter be referred to as the absorbed sales tax Inspectors.
At this place it is necessary to refer to certain orders having a bearing on the matter of absorption as aforesaid.
The first such order in the se quence which deserves to be noticed is a Memo dated 29th March, 1967 issued in the name of Governor of Madhya Pra desh.
It provided: "The Ex Block Development Officers and the Ex Block Level Extension Officers have been exempted by the Government from the competitive examinations to be conducted by the Public Service Commission for the purpose of absorption as Sales tax Inspectors.
The selection of these personnel to the said post shall be done by the departmental selection committee.
" The other order which requires mention is a memorandum dated 22nd may, 1967 issued by the Government of Madhya Pradesh General Administration Department inter alia to all Departments of Government.
In contained certain decisions in respect of the surplus class III (Executive) ministerial and Class IV employees of the development blocks on their ab sorption in other Departments of Government.
These decisions inter alia were about fixation of pay and fixation of sen iority.
With regard to fixation of seniority it was provided that seniority should be fixed with regard to the completed years of service counted for fixation of initial pay and the number of increments allowed therein.
This Memorandum was also issued "By order and in the name of the Governor of Madhya Pradesh".
With reference to this Memorandum it was, by a subsequent Memorandum dated 8th November, 1967, provid ed that the State Government had further decided that the facilities granted to surplus personnel to the Development Blocks vide G.A.D. Memo under reference may also be extended to such employees absorbed in Class III executive posts.
this place it may be mentioned that the post of Sales tax Inspector is a Class III (Executive) post.
Another Order dated 19th July 1973 was issued by the Madhya Pradesh Gov ernment to all the Heads of the Departments regarding facil ities to the extra officials on being 159 absorbed in other Departments.
The provision with regard to seniority was the same as in the Memorandum dated 22nd May, 1967.
As is apparent from the seniority list dated 6th Janu ary, 1981 showing the position of the Sales tax Inspectors as on 1.4.80, the existing Sales tax Inspectors were con firmed on various dates between 1st November, 1956 and 5th October, 1968.
With regard to fixation of seniority of the absorbed Sales tax Inspectors on decision seems to have been taken till 15th February 1980 when an Order of that date was issued from the office of Sales tax Commissioner of Madhya Pradesh which provided that the Sales tax Inspectors men tioned therein who were absorbed between 1967 and 1970 were made permanent to that post according to the directions of the Government with effect from 31st March, 1967 (presumed date).
The seniority list referred to above indicates that the names of the absorbed Sales tax Inspectors are to be found at serial Nos.
21 to 104 having, 31st March, 1967 as the date of confirmation of all of them.
The existing Sales tax Inspector Soni Badri Prasad shown at serial No. 20 was confirmed on 22nd May; 1966 whereas the existing Sales tax Inspector Cangrade Dashreth Lal shown at serial No. 105 was confirmed on 1st April, 1967.
The existing Sales tax Inspectors as well as the ab sorbed Salestax Inspectors both felt aggrieved by the con firmation order of the absorbed Sales tax Inspectors with effect from 31st March, 1967, the seniority list aforesaid prepared on its basis as well as a subsequent seniority list dated 15th May, 1982.
The two writ petitions referred to above were filed in the High Court, one by the existing Sales tax Inspectors and the other by the absorbed Sales tax Inspectors.
Both of them were decided by a common judgment whereby the order dated 15th February, 1980 referred to above was quashed and seniority was directed to be fixed in accordance with the Recruitment Rules and general conditions of Service Rules.
It is this judgment which is the subject matter of these two civil appeals, both having been filed by some of the absorbed Sales tax Inspectors.
The contention of the existing Sales tax Inspectors is that the absorbed Sales tax Inspectors could not be con firmed on 15th February ', 1980 retrospectively with effect from a presumed date, namely, 31st March, 1967.
According to them the determination of seniority, taking confirmation as the basis, is erroneous as they were entitled to have the entire period between their actual appointment and confirma tion taken into consideration; whereas the grievance of 160 the absorbed Sales tax Inspectors is that since they had been working in another department of the State Government as Block Level Extension Officers from various dates between 13th November, 1956 and the actual date of their absorption, they were entitled to have the entire period of their serv ice as Block Level Extension Officers taken into considera tion and the fixation of their seniority on the basis of their having been confirmed from the presumed date of 31st March, 1967 is erroneous.
It was also sought to be urged before us on behalf of the existing Sales tax Inspectors that the appointment of the absorbed Sales tax Inspectors as Sales tax Inspectors was illegal having been made not in conformity with the relevant rules and without the recommendation of the Public Service Commission.
For the absorbed Sales tax Inspectors on the other hand it was urged that none of the rules relied on by the existing Sales tax Inspectors was applicable to the absorption as Salestax Inspectors of the surplus Block Level Extension Officers and that it was the executive instruc tions issued in this behalf particularly dated 29th March, 1967, 22nd May, 1967, 8th November, 1967 and 19th July, 1973 referred to above which applied to their absorption.
Having heard learned counsel for the parties and M.C. Katarpanch, respondent No. 15 in C.A. No. 3412 of 1986, we are, on the facts of the instant case, so far as this sub mission is concerned, of the opinion that the validity of the absorption as Sales tax Inspectors of the surplus Block Level Extension Officers does not deserve to be permitted to be challenged in these appeals and that we have to proceed on the basis that their appointment by absorption as Sales tax Inspectors was valid.
It is true, as has been pointed out on behalf of the existing Sales tax Inspectors, that the surplus Block Level Extension Officers when called for interview for the purpose of being considered suitable for absorption were required to bear themselves the travelling expenses and that fresh letters of appointment were issued to them after the interview.
In our opinion, however, these circumstances are of very little significance for discerning the true nature of their absorption.
In this connection it is of significance that no material has been brought to our notice to indicate that the services of the surplus Block Level Extension Officers had ever been factually terminated.
Again, notwithstanding the fact that the nature of their appointment as Salestax Inspectors after interview was temporary, they were allowed to uninterruptedly continue to hold the post of Sales tax Inspector and were subsequently not only confirmed on that post but were also given ad hoc promotions as Assistant Sales tax Officers.
Another circums 161 tance which is of significance in this behalf is that no relief for the quashing of their appointments was sought for by the existing Sales tax Inspectors in the writ petition flied by them before the High Court nor was, as is apparent from the judgment appealed against, any such relief pressed before the High Court.
In fact, even the fixation of their pay as Sales tax Inspectors consequent upon their absorp tion, which was done in accordance with the executive in structions referred to above, does not seem to have been ever challenged.
On the other hand it is specifically stated in the judgment appealed against: "It is not in dispute that the respondents 4 to 88 were absorbed in the Sales tax Department between 13.2 1967 to 28.9.1970 although the respondent State adds that they were in Government service in other governmental departments and some of them right from the year 1948 long before the petitioners were appoint ed as Sales tax Inspectors.
" It is for these reasons that we are of the opinion that now it is too late a stage to chal lenge the validity of appointment of the absorbed Sales tax Inspectors on that post.
Now coming to the question of seniority, the term "absorbed" in Service Jurisprudence with reference to a post in the very nature of things implies that an employee who has not been holding a particular post in his own right by virtue of either recruitment or promotion to that post but is holding a different post in a different department is brought to that post either on deputation or by transfer and is subsequently absorbed in that post whereafter he becomes a holder of that post in his own right and loses his lien on his parent post.
No one asserts that the instant one was a case of the absorbed Sales tax Inspectors being initially sent on deputation from the post of Block Level Extention Officer to the post of Sales tax Inspector and being subse quently absorbed in that post.
Consequently, when as pointed out by the High Court, it was not disputed that the surplus Block Extension Officers had been absorbed in the post of Sales tax Inspectors it is obvious that it was a case of absorption by transfer.
In this connection it would be useful to recapitulate that the minutes of the meeting referred to above held on 30th September, 1965 laying down the principles of procedure for absorbing the surplus per sonnel specifically stated that the surplus staff which was to be "absorbed" should be treated as having been trans ferred from one post to another so that there may be no break in their service.
" The question as to whether the fixation of seniority by the Government was valid or not has to be considered in the aforesaid background.
The crux of the problem, therefore, is as to what princi 162 pie should govern the fixation of inter se seniority of the Sales tax Inspectors who were directly recruited as such, namely, the existing Sales tax Inspectors and those who became holders of that post by absorption on transfer from one Government department to another, namely, the absorbed Sales tax Inspectors.
The competing claims are, as already indicated above, that whereas the existing Sales tax Inspec tors contend that the date of confirmation alone was not relevant and that even the period between the dates of their actual appointment and confirmation should be counted for fixing their seniority, the contention of the absorbed Sales tax Inspectors is that the entire period of their service as Block Level Extension Officers should also be taken into consideration while fixing their seniority.
In so far as the legal position with regard to fixation of seniority is concerned it may be pointed out that a Constitution Bench of this Court in Direct Recruit Class 11 Engineering Officers ' Association vs State of Maharashtra and Others, ; after a conspectus of various earlier decisions has inter alia held: "(A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirma tion.
The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as stop gap arrangement, the officiation in such post cannot be taken into account for considering the seniority.
(B) If the initial appointment is not made by following the procedure laid down by the rules but the appointed continues in the post uninterruptedly till the regularisation of his service in accordance with the rules, the period of offici ating service will be counted.
" On its basic there is obviously substance in the asser tion of the existing Sales tax Inspectors that the period from the respective dates of their appointments to those of their confirmation deserve to be counted while fixing their seniority.
As regards the absorbed Sales tax Inspectors, even if their initial appointment as Sales tax Inspector is, for the sake of argument, taken to be irregular as was sought to be urged before us on behalf of the existing Sales tax Inspectors, the said appointment not being only ad hoc and they having continued in the 163 pOSt uninterruptedly till the regularisation of their serv ice, which event even if may be treated to have taken place on 15th February, 1980 when they were granted retrospective confirmation with effect from 31st March, 1967 they are entitled to have the entire period of their service as Sales tax Inspector counted inasmuch as their confirmation at any rate with effect from 15th February, 1980 cannot be said to be in violation of any rule.
The question which , therefore, remains to be considered is about the period during which they worked as Block Level Extension Officers before they were absorbed as Sales tax Inspectors.
Is the entire period to be taken into consideration or only a part of it and if so, what part or is the said period to be ignored in its entirety, are questions which call for an answer.
In R.S. Makashi vs I.M. Menon, ; the question of seniority arose among the members of the staff who, for maintaining a new department, had been drawn from four different sources.
It was pointed out that in such a situation it was inevitable that some reasonable principles had to be formulated for the determination of the inter se seniority of the personnel appointed to work in the differ ent categories of posts in the new organisation.
Rules for fixation of seniority were framed by the Government, validi ty of some of which was challenged on the ground of being violative of Articles 14 and 16 of the Constitution.
Rule 4(a) was one such rule.
A learned Single Judge of the High Court struck down that rule.
While reversing the judgment of the High Court it was held: "Almost the entire reasoning of the learned Single Judge is based on an assumption that there is an invariable "normal rule" that seniority should be determined only on the basis of the respective dates of appointment to the post and that any departure from the said rule will be prima facie unrea sonable and illegal.
The said assumption is devoid of any legal sanction.
We are unable to recognise the existence of any such rigid or inflexible rule.
It is open to the rule making authority to take a note of the relevant circum stances obtaining in relation to each department and deter mine with objectivity and fairness what rules should govern the inter se seniority and ranking of the personnel working in the concerned departments and the courts will only insist that the rules so formulated should be reasonable, just and equitable.
Judged by the said test of reasonableness and fairness, the action taken by the Government in equating the clerical personnel which had rendered two years ' regular 164 service in other departments with the temporary Supply Inspectors of the CFD and in directing as per impugned Rule 4(a) that their inter se seniority shall be determined with reference to the length of service calculated on the basis of the said equation cannot be said to be in any way dis criminatory or illegal.
We are unable to accept as correct the view expressed by the learned Single Judge of the High Court that "while fixing the seniority in the higher post, it is not open to take into consideration any service ren dered in the lower post and that by itself spells out dis crimination." (Emphasis supplied).
Relying on the aforesaid decision it was held in Wing Commander J. Kumar vs Union of India and Others, ; "Equally untenable is the further plea advanced by the appellant that since the R & D is an integrated cadre, there cannot be any further classification of the officers com prised therein on the basis of the length of service put in by them in their respective parent services prior to their permanent statement in the R & D.
As pointed out by this Court in the decision in R.S. Makashi vs I.M. Menon, (supra), it is a just and wholesome principle commonly applied in such situations where persons from different sources are drafted to serve in a new service that their pre existing length of service in the parent department should be respected and preserved by taking the same into account in determining their ranking in the new service cadre.
Such a provision does not involve any discrimination violative of Article 16 of the Constitution." In K. Madhavan and Anr.
vs Union of India and Ors.
, it was held that it will be against all rules of service jurisprudence if, when a Government servant holding a post is transferred to the same or an equivalent post in another Government Department, the period of his service in the post before transfer is not taken into consideration in computing his seniority in the post to which he is transferred.
The transfer cannot wipe out his length of service in the post from which he has been trans ferred.
It is true that R.S. Makashi and Others as well as Wing Commander J. Kumar, (supra) were cases where new service was created in our opinion, on that ground alone the principle enunciated 165 therein cannot be treated as to be confined only to a case where new service was created.
The observations made therein are obviously based on equitable principles and it is those principles which were applied in the case of K. Madhavan (supra).
Reliance was placed by learned counsel for the absorbed Salestax Inspectors on the decision of this Court in the case of K.C. Vasudeva and Others vs Union of India and Others, where it was held that fixa tion of seniority between existing employees and those taken over from an autonomous body after its dissolution must be based not on mere compassion but on rational criteria having full consideration for rights of other parties affected and having nexus with efficiency in administration.
Government must apply its mind and give reasons for its exercise of power to give relaxation to one class of employees.
In our opinion the said decision in clearly distinguishable.
First ly, that was a case where employees not of another Govern ment Department but of an autonomous body were brought in a Government Department and in the matter of determination of seniority the period during which they had worked in the autonomous body was taken into account.
Emphasis was placed in that case on this circumstance when it was pointed out that such employees were new entrants into Government serv ice and even so they were given credit for their former service in the autonomous body.
Secondly, unlike the instant case in that case credit for the entire period of Service in the autonomous body seems to have been given.
What is, however, noteworthy is that it was specifically stated in paragraph 5 the report of that case that "it is perfectly within the power of the Government to have a rationalisation of the entire situation and if it thinks fit even to give weightage or credit for service" in the autonomous body.
The principle of giving weightage was approved by this Court in an earlier decision also in the case of S.G. Jai Singhani vs Union of India; , and is a well recognised principle in the sphere of determination of seniority.
In view of the legal position enumerated above, it is true that the claim of the existing Sales tax Inspectors that the period between the dates of their appointment and confirmation should be counted seems to be justified but it is equally true that the claim of the absorbed Sales tax Inspectors that the period during which they worked in their parent Department should also be taken into account, does not obviously appear to be off the mark.
If the period between the dates or ' appointment and confirmation of the existing Sales tax Inspectors was counted for fixing their seniority but the period during which the 166 absorbed Sales tax Inspectors worked in their parent Depart ment was ignored, the former would have obviously been placed on a more advantageous position but only to the prejudice of the latter as it would have amounted to sacri ficing their interest.
If, on the other hand, the periods referred to above in case of both the sets of Sales tax Inspectors was taken into account, it would have resulted in granting benefit of the absorbed Sales tax Inspectors at the cost of the existing ones and presumably including those who had already been promoted as Assistant Sales tax Officers, even prior to 22nd May 1967, inasmuch as the period during which they had served in their parent Department was much longer than the period of officiation of the existing Sales tax Inspectors.
This was the situation with which the State Government was faced and it was its duty to evolve some policy or equitable formula which did justice, as far as possible, to the competing claims of both the sets of Sales tax Inspectors.
It was apparently in search of such a formula that the State Government appears to have given retrospective confirmation to the absorbed Sales tax Inspec tors from a presumed date and determined the seniority on the basis of the dates of confirmation.
This section can be justified even on the well recognised principle referred to above of giving weightage in the matter of determination of seniority.
The principle formulated in the case of R.S. Makashi (supra) with reference to a rule of seniority namely that "the Courts will only insist that the rules so formu lated should be reasonable, just and equitable" with the result that if they meet this requirement the Court will not interfere, would in our opinion apply even to a case of executive action of determining seniority if the above test is satisfied.
It is also relevant to point out that no statutory rule has been brought to our notice which may run counter to the decision mentioned above taken by the govern ment.
The two rules to which our attention has been invited are (i) Madhya Pradesh Civil Services (General Conditions of Service) Rules 1961 and (ii) Madhya Pradesh Sales taX Subor dinate Class III Executive Service Recruitment Rules, 1966.
In so far as the 1966 Rules are concerned, they do not contain any provision about seniority.
The 1961 Rules, no doubt, deal with seniority in Rule 12 but having gone through the said Rule we are of the opinion that the case of the absorbed Sales tax Inspectors does not fail under any of the categories enumerated therein.
At this place, we may mention that nothing substantial has been brought to our notice by either party on ' the basis of which it could safely be said that on the peculiar facts and circumstances of this case already referred to above, the decision of the State Government did not satisfy the above said test and was either arbitrary or discriminatory.
167 In this view of the matter.
we are of the opinion that it was not a fit case for interference by the High Court in exercise to its jurisdiction under Article 226 of the Con stitution of India with the decision of the State Govern ment.
In the result, these civil appeals are allowed, the common judgment of the High Court in the two writ petitions referred to above set aside and both the said writ petitions are dismissed.
In the circumstances of the case, however, the parties shall bear their costs in this Court as well as in the High Court.
P.S.S. Appeals allowed.
| IN-Abs | A group of Block Level Extension Officers rendered surplus in their parent department were appointed as Sales Tax Inspectors, Class III (Executive) posts, in the respond ent State between 13th February, 1967 and 28th September, 1970.
By an order dated 29th March, 1967, they were exempted from the requirement of going through competitive examina tion for the purpose of absorption.
By memorandum dated 22nd May, 1967 it was provided that seniority of surplus Class III ministerial employees of the development blocks on their absorption in other departments shall be determined with regard to the completed years of service counted for fixa tion of initial pay.
By a subsequent memorandum dated 8th November, 1967 this facility was also extended to employees absorbed in Class III executive posts.
Another order issued on 19th July, 1973 on the subject maintained the provision with regard to seniority as contained in the memorandum dated 22nd May, 1967.
Subsequently these Sales Tax Inspec tors were made permanent to that post retrospectively with effect from 31st March, 1967 by an order dated 15th Febru ary, 1980.
In the combined seniority list prepared accord ingly some of the directly recruited Sales Tax Inspectors were shown junior to the absorbed Sales Tax Inspectors.
On cross petitions being filed by the existing Sales Tax Inspectors and the absorbed Sales Tax Inspectors assailing the seniority list the High Court quashed the order dated 15th February, 1980 and seniority was directed to be fixed in accordance with the Recruitment Rules and general condi tions of Service Rules.
In these appeals by special leave, it was contended for the existing Inspectors that the absorbed Inspectors could not be confirmed on 15th February, 1980 retrospectively with effect from a presumed date, namely, 31st March, 1967; that the determination of seniority taking 155 confirmation as the basis was erroneous as they were enti tled to have the entire period between their actual appoint ment and confirmation taken into consideration, and that the appointment of the absorbed Inspectors was illegal having been made not in conformity with the relevant rules and without the recommendations of the Public Service Commis sion.
For the absorbed Inspectors it was contended that since they had been working in another department of the State Government from various dates between 13th November, 1956 and the actual date of their absorption they were entitled to have the entire period of their service in that department taken into consideration and the fixation of their seniority on the basis of their having been confirmed from the presumed date of 31st March, 1967 was erroneous, that none of the rules relied on by the existing 'Inspectors was applicable to them, and that it was the executive in structions issued in this behalf particularly dated 29th March, 1967, 22nd May, 1967, 8th November, 1967 which ap plied to their absorption.
Allowing the appeals, the Court, HELD: 1.
The order of the State Government dated 15th February, 1980 giving retrospective confirmation to the absorbed Sales tax Inspectors from a presumed date and determination of inter se seniority on the basis of the dates of confirmation was valid.
[159H] 2.1 Once an incumbent is appointed to a post according to rule, his seniority shall be counted from the date of his appointment and not according to the date of his confirma tion.
His transfer to the same or an equivalent post in another Government department cannot wipe out his pre exist ing length of service in the parent department.
[162D; 164G] Direct Recruit Class II Engineering Officers ' Associa tion vs State of Maharashtra & Ors., ; ; Wing Commander J. Kurnar vs Union of India & Ors., ; and K. Madhavan & Anr.
vs Union of India & Ors.
, , referred to.
2.2 It is, however, perfectly within the power of the Government to have a rationalisation of the entire situation and determine with objectivity and fairness what rules should govern the inter se seniority and ranking of the personnel working in the concerned department.
The Courts will only insist that the rules so formulated should be reasonable, just and equitable.
[165E; 166E] R.S. Makashi vs I.M. Menon, ; ; K.C. Vasudeva 156 S.G. Jai Singhghani vs Union of India, ; , referred to. 2.3 In the instant case, if the period between the dates of appointment and confirmation of the existing Inspectors was counted for fixing their seniority but the period during which absorbed Inspectors worked in their parent department was ignored, the former would have obviously been placed on a more advantageous position but only to the prejudice of the latter as it would have amounted to sacrificing their interest.
If, on the other hand, the periods of continuous service of both the sets of Inspectors was taken into ac count it would have resulted in granting benefit to the absorbed Inspectors at the cost of existing ones and presum ably including those who had already been promoted as As sistant Sales Tax Officers, even prior to 22nd May, 1967, inasmuch as the period during which they had served in their parent department was much longer than the period of offici ation of existing Inspectors.
This was the situation with which the State Government was faced and it was its duty to evolve some policy or equitable formula which did justice, as far as possible, to the competing claims of both the sets of officers.
The decision taken by the Government in the peculiar facts and circumstances of the case could not be said to be either arbitrary or discriminatory.
No statutory rule has been brought to Court 's notice which could run counter to it.
[165H; 166A D] 3.
The services of the absorbed Inspectors have not been shown to have ever been factually terminated in their parent department.
Again, though the nature of appointment of these officers in the Sales Tax Department was temporary they were allowed to uninterruptedly continue to hold the said post and were subsequently not only confirmed on that post but were also given ad hoc promotion as Assistant Sales Tax Officers.
Furthermore, no relief for the quashing of their appointment was sought for by the direct recruits before the High Court nor was any such relief pressed there.
In fact, even the fixation of their pay as Inspectors consequent upon their absorption, which was done in accordance with the executive instructions does not seem to have been ever challenged.
The validity of their appointment in the Sales Tax Department, therefore, could not be assailed.
[160G;
|
ivil Appeal No. 1811 of 1975.
From the Judgment and Order dated 18.4.1975 of the Allahabad High Court in Second Appeal No. 734 of 1975.
R.K. Mehta, Ms. Mona Mehta and S.K. Bagga (NP) for the Appellant.
P.K. Bajaj and Mrs. Rani Chhabra (NP) for the Respondents.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal by special leave arises from the judgment of the High Court of Judicature at Allaha bad dated April 18, 1975, dismissing the Second Appeal filed by the appellant.
Teja, the common ancestor, had five sons: Nanha, Mulle, Manna, Chhota and Ram Sahai.
All of them have died.
Appel lant Sita Ram is the son of Nanha.
Mulle had a son Nokhey who died in 1953 without any issue.
Respondent No. 2 Soney Lal is the son of Manna.
Kailasho Devi, respondent No. 3 is the widow of Ram Sahai.
Chhota Bhondey respondent No. 1, claims to be the son of Chhota which is disputed by the appellant.
The dispute in the appeal relates to sirdari holdings in Khata No. 72 and 73 in village Sambhalpur Sheoli in the State of Uttar Pradesh.
Lands in Khata No. 72 were originally entered in the names of Nanha, Manna and Ram Sahai in the revenue records and on their deaths the names of the appellant and respondents Nos. 2 and 3 were entered.
Respondent No. 3 sold her shares in these lands.
The lands in Khata No. 73 were entered in the name of Nanha alone and on his death the same were entered in the name of the appel lant.
Consolidation proceedings under the provisions of U.P. Consolidation of Holdings Act, 1953 (U.P. Act No. 5 of 1954) hereinafter referred to as 'the Act ' commenced in Village Sambhalpur Sheoli in the year 1969.
Respondent No. 1 filed objections to the entries and claimed one fourth share in the holdings in both the Khatas on the basis that he is the son of Chhota and that the said lands belonged to the joint Hindu family consisting of the sons of Tej Ram.
Respondents Nos. 2 and 3 filed objections claiming shares in the lands in Khata No. 73 on the ground that the said holding was jointly 187 acquired by Nanha and his brothers, Manna and Ram Sahai, and the name of Nanha was recorded in a representative charac ter.
The appellant contested the said claims and claimed that lands in Khata No. 73 were acquired by Nanha in his individual capacity and not on behalf of his family.
The appellant further claimed that respondent No. 1 could claim no interest in the holdings as he is not a member of the family.
The case of the appellant was that respondent No. 1 is not the son of Chhota but is the son of one Heera who was a resident of a different village.
The objections were considered by the Consolidation Officer, who, by order dated August 31, 1970, held that respondent No. 1 is the son of Heera alias Chhota.
He gave half share to the appellant and one fourth share each to respondents Nos. 1 and 2 in all the plots of the Khata No. 73 except plots Nos. 140, 141, 142/2, 142/3 and 143/3 which were given to the appellant exclusive ly.
The appellant as well as respondents Nos. 2 and 3 filed appeals against the said order of the Consolidation Officer.
The Assistant Settlement Officer (Consolidation), by Order dated February 8, 1971, allowed the appeal of the appellant and directed that Khata No. 73 will be continued in the name of the appellant alone inasmuch as the lands of the said Khata were acquired by Nanha between 1927 and 193 1 before the birth of respondent No. 1 and the said land was not the ancestral acquisition nor Nanha had acquired it in a repre sentative capacity.
The Assistant Settlement Officer, howev er, agreed with the findings of the Consolidation Officer that respondent No. 1 is the son of Heera alias Chhota and belongs to the family to which the appellant and respondent No. 2 belong.
The respondents went in revision against the said order of the Assistant Settlement Officer.
The said revisions were decided by the Deputy Director of Consolida tion by his Order dated May 13, 1971.
The Deputy Director allowed the revision of respondent No. 1 in full and held that he has got a share in Khata No. 72 along with the appellant and respondent No. 2 and since respondent No. 3 has already sold her share of Khata No. 72 the remaining three branches namely the appellant and respondents Nos. 1 and 2 are entitled to one third share each in the lands included in this Khata.
As regards lands in Khata No. 73 the Deputy Director disallowed the claim of the respondents in respect of plots Nos. 140, 141,142 and 143.
But with regard to other plots of Khata No. 73 the Deputy Director held that the name of Nanha was entered only in a representative capacity and that the branches of Manna, Chhota and Ram Sahai also had a share in these plots and that the respond ents had acquired equal shares along with the appellant in these plots and their names may also be recorded over the same.
The appellant filed a writ petition in the High Court to challenge the said decision of the Deputy Director of Consolidation, 188 but the said writ petition was dismissed in limine by the High Court by order dated July 23, 1971.
The application filed by the appellant for grant of certificate of fitness to appeal to this Court under Article 133 of the Constitu tion was also rejected by the High Court by its order dated November 9, 1972.
The appellant, thereafter, filed the civil suit giving rise to this appeal on January 25, 1973 for a declaration that the order of the Deputy Director of Consolidation dated May 13, 1971, is without jurisdiction.
The said suit was contested by respondent No. 1.
He raised a preliminary objection that the suit was barred by Section 49 of the Act.
The Munsiff Hawaii, Kanpur, by judgment dated August 16, 1974 decided the said preliminary objection in favour of respondent No. 1 and dismissed the suit on the ground that it was barred by Section 49 of the Act.
The said judgment and decree of the Munsiff Hawaii was affirmed in appeal by the Additional District and Sessions Judge, Kanpur Etawah by judgment dated January 17, 1975.
The second Appeal filed by the appellant against the said judgment was dismissed in limine by the High Court by the judgment under appeal.
The only question which arises for consideration in this appeal is whether the suit filed by the appellant was barred by Section 49 of the Act.
In the instant case the consolida tion proceedings under the Act were taken during the period 1969 to 1971 and the suit was filed in 1973.
At that time Section 49 read as under: "49.
Bar to civil jurisdiction Notwithstanding anything contained in any other law for the time being in force, the declaration and adjudication of rights of tenure holders in respect of land lying in an area, for which a notification has been issued under sub section (2) of Section 4 or adju dication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under this Act, shall be done in accordance with the provisions of this Act and no civil or revenue court shall entertain any suit or proceeding with respect to rights in such land or with respect to any other matters for which a proceeding could or ought to have been taken under this Act.
" Shri R.K. Mehta, the learned counsel for the appellant, has urged that the bar of Section 49 of the Act is not applicable to the suit of the appellant because the orders passed by the consolidation 189 authorities were without jurisdiction inasmuch as the con solidation authorities could not decide questions as to title to the lands as well as the question relating to the parentage of respondent No. 1 which the Civil Courts alone could decide.
The submission of Shri Mehta is that the bar of Section 49 of the Act is applicable in respect of only those matters which could be adjudicated upon by the consol idation authorities.
Shri Mehta has placed reliance on the decision of this Court in Suba Singh vs Mahendra Singh and Others, From a perusal of Section 49 it is evident that declara tion and adjudication of rights of tenure holders in respect of land lying in an area for which a notification has been issued under Section 4(2) and adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under the Act, had to be done in accordance with the provi sions of the Act only and the jurisdiction of the civil or revenue courts to entertain any suit or proceeding with respect to rights in such land or with respect to any other matter for which a proceeding could or ought to have been taken under the Act, has been taken away.
The language used in Section 49 is wide and comprehensive.
Declaration and adjudication of rights of tenure holders in respect of land lying in the area covered by the notification under Section 4(2) of the Act and adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under the Act, would cover adjudication of questions as to title in respect of the said lands.
This view also finds support from the other provisions of the Act and the amendments that have been introduced therein.
In the Act, as originally enacted, Section 12 made provision for filing of objections against the statement of plots and tenure holders prepared by the consolidation authorities and in sub section (4) of Section 12 it was prescribed that where the objection filed under subsection (1) involves a question of title and such question has not already been determined by a competent court, the Consolida tion Officer shall refer the question for determination to the arbitrator.
Sub section (5) of Section 12 laid down that all suits or proceedings in the Court of first instance or appeal in which a question of title in relation to some land has been raised shall be stayed.
Under subsection (6) Of Section 12 finality was given to the decision of the Arbi trator under sub section (4).
Similarly Section 20 made provision for filing of objections against statement of proposals prepared by the consolidation authorities under Section 19 of the Act.
Section 22 prescribed that where any objection filed under Section 20 involves a 190 question of title in or over land and such question has not already been finally determined by a competent court, the Consolidation Officer shall refer it to the Arbitrator for determination and all suits or proceedings of the first instance or appeal in which a question of title in relation to the same had been raised shall be stayed and the decision of the Arbitrator shall be final.
There was a similar provi sion for reference to arbitrator in Section 36.
These provi sions indicate that initially the Act envisaged that ques tions of title, if not finally determined by a competent court, shall, instead of being decided by the Courts, be decided by an Arbitrator and the decision of the Arbitrator would be final.
As a result the determination of questions of title was withdrawn from the jurisdiction of the Courts.
On a consideration of the scheme of the Act and the policy behind the legislation, in the light of the provisions referred to above, this Court has observed: "The scheme of that Act, the policy behind that legislation and the language of the relevant provisions clearly show that the Legislature did not want questions of title to be decided by the Civil Court when the consolidation proceed ings were under way.
It is perfectly plain that the frag mented holdings being converted into consolidated parcels of land is a complicated operation to be conducted by adminis trative authorities, and if long and frequent proceedings in Civil Courts hold up consolidation operations, the very transformation of land holdings in villages the legislature desired to produce .would have been indefinitely postponed and messed up.
It is thus obvious that at this stage Civil Courts should not intervene even if the questions were of heirship or title to property.
At the same time, the Legis lature did not want to hand over these complicated questions of title and the like to mere consolidation agencies, and so under Sections 12(4) and 22(1), it was provided that objec tions relating to title to land, if they cropped up at intermediate stages of these operations, were to be referred to arbitration." (p.420 21) Extensive amendments were made in the Act by the U .P.
Consolidation of Holdings (Amendment) Act, 1958 (U.P. Act No. 38 of 1958) whereby a number of sections including section 36, were deleted and various provisions, including sections 5, 7 to 12 and 22, were substituted.
As a result of these amendments the provisions with 191 regard to arbitration contained in Sections 12, 22 and 36 of the original Act were removed.
In sub clause (i) of Clause (b) of Section 5, as substituted, it was provided that all proceedings for correction of the records and all suits for declaration of rights and interests over land, or for pos session of land or for partition, pending before any author ity or court, whether of first instance, appeal, or refer ence, or revision, shall stand stayed, but without prejudice to the rights of the persons affected to agitate the right or interest in dispute in the said proceeding or suits before the consolidation authorities under and in accordance with the provisions of the Act and the Rules made thereun der.
In sub clause (ii) of Clause (b) it was further provid ed that the findings of consolidation authorities in pro ceedings under the Act in respect of such right or interest in the land, shall be acceptable to the authority or court before whom the proceeding or suit was pending which may, on communication thereof by the parties concerned, proceed with the proceeding or suit, as the case may be.
In Section 9 as substituted, provision was made for issuing notice of the statement prepared under Section 8 of the Act to tenure holders concerned and to persons interested calling upon them to file before him objections, if any, disputing the correctness or nature of the entries in the extracts and pointing out of any omission therefrom.
In Section 10 of the Act provision was made for adjudication by the Consolidation Officer of the said objections in disputed cases.
In Section 11 provision was made for appeal against the orders passed by the Assistant Consolidation Officer and the Consolidation Officer under Sections 9 and 10.
Section 12, as substituted, prescribed that all matters relating to changes and trans fers affecting any of the rights or interests recorded in the revised records published under Section 1 1B for which a cause of action was non existent when proceedings under Sections 7 to 10 were started or were in progress may be raised before the Assistant Consolidation Officer as and when they arise but not later than the date of notification under Section 52 or under sub section (1) of Section 6 and that the provisions of Sections 7 to II shall mutatis mutan dis, apply to the hearing and decision of any matter praised under Section (1) as if it were a matter raised under the aforesaid Sections.
The scheme of the above mentioned amend ments introduced in the Act by the Amendment Act of 1958 was to empower the consolidation authorities to adjudicate on matters involving declaration of right and interests over land or for possession of land or for partition and suits or proceedings in that regard pending before any Court were to be stayed till such determination and after such determina tion.
the Court was to proceed with the said proceedings in the light of the findings of the consolidation authorities.
In other words the question as to title which were 192 earlier required to be determined by arbitration were to be adjudicated upon by the consolidation authorities under the Act.
From the Statement of Objects and Reasons for the Amendment Act of 1958 it appears that it become necessary to do away with the provisions for arbitration because it used to cause great delay and in order to inspire greater confi dence in the people in the adjudication of rights of tenure holders by consolidation authorities provision was made for a Second Appeal against orders passed by the Consolidation officer.
Further amendment was made in Section 5 of the Act by U.P. Act No. 21 of 1966 whereby clause (b) of sub section (1) of Section 5, as renumbered, was omitted and sub section (2) was added in Section 5.
By clause (a) of the said sub section (2) it has been provided that upon the publication of the notification under sub section (2) of Section 4 every proceeding for the correction of the records and all suits and other proceedings in respect of declaration of rights and interests in any land lying in the area, or for declara tion or adjudication of any other right in regard to which proceedings can or ought to be taken under the Act, pending before any Court or authority whether of the first instance or of appeal, reference or revision, shall, on an order being passed in that behalf by the Court or authority before whom such suit or proceeding is pending, stand abated.
In clause (b) of sub section (2) of Section 5 it is further provided that such abatement shall be without prejudice to the rights of the persons affected to agitate the right or interest in dispute in the said suit or proceedings before the appropriate consolidation authorities under and in accordance with the provisions of the Act and the Rules made thereunder.
As a result of the said amendment which has been introduced in Section 5 the right of the Courts to adjudi cate in respect of declaration of rights or interest in any land lying in the area for which the notification has been issued under Section 4(2) or for declaration or adjudication of any other right in regard to which proceedings can or ought to be taken under the Act has been completely taken away and the adjudication of these rights is to be done by the consolidation authorities under and in accordance with the provisions of the Act and the Rules made thereunder.
Section 49 of the Act which bars the jurisdiction of the civil and revenue Courts gives effect to the aforesaid provisions contained in Section 5(2) of the Act.
As a result of these amendments civil and revenue Courts have no role in the matter of determination of rights or interests in any land lying in the area for which notice has been issued under Section 4(2) of the Act or for the declaration or adjudication of any other right in regard to which proceed ings can or ought to be taken under the Act.
193 In Ram Adhar Singh vs Ramroop Singh and Others, ; this Court has dealt with the question whether a suit for recovery of possession filed by the plaintiff claiming to be 'Bhoomidar ' of the land and asserting that the defendant was a trespasser and not entitled to remain in possession of the property was covered by Section 5(2) of the Act as amended by U.P. Act No. 21 of 1966.
After consid ering the various provisions of the Act this Court held that "disputes of the nature which exists between the parties in the present litigation are all now within the jurisdiction of the authorities, constituted under the Act, to adjudicate upon" and on that basis it was held that the suit had abated under Section 5(2).
In Gorakh Nath Dube vs Hari Narain Singh and Others, ; this Court was concerned with a suit for cancellation of a Sale Deed to the extent of half share claimed by the plaintiff in fixed rates tenancy plots and for award of possession of the plaintiff 's share.
This Court held that the said suit had abated under Section 5(2) of the Act inasmuch as the claim made in the said suit could be adjudicated upon by consolidation courts.
Referring to Section 5 of the Act this Court has observed: "The whole object of this provision of the Act was to remove from the jurisdiction of ordinary civil and revenue courts, for the duration of consolidation operations, all disputes which could be decided in the course of consolidation pro ceedings before special courts governed by special proce dure.
Such adjudication by consolidation authorities were considered more suitable, just and efficacious for speedy decisions which had to be taken in order to enable consoli dation operations to be finalised within a reasonable time.
(P.341) This Court has held that questions relating to the validity of sale deeds, gift deeds and wills could be gone in proceedings before the consolidation authorities because such questions naturally and necessarily arose and had to be decided in the course of adjudication on rights or interests in land which are the subject matter of consolidation pro ceedings.
A distinction has, however, been made between cases where the document is wholly or partially invalid so that it can be disregarded by any court or authority and one where it has to be actually set aside before it can cease to have.legal effect.
With regard to cases falling in the first category it was held that such a claim can be 194 adjudicated by consolidation courts on the view that an alienation made excess of power to transfer would be, to the extent of the excess of power, invalid and an adjudication on the effect of such a purported alienation would be neces sarily implied in the decision of a dispute involving con flicting claims to rights, or interests in land which are the subject matter of consolidation proceedings.
But as regards cases falling in the second category where there is a document the legal effect of which can only be taken away by setting it aside or its cancellation, it was held that the consolidation authorities would have no power to cancel the same and it must be held to be binding no them so long as it is not cancelled by a court.
In the instant case respondent No. 1 was claiming an inter est in the land lying in the area covered by notification issued under section 4(2) on the basis that he is the son of Chhota, brother of Nanha and that the lands were recorded in the name of Nanha in a representative capacity on behalf of himself and his other brothers.
This claim which fell within the ambit of Section 5(2) had to be adjudicated by the consolidation authorities.
Since it was a matter falling within the scope of adjudicatory functions assigned to the consolidation authorities under the Act the jurisdiction of the Civil Court to entertain the suit in respect of the said matter was expressly barred by Section 49 of the Act and the suit of the appellant was rightly dismissed on that ground.
Suba Singh vs Mahendra Singh, (Supra), on which reliance has been placed by the learned counsel for the appellant,has no application to the present case.
That case related to the year 1956 i.e. before the Amendment Act of 1958.
At that time provision relating to arbitration were contained in Sections 12(4) and 21(1) of the Act.
The provisions of sections of Section 49 of the Act which were in force at that time had a narrower scope and the jurisdiction of the Civil Court was barred "with respect of any matter arising out of consolidation proceedings or with respect to any other matter in regard to which a suit or application could be filed under the provisions of the Act.
" In that case after the scheme for consolidation under Section 23 of the Act had been confirmed one Jag Ram, who was held to be a Bhoomidar under the Scheme, had died.
Jag Ram had four sons including Ram Bhajan who hadpre deceased Jag Ram.
The plaintiff appellant claimed himself to be the son of Ram Bhajan and had applied for mutation in the consolidation proceedings on that basis which was allowed.
Thereafter he approached the Civil Court for partition of the property of Jag Ram.
The question was whether the said suit was barred by Section 49 of the Act.
This Court held that it was not so barred on the view that the 195 question as to who were the heirs of Jag Ram was not a matter arising out of consolidation proceedings and further that the said question of inheritance to the estate of Jag Ram arose after the consolidation operations had been sub stantively completed.
In this context this Court has ob served that there is no provision in the Act for any dispute of title which arises subsequent to confirmation of the statement under Section 23 to be decided by way of arbitra tion or otherwise and that the consolidation authorities had no jurisdiction to determine finally the complicated ques tion of title when the cause of action had arisen subsequent to the finalisation, publication and even implementation of the consolidation scheme so far as Jag Ram was concerned.
This would show that in this case this Court was considering the question whether a dispute as to title which arises subsequent to confirmation of the statement under Section 23 could be adjudicated upon by the consolidation authorities.
As pointed out earlier the position has been changed after the amendments that have been introduced in the Act by the Amendment Acts of 1958 and 1966.
For the reasons aforesaid we find no substance in this appeal and it is accordingly dismissed with costs.
R.S.S. Appeal dis missed.
| IN-Abs | In the course of consolidation proceedings under the U.P. Consolidation of Holdings Act, 1953, questions arose amongst the members of a family regarding the title to certain properties.
Respondent No. 1 filed objections to the original entries in respect of lands in Khata No. 72 and 73 on the basis that he was the son of Chhota, one Of the sons of Teja, the common ancestor.
Similarly, respondents Nos. 2 and 3 filed objections claiming shares in the lands in Khata No. 73 on the ground that the said holding was jointly acquired but was recorded in the name of Nanha in a repre sentative character.
The appellant contested the claims of respondents Nos. 1, 2 and 3.
The objections were considered by the Consolidation Officer, who held that respondent No. 1 was the son of Heera alias Chhota, brother of Nanha, and granted him his share in certain plots of the Khata No. 73.
The appellant as well as respondents Nos. 2 and 3 fried appeals against the said order of the Consolidation Officer.
The Assistant Settlement Officer (Consolidation) allowed the appeal of the appellant and directed that lands in Khata No. 73 will be continued in the name of the appellant alone.
The respondents went in revision against the order of the Assistant Settlement Officer.
The Deputy Director of Consolidation allowed the revision of respondent No. 1 in full in respect of share in Khata No. 72.
As regards plots in Khata No. 73 the Deputy Director held that the name of Nanha was entered only in a representative capacity.
The appellant filed a writ petition in the High Court to challenge the decision of the Deputy Director of Consolida tion which was dismissed in limine.
185 The appellant, thereafter, 'filed the civil suit for a declaration that the order of the Deputy Director of Consol idation was without jurisdiction.
Contesting the suit, respondent No. 1 raised a preliminary objection that the suit was barred by section 49 of the Act.
The Munsiff decid ed the preliminary objection in favour of respondent No. 1.
The Additional District and Sessions Judge in appeal, af firmed the order of the Munsiff.
The second appeal filed by the appellant was dismissed by the High Court in limine.
Before this Court, it was contended on behalf of the appellant that the bar of section 49 of the Act was not applicable to the suit of the appellant because the orders passed by the consolidation authorities were without juris diction inasmuch as the consolidation authorities could not decide questions as to title to the lands as well as the question relating to the parentage of respondent No. 1 which the civil courts alone could decide.
Dismissing the appeal, this Court, HELD: (1) The language used in section 49 of the U.P. Consolidation of Holdings Act, 1953 is wide and comprehen sive.
Declaration and adjudication of rights of tenure holders in respect of land lying in the area covered by the notification under section 4(2) of the Act and adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under the Act, would cover adjudication of ques tions as to title in respect of the said lands.
Accordingly, the jurisdiction of the civil or revenue courts to entertain any suit or proceeding with respect to rights in such land or with respect to any other matter for which a proceeding could or ought to have been taken under the Act has been taken away.
[189D E; C] Suba Singh vs Mahendra Singh and Others, ; Gorakh Nath Dube vs Hari Narain Singh, , referred to.
(2) In the instant case, respondent No. 1 was claiming an interest in the land lying in the area covered by the notification issued under section 4(2) on the basis that he was the son of Chhota, brother of Nanha, and that the lands were recorded in the name of Nanha in a representative capacity on behalf of himself and his other brothers.
This claim which fell within the ambit of section 5(2) had to be adjudicated by the consolidation authorities under the Act, and the jurisdiction of the Civil Court to entertain the suit in respect of the said 186 matter was expressly barred by section 49 of the Act and the suit of the appellant was rightly dismissed on that ground.
[194C D]
|
ivil Appeal Nos. 47(11 and 4702 of 1985.
From the Judgment and Order dated 12.12.
1983 of the Karnataka High Court in C.R.P. No. 3765 of 1981.
Dr. Y.S. Chitale Rameshwar Nath, Ravinder Nath and Sukumar Ghosh for the Appellants in C.A. Nos. 4701 and 4702 of 1985.
253 P. chidambram, S.S. Javali, H.R. Anantha Krishna Murthy and Ranjit Kumar for the Respondents in C.A. Nos. 4701 and 4702 of 1985.
The Judgment of the Court was delivered by VERMA, J.
These appeals by special leave are by the tenant and the sub tenant against a decree for eviction passed on the grounds of sub letting and the reasonable and bona fide requirement of the respondent landlord specified in clauses (f) & (h) of the proviso to sub section 1 of Section 21 of the Karnataka Rent Control Act, 1961 (herein after called 'the Act ').
The Trial Court had rejected the landlord 's application.
for an order of eviction on these grounds, but the High Court in a revision under Section 50 of the Act has set aside the Trial Court 's order and passed the decree for eviction on these grounds.
Hence these ap peals.
The material facts are undisputed at this stage.
The premises comprises of two shops and a house adjoining the shops and belonged earlier to one T.A. Jotindranath Mudali ar.
The premises were let out by the original lessor to M/s. Bhoolchand Chandiram (Appellant in Civil Appeal No. 470 1 of 1985) on 4.10.1943 on terms contained in the letter dated 4.10.
1943 from the original lessor to M/s. Bhoolchand Chandiram which reads as under: "T.A. Jotindranath 933, Laxmipur Mudaliar.
Mysore, 4th October 43 To Messrs. Boolchand Chandiram, Silk Merchant, C/o Messrs. Bhagwandas Shyam sunder & Co., 112, Commercial Street, Bangalore Cantt.
Dear Sirs, With reference to your letter dated 30th Sept. 43 and your personal conversation about renting out my shops in 254 the Commercial Street, Bangalore Cantonment, it is agreed and confirmed that you are prepared to take the two shops at monthly rent of Rs.430 (Rs. Four hundred and thirty only) with two years agreement and three month 's advance and execute the necessary rental Deed, with the option of sub letting one of the shops.
As for the House adjoining the shops at monthly rent of Rs.50 (Rs. Fifty only) with one month 's advance and Eleven Month 's rental Deed.
You have the option of sub letting the house also.
Yours sincerely, sd/ T.A. Jotindernath Mudaliar" M/s. Bhoolchand Chandiram continued as a tenant in the premises and sometime in the year 1946 sublet one of the two shops to one 'Arts Palace '.
Later, w.e.f.
1.4.1948 the appellant M/s. Bhoolchand Chandiram inducted another sub tenant M/s. Super Dry Cleaners (Appellant in Civil Appeal No 4702 of 1985) in place of Arts Palace in the same shop.
In 1960, a partition took place in the Hindu Undivided Family of Mudaliar brothers, the original lessor and the suit premises fell to the share of Narendranath Mudaliar.
M/s. Bhoolchand Chandiram continued in the premises as the tenant with Super Dry Cleaners as the sub tenant in one shop from 1.4.
The original lessor (including Narendranath Mudaliar after partition in the HUF of Mudaliar brothers) continued to take rent from the tenant M/s. Bhoolchand Chandiram of the entire premises i.e. two shops and the house adjoining the shops till May, 1974.
On 28.6.1974, the said Narendranath Mudaliar executed a registered sale deed in favour of respondent No. 1, M/s. Kay Pee Cee Investments, a registered partnership firm comprising of three ladies of one family as partners, for the sale consideration of Rs. 1,40,000.
It may be mentioned that in a proceeding for fixation of standard rent between the original lessor and the tenant, monthly rent of Rs.325 was fixed for the entire premises i.e. two shops and the house and the rent due upto May, 1974 was paid by the tenant to the original lessor.
After execution of the said sale deed in favour of respond ent No. 1, the tenant attorned in favour of respondent No. 1 and paid rent for the entire premises @ Rs.325 per month to respondent No. 1.
The suit premises comprises of Shop.
Nos. 44 and 45 (New Nos. 1 & 2) in commercial Street, Bangalore Cantt.
and House No. 250 (New No. 22 Narain Pillai Street Cross).
Admittedly, the premises are 255 in a prestigious commercial locality of the city of Banga lore.
Respondent No. 1 landlord claims that the entire suit premises is reasonably and bona fide required by the land lord for its own business as agents of various textile mills for the purpose of opening a showroom for which it was purchased.
It is also alleged that one of the shops was unlawfully sublet w.e.f.
1.4.1948 giving rise to the other ground of sub letting also for eviction.
The respondent No. 1 gave a notice on 31.7.1975 terminating the appellant tenant 's tenancy.
Thereafter on 5.9.1975 a petition was filed by respondent No. 1 for eviction of the appellant on the grounds of sub letting and bona fide need of the land lord under clauses (f) & (h) of the proviso to sub section 1 of Section 21 of the Karnataka Rent Control Act, 1961.
As earlier stated, the Trial Court dismissed the application, but the High Court has set aside that order and passed a decree for eviction on both the grounds.
The ground of sub letting is to be decided on the above undisputed facts on the basis of legality of the act of sub letting on 1.4.1948 in these circumstances.
The ground of bona fide need of the landlord is to be decided on the basis of the evidence led which is entirely oral from both the sides with reference to the infirmity, if any, in the High Court 's finding permitting interference therewith in these appeals.
Dr. Y.S. Chitale, learned counsel appearing for the appellant tenant assailed the High Court 's findings on both these questions.
Shri section Ghosh, learned counsel appearing for the sub tenant adopted the arguments of Dr. Chitale.
Shri Chidambaram, learned counsel appearing on behalf of the respondent No. 1 landlord has urged that there is no infirmity in the High Court 's decision on both the questions to permit any interference in these appeals.
We shall first take up the question relating to the landlord 's reasonable and bona fide requirement which is a ground for eviction under clause (h) of the proviso to sub section 1 of Section 21 of the Act.
It may be recalled that the Trial Court had negatived the existence of this ground while the High Court reversing that conclusion has held it to be proved.
The question before us is whether there is any infirmity in the High Court 's reversal of this finding justifying interference in these appeals.
Against the deci sion of the Trial Court, the provision made in Section 50 of the Act is of a revision and not an appeal to the High Court.
However, the power of revision is not narrow as in section 115 CPC but wider requiring the High Court to examine the impugned order for the purpose of satisfying itself as to the legality or correctness of such order or proceeding ' which enables the High Court to 'pass such order in refer ence thereto as it thinks fit '.
256 It is clear that the High Court in a revision under Section 50 of the Act is required to satisfy itself not only as to the legality of the impugned order or proceeding but also of its correctness.
The power of the High Court, therefore, extends to correcting not merely errors of law but also errors of fact.
In other words, the High Court in a revision under Section 50 of the Act is required to examine the correctness of not only findings on questions of law but also on questions of fact.
It is significant that the revi sion provided is directly against the Trial Court 's order and not after a provision of appeal on facts.
All the same, the power in revision under Section 50 of the Act cannot be equated with the power of the Appellate Court under Section 107(2) of the Code of Civil Procedure which is the same as that of the original court; and the revisional power under Section 50 of the Act even though wide as indicated, must fall short of the Appellate Court 's power of interference with a finding of fact where the finding of fact depends on the credibility of witnesses, there being a conflict of oral evidence of the parties.
It has, therefore, to be seen whether the High Court in the present case while reversing the Trial Court 's finding on the question of landlord 's reasonable and bone fide requirement of the suit premises exceeded its jurisdiction.
Admittedly, the only evidence led by the landlord for this purpose is oral comprising of the testimony of PW.
I Dinesh, the Power of Attorney holder of the landlord and son of one of the three ladies who were partners of that firm.
The evidence in rebuttal is also oral comprising essentially of denial of the plaintiffs requirement.
The credibility of the oral evidence adduced by the parties has to be assessed in the background of certain undisputed facts and circumstances.
It is undisputed that the respondent No. firm comprising of three partners, all women, belonging to a family of businessmen having textile business also was constituted in 1958 and the firm was registered in 1961; the power of attorney was given to PW 1 Dinesh, son of one of the partners, on 4.9.1970; the suit premises was purchased by the respondent No. 1 firm in 1974; respondent No. 1 firm has its business in one room on the third floor in a rented premises in Bangalore and it does not have any other premises for this purpose; and PW. 1 Dinesh is looking after the entire business of the respond ent No. 1 firm as a duly constituted attorney.
1 Thakur das Bhoolchand, proprietor of M/s. Bhoolchand Chandiram also admitted that the children of the ladies who were partners of the respondent No. 1 firm are carrying on the business and that business is being carried on 257 in a premise at Sakalji Market, Avenue Raod, Bangalore which according to respondent No. 1 is a rented accommodation.
RW. 1 has merely denied knowledge of the premises being taken on rent by respondent No. 1.
The question, therefore, is wheth er on these undisputed facts and circumstances the ,land lord 's reasonable and bona. fide need has been proved.
The Trial Court in deciding against the landlord was influenced considerably by the fact that in support of the landlord 's case 'no piece of documentary evidence is pro duced '.
The Trial Court accepted that the family of the respondent No. 1 carries on textile business but held it not proved that partition in the family has taken place to give rise to the requirement of respondent No. 1 firm for the suit premises when the joint family owns other premises in Bangalore.
According to the Trial Court, the respondent No. 1 firm is not a separate entity detached from the family.
The Trial Court was obviously in error in being influenced by the absence of any documentary evidence to support the need set up by respondent No. 1.
There is no finding record ed by the Trial Court of the existence of any document which was material for deciding the question and it being in possession of the respondent No. 1 had not been produced at the trial.
In the absence of any such finding, the effect of non production of any documentary evidence being put in scales against the landlord resulted in an infirmity permit ting the High Court to examine the correctness of the find ing even when it was based on the credibility of the oral evidence adduced by the parties.
Similarly, the suit prem ises belonging, admittedly, to the three ladies who were partners of the respondent No. 1 firm and to no other member of the family to which those ladies belonged, the premises, if any, belonging to other members of the family could not be taken into account for assessing the reasonable and bona fide need of the business of respondent No. 1 firm.
Since the three ladies constituting the respondent No. 1 firm come from a family having textile business and for the purpose of the suit premises, they being distinct from other members of the family with their separate business in a rented accommo dation in the same city, the Trial Court 's finding was vitiated by another infirmity when it failed to examine the need set up by respondent No. 1 firm in the correct perspec tive.
The High Court was, therefore, justified in re examin ing the correctness of the finding on this question correct ing both these errors which had vitiated the Trial Court 's finding.
These infirmities in the Trial Court 's finding clearly show that the weight of the Trial Court 's finding of fact in the present case was considerably reduced and the High Court in a revision under Section 50 of the Act was empowered to examine the cor 258 rectness of this finding after eliminating both the infirmi ties.
It is obvious that the partners of the respondent No. 1 firm belonging to a family already having large textile business would not purchase the suit premises in a presti gious commercial locality at Bangalore merely for earning the monthly rent of Rs.325 after investing the amount of Rs. 1,40,000 in 1974 to acquire the business premises.
This factor indicating the greater probability also has to be put in scales while assessing the landlord 's bona fide require ment set up in the present case.
Viewed in this manner, the High Court 's finding on this question based on the oral evidence adduced by the parties in the background of undis puted facts and circumstances of the case reaching the conclusion that the landlord 's reasonable and bona fide requirement of the suit premises for its own occupation is proved does not suffer from any infirmity which can justify interference therewith in these appeals.
This alone is sufficient to affirm the decree for eviction passed against the appellants in these appeals.
We shall now consider the other question relating to sub letting which is a ground for eviction specified in clause (f) of the proviso to sub section 1 of Section 21 of the Act.
The basic point for decision is whether the sub letting made by M/s. Bhoolchand Chandiram to M/s. Super Dry Cleaners of one shop which is a part of the suit premises w.e.f. 1.4, 1948 was unlawful being contrary to any provi sion of law then in force.
Considerable argument was ad vanced from both sides relating to the law then in force.
We may here indicate that existence of the ground of sub let ting loses much of its significance on our above conclusion that the landlord 's reasonable and bona fide need was right ly held proved by the High Court with the consequence that the decree for eviction can be sustained on that ground alone.
The ground of sub letting, however, remains of prac tical significance only for the purpose of applicability of sub section 4 of Section 21 of the Act since that would be attracted only if the ground of sub letting also found proved by the High Court, is not upheld herein.
If, however, this ground also is upheld, then the decree being passed even on this ground, the further question of greater hard ship to the landlord or the tenant under Section 21(4) of the Act would not arise.
It is for this reason that we consider it necessary to examine the question of subletting.
The main controversy between the two sides on the ground of sub letting is whether a written consent of the landlord for sub letting was necessary on 1.4.1948 when the sub letting was made and, if so, 259 was there such a written consent given by the landlord? The written consent of the landlord on which reliance is placed by the tenant as well as the sub tenant, the appellants in these appeals, is that contained in the above quoted letter dated 4.10.1943 of the original lessor.
Unless the written consent of the landlord contained in the above letter dated 4.10.1943 can be held to be subsisting on 1.4.1948 when the sub letting was made in favour of M/s. Super Dry Cleaners there , would, admittedly, be no written consent of the landlord to this subletting.
There is no controversy in this respect.
The first point for consideration, therefore, is whether the written consent of the landlord contained in the above quoted letter dated 4.10.1943 can be treated as subsisting and available on 1.4.
1948 when the subletting in question was, in fact, made.
There is no case set up by the tenant and sub tenant of any implied consent of the original lessor or waiver of the ground of sub letting and, therefore, that question does not arise for consideration.
The written consent of the landlord for sub letting on 1.4.1948 according to learned counsel for the appellants is to be found in the letter dated 4.10.1943 of the original lessor.
The consent of the landlord for sub letting is a question of fact.
Such consent is an act of volition of the landlord and is not to be inferred from any statutory provi sion.
The effect of the statute comes in, if at all, only for the purpose of ascertaining whether the landlord 's consent can be treated as subsisting after lapse of the period for which it was expressly given.
There being no compulsion on the landlord to give such consent it cannot ordinarily extend beyond the period for which alone it was expressly given.
Admittedly, the consent which was given by the original lessor in the present case is to be found only in the said letter dated 4.10.1943.
We must, therefore, see the consent given therein.
The aforesaid letter dated 4.10.1943 of the original lessor confirming the creation of the tenancy with effect from 4.10.1943 stated that two shops were let out on a monthly rent of Rs.430 for two years with the option of sub letting one of the shops; and the house adjoining the shops was let out on a monthly rent of Rs.50 for eleven months with the option of sub letting the house also.
There is no dispute that subsequently in a proceeding for fixation of the standard rent, the entire premises comprising of the two shops and the houses, was treated as one premises and the monthly rent of Rs.325 was fixed for the entire premises and this is how the tenancy was treated by both sides as one tenancy instead of two separate tenancies appearing in the 260 letter dated 4.10.1943.
The letter dated 4.10.1943 created contractual tenancy for a period of two years in respect of the two shops and for a period of eleven months for the adjoining houses.
Obviously, the consent of the landlord for sub letting mentioned therein by giving the tenant the option of sub letting cannot, therefore, be construed as consent for a period beyond the period of the contractual tenancy which was only two years in respect of two shops.
It would neither be reasonable nor appropriate to construe that the consent was given for any period after expiry of the period of contractual tenancy specified therein.
There is nothing in the said letter dated 4.10.
1943 10 suggest the continuance of the tenancy after the expiry of the specified period of contractual tenancy and, therefore, there could be no occasion to contemplate any consent for sub letting after expiry of the period of contractual tenancy of two years in respect of the two shops.
This is the factual position emerging from the aforesaid letter dated 4.10.1943 which alone is the basis of appellant 's assertion that sub letting w.e.f.
1.4.1948 was with the written consent of the original lessor.
Admittedly, creation of the sub tenancy w.e.f.
1.4.1948 in respect of one of these shops was long after the expiry of the period of contractual tenancy of two years specifically mentioned in that letter.
The question, there fore, is: whether the landlord 's consent given in the said letter dated 4.10.1943 could be treated as subsisting for creation of a valid sub tenancy w.e.f. 1.4.
1948 after the expiry of the period of contractual tenancy? The argument of Dr. Chitale, learned counsel for the appellanttenant, which has also been adopted by Shri Ghosh, learned counsel for the appellant sub tenant is that on expiry of the contractual tenancy, the tenant became a statutory tenant by virtue of the restriction on his evic tion except on one of the grounds for eviction provided in the statute and, therefore, all the terms and conditions of the contractual tenancy became the terms and conditions of the statutory tenancy.
On this basis, it was argued that the written consent of the landlord for sub letting during the period of the contractual tenancy continued to subsist as one of the terms and conditions of the statutory tenancy also.
It was argued that for this reason, even though the subletting was made w.e.f.
1.4.1948 after the period of the contractual tenancy, yet it too must be deemed to be with the written consent of the landlord which was available during the period of the contractual tenancy.
Dr. Chitale also referred to the fact that the first sub letting in 1946 to Arts Palace of the same shop which was later sublet w.e.f. 1.4.
1948 to M/s Super Dry Cleaners was also after expiry of the period of two years of the contractual tenan cy.
This fact, however, is not 261 material in the present case since the first sub letting ended before commencement of the second sub letting on 1.4.
1948 and it is only the validity of the subsisting sub letting w.e.f. 1.4.
1948 which is in question in the present proceedings.
Dr. Chitale relied on a number of decisions of this court in support of his contention ' that the written consent of the landlord for sub letting during the period of contractual tenancy continued as one of the terms and condi tions of the statutory tenancy when the sub letting was made w.e.f. 1.4.1948.
In reply, Shri Chidambram contended that the written consent of the landlord for sub letting is not one of the terms which ensures to the benefit of the tenant during subsistence of the statutory tenancy after expiry of the contractual tenancy.
The decisions cited at the Bar on this point are Damadilal and Others vs Parashram and Others, [1976] Supp.
SCR 645; Y. Dhanapal Chettiar vs Yesodai Ammal, ; ; Smt.
Gian Devi Anand vs Jeevan Kumar and Others, [1985] Supp. 1 SCR 1; Mahabir Prasad Verma vs Dr. Surinder Kaur; , ; M/s. Shalimar Tar Products Ltd. vs H.C. sharma and Others; , ; Shantilal Rampuria and Others vs M/s Vega Trading Corporation and Others, ; ; M/s. Bajaj Auto Limited vs Behari Lal Kohli, ; ; Duli Chand (Dead) by L.rs.
vs Jagmender Dass; , and Tara Chand and Another vs Ram Prasad, The decision in Damadilal 's case (supra) and others in the same line related primarily to the question of heritable interest in the premises of the legal representatives of the deceased tenant who was in occupation as statutory tenant.
Pointing out that the concept of statutory tenancy under the English Rent Acts and under Indian Statutes like the one with which we are concerned rests on different foundations, it was held that the statutory tenant had a heritable inter est in the premises which was not merely a personal interest but an interest in the estate like that of a contractual tenant.
On this conclusion, the right of legal representa tives of the statutory tenant to protect the possession and prosecute the appeal against eviction order was upheld.
The main question for decision in Damadilal 's case (supra) was the heritable nature of the statutory tenancy and it was in this context that the terms and conditions of a statutory tenancy were held to be the same as those of the contractual tenancy preceding it.
No question arose in Damadilal 's case (supra) of the right of a statutory tenant to create a sub tenancy after replacement of the contractual tenancy with the statutory 'tenancy.
The observations made and the deci sion rendered in Damadilal 's case (supra) cannot, therefore, be construed as holding that a statutory tenant has a right to create a sub tenancy 262 during subsistence of statutory tenancy after expiry of the contractual tenancy when the Rent Acts give the same protec tion against eviction tO the tenant except on one or more of the specified grounds.
Obviously, the protection to the statutory tenant and the heritable nature of the statutory tenancy providing the same protection against eviction to the tenant 's heirs does not further require conferral of the right of inducting a sub tenant which is not necessary for enjoyment of the tenancy and the protection against eviction given by the Rent Acts.
There is no rationale for inferring or extending the landlord 's written consent for sub letting beyond the period of contractual tenancy for which alone it is given.
No separate discussion of the later decisions in the same line is necessary because of the same distinction in all of them.
One decision which.
requires specific mention and is obviously nearest on facts to the present case is Mahabir Prasad Verma vs Dr. Surinder Kaur, ; In that case, the contractual tenancy was for a period of one month from 1.4.
1974 to 30.4.1974 with the landlord 's consent for sub letting.
The tenant continued to occupy the premises even after expiry of the contractual tenancy on 30,4.1974 and inducted therein a sub tenant.
The landlord sued for eviction of the tenant on the ground of unlawful sub letting of the premises which was a ground for eviction under the relevant Rent Act.
There was some dispute about the time of induction of the sub tenant, it being claimed by the tenant that the induction of the sub tenant was in the month of April, 1974 during subsistence of the contractual tenancy while the landlord contended that the sub letting was after the month of April, 1974.
It was found as a fact that the tenant had sublet in the month of April, 1974 when the written consent of the landlord subsisted and not subsequent to it in May as claimed by the landlord.
The crux of the question for decision therein was stated thus: "The crux of the question, therefore, is whether the sublet ting by the tenant with the written consent of landlord during the currency of the tenancy becomes unlawful and illegal on the determination of the tenancy and furnishes a ground for eviction within the meaning of section 13(2)(ii)(e) of the Act.
" On the finding that the sub tenant had been inducted during the period of contractual tenancy on the basis of the writ ten consent for subletting given by the landlord, the sub letting did not become unlawful merely because the contrac tual tenancy of the tenant came to an end and the protection against eviction to the tenant as a statutory tenant also 263 enured to the benefit of the lawful sub tenant recognised by the statute.
It was held as under: "Subletting lawfully done with the written consent of the landlord does not become unlawful merely on the ground that the contractual tenancy has come to an end.
Subletting to constitute a valid ground for eviction must be without the consent in writing of the landlord at the time when the tenant sub lets any portion to the sub tenant.
A subletting by the tenant with the consent in writing of the landlord does not become unlawful on the expiry of the contractual tenancy of the tenant, unless there is any fresh sub letting by the tenant without the written consent of the landlord Mere continuance in posses sion of a sub tenant lawfully inducted does not amount to any fresh or further sub letting.
We are, therefore, satis fied that in the instant case the tenant has not sub let any portion without the written consent of the landlady after the commencement of the Act . .
Mere continuance of possession by the subtenants lawfully inducted by the tenant with the written consent of the landlady contained in rent note does not afford any ground to the landlady for eviction of the tenant on the ground of sub letting, as the tenant has not sub let after the commencement of the Act any por tion without the consent in writing of the landlady." (emphasis supplied) Of all the decisions cited at the Bar, this decision is, admittedly, nearest on facts to the present case with the only difference that the sub letting in the present case was after expiry of the contractual tenancy and after the com mencement of the Act prohibiting subletting without the written consent of the landlord when it was made on 1.4.1948, while the sub letting in Mahabir Prasad 's case (supra) was during the period of contractual tenancy when the express written consent of the landlord for sub letting was available.
The principle for application, however, is the same with the only difference in the result since in Mahabir Prasad 's case (supra) the sub letting was made during subsistence of the contractual tenancy with the written consent of the landlord.
It is significant that the judgment in Mahabir Prasad 's case (supra) was by A.N. Sen, J. who also wrote the opinion in Gian Devi 's case (supra) relied on by Dr Chitale as one of the decisions in line with Damadilal 's case (supra).
It is clear that A.N. Sen, J., who wrote the 264 opinion of the Bench in Mahabir Prasad 's case (supra) as well as in Gian Devi 's case (supra) did not construe the earlier decisions starting with Damadilal 's case (supra) in the manner read by Dr. Chitale.
If Dr. Chitale is correct in his submission on this point, then the entire emphasis in Mahabir Prasad 's case (supra) on the sub letting being made during the period of contractual tenancy in April, 1974 and not thereafter being decisive of the validity of sub letting was misplaced and a futile exercise.
In our opinion this was not so and the correct premise is that landlord 's written consent for sub letting during the period of contractual tenancy cannot be construed as his consent subsisting after expiry of the contractual tenancy.
The submission of learned counsel for the appellants runs counter to the clear deci sion in Mahabir Prasad 's case (supra) which, in our opinion, is in no way contrary to the decisions starting with Damadi lal 's case (supra), the observations wherein are in the context of heritability of the statutory tenancy.
In fact.
it is rightly not even contended by Dr. Chitale that the decision in Mahabir Prasad 's case (supra) runs counter to Damadilall 's case Supra and other decisions following them.
This is sufficient to indicate that the appellants ' conten tion is untenable.
There is some controversy between the parties about the legislative history of the Rent Acts in the Bangalore Civil Station wherein the suit premises is located, but an in depth consideration of that controversy is not necessary.
The only question is: whether on 1.4.1948 when the sub letting was made in favour of M/s. Super Dry Cleaners, the contractual tenancy giving written consent for sub letting having expired was the written consent of the landlord for sub letting necessary under the statute then in force? It is sufficient to state that the Bangalore House Rent and Accom modation Control Act, 1946 was brought into force w.e.f. 1.10.1946 for a period of two years expiring on 1.10. 1948.
Later enactments were Mysore House Rent and Accommodation Control Act, 1951 and then Karnataka Rent Control Act, 1961 w.e.f.
31.12.1961.
The suit for eviction was filed in Sep tember, 1975 on the grounds contained in clauses (f) and (h) of the proviso to sub section 1 of Section 21 of the Karna taka Rent Control Act, 1961.
in the Bangalore House Rent and Accommodation Control Act, 1946 which applied at the time of sub letting in the present case on 1.4.1948 the provision for eviction of tenants was made in Section 9 thereof.
Sub section 2 specifies the grounds on which a landlord was entitled to seek eviction of his tenant.
One such ground in Sub section 2 is of sub letting and the relevant portion reads as under: "(iii) that the tenant has after the commencement of this 265 Law without the written consent of this landlord .
(a) sub let the entire building or any portion thereof; or ,, It is, therefore, clear that the written consent of the landlord for sub letting was necessary under the relevant statute applicable on 1.4.
1948 when the sub letting was made in the present case.
In fact.
this requirement of written consent of the landlord was the basis on which both sides argued the case and the main thrust of Dr. Chitale 's argument was that such a written consent was to be found in the letter dated 4.10.1943 of the original lessor.
We have, earlier, indicated that the landlord 's consent in the afore said letter dated 4.10.1943 was not available on 1.4.1948 after expiry of the contractual tenancy.
The rest is only a logical corollary to this conclusion leading to the inevita ble result that induction of the sub tenant M/s.
Super Dry Cleaners w.e.f. 1.4.1948 by the tenant M/s. Bhoolchand Chandiram was unlawful being made contrary to the provision of law then in force which constitutes the ground for evic tion contained in clause (f) of Sub section 1 of Section 21 of the Karnataka Rent Control Act, 1961.
There is, thus, no ground to differ with the conclusion reached by the High Court that the ground of sub letting has been made out, even though our reasons are different.
On the above conclusion that the ground of sub letting also was rightly held proved by the High Court in addition to the ground of landlord 's reasonable and bona fide re quirement, the question of applicability of Sub section 4 of Section 21 of the Karnataka Rent Control Act, 1961 does not arise and, therefore, it is not necessary to examine the question of comparative hardship.
In that view of the mat ter, the appeals must fail.
Consequently, both the appeals are dismissed.
In view of the fact that the appellants are carrying on their business in the suit premises for a long time and will, therefore, need some reasonable time to shift to some other place, we grant to the appellants time till 31.3.1991 for vacating the suit premises and delivering vacant possession thereof to the landlord respondent No. 1, subject to undertaking in the usual terms being filed by the appellants within a period of four weeks.
No costs.
Y. Lal Appeals dis missed.
| IN-Abs | T.A. Jotindranath Mudaliar, the original lessor, let out his premises viz. two shops and a house adjoining the shops to M/s,Bhoolchand Chandiram, appellant on 4.10.1943 on the terms contained in the letter dated 4.10.1943 whereby the shops were let out on a monthly rent of Rs.430 for two years with the option of sub letting one of the shops and the house adjoining the shops was let out on a monthly rent of Rs.50 for eleven months with the option of sub letting the house also.
The appellant sub let one of the two shops to one 'Arts Palace ' and later w.e.f.
1.4.1948, the appellant inducted another sub tenant M/s. Super Dry Cleaners, appel lant in the other appeal.
Consequent upon a partition in the family of original lessor, the premises in dispute came to the share of Narendranath Mudaliar.
The original lessor including Narendranath Mudaliar after partition continued to realise rent from the tenant of the entire premises till May 1974.
On 28.6.1974, Narendranath Mudaliar sold the property in question to respondent No. 1.
The appellanttenants at torned in favour of respondent No. 1 and paid rent for the premises @ Rs.335 (fair rent fixed) to respondent No. 1.
Respondent No. 1 filed petition on 5.9.1975 for eviction of the appellant on the grounds of sub letting and bona fide need of the landlord under clauses (f) and (h) of the provi so to sub section (1) of Section 21 of the Karnataka Rent Act.
The trial court dismissed the application, but the High Court set aside that order and passed a decree for eviction on both the grounds.
Hence these appeals by the tenant and sub tenant have been filed after obtaining special leave of the Court.
The appellants question the findings of the High Court on both the questions viz. bona fide requirement of the landlord as also sub letting.
252 Respondent No. 1 on the other hand urged that there is no infirmity in the High Court 's decision on both the questions so as to warrant any interference in these appeals.
Dismissing the appeals, this Court, HELD: Landlord 's written consent for sub letting during the period of contractual tenancy cannot be construed as his consent subsisting after the expiry of the contractual tenancy.
[265D] A sub letting by the tenant with the consent in writing of the landlord does not become unlawful on the expiry of the contractual tenancy of the tenant, unless there is any fresh sub letting by the tenant without the written consent of the landlord.
Mere continuance in possession of a sub tenant lawfully inducted does not amount to any fresh or further sub letting.
[265E F] The sub letting in the instant case was after expiry of the contractual tenancy and after the commencement of the Act prohibiting sub letting without the written consent of the landlord when it was made on 1.4.1948.
[265B] Damadilal and Ors.
vs Parashram and Others, [1976] supp.
SCR 645; Dhanapal Chettiar vs Yesodai Ammal ; ; Smt.
Gian Devi Anand vs Jeerart Kumar and Ors., [1985] Supp. 1 SCR 1; L. Mahabir Prasad Verma vs Dr. Surinder Kaur, ; ; M/s. Shalimar Tar Products Ltd. vs H.C. Sharma and Ors.
, ; ; Shantilal Rampuria and Ors.
vs M/s. Vega Trading Corpn.
and Ors., ; ; M/s. Bajaj Auto Ltd. vs Behari Lal Kohli, ; ; Duli Chand (dead) by Lrs. & Ors.
vs Jagmender Dass, ; and Tara Chand and Ant.
vs Ram Prasad, , referred to.
|
vil Appeal Nos.
5036 39 of 1989.
From the Judgment and Order dated 22.10.1984 of the Punjab and Haryana High Court in L.P.A. Nos.
696,695,694 and 697 of 1982.
G.L. Sanghi, Dhruv Mehta (NP), Aman Vachher and S.K. Mehta for the Appellant.
V.C. Mahajan, Tapash Ray, A. Minocha, K.R. Nagaraja and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by RAY, J.
These appeals on special leave are directed against the judgment and order passed by the Division Bench of the High Court of Punjab and Haryana in Letters Patent Appeal Nos.
694 to 697 of 1982 dismissing the appeals with costs.
The salient facts out of which these appeals have arisen, are as follows: The appellant Trust prepared a development scheme under section 24 read with section 28 of the Punjab Town Improve ment Trust Act, 1922 (hereinafter referred to as the Act) in relation to an area of about 60 acres of land at Palani Road.
The lands of the respondents fell within the said area.
On April 9, 1976 a notice under Section 36 of the Act was published in daily Tribune inviting objections till 5th May, 1976.
This notice was published in the three consecu tive weeks of the said newspaper dated 9th April, 15th April and 23rd April, 1976.
The very notice of the said scheme was also published under section 36 of the said Act in the Punjab Government Gazette on three consecutive weeks i.e. 7th May, 14th May and 21st May, 1976 inviting objections till May 5, 1976 against the scheme framed.
In accordance with the provisions of Section 38 of the said Act the Trust also served notice on every person who was occupier or owner of any immoveable property falling within the area proposed to be acquired in executing the scheme within 30 days from the date of publication of the notice under section 36, in order to enable the owners and occupiers of such pre 230 mises to file objections to such acquisition and to state their reasoning in writing within a period of 60 days of service of the notice.
After completion of the acquisition formalities, a notification under section 42 of the said Act was published on March 26, 1979.
The respondent No. 2 and ors.
assailed the appellant 's scheme notified under the Act in CWP No. 2561 of 1979 and CWP Nos. 4075, 36.15, 3654 of 1981 on the ground that they could not file objections against the scheme in terms of Section 36 of the Act till 5th May; 1976 as the notification was published in the Punjab Government Gazette on 7th May, 14th May and 21st May, 1976.
These writ petitions were allowed by order dated 25th February, 1982 and the sanctioned scheme notified under section 42 of the Act was quashed.
It was also mentioned in the said order that the appellant may, however, publish the scheme again either amended or unamended under section 36 of the said Act and proceed further in the matter in accordance with law.
It is against this order the L.F.A. No. 694 to 697 of 1982 were filed.
The Division Bench of the High Court affirmed the judgment and order of the learned single Judge and held that the provisions contained in Section 36 of the Act were mandatory and as it had not been complied with in the present cases, the illegality of non compliance of the mandatory provisions contained in Section 36 would not stand cured under Section 101 (1)(d) of the Act.
Hence the Letters Patent Appeals were dismissed.
Against this judgment and order the instant appeals on special leave have been filed in this Court.
Mr. Mahajan, learned counsel appearing on behalf of the respondent No. 2 and ors.
has very strenuously contended that the provisions of Section 36 of the said Act are mandatory inasmuch as it provides for publication of the notice as to the framing of the scheme under the Act in three consecutive weeks in the official Gazette as well as in the newspaper with a state ment inviting objections.
Though the notice was duly pub lished in the newspaper Tribune ' for three consecutive weeks on 9th, 16th and 23rd April, 1976 notifying the date for filing objections till 5th May, 1976 yet the notification that was published in the Punjab Government Gazette for three consecutive weeks was admittedly after the expiry of period of filing objections i.e. 5th May, 1976.
It has, therefore, been contended by Mr. Mahajan that due to non publication of the scheme in the Government Gazette before the expiry of the period of filing objections against the proposed scheme, the valuable right of the respondents to file objections against the scheme has been done away with.
As such the publication of the scheme was rightly quashed by the courts below as this mandatory requirement had not been complied with by the State.
In this connection, he has referred to the case of Prof. Jodh 231 Singh & Ors.
vs Jullundur Improvement Trust, Jullundur and Ors.
, This case was decided by the full bench of the High Court of Punjab and Haryana as to whether issuance of a notification under sub section (1) of Section 42 of the Punjab Town Improvement Act, 1922, would bar a challenge to the validity of the scheme or the govern mental sanction thereto for any reason including the reason that the scheme had been framed and sanctioned without compliance of the mandatory provisions particularly those of Sections 36, 38 and sub section (1) of Section 40 of the Act.
It was held that: "Since the given provisions do not merely provide for the framing of the scheme simpliciter but also provide for acquisition of property to enable the execution of the scheme and since no person can be deprived of his property without being heard and one cannot ask for hearing unless he knows that he is being deprived of his property, so, by necessary implication a notice of the intention of the authorities of acquiring a given person 's property is im pliedly necessary to enable him to bring to the notice of the concerned authority his objections against the, acqui sition of his property.
Hence such provisions as provide for notice, raising of objections and personal hearing in sup port of the objection would be mandatory in character.
" In that case a notice under section 38 of the Act was issued on the petitioner who submitted objections in time.
In the return filed on behalf of the Trust it was admitted that due to over sight, the petitioners could not be called for hearing along with other objectors as the objections filed by the petitioners had inadvertently got placed in some other file and that for the same reason their objec tions were neither considered by the Trust nor forwarded to the State Government along with the summary of the objec tions submitted at the time of sanction for the said scheme, It was contended on behalf of the Trust that the infirmity, if any, stemming from the non consideration by the Trust of the objections filed by the petitioners and sanction of the scheme by the Government in ignorance of the said fact stood cured by the provisions of sub section (2) of Section 42 of the Act.
It was in that context the above observation was made by the full bench.
Mr. Mahajan next contended that though admittedly no tices under section 33 of the said Act were issued on the respondent No. 2 and others who are either owners or occupi ers of the lands falling within the improvement scheme of the appellant and the respondent 232 No. 2 and others had filed objections against the proposed acquisition of their lands, yet on the basis of the said individual notices issued under section 38 of the said Act, the respondent No. 2 and others are debarred from raising objections against the proposed improvement scheme.
It is further submitted that under Section 38 the owners and occupiers of the land affected by the said scheme may merely object to the proposed acquisition of their lands but they cannot file objections against the scheme published.
The respondent No. 2 and others are therefore, deprived of their right to file objections against the scheme as provided in Section 36 of the said Act and so in view of the noncompli ance of the provisions of Section 36 of the said Act by the State Government, the development scheme cannot be enforced merely because the State Government notified the sanction of the scheme under section 42 of the Act.
The learned counsel appearing on behalf of the appellant on the other hand, contended that in compliance of the provisions of Section 36 of the said Act a notice regarding the framing of the development scheme was published in the newspaper 'Tribune ' for three consecutive weeks i.e. on 9th, 16th and 23rd April, 1976 inviting objections till 6th May, 1976.
It is only in the Punjab Government Gazette that the notification was published on 7th, 14th and 21st May, 1976 inviting objections till 5th May, 1976 i.e. the notification was made in the Punjab Government Gazette after the period for filing objections had expired.
It has also been contend ed that individual notices under section 38 of the said Act were served on the owners and occupiers of the immovable property falling under the development scheme intimating them about the acquisition of the land with particulars of the lands failing within the said scheme and inviting their objections to be filed within a period of 60 days from the date of service of the notice.
It has also been submitted that the respondent No. 2 and others i.e. the owners of the lands duly submitted their objections against the acquisi tion of the land as well as against the proposed scheme and the same were heard and considered by the prescribed author ity.
After the hearing of the objections, a notification was made by the State Government sanctioning the said scheme and also that this Trust shall proceed forthwith to execute the said scheme.
It has, therefore, been submitted that in these circumstances, the objections raised by the counsel for the respondent No. 2 and others are wholly unsustainable being devoid of any merit.
It is convenient to mention herein that the award deter mining the compensation was passed in 1980 and the compensa tion to the tune 233 of Rs.32 lakhs had already been paid.
A sum of Rs.2,30,465.08 had been spent for the construction of roads and foot paths.
Another sum of Rs. 1, 12,2 17.24 had been spent for lighting of the streets.
Another sum of Rs.3 lakhs had been paid to the Punjab Water Supply and Sewerage Board for sewerage purposes.
Thus, a sum of Rs.38,42,682.35 had already been spent for implementation of the scheme.
Several plots had already been sold in open auction.
The reference under section 18 of the Act is also pending.
In this context we are to consider the contention raised by the learned counsels for the respondent No. 2 and others.
Under section 24 and 28 of the Punjab Town Improvement Act, 1922, the impugned development scheme was prepared by the appellant Trust.
The scheme was notified as has been referred herein before in accordance with the provisions of Section 36 of the Act.
In so far as the publication of the scheme in the newspaper 'Tribune ' in three consecutive weeks in April, 1976 inviting objections thereto till 5th May, 1976 is quite in accordance with the provisions of the said section.
The Gazette Notification published in three consecutive weeks was however, made after expiry of the period of filing objections against this scheme.
This has been the bone of contention on behalf of the respondent No. 2 and others that this resulted in violation of the provisions of section 36 of the Act as their right to file objections against the scheme was set at naught.
This contention in our considered opinion is totally devoid of merit inasmuch as admittedly individual notices under section 38 of the said Act were duly served on all the owners and occupiers of the land falling within the said scheme and purported to be acquired and the respondent No. 2 and others admittedly filed objec tions against the proposed acquisition of their land.
The said objections were duly considered after hearing the respondent No. 2 and others and notice was issued sanction ing the scheme by the State Government.
In these circum stances, it does not lie in the mouth of respondent No. 2 and others to challenge the scheme on the mere plea that the Gazette Notification was not duly published.
The legislative intent of provision of section 36 read with section 38 of the said Act is to afford reasonable opportunity to the owners and occupiers affected by the proposed scheme to file objections not only against the scheme but also against the acquisition of their lands falling within the scheme and to achieve this purpose not only notifications in the Govern ment Gazette and newspaper are to be published but also individual notices on each of the person affected are to be served with details of the plots of land failing within the scheme and proposed to be acquired with a view to giving them adequate opportunity to file objections both against the scheme as well as against the proposed acquisition of their lands.
It is, therefore, incomprehensible to contend 234 that non observance of provisions of Section 36 of the said Act by not publishing the notification in the Govern ment Gazette before the expiry of the date for filing the objections renders the publication of the entire development scheme illegal and bad.
The above contention, in our consid ered opinion, is not at all sustainable on the simple ground that the respondent No. 2 and others were duly served with the notices under section 38 and they pursuant to that notice duly filed their objections against the acquisition as well as the scheme.
The decision of the full bench re ported in Prof. Jodh Singh and Ors.
vs Jullundur Improvement Trust, Jullundur & Ors.
(supra) is not applicable to this case inasmuch as in that case the objections filed under section 38 of the said Act having been misplaced were not at all considered and thereafter the Government issued a noti fication under section 42 of the said Act giving sanction to the scheme itself.
In that view of the matter, the said decision has no application to the instant case.
In these circumstances, considering from all aspects we hold that the decision of the courts below is wholly untenable in law and as such they are liable to be set aside.
We, therefore, set aside the decision of the learned single Judge as well as to the Division Bench of the High Court of Punjab and Haryana and allow the appeal setting aside the orders of the courts below.
There will, however, be no order as to costs.
G.N. Appeals allowed.
| IN-Abs | The appellant Trust prepared a development scheme under the provisions of the Punjab Town Improvement Trust Act, 1922 covering certain lands including that of the respond ents.
Notice inviting objections was published in a dally Newspaper on 9th, 16th and 23rd April, 1976.
It was also published in the Punjab Government Gazette on the 7th, 14th and 21st May, 1976.
The last date for filing objections was 5th May, 1976.
Notices were also served on each person whose land was to be acquired in accordance with Section 36 of the Act.
After completion of the acquisition formalities, noti fication under section 42 of the Act was published on 26th March, 1979.
Respondent No. 2 and others challenged the scheme noti fied under the Act by way of Writ Petitions on the ground that they could not file objections by 5th May, 1976 since the notification was published in the Gazette only thereaf ter.
The High Court allowed the Writ Petitions and quashed the notification sanctioning the scheme.
However, it ob served that the appellant may publish the scheme again either amended or unamended under section 36 of the Act and proceed further in accordance with law.
Against the said order, Letters Patent Appeals were flied, which were dis missed by the Division Bench.
Appellant has preferred these appeals by special leave.
On behalf of the appellant, it was mainly contended that infirmity, if any, stemming form the non consideration of the objections and the sanction of the scheme by the Govern ment in ignorance of the fact stood cured by the provisions of section 42(2) of the Act.
It was also contended that since Respondent No. 2 and others had flied objections in response to individual notices, they are debarred from raising objec tions against the proposed improvement scheme.
228 On behalf of Respondents if was inter alia contended that due to non publication of the scheme in the Government Gazette before the expiry of the period of filing objections against the proposed scheme, the valuable right of the respondents to file objections against the scheme has been done away with, contrary to the mandatory provision con tained in section 36 of the Act.
Allowing the appeals, this Court, HELD: 1.
It is incomprehensible to say that non observ ance of provisions of Section 36 of the Punjab Town Improve ment Trust Act, 1922 by not publishing the notification in the Government Gazette before the expiry of the date for filing the objections renders the publication of the entire development scheme illegal and bad.
[234A] 2.
The legislative intent of provision of section 36 read with section 38 of the Act is to afford reasonable opportunity to the owners and occupiers affected by the proposed scheme to file objections not only against the scheme but also against the acquisition of their lands failing within the scheme and to achieve this purpose not only notifications in the Government gazette and newspaper are to be published but also individual notices on each of the person affected are to be served with details of the plots of land failing within the scheme and proposed to be acquired with a view to giving them adequate opportunity to file objections both against the scheme as well as against the proposed acquisition of their lands.
[233G H] 3.
In the instant case, the development scheme was prepared by the appellant Trust, and was notified in accord ance with the provisions of Section 36 of the Act.
In so far as the publication of the scheme in the newspaper 'Tribune ' in three consecutive weeks in April, 1976 inviting objec tions thereto till 5th May, 1976 is quite in accordance with the provisions of the said section.
The Gazette Notification published in three consecutive weeks was however, made after expiry of the period of filing objections against this scheme.
Admittedly individual notices under section 38 of the said Act were duly served on all the owners and occupi ers of the land falling within the said scheme and purported to be acquired and respondent No. 2 and others admittedly filed objections against the proposed acquisition of their land.
The said objections were duly considered after hearing the respondent No. 2 and others and notice was issued sanc tioning the scheme by the State Government.
In these circum stances, it does not lie in the mouth of respondent No. 2 and others to challenge the scheme on the mere plea that the Gazette Notification was not duly published.
[233C F] 229 Prof. Jodh Singh & Ors.
vs Jullundur Improvement Trust, Jullundur and Ors., , distinguished.
[This Court set aside the decision of the Single Judge as well as that of the Division Bench of the High Court.] [234D]
|
vil Appeal Nos.
4890 91 of 1990.
From the Judgment and Order dated 17.10.1989 of the Madras High Court in C.R.P. Nos.
517 & 5 18 of 1989.
section Padmanabhan, P.N. Ramalingam and A.T.M. Sampath for the Appellants.
K. Parasaran, section Balakrishnan and Ms. Revati for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
Special Leave granted.
Counsel heard.
These two appeals are filed by Special leave against the judgment of the High Court of Madras in Revision Petitions Nos. 5 17 and 5 18 of 1989.
These appeals raise an interest ing question as to whether it is obligatory on the Court, before granting leave to institute a suit as required under section 92 of the Code of Civil Procedure, 1908, to give an opportunity to the respondents to show cause against the grant of such leave, and whether leave granted without such opportunity having been given is void.
The appellants instituted suit No. O.S. 55 of 1987 in the court of the learned subordinate Judge of Sivaganga in Tamil Nadu against the respondents as a representive suit inter alia praying for framing a scheme for a public char itable trust.
It is common ground that the reliefs prayed for in the suit were such that leave under section 92 of 269 the Civil Procedure Code was required for instituting the suit.
On the same day on which the suit was filed by lodging the plaint in court an application was made praying for leave to institute the suit under section 92 of the Code.
Without issuing any notice to the respondents, the said court granted leave by passing an order reading "permitted" and issued summons to the respondents.
In March, 1988 the respondents filed an interim application before the learned Subordinate Judge for revoking the leave granted inter alia on the ground that the respondents had not been given any opportunity to be heard before leave was granted.
The learned Subordinate Judge dismissed the said application on the ground that the grant of leave was an administrative act of the court and no notice to the respondents was required before such leave was granted.
The respondents then pre ferred a Civil Revision Petition in the Madras High Court which has been allowed by a judgment delivered by learned Single Judge.
He took the view that an analysis of the provisions of section 92 of the Code shows that in order to institute a representative suit as contemplated in the said section two or more persons must have an interest in the trust and they should have obtained the leave of the court before they institute the suit.
The learned Single Judge held that while the said section enables persons interested in a public trust to file a suit to secure the proper admin istration and management of the trust and its properties by its trustees, it also imposes a check on the institution of such suits by the imposition of certain conditions, one of which is the obtaining of leave from the court.
It was held that it is the grant of leave which confers on the person concerned a right to institute a suit under section 92 of the Code.
If there were any facts which might disentitle the applicants for leave from obtaining the leave of the court, these could be best brought to the notice of the court by the party arrayed on the opposite side.
The learned Judge also referred to the provisions of section 104(1) (ffa) of the Code whereby an order under section 91 or section 92 refusing leave to institute a suit of the nature referred to in section 91 is made appealable.
The learned Judge followed the decision of the High Court of Madras in T.M. Shanmugam and Others vs The Periyar Self Respect Propaganda Institu tion and Others, [1984] II MLJ 440; and held that as the leave had been granted without any notice to the respondents, it was void and liable to be set aside.
The learned Judge allowed the revision petitions, set aside the leave and held that the suit could not be entertained and was liable to be dismissed.
It is against this decision that these appeals have been peferred to.
Learned counsel for the appellants submitted that if the court 270 were required to give opportunity to the defendants to be heard before granting leave to under section 92, the grant of leave would entail a great deal of delay and might defeat the ends of justice where some urgent relief was required.
He pointed out that, if a defendant had a grievance against the grant of leave he could always made an application to revoke the leave and no serious prejudice would be caused to the defendant by the grant of leave.
Learned counsel for the respondents contended that leave under section 92 of the Code to institute a suit was a material requirement for maintenance of a suit.
Before granting leave the court was called upon to consider various aspects of the matter, namely, whether the suit was such as contemplated under section 92, whether the persons applying for such leave were fit persons to institute a representa tive suit and so on.
It was submitted by him that the court could not decide whether leave should be granted without giving an opportunity to the defendants to show cause against the grant of leave.
It was submitted by him that the grant of leave was a pre condition for instituting a 'suit under section 92.
Leave granted without giving any opportu nity to the defendant to show cause was void and a suit instituted on the basis of such void leave was not maintain able at all.
It was submitted by him that at the stage of grant of leave what the court is called upon to consider is the plaint and whether, prima facie, the suit proposed to be instituted was of the kind contemplated under section 92 of the Code, that is, whether the reliefs prayed for were such as were set out in section 92 and whether the suit was against a public trust.
It was also necessary for the court to consider whether, the proposed plaintiffs had an interest in the public trust and were fit persons for leave being granted to them.
The Court could also consider whether, prima facie, the allegations in the plaint were baseless or frivolous.
At that stage, it was necessary to give any notice to the defendant because he could point out the reasons why leave should not be granted.
Before considering the merits of the aforesaid conten tions, it would not be out of place to refer to the relevant provisions of the Code of Civil Procedure.
The relevant part of sub section (1) of section runs as follows: "92.
Public Charities (1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charita ble or religious nature, or where the direction of the Court 271 is deemed necessary for the administration of any such trust, the Advocate General, or two or more persons having an interest in the trust and having obtained the leave of the Court, may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other court empowered in that behalf by the State Gov ernment within the local limits of whose jurisdiction the whole or any part of the subject matter of the trust is situate to obtain a decree (a) removing any trustee; (b) appointing a new trustee; (c) vesting any property in a trustee; (cc) directing a trustee who has been removed or a person who has ceased to be a trustee, to deliver possession of any trust property in his possession to the person entitled to the possession of such property; (d) directing accounts and enquiries; (e) declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust; (f) authorising the whole or any part of the trust property to be let, sold, mortgaged or exchanged; (g) settling a scheme; or (h) granting such further or other relief as the nature of the case may require.
Section 104 provides for appeals against certain orders unless otherwise provided in the body of the Code or by any other law in force.
Clause (ffa) of that section runs as follows: "(ffa) an order under section 91 or section 92 refusing leave to institute a suit of the nature referred to in section 91 or section 92, as the case may be.
" 272 We may mention that prior to its amendment in 1976, section 92 of the Code provided that leave of the Advocate General had to be obtained for the institution of a suit of the kind described in that section and not the leave of the court.
We may now discuss the main cases relied on by the learned Counsel for the respective parties.
Coming first to the cases relied upon by learned Counsel for the appellants, we find that the first decision cited by him was the deci sion of this Court in Swami Parmatmanand Saraswati & Anr.
vs Ramji Tripathi & Anr., ; at p. 796.
In that case it was held that to see whether the suit falls within the ambit of section 92, only the allegations in the plaint should be looked into in the first instance.
But, if, after the evidence is taken, it is found that the breach of trust alleged has not been made out and that the prayer for direc tion of 'the court is vague and is not based on any solid foundation of fact or reason but is made only with a view to bring the suit under the section then such a suit must be dismissed.
Learned Counsel next drew our attention to the decision of this Court in Charan Singh & Anr.
vs Darshan Singh & Ors., ; Section 92 of the Code before its amendment in 1976 was applicable to the case.
The court cited with approval the observations of Mukherjea, J., (as he then was), in Mahant Pragdasji Guru Bhagwandasji vs Patel Ishwarlalbhai Narsibhai and Others, reported in 13 which runs as follows: "A suit under section 92, Civil Procedure Code, is a suit of a special nature which presupposes the existence of a public trust of a religious or charitable character.
Such suit can proceed only on the allegation that there is a breach of such trust or that directions of the court are necessary.
It is only when these conditions are fulfilled that the suit has got to be brought in conformity with the provisions of section 92, Civil Procedure Code . " Neither of the aforesaid decisions of this Court deal with the question as to whether, before granting leave to insti tute a suit under section 92, Advocate General, or later the Court, was required to give an opportunity to the proposed defendants to show cause why leave should not be granted.
What learned counsel for the appellants urged, however, was that these decisions show that at the time when the Advo cate General or the Court is required to consider whether to grant leave to institute a suit as contemplated under sec tion 92, it is only the averments in the plaint which have to be examined and hence, 273 the presence of the defendant is not necessary.
We may now consider the High Court decisions relied on by the learned counsel for the appellants.
In Prithipal Singh vs Magh Singh and Others, AIR 1982 Punjab and Haryana 137 a learned Single Judge of the Punjab and Haryana High Court held that the grant of leave to file a suit is not a mere irregularity which can be cured but is a condition precedent.
The provisions of section 92 are mandatory in nature in that respect.
He further held that in granting leave under section 92 of the Code, the court does not have to write a reasoned order.
It does not even have to give a notice to the defendant of an application for leave to file a suit as the order granting leave is of an adminis trative nature.
The same view was taken by a Division Bench of the Punjab and Haryana High Court in Lachhman Dass Udasi (deceased by L.R. 's) and Others vs Ranjit Singh and Others, AIR 1987 Punjab and Haryana 108 wherein it was held that no notice is necessary to be issued to the defendants prior to the granting or refusing of leave under section 92 of the Code as at that stage it is only the subjective satisfaction of the court that is required and, thus, the order is an order of administrative nature.
A Division Bench of the Kerala High Court also took the same view in P.V. Mathew and Others vs K.V. Thomas and Oth ers, AIR 1983 Kerala 5.
In that case it was held that along with the petition for leave the plaintiffs petitioners should produce in court the plaint for the court 's perusal to enable it to pass a proper order under section 92(1).
This does not preclude the court from requiring the produc tion of any other record necessary for a proper decision.
The court, if it is so satisfied, may grant the leave with out issuing notice to the respondents defendants or hearing them.
In coming to this conclusion, the Division Bench relied upon the earlier decision of the Full Bench of the Kerala High Court in Mayer Simon, Perur vs Advocate General of Kerala and Others, which was rendered before the amendment of Section 92 of the Code in 1976.
Learned Counsel referred to the judgment of a learned Single Judge of Allahabad High Court in Ambrish Kumar Singh vs Raja Abhushan Bran Bramhshan and Others, AIR 1989 Allaha bad 194.
In that case the learned Judge held that while granting leave the court does not decide the rights of the parties.
No right is adjudicated at this stage.
The court has merely to see whether there is a prima facie case for granting leave to file a suit.
This order does not in any way affect the final decision which will be given on merits after the parties have 274 led evidence in the suit.
Section 92 of the Code does not contemplate giving of any notice to the proposed defendants before granting leave.
Learned counsel for the respondent.
on the other hand drew our attention to the afore mentioned decision of the Madras High Court in T.M. Shanmugham and Others vs The Periyar Self Respect Propaganda Institution and Others, which has been relied upon in the impugned judgment.
In that case a learned Judge of the said High Court held that leave granted to the plaintiffs to institute a suit under section 92 of the Code without notice to the defendants is void in law and the logical consequence will be that the institution and the numbering of the suit cannot be validly sustained in law and, therefore, the suit was liable to be dismissed on that technical ground.
However, this will not stand in the way of the plaintiffs, if so desired, to institute fresh proceedings in accordance with law under section 92 of the Code.
In the case of Gurdwara Prabandhak Committee.
Delhi Cantonment and Others vs Amarjit Singh Sabharwal and Others.
a learned Single Judge of the Delhi High Court has taken the view that an order of District Judge granting or refusing leave must be a reasoned order.
The public trust concerned has right to be heard before the grant or refusal of leave.
It was held by him that if the trust is not given an opportunity of being heard, it would be a material irregularity.
To pass a non speaking order in a judicial proceeding is also a material irregularity and revision would lie against such an irregularity.
The grant ing or refusing leave is a judicial order subject to revi sion or appeal and it must be supported by reasons.
Before such an order is passed both sides must have had an opportu nity of being heard.
As far as the decisions of this Court which have been pointed out to us are concerned, the question as to whether before granting leave to institute a suit under section 92 of the Code, the Court is required to give an opportunity of being heard to the proposed defendants did not arise for determination at all in those cases.
As far as the High Courts are concerned, they have taken different views on this question.
The legislative history of section 92 of the Code indicates that one of the objects which led to the enactment of the said section was to enable two or more persons interested in any trust created for a public purpose of a charitable or religious nature should be enabled to file a suit for the reliefs set out in the said section without having to join all the beneficiaries since it would be highly inconvenient and impractic 275 able for all the beneficiaries to join in the suit; hence any two or more of them were given the right to institute a suit for the reliefs mentioned in the said section 92 of the Code.
However, it was considered desirable to prevent a public trust from being harassed or put to legal expenses by reckless or frivolous suits being brought against the trus tees and hence, a provision was made for leave of the court having to be obtained before the suit is instituted.
A plain reading of section 92 of the Code indicates that leave of the court is a pre condition or a condition prece dent for the institution of a suit against a public trust for the reliefs set out in the said section: unless all the beneficiaries join in instituting the suit.
if such a suit is instituted without leave, it would not be maintainable at all.
Having in mind, the objectives underlying section 92 and the language thereof.
it appears to us that, as a rule caution, the court should normally.
unless it is impractica ble or inconvenient to do so, give a notice to the proposed defendants before granting leave under section 92 to insti tute a suit.
The defendants could bring to the notice of the court for instance that the allegations made in the plaint are frivolous or reckless.
Apart from this.
they could, in a given case, point out that the persons who are applying for leave under section 92 are doing so merely with a view to harass the trust or have such antecedents that it would be undesirable to grant leave to such persons.
The desirability of such notice being given to the defendants, however, cannot be regarded as a statutory requirement to be complied with before leave under section 92 can be granted as that would lead to unnecessary delay and, in a given case.
cause considerable loss to the public trust.
Such a construction of the provisions of section 92 of the Code would render it difficult for the beneficiaries of a public trust to obtain urgent interim orders from the court even though the circum stances might warrant such relief being granted.
Keeping in mind these considerations, in our opinion.
although, as a rule of caution, court should normally give notice to the defendants before granting leave under the said section to institute a suit.
the court ' is not bound to do so.
If a suit is instituted on the basis of such leave, granted without notice to the defendants, the suit would not thereby be rendered bad in law or non maintainable.
The grant of leave cannot be regarded as defeating or even seriously prejudicing any right of the proposed defendants because it is always open to them to file an application for revocation of the leave which can be considered on merits and according to law.
We may mention that although clause (ffa) of a section 104(1) of the Code provides that an appeal shall lie against the refusal of grant of 276 leave, that cannot lead to the conclusion that it is obliga tory on the part of the court to give notice to the proposed defendants before granting leave because an appeal lies only against the refusal of leave and not against the grant of leave.
Before refusing leave the proposed plaintiffs are bound to be heard and it is the plaintiffs and not the defendants who could be prejudiced by refusal to grant such leave.
In the result, the appeals are allowed as aforestated.
The impugned judgment of the High Court is set aside.
The Trial Court is directed to dispose of the application for revocation of leave on merits and in accordance with law.
On the facts and circumstances of the case, there will be no order as to cost incurred so far.
R.S. section Appeals allowed.
| IN-Abs | The appellants instituted a representative suit in the court of the learned Subordinate Judge against the respond ents inter alia praying for framing a scheme for a public charitable trust.
On the same day, an application was made in the court praying for leave to institute the suit, as required under section 92 of the Civil Procedure Cede.
The Court granted leave without issuing any notice to the re spondents.
Thereupon, the respondents filed an interim application before the Court for revoking the leave granted inter alia on the ground that the respondents had not been given any opportunity to be heard before leave was granted.
The learned Subordinate Judge dismissed the said application on the ground that the grant of leave was an administrative act of the Court and no notice to the respondents was re quired before the grant of such leave.
The respondents preferred a Civil Revision Petition in the High Court which was allowed.
The learned Single Judge took the view that as the leave had been granted without any notice to the respondents, it was void and liable to be set aside.
Before this Court it was contended on behalf of the appellants that if tile court were required to give an opportunity to the defendants to be heard before granting leave under section 92, the grant of leave would entail a great deal of delay and might defeat the ends of justice where some urgent relief was required.
It was also urged that at the time when the court considered whether to grant leave, it was only the averments in the plaint which had to be examined and hence, the presence of the defendant was not necessary.
It was further submitted that if a defendant had a grievance against the grant of leave, he could always make an application to revoke the same and no prejudice would be caused to the defendant by the grant of leave.
267 On behalf of the respondents it was submitted that the court could not decide whether leave should be granted or not without giving an opportunity to the defendants who could point out the reasons why leave should not be granted.
Allowing the appeals and directing the Trial Court to dispose of the application for revocation of leave on merits and in accordance with law, this Court, HELD: (1) A plain reading of section 92 of the Civil Procedure Code indicates that leaves of the court is a pre condition or a condition precedent for the institution of a suit against a public trust for the reliefs set out in the said section, unless all the beneficiaries join in institut ing the suit; if such a suit is instituted without leave it would not be maintainable at all.
[275B C] (2) Having in mind the objectives underlying section 92 and the language thereof, it appears that, as a rule of caution, the court should normally, unless it is impractica ble or inconvenient to do so, give a notice to the proposed defendants before granting leave under section 92 to insti tute a suit.
The desirability of such notice being given to the defendants, however, cannot be regarded as a statutory requirement to be complied with before leave under section 92 can be granted as that would lead to unnecessary delay, and in a given case, could cause considerable loss to the public trust.
[275C E] (3) If a suit is instituted on the basis of such leave granted without notice to the defendants, the suit would not thereby be rendered bad in law or non maintainable.
The grant of leave cannot be regarded as defeating or even seriously prejudicing any right of the proposed defendants because it is always open to them to file an application for revocation of the leave which can be considered on merits and according to law.
[275G] T.N. Shanmugam and Others vs The Periyar Self Respect Propaganda Institution and Others, [1984] II MLJ 440; ; Swami Parmatmanand Saraswati & Anr.
vs Ramji Tripathi & Anr., ; , 795; Charan Singh & Anr.
vs Darshan Singh and Ors.
, ; ; Mahant Pragdasji Guru Bhagwandasji vs Patel Ishwarlal Bhai Narsibhai and Others, ; ; Prithipal Singh vs Magh Singh and Others, AIR 1982 Punjab & Haryana 137; Lachhman Dass Udasi (deceased by L. RS.) and Others vs Ranjit Singh and Others.
AIR 1987 Punjab and Haryana 108; I. V. Mathew vs K.V. 268 Thomas.
AIR 1983 Kerala 5; Mayer Simon Perur vs Advocate General of Kerala, ; Ambrish Kumar Singh vs Raja Abhushan Bran Bramhshan and Others, AIR 1989 All 194 and Gurdwara Prabandhak Committee, Delhi Cantonment and Others vs Amarjit Singh Sabharwal and Others, , referred to.
(4) Although clause (ffa) of section 104(1) of the Code of Civil Procedure provides that an appeal shall lie against the refusal of grant of leave, that cannot lead to the conclusion that it is obligatory on the part of the court to give notice to the proposed defendants before granting leave because an appeal lies only against the refusal and not the grant of leave.
[275H; 276A]
|
ivil Appeal No. 1731 of 1986.
From the Judgment and Order dated 26.4.
1985 of the Madhya Pradesh High Court in Misc.
Petition No. 1729 of 1984.
Avadh Behari and S.K. Gambhir for the Appellant.
330 Rameshwar Nath, V.S. Dabir, Rajinder Narain for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
S.P. Dubey, employed with the Madhya Pradesh State Road Transport Corporation, was retired from service on his attaining the age of 58 years.
He claims that the age of superannuation was 60 years and as such his retirement at 58 was illegal.
We may state the necessary facts.
Dubey joined service as a junior clerk with the Central Provinces Transport Service Limited (hereinafter called the company) in the year 1947.
The Board of Directors of the company by a resolution dated July 30, 1954 fixed the age of superannuation of all its employees except the drivers as 60 years.
The company was purchased and taken Over by the State of Madhya Pradesh by a notification dated August 31, 1955.
The relevant part of the said notification is as under: "The undertaking will as from the 31st August, 1955 be entitled 'The Central Provinces Transport Services (under Government Ownership)".
So far as the public is concerned there will be no change or interruption in the course of business and the continuity of operation will not be dis turbed and the existing staff will not be adversely affected with regard to terms and conditions of their services.
The statutory instrument to be made in due course will provide, among other things that all the rights and liabilities of the Central Provinces Transport Services Ltd. will become the rights and liabilities of the Central Provinces Trans port Services (Under Government ownership) and from a legal point of view the staff, customers and contractors can look to the Central Provinces Transport Services (Under Govern ment ownership) to discharge all the obligations and exer cise all the rights that at present rest with the Central Provinces Transport Service Ltd., Rules for the conduct of business of the above constituted Board of Management are being published separately.
" It is thus obvious that the Government continued to maintain the Central Provinces Transport Services as a separate entity.
The conditions of service, of the staff of the taken over company, were specifically protected.
331 The State of Madhya Pradesh was recoganised under the .
The Central Government, by a notification dated February 28, 1961, extended the provi sions of Road Transport Corporation Act, 1958 (hereinafter called 'the Act ') to the State of Madhya Pradesh with effect from April 1, 1961.
Thereafter the Madhya Pradesh Government acting under Section 3 of the Act established the Madhya Pradesh State Road Transport Corporation (hereinafter called Corporation) with effect from May 21, 1962.
The Madhya Pradesh Government issued two memorandums on May 4, 1962.
By one memorandum the services of the concerned employees including Dubey were transferred to the Corporation and by the second it was clarified that the said transfer was subject to the conditions that their service would be treat ed as uninterrupted and their pay scales and conditions of service would not be affected.
On the same day and Board of Directors of the Corporation passed a resolution to the following effect: "Resolved that the services of the employees employed under M.B.R. and C.P.T.S. on 31.5.1962 are transferred to the Corporation temporarily until further orders from 1.6.1962 on the following conditions: 1.
The pay scale and conditions of service are not affected by the transfer.
The transfer will not be considered as interruption of services.
In case of employees coming under the category of workman as defined under the , the Corporation in the event of retrenchment will pay compensation on the basis that the services had been contin ued and had not affected by transfer.
" The State Government issued directions dated October 29, 1963 to the Corporation under Section 34 of the Act.
Rele vant part of the directions is as under: "The members of the staff of the Madhya Bharat Roadways and Central Provinces Transport Services, who have opted to serve under the Corporation in pursuance of the notices issued to them by the Commerce and Industry Department or any authority of the Madhya Bharat Road 332 ways and Central Provinces Transport Service shall be em ployed by the Corporation subject to such regulations as may be made by it under Section 45(2)(c) of the 'Road Transport Corporation Act, 1950 '(Central Act LXIV of 1950), and subject to 'such assurance as may have been given to them by the State Government.
" The Corporation framed regulations called The Madhya Pradesh State Road Transport Corporation Employees Service Regulations, 1964.
" Regulation 59 which provided the age of superannuation was as under: "Employees of/he State Transport are liable to compulsory retirement on the date of their completion of fifty eight years of age unless specifically permitted by the Corpora tion to continue in service for a specified period thereaf ter, but he must not be retained after the age of 60 years, without the sanction of State Government.
" The corporation issued a notice dated May 25, 1983 to Dubey informing him that he was due to retire from service on June 30, 1984 on attaining the age of 58 years.
He chal lenged the said notice by way of a writ petition under Article 226/227 of the Constitution of India before the Madhya Pradesh High Court at Jabalpur, The High Court by its judgment dated April 26, 1985 dismissed the writ petition.
The present appeal by way of special leave petition is against the judgment of the High Court.
The High Court, following its earlier Division Bench judgment, came to the conclusion that on August 31, 1955 when the appellant became State Government employee his age of superannuation came to be governed by the statutory rules under Article 309 of the Constitution of India operating in respect of the Government employees of the State of Madhya Pradesh and the age of retirement of the State servants under the said rules being 58 years the appellant was right ly retired.
The appellant was in service of the company from 1947 to August 30, 1955.
Admittedly, the age of superannuation of the company employees was 60 years.
The Government of Madhya Pradesh took over the company with effect from August 31, 1955 by a notification of the same date.
The notification specifically stated that the existing staff of the company would not be adversely affected with regard to 333 their conditions of service.
It is no doubt correct that on August 31, 1955 rules were operating in respect of the State Government employees according to which the age of superan nuation was 58 years but the persons who were service with the company were taken into Government serving with a spe cific assurance that their conditions of service were. not to be adversely affected.
When the.
State Government takes over a private company and gives an assurance of the types it is but fair that the State Government should honour the same.
Thus, the State Service rules which fixed the age of superannuation at 58 years could not be made applicable to the appellant and other employees of the taken over company.
We, therefore, do not agree with the reasoning of the High Court.
It was then urged that on the transfer of appellant 's service to the Corporation he was governed by the Regula tions framed by the Corporation under the Act and Regulation 59 provided 58 years as the age of superannuation.
We do not agree with the contention.
The State Government issued directions under Section 34 of the Act which we have repro duced above.
The said directions are binding on the corpora tion.
This Court in The General Manager, Mysore State Road Transport Corporation vs Devraj ors and another, interpreting Section 34 of the Act held as under: "Directions given by the State Government are binding on the corporation and it cannot depart from any general instruc tions issued under sub section (1) of Section 34 except with the previous permission of the State Government.
Such in structions have the force of law .
Therefore breach of the directions given by State Government in the matter of disciplinary action against the respondents was a breach of the statutory duty and made the action of the corporation amenable to the jurisdiction of the High Court under Article 226 of the Constitution".
The State Government and also the Corporation had given assurance to the appellant and other employees who were transferred to the Corporation that their conditions of service would not be adversely affected.
The said assurance was incorporated in the directions issued under the Act.
The Corporation cannot frame regulations contrary to the direc tions issued by the State Government under Section 34 of the Act.
The age of superannution which the appellant was enjoy ing under the State Government could not be altered to his disadvantage by the 334 Corporation.
We are, therefore, of the view that Regulation 59 flamed by the Corporation was not applicable to the appellant.
He was entitled to continue in service upto the age of 60 years.
We, therefore, allow the appeal with costs and set aside the judgment of the High Court.
The appellant has already attained the age of 60 years.
He is only entitled to two years emoluments.
The respondents are directed to pay the same to the appellant within three months from today.
We quantify the costs as Rs.5,000.
P.S.S. Appeal allowed.
| IN-Abs | The age of superannuation for the employees of the private transport company in which the appellant was ini tially employed was 60 years.
When the said company was taken over by the State on August 31, 1955, the notification specifically provided that the existing staff would not be adversely affected with regard to terms and conditions of service.
Again, when the services 01 the staff of the taken over company were transferred to the respondent Corpo ration established under section 3 of the Road Transport Corpora tion Act, 1950, the memorandum dated May 4, 1962 recited the same assurance.
A resolution passed by the Board of Direc tors of the Corporation on the same day also reiterated the said assurance.
Subsequently, when the State Government issued directions on October 29, 1963 to the Corporation under section 34 of the Act the said assurance was embodied therein too.
However, Regulation 59 of the M.P. State Road Transport Corporation Employees Service Regulations, 1964 framed by the Corporation under section 45(2)(c) of the Act provided that the employees of the Corporation were liable to compulsory retirement on the date of their completion of 58 years of age unless specifically permitted to continue.
When the appellant was sought to be retired from service in terms of Regulation 59 of the said Regulations on attain ing the age of 58 years with effect from June 30, 1984 by a notice dated May 25, 1983, he challenged it by a petition under Article 226/227 of the Constitution.
It was dismissed by the High Court on the view that on August 31, 1955 when the appellant became State Government employee his age of superannuation came to be governed by the statutory rules under Article 309 of the Constitution and the age of retire ment of the State servants under the said rules being 58 years the appellant was rightly retired.
329 Allowing the appeal, the Court, HELD: 1.
The appellant was entitled to continue in service upto the age of 60 years.
2.1 When the State Government takes over a private company and gives an assurance that conditions of service of the existing staff would not he adversely affected, it is but fair that the State Government should honour the same.
2.2 In the instant case, the appellant was in service of the company from 1947 to August 30, 1955 in which the age of superannuation of the employees was 60 years.
The company was taken over by the State Government with effect from August 31, 1955 by a notification of the same date which specifically stated that the existing staff of the company would not he adversely affected with regard to their condi tions of service.
The State Service Rules which fixed the age of superannuation at 58 years could not thus he made applicable to the appellant and other employees of the taken over company.
Furthermore, the said assurance was also incorporated in the directions issued by the State Government to the Corporation under section 34 of the Act.
The Corporation could not frame regulations contrary to the said directions and the age of superannuation which the appellant was enjoying under the State Government could not he altered to his disadvantage by the Corporation.
Regulation 59 framed by the Corporation was, therefore, not applicable to the appellant.
The General Manager, Mysore State Road Transport Corpo ration vs Devraj Ors and Anr., , referred to.
Since the appellant had already attained the age of 60 years, he was only entitled to two years emoluments.
The respondents are directed to pay the same to him within three months.
[334B]
|
ontempt Petition No. 71 of 1990.
AND Interlocutory Application No. 1 of 1990.
IN Writ Petition (Civil) No. 1 1222 of 1983.
(Under Article 32 of the Constitution of India).
Shanti Bhushan, Bashant Bhushan, Bohla Prasad Singh for the Petitioner.
Kapil Sibal, Additional Solicitor General, Ashok H. Desai, Solicitor General, Tapas Roy, Ratin Das and D.K. Sinha for the Respondent.
The Judgment of the Court was delivered by KANIA, J.
Seth Mannalal Surana Memorial Trust is the owner of a building situate at 7/ID, Lindsay Street, Calcut ta, one of the busiest streets in Calcutta where the New Market is situated.
The petitioner is the lessee of the said building from the said Trust.
On February 25, 1958, a por tion of the ground floor premises in the said building admeasuring 4198 Sq.
(referred to hereinafter as "the said premises") was requisitioned by the Government of West Bengal under the West Bengal Premises Requisition and Con trol (Temporary Provisions) Act, 1947, (hereinafter referred to as "the West Bengal Act").
The purpose for which the said premises were requisitioned was establishing the main show room of West Bengal Handicraft Development Corporation Limited, a West Bengal Government Undertaking.
The said show room is called "Manjusha" and has become a landmark in Calcutta.
In H.D. Vora vs State of Maharashtra and Others, ; this Court held that the provisions for, 248 requisition could be resorted to only where premises were required for a temporary purpose but not where they were required for a permanent purpose.
If premises were required for a permanent purpose, they have to be acquired in accord ance with law.
Following upon this decision, the petitioner filed the aforesaid Writ Petition No. 1 1222 of 1983 in this Court praying for a mandatory order directing that the premises should be derequisitioned and handed over to the petitioner.
Certain interim applications were made in this Court and orders were passed thereon to which it is not necessary to refer in this Judgment.
By an order dated January 16, 1990, certain directions were given to respondent No. 4 in the writ petition.
The relevant portion of the said order runs as follows: "In view of the earlier orders, we direct respondent No. 4 to hand over the possession of the premises in question to the petitioner within nine weeks from today subject to their obtaining any order from the Calcutta High Court in the appeal pending in that Court against the decision of a learned Single Judge in W.P. No. 2063 of 1987 or acquiring any independent right to retain possession of the suit premises within that period.
It is contended by Shri Shanti Bhushan, learned coun sel for the petitioner that as the respondents have not succeeded in obtaining any order from the Calcutta High Court in the said appeal or in acquiring any independent right to retain possession of the said premises within the period of nine weeks from January 16, 1990, as set out in the said order, they were bound to hand over the possession of the said premises to the petitioner and have committed contempt as they have deliberately failed to do so.
We find that it is not possible to accept the submis sion set out hereinabove.
On February 21, 1990, the Govern ment of West Bengal issued a notification under section 4 of the Land Acquisition Act as applicable to the State of West 'Bengal, declaring its intention to acquire the said prem ises.
On February 27, 1990, the said declaration was duly published.
By the beginning of March 1990 the declaration under section 6 of the Land Acquisition Act in respect of the said premises was duly made and published and on 1st of March.
1990 the Government of West Bengal authorised the First Lanisition Collector to take possession of the said premises under section 17(1) of the Land Acquisition Act.
Public notices were given on 9th March, 249 1990.
A few days later, the trustees of the said trust which owned the said building filed a writ petition in the Calcut ta High Court challenging the validity of the acquisition proceedings in respect of the said premises which had been initiated consequent upon the amendment of the Land Acquisi tion Act as applicable to the State of West Bengal and on 20th March, 1990, the Calcutta High Court directed the status quo to be maintained regarding possession.
It is clear that unless the said order dated March 20, 1990, is vacated, it is not possible for the respondents to proceed with the acquisition and acquire title to the prem ises.
The contention of the learned counsel for the peti tioner is that the acquisition is patently bad in law as it is not open to the Government to acquire the said premises on the ground floor of the said building without acquiring the corresponding area on the upper floors.
It was submitted by him that such acquisition would be clearly bad in law in spite of the amendment carried out to the provisions of Land Acquisition Act as applicable to the State of West Bengal by the insertion of Section 49 A therein by Land Acquisition (West Bengal Amendment) Act, 1986, which came into force on February 14, 1990, after obtaining the consent of the Presi dent of India.
Section 49A permits acquisition of a part of a house.
In our view, the question whether the acquisition is valid or not is pending for decision in the Calcutta High Court in the said writ petition filed by the said trust as owner of the building challenging the validity of the said amendment.
In our opinion, before a party can be committed for contempt, there must be a wilful or deliberate disobedience of the orders of the Court.
In the present case, we do not find that any such wilful or deliberate or reckless disobe dience of our order dated January.
16, 1990, has been com mitted by the respondent to the contempt petition.
Hence, the contempt petition is dismissed.
There will be no order as to costs.
We hope that the Calcutta High Court will be able to dispose of the said writ petition challenging the validity of the said amendment as early as possible.
Interlocutory Application No. 1 of 1990 in writ petition No. 11222 of 1983 is not pressed and is allowed to be with drawn with liberty to renew the same if any occasion arises.
Although we are of the view that the respondent has not commit 250 ted contempt, we do realise that in case the petitioner succeeds in the writ petition, the respondent would have remained in possession of the said premises for a long time after they should have handed over the possession of the same to the petitioner.
We find that the respondent has already been directed to pay compensation for the use of the said premises at the rate of Rs. 15,000 per month by an order of this Court passed over two years earlier.
We direct that the respondent shall deposit, in addition, an amount of Rs. 10,000 per month commencing from 1st October, 1990, in the Court, the first of such deposits to be made on or before 20th October, 1990, and deposits for each succeeding month to be made by 15th day of each succeeding month.
The amounts deposited shall be invested by the Registrar General at suitable intervals in a nationalised bank in fixed depos it after consulting the parties.
| IN-Abs | By its order dated January 16, 1990 in the writ petition, the Court had directed respondent No. 4 to band over possession of the premises requisitioned under the West Bengal Premises Requisition and Control (Temporary Provi sions) Act, 1947, within nine weeks subject to their obtain ing any order from the High Court or acquiring any independ ent right within that period to retain possession.
In the meantime, the Land Acquisition (West, Bengal Amendment) Act, 1986, which inserted section 49A in the Land Acquisition Act, 1894 as applicable to the State, came into force on February 14, 1990 permitting acqusition of a part of a house.
A week thereafter the State Government initiated acquisition process in respect of the said premises.
Notifi cations under sections 4 and 6 of the Land Acquisition Act were issued, and the Land Acquisition Collector authorised to take possession under section 17(1) of the Act.
However, on March 20, 1990 in a writ challenging the validity of the acquisi tion proceedings the High Court directed the status quo to be maintained regarding possession.
In this contempt petition, the petitioner alleged that the respondent had deliberately failed to hand over possession in terms of the order dated January 16, 1990.
The acquisition was also assailed as being patently bad in law.
HELD: 1.
Before a party can be committed for con tempt, then must be a wilful or deliberate disobedience of the orders of the Court In the instant case, no such wilful or deliberate or reckless disobedient, of the order dated January 16, 1990 has been committed by the respondent to the contempt petition.
[249F] 2.
The question whether the acquisition is valid or not is pending 247 for decision in the High Court.
In case the petitioner succeeds the respondent would have remained in possession of the said premises for a long time after they should have handed over the possession.
They are, therefore, directed to deposit an amount of Rs. I0,000 per month commencing from 1st October, 1990 in the Court in addition to Rs.15,000 per month they are already paying under the earlier directions.
[250A C]
|
ivil Appeal No. 709 of 1957.
Appeal by special leave from the judgment and order dated April 18, 1955, of the Madras High Court in Case Referred No. 25 of 1952.
A. V. Viswanatha Sastri and M. section K. Sastri, for the appellant.
"M. C. Setalvad, Attorney General for India, R, Ganapathy Iyer, R. H. Dhebar and D. Gupta, for the respondent.
November.24.
The Judgment of the Court was delivered by 649 GAJENDRAGADKAR, J.
The appellant is a firm acting as managing agents of the Janardana Mills Ltd., Coimbatore.
It purchased four contiguous plots of land admeasuring 5 acres 26 cents under four sale deeds executed on October 25, 1941, November 15, 1941, June 29, 1942, and November 19, 1942, respectively for a total consideration of Rs. 8,712 15 6.
After about five years these properties were sold by the appellant in two lots to the Janardana Mills Ltd. The first lot was sold on September 1, 1947, and the second on November 10, 1947, the total consideration for the two sales being Rs. 52,600.
These two sales realised for the appellant a sum of Rs.43,887 0 6 in excess of the purchase price.
The Income tax Officer treated the said amount of Rs. 43,887 as the income of the appellant for the assessment year 1948 49, and assessed it to income tax under the head " business ".
The officer held that there was no evidence to show that the appellant had purchased the said lands for agricultural purposes or that it had acquired them as an investment.
He also found that, since the lands were adjacent to the Janar dana Mills, the appellant must have purchased them solely with a view to sell them to the said mills with a profit.
That is why, though the transaction was in the nature of a solitary transaction, it was held that it had all the elements of a business transaction and was thus an adventure in the nature of trade.
Against this order of assessment the appellant preferred an appeal to the Appellate Assistant Commissioner.
The appellate authority upheld the appellant 's contention that the amount in question was not assessable as it cannot be hold to be income or profit resulting from a profit making scheme, and set aside the order under appeal.
The respondent challenged the correctness of this order by taking an appeal against it to the Incometax Appellate Tribunal.
The tribunal agreed with the view taken by the Income tax Officer and held that the amount in question was not a capital accretion but a gain made in an adventure in the nature of business 82 650 in carrying out a scheme of profit making.
The tribunal rejected the explanations given by the appellant as to why it had purchased the properties and held that the purchase had been made by the appellant solely with a view to sell the said properties at profit to the Janardana Mills.
At the instance of the appellant the tribunal then referred to the High Court of Madras the question suggested by it in these words: " whether there was material for the assessment of the sum of Rs. 43,887 being the difference between the purchase and sale price of the four plots of land as income from an adventure in the nature of trade ".
This reference was heard by Rajagopalan and Rajagopala Ayyangar, JJ., and the question referred has been answered against the appellant.
The High Court has held that the transaction in question was an adventure in the nature of trade and so the respondent was justified in taxing the amount in question under the head " business " for the relevant year.
The application for leave made by the appellant was rejected by the High Court.
Thereupon the appellant applied for, and obtained, special leave to appeal to this Court.
That is how the appeal has been admitted in this Court ; and the only question which it raises for our decision is whether the High Court was right in holding that the transaction in question was an adventure in the nature of trade.
We may at this stage brie y indicate the material facts and circumstances found by the tribunal and the inference drawn by it in regard to the character of the transaction in question.
The appellant purchased the four plots under four different sale deeds.
The first purchase was for Rs. 521 and it covered a piece of land admeasuring 281 cents; the second purchase related to 2 acres 791 cents and the price paid was Rs. 1,250; while the third and the fourth purchases were for Rs. 1,942 and Rs. 5,000 and they covered 28 1/4 cents and 1 acre and 90 cents respectively.
The property purchased under the first sale deed was sold on November 10, 1947, for Rs. 2,825 whereas the three remaining properties were sold on September 1, 1947, 651 for Rs. 49,775, the purchaser in both cases being the Janardana Mills Ltd. The purchase of the first item of property by the appellant had been made in the name of Mr. V. G. Raja, assistant manager of the Janardana Mills Ltd., who is the son in law Of G. Venkataswami Naidu, one of the partners of the appellant firm.
Naturally when this property was sold to the mills the document was executed by the ostensible owner V. G. Raja.
It is not disputed that the purchase in the name of V. G. Raja was benami for the appellant.
All the plots which were thus purchased by the appellant piecemeal are contiguous and they adjoin the mills.
On the plot purchased on June 29, 1942, there stood a house of six rooms which fetched an annual rent of about Rs. 100; and after deduction of taxes, it left a net income of Rs. 80 per year to the appellant.
The other plots are vacant sites and they brought no income to the appellant.
During the time that the appellant was in possession of these plots it made no effort to put up any structures on them or to cultivate them; and so it was clear that the only object with which the appellant had purchased these plots was to sell them to the mills at a profit.
It was, however, urged by the appellant that the properties had been bought as an investment.
This plea was rejected by the tribunal.
The tribunal likewise rejected the appellant 's case that it had purchased the plots for building tenements for the labourers working in the Janardana Mills.
Alternatively it was urged by the appellant that the Janardana Mills decided to purchase the plots because ' an award passed by an industrial tribunal in June 1947 had recommended that the mills should provide tenements for its labourers.
Thus the appellant 's case was that it had not purchased the properties with a view to sell them to the mills and the mills in fact would not have purchased them but for the recommendation made by the award which made it necessary for the mills to purchase the adjoining plots for the purpose of building tenements for its employees.
The tribunal was not impressed even by this plea; and so it ultimately held that the plots had been purchased by the appellant wholly and solely, 652 with the idea of selling them at profit to the mills.
The tribunal thought that since the appellant was the managing agent of the mills it was in a position to influence the decision of the mills to purchase the properties from it and that was the sole basis for its initial purchase of the plots.
On these findings the tribunal reached the conclusion that the sum of Rs. 43,887 was not a capital accretion but was a gain made in the adventure in the nature of business in carrying out the scheme of profit making.
The appellant contends that, on the facts and circumstances found in the cage, it is erroneous in law to hold that the transaction in question is an adventure in the nature of trade.
There is no doubt that the jurisdiction conferred on the High Court by section 66(1) is limited to entertaining references involving questions of law.
If the point raised on reference relates to the construction of a document of title or to the interpretation of the relevant provisions of the statute, it is a pure question of law; and in dealing with it, though the High Court may have due regard for the view taken by the tribunal, its decision would not be fettered by the said view.
It is free to adopt such construction of the document or the statute as appears to it reasonable.
In some cases, the point sought to be raised on reference may turn out to be a pure question of fact; and if that be so, the finding of fact recorded by the tribunal must be regarded as conclusive in proceedings under section 66(1).
If, however, such a finding of fact is based on an inference drawn from primary evidentiary facts proved.
in the case, its correctness or validity is open to challenge in reference proceedings within narrow limits.
The assessee or the revenue can contend that the inference has been drawn on considering inadmissible evidence or after excluding admissible and relevant evidence; and, if the High Court is satisfied that the inference is the result of improper admission or exclusion of evidence, it would be justified in examining the correctness of the conclusion.
It may also be open to the party to challenge a conclusion of fact drawn by the tribunal on the ground that it is not supported by any legal evidence; or that the impugned conclusion drawn 653 from the relevant facts is not rationally possible; and if such a plea is established, the court may consider whether the conclusion in question is not perverse and should not, therefore, be set aside.
It is within these narrow limits that the conclusions of fact recorded by the tribunal can be challenged under section 66(1).
Such conclusions can never be challenged on the ground,,, that they are based on misappreciation of evidence.
There is yet a third class of cases in which the assessee or the revenue may seek to challenge the correctness of the conclusion reached by the tribunal on the ground that it is a conclusion on a question of mixed law and fact.
Such a conclusion is no doubt based upon the primary evidentiary facts, but its ultimate form is determined by the application of relevant legal principles.
The need to apply the relevant legal principles tends to confer upon the final conclusion its character of a legal conclusion and that is why it is regarded as a conclusion on a question of mixed law and fact.
In dealing with findings on questions of mixed law and fact the High Court would no doubt have to accept the findings of the tribunal on the primary questions of fact; but it is open to the High Court to examine whether the tribunal had applied the relevant legal principles correctly or not; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure points of law.
This question has been exhaustively considered by this Court in Meenakshi Mills, Madurai vs Commissioner of Income tax, Madras (1).
In this case the appellate tribunal had come to the conclusion that certain sales entered in the books of the appellant company in the names of certain intermediaries, firms and companies, were fictitious and the profits ostensibly earned by them were in fact earned by the appellant which had itself sold the goods to the real purchasers and received the prices.
On this finding the tribunal had ordered that the profits received from such sales should be added to the amount shown as profits in the appellant 's books and should be taxed.
The appellant 654 applied for a reference to the tribunal under section 66(1) and the High Court of Madras under section 66(2), but his application was rejected.
Then it came to this Court by special leave under article 136 and it was urged on its behalf that the tribunal had erred in law in holding that the firms and companies described as the intermediaries were its benamidars and that its application for reference should have been allowed.
This plea was rejected by this Court because it was held that the question of benami is purely a question of fact and not a mixed question of law and fact as it does not involve the application of any legal principles for its determination.
In dealing with the argument urged by the appellant, this Court has fully considered the true legal position in regard to the limitation of the High Court 's jurisdiction in entertaining references under section 66(1) in the light of several judicial decisions bearing on the point.
The ultimate decision of the Court on this part of the case was that " on principles established by authorities only such questions as relate to one or the other of the following matters can be questions of law under section 66(1): (1) the construction of a statute or a document of title (2) the legal effect of the facts found where the point for determination is a mixed question of law and fact; and (3) a finding of fact unsupported by evidence or unreasonable and perverse in nature ".
Having regard to this legal position this Court held that the question of benami was a pure question of fact and it could not be agitated under section 66(1).
The point about the scope and effect of the provisions of section 66(1)has again been considered by this Court in The Oriental Investment Co. Ltd. vs Commissioner of Income tax, Bombay(1) This was a case on the other side of the line.
It was held that whether the appellant 's business amounted to dealing in shares and properties or to investment is a mixed question of law and fact and that the legal effect of the facts found by the tribunal as a result of which the appellant could be treated as a dealer or investor is a question of law.
As a result of this conclusion the appeal (1) ; 655 preferred by the appellant was allowed, the order passed by the High Court refusing the appellant 's request for reference was set aside and the case was remitted to it for directing the tribunal to state a case, on the two questions mentioned in the judgment. ' These two decisions bring out clearly the distinction between findings of fact and findings of mixed questions of law and fact.
What then is the nature of the question raised before us in the present appeal ? The tribunal and the High Court have found that the transaction in question is an adventure in the nature of trade; and it is the correctness of this view that is challenged in the present appeal.
The expression " adventure in the nature of trade" is used by the Act in section 2, sub section
(4) which defines business as including any trade, commerce or manufacture, or any adventure or concern in the nature of trade, commerce or manufacture.
Under section 10, tax shall be payable by an assessee under the head profits and gains of business, profession or vocation in respect of the profit or gains of any business, profession or vocation carried on by him.
Thus the appellant would be liable to pay the tax on the relevant amount if it is held that the transaction which brought him this amount was business within the meaning of section 2, sub section
(4) and it can be said to be business of the appellant if it is held that it is an adventure in the nature of trade.
In other words, in reaching the conclusion that the transaction is an adventure in the nature of trade, the tribunal has to find primary evidentiary facts and then apply the legal principles involved in the expression " adventure in the nature of trade " used by section 2, sub section
It is patent that the clause " in the nature of trade " postulates the existence of certain elements in the adventure which in law would invest it with the character of a trade or business; and that would make the question and its decision one of mixed law and fact.
This view has been incidentally expressed by this Court in the case of Meenakshi Mills, Madurai (1) in repelling the appellant 's argument based on the decision of the (1) ; 656 House of Lords in Edwards vs Bairstow (1).
For the respondent, the learned Attorney General has, however, relied on the fact that the relevant observations in the case of Meenakshi Mills, Madurai, are obiter and he has invited our attention to the decision in the case of Edwards (1) in support of his contention that the judgment of the House of Lords would show that the question about the character of the transaction was ultimately treated as a question of fact.
Before we refer to the said decision it may be relevant to observe that there are two ways in which the question may be approached.
Even if the conclusion of the tribunal about the character of the transaction is treated as a conclusion on a question of fact, it cannot be ignored that, in arriving at its final conclusion on facts proved, the tribunal has undoubtedly to address itself to the legal requirements associated with the concept of trade or business.
Without taking into account such relevant legal principles it would not be possible to decide whether the transaction in question is or is not in the nature of trade.
If that be so, the final conclusion of the tribunal can be challenged on the ground that the relevant legal principles have been misapplied by the tribunal in reaching its decision on the point; and such a challenge would be open under section 66(1) because it is a challenge on a ground of law.
The same result is achieved from another point of view and that is to treat the final conclusion as one on a mixed question of law and fact.
On this view the conclusion is not treated as one on a pure question of fact, and its validity is allowed to be impeached on the ground that it has been based on a misapplication of the true legal principles.
It would thus be seen that whether we call the. conclusion in question as one of fact or as one on a question of mixed law and fact, the application of legal principles which is an essential part in the process of reaching the said conclusion is undoubtedly a matter of law and if there has been an error in the application of the said principles it can be challenged as an error of law.
The difference then is merely one of form and not substance; and on the whole it is (1) ; ; 657 more convenient to describe the question involved as a mixed question of law and fact.
That is the view expressed by this Court in the case of Meenakshi Mills, Madurai (1); and, in our opinion, it avoids any confusion of thought and simplifies the position by treating such questions as analogous to those falling under the category of questions of law.
Let us then consider whether the decision of the ' House of Lords in the case of Edwards(2) is inconsistent with this view.
In this case the respondents, who were respectively a director of a leather manufacturing company and an employee of a spinning firm, purchased a complete cotton spinning plant in 1946 with the object of selling it as quickly as possible at a profit.
They hoped to sell the plant in one lot, but ultimately had to dispose of it in five separate lots over the period from November 1946 to February 1948.
Assessments to income tax in respect of profits arising from this transaction were made under Case I of Schedule D for the years 1946 47 and 1947 48.
On the matter being taken before the Chancery Division, it was held in accordance with the earlier decisions of the Court of Appeal in Cooper vs Stubbs (3) and Leeming vs Jones (4) that the finding of the General Commissioners was a finding of fact which could not be challenged in appeal.
The attention of the court was drawn to the different view expressed in a Scottish case, Commissioners of Inland Revenue vs Fraser (5) where the Court of Session had held that it was at liberty to treat the matter as a mixed question of fact and law, and in fact it had overruled the finding of the General Commissioners in that behalf " It does not seem to me ", observed Upjohn, J., " that in this court I am at liberty to follow the practice of the Scottish Court, attractive though it would be to do so, if the matter was res integra ".
However, since apparently the finding of the General Commissioners did not appear to the court to be satisfactory, the matter was remitted to them with an intimation that they should consider (2) [1956]A.C.14;; (4) (1) [1956)S.C.R. 691.
(3) (1925) To Tax Cas. 29.
(5) 83 658 the question whether the transaction, being an isolated transaction, there was nevertheless an adventure in the nature of trade which was assessable to tax under Case 1 of Schedule D.
The Commissioners were directed to hear further arguments on this point before stating a supplementary case.
After remand, the Commissioners adhered to their earlier view and stated that they were of opinion that the transaction was an isolated case and not taxable and so they discharged the assessments.
With the statement of this supplementary case, the matter was argued before the Chancery Division again.
Wynn Parry, J., who delivered the judgment on this occasion referred to the earlier decisions of the Court of Appeal and held that " on those authorities prima facie the matter is concluded by the decision of the Commissioners that the transaction, the subject matter of the case, was not an adventure in the nature of trade ".
Then the learned judge examined the question as to whether the decision of the Commissioners can be said to be perverse; and held that it could not be so characterised.
In the result the appeal was dismissed.
The question then reached the Court of Appeal but the result was the same.
The Court of Appeal observed that the earlier decisions were binding on it no less than the Court of First Instance ; and so it held that the conclusion of the Commissioners was a finding of fact which the court cannot disturb.
However, it is apparent from the discussion that took place when the court granted leave to.
the Crown to take the matter to the House of Lords that the court did not feel happy about the correctness of the finding made by the General Commissioners in the case.
That is how the matter reached the House of Lords.
The facts in this case were so clearly against the finding of the Commissioners that Viscount Simonds made it clear at the outset that in his opinion, " what.
ever test is adopted, that is, whether the finding that the transaction was not an adventure in the nature of trade is to be regarded as a pure finding of fact or as the determination of the question of law or of mixed law and fact, the same result would be reached in this 659 case.
The determination cannot stand.
This appeal must be allowed and the assessments must be confirmed".
It is in the light of this emphatic statement that the rest of the judgment of Viscount Simonds must be considered.
He referred to the divergence of views expressed in English and Scottish decisions and his conclusion was that " if and so far as there is any,, divergence between the English and Scottish approach it is the former which is supported by the previous authority of this House to which reference has been made "; but he analysed the position involved in both the approaches and held that the difference between them was not of substance.
" To say that a transaction is or is not an adventure in the nature of trade ", observed Viscount Simonds, " is to say that it has or has not the characteristics which distinguish such an adventure but it is a question of law not of fact what are those characteristics, or, in other words, what the statutory language means.
It follows that the inference can only be regarded as an inference of fact if it is assumed that the Tribunal which makes it is rightly directed in law what the characteristics are and that, I think, is the assumption that is made ".
Dealing with the merits of the case, Viscount Simonds observed that " sometimes, as in the case as it now comes before the Court where all the admitted or found facts point one way and the inference is the other way, it can only be a matter of conjecture why that inference has been made.
In such a case it is easy either to say that the Commissioners have made a wrong inference of fact because they have misdirected themselves in law or to take a short cut and say that they have made a wrong inference of law, and I venture to doubt whether there is more than this in the divergence between the two jurisdictions which has so much agitated the Revenue authorities ".
Lord Radcliffe substantially agreed with this view.
He also referred to the divergence of views expressed in Scottish and English decisions and observed that " the true position of the Court in all these cases can be shortly stated.
If a party to a hearing before the Commissioners expresses dissatisfaction with their determination 660 as being erroneous in point of law,it is for them to state a case and in the body of it to set out the facts that they have found as well as their determination.
I do not think that inferences drawn from other facts are incapable of themselves being findings of fact, although there is value in the distinction between primary facts and inferences drawn from them.
When the case comes before the Court, it is its duty to examine the determination having regard to its knowledge of the relevant law.
If a case contains anything ex facie which is bad in point of law and which ' bears upon the determination, it is obviously, erroneous in point of law.
But, without any such misconception appearing ex facie, it may be that the facts found are such that no persons acting judicially and properly instructed as to the relevant law could have come to the determination under appeal.
In those circumstances,too, the Court must intervene ".
Lord Radcliffe remarked that the English courts had been led to be rather overready to treat these questions as pure questions of fact and added "if so I would say with very great respect that I think it a pity that such a tendency should persist ".
Therefore, it seems to us that in effect this decision is not inconsistent with the view we have taken about the character of the question raised before us in the present appeal.
As we have already indicated, to avoid confusion or unnecessary complications it would be safer and more convenient to describe the question about the character of the transaction in the context as a question of mixed law and fact.
The learned Attorney General has invited our attentionto the fact that the form in which the question referred tothe High Court has been framed in the present case seems to assume that the impugned finding is a finding of fact.
It is only in regard to a finding of fact that a question can be properly framed as to whether there was material to support the said finding.
We would, therefore, like to add that it would be more appropriate to frame the question in this form: whether, on the facts and circumstances proved in the case, the inference that the transaction in 661 question is an adventure in the nature of trade is in law justified ? In substance, that is the basis on which the question has been framed by the respondent and considered by the High Court.
This question has been the subject matter of several judicial decisions; and in dealing with it all the judges appear to be agreed that no principle can be evolved which would govern the decision of all cases in which the character of the impugned transaction falls to be considered.
When section 2, sub section
(4), refers to an adventure in the nature of trade it clearly suggests that the transaction cannot properly be regarded as trade or business.
It is allied to transactions that constitute trade or business but may not be trade or business itself.
It is characterised by some of the essential features that make up trade or business but not by all of them; and so, even an isolated transaction can satisfy the description of an adventure in the nature of trade.
Sometimes it is said that a single plunge in the waters of trade may partake of the character of an adventure in the nature of trade.
This statement may be true; but in its application due regard must be shown to the requirement that the single plunge must be in the waters of trade.
In other words, at least some of the essential features of trade must be present in the isolated or single transaction.
On the other hand, it is sometimes said that the appearance of one swallow does not make a summer.
This may be true if, in the metaphor, summer represents trade; but it may not be true if summer represents an adventure in the nature of trade because, when the section refers to an adventure in the nature of trade, it is obviously referring to transactions which individually cannot themselves be described as trade or business but are essentially of such a similar character that they are treated as in the nature of trade.
It was faintly argued for the appellant that it would be difficult to regard a single or an isolated transaction as one in the nature of trade because income resulting from it would inevitably lack the characteristics attributed to it by Sir George Loundes in Commissioner of I. T. vs Shaw Wallace and Company(1). 'Income their Lordships (1) (1932) L. R. 59 I.A. 206.
662 think ", observed Sir George Loundes, " in this Act connotes a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources Then the learned judge proceeded to observe that income has been likened pictorially to the fruit of a tree, or the crop of a field.
It is essentially the produce of something which is often loosely spoken of as capital".
In our opinion, it would be unreasonable to apply the test involved in the use of this pictorial language to the decision of the question as to whether a single or an isolated transaction can be regarded as an adventure in the nature of trade.
In this connection we may, with respect, refer to the comment made by Lord Wright in Raja Bahadur Kamakshya Narain Singh of Ramgarh vs Commissioner of I. P., Bihar and Orissa (1) that " it is clear that such picturesque similes cannot be used to limit the true character of income in general ".
We are inclined to think that, in dealing with the very prosaic and sometimes complex questions arising under the Income tax Act, use of metaphors, however poetic and picturesque, may not help to clarify the position but may instead introduce an unnecessary element of confusion or doubt.
As we have already observed it is impossible to evolve any formula which can be applied in determining the character of isolated transactions which come before the courts in tax proceedings.
It would besides be inexpedient to make any attempt to evolve such a rule or formula.
Generally speak ing, it would not be difficult to decide whether a given transaction is an adventure in the nature of trade or not.
It is the cases on the border line that cause difficulty.
If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit, it would be a clear case of capital accretion and not profit derived from an adventure in the nature of trade.
Cases of realisation of investments consisting Of purchase and resale, though profitable, are clearly outside the doma in of adventures in the nature of trade.
In deciding (1) (1943) L.R. 70 I.A, 180, 193.
663 the character of such transactions several factors are treated as relevant.
Was the purchaser a trader and were the purchase of the commodity and its resale allied to his usual trade or business or incidential to it ? Affirmative answers to these questions may furnish relevant data for determining the character of the transaction.
What is the nature of the commodity purchased and resold and in what quantity was it purchased and resold ? If the commodity purchased is generally the subject matter of trade, and if it is purchased in very large quantities, it would tend to eliminate the possibility of investment for personal use, possession or Goverment.
Did the purchaser by any act subsequent to the purchase improve the quality of the commodity purchased and thereby made it more readily resaleable ? What were the incidents associated with the purchase and resale ? Were they similar to the operations usually associated with trade or business ? Are the transactions of purchase and sale repeated ? In regard to the purchase of the commodity and its subsequent possession by the purchaser, does the element of pride of possession come into the picture ? A person may purchase a piece of art, hold it for some time and if a profitable offer is received may sell it.
During the time that the purchaser had its possession he may be able to claim pride of possession and aesthetic satisfaction ; and if such a claim is upheld that would be a factor against the contention that the transaction is in the nature of trade.
These and other considerations are set out and discussed in judicial decisions which deal with the character of transactions alleged to be in the nature of trade.
In considering these decisions it would be necessary to remember that they do not purport to lay down any general or universal test.
The presence of all the relevant circumstances mentioned in any of them may help the court to draw a similar inference; but it is not a matter of merely counting the number of facts and circumstances pro and con; what is important to consider is their distinctive character.
In each case, it is the total effect of all relevant factors and circumstances that determines the character of the transaction; and so, though we may attempt to derive some assistance from decisions bearing on this point, we cannot seek to deduce any rule from them and mechanically apply it to the facts before us.
In this connection it would be relevant to refer to another test which is sometimes applied in determining the character of the transaction.
Was the purchase made with the intention to resell it at a profit ? It is often said that a transaction of purchase followed by resale can either be an investment or an adventure in the nature of trade.
There is no middle course and no half way house.
This statement may be broadly true; and so some judicial decisions apply the test of the initial intention to resell in distinguishing adventures in the nature of trade from transactions of investment.
Even in the application of this test distinction will have to be made between initial intention to resell at a profit which is present but not dominant or sole; in other words, cases do often arise 'Where the purchaser may be willing and may intend to sell the property purchased at profit, but he would also intend and be willing to hold and enjoy it if a really high price is not offered.
The intention to resell may in such cases be coupled with the intention to hold the property.
Cases may, however, arise where the purchase has been made solely and exclus ively with the intention to resell at a profit and the purchaser has no intention of holding the property for himself 'or otherwise enjoying or using it.
The presence of such an intention is no doubt a relevant factor and unless it is offset by the presence of other factors it would raise a strong presumption that the transaction is an adventure in the nature of trade.
Even so, the presumption is not conclusive; and it is conceivable that, on considering all the facts and circumstances in the case, the court may, despite the said initial intention, be inclined to hold that the transaction was not an adventure in the nature of trade.
We thus come back to the same position and that is that the decision about the character of a transaction in the context cannot be based solely on the application of any abstract rule, principle or test and 665 m st in every case depend upon all the relevant facts and circumstances.
Let us now consider some of the decisions to which our attention was invited.
Normally the purchase of land represents investment of money in land; but where a company is formed for the purpose inter alia of acquiring and reselling mining property, and after acquiring and working various property, it resells the whole to a second company receiving payment in fully paid shares of latter company, it was held in The Californian Copper Syndicate (Limited and Reduced) vs Harris (Surveyor of Taxes) (1) that the difference between the purchase price and the value of the shares for which the property was exchanged is a profit assessable to income tax.
In this case Lord Justice Clerk has observed that "it is quite a well settled principle in dealing with the question of assessment of Income Tax, that where the owner of an ordinary in.
vestment chooses to realise it, and obtains a greater price for it than he originally acquired it at, the enhanced price is not profit in the sense of Schedule D of the Income Tax Act "; and he added that " it is equally well established that the enhanced value obtained from realisation or conversion of security may be so assessable where what is done is not merely a realisation or a change of investment but an act done in what is truly the carrying on or carrying out of a business ".
This was a clear case where the company was held to be carrying on the business of purchase and sale of mining property.
Where land purchased, and subsequently developed, with the object of making it more readily saleable, was sold at a profit, the intention of the assessee was treated to be not to hold the land as an investment, but as a trading asset in Cayzer, Irvine and Co. Ltd. vs Commissioners of Inland Revenue(2).
In his judgment, Lord President Normand referred to the large development expenditure incurred by the assessee to improve the property and observed that it appeared to be on the whole consistent with the idea that it was carrying on a trade in land rather than with the idea that (1) (2) 84 666 it was throughout holding it as an investment only to be realised if at all when it desired to meet some financial need.
In repelling the plea that the transaction showed investment, the Lord President added that the Commissioners " with their knowledge and experience of these matters, have come to the conclusion that the intention was to hold this estate not as an investment but as a trading asset and in, order to develop it and to market it ".
It would thus appear that the conduct of the assessee in incurring a large amount of expenditure on the development of land consisting mainly in the construction of roads and sewers was held to justify the inference that the transaction was an adventure in the nature of trade, though the property purchased and sold was land.
In the Commissioner 's of Inland Revenue vs Livingston (1) the assessees respondents were a ship repairer, a blacksmith and a fish salesmen 's employee; they purchased as a joint venture a cargo vessel with a view to converting it into a steam drifter and selling it.
They were not connected in business and they had never previously bought a ship.
After the ship was purchased, extensive repairs and alterations were carried out by the orders of the respondents and the ship was then sold at a profit.
It was held that the profit arising from the transaction was assessable to income tax under Case I of Schedule D. Lord President Clyde said that in deciding whether the profits in question were taxable, regard must be had to the character and circumstances of the particular venture.
" If the venture was one consisting simply in an isolated purchase of some article against an expected rise in price and, a subsequent sale ", observed the Lord President, " it might be impossible to say that the venture was in the nature of trade ".
According to him the test to be applied would be whether the operations involved in the transaction are of the same kind and carried on in the same way as those which are characteristic of ordinary trading in the line of business in which the venture was made.
If they are, there was no reason why the venture should not be (1), 667 regarded as in the nature of trade merely because it was a single venture which took only three months to complete.
Reference was then made to the steps taken ,by the assessees to buy a secondhand vessel and to ,convert into a marketable drifter; and it was stated that the profit made by the venture arose not from the mere appreciation of the capital value of an isolated purchase for resale but from the expenditure on the subject purchased of money laid out upon it for the purpose of making it marketable at a profit.
" That ", said the Lord President, " was the very essence of trade ".
It was in this connection that the Lord President observed that the appearance of a single swallow does not make a summer.
It would thus be noticed that this decision was based substantially on the ground that after the ship was purchased the assessees bestowed labour and money on converting it into a marketable drifter and that imprinted upon the transaction the character of trade.
It is true that some of the observations made by the Lord President would indicate that from the intention to resell at a profit it would be impossible to attribute to the transaction the character of an adventure in the nature of trade.
However, as we will presently point out, these observations have been explained by the Lord President himself subsequently in Rutledge vs Commissioners of Inland Revenue (1); and it is to this case that we will now refer.
In the case of Rutledge(2) the appellant was a moneylender who was also interested in a cinema company in 1920.
Since that time he had been interested ill various businesses.
He was in Berlin in 1920 on business connected with the cinema company where he was offered an opportunity of purchasing very cheaply a large quantity of paper.
He effected the purchase and within a short time after his return to England he sold the whole consignment to one person at a considerable profit.
This profit 'Was held liable to assessment to income tax, Schedule D, and to excess profits duty as being profit of an adventure in the nature of trade.
This assessment was the subject matter (1) 668 of an appeal before the Court of Appeal, and on behalf of the appellant the observations made by the Lord President Clyde in the case of Livingston (1) were pressed into service; but the Lord President did not accept the plea based on his earlier observations because he said that the said observations were intended to show that a single transaction fell far short of constituting a dealer 's trade; whereas, in the present case, the question was whether the transaction was an adventure in the nature of trade.
The Lord President agreed that mere intention is not enough to invest a transaction with the character of trade but he added that, if the purchase is made for no purpose except that of resale at a profit, there seems little difficulty in arriving at the conclusion that the deal was in the nature of trade though it may be wholly insufficient to constitute by itself a trade.
Then he referred to the illustration which he had cited in his earlier decision about the purchase of a picture and observed that if a picture was purchased to embellish the purchaser 's own house for a time, he might sell it if the anticipated appreciation in the value ultimately realised itself.
" In such a case ", says the Lord President, " I pointed out that it might be impossible to affirm that the purchase and sale constituted an adventure in the nature of trade although, again, the crisis of judgment might turn on the particular circumstances ".
It would thus be clear that the strong observations made by the Lord President in the case of Livingston (1) must be considered in the light of the clarification made by him in this case.
Lord Sands, who agreed with the Lord President has thus observed: "Your Lordship in the Chair has indicated that there may be cases of purchase and resale at a profit where the transaction cannot be said to be in the nature of trade.
In particular, this may be the case where there is no definite intention of reselling when the purchase is made ".
This decision, therefore, shows that where the assessee purchased a very large quantity of paper with the intention to sell it at profit the transaction was treated as an adventure in the nature of trade.
It was held (1) 669 to be a most successful adventure on the part of the assessee and having regard to the circumstances attending the purchase and sale it was treated as an adventure in the nature of trade.
In T. Beynon & Co. Ltd. vs Ogg (1) the court was dealing with the case of a company which was carrying on business as coal merchants, ship and insurance brokers and as sole selling agent for various colliery companies in which latter capacity it was a part of its duty to purchase wagons on its own account as a speculation and subsequently to dispose of them at a profit.
The assessee contended that the transaction of purchase and sale being an isolated one the profit was in the nature of a capital profit on the sale of an investment and should be excluded in computing its liability to income tax.
The court held that the profit realised was made in the operation of the company 's business and was properly included in the computation of company 's profits for assessment under Schedule D.
It appears that, in 1914, acting as agent on behalf of two colliery , companies, the assessee had purchased two lots of wagons each of which consisted of 250 wagons.
During the course of negotiations the assessee, foreseeing that the cost of material and wages was likely to increase, determined to buy a, third lot of 250 wagons for itself and did eventually purchase it.
In July 1915 the assessee sold this lot and made a profit of pound 2,500.
The question which arose for decision was whether this sum was chargeable to incometax.
In dealing with the argument that as an isolated transaction the profit arising out of it was not chargeable to tax, Sankey, J., observed that he thought " in most cases an insolated transaction does not fall to be chargeable ".
But he added " you have to consider the transaction and you cannot lay it down as a matter of law without regard to the circumstances that in this case the pound, 2,500 is not chargeable ".
Then the learned judge considered that the number of wagons purchased was large and held that the other circumstances attending the purchase and sale of the said wagons showed that this transaction was a (1) 670 transaction, and this profit was a profit " with the result that it made the operation of the assessee in that behalf its business.
The learned judge ' however, added a word of caution that he did not think it desirable to lay down any rule as to where the line ought to be drawn, and that it was not even possible to lay down such a rule.
" But ", said the learned judge, " it is perfectly easy to say whether Case A or Case B falls on the one side or the other ".
In the Balgownie Land Trust, Ltd. vs The Commissioners of Inland Revenue (1) the owner of a landed estate, at his death, had left his estate to trustees with a direction to realise.
The trustees were not successful in their efforts to sell the estate in the market.
So they formed a company with general powers to deal in real property ' and transferred the estate to this company in exchange for shares which were allotted to the beneficiaries under the trust and were, at the date of the appeal still mainly held by those beneficiaries or their representatives.
Soon after its incorporation the purchaser company made a substantial purchase of some other property acquired by borrowing on the security of the original estate.
The company received rents and paid a regular dividend on its capital.
In 1921 and the following years parts of the original estate were sold and in 1925 the whole of the additional property was sold.
When the profits realised by the sales were taxed under Schedule D for the year 1926 27, the assessee contended that the transactions in question were not in the nature of trade and the profits arising therefrom cannot be taxed.
This contention was negatived by the General Commissioners whereupon the assessee appealed.
Lord President Clyde described the problem raised by the assessee as one of.
the most familiar problems under Case I of Schedule D and ob.
served that " a single plunge may be enough provided it is shown to the satisfaction of the Court that the plunge is made in the waters of trade; but the sale of a piece of property if that is all that is involved in the plunge may easily fall short of anything in the nature of trade.
Transactions of sale are characteristic (1) 671 of trade, but they are not necessarily distinctive of it; much depends on the circumstances".
Then the conduct of the assessee after its incorporation was considered and it was held that the purchase of the property in substance amounted to a launching forth albeit, not in a very large scale.
In the result the finding of the Commissioners was confirmed and the profit, Was held liable to tax.
In Martin vs Lowry (1) the House of Lords was considering a case of a wholesale agricultural machinery merchant who had never had any connection with the linen trade purchasing from the government the whole of its surplus stock of aeroplane linen (some 44 million yards) at a fixed price per yard.
The contract of purchase provided in detail as to delivery, and the payment of the price.
The purchaser failed in his original attempt to sell the whole of the linen to Belfast linen manufacturers outright.
Then he sought to bring pressure on them by placing the linen for sale to the public.
It led to an extensive advertising 'campaign, renting of offices and engaging advertising manager, a linen expert as adviser and a staff of clerks.
Sales then proceeded rapidly and soon the whole stocks were disposed of.
In all 4,279 orders were received from 1,280 purchasers.
Assessment to income tax and excess profits duty were made upon the assessee in respect of profits of the transaction.
It was held that the dealings of the assessee in linen constituted the carrying on of a trade of which the profits were chargeable to income tax and excess profits duty.
One of the points raised before the House of Lords was that the assessee did not carry on trade or business but only engaged in a single adventure not involving trading operation.
In rejecting this contention, Viscount Cave, L. C., observed that " the Commissioners have found as a fact that he did carry on trade, and they set out in the Case ample material upon which they could come to that conclusion ".
He added that, indeed, having regard to the methods adopted for the resale of the linen, to the number of operations into which the assessee entered and to the time occupied by (1) 672 the resale, he did not himself see how they could have come to any other conclusion.
The other point raised in the appeal was that the profits in question did not come within the description of annual profits or ,gains but we are not concerned with that point.
In F. A. Lindsay, A. E. Woodward and W. Hiscox vs Commissioners of Inland Revenue (1) the appellant L, a wine merchant, had on hand a large quantity of American rye whisky.
He invited the appellants W & H who were also engaged in the wine trade to join with him in a venture of shipping the whisky to the United States.
It was agreed that W & H should contribute certain sums towards expenses and that the profits should be shared in certain proportions.
agreement was not reduced to writing.
The shipping of the whisky was arranged by L with consultation with W & H and was carried out gradually over a period of two years.
From time to time W & H met L who told them that the whisky had been successfully shipped to the United States and sold there profitably.
Subsequently the appellants decided to discontinue the export of whisky and to employ the monies which they had accumulated in the purchase with a view to resale of a wine business in Portugal.
In respect of the profits made by the appellants from the sale of wine an assessment was made on them jointly for 1922 23.
The Special Commissioners found that a partnership or joint venture subsisted between the appellants and that the profits of the sales of whisky were assessable to income tax.
The Lord President Clyde rejected the appellant 's contention and observed that " the nature of the transaction apart from the fraudulent breaches of law which were inherent in it was neither more nor less than the commercial disposal of a quantity of rye whisky ".
In point of fact the disposal was not effected by a single transaction but extended over a year and more; and so it could not fall outside the sphere of trade.
This was a clear case where a large number of distinctive features of trade were associated with the transaction.
(1) 673 The transaction of the purchase and sale of whisky was again brought before the court for its decision in the Commissioners of Inland Revenue vs Fraser (1).
In this case the assessee, a woodcutter, bought through an agent for resale whisky in bond for pound 407.
Nearly three years thereafter the whisky was sold at a profit for pound, 1,131.
This was the assessee 's sole dealing in whisky.
He had no special knowledge of the trade and he did not take delivery of the whisky nor did he have it blended and advertised.
Even so, it was held that the transaction was an adventure in the nature of trade.
It may be mentioned that when the matter was first taken before the Commissioners they took the view that an adventure in the nature of trade had not been carried on by the assessee, that merely an investment had been made and subsequently realised and so the profit was not assessable to income tax.
This view was, however, reversed by the First Division of the Court of Session and it was held that in coming to the conclusion the Commissioners had misdirected themselves as to the meaning of " being engaged in an adventure in the nature of trade ".
The Lord President Normand conceded that it would be extremely difficult to hold that a single transaction amounted to a trade but he added that it may be much less difficult to hold that a single transaction was an adventure in the nature of trade.
" There was much discussion ", observed the Lord President, " as to the criterion which the court should apply.
I doubt if it would be possible to formulate a single criterion.
" The following observations made by the Lord President in this connection may be usefully quoted: " It is in general more easy to hold that a single transaction entered into by an individual in the line of his own trade (although not part and parcel of his ordinary business) is an adventure in the nature of trade than to hold that a transaction entered into by an individual outside the line of his own trade or occupation is an adventure in the nature of trade.
(1) 85 674 But what is a good deal more important is the nature of the transaction with reference to the commodity dealt in.
The individual who enters into a purchase of an article or commodity may have in view the resale of it at a profit, and yet it may be that that is not the only purpose for which he purchased the article or the commodity, nor the only purpose to which he might turn it if favourable opportunity of sale does not occur.
In some of the cases the purchase of a picture has been given as an illustration.
An amateur may purchase a picture with a view to its resale at a profit, and yet he may recognise at the time or after wards that the possession of the picture will give him aesthetic enjoyment if he is unable ultimately, or at his chosen time, to realise it at a profit.
A man may purchase stocks and shares with a view to selling them at an early date at a profit, but, if he does so, he is purchasing something which is itself an investment, a potential source of revenue to him while he holds it.
A man may purchase land with a view to realising it at a profit, but it also may yield him an income while he continues to hold it ' If he continues to hold it, there may be also a certain pride of possession.
But the purchaser of a large quantity of a commodity like whisky, greatly in excess of what could be used by himself, his family and friends, a commodity which yields no pride of possession, which cannot be turned to account except by a process of realisation, I can scarcely consider to be other than an adventurer in a transaction in the nature of a trade; and I can find no single fact among those stated by the Commissioners which in any way traverses that view.
In my opinion the fact that the transaction was not in the way of business (whatever it was) of the Respondent in no way alters the character which almost necessarily belongs to a transaction like this.
Most important of all, the actual dealings of the Respondent with the whisky were exactly of the kind that take place in ordinary trade.
" These observations indicate some of the important considerations which are to be borne in mind in determining the character of a single transaction.
675 We may now refer to the decision of the House of Lords in Leeming vs Jones (1).
In this case the appellant was a member of a syndicate of four persons formed to acquire an option over a rubber estate with a view to resell it at a profit.
The option was secured but the estate was considered too small for a resale to a company for public floatation.
An option over another adjoining estate was accordingly secured and it was decided to resell the two estates to a public company to be formed for the purpose.
Another member of the syndicate undertook to arrange for the promotion of this company.
The syndicate 's total receipts resulting from the transactions in respect of the estates amounted to pound 3,000 and the balance remaining, after deduction of certain expenses, was divided between the members.
The appellant was assessed to income tax, Schedule D, in respect of his share.
The General Commissioners held that the appellant acquired the property or interest in the property in question with the sole object of turning it over again at a profit and that he at no time had any intention of holding it as an investment.
That is why they confirmed the assessment.
After the case was heard before the King 's Bench Division it was remitted to the General Commissioners for a finding as to whether there was or was not a concern in the nature of trade.
The Commissioners then found that the transaction in question was not a concern in the nature of trade and that there was no liability to assessment.
It may be pointed out that in remitting the case for the re consideration of the General Commissioners, Rowlatt, J., had observed that it was quite clear that what the Commissioners had got to find was whether there was a concern in the nature of trade and all that they had found was that the property was acquired with the sole object of turning it over again at a profit and without any intention of holding it as an investment.
" That describes ", said Rowlatt, J., " what a man does if he buys a picture that he sees going cheap at Christie 's, because he knows that in a month he will sell it again at Christie 's That ", according to (1) 676 the learned judge, " is not carrying on trade " and " so what the Commissioners must do is to say, one way or the other, was this, I will not say carrying on a trade, but was it a speculation or an adventure in the nature of trade ".
The learned judge to doubt added that he did not indicate which way the finding ought to be, but he commended the Commissioners to consider what took place in the nature of organising the speculation, maturing the property and disposing of the property, and when they have considered all that, to say whether they think it was an adventure in the nature of trade or not.
It is thus clear that Rowlatt, J., indicated clearly though in cautious words what he thought was the true nature of the transaction made.
Even so, on reconsideration of the matter the Commissioners returned a finding in favour of the assessee.
After the finding was returned Rowlatt, J., held that he must abide by his own decision in Pearm vs Miller (1) and so the appeal was allowed.
The matter was then taken to the Court of Appeal where the revised finding of the Commissioners was treated as a finding on a question of fact not open to challenge and the point which was considered at length was whether even if the transaction was not an adventure in the nature of trade, could the profit resulting from it be taxed under Case VI? The Master of the Rolls Lord Hanworth traced the history of the dispute, mentioned how Mr. Justice Rowlatt had indicated to the Commissioners what they had to consider in determin ing the question remitted to them and observed that " Mr Justice Rowlatt, and I think this Court, might perhaps have taken the course of saying that having regard to what he had called attention to in this case, the particular facts, of organising the speculation, of maturing the property, and the diligence in discovering a second property to add to the first, and the disposing of the property, there ought to be and there must be a finding that it was an adventure in the nature of trade; but Mr. Justice Rowlatt withheld his hand from so doing and I think he was right, for however strongly one may feel as to the facts, the facts (1) 677 are for the decision of the Commissioners ".
It would thus be clear that the decision of the Commissioners appeared both to Rowlatt, J., and the Court of Appeal to be erroneous.
Even so, they refused to interfere with it on the ground that it was a decision on a question of fact.
We may, with respect, recall that it was in regard to this approach that Lord Radcliffe observed in the case of Edwards (1) that " it was a pity that such a tendency should persist to treat the findings of the Commissioners on the question as to the character of the transaction as conclusive ".
In dealing wit the question as to whether if Case I did not apply Case VI could apply, Lord Justice Lawrence observed that " in the case of an isolated transaction of purchase and resale of property there is really no middle course open.
It is either an adventure in the nature of trade, or else it is simply a case of sale and resale of property ".
The Court of Appeal held that if the transaction did not fall in Case.
It was difficult to see how it could fall under Case VI.
The discussion on this part of the case is, however, not relevant for our purpose.
This decision of the Court of Appeal was taken before the House of Lords and the question debated before the House of Lords was about the application of Case VI to the transaction.
The House of Lords affirmed the view taken by the Court of Appeal and held that " Case VI was inapplicable because Case VI neces sarily refers to the words of Schedule D, that is to say, it must be a case of annual profits and gains and those words again are ruled by the first section of the Act which says that when an Act indicates that income tax shall be charged for any year at any rate the tax at that rate shall be charged in respect of the profits and gains according to the Schedules ".
Lord Buckmaster agreed with the observations of Lord Justice Lawrence that there can be no middle course open in such cases.
Viscount Dunedin, in concurring with the opinion of Lord Buckmaster, dealt with the several arguments urged by the Crown but the observations made by him with regard to the last argument are relevant for our purpose.
" The last argument of the (1) ; ; 678 counsel for the Crown ", observed Viscount Dunedin, was that there was a finding that the respondent never meant to hold the land bought as an investment.
The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or concern in the nature of trade in respect of his investment but per se it leads to no conclusion whatever ".
According to Viscount Dunedin, recourse to Case VI ignores the fact that it had been settled again and again that Case VI does not suggest that anything that is a profit or gain falls to be taxed.
The observations made by Viscount Dunedin were considered in the Commissioners of Inland Revenue vs Reinhold (1).
We ought to add that the appellant has placed strong reliance on this decision.
In this case, the respondent was a director of a company carrying on a business of ware house men; he bought four houses in January 1945 and sold them at a profit in December 1947.
He admitted that he had bought the property with a view to resale and had instructed his agents to sell whenever a suitable opportunity arose.
The profits made by him on resale were assessed to tax.
On appeal before the General Commissioners he contended that the profit on resale was not taxable.
The Crown urged that the transaction was an adventure in the nature of trade and that profits arising therefrom were chargeable to Ax.
The General Commissioners being equally divided allowed the appeal and discharged the assessment.
It was on these facts that the matter was then taken before the First Division of the Court of Session and it was urged on behalf of the Crown that the initial intention of the assessee clearly was to sell the property at a profit and so the view taken by the General Commissioners about the character of the transaction was erroneous.
This argument was, however, rejected and the order of discharge passed by the General Commissioners was confirmed.
When the Crown referred to the observations of Lord Dunedin in the case of Leeming (2) which we have (1) (2) 679 already cited, Lord Carmont observed that he did not wish to read the said passage out of its context and without regard to the facts of the case then under consideration.
Then Lord Carmont added that though the language used by Lord Dunedin " may cover the purchase of houses" it " would not cover a situation in which a purchaser bought a commodity which from G its nature can give no annual return ".
"This comment of mine ", said Lord Carmont, " is just another way of saying that certain transactions show inherently that they are not investments but incursions into the realm of trade or adventures of that nature Then reference was made to the fact that the assessee was a warehouse company director and not a property agent or speculator and that the only purchases of property with which he was concerned were two separated by ten years and that the first heritage was acquired without the intention to sell, which only arose fortuitously.
His Lordship then put his conclusion in this way: "I would therefore say that the Commissioners of Inland Revenue have failed to prove and the onus is on them the case they sought to make out".
According to Lord Carmont, Lord Dunedin 's observations do not suggest that the initial declaration of intention per se leads to the conclusion that the transaction was in the nature of trade.
He thought that much more was required to show that the assessee was engaged in an adventure in the nature of trade than was proved in the case before the court.
Lord Russell, who concurred with this opinion, began with the observation that " prima facie the difference of opinion among the General Commissioners suggests that the case is a narrow one and that the onus on the appellants of showing that the transaction was an adventure in the nature of trade is not a light one".
Lord Russell then mentioned the argument of the Lord Advocate that if a person buys anything with a view to sale that is a transaction in the nature of trade because the purpose of the acquisition in the mind of the purchaser is all important and conclusive; and that the nature of the thing purchased and the other surrounding circumstances do not 680 and cannot operate so as to render the transaction other than an adventure in the nature of trade, and observed that in his opinion the argument so formulated " is too absolute and is not supported by the judicial pronouncements on which it was sought to be raised ".
He then referred to the variety of circumstances which are or may be relevant to the determination of such a question; and he concluded with the observation that the appellants had not discharged the burden of showing that the transaction was an adventure in the nature of trade.
Lord Keith also took the same view and stated that " the facts were, in his opinion, insufficient to establish that this was an adventure in the nature of trade ".
This case was no doubt a case on the border line; and if we may say so with respect it was perhaps nearer an adventure in the nature of trade than otherwise.
It would not be unreasonable to suggest that, in this case, if the Commissioners had found that the transaction was an adventure in the nature of trade, the court would probably not have interfered with the said conclusion; but the Commissioners were equally divided and so the assessment had been discharged by them.
It was under these circumstances that the point about the onus of proof became a matter of substance; and, as we have already pointed out, all tile learned judges have emphasized that the onus had not been discharged and that no case had been made out for reversing the order of discharge passed by the Commissioners.
However that may be, it would, we think, be unsafe to treat this case as laying down any general proposition the application of which would assist the appellant before us.
We would also like to add that there can be no doubt that Lord Russell 's criticism against the contention raised by the Lord Advocate was fully justified because the contention as raised clearly overstated the significance and effect of the initial intention.
As we have already pointed out, if it is shown that, in purchasing the commodity in question, the assessee was actuated by the sole intention to sell it at a profit, that no doubt is a relevant circumstance which would raise a strong presumption that the 681 purchase and subsequent sale are an adventure in the nature of trade; but the said presumption is not conclusive and it may be rebutted or offset by other relevant circumstances.
What then are the relevant facts in the present case ? The property purchased and resold is land and it must be conceded in favour of the appellant that land is generally the subject matter of investment.
It is contended by Mr. Viswanatha Sastri that the four purchases made by the appellant represent nothing more than an investment and if by resale some profit was realised that cannot impress the transaction with the character of an adventure in the nature of trade.
The appellant, however, is a firm and it was not a part of its ordinary business to make investment in lands.
Besides, when the first purchase was made it is difficult to treat it as a matter of investment.
The property was a small piece of 28 1/4 cents and it could yield no return whatever to the purchaser.
It is clear that this purchase was the first step taken by the appellant in execution of a well considered plan to acquire open plots near the mills and the whole basis for the plan was to sell the said lands to the mills at a profit.
, Just as the conduct of the purchaser subsequent to the purchase of a commodity in improving or converting it so as to make it more readily resaleable is a relevant factor in determining the character of the transaction, so would his conduct prior to the purchase be relevant if it shows a design and a purpose.
As and when plots adjoining the mills were available for sale, the appellant carried out his plan and consolidated his holding of the said plots.
The appellant is the managing agent of the Janardana Mills and probably it was first thought that purchasing the plots in its own name and selling them to the mills may invite criticism and so the first purchase was made by the appellant in the name of its benamidar V. G. Raja.
Apparently the appellant changed its mind and took the subsequent sale deeds in its own name.
The conduct of the appellant in regard to these plots subsequent to their 86 682 purchase clearly shows that it was not interested in obtaining any return from them.
No doubt the appellant sought to explain its purpose on the ground that it wanted to build tenements for the employees of the mills; but it had taken no steps in that behalf for the whole of the period during which the plots remained in its possession.
Besides, it would not be easy to assume in the case of a firm like the appellant that the acquisition of the open plots could involve any pride of possession to the purchaser.
It is really not one transaction of purchase and resale.
It is a series of four transactions undertaken by the appellant in pursuance of a scheme and it was after the appellant had consolidated its holdings that at a convenient time it sold the lands to the Janardana Mills in two lots.
When the tribunal found that, as the managing agent of the mills, the appellant was in a position to influence the mills to purchase its properties its view cannot be challenged as unreasonable.
If the property had been purchased by the appellant as a matter of investment it would have tried either to cultivate the land, or to build on it; but the appellant did neither and just allowed the property to remain unutilised except for the net rent of Rs. 80 per annum which it received from the house on one of the plots.
The reason given by the appellant for the purchase of the properties by the mills has been rejected by the tribunal; and so when the mills purchased the properties it is not shown that the sale was occasioned by any special necessity at the time.
In the circumstances of the case the tribunal was obviously right in inferring that the appellant knew that it would be able to sell the lands to the mills whenever it thought it profitable so to do.
Thus the appellant purchased the four plots during two years with the sole intention to sell them to the mills at a profit and this intention raises a strong presumption in favour of the view taken by the tribunal.
In regard to the other relevant facts and circumstances in the case, none of them offsets or rebuts the presumption arising from the initial intention; on the other hand, most of them corroborate 683 the said presumption.
We must, therefore, hold that the High Court was right in taking the view that, on the facts and circumstances proved in this case, the transaction in question is an adventure in the nature of trade.
The result is the appeal fails and must be dismissed with costs.
Appeal dismissed.
| IN-Abs | The appellant, who was a firm acting as managing agents of a limited company (the Mills), purchased four plots of land adjoining the Mills on various dates between 1941 and 1942, and about five years later sold them to the Mills, as a result.
of which the appellant realised a sum of Rs. 43,887 in excess of the purchase price, For the assessment year.
1948 49 the Income tax Officer treated the amount as the income.
of the appellant 'and assessed it to income tax under head 'business ', on the ground that there was no evidence to show that the appellant had purchased the said lands for agricultural purposes or that they were acquired as an investment, and, that since the lands: were adjacent to the Mills the appellant must have purchased them solely with a view to sell them to the Mills; with.
profit. 'He considered that the transaction ' had ;ill the elements of a business transaction ' and was thus an adventure in the, natural of 'trade within section 2(4)of the Indian Income tax Act 7 The Appellate, Tribunal rejected the explanation given by the appellate 'regarding" the object with which it had purchased the plots of land agreed 641 with the view taken by the Income tax Officer.
At the instance of the appellant the Tribunal referred to the High Court the question: " whether there was material for the assessment of the sum of.
Rs. 43 87 being the difference between the purchase and sale price of the four plots of land as income from all adventure in the nature of trade.
The High Court held that ' the transaction in question was an adventure in the nature of trade and so the income tax authorities were justified in taxing the amount under the head 'business ' for the relevant year.
On appeal by special leave to the Supreme Court, it was contend ed for the appellant that on the facts and circumstances of the case it was erroneous in law to hold that the transaction ill question was an adventure in the nature of trade.
On the other hand, it was urged for the respondent that the question as raised before the High Court was one of fact not liable to be challenged under section 66(1) of the Act.
Held, (1) that the expression " adventure in the nature of trade " in sub section
(4) Of section 2 of the Indian Income tax Act, 1922, postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business and that a tribunal while considering a question as to whether a transaction is or is not an adventure in the nature of trade, before arriving at its final conclusion on facts, has to address itself to the legal requirements associated with the concept of trade or business.
Such a question is one of mixed law and fact and the decision of the tribunal thereon is open to consideration under section 66(1) of the Act.
Meenakshi Mills, Madurai vs Commissioner of Income tax, Madras, ; and Oriental Investment Co., Ltd. vs Commissioner of Income tax, Bombay; , , relied on.
Edwards vs Bairstow ; , considered and held not inconsistent with the above said decisions.
2) that in the circumstances of this case it would be more appropriate to frame the question in this from: " whether, on the facts and circumstances proved in the case, the inference that the transaction in question is an adventure in the nature of trade is in law justified.
" Held, further, that even an isolated transaction might be regarded as an adventure in the nature of trade within section 2(4) Of the Act, if it is characterised by some of the essential features that make up trade or business.
Though judicial decisions which deal with the character of transactions alleged to be in the nature of trade do not purport to lay down any general or universal test, the presence of all the relevant circumstances, mentioned by. them my help the court to draw a similar inference, but it is not a matter of merely counting the number of facts and circumstances pro and con; it is the total effect of all the relevant factors and circumstances that determine the distinctive character of the transactions 648 If a person invests money in land intending to hold it, enjoys its income for some time, and then sells it at a profit,then it is a case of capital accretion and not profit derived from an adventure in the nature of trade.
But where a purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser had no intention of holding the property for himself or otherwise enjoying or using it, there would be a strong presumption that the transaction is an adventure in the nature of trade; but this may be rebutted by the other facts or circumstances of the case.
The Californian Copper Syndicate (Limited and Reduced) vs Harris (Surveyor of Taxes), ; T. Beynon lnland Revenue vs Livingston, ; Martin vs Lowry, ; Rutledge vs Commissioners of Inland Revenue, ; Balgownie Land Trust, Ltd. vs The Commissioners of Inland Revenue, ; F. A. Lindsay, A. E. Woodward and W. Hiscox vs Commissioners of Inland Revenue, and Cayzer, Irvine and Co., Ltd. vs Commissioners of Inland Revenue, , considered.
Commissioners of Inland Revenue vs Reinhold, , distinguished and considered as not laying down any general proposition of law.
In the present case, the circumstances showed that the appellant whose ordinary business was not to make investment in lands had purchased the plots of land with the sole intention of selling them to the Mills at a profit and this intention raised a strong presumption that the purchase and the subsequent sale were an adventure in the nature of trade; and, it was held that in the absence of any rebutting evidence, the Income tax authorities were justified in taxing the amount in question as income from business.
|
been clearly mentioned that they shall be deemed to have been made ap plicable from 1st April, 1974.
The Board had set up 280 their case in the reply to the writ petition on the basis of these Regulations and it was the duty of the Division Bench of the High Court to have looked into the reply filed by the Board and to decide the effect of such statutory regulations in the present case.
[291D E] (5) The High Court committed a serious error in ignoring clause IX of the First Settlement dated 22.2.1972 as well as the Regulations made by the Board in 1978.
[291H] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2917 of 1985.
WITH Civil Appeal Nos.
2900 2901, 2903 2916 of 1985 and 2918 21 of 1985.
From the Judgment and Order dated 21.5.1984 (Judgment pronounced on 2.7. 1984) of the Rajasthan High Court in D.B. Civil Special Appeal No. 172 of 1984.
Dr. L.M. Singhvi, Sushil Kumar Jain, Shahid Rizvi, Dr. D.K. Singh, Pradeep Agarwal, Pratibha Jain and Sudhanshu Atreya for the Appellants.
Rajinder Singhvi, M.R. Singhvi and Surya Kant for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
All these civil appeals by special leave are directed against the Judgments of the Rajasthan High Court dated May 11, 1984, May 21, 1984 and the reasons whereof pronounced on 2.7.
Controversy raised in all these cases is whether the respondents are entitled to pay scale No. 2 or pay scale No. 3.
The Government of India vide its Resolution dated 20th May, 1966 constituted a General Wage Board for electricity undertakings for evolving wage structure, specialisation of nomenclature and job description.
The recommendations of the said Wage Board were accepted by the Government of India in July, 1970.
The Prantiya Vidyut Mandal Mazdoor Federation (in short the Federation) recognised trade union of the employees of the Rajasthan State Electricity Board presented their demands before the Labour Department of the 281 Government of Rajasthan for implementation of the recommen dations of the Wage Board.
While the said industrial dispute between the management of the Board and its employees was pending before the Conciliation Officer, a settlement was arrived at on February 22.
By this agreement the parties agreed that the existing scale of pay of various categories of posts would be revised w.e.f.
1st April, 1969.
The schedule of the said agreement set out various catego ries of posts under different pay scales.
At St. No. 21 Meter Reader/Meter Checker was mentioned under scale No. 3 i.e. Rs. 126 8 150 10 250.
In pursuance to the above settle ment the Board issued a notification dated 22nd March, 1972 revising the pay scales of its employees w.e.f. 1st April, 1969.
Subsequent to this agreement the Board entered into another agreement with the Federation on December 2, 1972 (hereinafter referred to as the Second Settlement).
In the second settlement.
it was mentioned that this was done in view of some anomalies and difficulties which had cropped up in the course of implementation of previous agreements dated January 26, 1970; April 27, 1971; and July 28, 1972.
It was also mentioned in the said settlement that it was considered desirable to remove the anomalies and clarify certain points by mutual negotiations.
The settlement was made effective w.e.f.
1st April, 1968.
In the second settlement it was agreed to have two categories for Meter Readers i.e. Meter Reader I/Meter Checker I and Meter Reader II/Meter Checker II.
The relevant Clause in this regard reads as under: "II.
Under pay scale No. 3 technical read 21" Meter Reader I/Meter Checker I and under pay scale No. 2 technical, insert "7 Meter Reader /I/Meter Checker II" and insert the following Note below pay scale No. 2: "Meter Reader II/Meter Checker II appointed/fixed, pro moted/adjusted on or before 31.3.
1968 will be fixed in pay scale No. 3 instead of pay scale No.2.
The Board in accordance with the second settlement issued another Notification dated 6.12.
1972 whereby the previous Notification dated March 22, 1972 was amended.
Some of the employees, namely, Jagdish Prasad, Brij Mohan, Madho Singh, Prakash Chander, section Samuel, Brij Lal and Chander Bhan filed writ petitions in the High Court of Judicature for Rajasthan at Jodhpur and challenged the Notification dated 6th December, 1972.
It may be noted that all these employees were appointees before 6.12.
Learned Single Judge of the High Court by Judgment dated 21st March, 1979 allowed the write 282 petitions and quashed the Notification dated 6th December, 1972 mainly on the ground that the second settlement could not have been made as no conciliation proceedings were pending before such settlement and that the date 1.4.1968 mentioned in the notification for making the settlement effective was arbitrary and without basis.
The Board filed on appeal before the Division Bench which by their judgment dated 19th December, 1979 dismissed the same and upheld the judgment of the Learned Single Judge.
The Board implemented the judgment of the High Court in respect of Jagdish Prasad & Ors.
and issued orders to provide scale No. 3 to all Meter Readers appointed upto 6.12.
After 6th December, 1972 some more persons were appoint ed on the post of Meter Reader/Meter Checker Grade II i.e. in the pay scale of Rs.80 5 110 6 152 7 194 between the period 1972 1979.
Some of the employees again filed writ petitions in the High Court.
The High Court vide its judg ment dated 29th March, 1982 allowed the writ petitions on the ground that the second settlement had already been quashed by the earlier judgment given in Brij Lal vs Rajas than State Electricity Board, [1979] WEN UC 221.
The High Court inter alia held and observed as under: "Once the second settlement dated December 6, 1972, no longer exists in view of non compliance with Section 19(2) of the aforesaid Act and in view of the decision of this Court in Brijlal 's case (supra), the only settlement which can be said to be in existence is the first settlement dated February 22, 1972.
The aforesaid settlement only provides one grade (scale No. 3 item No. 21) for Meter Reader/ Check er, and, therefore, the petitioner is entitled to be fixed in that grade.
Merely because the post of Meter Reader II/Checker II was advertised with pay scale No. 2 and the petitioner applied and was selected, it cannot be said that the petitioner is estopped now from challenging his fixation in the aforesaid pay scale.
There can be no estoppel against statute.
The petitioner was not knowing and could not know that it is the first settlement dated February 22, 1972 which was in force and the settlement dated December 6, 1972 was invalid, and, therefore, no case of estoppel is made out against the petitioner.
Once this Court had quashed the second settlement dated December 6, 1972 and held that the first settlement 283 dated 22,2, 1972 Was in force, it Was necessary for the Board to have fixed the Meter Reader/Meter Checker in scale No. 3 item No. 21 of Schedule 'A ' to the first settlement.
The Board in spite of demand made to it by the petitioner in this behalf refused to do it".
A bunch of 35 identical writ petitions directing the Board to fix the petitioners in the pay scale No. 3 (Rs. 126 250) as revised from time to time were allowed by learned Single Judge of the High Court by a common order dated November 15, 1983.
The Board filed special appeals before the Division Bench.
The Division Bench dismissed the special appeals by orders dated 11.5.1984, 21.5.1984 and observed that the reasons will be recorded later on.
The Division Bench thereafter pronounced the reasons by order dated 2.7.
The Board has now filed these appeals restricted to such employees who were appointed as Meter Readers/Checkers grade II after 1.4.1974.
It may also be mentioned at this stage that under Clause IX of the first settlement dated 22nd February, 1972 it was mentioned as under: "(IX) This agreement shall remain in force upto 31st March, 1974 and the Federation agrees not to raise any demand in respect of any of the matters covered by this agreement during the period of the operation of the agreement".
It may also be mentioned that in exercise of the powers conferred by Section 79, sub sec.
(c) and (k) of the Elec tricity (Supply) Act, 1948, the Board after obtaining con currence of the Government of Rajasthan and directives issued under Sec.
70(A) of the said Act and taking into consideration the suggestions made by the representatives of the employees, made regulations which are called Rajasthan State Electricity Board Employees (emoluments) Regulations, 1978.
These regulations were made applicable retrospectively from 1st April, 1974.
Under these regulations post of Meter Reader II/Meter Checker I1 was mentioned in scale No. 2 as revised in the pay sclae of Rs.260 8 324 10 464.
Dr. L.M. Singhvi, St. Advocate appearing on behalf of the Board contended that irrespective of the earlier judg ment given by the High Court in Brij Lal vs R.S.E.B. (supra) quashing the second notification dated 6.12.1972 the present appeals having been filed against the Meter Readers appoint ed on or after 1.4.1974, they are not entitled to scale 284 No. 3 as the first settlement dated 22.2.
1972 was to remain in force upto 31st March, 1974.
It was also argued that in the appointment orders of the respondent employees appointed after 1.4.1974, it was clearly mentioned that they were appointed as Meter Reader/Meter Checker II in pay scale No. 2 i.e. Rs.80 194.
Dr. Singhvi further argued that the Board had also made regulations which had statutory force and were made applica ble retrospectively from 1st April, 1974.
Under these regu lations also the post of Meter Reader II/Meter Checker II was mentioned in Scale No. 2.
It was thus contended that considering the matter from any angle, the respondents were not entitled to scale No. 3 but were only entitled to scale No. 2 as revised from time to time.
It was also pointed out by Dr. Singhvi that without prejudice to the above submis sions so far as respondents Laxman Lal, Sita Ram and Madhay Lal are concerned, they were otherwise also not entitled to get any relief in as much as they were appointed Meter Readers II after the notification of the Regulations of 1978.
The Regulations were notified vide notification No. RSEB.
F. RRBS/D.41 dated 4th May, 1978 whereas Laxman Lal, Sita Ram and Madhay Lal were appointed respectively on 19th August, 1978.8th October, 1979 and 9th April, 1979.
Learned counsel for the respondent employees on the other hand submitted that in the settlement dated February 22, 1972 no distinction was made of Meter Reader Gr.
I or II and the post of Meter Reader/ Meter Checker was placed in pay scale No. 3.
It was submitted that validity of second settlement and the notification dated December, 6, 1972 was challenged in Brij Lal 's case and a Division Bench of the High Court had quashed the aforesaid settlement and the said judgment was not challenged by the Board before this Hon 'ble Court and the same had become final.
Thereafter an arbitra tion award was given in 1979 between the Board and the Federation under which two categories of Meter Readers/Meter Checkers were again made.
According to this award Meter Reader/Meter Checker II was placed in the pay scale No. 2 of Rs.80 194 and Meter Reader/Meter Checker I was placed in the pay scale of No. 3 of Rs. 126 250.
It was thus submitted that all the Meter Readers appointed upto 1979 were entitled to scale No. 3.
It was further submitted that the first settlement dated February 22, 1972 and the notification issued thereafter on March 22, 1972 continued to operate and there was only one pay scale of Rs. 126 250 for all Meter Readers and there being no classification of Gr.
I or II, the pay scale of Rs. 126 250 remained in force, till the arbitration award was given on June 15, 1979.
It was submit ted that all the respondents having been 285 appointed prior to June 15, 1979, they were entitled to pay scale No. 3.
As regards the stand taken by the Board that it had framed Regulations regarding the fixation of pay scales it was contended that no such plea was taken in reply to the writ petitions filed by the employees.
It was pointed out that the contention with regard to the first settlement having come to an end on March 31, 1974 as well as the contention raised on the basis of regulations was rightly negatived by the Division Bench of the High Court in the following manner: "It was contended by the learned counsel for the appellants that the learned Single Judge did not take into considera tion the fact that first settlement came to an end on March 31, 1974 and was not in force after that date.
He submitted that the Board had powers under Sec.
79(c) and (k) of the to frame Regulations regard ing the fixation of pay scales.
Learned counsel for the appellants was asked to show from the writ petitions whether this point was taken in the writ petitions or not.
Learned counsel for the appellants candidly admitted that it was not raised in the writ petitions filed by the petitioners.
It was, then.
put to the learned counsel whether this point was argued before the learned Single Judge.
Mr. S.N. Deedwania submitted that in the absence of the affidavit of the coun sel who argued on behalf of the appellants before the learned Single Judge positive assertion to that effect cannot be made.
In the memo of appeal this ground, of course, has been taken but not in the manner in which it has been stated hereinabove.
As this point was not taken in the writ peti tions and it was not argued before the learned Single Judge, we do not consider it necessary to examine it.
We shall examine the validity of the order under appeal on the basis of the grounds that were argued on behalf of the petitioners before the learned Single Judge".
It was further contended that during the pendency of these appeals additional affidavit was filed on behalf of Laxman Lal respondent.
It was pointed out in the additional affidavit that Sh.
Udai Lal and Sh.
Shyam Lal were appointed as Meter Readers vide order dated 6.9.1974.
These persons filed writ petitions Nos.
1191/81 and 1181/81 respectively.
The aforesaid writ petitions were allowed by the High Court vide judgment dated 28.3.1982.
One Sh.
Prem Shankar who was appointed as Meter Reader vide order dated 16.5.
1974 also filed a writ petition 286 No. 120/81 in the High Court and it was also allowed by order dated 28th March, 1982.
The Board did not challenge the aforesaid orders and issued order on 23.8.1982 imple menting the judgment of the High Court.
The above examples were given in order to show that these persons were also appointed after 1.4.1974 and in their cases also relief was granted by the High Court and the Board never challenged the aforesaid judgments given in favour of Udai Lal, Shyam Lal and Prem Shankar.
It has also been submitted that the Board has also published a revised revenue manual on 1.9. 1986 in which vide para 124 duties of Meter Readers have been laid down.
It is contended that in the manual no dif ferent duties have been prescribed for Meter Reader II and Meter Reader I and thus in the discharge of duties there is no difference.
A supplementary affidavit has been filed by Shri R.C. Harit, Deputy Director, Rajasthan State Electricity Board.
It has been submitted in the supplementary affidavit as under: "That is so happened that after the aforesaid judgment dated 19th December, 1979 in the matter of R.S.E.B. vs Jagdish Prasad Brij Lal D.B. Appeal No. 179 of 1979 some other Meter Readers on the basis of this judgment filed various other writ petitions.
In these writ petitions the question above the applicability of Regulations or the question as to whether the Respondent can challenge his own appointment by which they were appointed to Meter Reader II post were not at all raised or decided by the High Court.
The High Court decided the said writ petitions only on the basis of the earlier judgment in the matter of R.S.E.B. vs Jagdish Prasad (Brij Lal).
The Appellant Board implemented the said order.
The respondent is trying to raise the said question which was neither been decided by the High Court and has been raised for the first time in this supplementary affidavit.
On account of lapse of time, the appellant is finding it difficult to give reply.
The Deponent has tried his best to locate the records but in such a short period he could not get the file of the case which was decided about eight years back as it appears to have been mixed up in the old record.
That the order passed in the matter of Shanti Lal was a Judgment inter parties and, therefore, simply because the Board did not challenge the said order, it does not mean that the respondent can also take advantage of the same and can raise the question of equal pay for equal work.
In this the 287 Appellants further state that all the persons except re spondent Shri Lehar Singh and Gharsi Lal (Geharial) in civil appeal in the present case were appointed after 7th Septem ber, 1974 and 16th May,1974 i.e. the date on which three persons whose matters were decided alongwith Shanti Lal 's case were appointed" We have thoroughly examined the record and have consid ered the arguments advanced b.y Learned counsel for the parties.
It may be noted that all the above appeals are in respect of such employees who were appointed after 1.4.1974.
In the appointment orders of all the respondents it was specifically mentioned that they were appointed as Meter Reader Gr.
II in the pay scale of Rs. 80 194 (subsequently revised to Rs. 260 464).
In Clause (ix) of the First Settle ment dated 22nd February, 1972 it was clearly mentioned that this agreement shall remain in force upto 31st March, 1974.
The stand taken by the Board all along was that this settle ment was subsequently amended by another agreement (Second Settlement) on December 2, 1972.
In this second Settlement certain anomalies and difficulties had cropped up in the course of implementation of earlier settlements and hence some clarifications were made by mutual negotiations.
The clarifications relevant for our purpose were that the First Settlement was made effective w.e.f.
1st April, 1968 instead of 1st April, 1969 and two categories were fixed for Meter Readers i.e. Meter Reader I/Meter Checker I and Meter Read er II/Meter Checker II.
Necessary amendments were made in the Schedules annexed to the Settlement according to which under pay scale No. 3 at Item No. 21 Meter Reader I/ Meter Checker I and under pay scale No. 2 at Item No. 7 Meter Reader II/Meter Checker II were inserted.
This Second Set tlement was subsequently notified by a Notification dated 6.12.
According to the Board this Second Settlement was merely a clarification settlement and not a new settle ment in as much as it sought to make clear the ambiguity which had cropped up in the First Settlement in the matter of fixing the grades and pay scales of the Meter Readers/Meter Checkers.
The Notification dated 6.12.1972 which related to the Second Settlement dated 2.12.1972 was challenged by some of the employees by filing writ petitions in the High Court and Learned Single Judge by Judgment dated 21st March, 1979 allowed the writ petitions and quashed the notification dated 6th December, 1972.
It may be noted that the Second Settlement was quashed on the ground that the Second Settlement could not have been made as no concilia tion proceedings were pending before such settlement and the date 1.4.1968 mentioned in the Notification was arbitrary and without any 288 basis.
An appeal filed by the Board against the aforesaid decision was dismissed by the Division Bench of the High Court on 19th December, 1979.
This litigation was commenced by such employees who were appointed prior to 6.12.1972.
Subsequently employees appointed between the period 1972 1979 filed writ petitions in the High Court.
The stand taken by these employees was that the Notification dated 6.12.
1972 had already been quashed by the High Court and as such they were to be governed by the First Settlement dated February 22, 1972 in which there was only one category Of Meter Reader/Meter Checker to whom pay scale No. 3 had been given and as such they were also entitled to pay scale No. 3.
The High Court allowed the writ petitions and granted pay scale No. 3 to all the 35 petitioners.
the Board has now come before this Court against such employees who were appointed after 1.4.1974.
The contention of the Board is that even if for arguments ' sake the earlier decision given by the High Court may be considered as final, that was in respect of employees who were appointed before 6th December, 1972.
As regards the present employees it has been submitted that no benefit can be granted in their case as the First Settlement itself was to remain in force upto 31st March, 1974 and in any case in the appointment orders of the re spondents it was clearly mentioned that they were appointed as Meter Reader/Meter Checker Gr.
II in the pay scale No. 2.
It has also been urged before us that the Board had made Rajasthan State Electricity Employees (emoluments) Regula tions 1978 published on 4.5.
1978 but the same were deemed to have been made applicable from 1st April, 1974.
Under these regulations post of Meter Reader II/Meter Checker II in pay scale No. 2 and Meter Reader I/Meter Checker I have been placed in pay scale No. 3.
Learned counsel for the employees respondents contended that though according to Clause IX of the First Settlement dated 22.2.
1972, it was mentioned that the same will remain in force till 31st March, 1974 yet the same would remain in operation until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement as provided under Sub section
(2) of Section 19 of the (hereinafter referred to as the Act).
It has been submitted that no such notice was given by the Board and the Second Settlement dated 2.12.
1972 and Notification dated 6.12.
1972 had already been quashed by the High Court in Brij Lal 's case (supra) and the same having become final, the first settle ment Would govern the parties.
Reliance in support of the above contention is placed on The Life Insurance Corporation of India vs D.J. 289 Bahadur and Ors., [1980] Lab.
I.C. Vol.
2 1218.
Our attention was drawn to para 33 of the above case which reads as under: "The core question that first fails for consideration is as to whether the settlements of 1974 are still in force.
There are three stages or phases with different legal effects in the life of an award or settlement.
There is a specific period contractually or statutorily fixed as the period of operation.
Thereafter, the award or settlement does not become honest but continues to be binding.
This is the second chapter of legal efficacy but qualitatively different as we will presently show.
Then comes the last phase.
If notice of intention to terminate is given under Section 19(2) or 19(6) then the third stage opens where the award or the settlement does survive and is in force between the parties as a contract which has superseded the earlier contract and subsists until a new award or negotiated set tlement takes its place.
Like Nature, Law abhors a vacuum and even on the notice of termination under Sections 19(2) or (6) the sequence and consequence cannot be just void but a continuance of the earlier terms, but with liberty to both sides to raise disputes, negotiates settlements or seek a reference and award.
Until such a new contract or award replaces the previous one, the former settlement or award will regulate the relations between the parties.
Such is the understanding of industrial law at least for 30 years as precedents of the High Courts and of this court bear testi mony.
To hold to the contrary is to invite industrial chaos by an interpretation of the ID Act whose primary purpose is to obviate such a situation and to provide for industrial peace.
To distil from the provisions of Sec. 19 a conclusion diametrically opposite of the objective, intendment and effect of the Section is an interpretative, stultification of the statutory ethos and purpose.
Industrial law frowns upon a lawless void and under general law the contract of service created by an award or settlement lives so long as a new lawful contract is brought into being.
To argue other wise i, to frustrate the rule of law.
If law is a means to an end order is society can it commit functional harakiri by leaving a conflict situation to lawless void"? In our view the above Sections 19(2) and 19(6) of the Act cannot give any benefit to the respondents in the fact of the present case.
It is not 290 in dispute that the period of the First Settlement was agreed upto 31st March, 1974.
The question which calls for our consideration is not the applicability of the First Settlement, but the real question to be considered is wheth er the Board could have appointed or not the respondents on the post of Meter Reader/Meter Checker Gr.
II in pay scale No. 2 after 1.4.
The respondents/employees in the present case want to take advantage of the First Settlement simply on the ground that it did not make any mention of Meter Reader/Meter Checker Gr.
I or II and it simply made mention of Meter Reader/Meter Checker to whom pay scale No. 3 was given.
The above ambiguity was clarified by an agree ment between the Board and the Union representing the em ployees as early as on 2.12.
1972 itself to the effect that Meter Reader/Meter Checker can be placed in two different grades.
After this there was no restriction on the Board to make appointment of the Meter Reader/Meter Checker in Grade II after 1.4.
That apart there was clear mention in the appointment orders of the respondents that they were appointed as Meter Reader/Meter Checker Gr.
II in pay scale No. 2.
Learned counsel for the respondents/employees were unable to place any law, Rule or Regulation of the Board to show that the Board had no power to make such appointments of the Meter Reader/Meter Checker in Gr.
The Board had already taken the stand the first settlement was clarified by the second settlement and as such even if the High Court had quashed the second settlement, it was at least a suffi cient notice within the meaning of Section 19(2) of the Act that the Board had terminated the first settlement after 31.3.
The Regulations deemed to have come into force from 1.4.1974 also clearly provided for pay scale No. 2 for Meter Reader/Meter Checker Gr.
The Division Bench of the High Court refused to consider the above argument placed on behalf of the Board on the ground that learned counsel for the appellants was asked to show from the writ petitions whether this point was taken in the writ petitions or not and the learned counsel candidly admitted that it was not raised in the writ petitions filed by the petitioners.
The High Court further observed in this regard that as this point was not taken in the writ peti tions and it was not argued before the Learned Single Judge, they did not consider it necessary to examine it.
We have already extracted in extenso the observations of the High Court in this regard in the earlier part of the Judgment.
There is a complete fallacy, in the above order in as much as the Board was not the petitioner before the High Court and there was no question of taking any such ground in the writ petitions.
In one of the above appeals No. 2901 of 1985 Rajasthan State Electricity 291 Board & Ors.
vs Sharad Chander Nagar reply to the writ petition filed by the Board has been placed on record as Annexure 'C '.
In the said reply in Para (8) it has been stated as under: "That the contents of Para No. 8 of the writ petition are wrong and denied.
The petitioner was not appointed at the time of settlement date 22.2.1972.
The Wage Board set tlement dated 22.2.1972, which was in force upto 31.3.
1974, and thereafter the Rajasthan State Electricity Board Employ ees (Emoluments) Regulation 1978 was (sic) come into force with effect from 1.4.1974 and wages of all the employees were revised in pursuance of the Rajasthan State Electricity Board (Emoluments) Regulation 1978.
The copy of the Board (Emoluments) Regulation 1978 is submitted herewith as Annex ure "B".
Apart from the above circumstances of the case the Board in its reply to the writ petition also took the stand that the post of the Meter Reader Gr.
I is a promotion post while the post of Meter Reader Gr.
II is filled by direct recruit ment.
The Rajasthan State Electricity Board (Emoluments) Regulation 1978 made in exercise of the powers conferred by Sec.
79 Sub sections (c) & (k) of the have Statutory force and it has been clearly mentioned that they 'shall be deemed to have been made applicable from 1st April, 1974.
The Board had set up their case in the reply to the writ petition on the basis of these Regulations and it was the duty of the Division Bench of the High Court to have looked into the reply filed by the Board and to decide the effect of such statutory regulations in the present case.
The Board under Clause (C) of Regulation 79 was fully empowered to provide for the duties of officers and other employees of the Board, and their salaries, allowances and other conditions of service or under the residuary clause (k) for any other matter arising out of the Board 's function under this Act for which it is necessary or expedient to make regulations.
We have gone through the regulations which have been brought into force from 1st April, 1974 and in Schedule II group 'B ' at Item No. 7 Meter Reader II/Meter Checker II has been fixed in the revised pay scale of Rs.260 464 (original scale Rs.80 194) and in group 'C ' at Item No. 21 Meter Reader I/Meter Checker I in scale No. 3 revised pay scale Rs.370 570 (original scale Rs. 126 250).
The High Court committed a serious error in ignoring Clause IX of the First Settlement dated 22.2.1972 as well as the Regulations made by the Board in 1978.
292 So far as the cases of Udai Lal, Shyam Lal and Prem Shankar are concerned even if the Board did not challenge the order of the High Court dated 28.3.1982 in their cases, it cannot act as res judicata or as estoppel against the Board in challenging the present order of the High Court before this Court.
There is no question of applying the principle of equal pay for equal work in the facts and circumstances of this case and to allow Meter Readers II/Meter Checker Gr.
II, the pay scale of Meter Reader/Meter Checker Gr.
I. Apart from that, these controversies have been raised by the respondents for the first time by filing affidavits before this Court at the fag end of arguments, and these questions being mixed questions of fact and law, cannot be permitted to be raised now.
In the result, we allow all these appeals, set aside the Judgment of the High Court, and dismiss all the writ peti tions.
In the facts and circumstances of the case we direct the parties to bear their own costs.
R.S.S. Appeals al lowed.
| IN-Abs | A settlement was arrived at on 22.2.1972 between the Rajasthan State Electricity Board and the Union representing its employees.
In pursuance of this settlement, notification dated 22.3.1972 was issued revising the pay scales of var ious categories of posts, effective from 1st April, 1969.
As per the settlement, Meter Reader/Meter Checker was mentioned under scale No. 3.
On December 2, 1972 a Second Settlement was entered into between the parties with a view to removing certain ambigui ties in the earlier settlement.
In this second Settlement, notified on 6.12.1972, it was agreed to have two categories of Meter Readers, that is, Meter Reader I/Meter Checker I and Meter Reader II/Meter Checker II.
This settlement was made effective w.e.f. 1.4.1968.
Some employees appointed before 6.12.1972 challenged the notification dated 6.12.1972.
The learned Single Judge of the High Court allowed the writ petitions and quashed the notification mainly on the ground that the Second Settlement could not have been made as no conciliation proceedings were pending before the second settlement.
The Division Bench dismissed the appeal filed by the Board.
Accordingly, the Board implemented the Judgment of the High Court and issued orders to provide scale No. 3 to all the Meter Readers appointed upto 6.12.1972.
Brijlal vs Rajasthan State Electricity Board, [1979] WLN (UC) 221, referred to.
During this period, the State Electricity Board in exercise of the powers conferred by section 79, sub section (c) and (k) of the made regulations which are cared Rajasthan State 278 Electricity Board Employees (Emoluments) Regulations, 1978.
These Regulations were made applicable retrospectively from 1st April, 1974.
Under these regulations, post of Meter Reader II/Meter Checker II was mentioned in scale No. 2.
In 1979, an arbitration award was given between the Board and the union under which two categories of Meter Readers/Meter Checkers were again made.
Subsequently, 35 employees appointed between the period 197279 filed the present writ petitions in the High Court.
The stand taken by these employees was that the Notification dated 6.12.1972 had already been quashed by the High Court and as such they were to be governed by the First Settlement dated February 22, 1972 in which there was only one category of Meter Reader/Meter Checker to whom pay scale No. 3 had been given and as such they were also entitled to pay scale No. 3.
The High Court allowed the writ petitions and granted pay scale No. 3 to all the petitioners.
The Division Bench dismissed the special appeal of the Board.
The Board has now come before this Court against such employees who were appointed after 1.4.1974.
The contentions of the Board before this Court were that (i) even if for arguments ' sake the earlier decision given by the High Court may be considered as final, that was in respect of the employees who were appointed before 6th December, 1972; (ii) as regards the present employees no benefit could be granted in their case as the First Settle ment itself was to remain in force upto 31st March, 1974; (iii) in any case in the appointment orders of the respond ents it was clearly mentioned that they were appointed as Meter Reader/Meter Checkers Gr.
II in the pay scale No. 2; and (iv) under the Rajasthan State Electricity Employees (Emoluments) Regulations 1978, which were made applicable from 1st April, 1974 Meter Reader II/Meter Checker II have been placed in pay scale No. 2 and Meter Reader I/Meter Checker I have been placed in pay scale No. 3.
On behalf of the employees respondents it was connected that (i) though according to Clause IX of the First Settle ment dated 22.2.1972 the settlement was to remain in force till 31st March, 1974 yet the same would remain in operation until the expiry of two months from the date on which a notice in writing of an intention to terminate the settle ment was given by one of the parties to the other party or parties to the settlement as provided under sub section (2) of Section 19 of the ; (ii) that an arbitration award was given in 1979 279 between the Board and the employees federation under which two categories of Meter Readers/Meter Checkers were again made and hence all the Meter Readers appointed upto 1979 before the arbitration award were entitled to scale No. 3, and (iii) the contention with regard to the first settlement having come to an end on March 31, 1974 as well as the contention raised on the basis of Regulations were rightly negatived by the Division Bench of the High Court as these points were not taken in the writ petitions and were not argued before the learned Single Judge.
Allowing the appeals, this Court, HELD: (1) The respondents/employees in the present case want to take advantage of the First Settlement simply on the ground that it did not make any mention of Meter Reader/Meter Checker Gr.
I or II and it simply made mention of Meter Reader/Meter Checker to whom pay scale No. 3 was given.
The above ambiguity was clarified by an agreement between the Board and the Union representing the employees as early as on 2.12.1972 itself to the effect that Meter Reader/Meter Checker could be placed in two different grades.
After this there was no restriction on the Board to make appointment of the Meter Reader/ Meter Checker in Grade II after 1.4.1974.
[290B C] (2) There was clear mention in the appointment orders of the respondents that they were appointed as Meter Readers/Meter Checkers Gr.
II in pay scales No. 2.
Learned Counsel for the respondents/employees were unable to show that the Board had no power to make such appointments of the Meter Reader/Meter Checker in Gr.
[290D] (3) The Board had already taken the stand that the first settlement was clarified by the second settlement and as such even if the High Court had quashed the second settle ment, it was at least a sufficient notice within the meaning of section 19(2) of the that the Board had terminated the first settlement after 31.3.1974.
[290E] The Life Insurance Corporation of India vs D.J. Bahadur (4) The Rajasthan State Electricity Board (Emoluments) Regulation, 1978 made in exercise of the powers conferred by Sec.
79 Subsections (c) and (k) of the
|
ION: Civil Appeal No. 140 of 1977.
From the Judgment and Decree dated 31.1.
1973 of the Madras High Court in L.P.A. No. 6 of 1965.
A.T.M. Sampat and P.N. Ramalingam for the Appellants.
Ms. Lily Thomas for the Respondents.
The facts leading to the institution of the suit are as follows: On 3 239 March 1942, one Karuppanna Pillai (hereinafter referred to as "testator") executed his last Will and testament Ext.
Thereunder he disposed of all his properties described in five schedules, A, B, C, D and E. He directed that the properties under A, B .and
C schedules shall be respectively taken and be in the possession of the defendant, the first plaintiff and the second plaintiff.
In respect of E schedule properties, he has made a bequest creating an endowment that after his life time, it should be managed for the purpose and in the manner mentioned therein.
The dispute in the suit was as to the validity of the endowment.
One Palaniammal and Chellammal are the sisters of the plaintiffs and the defend ant.
The testator created a life estate in favour of those sisters in respect of D schedule properties with a direction that after their lifetime the properties shall be dealt with in the same manner as the E schedule properties.
We are not concerned in the present litigation with any of the proper ties in schedules A to D.
We are concerned only with the validity of the disposition of E schedule properties.
The Will is in Tamil but we are helpfully provided with the English translation of the relevant portion.
It is also found incorporated in the judgment of the District Judge.
It runs as follows: "After my lifetime, the aforesaid three persons, Ponnuswami Pillai, Malayalam Pillai and Thangavelu Pillai, shall take and manage the E schedule properties, from out of the income from the said properties pay the kist for the aforesaid E schedule properties, and out of the balance of income for the salvation of my soul after my lifetime, shall enter mY body, after my life is extinct, in the land S.F. No. 68/B, Punjai Thottakurichi Village pertaining to the aforesaid E schedule, build structure therefore and put up light every day shall plant flower plants in the said land and grow them, shall construct a Matam for annual ceremonies, install pictures therein, put up light in the Matam every day, conduct Guru Pooja, distribute saffron coloured clothes and on that day, shall feed the poor.
Since the aforesaid Pon nuswami Pillai is the eldest of the sons, he shall be the Manager, to conduct the above matters.
The surplus income shall be taken in the shares of 2/4 by Ponnuswami Pillai, 1/4 by Malayalam Pillai, and 1/4 by Thangavelu Pillai.
After the said Ponnuswami Pillai 's life, out of his make heirs, the eldest son shall conduct in the same manner as above and the surplus income shall be taken by the said eldest son.
" 240 There then follows a residuary clause which is as under: "The movable and immovable properties belonging to me and not mentioned herein shall be taken and enjoyed by the aforesaid three persons after my lifetime." The plaintiff 's case has been that the testator could not have created on endowment of properties for construction of his own tomb or Samadhi and for performing Pooja and ceremonies thereat.
Since the testator has bequeathed E schedule properties for "Samadhi Kainkaryam", the trust would be invalid and the said properties should be shared by the plaintiffs and defendant under the residuary clause in the Will as if they remain undisposed of by the testator.
The suit is also for account from the defendant regarding the income of the E schedule properties.
The defendant has resisted the suit and sought to justi fy the creation of the trust and its purposes.
It was con tended inter alia, that the Matam and the Samadhi were constructed for different purposes.
They are separated by a respectable distance.
At the Samadhi, there is no perform ance of pooja.
It is only at the Matam, the ceremonies and Guru Pooja are performed with feeding the poor and distribu tion of saffron clothes.
These acts are distinctly and substantially religious and charitable purposes.
It was also contended that the plaintiffs in any event are not entitled to claim partition and separate possession of the Schedule properties.
At the trial, learned Subordinate Judge accepted the plaintiff 's case declaring that the dedication of the E Schedule property for purposes enumerated under the Will was invalid and accordingly he decreed the suit as prayed for.
In appeal, the District Judge took a different view.
He held that the purposes for which the E Schedule properties have been dedicated were charitable or religious in nature.
He dismissed the suit but gave certain directions to the de fendant for rendition of accounts of the surplus income from the properties which the defendant as a manager is obliged to do.
In second appeal to the High Court, the learned single Judge expressed the view that the Trust in respect of the properties for construction of the Samadhi with raising flower garden and lighting up would not be valid as it is not recognised under the Hindu Law.
That part of E Schedule properties referable to the Samadhi and its maintenance should remain as the property undisposed of by the Will.
241 Neither the plaintiffs nor the defendants will be entitled to it under the terms of the Will.
He however, held that the endowment and directions as to application of the property for construction of the Matam and performance of ceremonies and pooja would be valid since they are religious and char itable in nature.
He dismissed the suit for partition while at the same time affirmed the decree for accounting the surplus income from the properties referable to the Matam and charities.
In the Letters Patent Appeal, the Division Bench has disagreed with the views expressed by learned Single Judge.
It has been observed that the Matam is close to the Samadhi and the former has been built for the purpose of providing a convenient place for the purpose of offering worship and performing ceremonies connected with the Samadhi and Matam are covered by one scheme, and therefore, the entire trust must fail.
In support of the conclusion, the Division Bench largely relied upon the decision of the Privy Council in N. Subramania Pillai vs A. Draviyasundaratn Pillai, AIR 1950 PC 37.
In the Privy Council case referred above, the testator by name 'Kanakasabhapathy ' in his Will constituted a Trust of his properties with certain directions as to its applica tion.
He directed that "his body should be buried in a Sa madhi and at the same place where the Samadhi is made, a Matam should be built with a stone inscription in the front portion of the Matam as Kanakesabhapathi Samadhi Matam '.
He also directed that regular worship should be conducted with Guru Pooja and poor feeding.
Construing the terms of the Will, the Privy Council observed that the directions given by the testator were embodied in a single scheme and they were primarily intended to keep his memory alive and to enhance his own posthumous reputation.
Feeding the poor was to be conducted during the daily pooja to be performed in connection with the burial place and it did not provide for any charity apart from the ceremonies to be conducted at his own burial place and therefore the trust must fail.
In Hindu system there is no life of demarcation between religion and charity.
On the other hand, Charity is regarded as a part of religion.
Hindu Law of Religious & Charitable Trusts, by B.K. Mukherjea, 5th Ed.
p. 11.
But "what are purely religious purposes and what religious purposes will be charitable must be entirely decided according to Hindu Law and Hindu notions.
" Mayne 's Hindu Law 10th Ed.
p. 9 12.
242 The perpetual dedication of property for construction of a Samadhi or a tomb over the mortal remains of an ordinary person and the making of provisions for its maintenance and for performing ceremonies in connection thereto however, has not been recognised as charitable or religious purpose among the Hindus.
But the Samadhi of a Saint stands on a different footing.
This was the consistent view taken by the Madras High Court in several cases, namely, Kunhamutty vs T. Ahmad Musaliar & Ors., ILR 1953 Mad. 29; A. Draivaisundram Pillai vs N. Subramania Pillai, ILR 1954 Mad. 854; Veluswami Goundan vs Dandapani, 1946 Mad.
This Court in Saraswati Ammal vs Rajagopl Ammal, ; has approved those decisions of the Madras High Court.
Jagannatha Das, J., who spoke for the Court said (at 289): "We see no reason to think that the Madras decisions are erroneous in holding that perpetual dedication of property for worship at a tomb is not valid amongst Hindus.
" The view taken in Saraswati Ammal case has been reiter ated in Nagu Reddiar & Ors.
vs Banu Reddiar & Ors., ; where Kailasam, J., observed (at 600): "The raising of a tomb over the remains of an ancestor, an ordinary person is not recognised as religious in nature.
The burden is on the person setting up a case of religious practice in the community to prove it.
This prohibition may not apply when an ancestor is cremated and a memorial raised for performing Shradha ceremonies and conducting periodical worship, for, this practice may not offend the Hindu senti ment which does not ordinarily recognise entombing the remains of the dead.
" We are, therefore, inclined to hold that the provision made by the testator for construction of a Samadhi over his burial place and for its maintenance cannot be regarded as valid.
But that however, does not mean that the entire dedica tion of E Schedule properties must fail.
It is one of the cardinal principles of construction of Wilts that wherever it is possible, effect should be given to every bequest of the testator unless it is opposed to law, custom or prac tice.
If the testator has set apart the property intended for endowment and disclosed his charitable intent in any one of his directions, such direction may be extricated leaving aside the directions which are repugnant to the recognised notions of Hindu religion 243 or Hindu Law.
Attempt should be made to give effect to the provisions made for recognised charitable purposes even though the entire scheme of the testator cannot be saved.
In the instant case, the E Schedule has been endowed for con struction of a Samadhi and Matam, and for performing reli gious rites and charitable acts.
The Samadhi and Matam are constructed in the same survey number but are independent of each other, separated by a distance of about 15 feet.
Per formance of annual ceremonies, conducting Guru Pooja, feed ing the poor and distribution of saffron coloured clothes to mendicants appear to be independent and have no connection with the Samadhi.
There is no indication in the Will that Guru Pooja should be performed to the testator.
In fact he has not even indicated that his photo should be kept in the Matam.
His directions are only to install pictures at the Matam, put up light every day in the Matam and perform Guru Pooja once a year with the other charities.
These provisions in the Will are not in close parallel with and indeed far removed from those obtained in the Privy Council decision in Subramania Pillai 's case.
The Division Bench of the High Court was therefore in error in relying upon that decision to invalidate the entire endowment.
Counsel for the plaintiffs nevertheless argued that the defendant has been performing Guru Pooja only to the testa tor and not for the deity.
He referred to us Ext.
A 5 to A 9 which are the invitations sent by the defendant for the annual ceremonies and Guru Pooja to be performed to the testator.
But in construing the validity of an endowment created under a Will, we cannot be guided merely by the acts of the manager or the manner in which the executor of the Will has understood the directions of the testator.
We are required to examine the dominant intention of the testator and that could be ascertained only by the terms of the Will.
The terms of the Will in this case clearly specify the religious or charitable purposes.
The defendant Ponnuswami Pillai (DW 1) in his cross examination has also explained that there was a mistake in the writing of Ext.
A 5 to A 9 for which he was not responsible.
He has testified that he performed really the annual ceremonies on the date of death of the testator and no pooja was performed at Samadhi.
The Poojas are performed only at Matam with Guru Pooja to Lord Subramania on 'Thai Poosam ' every year.
He has further stated that the annual ceremonies of the testator fall on Margali Mrisaseerusham Nakshatram and Guru Pooja is not performed on that day.
It is undisputed that the testator died on Margali Mrigaseerusham Nakshatram.
Ramaswamy Goundar (DW 2) has also deposed 244 that no Guru Pooja was performed on the date of death of the testator and it was performed only to Lord Subramania in Thai month every year.
He used to participate in the Guru Pooja every year alongwith the other villagers.
The evidence of Marudamuthu Pillai (DW 3) also supports these versions.
We have no reason to disbelieve the testimony of the defendant and his witnesses.
Even the evidence from the plaintiff indicates that the Matam is called 'Madam of Sri Subramanya Swami '.
B 2 is a printed marriage invitation of the plaintiff (PW 1) in which it has been expressly stated that the plaintiff 's marriage will be performed at our Madam Sri Subramaniaswami Sannadhi built by our grandfa ther Karuppanna Pillai . "Ext.
A 11 also refers to the Matam as Subramaniaswami Sannadhi.
A 2 is the Commis sioner 's Report.
The Commissioner has stated that there are pictures of Gods in the Matam.
There is pooja room.
Lord Subramania 's picture is also in the pooja room.
The deity of Sri Vinayagar in granite has been installed at a special place with material to indicate that pooja is also being performed to Sri Vinayagar.
It is true that the directions of the testator are in general terms, and there is no particular mention in the Will as to whom Guru Pooja is required to be performed since no particular deity is named in the Will.
But trust cannot be rendered invalid on that ground.
It is for the Court to ascertain the presumed intention of the testator and give effect to it.
As observed by Patanjali Shastri, J., as he then was, in Veluswami Goundan 's case where no deity is named in the deed of endowment, the court should ascertain the sect to which the donor belonged, the tenets which he held, the doctrines to which he was attached and the deity to which he was devoted and by such means the presumed intention of the testator as to the application of the property should be ascertained.
We agree that these are the safe guides.
If we peruse the various terms in the Will and the provisions made for offerings, it will be clear that the testator was a great devotee of Lord Subramaniaswami.
He has made provisions to perform annual pooja to Lord Subramanias wami and Sri Vinayagar in the different temples out of the income from A to C Schedules.
The Matam also goes by the name of "Subramanya".
The evidence of DW 1 to DW 2 further indicates that Guru Pooja is being performed to Lord Subra manya followed by poor feeding and distribution of saffron coloured clothes.
The endowment with regard to these pur poses must therefore be upheld.
245 The permanent dedication of properties for performance of annual ceremonies of the testator is equally valid.
Whether one terms it as annual Shradha or anniversary, it is certainly a religious rite and it is not uncommon among the Hindu testators to make provisions in their Wills for cele bration or performance of such anniversaries of themselves or their ancestors.
We are, therefore, unable to agree with the decision of the Division Bench of the High Court.
We are on the other hand in agreement with the views expressed by learned Single Judge.
In the result, the appeal is allowed.
In reversal of the judgment of the Division Bench, the judgment and decree of the learned Single Judge are restored.
The respondents must pay the costs of this appeal to the appellants.
T.N.A. Appeal al lowed.
| IN-Abs | K. bequeathed his properties describing them in five Schedules, A, B, C, D and E.
In respect of the 'E ' schedule properties, he created an endowment stating that after his death it should be managed for construction of his own tomb or samadhi and for performing poojas and ceremonies thereat.
Two of the legatees under the will filed a suit against the third legatee, the manager of the trust, for partition and possession of the E schedule properties as well as for rendition of accounts pertaining to the income from the said properties contending: (i) that under Hindu Law the testator could not have created an endowment of properties for con struction of his own tomb or samadhi for performing poojas and ceremonies thereat; (ii) since the testator had be queathed his properties for "Samadhi Kainkaryam", the Trust was invalid; and that the said properties should be shared by the plaintiffs and the defendant under the residuary clause of the will as if they remained undisposed of by the testator.
The defendant resisted the suit contending that Matam and the Samadhi were constructed for different purposes and it is only at the Matam that the ceremonies and Guru Pooja were performed with feeding the poor and distribution of saffron clothes; and that these acts were distinctly and substantially religious and charitable purposes.
The subordinate judge accepted the plaintiff 's case declaring that the dedication of the 'E ' schedule properties was invalid and accordingly he decreed the suit.
236 On appeal the District Judge dismissed the suit with a direction to the defendant for rendition of accounts of the surplus income from the properties on the ground that dedi cation of properties by the testator was for charitable or religious in nature.
On second appeal a single Judge of the High Court dismissed the suit for partition but affirmed the decree for accounting the surplus income from the properties referable to the Matam and charities by holding (i) that the trust in respect of the properties for construction of samadhi was not valid as it was not recognised under the Hindu Law; (II) but the endowment and directions as to application of the property for construction of Matam and performance of cere monies and pooja were valid since they were religious and charitable in nature.
On further appeal by Letters Patent the Division Bench of the High Court, relying upon the decision of the Privy Council in N. Subramania Pillai vs A. Draviyasundaram Pil lai, AIR 1950 PC 37, held that the entire endowment was invalid under Hindu Law.
Hence this appeal.
Allowing the appeal, this Court, HELD: 1.
The perpetual dedication of property for construction of a samadhi or a tomb over the mortal remains of an ordinary person and the making of provisions for its maintenance and for performing ceremonies in connection thereto is not recognised as charitable or religions purpose among the Hindus.
But the Samadhi of a Saint stands on a different footing.
Therefore, the provision made by the testator for construction of a Samadhi over his burial place and for its maintenance cannot be regarded as valid.
[242A B Kunhamutty vs T. Ahmad Musaliar & Ors., I.L.R. ; A. Draviyasundaram Pillai vs N. Subramania Pillai, I.L.R. and Veluswami Goundan vs Dandapani, , approved.
Saraswati Ammal vs Rajagopal Ammal, ; and Nagu Reddiar & Ors.
vs Banu Reddiar & Ors., ; , referred to.
It is one of the cardinal principles of construc tion of Wills that wherever it is possible, effect should he given to every bequest of the testator unless it is opposed to law, custom or practice.
If the testator has set apart the property intended for endowment and disclosed his 237 charitable intent in any one of his directions, such direc tion may be extricated leaving aside the directions which are repugnant to the recognised notions of Hindu religion or Hindu Law.
Attempt should be made to give effect to the provisions made for recognised charitable purposes even though the entire scheme of the testator cannot be saved.
[242G H] 2.1 In the instant case the scheduled properties have been endowed for construction of a Samadhi and Matam, and for performing religious rites and charitable acts.
The Samadhi and Matam are constructed in the same survey number but are independent of each other, separated by a distance.
The other provisions in the will relating to performance of annual ceremonies conducting Guru Pooja, feeding the poor and distribution of saffron coloured clothes to medicants are independent and have no connection with the Samadhi.
Consequently, the entire dedication of the Scheduled proper ties will not fail.
[243A B] N. Subramania Pillai vs A. Draviyasundram Pillai, A.I.R. , held inapplicable.
In construing the validity of an endowment created under a Will, the Court cannot be guided merely by the acts of the Manager or the manner in which the executor of the Will has understood the directions of the testator.
The Court is required to examine the dominant intention of the testator and that could be ascertained only by the terms of the Will.
3.1 A trust cannot be rendered invalid on the ground that the directions of the testator are in general terms and that there is no particular mention in the will as to whom Guru Pooja is required to be performed since no particular deity is named in the Will.
It is for the Court to ascertain the presumed intention of the testator and given effect to it.
Therefore where no deity is named in the deed of endow ment, the Court should ascertain the sect to which the donor belonged, the tenets which he held, the doctrines to which he was attached and the deity to which he was devoted and by such means the presumed intention of the testator as to the application of the property should be ascertained.
These are the safe guides.
[244E & F] Veluswami Goundan vs Dandapani, [1946] 1 MLJ 354 AIR 1946 Mad. 485, referred to. 3.2 In the instant case there is no indication in the Will that Guru Pooja should be performed to the testator.
On the other hand the terms 238 in the Will show that the testator was a great devotee of Lord Subramaniaswami.
The evidence also indicates that Guru Pooja is being performed to Lord Subramanya followed by poor feeding and distribution of saffron coloured clothes.
These terms of the will clearly specify the religious or charita ble purposes.
Therefore the endowment with regard to these purposes is upheld.
[244E & G H] 3.3 Annual Shradha or anniversary is a religious rite.
The permanent dedication of properties for performance of annual ceremonies of the testator is equally valid.
[245A] 4.
The Division Bench of the High Court was therefore in error in invalidating the entire endowment.
Accordingly, the judgment of the Division Bench is reversed and the judgment and decree of the Single Judge are restored.
[245B C] 5.
In Hindu system there is no line of demarcation between religion and charity.
On the other hand, charity is regarded as a part of religion.
But what are purely reli gious purposes and what religious purposes will be charita ble must be entirely decided according to Hindu Law and Hindu notions.
[241G H] Hindu Law of Religious & Charitable Trusts, by B.K. Mukherjea, 5th Edn.
p. 11; Mayne 's Hindu Law, 11th Edn.
p. 912, referred to.
|
vil Appeal Nos.
1467 69 of 1976.
295 Appeals by Certificate from the Judgment and Order dated 7.5.
1965 of the Calcutta High Court in Income Tax Reference No, 28 of 1954.
B. Sen, N.B. Singh, Sanjay J. Khaitan, Darshan Singh, B.N. Dhar and Ms. Suman Khaitan for the Appellant.
S.C. Manchanda, section Rajappa and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by THOMMEN, J.
These appeals by the assessee arise from the judgment dated 7.5.1965 of the Calcutta High Court.
The question relates to the assessment for the years 1945 46, 1946 47 and 1947 48 under the Indian Income Tax Act, 1922 (hereinafter referred to as "the Act").
The assessee was a company resident in British India during the relevant years.
It had a cotton mill in British India.
The cloth manufac tured by the mill was sold in British India as well as in the native States.
In the assessment for 1944 45, it had been held that, for the sales effected in the native States, 1/3rd of the profit was, in terms of section 42(3) of the Act, deemed to have accrued to the assessee in British India.
This profit was considered as the profit attributed to the manufacturing part of the business carried out in British India, although the sales were effected in the native States.
On the same basis, assessment in terms of section 42(3) was made in respect of the assessment years 1945 46, 1946 47 and 1947 48.
In addition to the deemed income in British India, the assessee was assessed under section 14(2)(c) of the Act in respect of certain sums remitted to British India from the native States.
The assessee 's contention that 1/3rd of the income having been assessed under section 42(3) of the Act as income deemed to have accrued in British India, no further assessment should be made under section 14(2)(c) of the Act with respect to profits brought into British India, was rejected by the Income Tax Officer as well as the Appellate Assistant Commissioner.
On further appeal, the Income Tax Appellate Tribunal also held that there was no substance in that contention.
The Tribunal stated " . . the assessment of profits brought into British India from a Native State under Section 14(2)(c) is on a distinct and separate footing from the assessment of Native States 296 profits which are deemed to have accrued in British India under Section 42 . " The assessee raised an additional contention for the first time before the Tribunal.
That contention was that the remittances made to British India had to be taken as having first come out of profits "deemed to have accrued in British India" and brought to tax under section 42(3), and only the excess remittances, if any, could be taken as having come out of the remainder profits exempted from tax under section 42.
The assessee pointed out that I/3rd of the profits having been already charged under section 42(3), by reason of the legal fiction contained in that sub section, any amount brought into British India upto the extent of 1/3rd should be presumed to be that which was attributable to that 1/3rd which had already suffered tax, and the balance remit tance, if any, alone should be taxed under section 14(2)(c) of the Act.
In other words, according to the assessee, if the remittances made to British India in any accounting year exceeded the amount taxed under section 42(3) of the Act, then it was only so much of that excess which could be taxed under section 14(2) of the Act.
The Tribunal did not accept this contention.
However, it stated: " . . it appears to us that the common sense point of view would be that the remittances to British India include both the assessed as well as the exempt profits in the same proportion in which those existed in the Native State . .
It therefore appears to us that the correct view would be to apportion the remittances over the assessed and the exempt parts in the same proportion as these existed in the total profits made in the Native State.
As such proportion was one third and two thirds, the remittances would be similarly split up.
Thus 1/3rd of the remittances has come out of profits assessed under Section 42.
On this basis, these additions made by the Income Tax Officer and confirmed by the Appellate Assistant Commissioner will have to be reduced by one third of such remittances.
" On a reference under section 66(1) of the Act, the High Court by its judgment dated 22.7.1957, found that the facts stated were insufficient and that there was an error appar ent on the face of the question as framed.
The High Court accordingly called for a supplementary statement of the case.
In its supplementary statement, the Tribunal referred the following question: 297 "Whether on the facts and in the circumstances of the case, the sums of Rs.50,195 for 1945 46, Rs.76,155 for 1946 47 and Rs.6,00,909 for 1947 48 assessments have been rightly in cluded in the assessable income of the applicant under Section 14(2)(c) of the Indian Income tax Act as profits brought into British India from Indian States?" The High Court by its judgment dated 7.5,1965 rejected the assessee 's contention that, where there was a mixed fund composed of taxed and non taxed items and a neutral payment was made i.e. without specifying the exact source of the payment, the taxing authorities, in the absence of any evidence to the contrary, had to proceed on the basis that the payment was made out of that part of the mixed fund which had already borne tax.
The High Court, however, ob served: " . in this case the assessee did not have two funds but only one fund composed of taxed and non taxed amounts and as one third of the entire amount of profits made by the assessee in the Indian States had been subjected to tax the income tax authorities took a reasonable view in excluding one third of the remitence to British India from taxation in each year.
There were sufficient profits in each year out of which remittance could be made even after deduction of the portion which had been taxed . . ".
In the result, the question referred was answered by the High Court against the assessee.
Hence the present appeals.
If there were two funds at the disposal of the assessee one upon which tax had been already levied and another which was liable to be brought to tax a presump tion, in the absence of evidence to the contrary, might arise that the remittance made by the assessee in the course of its business was made out of the fund that was already taxed and not out of the fund that remained to be taxed.
See Meyyappa Chettiar vs The Commissioner of Income Tax, , 45.
That was apparently not the case here, for, on the facts found, the assessee did not have two funds, but only one fund composed of taxed and non taxed amounts.
As one third of this amount had already been taxed under sec tion 42(3) of the Act, 1/3rd of the remittances to British India in a particular year was held to be exempted from levy.
Relying on the principle referred to in Paton (As Pen ton 's Trustee) vs CommissiOners of Inland Revenue, 21 Tax Cases 626, Dr. 298 B. Sen, on behalf of the assessee, however, submits that where there was a mixed fund, as in the present case, con sisting partly of taxed and partly of untaxed monies, any remittance made should be deemed to have been paid out of that part of the money which had suffered tax.
It is a right of the tax payer to attribute the payment to the taxed money, so as to obtain the benefit allowed by the law.
Lord Wright, M.R. in Paton (As Penton 's Trustee) vs Commissioners of Inland Revenue, 21 Fax Cases 626 at 639), referring to the right of the tax payer to attribute payment to taxed monies, stated: " . . in the ordinary course, a person paying interest does not generally appropriate the payment to income or to any particular piece of income or any specific asset: he has the general body of available funds, say his banking ac count, if he has only one, and he pays by drawings on that account.
which may include income, borrowed money, capital and so forth.
This is what is meant by payment out of a mixed fund, or payments made out of the general till, or payments made neutrally.
The Revenue authorities have no right in such cases to appropriate those payments to non taxable rather than taxable moneys.
Hence the taxpayer is given the right of attribution in the way most favourable to himself It is presumed, in the absence of evidence to the contrary, that payments are made out of income".
This principle of attribution is no doubt applicable in certain circumstances, such as those narrated by Lord Wright in Paton (supra), although in that case, on the facts found, the principle was not applied.
Whether that principle is applicable in a particular case depends upon the facts of that case and the provisions of the statute.
The abstract principle of attribution, which is applicable in certain circumstances, can be adopted only to the extent that it is consistent with the law and facts.
It is well to recall: " . . there is no room for any intendment; there is no equity about a tax: there is no presumption as to a tax; you read nothing in; you imply nothing, but you look fairly at what is said and at what is said clearly and that is the tax".
[Per Rowlatt, J. The Cape Brandy Syndicate vs The Com 299 missioners of Inland Revenue, 12 Tax Cases 359,366].
The view taken by the Tribunal, with reference to the facts found and the provisions of the statute, was, in our opin ion, reasonable.
It was so found by the High Court.
In the circumstances, we hold that the Tribunal having excluded 1/3rd of the remittances to British India from taxation during a particular year, the High Court was justi fied in refusing to grant any further relief to the asses see.
Accordingly, we see no merit in these appeals and they are dismissed with costs throughout.
N.P.V. Appeals dis missed.
| IN-Abs | The appellant, a company resident in British India, had a cotton mill.
The cloth manufactured in the mill was sold in British India as well as native States.
For the assess ment years 194546, 194647 and 1947 48, the company was assessed under Section 14(2)(c) of the Income Tax Act, 1922, in respect of certain sums remitted to British India from native States, in addition to the assessment under Section 42(3), deeming 1/3rd of the profit from the sales effected in native States, as having accrued from the manufacturing part of business in British India.
The assessee 's contention that 1/3rd of income having been assessed under Section 42(3), as income deemed to have accrued in British India, no further assessment should be made under Section 14(2)(c) was rejected by the Income Tax Officer, the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal.
The Tribunal also rejected the assessee 's additional contention that if the remittances made to British India in any year exceeded the amount taxed under Section 42(3), then it was only so much of the excess which could be taxed under Section 14(2)(c).
However, it reduced the additions made by the Income Tax Officer and affirmed by the appellate authority, by 1/3rd of such remit tances.
On a reference made under Section 66(1), the High Court confirmed the Tribunal 's decision.
In the appeal before this Court, on behalf of the appel lantassessee R was contended that where there was a mixed fund, as in the instant case, consisting partly of taxed and partly of untaxed monies, any remittance made should he deemed to have been paid out of that 294 part of the money which had suffered tax and that it was the right of the tax payer to attribute the payment to the taxed money so as to obtain the benefit allowed by the law.
Dismissing the appeals, this Court, HELD: 1.1 If there were two funds at the disposal of the assessee one upon which tax had been already levied and another which was liable to be brought to tax a presump tion, in the absence of evidence to the contrary might arise that the remittance made by the assessee in the course of its business was made out of the fund that was already taxed and not out of the fund that remained to be taxed.
[297F] Meyyappa Chettiar vs The Commissioner of Income Tax, , 45, referred to. 1.2 The tax payer is given the right of attribution in the way most favourable to himself.
In the absence of evi dence to the contrary, it is presumed that payments are made out of income.
This abstract principle of attribution is applicable in certain circumstances.
Whether it is applica ble in a particular case depends upon the facts of that case and the provisions of the statute.
It can be adopted only to the extent that it is consistent with the law and facts.
[298E F] Paton (As Penton 's Trustee) vs Commissioners of Inland Revenue, 21 Tax Cases 626 and The Cape Brandy Syndicate vs The Commissioners of Inland Revenue, 12 Tax Cases 359, 366, referred to.
In the instant case, on the facts found the assessee did not have two funds, but only one fund composed of taxed and non taxed amounts.
As one third of this amount had already been taxed under section 42(3) of the Act, 1/3rd of the remittances to British India in a particular year was held to be exempted from levy.
The Tribunal having excluded 1/3rd of the remittances to British India from taxation during a particular year, the High Court was justified in refusing to grant any further relief to the assessee.
[297G; 299B]
|
vil Appeal No. 262 (NC) of 1976.
From the Judgment and Order dated 24.4.1975 of the Rajasthan High Court in D.B. Civil I.T.R. No. 45 of 1969.
Mrs. Anjali Verma for JBD & Co. and D.N. Misra for the Appellant.
O.P. Vaish, section Rajappa, Vinay Vaish, S.K. Aggarwal and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Rajasthan dated 24.4.1975 answering the question referred to it by the Income Tax Appellate Tribunal in the negative, in favour of the Revenue and against the assessee.
The question referred to the High Court was as under: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the payment of Rs.3 lakhs to the Northern Railway was a revenue expenditure and was a deduction allowable under the Income Tax Act.
1961?" The circumstances leading to the reference and the appeal was necessary to be stated.
The Natural Science (India) Ltd. predecessor ininterest of the assessee acquired a lease from the Maharaja of the 317 erstwhile Bikaner State on September 29, 1948 for mining of gypsum for a period of 20 years over an area of 4.27 square miles at Jamsar.
The lease was liable to be renewed after expiring of 20 years.
The Natural Science (India) Ltd. by a deed of assignment dated December 11, 1948 assigned the rights under the lease to the Bikaner Gypsums Ltd., a compa ny wherein the State Government owned 45 per cent share.
The Bikaner Gypsums Ltd. (hereinafter referred to as the asses see) carried on the business of mining gypsum in accordance with the terms of conditions stated in the lease.
The asses see entered into an agreement with Sindri Fertilizers, a Government of India Public Undertaking for the supply of gypsum of minimum of 83.5 per cent quality.
Under the lease, the assessee was conferred the liberties and powers to enter upon the entire leased land and to search for win, work, get, raise, convert and carry away the gypsum for its own benefits in the most economic, convenient and beneficial manner and to treat the same by calcination and other proc esses.
Clause 2 of Part II of the lease authorised the lessee to sink, dig, drive, quarry, make, erect, maintain and use in the said lands any borings, pits, shafts, in clines, drifts, tunnels, trenches, levels, water ways, airways and other works and to use, maintain, deepen or extend any existing works of the like nature in the demised land for the purpose of winning and mining of the mineral.
Clause 3 granted liberty to erect, construction, maintain and use on or under the land any engines, machinery, plant, dressing, floors, furnaces, brick kilns, like kilns, plaster kilns etc.
Clause 4 conferred liberty on the lessee to make roads and ways and use existing roads and ways.
Clause 7 granted liberty to the assessee to enter upon and use any part of parts of the surface of the said lands for the purpose of stacking, heaping or depositing thereon any produce of the mines or works carried on and any earth materials and substance dug or raised under the liberties and powers.
Clause 8 conferred liberty on the lessee to enter upon and occupy any of the surface lands within the demised lands other than such as are occupied by dwelling houses or farms and the offices, gardens and yards.
Clause 9 conferred power on the lessee to acquire, take up and occupy such surface lands in the demised lands as were then in the occupation of any body other than the Government on payment of compensation and rent to such occupiers, and if the lessee is unable to acquire such land from the tenants and occupiers, the Government undertook to acquire such surface land for the lessee at the lessee 's cost.
Clause 15 of Part II conferred liberty and power on the lessee to do all things which may be necessary for winning, working getting the said minerals and also for calcining, smelting, manufac turing, converting and making merchantable.
318 Part III of the lease contained restrictions and condi tions to the exercise of the liberties and powers and privi leges as contained in Part II of the lease.
Clause 2 of Part III provided that the lessee shall not enter upon or occupy surface of any land in the occupation of any tenant or occupier without making reasonable compensation to such tenant or occupier.
Clause 3 prescribed restriction on mining operation within 100 yards from any railway, reser voir, canal or other public works.
It reads as under: "Clause 3: No mining operations or working shall be carried on or permitted to be carried on by the lessee in or under the said lands at or to any point within a distance of 100 yards from any railway, reservoir, canal or other public works or any buildings or inhabited site shown on the plan hereto annexed except with the previous permission in writ ing of the Minister, or some officer authorised by him in that behalf or otherwise then in accordance with such in structions, restrictions and conditions either general or special which may be attached to such permission.
The said distance of 100 yards shall be measured in the case of a Railway Reservoir or canal horizontally from the outer of the bank or of outer edge of the cutting as the case may be and in the case of a building horizontally from the plinth thereof.
" The above clause had been incorporated in the lease to protect the railway track and railway station which was situate within the area demised to the lessee.
Clause 5 of Part VIII of the agreement stated as under: "Clause 5: If any underground or mineral rights in any lands or mines covered and leased to the lessee in accordance with the provisions of those presents be claimed by any 'Jagir dar ' 'Pattedar ', 'Talukdar ', tenant or other person then and in all such cases the Government shall upon notice from the lessee forthwith put the lessee in possession of all such lands and mines free of all costs and charges to the lessee and any compensation required to be paid to any such "Jagir dar", 'Pattedar ', 'Talukdar ', tenant or other person claim ing to have any underground or mineral rights shall be paid by the Government." The assessee company exclusively carried on the mining of 319 gypsum in the entire area demised to it.
The Railway author ities extended the railway area by laying down fresh track, providing for railway siding.
The Railways further con structed quarters in the lease area without the permission of the assessee company.
The assessee company filed a suit in civil court for ejecting the Railway from the encroached area but it failed in the suit.
The assessee company, there upon, approached the Government of Rajasthan which had 45 per cent share of it and the Railway Board for negotiation to remove the Railway Station and track enabling the asses see to carry out the mining operation under the land occu pied by the Railways (hereinafter referred to as the 'Rail way Area ').
Since, on research and survey the assessee company found that under the Railway Area a high quality of gypsum was available, which was required as raw material by the Sindri Fertilizers.
All the four parties namely, Sindri Fertilizers, Government of Rajasthan, Railway Board and the assessee company negotiated the matter and ultimately the Railway Board agreed to shift the railway station, track and yards to another place or area offered by the assessee.
Under the agreement the Railway authorities agreed to shift the station and all its establishments to the alternative site offered by the assessee company and it was further agreed and all the four parties, Sindri Fertilizers, Govern ment of Rajasthan, Indian Railway and the assessee company shall equally bear the total expenses of Rs. 12 lakhs in curred by the Railways in shifting the railway station, yards and the quarters.
Pursuant to the agreement, the assessee company paid a sum of Rs.3 lakhs as its share to the Northern Railway towards the cost of shifting of the Railway Station and other constructions.
In addition to that the assessee company further paid a sum of Rs.7,300 to the Railways as compensation for the surface rights of the leased land.
On the shifting of the Railway track and Sta tion the assessee carried out mining in the erstwhile Rail way Area and it raised gypsum to the extent of 6,30,390 tons and supplied the same to Sindri Fertilizers.
The assessee company claimed deduction of Rs.3 lakhs paid to the Northern Railway for the shifting of the Railway Station for the assessment year 1964 65.
The Income Tax Officer rejected the assessee 's claim on the ground that it was a capital expenditure.
On appeal by the assessee, the Appellate Assistant Commissioner confirmed the order of the Income Tax Officer.
On further appeal by the assessee the Income Tax Appellate Tribunal held that the payment of Rs.3 lakhs by the assessee company was not a capital expenditure, instead it was a revenue expenditure.
On an application made by the Revenue the Income Tax Appellate Tribunal (hereinaf ter referred to as the 320 Tribunal referred the question as aforesaid to the High Court under section 256 of the Income Tax Act, 1961.
The High Court held that since on payment of Rs.3 lakhs to the Rail way the assessee acquired a new asset which was attributable to capital of enduring nature, the sum of Rs. 3 lakhs was a capital expenditure and it could not be a revenue expendi ture.
On these findings the High Court answered the question in the negative in favour of the Revenue against the asses see and it set aside the order of the Tribunal by the im pugned order.
Learned counsel for the appellant contended that since the entire area had been leased out to the assessee for carrying out mining operations, the assessee had right to win, the minerals which lay under the Railway Area as that land had also been demised.
to the assessee.
Since, the existence of railway station, building and yard obstructed the mining operations, the assessee paid the amount of Rs.3 lakhs for removal of the same with a view to carry on its business profitably.
The assessee did not acquire any new asset, instead, it merely spent money in removing the ob struction to facilitate the mining in a profitable manner.
On the other hand, learned counsel for the Revenue urged that in view of the restriction imposed by Clause 3 of Part III of the lease, the assessee had no right to the surface of the land occupied by the Railways.
The assessee acquired that right by paying Rs.3 lakhs which resulted into an enduring benefit to it.
It was a capital expenditure.
Both the counsel referred to a number of decisions in support of their submissions.
The question whether a particular expenditure incurred by the assessee is of Capital or Revenue nature is a vexed question which has always presented difficulty before the Courts.
There are a number of decisions of this Court and other courts formulating tests for distinguishing the capi tal from revenue expenditure.
But the tests so laid down are not exhaustive and it is not possible to reconcile the reasons given in all of them, as each decision is rounded on its own facts and circumstances.
Since, in the instant case the facts are clear, it is not necessary to consider each and every case in detail or to analyse the tests laid down in various decisions.
However, before we consider the facts and circumstances of the case, it is necessary to refer to some of the leading cases laying down guidelines for deter mining the question.
In Assam Bengal Cement Co. Ltd. vs The Commissioner of Income Tax, West Bengal, , 'this Court observed that in the great diversity of human affairs and the complicated nature of business opera tion, it is difficult to lay down a test which would apply to all situations.
One has, therefore, to apply the criteria from the business 320 point of view in order to determine whether on fair appreci ation of the whole situation the expenditure incurred for a particular matter is of the nature of capital expenditure or a revenue expenditure.
The Court laid down a simple test for determining the nature of the expenditure.
It observed: the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring bene fit of the business it is properly attributable to capital and is of the nature of capital expenditure.
If on the other hand it is made not for the purpose of bringing into exist ence any such asset or advantage but for running the busi ness or working it with a view to produce the profits it is a revenue expenditure.
If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically.
The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure.
" In K.T.M.T.M. Abdul Kayoom and Another vs Commissioner of Income Tax, , this Court after consider ing a number of English and Indian authorities held that each case depends on its own facts, and a close similarity between one case and another is not enough, because even a single significant detail may alter the entire aspect.
The Court observed that what is decisive is the nature of the business, the nature of the expenditure, the nature of the right acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases.
In that case the assessee claimed deduction of Rs.6, 111 paid by it to the Government as lease money for the grant of exclusive rights, liberty and authority to fish and carry away all chank shells in the sea off the coast line of a certain area specified in the lease for a period of three years.
The Court held that the amount of Rs.6,111 was paid to obtain an enduring benefit in the shape of an exclusive right to fish; the payment was not related to the chanks, instead it was an amount spent in acquiring an asset from which it may collect its stockin trade.
It was, therefore, an expenditure of a capital nature.
In Bombay Steam Navigation Co. Pvt. Ltd. vs Commissioner of Income Tax, Bombay, ; , the assessee pur chased.
the 321 assets of another Company for purposes of carrying on pas senger and ferry services, it paid part of the consideration leaving the balance unpaid.
Under the agreement of sale the assessee had to pay interest on the unpaid balance of money.
The assessee claimed deduction of the amount of interest paid by it under the contract of purchase from its income.
The court held that the claim for deduction of amount of interest as revenue expenditure was not admissible.
The Court observed that while considering the question the Court.
should con . sider the nature and ordinary course of business and the object for which the expenditure is in curred.
If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit earning process and not for acquisition of an asset or a right of a perma nent character, the possession of which is a condition for the carrying on of the business, the expenditure may be regarded as revenue expenditure.
But, on the facts of the case, the Court held that the assessee 's claim was not admissible, as the expenditure was related to the acquisi tion of an asset or a right of a permanent character, the possession of which was a condition for carrying the busi ness.
The High Court has relied upon the decision of this Court in R.B. Seth Moolchand Suganchand vs Commissioner of Income Tax, New Delhi, , in rejecting the assessee 's contention.
In Suganchand 's case the assessee was carrying on a mining business, he had paid a sum of Rs. 1,53,800 to acquire lease of certain areas of land bearing mica for a period of 20 years.
Those areas had already been worked for 15 years by other lessees.
The assessee had paid a sum of Rs.3,200 as fee for a licence for prospecting for emerald for a period of one year.
In addition to the fee, the assessee had to pay royalty on the emerald excavated and sold.
The assessee claimed the expenditure of Rs.3,200 paid by it as fee to the Government for prospecting licence as revenue expenditure.
The assessee further claimed that the appropriate part of Rs. 1,53,800 paid by it as lease money was allow able as revenue expenditure.
The Court held that while considering the question in relation to the mining leases an empirical test is that where minerals have to be won, extracted and brought to surface by mining operations, the expenditure incurred for acquiring such a right would be of a capital nature.
But, where the mineral has already been gotten and is on the surface, then the expenditure incurred for obtaining the right to acquire the raw material would be a revenue expenditure.
The Court held that since the payment of tender money was for acquisition of capital asset, the same could not be treated as a revenue expenditure.
As regards the claim relating to the prospecting licence 322 fee of Rs.3,200 the Court held that since the licence was for prospecting only and as the assessee had not started working a mine, the payment was made to the Government with the object of initiating the business.
The Court held that even though the amount of prospecting licence fee was for a period of one year, it did not make any difference as the fee was paid to obtain a licence to investigate, search and find the mineral with the object of conducting the business, extracting ore from the earth necessary for initiating the business.
The facts involved in that case are totally dif ferent from the instant case.
The assessee in the instant case never claimed any deduction with regard to the licence fee or royalty paid by it, instead, the claim relates to the amount spent on the removal of a restriction which obstruct ed the carrying of the business of mining within a particu lar area in respect of which the assessee had already ac quired mining rights.
The payment of Rs.3 lakhs for shifting of the Railway track and Railway Station was not made for initiating the business of mining operations or for acquir ing any right, instead the payment was made to remove ob struction to facilitate the business of mining.
The princi ples laid down in Suganchand 's case do not apply to the instant case.
In British Insulated and Helsby Cables Ltd. vs Atherton, , Lord Cave laid down a test which has almost universely been accepted.
Lord Cave observed: ". when an expenditure is made, not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, I think that there is very good reason (in the absence of special circum stances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue out to capital." This dictum has been followed and approval by this Court in the cases of Assam Bengal Cement Co. Ltd. (supra); Abdul Kayoom (supra) and Seth Sugancha.nd (supra) and several other decisions of this Court.
But, the test laid down by Lord Cave has been explained in a number of cases which show that the tests for considering the expenditure for the purposes of bringing into existence, as an asset or an advantage for the enduring benefit of a trade is not always true and perhaps Lord Cave himself had in mind that the test of enduring benefit of a trade would be a good test in the absence of special circumstances leading to an opposite conclusion.
Therefore, the test laid down by Lord Cave was not a conclusive one as Lord Cave himself did not regard his test 323 as a conclusive one and he recognised that special circum stances might very well lead to an opposite conclusion.
In Gotan Lime Syndicate vs C. I. T., Rajasthan & Delhi, 18, the assessee which carried on the busi ness of manufacturing lime from limestone, was granted the right to excavate limestone in certain areas under a lease.
Under the lease the assessee had to pay royalty of Rs.96,000 per annum.
The assessee claimed the payment of Rs.96,000 to the Government as a revenue expenditure.
This Court after considering its earlier decision in Abdul Kayoom 's case (supra) and also the decision of Lord Cave in British Insu lated (supra), held that the royalty paid by the assessee has to be allowed as revenue expenditure as it had relation to the raw materials to be excavated and extracted.
The Court observed that the royalty payment including the dead rent had relation to the lime deposits.
The 'Court observed although the assessee did derive an advantage and further even though the advantage lasted at least for a period of five years there was no payment made once for all.
No lump sum payment was ever settled, instead, only an annual royal ty and dead rent was paid.
The Court held that the royalty was not a direct payment for securing an enduring benefit, instead it had relation to the raw materials to be obtained.
In this decision expenditure for securing an advantage which was to last at least for a period of five years was not treated to have enduring benefit.
In M.A. Jabbar vs C.I.T. Andhra Pradesh, Hyderabad; , , the assessee was carrying on the business of supplying lime and sand, and for the purposes of acquiring sand he had obtained a lease of a river bed from the State Government for a period of 11 months.
Under the lease he had to pay large amount of lease money for the grant of an exclusive right to carry away sand within, under or upon the land.
The assessee in proceedings for assessment of incometax claimed deduction with regard to the amount paid as lease money.
The Court held that the expenditure incurred by the assessee was not related to the acquisition of an asset or a right of permanent character instead the expenditure was for a specific object of ena bling the assessee to remove the sand lying on the surface of the land which was stock in trade of the business, there fore, the expenditure was a revenue expenditure.
Whether payments made by an assessee for removal of any restriction or obstacle to its business would be in the nature of capital or revenue expenditure, has been consid ered by courts.
In Commissioner of Inland Revenue vs Carron Company, [1966 69] 45 Tax Cases 13 the assessee carried on the business of iron founders which was incor 325 porated by a Charter granted to it in 1773.
By passage of time many of its features had become archaic and unsuited to modern conditions and the company 's commercial performance was suffering a progressive decline.
The Charter of the company placed restriction on the company 's borrowing powers and it placed restriction on voting rights of certain mem bers.
The company decided to petition for a supplementary Charter providing for the vesting of the management in Board of Directors and for the removal of the limitation on compa ny 's borrowing powers and restrictions on the issue and transfer of shares.
The company 's petition was contested by dissenting share holders in court.
The company settled the litigation under which it had to pay the cost of legal action and buy out the holdings of the dissenting share holders and in pursuance thereof a supplementary Charter was granted.
In assessment proceedings, the company claimed deduction of payments made by it towards the cost of obtain ing the Charter, the amounts paid to the dissenting share holders and expensed in the action.
The Special Commissioner held that the company was entitled to the deductions.
On appeal the House of Lords held that since the object of the new Charter was to remove obstacle to profitable trading, and the engagement of a competent Manager and the removal of restrictions on borrowing facilitated the day to day trading operation of the company, the expenditure was on income account.
The House of Lords considered the test laid down by Lord Cave L.C. in British Insulated Company 's case and held that the payments made by the company, were for the purpose of removing of disability of the company trading operation which prejudiced its operation.
This was achieved without acquisition of any tangible or intangible asset or without creation of any new branch of trading activity.
From a commercial and business point of view nothing in the nature of additional fixed capital was thereby achieved.
The Court pointed out that there is a sharp distinction between the removal of a disability on one hand payment for which is a revenue payment, and the bringing into existence of an advantage, payment for which may be a capital payment.
Since, in the case before the Court, the Company had made payments for removal of disabilities which confined their business under the out of date Charter of 1773, the expendi ture was on revenue account.
In Empire Jute Company vs C.I. T, [1980] 124 ITR I, this Court held that expenditure made by an assessee for the purpose of removing the restriction on the number of working hours with a view to increase its profits, was in the nature of revenue expenditure.
The Court observed that if the advantage consists merely in facilitat ing the assessee 's trading operations of enabling the man agement and conduct of the assessee 's business to be carried on more efficiently or more profitably while leaving 326 he fixed capital untouched, the expenditure would be on revenue account even though the advantage may endure for an indefinite future.
We agree with the view taken in the aforesaid two decisions.
In our opinion where the assessee has an existing right to carry on a business, any expendi ture made by it during the course of business for the pur pose of removal of any restriction or obstruction or disa bility would be on revenue account, provided the expenditure does not acquire any capital asset.
Payments made for remov al of restriction, obstruction or disability may result in acquiring benefits to the business, but that by itself would not acquire any capital asset.
In the instant case the assessee had been granted mining lease in respect of 4.27 square miles at Jamsar under which he had right to sink, dig, drive, quarry and extract mineral i.e. the gypsum and in that process he had right to dig the surface of the entire money, licence fee and other charges for securing the right of mining in respect of the entire area of 4.27 square miles including the right to the miner als under the Railway Area.
The High Court has held that on payment of Rs.3 lakhs, the assessee acquired capital asset of an enduring nature.
The High Court failed to appreciate that Clause 3 was only restrictive in nature it did not destroy the assessee 's right to the minerals found under the Railway Area.
The restriction operated as an obstacle to the assessee 's right to carry on business in a profitable man ner.
The assesse paid a sum of Rs.3 lakhs towards the cost of removal of the obstructions which enabled the assessee to carry on its business of mining in an area which had already been leased out to it for that purpose.
There was, there fore, no acquisition of any capital asset.
here is no dis pute that the assessee completed mining operations on the released land (Railway Area) within a period of 2 years, in the circumstances the High Court 's view that the benefit acquired by the assessee on the payment of the disputed amount was a benefit of an enduring nature is not sustain able in law.
As already observed, there may be circumstances where expenditure, even if incurred for obtaining advantage of enduring benefit may not amount to acquisition of asset.
The facts of each case have to be borne in mind in consider ing the question having regard to the nature of business its requirement and the nature of the advantage in commercial sense.
In considering the cases of mining business the nature of the lease the purpose for which expenditure is made, its relation to the carrying on of the business in a profitable manner should be considered.
In the instant case existence of Railway Station, yard and buildings on the surface of the demised land operated as an obstruction to 327 the assessee 's business of mining.
The Railway Authorities agreed to shift the Railway establishment to facilitate the assessee to carry on his business in a profitable manner and for the purposes the assessee paid a sum of Rs.3 lakhs towards the cost of shifting the Railway construction.
The payment made by the assessee was for removal of disability and obstacle and it did not bring into existence any advan tage of an enduring nature.
The Tribunal rightly allowed the expenditure on revenue account.
The High Court in our opin ion failed to appreciate the true nature of the expenditure.
We are, therefore, of the opinion that the High Court committed error in interfering with the findings recorded by the Income Tax Appellate Tribunal.
We, accordingly, allow the appeal, set aside the order of the High Court and re store the order of the Tribunal.
The appellant is entitled to its costs.
N.V.K. Appeal allowed.
| IN-Abs | The appellant assessee carried on the business of mining gypsum.
The predecessor in interest of the assessee acquired a lease from the Maharaja of one of the erstwhile princely State on September 29, 1948 for mining of gypsum for a period of 20 years over an area of 4.27 square miles in the State.
The lease was liable to be renewed after the expiry of 20 years.
By a deed of assignment dated December 11, 1948 the rights under the lease were assigned to the assessee company, in which the State Government owned 45% shares.
The assessee entered into an agreement with a Government of India Public Undertaking for the supply of gypsum of minimum of 83.5% quality.
Under the lease, the assessee was conferred the liberties and powers to enter upon the entire leased land and to search for win, work, get, raise, convert and carry away the gypsum for its own benefits in the most economic convenient and beneficial manner and to treat the same by calcination and other processes.
The lease agreement consisted of several parts and each part contained several clauses.
Clause 3 of part Iii prescribed restrictions on mining operation within 100 yards from any railway, reser voir, canal or other public works.
This clause had been incorporated in the lease to protect the railway track and railway station which was situated within the area demised to the lessee.
The assessee exclusively carried on the mining of gypsum in the entire area demised to it.
The Railway Authorities extended the railway area by laying down fresh track, pro viding for railway siding and further constructed quarters in the leased area without the permission of the assessee.
The assessee company filed a civil suit for ejecting the railways from the encroached area but it failed in the suit.
314 As the assessee company on research and survey found that under the railway area a high quality of gypsum was available, which was required as raw material by the Public Sector Company, all the parties (Public Sector Company, the Railway Board and the assessee company) negotiated the matter, the Railway Board agreeing to shift the railway station, track and yards to an alternative area offered by the assessee, the parties equally bearing the cost of the shifting.
Under the aforesaid agreement, the assessee company paid a sum of Rs.3 lakhs as its share towards the cost of shift ing of the Railway Station and other constructions, and claimed deduction of the said sum for the assessment year 1964 65.
The Income Tax Officer rejected the assessee 's claim on the ground that it was a capital expenditure.
The order was confirmed on appeal by the Appellate Assistant Commissioner.
On appeal by the assessee, the Income Tax Appellate Tribunal held that the payment of Rs.3 lakhs by the assessee company was not a capital expenditure, but a revenue expend iture.
The Tribunal referred the question to the High Court under section 256 of the Income Tax Act, 1961, on an appli cation by the revenue, which held that since on payment of Rs.3 lakhs to the Railways the assessee acquired a new asset which was attributable to capital of enduring nature, the sum of Rs.3 lakhs was a capital expenditure and it could not be a revenue expenditure.
In the appeal to this Court on the question whether the payment of Rs.3 lakhs to the Northern Railway was a revenue expenditure and was a deduction allowable under the Income Tax Act, 1961.
Allowing the appeal, this Court, HELD: 1(a) Where the assessee has an existing right to carry on a business, any expenditure made by it during the course of business for the purpose of removal of any re striction or obstruction or disability would be on revenue account, provided the expenditure does not acquire any capital asset.
[326A] (b) Payments made for removal of restriction, obstruc tion or disability may result in acquiring benefits to the business, but that by itself would not acquire any capital asset.
[326B] Gotan Lime Syndicate vs C.I.T., Rajasthan & Delhi, ; M.A. Jabbar vs C.I.T., Andhra Pradesh, Hyderabad, [1968] 315 2 SCR 413 and Commissioner of Inland Revenue vs Carron Company, [1966 69] 45 Tax Cases 18, referred.
Empire Jute Company vs C. I. T., ; , affirmed.
In the instant case, the assessee have been granted mining lease in respect of 4.27 square miles under which he had right to sink, dig, drive, quarry and extract mineral i.e. the gypsum and in that process he had right to dig the surface of the entire area leased out to him.
The payment of Rs.3 lakhs was not made by the assessee for the grant of permission to carry on mining operations within the railway area, instead the payment was made towards the cost of removing the construction which obstructed the mining opera tions.
On the payment made to the Railway Authorities the assessee did not acquire any fresh right to any mineral nor he acquired any capital asset instead, the payment was made by it for shifting the Railway Station and track which operated as hindrance and obstruction to the business of mining in a profitable manner.
[326C E] 2.
There may be circumstances where expenditure, even if incurred for obtaining advantage of enduring benefit would not amount to acquisition of asset.
The facts of each case have to be borne in mind in considering the question having regard to the nature of business, its requirement and the nature of the advantage in commercial sense.
[326F G] 3(a) The test for considering the expenditure for the purposes of bringing into existence an asset or an advantage for the enduring benefit of a trade is not always true and conclusive.
[327B] 3(b) In considering the cases of mining business the nature of the lease the purpose for which expenditure is made, its relation to the carrying on of the business in a profitable manner should be considered.
[326H] In the instant case, existence of Railway Station, yard and buildings on the surface of the demised land operated as an obstruction to the assessee 's business of mining.
The Railway Authorities agreed to shift the Railway establish ment to facilitate the assessee to carry on his business in a profitable manner and for that purpose the assessee paid a sum of Rs.3 lakhs.
The payment made by the assessee was for removal of disability and obstacle and it did not bring into existence any advantage of an enduring nature.
There was therefore.
no acquisition of any capital asset.
[326H; 327A] 316 British Insulated and Helsby.
Cables Ltd. vs Atherton, , explained.
Assam Bengal Cement Co. Ltd. vs The Commissioner of Income Tax, West Bengal, , referred to.
R.B. Seth Moolchand Suganchand vs Commissioner of Income Tax, New Delhi, , distinguished.
The Tribunal rightly allowed the expenditure on revenue account.
The High Court failed to appreciate the true nature of the expenditure.
It committed an error in interfering with the findings recorded by the Income Tax Appellate Tribunal.
[327B C]
|
ivil Appeal No. 2675 of 1987.
From the Judgment and Order dated 18.3.1987 of the Central Administrative Tribunal, Allahabad in Registration T.A. No. 999 of 1986.
A. Subba Rao and C.V. Rao for the Appellants.
Harish N. Salve, B.S. Chauhan, Sushil Kumar Jain, Ms. Gitanjali Mohan and B.P. Singh for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Respondents 1 and 2 in this Appeal Dr. Tripa thi and Shri Sinha (hereinafter referred to as the respond ents) were recruited directly to the posts of Income Tax Officers, Class I.
They had made a grievance before the Central Administrative Tribunal, Allahabad that they were not appointed to the next higher post of Assistant Commis sioner, Income Tax according to their turn in the seniority list prepared as per the directions given by this Court in the cases of Bishan Sarup Gupta etc.
vs Union of India & Ors., etc.
; , and Union of India etc.
vs Majji Jangamayya etc.; , As a result, their seniority as Assistant Commissioners was adversely affected and it required correction.
This grievance found favour with the Tribunal which by its impugned decision of 18.3.
1987 quashed the seniority list of Assistant Commis sioners and Commissioners of Income Tax and directed the appellants herein, namely, the Central Board of Direct Taxes and the Union of India to redetermine their seniority in the list of Asstt.
Commissioners, vis avis, the seniority of respondents 3 to 20 who are also direct recruits, and other concerned officers, in the light of the directions and princi 338 ples laid down by this Court in the case of Union of India etc.
vs Majji Jangamayya etc.
(supra).
The dispute with regard to the seniority between the direct recruits and the promotees in the Income Tax Depart ment was set at rest by a Constitution Bench of this Court when it delivered its decision on 16.4.1974 in B.S. Gupta case (supra) which is also known as the lind B.S. Gupta case.
By that decision, this Court accepted as correct the seniority list of Income Tax Officers which was filed before it on February 15, 1973 having been prepared in accordance with the directions given in the judgment dated August 16, 1972 in, what is known as the 1st B.S. Gupta case reported in 1975 Supp.
SCR 491.
On the basis of this seniority list, the Departmental Promotion Committee (hereinafter referred to as the Committee) prepared a selection list in July, 1974 for promotion of Income Tax Officers, Class I to the posts of Assistant Commissioners.
There were 112 vacancies and the Government sent to the Committee 336 names in order of seniority for consideration of the field of choice.
The Committee followed the instructions given for the purpose in the Government Memorandum of 1957 and found 276 Officers fit for the area of choice, assessed the merits of 145 persons in order of seniority, found one officer outstanding, 114 very good and 7 Scheduled Caste Scheduled Tribes Officers good.
This selection was challenged in various High Courts.
Two of the High Courts allowed the petitions in favour of the challenging petitioners and the other High Courts gave interim orders staying the operation of the selection list.
At that stage, the Union of India preferred appeals to this Court.
This Court allowed the appeals and upheld the selec tion list, vide Union of India etc.
vs Majji Jangamayya case (supra) decided on 5.11.1976.
While doing so, this Court explained the observations made in the 1st B.S. Gupta case (supra) at page 506 thereof, which were relied upon by the respondent Officers in that case.
These observations were as follows: "After the fresh seniority list is made in accord ance with the above directions, it will be open to any direct recruit or promotee to point out to the department that in the selections made to the post of Assistant Commis sioner from 1962 onwards, he, being otherwise eligible, was entitled on account of the new seniority given to him, to be considered for promotion to the post of Assistant Commis sioner.
The department may have to consider his case for promotion on his record as on the date when he ought to have been considered for selection but not so considered.
If 339 he is selected, his position will be adjusted in the cadre of the Assistant Commissioners without affecting the promo tee Assistant Commissioners who had been confirmed prior to 22.2.1967 the date on which the Jaisinghani 's case was disposed of by this Court." (Emphasis supplied) While explaining these observations, this Court observed as follows: "The observations . . are that if as a result of the fresh seniority list it is found that any officer was eligible for promotion to the post of Assistant Commissioner on account of his place in the new seniority list, the department might have to consider his case for promotion on his record as on the date when he ought to have been consid ered and if he would be selected his position will be ad justed in the seniority list of Assistant Commissioners.
The object is to see that the position of such a person is not affected in the seniority list of Assistant Commissioners because he is actually promoted later pursuant to the new seniority list, although according to the new seniority list itself he should have been promoted earlier.
The observa tions do not mean that although the Committee can meet for the selection of officers for promotion to the post of Assistant Commissioner only after the seniority list is approved by this Court, the selection would be deemed to be made at the time when a vacancy in the post of Assistant Commissioner occurred and the eligibility of officers for selection will be determined by such deemed date of selec tion.
No employee has any right to have a vacancy in the higher post filled as soon as the vacancy occurs.
Government has the right to keep the vacancy untilled as long as it chooses.
In the present case, such a position does not arise because of the controversy between two groups of officers for these years.
The seniority list which is the basis for the field of choice ,for promotion to the post of Assistant Commissioner was approved by this Court on 16 April, 1974.
Promotions to the post of Assistant Commissioners are on the basis of the selection list prepared by the Committee and are to be made prospectively and not retrospectively." (Emphasis ours) 340 The contention raised by the respondents Dr. Tripathi & Shri Sinha in the present appeal and which as stated above, is accepted by the Tribunal, was that in view of the said observations in 1st B.S. Gupta case (supra) as explained in Majji Jangamayya case (supra) while selecting the Income Tax Officers to the post of Assistant Commissioners, the Commit tee was required to consider the cases of the Income Tax Officer falling within the zone, with reference to their records on the date the Committee met for selection.
They were not to be selected with reference to their records relevant to the year for which their selection was to be made.
Since the Committee followed the latter course, it had, according to the petitioners, violated the directions of this Court given in the case of 1st B.S. Gupta (supra) as explained in the case of Majji Jangamayya (supra).
Unfortu nately, the Tribunal fell for this contention little realis ing that it was the first course canvassed by the contesting respondents and not the latter which would have been con trary to the directions of this Court in both the 1st B.S. Gupta case (supra) as well as Majji Jangamayya case (supra).
As is abundantly clear from the relevant observations repro duced above, what was desired by this Court in both these cases was that if according to the new seniority list there were cases of officers who were entitled to be considered for promotion much before they were considered on the basis of the old seniority list, the Committee should Look into such cases, and should adjust the promotions given right from the year 1962 onwards by considering the cases of such unjustly superseded officers.
Hence the Committee was re quired to consider the vacancies in the posts of Asstt.
Commissioners year wise from 1962 onwards, and if the super seded officers were found fit for such promotion, they were to be given seniority as Asstt.
Commissioners from the year in which they would have been promoted.
It goes without saying that while considering the promotions in the earlier years, the Committee had to consider the record of the officers relevant to those years.
The Committee could not have taken into consideration the record of future years for promotion in the earlier years.
This is also the import of the observations of this Court emphasised by us above.
The Committee did exactly that as is clear from what is stated in paragraphs 12 to 18 of the counter filed on behalf of the appellants in the proceedings before the Tribunal.
There it is pointed out specifically with reference to the contesting respondents Dr. Tripathi and Shri Sinha that the Committee which met from 1977 to 1979 to adjust the promotions as directed by this Court, ' considered in 1978 the case of Dr. Tripathi with respect to his claim which arose in September 1968, February 1969 and September 1969.
He was not selected to the post for the vacancies in September 1968 and February 341 1969 on the basis of comparative merit.
However, he was selected for one of the vacancies in September 1969 and was given deemed promotion with reference to that date.
So also the case of respondent Shri Sinha was considered for the vacancies in September 1968, February 1969 and September 1969.
He was not selected for the vacancies in September 1968 and February 1969, but was selected for one of the vacancies in September 1969.
He was given the deemed date of promotion from that date.
There is no dispute that the seniority of both the respondents as Asstt.
Commissioners has been fixed with reference to the said dates of their deemed promotion.
Mr. Salve, the leaned counsel appearing for both the contesting respondents, however, urged two contentions.
His first and the main contention was that the claims of the said respondents should have been considered on the basis of their records either on the date the new seniority list was prepared, i.e., February 2, 1973 (as.
approved in the lind Gupta case decided on April 16, 1974) or on the date the Committee met in 1978 to consider their claims for the promotional posts.
He contended that this was the direction given by this Court in the 1st Gupta case (supra) and in Majji Jangamayya case (supra).
We have already quoted above the directions given in both the said cases.
It will be obvious from the said directions that the course suggested by Shri Salve, if adopted by the Committee, would have been in clear violation of the said directions.
On the other hand, the Committee had strictly and correctly abided by the said directions.
The second contention urged by Shri Salve was that the selection was not made according to the instructions given in the Government Memorandum of 1957.
According to him, it is the merit cum seniority and not seniority cum merit formula which should have been followed while making the promotions.
We have no record before us to find out what exactly were the comparative merits of the contesting re spondents as against the other candidates.
The respondents in their counter affidavit have stated in so many words that the comparative merits of the respondents were considered, vis a vis the other candidates for each of the occasions.
They were not selected for the vacancies of two earlier occasions and were selected on the third occasion on the basis of the comparative merits.
We also cannot overlook the fact that before the Tribunal the contesting respondents neither advanced any such contention nor requested for the production of the records.
In fact, their case before the Tribunal did not centre rounds this point at all.
Even so, since the records were brought by the appellants in this Court, we had asked Shri Salve to look into them and inform us 342 whether his grievance that the merits of his clients were not given due weight by the Committee had any substance.
No such material was furnished to us.
The result is, the appeal is allowed and the impugned decision of the Tribunal is set aside.
In the circumstances, there will be no order as to costs.
The interim application and the contempt petitions respectively were filed by the contesting respondents for seeking directions to the appellants to appoint them provi sionally as Chief Commissioners of Income Tax and for taking action for the alleged breach of the orders of this Court for not considering their claims to the said posts according to seniority.
In the view we have taken, they have to be dismissed.
We also understand from the appellants that the contesting respondents have since been appointed as Chief Commissioners according to their seniority as determined by the department and approved by us as above.
We have been told by appellants ' counsel that the reversal of the Tribu nal 's decision no longer affects the promotion granted to them.
N.P.V. Appeal al lowed.
| IN-Abs | Respondents Nos. 1 and 2, direct recruit Income Tax Officers, CIasa I, flied a petition before the Central Administrative Tribunal contending that they were not ap pointed to the next higher post of Assistant Commissioner according to their turn in the seniority list prepared as per directions given by the Court in Bishan Sarup Gupta etc.
vs Union of India; , and Union of India Etc.
vs Majji Jangammayya, ; , adversely af fecting their seniority as Assistant Commissioners, and hence it required correction.
The Tribunal quashed the seniority list of Assistant Commissioners and Commissioners of Income Tax and directed the appellants to redetermine their seniority in the cadre of Assistant Commissioners via a via the seniority of re spondents No. 3 to 20, also direct recruits and other con cerned officers, in the light of the directions and princi ples laid down by this Court in Majji Jangamayya 's case.
Hence the appeal by the Department.
was contended on behalf of the respondents that in view of the instructions of this Court in 1st B.S. Gupta case (1975) Supp SCR 491, as explained in Majji Jangamayya 's case, while selecting the Income Tax Officers to the post of Assistant Commissioners, the Departmental Promotion Commit tee was required to consider the cases of the Income Tax Officers falling within the zone with reference to the records, either on the date of seniority list was prepared i.e. February 2, 1972 (as approved by the Court in 2nd Gupta case) or on the date the Committee met for selection, and not with reference to their records relevant to the year for which their selection was to made, but since the Committee had followed the latter course, it had violated the direc tions of this Court.
It was also urged that the selection was not rode according to the instruc 336 tions given in the Government Memorandum of 1957, and that while making the promotions, merit cum seniority and not seniority cummerit formula, should have been followed.
Allowing the appeal, this Court, HELD: 1.1 The dispute with regard to the seniority be tween the direct recruits and the promoters in the Income Tax Department was set at rest by this Court in 2nd B.S. Gupta case wherein this Court accepted as correct the sen iority list of Income Tax Officers, prepared in accordance with the directions given in the 1st B.S. Gupta case.
While upholding the selection list for promotion of Income Tax Officers, Class I to the posts of Assistant Commissioners prepared on the basis of the aforesaid seniority list and the instructions in the Government Memorandum of 1957, in Majji Jangamayya 's case, this Court explained the observa tions made in the 1st B.S. Gupta 's case.
[338B C; F] 1.2 What was desired by this Court in the 1st B.S. Gupta case and Majji Jangamayya case was that if according to the new seniority list there were cases of officers who were entitled to be considered for promotion much before they were considered on the basis of the old seniority list, the Committee should look into such cases, and should adjust the promotion given right from the year 1962 onwards by consid ering the cases of such unjustly superseded officers.
Hence the Committee was required to consider the vacancies in the posts of Asstt.
Commissioners year wise from 1962 onwards and if the superseded officers were found fit for such promotion, they were to be given seniority as Asstt.
Commis sioners from the year in which they would have been promot ed.
Thus, while considering the promotions in the earlier years, the Committee had to consider the record of the officers relevant to those years.
The Committee could not have taken into consideration the record of future years for promotion in the earlier years.
This is the import of the observations of this Court.
[340D F; B] 1.3 The Committee, which met from 1977 to 1979 to adjust the promotions as directed by this Court, considered in 1978 the cases of Respondents No. 1 and 2 with reference to their claims which arose in September 1968, February 1969 and September 1969.
They were not selected for the vacancies in September 1968 and February 1969, on the basis of compara tive merit.
However, they were selected for the vacancies in September 1969 and given deemed promotion with reference to that date and their seniority as Assistant Commissioners fixed as on that date.
The Committee has strictly and cor rectly abided by the directions in both the cases.
[340G H] 337 1.4 The comparative merits of the two respondents were considered on each of the three occasions and they were selected only on the third occasion.
They have since been appointed as Chief Commissioners according to their seniori ty as determined by the department and approved by this Court.
[342C] Bishan Sarup Gupta vs Union of India and Ors., [1975] Supp.
SCR 491; Union of India etc.
vs Majji Jangamayya etc.
; , explained and Bishan Sarup Gupta etc.
vs Union of India & Ors.
Etc., ; , re ferred to.
|
ivil Appeal No. 1996 of 1990.
From the Judgment and Order dated 14.9.
1989 of the Delhi High Court in Civil Writ No. 2038 of 1988.
T.S. Krishnamurthy Ayer, T.V.S.N. Chari and C.V. Rao for the Appellants.
Ashok Grover and V.N. Kaura for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
This appeal raises some questions which are important both for the Delhi Administration as well as for their lessees of land.
Shortly stated, the questions in volved are: (a) what constitutes an application for permis sion to convert the user of the land? (b) from which date the conversion charges are leviable? and (c) from which date interest is chargeable on the conversion charges? 2.
The land involved in the present ease is at 20, Barakhamba Road, New Delhi and admeasures about 0,956 acre.
It was leased by 304 the Governor General in Council to one Smt.
Rama Bai on November 17, 1931.
The regular lease deed was drawn up in 1938.
It was a perpetual lease given on a premium of Rs.8,000 at the annual rent of Rs.400.
Rama Bai con structed a residential building on the land.
On May 20, 1938, Smt.
Rama Bai assigned the lease in favour of Smt.
Leelawati who died on November 6, 1969.
The interest in the lease devolved on respondents 1 4 and one Hans Raj Gupta and their names were mutated in the record of rights as is evidenced by the Government Memo of November 21, 1977.
Hans Raj Gupta died on July 31, 1985.
Respondents 5 11 are his heirs and legal representatives.
It appears that Hans Raj Gupta had left a will.
It is the subject matter of probate proceedings in Suit No. 62 of 1985 which is being contested.
If the will is probated then share of the late Hans Raj Gupta will devolve upon respondents 6 9; otherwise, it will devolve on all his heirs, viz., respondents 5 11.
For the purpose of the questions to be answered in this appeal, we are not much concerned with the revolution of property after the death of late Hans Raj Gupta.
In September 1962, the Delhi Development Authority prepared a Master Plan for Delhi under Section 7 of the Delhi Development Act, 1957 (hereinafter referred to as the "Act").
Before the names of respondents 1 4 and the late Hans Raj Gupta were mutated in the property register on November 21, 1977, a letter was written on April 25, 1977 by one of the lessees to be precise, by the first respondent, through an advocate, to the Land & Development Officer which read as follows: ". .
My client Shri Dev Raj Gupta son of late Smt.
Leela Gupta proposes to construct a multi storeyed building on the above mentioned plot.
Please let me know the charges, if any, payable for conversion of the land use from residen tial to commercial for constructing a multi storeyed commer cial building on the said plot after demolishing the exist ing bungalow constructed on the above said plot.
Your early response in the matter shall highly be appreciated.
Thanking you, We do not have on record reply, if any, sent to this letter.
But it 305 appears that there was some letter of the same date, viz., April 25, 1977 addressed by "the heirs and executors" of the estate of late Smt.
Leelawati Gupta, C/o Shri Prem Shankar, Advocate, i.e., the very same advocate who had written the letter earlier alluded to on behalf of the first respondent, and a reply was given by the office of the Land & Develop ment Officer on July 29, 1977 to this letter of the "heirs and executors etc." stating therein that their letter was receiving attention.
What that letter was has not come on record.
The only development thereafter was, as stated earlier, the Government Memo of November 21, 1977 communi cating that the names of respondents 1 4 and of the late Hans Raj Gupta were mutated in the property register against the leased land.
It may be mentioned here that this Govern ment Memo was addressed to the late Hans Raj Gupta and respondents 1 4 care of the said Advocate, Shri Prem Shan kar.
We are informed at the Bar that the request for such mutation was made on October 12, 1972 on the basis of a partition deed of December 15, 1970 after the death of Smt.
Leelawati on November 26, 1969.
What is important to note from the developments so far, as tar as the issues involved in this appeal are concerned, is that no application for conversion of the land was made on behalf of the lessees of the land.
On February 15, 1978, the late Hans Raj Gupta, for himself and "Dev Raj Gupta and others", wrote a letter to the Land & Development Officer stating therein as follows: "Under the Master Plan and the Zonal Plan the above plot now residential can be developed for the construction of a Commercial building.
Please let me know your terms in respect thereof together with commercialisation charges that will have to be paid by us.
The plans have already been submitted to the N.D.M.C. after their approval by the Urban Land Art Commis sioner.
Yours faithfully, S/ d Hans Raj Gupta for Hans Raj Gupta, Dev Raj Gupta and Others" 306 We have then on record a letter dated March 1, 1980 by the Assistant Settlement Commissioner to the lessees as follows: S/Shri Hans Raj Gupta, Dev Raj Gupta, Prem Raj Gupta Pardeep Kumar Gupta, C/o Shri Hans Raj Gupta, 3 Ratendon Road, New Delhi.
Sub: Premises situated on Plot No. 5, Block No. 205 known as 20 Barakhamba Road, New Delhi.
Dear Sir, I am to say that the applications in respect of the above mentioned premises received so far from different persons (some of them are not co lessees) to intimate con version charges for the construction of Multi stroyed Commercial building and your intention to sell the property to M/s. Central Investment (P) Ltd. and the United Towers India (Pvt.) Ltd. but rejection of the same by *.he
Compe tent authority under Urban (Ceiling & Regulation) Act, 1976 have created some doubts about that ownership.
It has there fore been decided that a fresh application for the permis sion to construct the Multi storeyed Building duly signed by all the co lessees be asked for.
You arc therefore requested to make an application in the prescribed proforma for the permission to construct the Multi storeyed Commercial building duly signed by all the co lessees.
Yours faithfully, S/d Encl.
As above.
(R.L. Gupta) Asstt.
Settlement Commissioner".
On June 3, 1980, a reminder was sent by the Government to the late Hans Raj Gupta and respondents 1 4 which reads as follows: " . .
I am to refer to this Office Letter No. LI 9/205(5)/ 307 80/197 dated 1.3.1980 on the above subject and to say that no reply thereto has to far been.
(sic.) In case no reply is received from you within 15 days from the said date of receipt on this letter, then it will be presumed that you are not interested for the permis sion to construct the multi storeyed Commercial Building and the case will be treated as closed . . " To this reminder, the late Hans Raj Gupta replied that the letter of March 1, 1980 sent by the Government appeared to have been lost in transit and did not reach their hands and requested for a duplicate of the same to enable them to take necessary steps.
The Government by its letter of August 11, 1980 sent a copy of its letter of March 1, 1980 and along with it also sent to the late Hans Raj Gupta and others a show cause notice dated May 31, 1980 which had also been received back by the Government undelivered.
Thereaf ter, on February 27, 1981, the late Hans Raj Gupta, and one Raj Kumar Gupta as a constituted Attorney for respondents 1 4, sent an application in the prescribed form.
In the accompanying letter of the same date, if was mentioned that the application was sent with reference to the Land & Devel opment Officer 's letter dated March 1, 1980 and the discus sions held in his office on February 9, 1981 for permission to construct a multi storeyed building.
All that is neces sary for us to note from the contents of the application form is firstly that it was mentioned there against the relevant query that the plan for constructing commercial building was sanctioned on January 21, 1981 by the New Delhi Municipal Committee and that exemption application under Section 20(1) of the Urban Land (Ceiling & Regulation) Act, 1976 was being processed.
On January 12, 1984, the Govern ment intimated to the parties that with reference to their letter of February 27, 1981 seeking permission for construc tion of multi storeyed commercial building, the lessor, i.e., the Government was willing to consider their said request provided they were willing to comply with the terms and conditions mentioned therein full in advance.
The terms and conditions mentioned in this communication included, among other things, the payment of additional premium of Rs.1,77,31,548 in jumpsum and payment of interest on the additional premium at 10 per cent per annum from 27th May, 1981 to 14th July, 1983 being Rs.37,84,349.55 and from 15th July, 1983 to the date of payment, at Rs. 1,47,762.90 per month.
The other terms and conditions imposed by the said letter are not in dispute and, therefore, they need not be reproduced here.
308 6.
On receipt of this letter, the late Hans Raj Gupta and other lessees made a representation on March 31, 1984 to the Works & Housing Minister of the Government of India requesting reconsideration of the terms and conditions imposed in the Government 's letter of permission of January 12, 1984.
It appears that thereafter there was a correspond ence between the parties which finally culminated in the Government 's letter of June 12, 1987 which virtually reject ed the representations of the lessees.
Further representa tions were made thereafter for reconsideration of the terms and conditions offered by the Government for conversion of the use of the leased land but it appears that they were not replied to.
The result was that the lessees approached the High Court by a writ petition challenging the appellant 's letter dated June 12, 1987 reiterating the terms and condi tions which were intimated earlier by the letter of January 12, 1984.
The main challenge in the petition was to the base year for the calculation of the charges for conversion of the land from the residential to the commercial purpose.
It was the contention of the petitioners that since they had applied to the respondents for permission to convert the user on February 15, 1978, they were liable to pay charges calculated with reference to the said date and not as the respondents had done with reference to May 25,1981.
Their second contention was that for the same reason no charges for the misuse of the land could be levied after February 15, 1978 and their third contention was that no interest could be charged on the alleged additional premium which was calculated by taking into consideration May 25, 1981 as the base date.
The High Court accepted all the said three con tentions by holding that the date with reference to which the conversion charges had to be calculated was February 15, 1978 when according to the court the respondents had duly applied for conversion of the user.
The High Court also held that in fact there was no need to make any such application for conversion after September 1962 when the Master Plan was prepared by the Delhi Development Authority declaring the region in which the leased land was situate as a commercial zone.
According to the court, there was an automatic and statutory conversion of the use of the land from residential to commercial purpose and hence there was no question of either payment of conversion charges or the misuse charges.
In this view of the matter the court held that the demand which had been made by the appellants for conversion charges calculated on the basis of the rate prevalent in April, 1981 instead of the rate prevalent on February 15, 1978 was not in accordance with law and the respondents were not obliged to make the payment pursuant to an invalid demand.
The High Court, therefore, quashed the 309 demand for conversion charges contained in the appellants letters dated January 12, 1984 and June 12, 1987 and direct ed the appellants to recompute the additional premium and other charges within a period of six months in accordance with law and in accordance with the observations made by it.
It is this decision which is challenged in this appeal.
While narrating the facts we have referred to the alleged application made by the respondents or on their behalf on April 25, 1977 and February 15, 1978.
Since the respondents do not contend that their alleged application of April 25, 1977 was an application for conversion of the user of the land, it is not necessary for us to deal with the same.
However, since it is contended vehemently on their behalf that the application of February 15, 1978 was a proper application for conversion of the user of the land and the High Court has also accepted it as such, it is necessary to deal with the same.
The contents of the said application have been reproducted above.
In the first in stance, this application was sent by the late Hans Raj Gupta for himself and for "Dev Raj Gupta and others".
The late Hans Raj Gupta did not sign it for Dev Raj Gupta and others as the holder of the power of attorney from them.
Nor did he make clear who "the said others were".
The lessees of the property at that time were Dev Raj Gupta Prem Raj Gupta and Pradeep Kumar Gupta in addition to the late Hans Raj Gupta.
Neither the said letter was signed by Dev Raj Gupta Prem Raj Gupta and Pradeep Kumar Gupta nor was it stated any where in the letter that they had authorised the late Hans Raj Gupta to seek permission on their behalf.
As far as the contents of the letter are concerned, they are self explanatory.
All that the late Hans Raj Gupta wanted to know from the Land and Development Officer were the terms and conditions for the construction of a commercial building on the land and the charges that would have to be paid for the same.
This can hardly be called an application for permission to con struct a commercial building on the land.
It is no more than an enquiry.
We are, therefore, unable to appreciate the contention that this letter constituted an application for permission to use the land for commercial purposes.
It is for this reason that we are unable to agree with the High Court 's finding that this letter was an application for the conversion of the user of the land.
It is immaterial in this connection whether any regular form of application was prepared and was available for use at the relevant time.
Even assuming that such a form was prescribed for the first time on June 15, 1978, the letter of February 15, 1978 could hardly be described as an application signed by the lessees, meaning thereby, all the lessees for permission to convert the user of the land.
310 The absence of a prescribed from does not made the letter the required application.
The least that is expected in an application for the purpose is a request by all the lesseess to permit the change of the user of the land showing readi ness and willingness to abide by the terms and conditions for such conversion of the user.
The letter in question, on the other hand, did nothing more than make an enquiry sug gesting that the application for the change of the would be made after the terms and conditions including the charges for the same are known.
We are, therefore, satisfied that the letter of February 15, 1978 was not an application made for the change of the user of the land.
It is for this very reason that we are of the view that it was for the first time on February 27, 1981 that a proper application was made for the purpose.
As has been pointed out hereinabove, after the letter of February 15, 1978 addressed by the late Hans Raj Gupta and others to the authority, we have on record only the letter of March 1, 1980 addressed by the authority to Hans Raj Gupta and others pointing out that applications in respect of the land were received by him from different persons some of whom were not even co lessees, to intimate conversion charges for the construction of "multi storeyed commercial building".
The letter also referred to their intention to sell the property to M/s. Central Investment Private Limited and the United Towers India Private Limited".
The authority also referred to the reflection of the same by the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 stated that the same had created some doubts about the ownership of the land.
It was, therefore, necessary accord ing to the authority that a fresh application for the per mission to construct the multi storeyed building" duly signed by all the co lessees" in the prescribed form should be sent.
It is obvious from this letter that there was some correspondence between the parties between February 15, 1978 and March 1, 1980 which has not come on record.
The letter of March 1, 1980 is obviously not a reply sent by the au thority to the late Hans Raj Gupta 's letter of February 15, 1978, for the latter does not refer to the construction of a multi storeyed building or the intended sale of the property to a third party.
The letter is also addressed not to the late Hans Raj Gupta and Dev Rai Gupta and others, but to the late Hans Raj Gupta, Dev Raj Gupta, Prem Raj Gupta and Pradeep Kumar Gupta.
It is also clear from the authority 's letter that different persons were seeking permission for change of the user of the land and some of them were not even the co lessees of the land.
The situation which ob tained till March 1, 1980 was, therefore, that there was no firm application by the authorised person or persons for conversion of the user of the land and it 311 is for this reason that the authority had asked the lessees to send the application in the prescribed form duly signed by all the co lessees.
There was no reply to this letter of March 1, 1980 and hence a reminder was sent by the authority on June 3, 1980 warning the lessees that in case no reply was received from them within 15 days, the matter would be treated as closed.
It is pursuant to this reminder that on February 27, 1981 a letter accompanied by an application in the prescribed form was sent, and both the letter as well as the prescribed form were duly signed for the first time by all the co lessees.
The contents of the accompanying letter make it clear that even the lessees treated this application as the first duly made application for the purpose.
It may also be mentioned here that, as has been stated in the application, the plans for the construction of the commer cial building were sanctioned only on January 21, 1981 and the,exemption application made to the competent authority under Section 20 (1) of the Act was even then still under process.
It is in response to this application that the sanction was given by the authority on January 12, 1984 to convert the user of the land.
We are, in the circumstances, of the view that it was only on February 27, 1981 that an application for the change of the user of the land was made by or on behalf of the respondent lessees of the land.
There is no explanation given by the appellants as to why the application made by the respondents of February 27, 1981 was not replied to till January 12, 1984.
Hence in the absence of anything else on records, it will have to be held that the date with reference to which conversion charges have to be counted is 27th February, 1981.
The authority has calculated additional premium with reference to May 27, 1981 on the footing that the outer limit for granting permission was three months from the date of the receipt of the application.
There is no justification for the authority to hold thus, for they are expected to process the application as early as possible and not to wait till the end of three months.
Unless there are valid reasons for them to do so or the delay is caused on account of an omission or commission on the part of the applicants, it is not proper to take the end of the three months as the date with reference to which the conversion charges should be calculated.
We are, however, informed that in the present case it makes no difference whether the charges are calculated with reference to 27th February 1981 or May 27, 1981.
Hence, the difference in dates in immaterial for our purpose.
312 11.
The High Court is further not right in holding that there was an automatic or a statutory conversion of the user of the land because in the Master Plan the land in question fell in the area reserved for commercial use.
The High Court failed to appreciate that the charge of user of the land permitted by the Plan was only enabling in nature.
It lifted the restriction which was otherwise there for using the land for commercial purpose.
The land has to be used as per the agreement between the contracting parties, and no change of the user can be made contrary to the agreement even if the Plan permits such user.
The Plan helps the parties to change the user, if the parties mutually agree to do so.
It does not permit the occupant to change the user unilaterally.
It is not, therefore, correct to say that no permission of the landlord was reeded to change the user of the land.
In the view we have taken, we direct that the addi tional premium should be calculated by the appellants on the basis of the rate which was prevalent as on February 27, 1981 which is the date of the application made for the change of the user.
The interest should be charged on such additional premium w.e.f. 12th April, 1984 since a period of three months from the date of notice, viz., January 12, 1984 was available to the respondent lessees to make the payment of the additional premium.
Taking into consideration the facts and circumstances of the present case, the appellants should be given the facility to make the payment in three equal annual installments and the interest should be charged on such deferred payment at not more than 14 per cent per annum.
The respondent lessees would, however, not be enti tled to convert the present user of the land into the com mercial user until and unless the last of the amount of the additional premium together with the interest thereon is paid.
The respondents will further be liable to pay the misuse charges mentioned at items 6 and 7 of the ,notice of 12.1.1984 till 12th April, 1984 from which date, they would be paying the conversion charges as above.
The appellants will give the respondents the facility to pay the rest of the amounts, i.e., the amounts other than the conversion charges in twenty four monthly installments with interest at no more than 10 per cent annum.
The decision of the High Court is set aside and the appeal is allowed accordingly with no order as to costs.
G.N. Appeal al lowed.
| IN-Abs | The land in this case was leased by the Government to one R in 1931 and a regular lease deed was drawn in 1938.
It was a perpetual lease.
The lessee constructed a residential building on the land, and assigned the lease in favour of one L.
On the death of L, the interest in the lease devolved on the respondents.
Respondent No. 1 sent a letter through his Advocate to the Land & Development Officer, stating that he proposed to construct a multi storeyed building demolish ing the bungalow and demanding to know the charges for conversion of the land use from residential to commercial purposes.
The Land & Development Officer replied that the letter was receiving attention.
Actually the names of the respondents were mutated in the property register after the exchange of the above letters.
However, no application for conversion of the land user was made on behalf of the les sees of the land.
Again in 1978 the parties sent a letter to the Land & Development Officer demanding to know the terms for con struction of a commercial building on the lease land and the charges to be paid for the same.
The Assistant Settlement Commissioner sent a reply requesting that a formal applica tion be made in the prescribed proforma for permission to construct multi storeyed commercial building duly signed by all the co lessees.
In 1980 a reminder was sent to the parties.
Only thereafter the parties filed an application in the prescribed form.
In 1984, the Government intimated the parties that it was willing to comply with the request, provided the parties were willing to abide by certain terms and conditions in advance.
The parties made a representation to the Works & Housing Minis 301 ter requesting for reconsideration of the terms and condi tions.
After a good deal of correspondence the Government rejected the representation.
Thereafter the parties ap proached the High Court by way of a Writ Petition challeng ing the terms and conditions imposed by the Government.
It was contended that since they applied for permission to convert the user of land on 15.2.1978, they were liable to pay charges calculated with reference to that date only; that no charges for misuse of the land could be levied after 15.2.1978; that no interest could be charged on the alleged additional premium which was calculated by taking into consideration May 25, 1981 as the base date.
Accepting the contentions, the High Court held that there was no need to make any application for conversion after 1962 when the Master Plan was prepared by the Delhi Development Authority declaring the region as a commercial zone and that the conversion was automatic and statutory.
The High Court held that the Respondents were not,obliged to make the payment of conversion charges calculated at rates prevalent in April, 1984 instead of the rates obtaining in February, 1978.
It directed the Government to recompute the additional premium and other charges.
Aggrieved by the High Court Judgment, the Government preferred the present appeal.
The same contentions as were raised in the High Court were advanced before this Court, by both the parties.
Allowing the appeal, this Court, HELD: 1.
The land has to be used as per the agreement between the contracting parties, and no change of the user can be made contrary to the agreement even if the Master Plan permits such user.
The Plan helps the parties to change the user, if the parties mutually agree to do so.
It does not permit the occupant to change the user unilaterally.
It is not, therefore, correct to say that no permission of the landlord was needed to change the user of the land.
The High Court is not right in holding that there was an automatic or a statutory conversion of the user of the land because in the Plan the land in question fell in the area reserved for commercial use.
The High Court failed to appreciate that the change of user of the land permitted by the Plan was only enabling in nature.
It lifted the restriction which was otherwise there for using the land for commercial purpose.
[312B C & A] 2.
All that the parties wanted to know from the Land & Development Officer were the terms and conditions for the construction of a commercial building on the land and the charges to be paid for the same.
This can hardly be called an application for permission to con 302 struct a commercial building on the land.
It is no more than an enquiry.
It is immaterial in this connection whether any regular form of application was prepared and was available for use at the relevant time.
Even assuming that such a form was prescribed for the first time on June 15, 1978, the letter of February 15, 1978 could hardly be described as an application signed by the lessees meaning thereby all the lessees for permission to convert the user of the land.
The absence of a prescribed form does not make the letter the required application.
The least that is expected in an application for the purpose is a request by all the lessees to permit the change of the user of the land showing readi ness and willingness to abide by the terms and conditions for such conversion or the user.
The letter in question, on the other hand, did nothing more than make an enquiry sug gesting that the application for the change of the user would be made after the terms and conditions including the charges for the same are known.
Thus, the letter of February 15, 1978 was not an application made for the change of the user of the land.
[309F H; 310A B] 3.
It is clear from the authority 's letter dated March 1, 1980 that different persons were seeking permission for change of the user of the land and some of them were not even the co lessees of the land.
Since there was no firm application by the authorised person or persons for conver sion of the user of the land the authority had asked the lessees to sent the application in the prescribed form duly signed by all the co lessees.
There was no reply to this letter of March 1, 1980 and hence a reminder was sent by the authority on June 3, 1980 warning the lessees that in case no reply was received from them within 15 days, the matter would be treated as closed.
It is pursuant to this reminder that on February 27, 1981 a letter accompanied by an appli cation in the prescribed form was sent, and both the letter as well as the prescribed form were duly signed for the first time by all the co lessees.
The contents of the accom panying letter make it clear that even the lessees treated this application as the first duly made application for the purpose.
As has been stated in the application, the plans for the construction of the commercial building were sanc tioned only on January 21, 1981 and the exemption applica tion made to the competent authority under Section 20(1) of the Delhi Development Act, 1957 was even then still under process.
It is in response to this application that the sanction was given by the authority on January 12, 1984 to convert the user of the land.
Thus, it was only on February 27, 1981 that an application for the change of the user of the land was made by or on behalf of the respondent lessees of the land.
[310G H; 311A D] 4.
There is no explanation given by the appellants as to why the 303 application made by the respondents on February 27, 1981 was not replied to till January 12, 1984.
Hence in the absence of anything else on record, it will have to be taken that the date with reference to which conversion charges have to be counted is 27th February, 1981.
[311E] 5.
The additional premium should be calculated by the appellants on the basis of the rate which was prevalent as on February 27, 1981 which is the date of the application made for the change of the user.
The interest should be charged on such additional premium w.e.f. 12th April, 1984 since a period of three months from the date of notice, viz., January 12, 1984 was available to the respondent lessees to make the payment of the additional premium.
The respondent lessees would not be entitled to convert the present user of the land into the commercial user uniess and until the last of the three annual installments of the addi tional premium together with the interest thereon is paid.
[312C E] 6.
The respondents will further be liable to pay the misuse charges mentioned at items 6 and 7 of the notice of 12.1.1984 till 12th April, 1984 from which date, they would be paying the conversion charges.
[312F]
|
ivil Appeal No. 4979 of 1990.
From the Judgment and Order dated 25.8.1989 of the Bombay High Court in W.P. No. 6058 of 1986.
468 V.M.
Tarkunde, D.R. Poddar and V.B. Joshi for the Appellant.
K.P. Parasaran (N.P.), Rama Subramaniam, A.K. Ganguli, R.P. Bhat, K. Swamy and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
Leave granted.
Counsel heard.
This is an appeal from the judgment of a learned Single judge of the Bombay High Court dismissing Writ Petition No. 6058 of 1986 filed by the appellant on the Appellate Side of that Court.
The appellant and respondent No. 1 are companies incorporated under the Indian Companies Act.
ReSpOndent No. 2 is a Cooperative Society registered under the Maharashtra Cooperative Societies Act, 1961 (hereinafter referred to as "the said Act").
Appellant is a member of respondent No. 2 Cooperative Society and has its office premises in the building owned by respondent No. 2.
Some time prior to September 10, 1985 the appellant entered into an agreement to sell the said office premises to respondent No. 1 subject to the approval of respondent No. 2.
The terms of the said agreement were incorporated in a letter dated September 10, 1985 addressed by the appellant to the Vice Chairman and the president of respondent No. 1: It was set out in the said letter that the price for the said premises was to be calcu lated at the rate of Rs. 2,000 per square feet.
The letter further stated: "We are agreeable to sell you the same subject to approval of the Cooperative Society owning the building.
We shall provide you vacant possession and hand over the same free of all incumbrances only after we are able to obtain alternate accommodation for our company . . ".
A sum of Rs. 50,000 was paid by a demand draft by re spondent No. 1 to the appellant under the said agreement.
By a letter dated November 15, 1985 the appellant sought the approval of respondent No. 2 to the transfer of the said office premises to respondent No. 1.
By its letter dated November 18, 1985 addressed to the appellant, respondent No. 2 stated that the appellant was requested to offer to trans fer of the said.
premises to the existing members of the society as a first preference as per the established prac tice of the society.
It further stated that in case the existing members of respondent No. 2 were not willing to buy the said premises, the premises could be given for trans 469 fer to an outside transferee.
By its letter dated November 22, 1985, addressed to respondent No. 1 the appellant point ed out that respondent No. 2 had declined to grant permis sion for transfer unless the premises were first offered to the existing members of the society by Way of a first pref erence.
The said letter then stated that it was not possible to continue negotiations any further.
Along with the said letter the demand draft of Rs.50,000 referred to above was returned by the appellant.
Without any further correspond ence respondent No. 1 filed a dispute in the Cooperative Court No. 17 Bombay against the appellant and respondent No. 1 by statement of claim which can be conveniently referred to as a plaint.
In the plaint respondent No. 1 inter alia stated that on the promises and representations made by the appellant to respondent No. 1 it had paid a sum of Rs.2,60,000 to one I.M. Choksey representing himself as the Chairman of the appellant and one section Ramakrishnan, claiming to be the repre sentative of his wife who was a Director of the appellant.
Respondent No. 1 further claimed that it had paid a further sum of Rs.40,000 in cash to the appellant without taking a .receipt.
Respondent No. 1 urged that but for the assur ance given by Choksey and Ramakrishnan acting on behalf of the appellant and one Col.
G.D. Hadep, acting on behalf of respondent No. 2 that the appellant would be in a position to transfer the said premises by the end of November 1985 and respondent No. 2 would not object to such transfer, respondent No. 1 would not have paid such a huge amount to the appellant.
Respondent No. 1 further stated that the appellant and respondent No. 2 had promised respondent No. 1 that they would complete the formalities of transfer of the said premises within a few days and there would be no objec tion or obstruction whatever in the said transfer.
Respond ent No. 1 went on to say that it was given to understand that the appellant and respondent No. 2 were conspiring to sell the said premises to a third party for a larger amount.
Respondent No. 1 was ready and willing to perform its part of the contract and prayed for an order for specific per formance of the contract.
The relevant portion of paragraph 10 of the plaint, which deals with jurisdiction, sets out that respondent No. 2 is a cooperative society and is vital ly interested in the transfer and sale of the said premises and to ensure that the transfer is done under the provisions of its bye laws, the said Act and the rules.
Respondent No. 2 had taken active part in the transaction entered into be tween respondent No. 1 and the appellant who _is a member of respondent No. 2, and that respondent No. 1 was claiming his rights through the appellant who was a member and hence, the subject matter of the dispute fell within the ambit of section 470 91 of the said Act.
Respondent No. 1 prayed for a declara tion that the aforesaid dispute was a dispute falling under section 91 of the said Act and prayed that the appellant and respondent No. 2 should be directed to specifically perform the agreement recorded in the letter of September 10, 1985 and transfer the said premises to respondent No. 1.
The rest of the prayers in the plaint are immaterial for our pur poses.
Pursuant to certain orders made by the Bombay High Court the Cooperative Court framed an issue as to whether it had jurisdiction to entertain the dispute.
The Court recorded evidence led by respondent No. 1 off this issue and dis missed the dispute for want of jurisdiction.
This order was set aside by the Maharashtra Cooperative Appellate Court, Bombay, by its order dated September 9, 1986.
The appellant herein filed a writ petition in the High Court to challenge the said order.
The learned Single Judge who heard the said writ petition dismissed the same and held that the case was governed by the provisions of section 91 of the said Act.
; It is this decision which is sought to be challenged before us by the appellant.
It is submitted by Mr. Tarkunde, learned counsel for the appellant that the agreement to sell the said premises with which we are concerned, was entered into between the appel lant, a member of respondent No. 2, a Cooperative Society and respondent No. 1, a nonmember.
The said agreement was for transfer of premises belonging to the appellant to respondent No. 1, a non member, in a building owned by respondent No. 2, a cooperative society.
The claim in the dispute was for obtaining the specific performance of the said agreement and the prayer for directing respondent No. 2 to approve the said agreement was in the nature of an ancil lary prayer to complete the relief.
The main relief was for specific performance of the said agreement.
It was submitted by him that such a dispute cannot be said to be a dispute "touching the management or business of a society" as con templated in sub section (1) of section 91 of the said Act nor can it be said that respondent No. 1, a non member was making a claim against respondent No. 2 society through a member, namely, the appellant.
The main relief sought was for specific performance of an agreement by a member to sell the premises in the society building to a non member and such a claim can never be said to be made against the socie ty through a member.
In order to appreciate the submissions made, it is desirable to set out the material portion of Section 91 of the said Act which runs as follows: 471 "91(1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the con struction, elections of the office beares.
| IN-Abs | The appellant company, a member of Cooperative Society, respondent No. 2, was having its office premises in a build ing owned by respondent No. 2.
It entered into an agreement to sell the said premises to respondent No. 1, a non member subject to the approval of the Cooperative Society.
The Cooperative Society declined to grant permission for trans fer of the premises.
Respondent No. 1 filed a dispute against the appellant and respondent No. 2 Cooperative Society in the Cooperative Court under section 91 of the Maharashtra Cooperative Societies Act, 1960 praying for a decree of specific performance of the contract and a direc tion to the Cooperative Society to approve the said agree ment.
The Cooperative Court dismissed the dispute for want of jurisdiction.
On appeal by respondent No. 1, the Maharashtra Cooperative Appellate Court set aside the order of the Cooperative Court.
Against the order of the Cooperative Appellate Court, the appellant filed a writ petition in the High Court which was dismissed by holding that the dispute was governed by Section 91 of the Act.
In the appeal to this Court against the Judgment of the High Court, it was contended on behalf of the appellant that the dispute between the parties was not governed by Section 91 since it was neither a dispute "touching the business of the society" nor was it a dispute between a person claiming through a member against the society.
467 Allowing the appeal and setting aside the judgment of the High Court, this Court, HELD: 1.
Before a dispute can be referred to a Coopera tive Court under the provision of section 91(1) of the said Act it is not only essential that the dispute should be of a kind described in sub section (1) of section 91 but it is also essential that the parties to the said dispute must belong to any of the categories specified in clauses (a) to (e) of subsection (1) of the said section.
[473B] 2.
In the instant case the main claim of Respondent No. 1 a nonmember, was for a decree for specific performance of the agreement.
The prayer for an order that respondent No. 2 Society should be directed to give their approval to the said agreement was merely an ancillary prayer made with a view to complete the relief of specific performance.
The main claim to have the agreement specifically performed cannot be said to be a claim made by a person (non member) against the Society.
The claim against the society cannot be said to be made through a member, the appellant, because it is only when a decree for performance of the said agreement is passed against the appellant, that it could be contended that the other relief namely, for an order directing re spondent No. 2 to approve the said agreement is claimed against the society through a member.
Consequently, the dispute cannot be said to fall within the scope of section 91(1)(b) of the Act.
Therefore, the High Court committed an error in coming to the conclusion that both the parties to the dispute belonged to the categories covered under section 91(1)(b) of the Act.
[473E H; 474A] Deccan Merchants Cooperative Bank Ltd. vs M/s Dalichand Jugraj Jain and Ors., [1969] 1 S.C.R. 887; M/s Leong and Anr.
vs Smt.
Jinabhai G. Gulrajami and Ors., A.I.R. 1981 Bom.
244 and Sanwarmal Kejriwal vs Vishwa Cooperative Hous ing Society Ltd. and Ors., [1990] 2 SCC 288, distinguished.
O.N. Bhatnagar vs Smt.
Rukibai Narsindas & Ors., ; , referred to.
|
ivil Appeal No. 330 of 1976.
From the Judgment and Order dated 13.3.1972 of the Allahabad High Court in ITR No. 457 of 1968.
V. Gauri Shankar, section Rajappa and Ms. A. Subhashini for the petitioner.
Harish N. Salve, A.T. Patra, Ms. Bina Gupta, Ms. Monika Mohil, Rajiv Shakhdhar and Praveen Kumar for the Respondent.
The following Order of the Court was delivered: This appeal is directed against the Judgment dated 13.3.1972 made by a Division Bench of the Allahabad High Court in Income Tax Reference No. 457 of 1968 deciding the following question of law in favour of the assessee and against the Revenue.
"Whether on the facts and in the circumstances of the case the assessee can be said to have complied with the provi sions of proviso (b) to section 10(2)(vib) of the Income Tax Act, 1922 and was, therefore, entitled to allowance of development rebate on the plant and machinery installed after 1.1. 1958.
" It would be unnecessary to detail out facts which led to the framing of the question and the answer given.
The dis pute centered around the timing of the creation of the reserve known as the development rebate reserve.
In Commis sioner of Income Tax, Madras vs Veeraswami Nainar & Ors., 55 ITR p. 35, the Madras High Court took the view that develop ment rebate reserve should be made at the time of making up the Profits and Loss Account.
This view was affirmed by this Court in Indian Overseas Bank 's Ltd. vs Commissioner of Income Tax, 12.
Both cases arose under the Indian Income Tax Act, 1922.
Distinction was drawn between develop ment rebate reserve and other reserves creatable under the Companies Act and the Income Tax Act and it was required to be separately created.
On appearance of the Indian Overseas Bank 's case on the scene it appears that an 464 important circular of the Central Board of Direct Taxes was unwittingly mowed down.
That circular was of October 4, 1965 and stands reproduced in circular No. 189 dated 30th Janu ary, 1976 at page 90 in 102 Income Tax Reports (Statutes).
The Board 's Explanation with regard to the position for creation of statutory reserve for allowance of development rebate was in these terms: (a) In the case of certain industrial undertakings, particularly those in which there is Government participa tion either by way of capital, loan or guarantee, and where there are certain obligations by law or agreement about the maintenance of reserve for development purposes, the devel opment rebate reserve may be treated as included in the said reserve though not specifically created as a development rebate reserve.
(b) In a case where the total income computed before allowing the development rebate is a loss there was no legal obligation to create any statutory reserve in that year as no development rebate would actually be allowed in that year.
(c) Where there was no deliberate contravention of the provisions, the Income tax Officer may condone genuine deficiencies subject to the same being made good by the assessee though operation of adequate additional reserve in the current year books in which the assessment is framed.
This led to a spate of litigation, pressing the Indian Overseas Bank 's case some taxing authorities in some cases took revisional and rectificatory actions.
These reached various High Courts.
The Gujarat High Court in Surat Textile Mills Ltd. vs Commissioner of Income tax Gujarat, 80 I.T.R.P. 1 opted for what may be called a narrow view in assuming that besides Explanation (a) reproduced above explanations (b) and (c) as well too stood wiped out by Indian Overseas Bank 's case.
In these circumstances the Central Board of Direct Taxes took the step of withdrawing in the year 1972 the Circular dated October 14, 1965 to the extent it stood superseded by decision in Indian Overseas Bank 's case and the judgment of the Gujarat High Court in Surat Textile Mills Ltd. vs Commissioner of Income Tax.
Other High Courts took what may be called a broader view.
The trend of reasoning in those cases was that expla nation (a) only was done away with by this Court in Indian Overseas Bank 's case but explanations (b) and (c) were still alive.
In this connection Veerabha 465 dra Iron Foundary & Anr.
vs Commissioner of Income Tax, ; Tata Iron and Steel Co. Ltd. vs
N.C. Upadhyaya, 96 I.T.R.p.
1 and The Commissioner of Income Tax vs Sardar Singh, may be seen.
In the face of such difference of opinion, it was repre sented to the Board that earlier instructions dated October 14, 1965 represented the correct position of law and that the withdrawal to the extent it was presumed to be overruled by this Court in Indian Overseas Bank 's case had created unnecessary hardship to the assessees.
It appears that the instant case, out of which this appeal has arisen, was decided by the Allahabad High Court taking the broader view, Special leave was sought by the Revenue from this Court on the question of resolving the conflict between the two views.
Leave was granted at a time when the Board itself had clarified the matter vide Circular No. 189 dated 30th January, 1986 of which hint has been left earlier.
The Board states to have re examined the issue involved coming to the view that except the clarification given in paragraph (a) above, which stood superseded by the decision of this Court in Indian Overseas Bank 's case, the clarifications given in paragraphs (b) and (c) quoted above hold good.
It can thus legitimately be stated that the Board has itself opted for the view expressed in Tara Iron and Steel Companies ' case and other cases of the kind taking the broader view in the matter.
When the Board has itself opted for that view and that view is being followed by Income Tax authorities concerned, we see no reason to do the exercise of taking any side of the two views and leave the matter at that.
It is undisputed that the Board 's view is not only valid under the new Income Tax Act of 1961 but to the Indian Income Tax Act, 1922 as well.
For the foregoing discussions this appeal fails and the judgment of the High Court is left untouched.
In the circum stances of the case there will be no order as to costs.
V.P.R. Appeal dis missed.
| IN-Abs | In Commissioner of Income Tax, Madras vs Veeraswami Nainar & 9rs.
, , the Madras High Court took the view that the development rebate reserved should be made at the time of making up the Profits and Loss Account, and this was affirmed by this Court in Indian Overseas Bank 's Ltd. vs Commissioner of Income Tax, A distinction was drawn between development rebate reserve and other reserves createable under the Companies Act and the Income Tax Act and it was required to be separately created.
Consequent to this decision it was noticed that an important circuit of the Central Board of Direct Taxes dated October, 4, 1965 was unwittingly mowed down.
This circular gave the Board 's Explanation three paragraphs (a), (b) and (c) regarding the position for creation statutory reserve for allowance of development rebate.
A spate of litigation ensued and some of the taxing authorities, relying on the Indian Overseas Bank 's case in some cases, took revitional and rectificatory actions, and these reached various High Courts.
The Gujarat High Court in Surat Textiles Mills Ltd. vs Commissioner of Income tax Gujarat, opted for the narrow view in assuming that all the 3 Explanations contained in the 1965 Circular stood wiped out by Indian Overseas Bank 's case.
The Central Board of Direct Taxes, therefore, took the step of withdrawing in the year 1972 the Circular dated October 14, 1965 to the extent it stood superseded by deci sion in Indian Overseas Bank 's case.
Other High Courts, however, took a broader view to the effect that Explanation contained in para (a) only was done away with by this Court 's decision in Indian Overseas Bank 's case and that contained in paras (b) and (c) were still alive.
462 On account of the aforesaid difference of opinion, it was represented to the Board that the earlier instructions dated October 14, 1965 represented the correct position of law and that the withdrawal to the extent it was presumed to be overruled by the decision in Indian Overseas Bank 's case had created unnecessary hardships to the assessees.
In the instant appeal the question, whether the respond entassessee was entitled to allowance rebate on the plant and machinery after 1.1.1958, after due compliance with the provisions of proviso (b) to section 10(2)(vib) of the Income Tax Act, 1922 was answered by the Division Bench of the Allahabad High Court in favour of the assessee and against the Revenue.
The Revenue appealed to this Court.
Dismissing the appeal, this Court, HELD: 1.
The Board itself had clarified the matter by Circular No. 189 dated 30th January, 1986.
It states to have re examined the issue involved coming to the view that except the clarification contained in Explanation para (a) which stood superseded by the decision of this Court in Indian Overseas Bank 's case, the clarification given in paragraphs (b) and (c) hold good.
[465D] 2.
The Board itself has opted for the broader view expressed in the matter in the,Tata Iron and Steel Compa nies ' case and other cases.
There is, therefore, no reason to do the exercise of taking any side of the two views.
[465E] 3.
It is undisputed that the Board 's view is not only valid under the new Income Tax Act of 1961, but to the Indian income Tax Act, 1922 as well.
[465F] Commissioner of Income Tax, Madras vs Veeraswami Nainar and Ors., , affirmed.
Indian Overseas Bank Ltd. vs Commissioner of Income Tax, , followed.
Surat Textile Mills Ltd. vs Commissioner of Income Tax Gujarat, , overruled.
Veerabhadra Iron Foundary & Anr.
vs Commissioner of Income I.T.R. 425; Tata Iron and Steel Co. Ltd. vs
N. C Upadhyaya, and The Commissioner of Income Tax vs Sardar Singh, 86ITR 387, approved.
|
Civil Appeal No. 105 19 of 1983.
From the Judgment and Order dated 12.9.1983 of the Punjab and Haryana High Court in W.P. No. 3798 of 1983.
M.S. Gujral, S.K. Bagga, Ms. Bagga, S.D. Sharma, B,S. Gupta.
P.C Kapur, R.N. Mittal, S.D. Gupta, S,M. Ashri and K.K. Mohan for the Appellants.
R.S. Sodhi and C.M. Nayyar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellants were in service as tube well operators in the irrigation branch of the Public Works Department of the Punjab State.
The State took a decision to transfer all the tubewells in this branch to the Punjab State Tubewell Corporation (hereinafter referred to as 'the Corporation '), a company wholly owned and managed by the State of Punjab.
Consequent on this decision, a notification was issued on 30th November, 1982 to the effect that "the posts sanctioned for the Tubewell Circle, Irrigation Branch, Punjab, are no longer needed in the public interest.
" It was, therefore ordered that all the permanent posts sanc tioned for the above circle be abolished with effect from 1.3.1983 and that all temporary posts be discontinued with effect from the same date.
A little earlier, on 31st August, 1982, the petitioners were served with notices in terms of section 25 F of the (hereinafter referred to as 'section 25F ') terminating their services with effect from 30th November.
These notices were, however, set aside as not being in consonance with clause (c) of section 25 F. The State Government, therefore, issued fresh notices terminating the services of the petitioners with effect from March 1, 1983.
These notices were also set aside by the High Court on the ground that they did not conform to the provisions of clause (b) of section 25(F).
Thereupon the State served fresh notices on the petitioners terminating their services in terms of section 25 F with effect from August 31, 1983.
The appellants once again approached the High Court contending that the decision of the State Govern ment transferring the tubewells to the Corporation and terminating their services was invalid.
It was contended: (a) that the impugned notices did not fulfil the requirements of clauses (b) and (c) of section 25 F; (b) that the notifica tion by which the tubewells were transferred was mala fide, the only object of the transfer being to frustrate certain claims of the petitioners which had been judicially recog nised; and (c) that, in case the action of the State is upheld, the respondent Corporation should be held to be under an obligation to employ the petitioners with conti nutiy of service and under the same terms and conditions which they were enjoying prior to their retrenchment from the service of the State.
These contentions were rejected by the High Court.
It held that the notices did not suffer from any defect.
It was pointed out that the writ petitions had been filed before the expiry of the date from which the retrenchment notice was to be effective, namely, 31st August, 1983.
The re trenchment notice itself specifically mentioned that the retrenchment compensation, as admissible under the rules, will be paid before the notice of retrenchment took effect and that it could be collected personally from the respond ent 's Sub Divisional/Divisional Officers.
At the instance of the Court, the State had filed an additional affidavit in which it was averred that drafts in respect of the amounts of compensation had been despatched to the divisional of fices in the manner following Tubewell Division Malerkotla Between 25 to 27 August, 1983 Tubewell Division Hoshiarpur Between 19 to 24 August, 1983 Tubewell Division Jullundur Between 19 to 24 August, 1983 The relevant records showing the despatch of these drafts were also produced in the court.
The High Court was satis fied that the State had despatched individual bank drafts in respect of each of the employees well in advance of the date of expiry of the notice period and that the despatch of these drafts to the divisional offices constituted a good and valid tender of the compensation amount to the appellants.
The court held that this was sufficient compliance with the provisions of clause (b) of section 25 F. So far as the provisions of clause (c) of section 25 F were concerned, the High Court was satisfied that the requisite notice in the prescribed form 'P ' was sent to the Secretary to Government, Labour Department and the Employment Exchange concerned by personal delivery duly acknowledged in the peon book of the Department.
Pointing out that the requirements of clause (c) of section 25 F 373 were only directory and not mandatory, the High Court was of the opinion that the notices were not vitiated due to non compliance with clause (c) of section 25 F. Turning to the allegation regarding mala fides, the contention of the appellants was this.
They submitted that the tubewell operators in the Irrigation Branch of the PWD had filed a writ petition, being C.W.P. 3340 of 1972, in the Punjab High Court claiming parity of pay with the tubewell operators employed in the Public Health Department of the State Government.
That petition was allowed on February 5, 1981.
But the respondent authorities failed to implement the directions contained in that judgment, thus forcing the petitioners to move a contempt application (No. 221 of 1981).
Thereafter, the State authorities gave effect to the judgment and paid arrears to the petitioners in the writ petition but did not extend the benefit thereof to the tubewell operators other than the actual petitioners in the writ petition.
The other tubewell operators, thus denied the benefits of the judgment, were constrained to file three more writ petitions seeking the extension of same relief to them.
These writ petitions were allowed on 7.8.1981 in terms of the earlier decision dated 5.2.1981.
The respondent authorities chose to file S.L.P. Nos.9195 to 9197 of 198 1 in the Supreme Court but these were dismissed on 19.2.
Still, the respondent authorities showed their reluctance to implement the judgments of the High Court compelling the petitioners to file three contempt petitions (Nos.294 to 296 of 1981) against the defaulting authorities.
However, before the disposal of these writ petitions, the State filed a letters patent appeal against the judgment in C.W.P. No. 3340 of 1972 and obtained an order staying the operation of the said judgment.
Consequent on this, the contempt applications had to be withdrawn and were dismissed as such on 8.4. 1982.
We are told that the letters patent appeals have been dismissed recently on 7.8. 1990.
Accordingly to the appellants, the authorities took a decision to transfer the tubewells of the irrigation branch to the Corporation only with a view to deprive the appellants of the benefit they had gained as a result of the above litigation.
It was pointed out that the Corporation had come into existence as early as 1970.
Its main objects, as set out in the Corporation 's memorandum of association, were, inter alia: XXX XXX XXX (2) To take over from the Government of Punjab the existing system of State owned irrigation and augmentation 374 tubewells along with connected buildings, assets, works and any of their projects connected with the installation, maintenance and operation of the State owned tubewells, with the rights and liabilities of the Government of Punjab so far as they relate to such tubewells, buildings, assets, works or projects.
These assets shall be taken over by the Punjab State Tube well Corporation Limited as contribution by the Punjab Government towards share capital.
XXX XXX XXX (19) To enter into any arrangement with the Government of India, Government of Punjab, or any other Government or State or local authority for the purpose of carrying out the objects of the company for the furthering its interests and to obtain from such Government or Authority or person any charters, subsidies, loans, indemnities, grants, contracts, licences, rights, concessions, privileges or immunities which the company may think desirable to obtain and exercise and comply with any such arrangements, rights, privileges and concessions.
" Though the Corporation had been formed so long ago with the express object of taking over the tubewells of the irriga tion branch and though it was operating a large number of tubewells on its own account since then, no efforts had been made by the Government to transfer the tubewells belonging to the State to the Corporation till 1982.
Even under the impugned notification only tubewells belonging to the irri gation branch were transferred but not those which were being operated by the Public Health Department of the same State.
The appellants vehemently contended that all these facts clearly showed that the sudden decision in 1982 to transfer the tubewells to the Corporation was intended as a measure of victimisation of the appellants who were only fighting for their rights of equal pay with other tubewell operators in the State.
The High Court did not find any substance in this contention.
It pointed out that the idea that eventually the tubewells belonging to the State should be transferred to the Corporation had germinated as early as in 1970.
Though this was not implemented immediately, a decision to transfer the tubewells to the Corporation had been taken in the light 375 of the recommendations of the Estimates Committee of the Punjab Vidhan Sabha made in the year 1977 78, that is, about three years earlier to the decision of the High Court dated 5.2.1981 in C.W.P. No. 3340 of 1972.
The authorities had placed before the Court the minutes of a meeting held under the chairmanship of the Chief Minister of Punjab on October 18, 1979, wherein it had been decided that, since irrigation from the State tubewells had not developed as expected and the State Government was running into a finan cial loss on account of the operation of these tubewells, the same be transferred to the Corporation.
It had also been decided at the meeting that the Government would meet the loss that may be suffered by the Corporation on account of the operation and maintenance of these tubewells.
In the light of these facts, the High Court held that there was no basis for the allegation of the petitioners that the im pugned notification had been issued mala fide solely with a view to deprive the appellants of the benefits they had obtained from the courts.
It was pointed out by the High Court that the appellants had subsequently been given all the benefits which they had derived as a result of the writ petitions.
That apart, it was also found that the Corpora tion had made an offer of re employment to all the appel lants effective from the date of expiry of the notice of their retrenchment by the State Government.
All this showed, according to the learned Judges, that the sole object of the issuance of the notification was to get rid 'of the tube wells which were the cause of a constant and ever increasing loss to the State exchequer and not any mala fide or extra neous reasons.
On contention (c), the High Court observed as follows: "So far as the alternative relief of re employment with continuity of service and pensionary benefits in terms of the Punjab Civil Service Rules is concerned, the petitioners cannot be granted the same in view of the provisions of section 25 FF (of the ) as introduced on September 4, 1956.
In this regard the petitioners have based their whole claim on certain observations made in two Division Bench judgments of the Bombay High Court, reported as New Cotton Mills Ltd. vs Labour Appellate Tribunal and Others, and N.J. Chavan and Others vs P.D. Sawarkar and Others, A.I.R. 1958 Bombay 133.
Besides there being dissimilarity of facts in those cases and the instant case, the same relate to a period prior to the insertion of section 25 FF.
In Anakapalle Cooperative Agri cultural and Industrial Society 376 Ltd. vs Workmen and Others, ; , their Lord ships of the Supreme Court after noticing the first judgment of the Bombay High Court referred to above, have held in categorical terms that such employees can make no claim against the transferee concern.
Otherwise also we are of the view that the claim of the petitioners is not covered by section 25 FF of the Act as it has nowhere been pleaded or established by them that the ownership or management of the tubewells has been transferred by the State Government to the corporation either 'by agreement or by operation of law '.
As already pointed out, the transfer of the tubewells in the instant case has taken place as a result of the unilateral decision by the State Government.
Even if it is to be accepted to be a case of transfer of the undertaking by agreement as is suggested by the learned counsel for the petitioners, still the wording of the proviso and more 'particularly of clause (b) to section 25 FF clearly indi cate that the transfree concern of the management can change the terms and conditions of the workman.
Further on the facts of the case, we do not see how the petitioners can claim the benefits or rights of a civil servant while in the service of the corporation and thereby force the corporation to say good bye to its rules and regulations."
" In the result, the various writ petitions were dismissed and hence the present appeals.
Before us, practically the same arguments have been addressed as were addressed before the High Court but with slight variations.
It might appear at first sight that the appellants have really no cause of grievance inasmuch as, though retrenched by the State Government, their services have been taken over by the Corporation.
We have also been informed that the scale of pay of the tubewell operators in the Corporation is identical with that of those employed by the State Government.
Though at one stage the Corporation had taken the stand that the appellants will be taken as fresh appointees in the Corporation, it is now common ground that the Corporation has fixed them up at the same level of pay at which they were in Government service immediately before retrenchment and they are also being granted incre ments on that scale.
Though these concessions were made during the pendency of the proceedings on interim applica tions made by the appellants, the learned counsel for the State and Corporation have stated before us that these benefits would be continued 377 irrespective of the decision in these matters.
Thus, in the result, so far as pay is concerned, the petitioners have suffered no detriment whatsoever as a result of the action taken by the Government.
There are, however, two grounds of dissatisfaction which are consequent on the appellants being treated as fresh appointees who have entered the service of the Corporation only on the dates of their respective ap pointments thereto with the result that all the appellants will be junior in service to the tubewell operators who had been engaged by the Corporation, on its own account, between 1970 and the dates on which the appellants joined the serv ice of the Corporation.
This by itself may also not be much of a disadvantage to the appellants since many of them are senior in age the other tubewell operators and may well retire earlier and we are also told that there are no ave nues of promotion from the post of tubewell operators, with the result that the question of seniority may not be very material.
The apprehension of the petitioners, however, is that their down gradation in seniority will affect them in case the Corporation starts closing down some of the tube wells and discharging its staff, an apprehension which is stated to be not purely hypothetical but quite real.
The second disadvantage is that many of the appellants have put in a large number of years in the service of the Government.
By being treated as retrenched Government servants, they will be able to get terminal benefits and pension only on the basis of their present lengths of their service in the Government.
On the other hand, if they were to continue with the Corporation under the same terms and conditions which they were enjoying under the Government, they would get the advantage of continuity of service and thus be entitled to substantially higher amounts of pension and other terminal benefits.
On a bought calculation, it is stated that some of the appellants might stand to lose about Rs.600 to Rs.700 per month as a result of being deprived of the benefit of their long service in Government and by being treated as new recruits in the corporation.
We have heard the learned counsel for the appellants as well as the counsel for the State and the counsel for the Corporation.
We entirely agree with the reasoning of the High Court on contentions (a) and (b) earlier set out.
We are also of the opinion that no ulterior motives on the part of the Government have been established.
It is no doubt true that there was some litigation between the appellants and the Government but this related to their pay scales and it is not common ground before us eventually the petitioners have had the benefit of the higher pay scales which were in vogue in the Public Health Department.
It is no doubt true that the increased wage bill consequent on these decisions of the High Court must have made the 378 tubewells in the irrigation branch more unremunerative than before and may thus have precipitated the decision to trans fer the tubewells to the Corporation.
However, as pointed out by the High Court, the decision that there should be a tubewell Corporation, that the Corporation should, in course of time, acquire the tubewells belonging to the Government and that the tubewells of the irrigation branch should be made over to the Corporation had been taken quite a long time back.
The fact appears to be that the tubewells were not being operated profitably by the Government and the Government seems to have taken a decision that it would be more efficient, economical and prudent to have these tube wells run by the Corporation.
There is no reason to doubt the bona fides or the genuineness of this arrangement It is true that the tubewells in the Public Health Department do not appear to have been transferred to the Corporation.
But we have no details before us regarding the magnitude of the State 's problem vis avis those tubewells and it is difficult to draw an inference, merely because the tubewells of the Public Health Department were not transferred to the Corpo ration, that the transfer of the tubewells in the irrigation branch was actuated by a desire to victimise the appellants.
We, therefore, see no substance in this contention of the appellants.
We do not also see any force in the contentions regard ing noncompliance with the provisions of section 25 F of the .
It is urged on behalf of the appel lants that the State has not furnished the details of the amounts of compensation determined in the case of each employee and that the State had also taken no steps to deliver the payment in respect of each employee at his door by the relevant date.
It is submitted that the tender of compensation under section 25 F, in order to be valid, should be of the precise amount and should be made simulta neously with termination of the service.
This, of course, is correct but the High Court has satisfied itself by looking into the original records, that drafts in respect of individual employees were dispatched in time so as to reach divisional/sub divisional offices by 31st of August, 1983.
An attempt was made before us to suggest that there was some discrepancy between two affidavits filed by the State Gov ernment in this behalf.
We have perused the said averments and we find no inconsistency as alleged.
It is true that the amounts were not actually paid or tendered to the workers by the Corporation directly but the Corporation had evolved a method of disbursement of compensation in the interest of the workers ' convenience.
Instead of making the appellants, spread out all over the State, to come to the head office to collect the compensation and to avoid the inconvenience and difficulty of the Corporation making available the compensa tion 379 at the doorstep of each employee, the Corporation made arrangements whereby the tubewell operators could go to the nearest divisional/sub divisional office and collect the amount of compensation due to them.
It appears that the appellants were not interested in taking the compensation amount.
None of them appears to have ascertained whether these amounts had reached the sub divisional office and whether they were for the correct amounts.
No instance has been pointed out to us to show that they were not for the correct amounts.
We do not think we need elaborate further on this aspect since the relevant records were brought before the High Court and the High Court was satisfied that the individual compensation drafts were sent to the various subordinate offices ready for distribution to the concerned workers on or before the relevant date.
In the circumstances of this case, we agree with the High Court that when indi vidual drafts for the amounts of compensation due to the various tubewell operators were forwarded to the divisional/sub divisional offices, sufficiently in time to be available to be taken by them by 31st August, 1983, there was sufficient compliance with the provisions of clause (b) of section 25 F. The contention based on clause (c) of section 25 F is equally baseless.
It has been verified that notices were sent to the Labour department as well as to the employment exchange through the peon book.
There is no reason to doubt the entries in these books.
The suggestion is that they should have been sent by registered post.
As rightly pointed out by the High Court, such a requirement can be treated only as directory and not mandatory and it would be errone ous to hold that, unless sent by registered post, the no tices cannot be treated as complying with the statute.
We, therefore, reject this contention as well.
This leaves for consideration the principal question in this case as to whether in circumstances such as these, the State is under an obligation to protect the terms and condi tions of service of the tubewell operators.
The State 's case is that it had transferred its tubewells to the Corporation.
The operators, therefore, became surplus and they were retrenched.
Retrenchment compensation was duly paid to them.
It is suggested that the State 's obligation came to an end with this.
It was under no obligation to find any fresh or alternative employment to the workers.
However, being a welfare State, it did arrange for such alternative employ ment.
It was obviously under the State 's directions that the Corporation went out of its way to confer a favour on the appellants by agreeing to take them into its service.
It is submitted that 380 the Corporation had its own terms and conditions of service for its employees and could not change those terms and conditions of service for the benefit of those few employees whose services had been taken over as an act of commiseration.
It would be unfair on the part of the Corporation to give the appellants benefit of their earlier service in the Government and made them senior to other employees who had been serving in the Corporation right from the beginning.
It is, therefore, submitted that the two chapters of service of the appellants, one with the Government and the other with the Corporation are two separate and independent chapters.
The first chapter has come to a close because the State Government was not able to continue to operate the tubewells by itself.
The second chapter has commenced with a totally independent offer by the Corporation to the erstwhile Gov ernment servants of an employment in the Corporation.
This is a fresh employment subject to the normal rules and regu lations of the Corporation.
The appellants have no right to claim any continuity of service in the circumstances.
Shri Gujral, learned counsel for the appellants has contended 'before us that the approach which the State Government wants this Court to adopt is an unrealistic and purely technical approach.
According to him, the Corporation is realty nothing but a department of the Government.
It is no doubt an independent entity in the sense that it has a separate legal existence with its own employees and its own finances to be looked after according to certain rules and regulations but, says Sri Gujral, in circumstances such as these, the "corporate veil" of the Corporation has to be torn as under and the basic identity of the Corporation as a department of the Government should be recognised and given effect to.
Alternatively, Shri Gujral argues, even if the Corpora tion be taken to be a separate legal entity, it is clearly a "successor" to the Government department.
He points out that the very memorandum of the Corporation contemplates the taking over by it of the tubewells belonging to the Govern ment together with all the rights and liabilities of the Government so far as they relate to such tubewells.
The assets taken over are to be treated as contributions of capital by the Government to the Corporation.
It is also common ground that in this case, while transferring the tubewells to the Corporation, the Government has assured the Corporation that, if it suffers any loses because of the transfer, the losses would be made good by the Government.
The true and real essence of the transaction put through is that the tubewells, along with all appurtenances, rights and liabilities, including the liabi 381 lity to continue the services of the tubewell operators have been taken over by the Corporation.
Having regard to the virtual identity of the Corporation and the Government, this is really a case of the Corporation having taken over a department of the Government though, in form, the Government has purported to retrench, and the Corporation to re employ, the appellants.
Shri Gujral submitted that both the irriga tion branch of the State Government as well as the Corporation admittedly constitute an "industry" within the meaning of the .
Indeed, retrenchment compen sation has been offered to the appellants under the Indus trial Disputes Act.
In these circumstances, Shri Gujral vehemently contends, the problem before us should be looked at from the. point of view of industrial law.
One should ask oneself the question: if a similar transaction had been put through in the private sector by two industrial organisa tions, how would the Court could have tackled the problem? This, according to Shri Gujral, is the proper test to be applied and, if that is done, he submits, there can be put one answer to the question in this case.
There is no dispute before us that the running of tube wells constitutes an 'industry ' whether in the hands of the Government or in the hands of the Corporation.
As pointed out by this Court in State of Bihar vs Industrial Tribunal,, , there is also no incompatibility in applying some of the provisions of the to persons in the service of the Government.
We may, therefore, first examine what position would be if the principles of industrial law were to be applied to a situa tion where one person succeeds to the business which is being carried on by another.
Shri Gujral contends that there is preponderant authority for holding that, if those princi ples were to apply, the tubewell operators should have, in the Corporation, the same terms and conditions of service which they enjoyed when they were in the Government.
In support of this proposition, Shri Gujral relies upon the decision of the Bombay High Court in New Gujarat Cotton Mills Ltd. vs Labour Appellate Tribunal, [1957] II LLJ 194.
In that case, the business and undertaking of a cotton mill was taken over as a going concern by another company.
The successor company, however, declined to continue in its employment some of the employees of the predecessor company.
Thereupon, the applications were filed by them before the labour court for an order against the successor company for reinstatement or reemployment.
This application was rejected by the labour court but, on appeal the Labour Appellate Tribunal held that the new company could not refuse tO take them in.
It observed (vide Ramjilal Nathulal vs Himabhai Mills Co. Ltd., [1956] II LLJ 244: 382 "12.Under the civil law, a person who is a successor to a business is not bound merely because of such succession by the debts or liabilities of the old business and even if he has agreed with his transferor to be so liable, third par ties, in the absence of a tripartite arrangement, cannot enforce such debt or liability against the transferor who alone continues to remain liable for such debts and liabili ties to third parties.
13.Unlike the civil law, however, the industrial law has naturally taken a different view with regard to the duties of a successor in business who has decided to run the same and in the case of employees of the old concern it has regarded the rights and obligations of the old concern as continuing and to be enforceable as against the new manage ment and not to be affected by the substitution of the new management for the old, whenever justice of the case would require such enforcement .
The same principles have also been recognised as of general application by the Madras High Court in the case of Odeon Cinema, [1954] II LLJ 314 as shown by the observations of their Lordships at p.319 where they remark : 'The industrial tribunal has cited a number of decisions of other industrial tribunals, in the course of which it has been held that where there is a transfer of business of one management to another, the rights and obli gations which existed as between the old management and their workers continue to exist vis a vis the new manage ment, after the date of the transfer.
The learned counsel for the petitioners does not challenge the correctness of these decisions, which really are in application of the principle embodied in section 18(c) of the (underlining ours) This view was approved by the Bombay High Court.
Speaking for the Court, Shah, J. observed: "In our view, in industrial matters, the Court is entitled and is indeed bound to modify contractual rights and obliga tions on considerations of equity and in the larger inter ests of the community, such as promotion of industrial peace and security of employment of workmen.
Merely because under the law of contracts, a claim may not lie at 383 the instance of the applicants to be reemployed or reinstat ed by the new company, the claim made by the applicants cannot be regarded as inadmissible.
It appears to have been settled by a large number of decisions of the industrial and labour courts that the industrial law takes a different view about the duties and obligations of a successor inbusiness, and if a successor decides to run the same business which was carried on by his predecessor, the employees of the old concern are entitled to submit a dispute before the indus trial tribunal regarding their rights and obligations in the business of the old concern, and those rights and obliga tions must be regarded as continuing and enforceable against the new management and not affected by the substitution of the new management for the old.
In Odeon Cinema vs Workers of Sagar Talkies, [1954] II LEJ 3 14, it was observed by the Madras High Court (p. 319): " where there is a transfer of a business of one management to another, the rights and obligations which existed as between the old management and their work ers continue to exist vis a vis the new management, after the date of the transfer."
It is also implicit is Ss. 114 and 1 15 of the Bombay Indus trial Relations Act that the rights and obligations of a management of an industrial undertaking are enforceable in proper cases against its successor.
It appears from the terms of section 18(c) of the that a successor to an old undertaking is liable to meet certain obligations of its predecessors.
In our view, therefore, the absence of a direct contractual relation between the appli cants and the new company is by itself not a ground for rejecting the claim made by the applicants. "
Shri Nayar submits that the Bombay case was one in which the employees of the old concern had only sought 're employment" in the successor concern, a concept quite different from the concept of continuity in service on the same terms and conditions and invited our attention to section 25H of the Act and to the decision in Indian Hume Pipe Co. Ltd. vs Bhima rao, It is true that the claim in the Bombay case appears to have been one for re employment but the principle laid down in these decisions is in wider terms, as the passages 384 underlined in the above excerpts will show.
We may also refer in this context to the brief decision of this Court in Ban Nigam Karamchari Kalyan Sangh & Anr vs Divisional Logging Manager & Ors., JT In this case, the petitioners were in the employment of U.P. Forest Corpora tion which was appointed agent for collecting tendu leaves.
The Ban Nigam was appointed in place of the Corporation.
Thereupon, the Corporation terminated the services of the workmen.
This Court passed a brief order to the following effect: "In the proceeding before the High Court, as also here, the State and the Nigam have not been impleaded as parties but learned counsel for the Corporation tells us that it was the understanding that the Nigam would takeover these 149 work men on the same terms and conditions as were applicable when they were working under the Corporation.
Since both the Corporation and the Nigam are Government concerns as learned counsel for the Corporation tell us that this was the under standing, we direct the Nigam to continue the 149 workmen in employment on the same terms and conditions as were applica ble to them when the Corporation was the agent for collection of tendu leaves.
The list of the 149 workmen is not on record.
Learned counsel for the applicants has undertaken to provide the list within 24 hours.
" There was no doubt an understanding in this case but even without this, counsel says, the position would be the same.
It appears that the broad issue as to the rights of such workmen against a successor inbusiness was raised but not decided in Workmen vs Dahingeapara Tea Estate, [1958] II L.L.J. 498, a case which came up before a five judge Bench of this Court.
The High Court has, however, referred to decision of this Court in Anakapala Coop Agricultural and Industrial Society Ltd. vs Its Workmen, [1963] Supp. 1 S.C.R. 730 and taken the view that the principle enunciated in the judgments quoted earlier is not valid after the enactment of section 25FF of the Act.
This section provides that where there is a transfer of an undertaking by agreement or operation of law, an employee who loses his job because of such transfer will have a right to compensation from the predecessor, except where he gets the benefit of uninter rupted service with the new employer on no less favorable terms than before and will be entitled to compensation in case he should be retrenched later by the new employer.
It has been construed in the Anakapalla Society case to say that in such a situation the employee can at best claim retrenchment compensation from the predecessor on the basis of a notional 385 retrenchment but will have no right to claim re employment, much less on the same conditions as before, from the successor.
It is necessary to extract here certain observations from judgment in the Anakapalla case (supra) which, if we may say so with respect, clinch the issue.
Gajendragadkar, J., speaking for a five Judge Bench of the Court summed up the earlier legal position thus: "That takes us to the question as to what would be the nature of the appellant 's liability to the employees of the Company.
Before section 25 FF was introduced in the Act in 1956, this question was considered by industrial adjudication on general considerations of fair play and social justice.
In all cases, where the employees of the transferor concern claimed re employment at the hands of the transferee con cern, industrial adjudication first enquired into the ques tion as to whether the transferee concern could be said to be a successor in interest of the transferor concern.
If the answer was that the transferee was a successor in interest in business, then industrial adjudication considered the question of re employment in the light of broad principles.
It enquired whether the refusal of the successor to give re employment to the employees of his predecessor was capri cious and unjustified, or whether it was based on some reasonable and bona fide grounds.
In some cases, it appeared that there was not enough amount of work to justify the absorption of all the previous employees; sometimes the purchaser concern needed bona fide the assistance of better qualified and different type of workers; conceivably, in some cases, the purchaser has previous commitments for which he is answerable in the matter of employment of labour; and so, the claim of re employment made by the employees of the vendor concern had to be weighed against the pleas made by the purchaser concern for not employing the said employees and the problem had to be resolved on general grounds of fairplay and social justice.
In such a case, it was obvious ly impossible to lay down any hard and fast rules.
Indeed, experience of industrial adjudication shows that in resolv ing industrial disputes from case to case and from time to time, industrial adjudication generally avoids as it should to lay down inflexible rules because it is of the essence of industrial adjudication that the problem should be resolved by reference to the facts in each case so as to do justice to both the parties.
386 It was in this spirit that industrial adjudication ap proached this problem until 1956 when section 25 FF was intro duced in the Act.
Sometimes, the claim for re employment was allowed, or sometimes the claim for compensation was considered.
But it is significant that no industrial decision has been cited before us prior to 1956 under which the employees were held entitled to compensation against the vendor em ployer as well as re employment at the hands of the purchas er on the ground that it was a successor ininterest of the vendor.
" The Court then referred to the insertion of section 25 FF in 1956, the inadequacy of its language in view of Hariprasad vs Divikar, [1957] SCR 121, the effect of its retrospective amendment in 1957 and then concluded: . . and, therefore, in all cases to which section 25FF applies; the only claim which the employees of the transferred concern can legitimately make is a claim for compensation against their employers.
No claim can be made against the transferee of the said concern.
By amending section 25FF, the legislature has made it clear that if industrial undertakings are trans ferred, the employees of such transferred undertakings should be entitled to compensation, unless, of course, the continuity of their service or employment is not disturbed and that can happen if the transfer satisfies the three requirements of the proviso.
" The Supreme Court was dealing with a case of genuine transfer between two parties a predecessor and a successor at arms ' length where the principles of the law of contracts clearly held the field.
The employees of the predecessor had no privity of contract with the successor and could make no claims against him.
The industrial law, however, safeguarded his interests by inserting section 25FF and giving him a right to compensation against his former employer on the basis of a notional retrenchment except in cases where the successor, under the contract of transfer itself, adequately safeguard ed them by assuring them of continuity of service and of employment terms and conditions.
In the result he can get compensation or continuity but not both.
The present case before us raises an allied, but sometimes more important issues as to whether there cannot be situations in which the court or 387 industrial adjudicator, should, in the interests of justice, fairplay and industrial peace, hold the employee entitled to continuity with the successor without being compelled to be satisfied with compensation from the predecessor.
The Supreme Court itself has visualised such a case and made it clear that if a transfer is fictitious or benami section 25FF has no application at all.
Of course, in such a case, "there has been no change of ownership or management and despite an apparent transfer, the transferor employer continues to be the real employer and there has to be continuity of service under the same terms and conditions of service as before and there can be no question of compensation".
A second type of cases which comes to mind is one in which there is form, and perhaps also in law, a succession but the management contin ues to be in the hands of the same set of persons organised differently such as in Bombay Garage Ltd. vs Industrial Tribunal, and Artisan Press vs L.A.T., [1954] II L.L,.J. 424.
In such cases, the transferee and transferor are virtually the same and the over riding prin ciple should be that no one should be able to frustrate the intent and purpose of the law by drawing a corporate veil across the eyes of the court.
(see, Palmer, Company Law, 23rd Edn., pages 200 201, paras 8 and 10 and the decision in Kapur vs Shields, , cited therein).
These exceptions to the above rules, we think, would still be operative.
But it is not necessary here to decide whether this principle will help us to identify the corporation with the State Government in the present case for the present purposes, particularly as there is a catena of cases which do not approve of such identification (see Accountant and Secretarial Services P. Lid: vs Union, ; and the cases cited therein.).
Leaving this out of account then, we may turn to a third category of cases, which we think would also fail as an exception to the principle behind section 25FF.
This is where, as here, the transferor and/or transferee is a State or a State instrumentality, which is required to act fairly and not arbitrarily (see the recent pronouncement in Mahabir Auto Stores vs Indian Oil Corporation, [1990] 3 S.C.C. 752 and the Court has a say as to whether the terms and conditions on which it proposes to hand over or take over an industrial undertaking embody the requisite of "fairness inaction" and could be upheld.
We think that, certainly, in such circumstances it will be open to this Court to review the arrangement between the State Government and the Corporation and issue appropriate directions.
Indeed, such directions could be issued even if the elements of the transfer in the present case fall short of a complete succession to the business or undertaking of the State by the Corporation, as the principle sought to be applied is a constitutional principle flowing from the contours of article 14 of the Constitution which the State and Corpora 388 tion are obliged to adhere to.
We are making this observa tion because it was attempted to be argued on behalf of the State and the Corporation that only certain assets of the State 'industry ', viz. the tubewells, were taken over by the latter and nothing more.
We do not quite agree with this contention but, in view of the approach we propose to adopt, this aspect is not very material and need not be further discussed.
Looking at the facts of this case in the above perspec tive, it appears to us that the State Government has acted arbitrarily towards the appellants.
It is true that the State Government was incurring losses and decided to trans fer the tubewells to the Corporation.
This decision would have been the most unexceptionable, prudent and perhaps the only decision that the Government could have taken, if it had decided to completely cut itself off thereafter from any responsibility or liability arising out of the operation of the tubewells.
But that the Government did not do.
As point ed out earlier, the State Government, although transferring the tubewells, undertook to recoup any losses that the Corporation might incur as a result of the transfer.
The result, therefore, was that, despite the transfer of tube wells to the Corporation the Government continues to bear the losses arising from this activity.
But, while doing so, it has abridged the rights of the appellants by purporting to transfer only the tubewells and retrenched the appellants from service as a consequences.
A grievance has been made that, while several other members of staff belonging to the irrigation department such as engineers, clerks, etc. have been sent on deputation to the Corporation, the State has only chosen to retrench the service of as many as 498 tube well operators.
This differential treatment may not amount to discrimination as contended by the appellants because those others belonged to categories of Government staff which could come back to Government service in the event of the Corporation finding their services unnecessary at a future date, for one reason or another as they were persons with general qualifications who could be fitted into the other work of the irrigation branch.
The tubewell operators, however, could not have been sent on deputation because there was no possibility at all of their being fitted into the irrigation branch later, in case the Corporation could find no use for them because, once the tubewells had been transferred for good to the Corporation, the Government could find no openings for them in the service.
While, therefore, we do not agree with the appellant that the State Government discriminated against the appellants as compared with the other members of the staff by sending them on deputation but not the appellants, we think that this treat ment meted but to the other staff shows that the Government did not hesitate to burden the Corpo 389 ration with the liability of their salary etc.
while serving on deputation which would only augment the losses, if any, that the Corporation would incur by operating the tubewells.
But when it came to the case of the appellants, the Govern ment has considered it fit to retrench their services, simultaneously making some arrangement or issuing some directions enabling the Corporation to absorb them as if they were fresh recruits.
The assurance that they would be paid according to their original scales of pay and at their original leaves of pay came as a later development only because of the pending litigation.
It was very fair on the part of the State Government to decide that, as the tube wells would be operated by the Corporation, it would be prudent to run them with the help of the appellants rather than recruit new staff therefore and that the Government should bear the burden of any losses which the Corporation might incur as a result of running the tubewells But having gone thus far, we are unable to see why the Government stopped short of giving the appellants the benefit of their past services with the Government when thus absorbed by the Corporation.
Such a step would have preserved to the appel lants their rightful dues and retirement benefits.
The conduct of the Government in depriving the appellants of substantial benefits which have accrued to them as a result of their long service with the Government, although the tubewells continue to be run at its cost by a Corporation wholly owned by it, is something which is grossly unfair and inequitable.
This type of attitude designed to achieve nothing more than to deprive the employees of some benefits which they had earned, can be understood in the case of a private employer but comes ill from a State Government and smacks of arbitrariness.
Acting as a model employer, which the State ought to be, and having regard to the long length of service of most of the appellants, the state, in our opinion, should have agreed to bear the burden of giving the appellants credit for their past service with the Government.
That would not have affected the Corporation or its employees in any way except to a limited extent indicated below and, at the same time, it would have done justice to the appellants.
We think, therefore, that this is something which the State ought to be directed to do.
We would, however, like to clarify that the sole purpose and object of our above direction is that the appellants should be entitled to count their past service with the Government for the purpose of computation of their salary, length of service and retirement benefits with the Corporation.
This, however, should not result in the appellants ' claiming any seniority over the staff which the Corporation has otherwise engage right from its commencement in 1970.
To permit 390 such a claim would result in injustice to those employees whose seniority is based on their terms and conditions of service with the Corporation which had been entered into a long time before the present transfer proposal came to be implemented.
Though, as we have mentioned earlier, seniority in service is not of much importance in this case as there is no avenue of promotion to tubewell operators, the ques tion of seniority still becomes crucial in case the Corpora tion should close down any of the tubewells or decide on the retrenchment of its staff by reorganising the operation of tubewells in such a way that some of the staff may become surplus.
In such an event, if the appellants are given the benefit of their length of service with the Government for all purposes, some of the present employees of the Corpora tion may become liable to be retrenched as junior in length of service to some of the appellants.
Clearly, this should not be allowed to happen and the Corporation staff should not suffer merely because the appellants, who have been subsequently inducted into the Corporation, are given all the benefits of the length of their service with the Govern ment.
There can be no question of any of the appellants being considered senior to such operators on the Corpora tion 's establishment.
In fact we cannot give such a direc tion without giving such operators an opportunity of being heard.
We would, therefore, like to make it clear that, while the appellants will have, for purposes of computation of their salary, length of service and retirement benefits the advantage of counting the period of their service with the Government, this will not enable them to claim any seniority over the former employees of the Corporation.
At the same time there is the apprehension of the appel lants that if they are treated as juniors to all the Corpo ration 's employees, they may be sent out first in case there is any retrenchment.
It is prayed that it should be ensured that such an eventuality does not affect the present appel lants as a result of their being treated as juniors to the former employees of the Corporation.
We are told that this eventuality is not merely hypothetical but real.
This is a situation that cannot be helped, being one in which the equities in favour of the appellants will be counter weighed by those in favour of the Corporation 's direct employees, The only solution to this difficulty which we can see in for the Corporation not to retrench the services of any of the appellants as far as possible whether due to the closure of some of the tubewells or otherwise.
We are informed that a circular was issued by the Corporation on 13.7.87 and 19.8.87, directing, inter alia, that no fresh appointments of tubewell operators will be made in the Corporation against vacancies caused due to retrenchment, resignation or death of an exist 391 ing incumbent.
Such a direction became necessary because many of the tubewells of the Corporation had been installed in the fifties and they had out lived their optimum lives and it became necessary to cut down on the staff.
The continued adoption of this policy for some more time will help the appellants tide over the crisis envisaged above.
We have already pointed out that most of the appellants, who have now joined the Corporation, have rendered long years of service with the Government and will be retiring from serv ice in the next few years.
The Corporation can perhaps manage to continue them i. service without retrenching any of them on the ground that some of the tubewells have to be closed down or that some of these operators for some other reason have become surplus for its needs.
If this could be done, it will be most equitable as it will achieve the following ends: (1) it will enable the present appellants to continue in service till they retire in normal course; (2) it will protect the interests of the erstwhile operators of the Corporation who have been serving in the Corporation from the beginning; (3) it will not cause any financial prejudice to the Corpo ration because of the assurance already given that any losses incurred by running the tubewells would be borne by the Government itself; and it will ensure that the Government acts fairly and equitably fulfilling the legitimate expectations of its employees.
For the reasons discussed above, we declare that the appellants will be entitled to add their service in the Government to their length of service in the Corporation for purposes of computation of their salary, length of service and retirement benefits.
The Corporation is also directed to ensure, as far as possible, that none of the appellants are retrenched as surplus on account of any closure of tubewells or other like reason until they retire or leave the service of the Corporation voluntarily for any reason.
To sum up, even before the insertion of section 25FF in the Act, the employees of a predecessor had no right to claim re employment by the successor in business save in excep tional circumstances.
Even where available, that claim was not a matter of absolute right but of discretion, to be judicially exercised, having regard to all the 392 circumstances.
An industrial tribunal, while investigating such a claim, had to carefully consider all the aspects of the matter.
It had to examine whether the refusal to give re employment was capricious and industrially unjustified on the part of successor in business or whether he could show cause for such refusal on reasonable and bona fide grounds such as want of work, inability of the applicant to carry out the available work efficiently, late receipt of the application for re employment in view of prior commitments or any other cause which in the opinion of the tribunal made it unreasonable to force the successor in interest to give re employment to all or any of the employees of the old concern.
This discretion given to industrial courts is no longer generally available because of the insertion of section 25 FF.
But in a case where one or both of the par ties is a State instrumentality, having obligations under the Constitution, the Court has a right of judicial review over all aspects of transfer of the undertaking.
It is open to a court, in such a situation, to give appropriate direc tions to ensure that no injustice results from the change over.
In the present case, the parties to the transfer are a State on the one hand and a fully owned State Corporation on the other.
That is why we have examined the terms and condi tions of the transfer and given appropriate directions to meet the needs of the situation.
We, therefore, direct the State Government and the Corporation which is but a wholly owned State instrumentality bound to act at the behest of the State to carry out our directions above, the Corpora tion being at liberty to amend its rules and regulations, if necessary, to give effect to the same.
We have been given to understand that none of the appel lants has taken the compensation amounts tendered by the State and that the monies are now in deposit with the Corporation.
We have already pointed out that the appellants can claim either compensation or continuity of service but not both.
We should, therefore, like to make it clear that in case any of the appellants have been paid any compensation, that amount will have to be refunded by them before this order can be given effect to qua them.
The appeals stand disposed of accordingly.
There will be no order regarding costs.
R.S.S. Appeals disposed of.
| IN-Abs | The appellants were in service as tubewell operators in the Irrigation Branch of the Public Works Department of the Punjab Government.
The State took a decision to transfer all the tubewells in this branch to the Punjab State Tubewell Corporation, a company wholly owned and managed by the State of Punjab.
Consequent on this decision, a notification was issued on 30th November, 1982 abolishing all the posts of tubewell operators in the Irrigation Branch, and accordingly notices terminating the services of the appellants were issued.
The appellants challenged the termination notices before the High Court contending (i) that the notification by which the tubewells were transferred was mala fide, the only object being to frustrate certain claims of the petitioners which had been judicially recognised; (ii) that the impugned notices did not fulfill the requirements of clauses (b) and (c) of section 25F of the in so far as the compensation amount of each individual was not deliv ered at his door, and the notices under clause (c) were not sent by registered post; and (iii) that, in case the action of the State was upheld, the respondent Corporation should be held to be under an obligation to employ the appellants with continuity of service and under the same terms and conditions which they were enjoying prior to their retrench ment from the service of the State.
The High Court rejected the petitions flied by the appellants.
The High Court inter alia found that the appel lants had been given all the benefits which they had ob tained from the court.
It was also found that the respondent corporation had made an offer of re employment to all the appellants effective from the date of expiry of the notices of their retrenchment by the State Government.
According to the learned 368 Judges, the sole object of the issuance of the notification was to get rid of the tubewells which were the cause of constant and ever increasing loss to the State exchequer and not any mala fide or extraneous reasons.
The services of the appellants have since been taken over by the Corporation.
Though at one stage the Corporation had taken the stand that the appellants would be taken as fresh appointees in the Corporation, it had subsequently fixed them up at the same level of pay at which they were in Government service immediately before retrenchment, and they were also being granted increments on that scale.
There remained two grounds of dissatisfaction: (1) that the appellants would be junior in service to the tubewell operators who had been engaged by the Corporation on its own account before the appellants joined the service of the Corporation, giving the appellants the apprehension that their down gradation in seniority would affect them in case the Corporation started closing down some of the tubewells and discharging its staff, and (2) if treated as retrenched Government servant, they would be able to get terminal benefits and pension only on the basis of their present lengths of service in the Government.
Before this Court, the contention of the appellants in this regard was that the Corporation was really nothing but a Department of the Government, and that in such circum stances, its "corporate veil" had to be torn as under and its basic identity as department of the Government recog nised and given effect to.
Alternatively it was argued that even if the Corporation be taken to be a separate enti ty, it was clearly a "successor" to the Government Depart ment as the Government had assured the Corporation that, if it suffered any losses because of the transfer, the losses would be made good by the Government, that having regard to the virtual identity of the Corporation and the Government, this was really a case of the Corporation having taken over a department of the Government, and that both the Irrigation Branch of the State Government as well as the Corporation admittedly constituted an "industry" within the meaning of the .
and the problem should be looked at from the point of view of industrial law.
The respondent 's case was that the State 's obligation came to an end with the payment of retrenchment compensa tion, that the Corporation went out of its way to confer a favour on the appellants by agreeing to take them into its service; that it would be unfair on the part of the Corpora tion to give the appellants benefit of their earlier service in the 369 Government and make them senior to other employees who had been serving in the Corporation right from the beginning: and that this was a fresh employment subject to the normal rules and regulations of the Corporation and the appellants had no right to claim any continuity of service in the circumstances.
Disposing of the appeal, this Court, HELD: (1) The fact appears to be that the tubewells were not being operated profitably by the Government and the Government seems to have taken a decision that it would he more efficient, economical and prudent to have these tube wells run by the Corporation.
There is no reason to doubt the bona fides or the genuineness of this arrangement.
[378B C] (2) When individual drafts for the amounts of compensa tion due to the various tubewell operators were forwarded to the divisional subdivisional offices, sufficiently in time to be available to be taken by them by 31st August, 1983 there was sufficient compliance with the provisions of clause (a) of section 25 F. [379C D] (3) The running of tubewells constitutes an "industry" whether in the hands of the government or in the hands of the Corporation.
[381D] (4) There is no incompatibility in applying some of the provisions of the to persons in the service of the Government.
[381D] State of Bihar vs Industrial Tribunal, (5) Notices under clause (c) of section 25 F were sent to the Labour Department as well as to the employment ex change through the poen book.
The High Court is right in pointing out that such a requirement can be treated errone ous to hold that unless sent by registered post, the notices cannot be treated as complying with the statute.
[379E] (6) Where the transferor and transfree is a State or a State instrumentality, which is required to act fairly and not arbitrarily, the Court has a say as to whether the terms and conditions on which it proposes to hand over or take over an industrial undertaking embody the requisite of "fairness in action".
In such circumstances it will be open to this Court to review the arrangement between the State Government and the corporation and issue appropriate direc tions.
The princi 370 ple sought to be applied is a constitutional principle flow ing from the contours of article 14 of Constitution which the State and Corporation are obliged to adhere to.
[387F H; 388A] New Gujarat Cotton Mills Ltd. vs Labour Appellate Tribu nal, [1957] II L.L.J. 194; Ramjilal Nathulal vs Himabai Mills Co. Ltd., [1956] II L.L.J. 244; Indian Hume Pipe Co. 'Ltd. vs Bhimarao, ; Ban Nigam Karamchari Kalyan Sangh vs Divisional Logging Manager & Ors., J.T. ; Workmen vs Dahingeapara Tea Estate, ; Anakapalla Co op.
Agricultural & Industrial Society Ltd. vs Its Workmen, [1963] Supp.1 S.C.R. 730; Hariprasad vs Divikar, [1957] S.C.R. 121; Bombay Garage Ltd. vs Industrial Tribunal, [1953] I L.L.J. 14; Artisan Press vs L.A.T., [1954] II L.L.J. 14; Kapur vs Shields, ; Accountant and Secretarial Services P. Ltd. vs Union; , and Mahabir Auto Stores vs Indian Oil Corporation, [1990] 3 S.C.C. 752, referred to.
{7) Looking at the facts of this case in the above perspective, it appears that the State Government has acted arbitrarily towards the appellants.
The conduct of the Government in depriving the appellants of substantial bene fits which have accrued to them as a result of their long service with the Government, although the tubewells continue to be run at its cost by a Corporation wholly owned by it, is something which is grossly unfair and inequitable.
This type of attitude designed to achieve nothing more than to deprive the employees of some benefits which they had earned, can be understood in the case of a private employer but seems ill from a State Government and smacks of arbi trariness.
[388B; 389D E] (8) The appellants will be entitled to add their service in the Government to their length of service in the Corpora tion for purposes of computation of their salary, length of service and retirement benefits.
The Corporation is also directed to ensure, as far as possible, that none of the appellants are retrenched as surplus on account of any closure of tubewells or other like reason until they retire or leave the service of the Corporation voluntarily for any reason.
The advantage of counting the period of their past service with the Government will, however, not enable them to claim any seniority over the former employees of the Corporation.
[391G H; 390E] (9) Even before the insertion of section 25FF in the Act,.the employees of a predecessor had no right to claim re employment by the successor in business save in excep tional circumstances.
Even where 371 available, that claim was not a matter of absolute right but one 01 ' discretion, to be judicially exercised, having regard to all the circumstances.
[391G H]
|
ivil Appeal No. 2559 of 1988 From the Judgment and Order dated 31.8.1987 of A.P. Adminis trative Tribunal, Hyderabad in R.P. No. 393 i of 1987.
K. Madhva Reddy and G. Prabhakar for the Appellants.
Y.P. Rao for the Respondent.
561 The Judgment of the Court was delivered by SAWANT, J.
The admitted facts in the present case are that the respondent applied for Grade I and Grade II teacher posts (Post Graduate Teacher and Trained Graduate Teacher posts respectively) in September, 1985 pursuant to a news paper 's advertisement calling for applications for the said posts.
Admittedly, the qualification prescribed in the advertisement for the said posts was a second class degree in M.A., and the respondent held a third class degree in M.A.
However, it appears that on December 27, 1985, an order was issued wrongly by the first appellant appointing her as a Post Graduate Teacher in Hindi.
The order stated that her appointment was subject to the production of original cer tificates and to the compliance with the other necessary formalities.
When pursuant to the order, the respondent approached the authorities with the certificates, it was noticed that the respondent was not qualified for the post.
She was, therefore, not allowed to join the service, and was sent back.
The respondent thereafter approached the Andhra Pradesh Administrative Tribunal at Hyderabad representing to the Tribunal that pursuant to the order of December 27, 1985 she had joined her duties on January 2, 1986 and that she should be allowed to continue in service with all the bene fits from that day.
The Tribunal passed the impugned order directing the appellants to allow her to join the duties and to pay to her salary from the date she reported for her duties in compliance with the order of December 27, 1985.
The Tribunal also awarded costs against the appellants.
We are of the view that the Tribunal is clearly in error.
The reasons given by the Tribunal in support of its order are, firstly, that the appellants had issued the order of appointment knowing fully well that she was not quali fied, and secondly, that she was selected for the appoint ment because there was no other candidate available with better marks.
It has been brought to our notice during the course of the arguments that the original selection was made by mistake on the presumption that the respondent had satisfied the qualification requirements as stated in the advertise ment, without scrutinising the certificates copies of which were sent with her application.
The Selection Committee presumed that all those who had applied in response to the advertisement must have had the requisite qualifications needed for the posts.
However, the order appointing the respondent had made 562 it clear that the respondent should come along with the original certificates.
When the respondent approached the appellants with the originals of the certificates which were scrutinised, it was found that in fact she was short of the qualifications.
It is in these circumstances, that she was not allowed to join the service.
It cannot, therefore, be said that the appellants had selected the respondent with the knowledge that she was under qualified.
According to us, there is a good deal of force in this contention.
It is common knowledge that sometimes either by mistake or other wise the notes put up before the Selection Committee contain erroneous data prepared by the office, and sometimes the Selection Committee proceeds on the basis that all those who appear before it, are otherwise qualified.
However, the second stage at which the documents are scrutinised is when the higher authorities go through them at the time the candidate concerned approaches them for resuming duties along with the original certificates.
It is at that stage that the mistake was discovered in the present case and the respondent was not permitted to resume her duties.
We see nothing wrong in this action.
The observation of the Tribunal that there were no other candidates available with better marks is, in the circumstances, a halftruth because assuming that she had better mark among those who had applied, it seems that no one with second class had applied or the applications only of the third class candidates were considered.
If so, they were the applications of those third class candidates who had applied and not of all those who would have applied had the advertisement given an indication that those with a third class degree could also apply.
It must further be realised by all concerned that when an advertisement mentions a particular qualification and an appointment is made in disregard of the same, it is not a matter only between the appointing authority and the appointee concerned.
The aggrieved are all those who had similar or even better qualifications than the appointee or appointees but who had applied for the post because they did not possess the qualifications mentioned in the advertise ment.
It amounts to a fraud on public to appoint persons with inferior qualifications in such circumstances unless it is clearly stated that the qualifications are relaxable.
No court should be a party to the perpetuation of the fraudu lent practice.
We are afraid that the Tribunal lost sight of this fact.
We are, however, informed that the respondent subsequent ly 563 acquired another degree in M.A. with second class and has qualified herself to be appointed to the said post.
Whatever the merits of the decision given by the Tribunal, we cannot forget that she was entitled to rely upon it till this time where she had succeeded.
She was not allowed to join service on January 2, 1986 and thereafter she had approached the,Tribunal in January 1987.
The decision of the Tribunal was of 31st August, 1987 and thereafter the present Civil Appeal was pending in this Court from December 1987 till this day.
Considering the fact that she is compelled to serve, that she has acquired the requisite qualification, that today she may be overaged for the post and the further fact that many who were underqualified were appointed to the post earlier, we feel that it will be unjust to deprive her of the post at this stage.
We, therefore, set aside the impugned order of the Tribunal but allow the appeal partial ly and direct that the respondent should be appointed in the post from the beginning of the ensuing academic year 1990 91.
Since Shri Madhav Reddy contended that there is no vacant post at present, we further direct that, if neces sary, a post be created to accommodate her.
She will, howev er, not be entitled to any benefits including back wages till her appointment.
The parties will bear their own costs.
N.V.K. Appeal allowed.
| IN-Abs | Pursuant to a newspaper advertisement by the State Government calling for applications for Grade I and Grade II teacher posts (Post Graduate Teacher and Trained Graduate Teachers) the respondent in the appeal applied for the same.
The qualification prescribed in the advertisement was a second class degree in M.A.
However, the respondent who held a third class degree in M.A. was selected, and an order was issued appointing her as a Post Graduate Teacher in Hindi, subject to the production of original certificates, and compliance with the other necessary formalities.
When the respondent approached the authorities with her certificates, it was noticed that she was not qualified for the post, and was, therefore, not allowed to join service.
The respondent approached the State Administrative Tribunal for relief, which held that the appellants had issued the order of appointment knowing fully well that she was not qualified, and that she was selected for appointment because there was no other candidate available with better marks, and passed an Order directing the appellants to allow the respondent to join duty and pay her salary from the date she reported for duty.
The appellants appealed to this Court.
Allowing the appeal, HELD: 1.
When an advertisement mentions a particular quali fi 560 cation and an appointment is made in disregard of the same, it is not a matter only between the appointing authority and the appointee concerned.
The aggrieved are all those who had similar or even better qualifications than the appointee or appointees but who had not applied for the post because they did not possess the qualifications mentioned in the adver tisement.
[562F] 2.
It amount to a fraud on the public to appoint persons with inferior qualifications unless it is clearly stated in the advertisement that the qualifications are relaxable.
[562G] 3.
No Court should be a party to the perpetuation of the fraudulent practice.
The State Administrative Tribunal lost sight of this fact in the instant case.
[562G] 4.
It is common knowledge that sometimes either by mistake or otherwise the notes put up before the Selection Committee contain erroneous data prepared by the office and sometimes the Selection Committee proceeds on the basis that all those who appear before it, are otherwise qualified.
However, the second stage at which the documents are scruti nised is when the higher authorities go through them at the time the candidate concerned approaches them for resuming duties alongwith the original certificates.
It is at that stage that the mistake in the instant case was discovered, and the respondent was not permitted to resume her duties.
There is nothing wrong in such action.
[562B C] [The Court felt it would be unjust to deprive the re spondent of the post at this stage, as she had subsequently acquired another degree in M.A. with second class and there by qualified herself to be appointed, that she may be over aged for the post and many who were underqualified were appointed to the post earlier, and directed that she be appointed in the post from the beginning of the academic year 1990 1991.] [563B C]
|
iminal Appeal No. 186 of 1956.
Appeal by special leave from the judgment and order dated February 18, 1955, of the Punjab High Court in Criminal Appeals Nos. 389 and 406 of 1954, arising out of the judgment and order dated June 16, 1954, of the Court of the Additional Sessions Judge, Ferozepur, in Sessions Case No. 5 of 1954 and Trial No. 5 of 1954.
726 Jai gopal Sethi, Vidya Dhar Mahajan and K. L. Arora, for the appellants.
N.S. Bindra, B. H. Dhebar and T. M. Sen, for the respondent.
December 4.
The Judgment of the Court was delivered by SARKAR, J.
Eight persons were tried ::or offences under sections 148, 307 and 364 both read with sections 149 and 34 of the Indian Penal Code, by the Additional Ses.
sions Judge, Ferozepur.
The learned Sessions Judge acquitted four of the accused, namely, Het Ram, Teja Ram, Manphul and Surja Ram as he did not think that their presence at the occurrence had been proved beyond reasonable doubt.
He convicted the remaining four, namely, Narain, Jot Ram, Gheru and Jalu under sections 307 and 364 read with section 34.
He sentenced Narain, Jot Ram and Gheru to rigorous imprisonment for three years under section 307 and two years under section 364.
He sentenced Jalu to two years ' rigorous imprisonment under each section.
On appeal by the convicted persons the High Court of Punjab maintained the convictions but reduced the sentences passed on Jot Ram and Gheru to one year 's rigorous imprisonment and Jalu to the term of imprisonment already undergone.
It maintained the sentence passed on Narain and dismissed his appeal.
Narain, Jot Ram and Gheru have appealed To this Court from that judgment.
The prosecution case is that one Sultan was the proprietor of a field described in the proceedings as plot No. 97.
Sahi Ram had been a tenant of the land.
The land had not been cultivated in the year preceding the occurrence with which this case is concerned and the owner had thereupon resumed possession of it.
On June 14, 1953, Mani Ram a son of the proprietor, arrived at the field on a tractor accompanied by a Tabourer, Moola Ram, with the object of Ploughing it and found Sahi Ram actually ploughing.
Mani Ram turned Sahi Ram out of the field.
Sahi Ram raised a protest but eventually left abandoning his plough on the field.
Mani Ram then began to plough the field 727 with his tractor.
A little later the tractor developed mechanical trouble and Mani Ram stopped ploughing and started attending to it.
While Mani Ram was so engaged, Sahi Ram arrived at the spot accompanied by seven persons, being the accused earlier named other than Narain, variously armed.
Jalu had come on a horse.
They fell upon Mani Ram and assaulted him.
Moola Ram who ran to his rescue was also assaulted.
Moola Ram then attempted to run away whereupon Sahi Ram and his party chased him.
While Sahi Ram and his party had their attention on Moola Ram, Mani Ram got into his tractor and began to drive away from the field.
At this point of time Narain arrived on a horse with a gun in his hand.
He told the pursuers of Moola Ram to leave him as he was merely a hired man and pointed out that the real culprit Mani Ram was about to escape in the tractor.
The party then turned round and pursued Mani Ram.
Narain on his horse soon overtook Mani Ram and fired at him while he was still on the tractor in the driver 's seat.
Mani Ram fell down from the tractor which, being in motion, proceeded on its own and ran into a tree and stopped.
Narain 's horse fell against the cultivator of the tractor and was injured.
Mani Ram picked himself up and staggered for shelter into the hut of one Mukh Ram, which was nearby.
The pursuers then came up and Jot Ram fired a shot at Mani Ram inside the hut and so did Gheru.
Mani Ram fell down in the hut.
Mukh Ram threw himself on the body of Mani Ram to protect him.
Gheru and Narain then said that they would burn the hut with Mani Ram inside it.
Sahi Ram suggested that it would be better to carry Mani Ram to their house and there kill him and burn his body.
Mukh Ram 'was then dragged away and Mani Ram 's body was put on a horse and Jalu mounted it.
The party then proceeded towards the village by a foot path with Mani Ram, who was then unconscious, as their captive.
After they had gone some distance Raghbir, the younger brother of Mani Ram, having heard of the incident came to rescue Mani Ram.
He met Jalu on the horse with Mani Ram and Sahi Ram walking close behind, 728 the rest of the party being at some distance.
Raghbir asked Jalu to put down Mani Ram on which Jalu threatened to kill, and Sahi.
Ram pointed his sela at Raghbir.
Raghbir then shot at Sahi Ram with the pistol he was carrying and the latter fell down and died soon after.
Jalu got off the horse and ran away.
Before the others could arrive Raghbir carried Mani Ram to the house of one Birbal from where he, was later taken to the hospital.
The defence was that the prosecution case was wholly false and the real facts were as follows: On the date of the occurrence Sahi Ram was ploughing the field when Mani Ram and Raghbir came there and tried to stop him.
There was an altercation.
Jot Ram and Gheru who were in a field nearby came up and advised Sahi Ram not to dispute over the matter with Mani Ram but have it decided by Panchayat.
Sahi Ram, Jot Ram and Gheru then left the field and proceeded towards the village.
While going Jot Ram noticed that Sahi Ram was carrying a pistol and took it away from him to prevent him from using it in his excitement.
Mani Ram and Raghbir also went towards the village but by a different route.
The par.
ties again met at the village Shamlat.
Raghbir abused Sahi Ram and fired a shot at him killing him outright.
Jot Ram apprehending that he might also be shot at, fired the pistol which he had taken from Sahi Ram and might have injured Mani Ram.
There were two unknown persons with Raghbir and Mani Ram at this time and they also used their fire arms.
Mani Ram might have received injuries from these firings also.
The accused denied that any of them except Jot Ram and Gheru were present at the incident.
There were thus two conflicting versions of the same incident and there were two cross cases based on these separate versions.
We are concerned with the case started on the complaint of Mani Ram and concerning the injuries suffered by him and his abduction.
The other case was against Mani Ram, Raghbir, Sultan and Dalip also a son of Sultan and was based on what the defence version of the incident in the present case was.
In that case Raghbir and Mani 729 Ram were charged under section 302 read with section 34 of the Indian Penal Code for having caused the death of Sahi Ram and Sultan and Dalip were charged under section 302 read with section 109 of the same Code in the same connection.
The learned Sessions Judge who heard both the cases, acquitted Mani Ram, Raghbir, Sultan and Dalip of the charges brought against them and convicted the appellants and Jalu in the present case accepting the prosecution version of the incident.
As we have earlier stated, the conviction was upheld by the High Court.
In view of the concurrent findings of fact in the Courts below, the learned Advocate for the appellants confined himself in this Court to a question of law which we now proceed to discuss.
It has to be remembered that we are concerned only with the case in which the appellants had been tried for offences against Mani Ram.
With the other case we are not concerned.
In the trial Court, the prosecution had cited Raghbir as a witness.
Raghbir however refused to give evidence claiming protection under article 20 of the Constitution.
The learned Sessions Judge held that Raghbir could not be compelled to give evidence and rejected the contention of the accused that he was not entitled to the protection.
The prosecution in the end did not offer Raghbir as a witness and dropped him.
When the matter came up before the High Court in appeal, it was said on behalf of the appellants, that the learned Sessions Judge was wrong in holding that Raghbir was entitled to the protection of article 20 and that the trial had been vitiated by this decision as a result of which the accused had been deprived of the benefit of Raghbir 's evidence.
The High Court however held that the fact that Raghbir was not examined did not vitiate the trial in any way.
It is this part of the High Court judgment that has been challenged before us by the learned Advocate for the appellants.
The High Court observed as follows: " We may assume that Raghbir would 92 730 not have supported the prosecution story or that he would have admitted to having shot Sahi Ram.
The fact that he was unwilling to make a statement does not constitute an irregularity in the trial.
Had he been compelled to say something, he would, in all probability, not have told the truth, and the question is how the case would have been affected by his statement? In my view, whatever he had stated would not have rebutted the convincing testimony of the other witnesses in the case and therefore the failure of the Court to examine him does not in any way affect the ultimate decision of the case.
" The learned Advocate contended that the High Court had in view the provisions of section 167 of the Evidence Act though the section was not in terms referred.
We think this is a fair view to take.
The learned Advocate said that what the High Court has done is to say that even assuming that Raghbir 's evidence did not support the prosecution story, that would not have made any difference to the result, because, what ever he stated would not have rebutted the convincing testimony of the other witnesses.
According to the learned Advocate, this view was not justified by section 167.
It seems to us that the expression of the opinion of the High Court on this matter has not been happily worded.
The question under section 167 is not so much whether the evidence rejected would not have been accepted against the other testimony on the record as whether that evidence " ought not to have varied the decision.
" It is clear that if what Raghbir had said in his evidence had gone to support the defence version, then a, serious question would arise as to whether the decision of the trial Court would have been in favour of the accused instead of against them, as it happened to be.
It seems to us however that section 167 does not help the appellants.
It is clear from the record that the prose cution, though it had cited Raghbir as a witness, was not very keen to examine him When Raghbir objected to give evidence, the prosecution dropped him.
Therefore it seems to us that this is not a case in which evidence can be said to have been rejected 731 within section 167 of the Evidence Act.
The prosecution did not in fact tender Raghbir as a witness.
Nor have we any idea as to what he would have said had he given evidence.
Nor is it a case where the defence wanted to call him as a witness.
It is not necessary for us, nor have we been asked, to decide the question whether Raghbir was entitled under article 2o of the Constitution to refuse to give evidence.
It is amply clear from the record that the prosecution did not offer him as a witness upon his claiming protection under article 20.
The learned Advocate for the appellants then argued that in this view of the matter, it must be held that a material witness had been kept out of court by the prosecution and that would give rise to an adverse inference against the prosecution case and cast serious reflection on the fairness of the trial.
We were referred by learned Advocate to Habeeb Mohammad vs The State of Hyderabad (1) in this connection.
We agree that if a material witness has been deliberately or unfairly kept back, then a serious reflection is cast on the propriety of the trial itself and the validity of the conviction resulting from it may be open to challenge, The question then is, was Raghbir a material witness ? It is an accepted rule as stated by the Judicial Committee in Stephen Seneviratne vs The King (2) that " witnesses essential to the unfolding of the narrative on which the prosecution is based, must, of course, be called by the prosecution.
" It will be seen that the test whether a witness is material for the present purpose is not whether he would have given evidence in support of the defence.
The test is whether he is a witness " essential to the unfolding of the narrative on which the prosecution is based ".
Whe ther a witness is so essential or not would depend on whether be could speak to any part of the prosecution case or whether the evidence led disclosed that he was so situated that he would have been able to give evidence of the facts on which the prosecution relied.
It is not however that the prosecution is bound to call all witnesses who may have seen the occurrence and (1) ; (2) A.I.R. (1936) P.C. 289.
732 so duplicate the evidence.
But apart from this,.
the prosecution should call all material witnesses.
Was Raghbir then a witness essential to the unfolding of the prosecution case ? That clearly Raghbir was not.
The prosecution case, as we have seen, was concerned with the injuries caused to Mani Ram and his abduction.
According to the prosecution case, Raghbir arrived after these offences had been committed ; after Mani Ram had been assaulted and shot at and after he had been put on a horse and had been carried some distance.
The prosecution no doubt admits that Raghbir shot Sahi Ram but says that he did so in self defence.
This incident is an entirely separate incident.
It is not necessary to prove it in order to prove the offences with which the appellants were charged.
Raghbir therefore was not a witness whom the prosecution was bound to call to establish its case.
The fact, assuming it to have been so, that Raghbir would have said in his evidence that the incidents did not happen as the prosecution stated, may no doubt have established a good defence.
But if it was so, then he would have been only a witness material for the defence and not a witness essential to the unfolding of the narrative on which the prosecution case is based.
The prosecution is not bound to call witnesses to establish the defence but only witnesses who are material for proving its own case.
Indeed, since according to the prosecution case Raghbir arrived after the alleged offences were committed, he could not have given any evidence about the prosecution case.
We, therefore, think that the contention of the learned Advocate for the Appellants that the prosecution should have called Raghbir to ensure a fair trial or that he was a witness material to the prosecution case, is unfounded.
We do not think that the trial has at all been vitiated by the failure to call Raghbir.
It may be pointed out that the appellants had not sought to produce Raghbir as a witness on their behalf The learned Advocate then addressed us on the question of the sentence passed on Narain.
He said that the High Court passed a higher sentence on him 733 because it was under the impression that he had caused the only grievous injury that was found on the body of Mani Ram.
The learned Advocate pointed out that there was no evidence to show that the grievous injury had been caused by Narain.
It seems to us that this contention is justified.
There is however evidence to show that Narain merited the higher sentence.
It was he who directed the attack against Mani Ram.
He called the other members of the attacking party to desist from pursuing Moola Ram as Mani Ram was the real enemy and should be dealt with.
It is upon that the serious injuries on Mani Ram came to be inflicted.
We, therefore, think that the higher sentence imposed on the appellant Narain was justified.
No other question arises in this appeal.
The result is that the appeal fails and is dismissed.
Appeal dismissed.
| IN-Abs | Several persons attacked and seriously injured one M.
After assaulting him the assailants were carrying him away when M 's brother R came to rescue him and in self defence shot dead one of the assailants and carried M away.
For the assault on M eight persons, including the appellants, were tried for offences under (1) C.B.N.S. 161; (1862)133 R.R. 311.
725 sections 148, 307 and 364 both read with sections 140 and 34 Of the Indian Penal Code.
At the trial R was cited as a witness by the prosecution, but R refused to give evidence claiming protection under article 20 Of the Constitution.
The Sessions judge upheld R 's objection and the prosecution gave him up as a witness.
After trial, the Sessions judge acquitted four of the accused but convicted the appellants and one other person.
In appeal before the High Court the appellants urged that the Sessions judge was wrong in holding that R was entitled to the protection of article 2o and that the trial was vitiated by this decision whereby the accused had been deprived of the benefit of R 's evidence.
The High Court was of the view that if R had been compelled to give evidence he would not have supported the prosecution but whatever he would have stated would not have rebutted the convincing testimony of the other witnesses and that therefore the failure to examine R did not in any way affect the ultimate decision of the case.
The High Court apparently had section 167 Of the Evidence Act in view.
In the result the High Court upheld the convictions.
The appellants appealed and contended that the view of the High Court was not justified by section 167 and that the trial was not fair as R, a material witness, had been kept out of Court.
Held, that the trial was not vitiated by the failure of the prosecution to examine R as a witness.
Section 167 did not help the appellants as it was not a case in which evidence could be said to have been rejected within the meaning of that section.
Further, R was not a witness material to the prosecution inasmuch as he arrived on the scene after the assault was over and it was not necessary for the prosecution to examine him to ensure a fair trial.
Where a material witness has been deliberately or unfairly kept back, a serious reflection is cast on the propriety of the trial and the validity of the conviction resulting from it may be open to challenge.
The test whether a witness is material is whether he is essential to the unfolding of the narrative on which the prosecution is based and not whether he would have given evidence in support of the defence.
Habeeb Mohammad vs The State of Hyderabad, [1954] S.C.R. 475; Stephen Seneviratne vs The King, A.I.R. 1936 P.C. 289.
|
tion (Civil) Nos.
13003 of 1985, 1303 of 1987 and 302 of 1989.
(Under Article 32 of the Constitution of India) 437 Subhash Sharma Petitioner in person.
M.S. Ganeshan, Ms. M. Karanjawala (N.P.), H.S. Anand, P.H. Parekh and Ms. Sunita Sharma for the Petitioners.
Ashok Desai, Solicitor General, Ms. A. Subhashini, P.S. Poti, K.R. Nambiar, (For Kerala), Probir Chowdhury (For Assam), A.K. Panda (For Orissa), Ms. G.S. Misra, H.K. Puri, T.V.S.N. Chari (For Bihar), S.K. Agnihotri (For Madhya Pradesh), Ms. Kamini Jaiswal (For Chandigarh), Ms. section Dik shit (For U.P.), V. Krishnamurthy (For Tamil Nadu), B. Parthasarthi (For Andhra Pradesh), Ms. Urmila Kapoor & Ms. section Janani (For Manipur), Aruneshwar Gupta, M.N. Shroff (For Gujarat).
Mahabir Singh (For Haryana), A.S. Bhasme (For Maharashtra), I. Makwana (For Rajasthan), Ms. Urmila Kapur (For Manipur) and M. Veerappa (For Karnataka) the Respond ents.
The Judgment of the Court was delivered by RANGANATH MISRA, CJ.
These are applications under Arti cle 32 of the Constitution.
The first petition is by an advocate practising in this Court; the second by the Supreme Court Advocates on Record Association and the last by the Honorary Secretary of the Bombay Bar Association.
These applications are in the nature of public interest litiga tion.
The relief asked for is one for mandamus to the Union of India to fill up the vacancies of Judges in the Supreme Court and the several High Courts of the country and ancil lary orders of directions in regard to the same.
The peti tion from Bombay is confined to the relief of filling up of vacancies in the Bombay High Court.
Since common please were advanced and the relief sought was of similar nature, these applications have been clubbed together and heard from time to time.
In response to the rule, the Union of India took the stand through the Attorney General that the petitions were not maintainable and the filling up of the vacancies in the superior courts was not a justiciable matter.
Reliance was placed on the decision of this Court in the case ' of S.P. Gupta vs Union of India, [1982] 2 SCR 365.
The objection raised by the learned Attorney General was overruled by the Court by drawing a distinction between fixing the Judge strength in the Courts or selection of judges on one side and the filling up of vacancies on the basis of sanctioned strength on the other.
This Court as an interim measure took the view that while the ratio in S.P. Gupta 's case left the matter of fixing up of the Judge strength to the President of India under the constitutional scheme, and the choice of Judges to the 438 prescribed procedure, once the sanctioned strength was determined it was the obligation of the Union of India to maintain the sanctioned strength in the superior Courts and these cases were allowed to proceed.
Mr. Soli Sorabjee, the succeeding Attorney General, withdrew the objection regarding this Court 's jurisdiction and made a statement that he was of the view that it was the constitutional obligation of the Union of India to provide the sanctioned Judge strength in the superior courts and the default, if any, was a matter of public interest and the writ petitions requiring a direction to the Union of India to fill up the vacancies were maintainable.
I The superior judiciary is divided into the Union Judici ary covered by Chapter 4 of Part V and the High Courts in the States are covered by Chapter 5 of Part VI of the Con stitution.
Article 124(1) of the Constitution provides: "There shall be a Supreme Court of India consisting of a Chief Justice of India and, until Parliament by law pre scribes a larger number, of not more than seven other Judges." From time to time the Judge strength in the Supreme Court has been expanded and by the Supreme Court (Number of Judges) Amendment .
Act, 1986 (22 of 1986), the existing number has been fixed at 25 apart from the Chief Justice.
Article 2 14 provides: "There shall be a High Court for each State.
" But there are 18 High Courts in all on account of the fact that the High Court at Guwahati exercises jurisdiction over six States including Assam; the High Court at Chandigarh is common for the States of Punjab and Haryana and the juris diction of the High Court of Bombay extends over Goa.
There is High Court at Delhi though the mandate of Article 2 14 does not apply.
Article 2 16 provides: "Every High Court shall consist of a Chief Justice and such other Judges as the President may from time to time deem it necessary to appoint.
" 439 From time to time administratively the Judge strength of the different High Courts has been retired.
At the time these matters were first placed before us the total strength was 462 but later it has been enhanced to 470.
The enhancement has been on account of the fact that in the Judge strength of the High Courts of Calcutta,.
Himachal Pradesh, Karnata ka, Madras and Rajasthan had ten additions in all and the sanctioned strength of the Kerala High Court was reduced by two.
There was a time during the pendency of these writ petitions affidavit filed before this Court on behalf of the Ministry of Law & Justice the position as on 20th of Febru ary, 1990, showed that as against the sanctioned strength of 462,368 had been filled up and the vacancies were 94 in all.
By 16.8.1980, the sanctioned strength had gone up to 470 and as against these, 440 appointments had been made.
The total posts to be filled up were 30 in number 19 being permanent and 11 additional vacancies.
We gather that by now some more appointments have been made and the number of unfilled posts has been reduced to around 22.
These cases were adjourned from time to time with inter im directions calling upon Union of India to fill up the vacancies within specified dates.
As a result of monitoring by the Court by interim directions in these petitions, the position has somewhat eased but 22 vacancies still remain to be filled up.
With retirements and other cognate processes the number of vacancies keeps increasing from time to time.
We had made it clear to the learned Attorney General at the several interlocutory hearings that these petitions and the Court 's directions have nothing to do with the actual selection of particular Judges to be appointed in the vacan cies and that was a matter exclusively within the domain of the constitutional scheme and concern of the concerned constitutional functionaries.
These petitions are concerned with the filling up of vacancies and discharge of the con stitutional obligation of the Union of India to the nation in that behalf.
We may point out that filing of these writ petitions and the proceedings of the Court have helped the Union of India to fill up the vacancies to a considerable extent by making the various constitutional authorities con scious of the urgency of problem and of their responses.
We have noticed the fact that while the process of filling up of vacancies was considerably slow prior to the general election held in November, 1989, there has been an improve ment in the process from January this year.
We have, howev er, not been able to appreciate the stand taken 440 in some of the affidavits of the Union of India that as the place and process of appointments has been expedited, the writ petitions be taken to have served their purpose and do not survive.
We recall several occasions when our interim directions were received not with any conspicuous enthusiasm and other occasions when inspite of assurance and undertak ings no progress was noticed.
II For more than six scores of years High Courts have been functioning in this country.
Earlier appeals lay from the High Courts to the Privy Council in certain situations.
Under the Government of India Act, 1935, a Federal Court was stipulated which started functioning from 1937.
With Inde pendence of India in 1947, the jurisdiction of the Privy Council got repealed.
Our Constitution provided for a Su preme Court for the entire country and a High Court for every State.
The superior judiciary in India now, therefore, consists of the Supreme Court and the High Courts.
Article 50 in Part IV of the Constitution required the State to take steps to separate the Judiciary from the Executive in the public services of the States.
By now that has been done.
The constitutional scheme postulates Rule of Law and inde pendence of the judiciary.
With a view to providing the same as an indispensable factor for the sustenance of the demo cratic pattern of society, provisions have been made in the Constitution.
The Preamble of our Constitution stipulates justice social, economic and political for all citizens of India.
It is too late in the day to dispute the position that justice has to be administered through the courts and such administration would relate to social, economic and political aspects of justice.
The Judiciary therefore be comes the most prominent and outstanding wing of the Consti tutional System for fulfilling the mandate of the Constitu tion.
For its sound functioning, it is, therefore, necessary that there must be an efficient judicial system and one of the factors for providing the requisite efficiency is ensur ing adequate strength.
For Rule of Law to prevail, judicial independence is of prime necessity.
Dr. Robert MacGregor Dawson, speaking about individual independence of Judges once said: "The Judge must be made independent of most of the re straints, checks and punishments which are usually called into play against other public officers . . .
He is 441 thus protected against some of the most potent weapons which a democracy has at its command: he receives almost complete protection against criticism; he is given civil and criminal immunity for acts committed in the discharge of his duties; he cannot be removed from office for any ordinary offence, but only of misbehaviour of a flagrant kind, and he can never be removed simply because his decisions happen to be disliked by the Cabinet, the Parliament, or the people.
Such independence is unquestionably dangerous, and if this free dom and power were indiscriminately granted the results would certainly prove to be disastrous.
The desired protec tion is found by picking with special care the men who are to be entrusted with these responsibilities, and then para doxically heaping more privileges upon them to stimulate their sense of moral responsibility, which is called in as a substitute for the political responsibility which has been removed.
The Judge is placed in the position where he has nothing to loss by doing what is right and little to gain by doing what is wrong; and there is therefore every reason to hope that his best efforts will be devoted to the conscien tious performance of his duties." In Bradley vs Fisher, ; (1871) it was pointed out: "Our judicial system is guided by the principle that a judicial officer, in exercising the authority vested in him must be free to act upon his own convictions, without appre hension of personal consequences to himself.
" For the availability of an appropriate atmosphere where a Judge would be free to act according to his conscience it is necessary, therefore, that he should not be over burdened with pressure of work which he finds it physically impossi ble to undertake.
This necessarily suggests that the Judge strength should be adequate to the current requirement and must remain under constant review in order that commensurate Judge strength may be provided.
Within a few years of functioning under the aegis of the Constitution our people started realising that there was backlog in courts and the same was on rapid and constant increase.
The Law Commission in its 14th Report in Septem ber, 1958, dealt with the question adequacy of judicial strength as a matter of special importance.
It pointed out: 442 "The fundamental rights conferred by the Constitution and resort to the remedies provided for their enforcement have contributed largely to the increase in the volume of work in the High Courts.
Applications for the enforcement of funda mental rights, applications seeking to restrain the usurpa tion of jurisdiction by administrative bodies and applica tions or suits challenging the constitutionality of laws have made large additions to the pending files of the High Courts.
It has to be observed that many laws have come in for challenge in the courts on the ground of their incon sistency with the Constitution.
The complexity of recent legislation has resulted in a large number of novel and difficult questions having been brought before the High Courts.
Their decision have not only taken longer time but have led not infrequently to reference to Full Benches which necessarily divert the available judge power from what may be called normal judicial work.
As a result of this large addition to their work, the disposal of ordinary civil and criminal work in the High Courts has suffered very consider ably.
This increase of work and its specially difficult and novel character can well be regarded as an important cause of the accumulation of old cases.
" The Law Commission emphasised the position by further say ing: "Governments could not have been unaware, at any rate from 1950 onwards, that the files of the High Courts were being loaded with a large amount of additional work.
The large number of writ applications and applications questioning the constitutionality of enactments and rules flamed thereunder must have come directly to the notice of the Governments.
Responsible persons cannot also have failed to notice that the disposal of these complicated and in a sense novel matters consumed a great deal of the time of the High Courts which had the natural consequence of clogging the normal and usual work.
" Inspite of highlighting of the position by the Law Commission and the warning administered by it, the process of providing adequate judge strength commensurate with the volume of litigation has been usually slow.
Subsequent reports of the Law Commission have referred to this aspect.
443 The Commission took note of the position that due con sideration was not being bestowed upon the administration of justice and the importance of the subject was not realised by the Executive authorities.
Lack of adequate financial provision and absence of appropriate funding of schemes for improvement often led to abandonment of contemplated whole some measures and made long term planning difficult.
In fact, the plea from several relevant quarters that `Adminis tration of Justice ' should be treated as a `plan subject ' has not been entertained all these years.
It has been so more on account of lack of appropriate appreciation of the importance of the matter than anything also.
Lord Denning of the Preface to the Law in Crisis by Professor C.G. Weera Mantry has said: "We are passing through a critical moment in the history of mankind.
Civilised society appears to be disintegrating.
Minorities openly defy the law for their own ends.
Terror ists seize hostages and threaten to kill them.
Workmen set up picket hives outside power stations and threaten to bring the country to a standstill.
Students occupy buildings and prevent the running of their universities.
Only too often their threats succeed.
The peaceful majority give in.
They surrender.
Moral and spiritual values, too, appear to be at a low ebb.
The sanctions of religion have lost their force.
Schools and teachers take much interest in social sciences.
They explain how people behave.
They seek to help the mis fits.
But they do not set forth standards of conduct.
They do not tell people how to behave.
The only discipline to do this is the discipline of law.
It is the law which teaches that men must not resort to violence to obtain their ends; that they must keep their promises; they must not injure their neighbours and they must act fairly.
The law covers the whole range of human behaviour and says what men must do and must not do . .
Law which is the very foundation of the civilized society is in peril.
" Sir Frederick Pollock in one of his lectures pointed out that long indifference to the legal system and to all that goes with it is the result of many generations of neglect in communicating to the layman some understanding of the very ground work of the legal system under which 444 he spends his life.
Religion, politics, art, literature all these are taught as part of general education, but not the fundamentals concerning the administration of law, nor the history of liberty nor the need for public vigilance over its legal system.
It is not surprise that faith and confi dence in the law are steadily declining and legal systems, by and Large, are losing their base of popular support on which they must ultimately rely.
We are living in an age when all traditional institu tions are under scrutiny, suspicion and challenges of reas sessment.
If the current mood of disillusionment infects the core of the law and its institutions, we may have lost our last opportunity for the preservation of freedom under the Law.
It is, therefore, a matter for immediate attention of all concerned and of Government in particular that the need is recognised and the Administration of Justice is made a plain subject and given appropriate attention.
It is true that the number of High Courts compared to 1950 has increased in later years.
It is also true that the Judge strength has been increased.
It is, however, equally true that the enhancement has not been commensurate.
After a lot of exercise, per year disposal per Judge of main cases has been fixed at 650.
If this be the basis, perhaps no High Court in India excepting that for Sikkim has adequate judge strength.
e gather that the Kerala High Court where the sanc tioned strength has been reduced by 2, has a sanctioned strength 22 while its pendency as on 1.1. 1990 being 34,330 cases justifies a Judge strength of almost 50 on the basis of the measure of 650 cases per Judge per year.
We intend to indicate that there was no justification for reduction of the sanctioned strength.
We are alive to the position that in S.P. Gupta 's case this aspect has been held to be not justiciable.
We do not agree with the opinion expressed by the majority on this aspect and are of the opinion that that aspect requires reconsideration.
For the present we suggest to Government that the matter should be reviewed from time to time and steps should be taken for determining the sanctioned strength in a pragmatic way on the basis of the existing need.
If there be no correlation between the need and the sanctioned strength and the provision of judge manpower is totally inadequate, the necessary consequence has to be backlog and sluggish enforcement of the Rule of Law.
445 III Another reason directly contributing to backlog and its increase is the non filling up of the sanctioned vacancies.
Under the traditional process followed the matter, steps for filling up of vacancies have been initiated by the Chief Justice of the High Court six months in advance of the occurrence of the vacancy.
The date of retirement of a Judge is known on the date he enters office unless vacancy is caused by resignation, removal by impeachment or death.
Apart from these eventualities, the date of vacancy in the post being known for years before there can really be no justifiable excuse for inaction in the initiation of steps for filling up the vacancy well in advance of its actual occurrance.
The existing scheme of appointment involves a process of consultation with the Chief Justice, the Governor of the State, the Chief Justice of India before the Presi dent of India makes the appointment.
The involvement of the Governor brings in the Chief Minister and Presidential action involves the Central Government.
If, however, every functionary associated with the process remains cognisant of the constitutional obligation involved in the matter we see no justification as to why for selection of the incumbent more than 3 to 4 months should be necessary.
The system should be so perfect and smooth that with the retirement of one Judge his successor should be ready to step in and by this process not a day 's judge strength should be lost to a High Court.
The question of appointment of Judge was the subject matter of the 80th Report of the Law Commission.
It referred to its earlier Report (1979) where it was said: "As mentioned earlier, though the sanctioned judge strength of the High Courts in the country during the year 1977 was 352, only 287 judges on an average were in position.
Like rise, in the year 1976, even though the sanctioned strength was 351, only 292 judges were in position.
Leaving aside the judges who were entrusted with work outside their normal duties, the fact remains that the number of judges in posi tion in both the years was less than the sanctioned strength.
This disparity between the sanctioned strength, and the number of judges in position was apparently due to the fact that vacancies in the post were not filled in as soon as they occurred.
It is our considered opinion that delay in filling in the vacancies is one of the major con trolling factors reasonsible for the filling accu 446 mulation of arrears.
In our opinion, when a vacancy is expected to arise out of the retirement of a judge, steps for filling in the vacancy should be initiated six months in advance.
The date on which such a vacancy will normally arise is always known to the Chief Justice of the High Court and also to others concerned.
It should be ensured that necessary formalities for the appointment of a Judge to fill the vacancy are completed by the date on which the vacancy occurs.
" Several other reasons contributing to the non filling up of vacancies were brought to the fore in the Report.
Obviously, the reports furnished by the Law Commissions from time to time have not received adequate consideration in the hands of the appropriate authorities and administration of justice has not received its due attention.
This has resulted in the_ obstinate problem of backlog.
Prolongation of litigation is perhaps a necessary evil of our type of adjudicatory system.
Dacon (Law Tracts) listed the grievances of his times against the laws of England and the Justice system in the following way: "Certain it is that our laws, as they now stand, are subject to great uncertainties, and variety of opinion, delays and evasions whereof ensueth: (i) that the multiplicity and length of suits in great; (ii) that the contentious person is armed and the honest subject wearied and oppressed; (iii) that the judge is more absolute, who, in doubtful cases, hath a greater scope and liberty; (iv) that the chancery courts are more filled, the remedy of law being often absent and doubtful; (v) that the ignorant lawyer shroudeth his ignorance of law, in that doubts are frequent and many; and (vi) that men 's assurances of their lands and estates by patents, deeds, wills are often subject to question and hollow . . " Bacon 's description to a considerable extent represents even today 's situation.
The volume of litigation has in creased while there has been no commensurate expansion of the adjudicatory machinery.
When interim directions made in these cases were not yielding results, the Attorney General mentioned to us on repeated occasions that the consultations were taking time.
Very often, while the Chief 447 Justice of the High Court had made his recommendation, the response from the Chief Minister through the Governor of the State was not forthcoming, he used to say.
Repeated reminders were being sent from the Union Government and they went unheaded.
On one occasion to meet the stalemate we had indicated in an interlocutory order that a time frame must be set for the response of the constitutional authority in the State and if there was no response forthcoming within the time, the Union of India should be in a position to proceed with the recommendation of the Chief Justice of the High Court.
That even bore no fruit.
Backlog in Courts has become a national problem.
The adjudicatory process is being blamed for the equalling itself to the challenge of the times.
There is a general complaint that the judicial system is on the verge of col lapse.
It is, therefore, the obligation of the constitution al process to keep the system appropriately manned.
We have found no justification for the sluggish move in such an important matter.
We may, at this stage, advert to the Constitution (Sixty Seventh Amendment) Bill, 1990, which is pending before the Parliament.
In the statement of objects and reasons of this Bill, it has been stated: "The Government of India have in the recent past announced their intention to set up a high level judicial commission, to be called the National Judicial Commission for the ap pointment of Judges of the Supreme Court and of the High Courts and the transfer of Judges of the High Courts so as to obviate the criticisms of arbitrariness on the part of the Executive in such appointments and transfers and also to make such appointments without any delay.
The Law Commission of India in their 121st Report also emphasised the need for a change in the system.
" This part of the statement obviously accepts the posi tion that Government are satisfied that there is basis for criticism of the arbitrariness on the part of the Executive and the modality adopted following S.P. Gupta 's ratio has led to delay in the making of appointments which the Consti tutional Amendment seeks to eliminate.
From the affidavits filed by the Union of India and the statements made by learned Attorney General on the different occasions when the matter was heard.
We found that the Union Government had 448 adopted the policy of reopening recommendations even though the same had been cleared by the Chief Justice of India on the basis that there had in the meantime been a change in the personnel of the Chief Justice of the High Court or the Chief Minister of the State.
The selection of a person as a Judge has nothing personal either to the Chief Justice of the High Court or the Chief Minister, of the State.
The High Court is an institution of national importance wherein the person appointed as a Judge functions in an impersonal manner.
The process of selection is intended to be totally honest and upright with a view to finding out the most suitable person for the vacancy.
If in a given case the Chief Justice of the High Court has recommended and the name has been considered by the Chief Minister and duly processed through the Governor so as to reach the hands of the Chief Justice of India through the Ministry of Justice and the Chief Justice of India as the highest judicial authority in the country, on due application of his mind, has given finality to the process at his level, there cannot ordinari ly be any justification for reopening the matter merely because there has been a change in the personnel of the Chief Justice or the Chief Minister of the State concerned.
We intend to make it clear that this has to be the rule and the policy adopted by the Union of India as has been indi cated to us in Court by the learned Attorney General should immediately be given up.
In the functioning of public of fices there is and should be a continuity of process and action and all objective decisions taken cannot be trans formed into subjective issues.
That being the position, .recommendations finalised by the Chief Justice of India unless for any particular reason and unconnected with the mere change of the Chief Justice or the Chief Minister justifying the same should not be reopened and if in a given case the Union of India is of the view that the matter requires to be looked into again a reference should be made to the Chief Justice of India and there can be a fresh look at the matter only if the Chief Justice of India permits such a review of the case.
In fact, as an interim measure we had indicated that this should be the position but we find that steps contrary to the expression of this opinion have been taken.
That is why we have found it necessary to re state the opinion.
Government shall take appropriate action in accordance with this principle.
IV An independent non political judiciary is crucial to the sustenance of our chosen political system.
The vitality of the democratic process, the ideals of social and economic egalitarianism, the imperatives of a socio economic trans formation envisioned by the constitution as well as the Rule of law and great values of liberty and equality are all dependent on the tone of the judiciary.
The quality of the 449 judiciary cannot remain unaffected, inturn, in the process of selection of Judges.
Some of the important aspects of selection and appoint ment of Judges fell for debate before a seven judge bench in S.P. Gupta 's case [1982] 2 SCR 365.
The controversy was triggered off by a circular dated 13th March, 1981 issued by the Union Law Minister addressed to the Governor of Punjab and the Chief Ministers of the States referring to the desirability of one third of the judges of the High Courts, as for as possible, being from outside the State in the interest of `National Integration ' and "to combat narrow parochial tendency bred by caste, kinship and other local links and affiliations.
" The circular requested the Gover nor and the Chief Ministers to obtain from all the addition al judges working in the High Court in their respective States their consent to be appointed as permanent judges in the other High Courts of the country and also to obtain from persons who had already been, or may in the future be, proposed for initial appointment their consent to be ap pointed to any other High Court in the country.
The addi tional judges as well as the proposed appointees were also asked to name three High Court, in the order of preference, to which they would prefer to be so appointed as permanent judges.
The main issues that fell for consideration in the case were whether the said circular interfered with judicial independence; whether at all, and if so under what circum stances, a judge of High Court could be transferred to another High Court without his consent; and as to the crite ria on which an additional judge was entitled to be made permanent.
Several inciental issues such as whether the lawyers who brought the petitions had the requisite `stand ing to sue '; whether the records of the Government pertain ing to the appointment or non appointment of additional judges as permanent judges and to the transfer of judges were privileged from disclosure and, more importantly, the question as to the significance and status of the process of `consultation ' envisaged in the constitutional process of appointment of judges and the primacy of the position of the institution of the Chief Justice of India in the consulta tive process whether the opinion and advice of the Chief Justice of India was on the same significance as those of the other constitutional `functionaries viz., the Governor, the Chief Justice of the State who consulted in the matter also came to be debated.
In our opinion, the view expressed by four learned Judges whose views constituted the majority on the point the other three learned judges took a different view vitally affects the concept and values of judicial independence.
That case, indeed, traversed a wide ground and range of ideas.
450 Referring to that case a critical review published in the International and Comparative Law Quarterly [vol. 33 1984] said.
"In reaching these conclusions, members of the Court passed over much fascinating ground, and it gives intriguing in sight into the attitude of the Indian judiciary towards their own role and that of the Constitution in the context of India today.
Some of the most interesting observations are obiter, but that does not necessarily detract from their importance in the decision of a final court of appeal.
" The view taken by Bhagwati J., Fazal Ali J. Dasai J., and Venkataramiah J., to which we will presently advert, in our opinion, not only seriously detracts from denudes the prima cy of the position, implicit in the constitutional scheme, of the Chief Justice of India in the consultative process but also whittles down the very significance of "consulta tion" as required to be understood in the constitutional scheme and context.
This bears both on the substance and the process of the constitutional scheme.
The constitutional phraseology would require to be read and expounded in the context of the constitutional philosophy of separation of powers to the extent recognised and adumbrated and the cherished values of judicial independence.
Consistent with the constitutional purpose and process it becomes imperative that the role of the institution of the Chief Justice of India be recognised as of crucial importance in the matter of appointments to the Supreme Court and the High Court of the States.
We are of the view that this aspect dealt with in Gupta 's case requires re consideration by a larger bench.
The points which require to be re considered relate to and arise from the views of the majority opinion touching the very status of "consultation" generally and in particu lar with reference to "consultation" with Chief Justice of India and, secondly, as to the primacy of the role of the Chief Justice of India.
The content and quality of consulta tion may perhaps vary in different situations in the inter action between the executive and the judicial organs of the State and same aspects may require clarification.
There is yet another aspect as to the right to initiate the appointments of Judges.
In regard to this aspect, in practice, there appears to have been a distortion of the scope of the observations of the majority, even to the extent these observations go.
The statement that there should be no embargo on the State executive initiating the proposal for appointments goes with the qualification that the State executive can 451 not send its proposals directly to the Union Government but should first send it to the Chief Justice of the State.
Desai J., clearly and unambiguously qualified this right of the executive thus: ".
Similarly, mere could not be a blanket embargo on the State executive initiating the pro posal.
We agree that the State executive should not make its own recommendation and forward it directly to the Centre.
The State executive initiating the proposal must first forward it to the Chief Justice of the High Court who would be better informed about the practising advocates as well as the District Judges subordinate to the High Court, and seek the views of the Chief Justice.
The view of both may be forwarded to the Chief Justice of India . . " (Emphasis Supplied) But it has been mentioned that a practice is sought to be developed where the executive Government of the State sends up the proposals directly to the Centre without refer ence to the Chief Justice of the State.
This is a distortion of the constitutional scheme and is wholly impermissible.
So far as the executive is concerned, the `right ' to initiate an appointment should be limited to suggesting appropriate names to the Chief Justice of the High Courts or the Chief Justice of India.
If the recommendation is to emanate di rectly from a source other than that of the Chief Justices of the High Courts in the case of the High Courts and the Chief Justice of India in the case of both the High Courts and the Supreme Court it would be difficult for an appropri ate selection to be made.
It has been increasingly felt over the decades that there has been an anxiety on the part of the Government of the day to assest its choice in the ulti mate selection of Judges.
If the power to recommend would vest in the State Government or even the Central Government, the picture is likely to be blurred and the process of selection ultimately may turn out to be difficult.
Returning to the views of the majority, we may set out the views of these learned Judges in the Judgment as to "consultation" and primacy of the position of the Chief Justice of India which would, in our opinion, require re consideration.
Referring to `Consultation ' in Article 1 24(2) and 217(1) Bhagwati, said: " .
Iris obvious on a plain reading of clause (2) of Article 124 that it is the President, which in effect and substance means the Central Government, which is empowered by the 452 Constitution to appoint Judges of the Supreme Court .
It is clear on a plain reading of these two Articles that the Chief Justice of India, the Chief Justice of the High Court and such other Judges of the High Courts and of the Supreme Court as the Central Government may deem it neces sary to consult, are merely constitutional functionaries having a consultative role and the power of appointment resides solely and exclusively in the Central Government . " " .
But, while giving the fullest meaning and effect to `consultation ', it must be borne in mind that it is only consultation which is provided by way of fetter upon the power of appointment vested in the Central Government and consultation cannot be equated with concurrence . .
It would therefore be open to the Central Government to over ride the opinion given by the constitutional function aries required to be consulted and to arrive at its own decision in regard to the appointment of a Judge in the High Court or the Supreme Court . . .
Even if the opinion given by all the constitutional functionaries con sulted by it is identical, the Central Government is not bound to act in accordance with such opinion . " (emphasis supplied) [See: , 541,542] As to the primacy of the position of Chief Justice of India, the learned Judge observed: " .
It was contended on behalf of the petitioners that where there is difference of opinion amongst the constitu tional functionaries required to be consulted, the opinion of the Chief Justice of India should have primacy, since he is the head of the Indian Judiciary and pater families of the judicial fraternity.
We find ourselves unable to accept this contention . .
Article 217 places all the three constitutional functionaries on the same pedestal so far as the process of consultation is concerned.
(emphasis supplied) "It is therefore, clear that where there is difference of 453 opinion amongst the constitutional functionaries in regard to appointment of a Judge in a High Court, the opinion of none of the constitutional functionaries is entitled 10 primacy but after considering the opinion of each of the constitutional functionaries and giving it due weight, the Central Government is entitled to come to its own decision as to which opinion it should accept in deciding whether or not to appoint the particular person as a Judge . . " (emphasis supplied) [See: and 545] Certain observations of Fazal Ali J., on judicial inde pendence, indeed, reflect the state of acute poverty and ignorance of the large masses of Indian society and the consequent lack of awareness on their part of the niceties of the controversy and the general air of cynicism that degenerating standards in public life has engendered in them.
Learned judge observed: "There is another fact of life which, however unpleasant, cannot be denied and this is that precious little are our masses or litigants concerned with which Judge is appointed or not appointed or which one is continued or not continued.
The high sounding concept of independence of judiciary or primacy of one or the other of the Constitutional function aries or the mode of effective consultation are matters of academic interest in which our masses are least interest . . "It is only a sizeable section of the intellectuals consisting of the press and the lawyers who have made a prestigious issue of the independence of the judiciary.
I can fully understand that lawyers or other persons directly connected with the administration of justice may have a grievance however ill rounded that improper selection of Judges or interference with the appointment of Judges strictly according to constitutional provisions may mar the institution of judiciary and therefore they may to some extent be justified in vindicating their rights.
But at the same time, however, biting or bitter, distasteful and dia bolical it may seem to be, the fact remains that the masses in general are not at all concerned with these legal nice ties and so far as 454 administration of justice is concerned they merely want that their cases should be decided quickly by Judges who generate confidence. " (emphasis supplied) [See: But it is only through the great institutions of democ racy, political statesmanship and the activist role of the judiciary that the much needed socio economic transformation from a fuedal and exploitative society to an egalitarian social and economic order of a true welfare state that the Constitution dreams of, can emerge.
Political observers `see that despite object poverty and squalor amongst large sec tions of Indian masses, they manifest such rare intuitive political acumen, insight and sagacity which has sustained the democratic spirit that there is no justification for any cynical pessimism.
Even if the assumption that large sec tions of the people are not be able to appreciate the con stitutions niceties is true, that, by itself, does not detract from the necessity to maintain the highest standards of judicial independence.
On the contrary the need becomes all the greater.
Desai J., contemplated "Value packing" on the premise that a preponderant role for the judicial wing in the ap pointments raises a question of essential political doctrine that the very power of Judicial Review, with the concomitant jurisdiction to defeat the will of the people by striking down laws enacted by the people 's representatives, would be essentially an undemocratic process, a fortiori where there is no elective element in the appointment of judges.
Certain observations of Prof. Schwartz were referred to in this behalf.
On the same topic Venkataramiah, J. said: "In India we have adopted the procedure contained in Article 2 17(1) of the Constitution for the appointment of judges of the High Courts . .
This method appears to have been adopted so that the appointment of judges may have ultimate ly the sanction of the people whom the Council of Ministers represent in a parliamentary form of Government.
In that way only the judges may be called people 's judges.
If the ap pointment of judges is to be made on the basis of the recom mendation of judges only then they will be Judges ' judges and such appointments may not fit into the scheme of popular democracy.
" 555 [See: "The position of the Chief Justice of India under Article 2 17(1) however is not that of an appellate authority or that of the highest administrative authority having the power to overrule the opinion of any other authority.
From the spe cific roles attributed to each of them as explained above, which may to some extent be Overlapping also, it cannot be said that the Chief Justice of India has been given any position of primacy amongst the three persons who have to be consulted under Article 217(1) of the Constitution.
There are no express words conveying that meaning.
The President has to take into consideration the opinions of all of them and he should not accept the opinion of any of them only on the sole principle of primacy. . " [See: This, indeed, has the familiar ring of the controversy arising out of the judicial response of the Supreme Court of the United States to the "New Deal" legislation.
The strik ing down of the minimum wage law as unconstitutional trig gered an impassioned debate as to the very doctrinal justi fiability of Judicial Review and said to have led the Ameri can President to contemplate "Court packing".
That, subse quently the court gave a clean bill of health to the "New Deal" legislation is part of judicial history of that coun try.
Certain observations of Prof. Schwartz referred to by Desai J as the learned author 's own views to the contrary indicate are not apposite in the context in which the learned judge sought to invoke them.
The learned author, even in the American context, reiterated the imperative of Judicial Review to make "the provisions of a constitution more than mere maxims of political morality" and that "the universal sense of America has come to realise that there can be no constitution without law administered through the Supreme Court".
Referring to Chief Justice Marshall 's pro nouncement in the Marbury case, the learned author said: "That case is now rightly considered as the very keystone of the American constitutional arch, for, in it, the U.S. Supreme Court first ruled that it possessed the authority to review the constitutionality of statutes.
Yet, when the case came before the Supreme Court, it seemed to present any 456 thing but the question of judicial review." "Marbury vs Madison is crucial in the history of American public law because it laid down the doctrine of judicial review which has since been the foundation of the constitutional structure.
Marbury vs Madison was the first case to establish the Supreme Court 's power to review the constitutionality of legislative acts and it did so in terms so firm and clear that the power has never since been legal ly doubted.
Had Marshall not confirmed review power at the outset in his magisterial manner, it is entirely possible it would never have been insisted upon, for it was not until 1857 that the authority to invalidate a federal statute was next exercised by the U.S. Supreme Court.
Had the Marshall Court not taken its stand, more than sixty years would have passed without any question arising as to the omnipotence of Congress.
After so long a period of judicial acquiescence in Congressional supermacy, it is probable that opposition then would have been futile." [See: "Some makers of American Law"; Tagore Law Lectures pages 32 & 34] Referring to the dilemma of political theorists whether assumption by the Marshall Court of review power was justi fied by the constitution or was an act of judicial usurpa tion the learned author says: " .
Those who urge the latter position lose sight of the fact that Marbury vs Madison Merely confirmed a doctrine that was part of the American legal tradition of the time, derived from both the colonial and revolutionary experience.
One may go further.
Judicial review was the inarticulate major premise upon which the movement (discussed in my last lecture) to draft Constitutions and Bills of Rights was ultimately based.
The doctrine of unconstitutionality had been asserted by Americans even before the first written Constitutions, notably by James Otis in his 1761 attack on general writs of assistance and by Patrick Henry in 1763 when he challenged the right of the Privy Council to disal low the Virginia Two penny Act.
The Otis Henry doctrine was a necessary foundation, both for the legal theory underlying the American Revolution and the Constitutions and Bills of Rights it produced.
457 "Addressing the court in the Five Knights ' case (one of the great state trials of Stuart England), the AttorneyGeneral, arguing for the Crown, asked, "Shall any say, The King cannot do this? No, we may only say, He will not do this." It was precisely to insure that in the Ameri can system one would be able to say, "The State cannot do this," that the people enacted a written Constitution con taining basic limitations upon the powers of government.
Of what avail would such limitations be, however, if there were no legal machinery to enforce them? Even a Constitution is naught but empty words if it cannot be enforced by the courts.
It is judicial review that makes constitutional provisions more than mere maxims of political morality." (emphasis supplied) [See: "Some makers of American Law"; Tagore Law Lectures pages 35 & 37] In India, however, the judicial institutions, by tradition, have an avowed a political commitment and the assurance of a non political complexion of the judiciary cannot be divorced from the process of appointments.
Constitutional phraseology of "consultation" has to be understood and expounded con sistent with and to promote this constitutional spirit.
These implications are, indeed, vital.
The constitutional values can not be whittled down by calling the appointments of judges as an executive act.
The appointment is rather the result of collective, constitutional process.
It is a par ticipatory constitutional function.
It is, perhaps, inappro priate to refer to any `power ' or `right ' to appoint judges.
It is essentially a discharge of a constitutional trust of which certain constitutional functionaries are collectively repositories.
The executive, on whose advice the President acts, as a participant in the process has its own important and effective rule.
To say that the power to appoint solely vests with the executive and that the executive after bestowing such consideration on the result of consultations with the judicial organ of the State, would be at liberty to take such decision as it may think fit in the matter of appointments, is an over simplification of a sensitive and subtle constitutional sentence and, if allowed foul play, would be subversive of the doctrine .of judicial independ ence.
What Endmond Burke said is to be recalled: "All persons possessing a position of power ought to be strongly and awfully impressed with an idea that they act in trust and are to account for their conduct in that trust to 458 the one great Master; Author and Founder of Society.
" The word "consultation" is used in the constitutional provision in recognition of the status of the high constitu tional dignitary who formally expresses the result of the institutional process leading to the appointment of judges.
To limit that expression to its literal limitations, shorn of its constitutional background and purpose, is to borrow Justice Frankfurther 's phrase, "to stick in the bark of words".
Judicial Review is a part of the basic constitutional structure and one of the basic features of the essential Indian Constitutional policy.
This essential constitutional doctrine does not by itself justify or necessitate any primacy to the executive wing on the ground of its political accountability to the electorate.
On the contrary what is necessary is an interpretation sustaining the strength and vitality of Judicial Review.
It might under certain circum stances be said that Government is not bound to appoint a judge so recommended by the judicial wing.
But to contem plate a power for the executive to appoint a person despite his being disapproved or not recommended by the Chief Jus tice of the State and the Chief Justice of India would be wholly inappropriate and would constitute an arbitrary exercise of power.
Then again, whatever there might be difference of opinion between the Chief Justice of a State and the Chief Justice of India some of the weighty reasons in this behalf are set out by the other three judges in their opinion the opinion of the Chief Justice of India should have the preponderant role.
We are of the view that the primacy of the Chief Justice of India in the process of selection would improve the quality of selection.
The pur pose of the `consultation ' is to safeguard the independence of the judiciary and to ensure selection of proper persons.
The matter is not, therefore, to be considered that the final say is the exclusive prorogative of the executive Government.
The recommendations of the appropriate constitu tional functionaries from the judicial organ of the State has an equally important rule.
"Consultation" should have sinews to achieve the constitutional purpose and should not be rendered sterile by a literal interpretation.
Who is able to decide the qualities of lawyers proposed to be elevated to the Bench more than the Judges of the Superior Courts before whom they practice? There are preponderant and com pelling considerations why the views of the Chief Justices of the States and that of the Chief Justice of India should be afforded a decisive import unless the executive has some material in its possession which may indicate that the appointment is otherwise undesirable.
459 The view which the four learned Judges shared, in Gup ta 's case, in our opinion, does not recognise the special and pivotal position of the .institution of the Chief Jus tice of India.
The correctness of the opinion of the majority in S.P. Gupta 's case relating to the status and importance of con sultation, the primacy of the position the Chief Justice of India and the view that the fixation of Judge strength is not justiciable should be re considered by a larger bench.
Indeed, the Union Government has quite often both before the Parliament and outside has stated that it has, as matter of policy, not made any appointments to the superior judici ary without the name being cleared by the Chief Justice of India.
This, indeed, would be the application of a standard of selection higher than envisaged by the majority opinion in S.P. Gupta 's case.
But if the executive sets up a stand ard by which it professes its actions to be judged it must be held to those standards.
This is to be done by a judicial recognition of the standard with a concomitant legal and constitutional obligation for the executive to adopt and apply the standard.
As we have already pointed out, the bulk of the vacan cies in the High Courts have been filled up.
Apart from two vacancies all other Judges in the Supreme Court are in position.
Learned Attorney General has assured us that prompt steps are being taken to fill up the remaining vacan cies and thereafter it will take steps to fill up the addi tional posts which have recently been created in the differ ent High Courts.
In view of what we have already stated and the assurance held out by the learned Attorney General we are of the view that further monitoring for the time being is not necessary.
As already pointed out the petition from Bombay was confined to filling up of vacancies in the Bombay High Court.
Excepting two, the remaining vacancies have been filled up and we have been told that steps are afoot for getting two Judges to the Bombay High Court.
We, therefore, dispose of the writ petition from Bombay with no further direction.
Similarly, the writ application filed by Subhash Sharma for the reasons indicated above may also be disposed of without further directions.
As and when necessary the matter can be brought before the Court.
As in our opinion the correctness of the majority view in S.P. Gupta 's case should be considered by a larger Bench we direct the papers of W.P. No. 1303 of 1987 to be placed before the learned Chief Justice for constituting a Bench of nine Judges to examine the two 460 questions we have referred to above, namely, the position of the Chief Justice of India with reference to primacy and, secondly, justiciability of fixation of Judge strength.
We are aware of the position.
that the setting up of the National Judicial Commission through a Constitutional Amend ment is in contemplation.
In the event of the Amendment being carried and a National Judicial Commission being set up, the correctness of the ratio in S.P. Gupta 's case of the status of the Chief Justice of India may not be necessary to be examined in the view of the fact that by the Amendment the Chief Justice of India would become the Chairman of the Commission.
In case the Commission is not constituted, the two questions indicated above which are of vital importance to the efficient functioning of the judicial system in the country require consideration and there is an element of immediacy in the matter.
We, therefore, suggest that the writ petition on the two issues indicated above maybe taken up for hearing at an early date and preferably before the end of this year.
We hope and trust that the Supreme Court Advocate on Record Association would continue to evince interest in the matter but if our expectations are belied, this being in the nature of a public interest litigation, some on interested in the restitution of the issues would be brought on record to effectively continue the proceeding and assist the Court.
We clarify that apart from the two questions which we have indicated, all other aspects dealt with by us are intended to be final by our present order.
There shall be no order for costs.
R, section S Petitions dis posed of.
| IN-Abs | In these petitions in the nature of public interest litigation under Article 32 of the Constitution, the relief asked for is one for mandamus to the Union of India to fill the vacancies of Judges in the Supreme Court and the several High Courts of the country and ancillary orders or direc tions in regard to the relief of filling up of vacancies.
In response to the rule, the Union of India, relying upon S.P. Gupta vs Union of India, [1982] 2 SCR 365, raised a preliminary objection as to the justiciability of the issue.
The objection, however, was later withdrawn by the succeed ing Attorney General who made a statement that it was the constitutional obligation of the Union of India to provide the sanctioned Judge strength in the superior courts and default, if any, was a matter of public interest, and the writ petitions requiring a direction to the Union of India to fill up the vacancies were maintainable.
Disposing of the petitions, this Court, HELD: (1) The ratio in S.P. Gupta 's case left the matter of fixing Up Of the Judge strength to the President of India under the constitutional scheme, and the choice of Judges to the prescribed procedure, but once the sanctioned strength was determined it was the obligation of the Union of India to maintain the sanctioned strength in the superior Courts.
[437H; 438A] (2) It is too late in the day to dispute the position that justice has to be administered through the courts and such administration would relate to social, economic and political aspects of justice.
The Judiciary therefore be comes the most prominent and outstanding wing of the Consti tutional System for fulfilling the mandate of the Constitu tion.
434 For its sound functioning, it is necessary that there must be an efficient judicial system and one of the factors for providing the requisite efficiency is ensuring adequate strength.
[440E F] (3) For the availability of the appropriate atmosphere where a Judge would be free to act according to his con science it is necessary that he should not be over burdened with pressure of work which he finds it physically impossi ble to undertake.
This necessarily suggests that the judge strength should be adequate to the current requirement and must remain under constant review in order that commensurate Judge strength may be provided.
[441F G] Bradley vs Fisher, ; 1871, referred to.
(4) It is a matter for immediate attention of all con cerned and of Government in particular that the Adminis tration of Justice is made a plan subject and given appro priate attention.
[444C] (5) Backlog in Courts has become a national problem.
The adjudicatory process is being blamed for not equalling itself to the challenge of the times.
There is a general complaint that the judicial system is on the verge of col lapse.
It is, therefore, the obligation of the constitution al process to keep the system appropriately manned.
There is no justification for the sluggish move in such an important matter.
[447C D] (6) If in a given case the Chief Justice of the High Court has recommended and the name has been considered by the Chief Minister and duly processed through the Governor so as to reach the hands of the Chief Justice of India through the Ministry of Justice and the Chief Justice of India as the highest judicial authority in the country, on due application of his mind, has given finality to the process at his level, there cannot ordinarily be any justi fication for reopening the matter merely because there has been a change in the personal of the Chief Justice or the Chief Minister of the State concerned.
This has to be the rule and the policy adopted by the Union of India should immediately be given up.
[448B D] (7) In the functioning of public offices there is and should be continuity of process and action and all objective decisions taken cannot be transformed into subjective issues.
That being the position, recommendations finalised by the Chief Justice of India unless for any particular reason and unconnected with the mere change of the Chief 435 Justice or the Chief Minister justifying the same should not be reopened and if in a given case the Union of India is of the view that the matter requires to be looked into again a reference should be made to the Chief Justice of India and there can be a fresh look at the matter only if the Chief Justice of India permits such a review of the case.
[448E F] (8) Consistent with the constitutional purpose and process it becomes imperative that the role of the institu tion of the Chief Justice of India be recognised as of crucial importance in the matter of appointments to the Supreme Court and the High Courts of the States.
This aspect dealt with in Gupta 's case requires re consideration by a larger bench.
[450E] (9) In India the judicial institutions, by tradition, have an avowed a political commitment and the assurance of a non political complexion of the judiciary cannot be divorced from the process of appointments.
Constitutional phraseology of "consultation" has to be understood and expounded consistent with and to promote this constitutional spirit.
These implications are, indeed, vital.
The constitutional values cannot be whittled down by calling the appointment of Judges as an executive act.
The appointment is rather the result of collective, constitutional process.
It is a participatory constitutional function.
It is, perhaps, inappropriate to refer to any `power ' or `right ' to appoint judge.
It is essentially a discharge of a constitutional trust of which certain constitutional functionaries are collectively repositories.
[457D F] (10) The executive, on whose advice the President acts, as a participant in the process has its own important and effective role.
To say that the power to appoint solely vests with the executive and that the executive, after bestowing such consideration on the result of consultations with the judicial organ of the State, would be at liberty to take such decision as it may think fit in the matter of appointments, is an over simplification of a sensitive and subtle constitutional sentence subversive of the doctrine of judicial independence.
[457F G] (11) The word "consultation" is used in the constitu tional provision in recognition of the status of the high constitutional dignitary who formally expresses the result of the institutional process leading to the appointment of judges.
To limit that expression to its literal limitations, shorn of its constitutional background and purpose, is to borrow Justice Frankfurter 's phrase, "to stick in the bark of words".
[458B] (12) Judicial Review is a part of the basic constitutional structure 436 and one of the basic features of the essential Indian Con stitutional policy.
This essential constitutional doctrine does not by itself justify or necessitate any primacy to the executive wing on the ground of its political accountability to the electorate.
[458C] (13) It might under certain circumstances be said that Government is not bound to appoint a judge so recommended by the judicial wing.
But to contemplate a power for the execu tive to appoint a person despite his being disapproved or not recommended by the Chief Justice of the State and the Chief Justice of India would be wholly inappropriate and would constitute an arbitrary exercise of power.
[458D E] (14) The purpose of the `consultation ' is to safeguard the independence of the judiciary and to ensure selection of proper persons.
The matter is not, therefore, to be consid ered that the final say is the exclusive prerogative of the executive government.
The recommendations of the appropriate constitutional functionaries from the judicial organ of the State has an equally important role.
"Consultation" should have sinews to achieve the constitutional purpose and should not be rendered sterile by a literal interpretation.
[458F G] (15) There are preponerant and compelling cousideratious why the views of the Chief Justices of the States and that of the Chief Justice of India should be afforded a decisive import unless the executive has some material in its posses sion which may indicate that the appointment is otherwise undesirable.
[458G H] (16) The correctness of the opinion of the majority in S.P. Gupta 's case relating to the status and importance of consultation, the primacy of the position of the Chief Justice of India and the views that the fixation of Judge strength is not justiciable should be reconsidered by a larger bench.
[459B] (17) In view of the fact that the bulk of vacancies in the High Courts have been filled up, and in view of the assurance held out by the learned Attorney General that prompt steps are being taken to fill up the remaining vacan cies, further monitoring for the time being is not neces sary.
[459F]
|
Civil Appeal Nos. 152, 153, 155,156, 158, 160 and 162 of 1972.
From the Judgment and Order dated 20.11.
1970 of the Andhra Pradesh High Court in W.A. No. 616 of 1969.
103 of 1970, 472 397 of 1970,474 of 1970,473 of 1970,99of 1970 and W.P. No. 4947 of 1968.
G. Venkatesh Rao and A.V. Rangam for the Appellants.
C. Sitaramiah, B. Parthasarthi, A.D.N. Rao and A. Subba Rao the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
These seven appeals by certificate under Article 133(1)(a) of the Constitution of India are from the common Judgment of the Andhra Pradesh High Court dated 20.11.1970 in several appeals and writ petitions.
The appel lants are the tenants and respondents are the landholders or their legal representatives, as the case may be, in respect of the tenanted agricultural lands of the hitherto inam estates of Kukunuru and Veerabhadrapuram villages in the West Godavari District of Andhra Pradesh.
After coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948 (A.P. Act 25 of 1948), hereinafter referred to as `the Estates Abolition Act ', the inam estates were abolished and the land stood vested in the Government free of all encumbrances.
The pre existing right, title and interest of erstwhile landholders ceased except to claim ryotwari patta.
The tenants were not liable to be evicted pending the proceedings for issuance of ryotwari patta.
The respondents landholders, hereinafter referred to as `the landholders ', claimed that the lands in question were either under their personal cultivation or they intended to resume those for private cultivation and as such those were their private lands and they were entitled to ryotwari pattas.
The appellants tenants on the contrary claimed that those were not private lands of the landholders as those were neither under their personal cultivation nor they intended to resume those for personal cultivation, but those were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates.
The Settlement Officer of Anakappalla, after making inquiry under section 25 of the Estates Abolition Act held in all the cases in these appeals, except one (out of which W.P. No. 695/1968 arose) that the landholders failed to establish that they were personally cultivating the lands or they intended to resume the lands for personal cultivation and as such rejected their claims, except in the aforesaid case.
The landholders ' appeals therefrom to the Estates Abolition Tribunal were 398 allowed relying on.
and applying the tests formulated in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (FB) and holding that in all cases the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3(10)(b)(i) of the Andhra Pradesh.
(Andhra Area) Estates Land Act, 1908 (A.P. Act I of 1908), hereinaf ter referred to as `the Estates Land Act ', and that the tenants were not entitled to ryotwari pattas in respect of the same.
The appellants tenants moved writ petitions before the High Court of Andhra Pradesh impugning the deci sion of the Estates Abolition Tribunal.
O. Chinnappa Reddy, J. as he then was, sitting singly, after discussing the case law on the question, by a common Judgment in nine writ petitions, observing that it was common ground before the Subordinate Tribunal as well as before him that the nature of the lands at the inception, whether ryoti or private, was not known and that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and that the lands were sometimes leased under short term leases, there were no other circumstances indicating that the landholders intended to resume cultivation of the lands, held that after the pronouncement of this Court in Chidambaraam Chettiar vs Santhanaramaswamy Odayar; , , the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, (supra) could no longer be considered good law and that the decision in Jagdeesarn Pillai vs Kupparnreal, ILR and in Perish Priest of Karayar vs Thiaga raja Swami Devasthanam, App.
176 178 and 493 of 1946 once more held the field.
It was also observed that since in all the cases before him the only mode of proof attempted by the land holders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no `at tempt was made to prove personal cultivation or any inten tion to resume personal cultivation.
As the Estates Aboli tion Tribunal applied the tests laid down by the Madras Full Bench in Periannan 's case (supra) and since Periannan 's case was no longer good law, the writ petitions had to be allowed and the impugned orders of the Tribunal quashed in eight writ petitions.
In Writ Petition No. 695 of 1968 the orders of the Assistant Settlement Officer was quashed.
The landholders preferred writ appeals therefrom.
Two Writ Petitions, namely, Writ Petition No. 4947 of 1968 and Writ Petition No. 310 of 1968 were also taken up for hearing analogously.
The Division Bench observing that the main question for consideration in the appeals was whether the decision of the Full Bench in Periannan 's 399 case was good law and it turned on the effect of some impor tant precedents and a review of the principles enunciated by them, and after discussing the case law took the view that in the first place the e observations of this Court in Chidambaram 's case were in accord with the rule in Perian nan 's case and secondly, even if some of the dicta in the Judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been im pliedly overruled by this Court.
The writ appeals were accordingly allowed except Writ Appeal No. 616 of 1969 which was dismissed.
Writ Petition No. 4947 of was allowed and Writ Petition No. 310 of 1968 was dismissed taking the same view.
Hence these appeals by certificate.
Mr. A.V. Rangam, the learned counsel for the appellants, submits that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as those were neither under their personal cultivation nor they were intended to be resumed for personal cultivation and applying the rule in Chidamba ram 's case the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; and that the learned Single Judge correctly held that Periannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, (supra), it was held that the definition of private land in section 3(10) of the Estates Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases, it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases, the Division Bench erred in holding that Periannan 's test were still applicable.
Mr. C. Sitaramiah, the learned counsel for the respondents.
submits that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case and the Division Bench correctly applied those tests to find that the lands were private lands of the landholders; and that in Chidambaram 's case the appellant had not adduced sufficient evidence to rebut the presumption under section 185 of the Estates Land Act that the lands con cerned in the inam village were not ryoti lands as defined in section 3(16) as the Tanjore Palace Estate was held to be an `estate ' within the meaning of section 3(2)(d) of the Estates Land Act and the widows of the Raja enjoyed both the varams, but were not personally cultivating 400 them.
In the instant case, according to counsel, the rights of the landholders were not the same as those of the widows of the Raja of Tanjore after the relinquishment of the landed properties by the Government which amounted to a re grant.
The Division Bench pointed out several misconceptions in some precedents for which they could not be said to have laid down the correct law.
Counsel further submits that in Chidambaram 's case, the grant of Orathur Padugai village was of the whole village and a named one and, therefore, it was an Estate within the meaning of section 3(2)(d) of Estates Land Act and the courts having concurrently found that the lands in dispute were ryoti lands and not private lands, the landholders claiming that the lands were private lands had to show that they converted the ryoti lands into private lands which they could prove only by showing their personal cultivation and they failed to prove it, and that case was therefore distinguishable on facts and could not be held to have overruled Periannan 's tests.
The question to be decided in these appeals, therefore, is whether in view of this Court 's decision in Chidamba rarn 's case the decision in Periannan 's case is still good law, and whether on application of the correct legal tests the lands in dispute are private lands of the landholders entitling them to ryotwari pattas in respect thereof or those are ryoti lands in possession of the appellants as tenants of the landholders and, as such, they are entitled to ryotwari pattas thereof.
In other words, whether the appellants or the respondents are entitled to ryotwari pattas under the Abolition of Estates Act.
To appreciate the rival submissions, reference to the relevant provisions of the Estates Land Act and the Estates Abolition Act is necessary, and to understand the relevant provisions of the two Acts a little knowledge of development of the land system and legislation in the area will be helpful.
The Estates Land Act amended and declared the law relat ing to the holding on land in estated in the Andhra Area of the State of Andhra Pradesh which includes the West Godavari District to which the two inam villages concerned in this appeal belong.
It appears the scheme of the Estates Land Act divides cultivable lands in the two categories, namely, (1) private lands and (2) ryoti lands.
The Act relates to the holding of land in estates.
As defined in section 3(2) `estate ' means: "(a) any permanently settled estate or temporarily settled zamindari; 401 (b) any portion of such permanently settled estate or tempo rarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) (i) any inam village, or (ii) any hamlet or khandriga in an inam village, of which the grant as an inam has been made, confirmed or recognized by the Government, notwithstanding that subse quent to the grant, such village, hamlet or khandriga has been partitioned among the grantees, or the successors intitle of the grantee or grantees.
[Explanation: (1) Where a grant as an inam is expressed to be of a named village, [hamlet of khandriga in an inam village] the area which forms the subject matter of the grant shall be deemed to be an estate notwithstanding that: it did not include certain lands in the village [hamlet or khandriga] of that name which have already been granted on service or other tenure or been reserved for communal pur poses].
[Explanation: (1 A) An inam village, hamlet or kandriga in an inam village granted in inam, shall be deemed to be an estate, even though it was confirmed or recognized on dif ferent dates, or by different title deeds or in favour of different persons.
Explanation: (1 B) [If any hamlet or khandriga granted as inam] was at any time designated as an inam village of as a part thereof in the revenue accounts, it shall for purposes of item (ii) or sub clause (d) be treated as being a hamlet or khandriga of an inam village, notwithstanding that subse quently it [has come to be designated] in the Revenue ac counts as a ryotwari or zamindari village or part thereof].
Explanation (2) Where an inam village is resumed by the State Government, it shall cease to be an estate; but, if any village so resumed is subsequently regranted by the Government as an inam, it shall from the date of such re grant, be regarded as an estate.
402 Explanation (3): Where a portion of an inam village is resumed by the Government such portion shall cease to be part of the estate, but the rest of the village shall be deemed to be an inam village for the purposes of this sub clause.
If the portion so resumed or any part thereof is subsequently regranted by the Government as an inam, such portion or part shall from the date of such re grant.
be regarded as forming part of the inam village for the purpose of this sub clause; (e) any portion consisting of one or more villages of any of the estates specified above in clauses (a), (b) and (c) which is held on a permanent under tenure .
" It appears that the original definition had undergone several amendments.
Clause (d) and Explanation (I A) were substituted by section 2(i) of Act XXXV of 1956.
The Explanation (1) was inserted by section 2(1) of Act 1I of 1945.
Explanation (1) and (1 B) were amended by section 2(ii) of Act XXXV of 1956 and Explanation (2) and (3) are the renumbered old Explana tions (1) and (2) inserted by section 2(1) of Act H of 1945.
The respondents claim to have been `landholders '.
As defined in section 3(5): `Landholder ' means a person owning an estate or part there of and includes every person entitled to collect the rents of the whole or any portion of the estate by virtue of any transfer from the owner or his predecessor in title or of any order of a competent Court or of any provision of law.
Where there is a dispute between two or more persons as to which of them is the landholder for all or any of the purposes of this Act or between two or more joint landholders as to which of them is entitled to proceed and be dealt with as such landholder, the person who shall be deemed to be the landholder for such purposes shall be the person whom the Collector subject to any decree or order of a competent Civil Court may recognize or nominate as such landholder in accordance with rules to be flamed by the State Government in this behalf.
" Both "Private land" and "ryoti land" have been defined in the Act.
As 403 defined in section 3(10) private land means: "(a) in the case of an estate within the meaning of sub clauses (a), (b), (c) or (e) of clause (2) means the domain or home farm land of the landholder by whatever designation known such as, kambattam, khas, sir, or pannai, and includes all land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the commencement of this Act; and (b) in the case of an estate within the meaning of subclause (d) of clause (2), means (i) the domain or home farm land of the landholders, by whatever designation known, such as kambattam, khas, sir or pannai; or (ii) land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired stock, for a continuous period of twelve years immedi ately before the first day of July 1908, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land; or (iii) land which is proved to have been cultivated by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the first day of November, 1933, provided that the landholder has retained the kudiva ram ever since and has not converted the land into ryoti land; or (iv) land the entire kudivaram in which was acquired by the landholder before the first day of November, 1933 for valu able consideration from a person owning the kudivaram but not the melvaram, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land, and provided further that, where the kudivaram was acquired at a sale for arrears of rent, the land shall not be deemed to be private land unless it is proved to have been cultivated by the landholder him 404 self, by his own servants or by hired labour, with his own or hired stock.
for a continuous period of twelve years since the acquisition of the land and before the commence ment of the Andhra Pradesh (Andhra Area) Estates land (Third Amendment) Act, 1936.
" As defined in section 3(16): `Ryoti land ' means cultivable land in an estate other than private land but does not include (a) beds and bunds of tanks and of supply, drainage surplus of irrigation channels; (b) threshing floor, catfie stands, village sites, and other lands situated in any estate which are set apart for the common use of the villagers; (c) land granted on service tenure either free of rent or on favourable rent if granted before the passing of this Act or free of rent if granted after that date, so long as the service tenure subsists.
Village is defined in section 3(19): `Village ' means any local area situated in or constituting an estate which is designated as a village in the revenue accounts and for which the revenue accounts are separately maintained by one or more karnams or which is now recognized by the State Government or may hereafter be by the State Government for the purposes of this Act to be a village, and includes any hamlet or hamlets which may be attached there to." The Estates Abolition Act provided for `the repeal of the permanent settlement, the acquisition of the landholders in permanent estate and in certain other estates in the State of Andhra Pradesh and the introduction of the ryotwari settlement in such estates.
It extended to the whole of the State of Andhra Pradesh and applied to all estates as de fined in section 3 clause (2) of the Estates Land Act.
This Act, in section 2(3) defined `estate ' to mean a zamindari or an under tenure or an inam estate.
As defined in section 2(7) `inam estate ' means an estate within the meaning of section 3, clause (2)(d) of the Estates Land Act.
405 The statement of objects and reasons of the Estates Abolition Act speaks of acute discontent among estate ryots and good deal of agitation under zamindari administration which was considered to have outlived its usefulness and needed abolition.
It also mentioned about the election manifesto issued by the Working Committee of the Congress Party in December 1945 urging reform of the land system and that such reform involved the removal of all intermediaries between the peasant and the State and that the rights of such intermediaries should be abolished on payment of equi table compensation.
In February 1947 the Madras Legislative Council passed a resolution accepting the general principle of the abolition of the zamindari system and recommending to the Government that legislation for the purpose be undertak en and brought forward at an early date.
The Government accordingly proposed to abolish the zamindari system by acquiring all estates governed by the Estates Land Act including whole inam villages and converting them into ryotwari paying equitable compensation to the several per sons having an interest in the estates.
The Estates Abolition Act has also undergone a number of amendments.
The Amendment Act 1 of 1950 inserted section 54(a)& section 54(b) dealing with compensation.
The Amendment Act XVII of 1951 clarified certain positions in regard to Inam vil lages.
Section 17(1) of the Estates Abolition Act provided for the grant of ryotwari patta to a person holding any land granted on service tenure failing under section 3(16)(c) of the Estates Land Act irrespective of whether such land consisted of only a portion of a village or of one or more villages.
The reference to one or more villages in the section had given rise to the misapprehension that it applied also to an entire village granted on service tenure.
But the intention was that the provisions of the section should not apply to such a village and clause 3 of the Act gave effect to it and clause 4 was consequential of clause 3.
The provisions of the Estates Abolition Act were brought into force in certain inam villages on the assumption that they were under tenure estates.
But it had been subsequently found that the assump tion was not correct.
It was therefore necessary to withdraw the operation of the Act from those villages and the Amend ment Act provided for such withdrawal.
The Amendment Act XXI of 1956 dealt with annual payments to any religious educa tional or charitable institutions.
The Amendment Act XVII of 1957 made provisions for the abolition and conversion in the ryotwari tenure of certain categories of inams under the Estates Abolition Act.
Under section 3(2)(d) of the Estates Land Act, as originally enacted,.whole inam villages in respect of which the original grant conferred only the melvaram right on a person not owning the kudivaram thereof alone 406 became `estates '.
By virtue of Third Amendment of the Es tates Land Act whole inam villages m which both melvaram and kudivaram rights vested in the inamdars also became estates.
The provisions of the Madras Estates Land (Reduction of Rent) Act, 1947 (Madras Act XXX of 1947) were applicable to both these categories of whole inam villages.
But the provi sions of the Estates Abolition Act were not applicable to the whole inam villages which became estates under the Madras Estates, Land (Third Amendment) Act, 1936, i.e. those in which the inamdars possessed both the melvaram and kudi varam rights.
Under section 2 of the Estates Land Amendment Act, 1946, section 3(2)(d) of the Estates Land Act was further amended so as to include within the definition of `estate ' hamlets and khandrigas of inam villages which were previously held to be not estates.
Provision was also made so as to bring within its purview only such of the inam hamlets and inam khandrigas of inam villages wherein the melvaram rights alone vest in the inamdars.
Thus, the only categories of inam estates which now remained outside the purview of the Estates Abolition Act were: (a) the whole inam village which became estate by virtue of the Madras Act XVIII of 1936 and (b) inam hamlets and khandrigas of inam villages which became estates by virtue of the Estates Land (Andhra Amend ment) Act, 1956 but in respect of which both melvaram and kudivaram rights vested in the inamdars.
The Amendment Act XX of 1960 dealt with all post 1936 inam villages which were also brought within the purview of the Estates Abolition Act by the Amendment Act XVIII of 1957.
The Andhra Pradesh (Andhra Area) Inams (Abolition and Conversion into Ryotwari) Act, 1956 (Act XXXVII of 1956) provided for conversion of all inam lands other than estates into ryotwari tenure.
The Act extended to the whole of the Andhra State, but applied only to lands described in clause (c) of section 2.
Section 2(c) defined "inam land" to mean any land in respect of which the grant in inam has been made, confirmed or recognised by the Government, (Act 3 of 1964 inserted thereafter the words) "land includes any land in the merged territory of Banagana palle in respect of which the grant in inam has been made, confirmed or recognised by any former Ruler of the territo ry", but does not include an inam constituting an estate under the Estates Land Act.
Section 2(d) defines an "Inam Village" to mean a village designated as such in the revenue accounts of the Government, (and includes a village so designated immediately before it was notified and taken over by the Government under the Estates Abolition Act.
Thus to find out whether a `village was designated as inam village or not, prima facie the revenue accounts of the Government which 407 were there at the time of the Inam Abolition Act came into force had to be looked into.
If it was so shown no further proof was necessary.
Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the evidence Act.
Section 2 A of this Act said: "Notwithstanding anything contained in this Act all communal lands and poramookes, grazing lands, waste lands.
forest lands, mines and quer ries, tanks, tank beds and irrigation works, streams and rivers, fisheries and ferries in the inam lands shall stand transferred to the Government and vest in them free of all encumbrances.
" Section 3 of the Act prescribed the procedure for deter mination of inam lands and provided for giving opportunity to interested persons.
As we have already noted the High Court found that the basis of the decision of the Tribunal in all the cases was that .sometimes the leases were for short terms with occa sional change of tenants and rents payable by them and that the nature of the lands, whether ryoti or private, was not known and that it was the burden of the landholder to prove that the lands were private lands and that there was no other circumstances to show that the landholders intended to resume cultivation of the same.
It was conceded before the Single Bench by the learned Advocate for the petitioners that if the tests formulated by the Full Bench in Perian nan 's case applied to the facts of these cases the land must be held to be private land and the landholders must be considered to have established their claim to grant of ryotwari pattas.
The Division Bench did not change this position in view of the provisions of Section 185 of the Estates Land Act as amended from time to time.
The original section said: "185.
When in any suit or proceeding it becomes necessary to determine whether any land is landholder 's private land, regard shall be had to local custom and to the question whether the land was before the first day of July 1898, specifically let as private land and to any other evidence that may be produced, but the land shall be presumed not to be private land untill the contrary is shown: Provided that all land which is proved to have been cultivated as private land by the landholder himself, by his own servants 408 or by hired labour with his own or hired stock for twelve years immediately before the commencement of this Act shall be deemed to be the landholder 's private land.
" Section 185 was amended in 1934, 1936 and 1955 whereafter it as follows: "185.
When in any suit or proceeding it becomes necessary to determine whether any land is the landholder 's private land, regard shall be had (1) to local custom, (2) in the case of an estate within the meaning of subclause (a) (b), (c) or (c) of clause (2) of section 3 to the ques tion whether the land was before the first day of July 1898, specifically let as private land and (3) to any other evidence that may be produced: Provided that the land shall be presumed not to be private land until the contrary is proved: Provided .further that in the case of an estate within the meaning of sub clause (d) of clause (2) of sec tion 3 (i) any expression in a lease, patta or the like, executed or issued on or after the first day of July 1918, to the effect or implying that a tenant has no right of occupancy or that his right of occupancy is limited or restricted in any manner, shall not be admissible in evidence for the purpose of proving that the land concerned was private land at the commencement of the tenancy; and (ii) any such expression in a lease, patta or the like, executed or issued before the first day of July 1918, shall not by itself be sufficient for the purpose of proving that the land concerned was private land at the commencement of the tenancy.
" When the Estates Abolition Act was passed, the legisla ture envisaged the difficulties that could arise in respect of the estates in which the landholder would be entitled to ryotwari patta.
Section 13 409 provided as to in respect of what lands in inam estates the landholder would be entitled to ryotwari patta and said: 13.
Lands in inam estate in which landholder is entitled to ryotwari patta: In the case of an inam estate, the landholder shall, with effect on and from the notified date, be entitled to ryotwari patta in respect of (a) all lands (including lanka lands) which immediately before the notified date, (i) belonged to him as private land within the meaning of Section 3, clause (10)(b) of the Estates I.and Act, or (ii) stood recorded as private land in a record prepared under the provisions of Chapter XI or Chapter XII of the said Act, not having been subsequently converted into ryoti land; and (b)(i) all lands which were properly included, or which ought to have been properly included, in the holding of a ryot and which have been acquired by the landholder, by inheritance or succession under a will provided that the landholder has cultivated such lands himself, by his own servants or by hired labour with his own or hired stock, in the ordinary course of husbandry, from the date of such acquisition or the 1st day of July, 1945 whichever is later and has been in direct and continuous possession of such lands from such later date; (ii) all lands which were properly included, or which ought to have been properly included in the holding of the ryot and which have been acquired by the landholder by purchase, exchange or gift, including purchase at a sale or arrears of rent; Provided that the landholder has cultivated such lands himself, by his own servants or by hired labour, with his own or hired stock, in the ordinary course of husbandry from the 1st day of July, 1945 and has been in direct and continuous possession of such lands from that date; (iii) all lands [not being (i) lanka lands], (ii) lands of the description specified in Section 3, clause (16), sub clauses (a), (b) and (c) of the Estates Land Act, or (iii) forest lands which have been abandoned or relinquished by a ryot, or 410 which have never been in the occupation of a ryot, provided that the landholder has cultivated such lands himself, or by his own servants or hired labour, with his own or hired stock, in the ordinary course of husbandry, from the 1st day of July, 1945 and has been in direct and continuous posses sion of such lands from that date.
Explanation: `Cultivate ' in this clause includes the plant ing and rearing of topes, gardens and orchards, but does not include the rearing of topes of spontaneous growth.
" Section 15 dealt with the determination of lands in which the landholder would be entitled to ryotwari patta under the foregoing provisions of the Act and said: "(1) The Settlement Officer shall examine the nature and history of all lands in respect of which the landholder claims a ryotwari patta under Sections 12, 13 or 14, as the case may be, and decide in respect of which lands the claim should be allowed.
XX XX XX XX XX XX XX XX XX XX An interpretation of the words "Private land" and "ryoti land" has to be made in consonance with the legislative purpose, provisions and scheme of the enactment.
Interpre tare et concordare leges legibus, est optimus interpretandi modus.
To interpret and in such a way as to harmonize laws with laws is the best mode of interpretation.
We may now examine the question whether the tests formu lated in Periannan 's case (supra) can still be applied in face of the decision in Chidambaram 's case (supra).
In other words whether Periannan 's decision is still a good law.
In Periannan the Full Bench of Madras High Court dealt with a batch of second appeals and a batch of civil revision peti tions.
The suits out which the second appeals arose.
related to the village of Manamelpatti, a Dharmasanam village in the Ramnad District and those were instituted by the trustees of Airabhadeswarar Soundaranayagi Amman Temple for ejectment of the defendants from the lands in their respective possession and for recovery of rent for faslis 1349 and 1350 and for future profits.
The village comprised 80 pangus out of which the plaint temple in this batch owned 231/2 pangus purchased from the original owners and one pangu taken on othi from the owner.
The plaintiffs in the batch of suits out of which the civil 411 revision petitions arose were the managers of the Devastha nam of Nagara Vairavapatti Valaroleeswaraswami Nagara Vaira vaswami Devasthanam.
That temple owned 54 and 5/8th pangus or shares in the village and the suits were instituted for recovery of the balance of amounts due as `irubhogam ' for faslis 1349 and 1350.
In both the batches of suits the plaintiffs claimed that they were the owners of meIvaram and kudivaram interests in the lands which were being enjoyed as "pannai" lands or private lands; that they were leasing the lands from time to time changing tenants and collecting "swamibhogam" in recognition of their full proprietary rights in the lands.
They claimed that the tenants had no occupancy rights in the lands; and in the second appeals batch a relief for ejectment of the tenants was also claimed.
The defence of defendants tenants in both the batches was common.
They claimed that the temples owned only the melvaram interest and that they, the tenants, were the owners of the kudivaram which they had been enjoying heredi tarily paying half varam in respect of the nanjas and a fixed money rent for the punja or dry lands according to the "tharam" (classification) of lands.
They denied that they ever paid "swami bhogam" to the temple.
In all the suits there was the common plea that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act, as amended by the Madras Estates Land (Amendment) Act, 1936 (Act XVIII of 1936); that they had therefore acquired occu pancy rights under the Act; and that the lands were ryoti and that, therefore, the civil court had no jurisdiction to try those suits.
The plaintiffs also raised an alternative contention that on the footing that the village was an "estate" the suit lands were private lands or "pannai" lands of the temples and, therefore, the defendants acquired no occupancy rights in the lands under the statute and that the civil court alone had the jurisdiction to entertain and try the suits.
The High Court found that the main questions that had to be considered by the courts below were whether the village was or was not an estate under the Madras Estates Land Act and, if so, whether the lands were private lands as claimed by the plaintiffs or ryoti lands as claimed by the tenants.
The further question that even apart from the Estates Land Act whether the defendants had acquired occupancy rights by prescription was also raised and considered.
The jurisdic tion of the civil court to entertain the suits depended upon the decision of the question whether the village was or was not an estate.
On the main questions the concurrent findings of the Courts below were that the village was an "estate" under Section 3(2)(d) of the Madras Estates Land Act as amended in 1936, that the plaint temple owned the melvaram and kudivaram interests in the lands; that the lands were 412 private lands as defined by the Madras Estates Land Act; that the defendants had acquired no occupancy rights in the lands either under the Act or by prescription and that the suits were properly laid in the civil court which had un doubted jurisdiction to try the suits.
The Subordinate Judge, in appeals, agreed with the finding of the trial court but refused the plaintiff 's relief for ejectment on the ground that the tenancy was not lawfully terminated.
The lands in both the sets of cases were situated in the same village of Manamelpatti.
Before the High Court the findings of the courts below that the temple owned the melvaram and kudivaram interests in the lands and the defendants had not acquired permanent rights of occupancy in the lands apart from the Act had not been disputed by the defendants.
The dispute, therefore, was confined to two questions, namely, first, whether the vil lage was an "estate" under the Madras Estates Land Act and, secondly, whether the concurrent finding of the courts below that the lands were private lands of the temple was correct or not.
While deciding the second question and dismissing the second appeals and the civil revision petitions, the learned Judges discussed the relevant case law and therefrom Satyanarayana Rao, J with whom Vaswanath Sastri, J con curred, at paragraph 49 page 346 of the report held that the following propositions were established: "1.
If the land is known to be ryoti at its inception the only mode by which it could be converted into private land is by proof of continuous cultivation for a period of 12 years prior to the commencement of the Act.
Even if the nature of the land is not known, continuous cultivation for the required period of 12 years before the commencement of the Act would conclusively establish that the land is private land.
If there is no proof of cultivation for a continuous period of 12 years before the commencement of the Act, the land may be proved to be private land by other methods; provided the land was not shown to be once ryoti.
Cultivation of the lands or leasing of the lands under short term leases may be one mode of proof.
An intention to cultivate or resume for cultivation is also a test to decide that the land is private land and such 413 intention may be established by any other means, not neces sarily by cultivation and by cultivation alone.
The essence of private land is continuous course of conduct on the part of the land holder asserting and acting on the footing that he is the absolute owner thereof and recognition and acceptance by the tenants that the landhold er has absolute right in the land.
Mere proof that the land holder is the owner of both the warams is not sufficient to prove that the land is private land.
" Considered in light of the definition of "private land", sections 13 and 15 of the Estates Abolition Act and the basic concept of "domain or home farm land", we are of the view that the proposition 4, 5 and 6 above have to be doubt ed.
Viswanatha Sastri, J. who concurred summarised his conclusions as under: "I may now summarise my conclusion on the legal aspects of the case.
Where land proved or admitted to be once ryoti land is claimed to have been converted into private land, the claim is untenable unless the land holder proves direct cultivation for a period of 12 years before 1st July 1908.
No other mode of conversion is permissible.
Where you have to find out whether a land is private or ryoti its original character not being known, proof of direct cultivation of the land by the land holder for 12 years before 1st July 1908, would, without other evidence, conclusively establish its character as private land, but this is not the only mode of proof permitted to land holder.
Other evidence may be adduced and looked into and might consist, among other matters, of direct cultivation of the land at some period anterior to 12 years preceding 1st July 1908 but this is not indispensable.
Direct cultivation may be valuable and weighty evidence and may be inferred from accounts and other records usually kept by large land holders.
If, owing to lapse of time or other reasons, evi dence of direct cultivation is not forthcoming its absence is not fatal to the claim that the land is private.
section 185 of the Act 414 does not shut out, but on the other hand allows all evidence that would be relevant and admissible under the law of evidence, to prove that fact in issue, namely, whether the land is private or ryoti.
Local usage or custom and the letting of the land as private land in leases before 1898 are specifically mentioned in Ss. 185(1) and (2) as being relevant evidence but other evidence is also expressly made admissible under section 185(3).
The classification of lands as private lands at the time of the permanent settlement or in the early records of zamindaries, the terms of the grant of an undertenure, the assertion and enjoyment by the land holder of the right to both the warams, the intention to retain with himself the kudiwaram right and the consequent right to resume direct cultivation if he chooses, leases of the lands as private lands or with terms and conditions inconsistent with any right of occupancy in the leases, admissions by tenants that the land holder is the owner of both warams and that they have no occupancy rights, changes in the personnel of the tenants, variations in the rates of rent payable by the tenants these and kindred matters would be relevant and admissible in evidence to prove that the lands are private lands.
The probative value of such evidence depends on the facts and circumstance of each case.
The burden of proof that a particular land in an estate is private land rests on the land holder, the statu tory presumption being the other way.
This burden is not discharged merely by proving that both the warams were granted to or enjoyed by the land holder once upon a time.
There must be evidence of the treatment of the lands as private lands by the land holder, either by direct cultiva tion or otherwise in the manner above stated.
" Considering the statutory definition, in our opinion, the third paragraph and last part of last paragraph above have to be doubted.
Raghava Rao, J. who dissented summarised his conclusions separately.
We are not oblivious the fact that on the basis of the above propositions cases have been decided for a long time.
But their tenability having been questioned in the instant case we proceed to examine them.
The above propositions no doubt refer to different 415 aspects including the evidentiary aspect of the question of determination of `private lands ' and `ryoti lands ' but it may be difficult to hold that each or all of them by them selves laid down any rule to be invariably followed irre spective of the history, location and nature of the estates, their cultivation and the customs governing them.
There is also no sufficient exposition of the central concept of `domain ' and `home farm ' lands in the above propositions.
These words were not defined ,in the Estates Land Act In Zamindar of Chellapalli vs Rajalapati Somayya, , Wallis C.J. adopted the dictionary meaning, namely, "the land about the mansion house of a Lord and in his immediate occupancy".
Seshagiri Aiyar, J. in the same case quoted from the Encyclopaedia Brittanica, Vol.
III (3): `Domain ' as synonymous to `Domesne ' and is explained as follows: "Domesne (Domeine, Demain, Domain etc.) that portion of the land of a manor not granted out in the freehold tenancy, but (a) retained by the lord of the manor for his own use and occupation, or (b) let out as tenemental land to his retain ers or `villani. ' The domesne land originally held at the will of the landlord, in course of time came to acquire fixity of tenure and developed into the modern copyhold.
It is from domesne as used in sense (a) that the modern re stricted use of the word comes, i.e., `land immediately surrounding the mansion or dwelling house, the park or chase '." In Jagadeesam Pillai vs Kupoarnmal (supra) which related to lands in an inam village which was part of the Tanjore palace, Wadsworth, Offg.
C.J. accepeted the interpretation put upon the word "Domain" by Wailis, C.J. and Sesnagiri Aiyar, J. In Chellapalli case (supra) as meaning "land immediately surrounding the mansion or dwelling house, the park or chase" and that connoted land appurtenant to the mansion of the lord of the manor kept by the landlord for his personal use and cultivated under his personal supervi sion as distinct from lands let to tenants to be farmed without any control from the lord of the manor other than such control as in incident to the lease.
The learned Judge further observed: "It seems to us that the sub clause (b)(1) of the definition is intended to cover those lands which come obviously within what would ordinarily be recognised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
" In Parish Priest of Karayar Parish vs Thiagarajaswami Devas 416 thanam, (supra) Subba Rao and Chandra Reddy, JJ accepted the test laid down in Jagadeesam (supra) and the legal position was summarised as follows: "The legal position having regard to the provisions of the Act and the decisions dealing with them in so far as it is relevant for the purposes of this case may briefly be stated thus.
Private land as defined under the Madras Land Estates Act comprises two categories, private lands, technically so called and lands deemed to be private lands.
In regard to private lands strictly so called, it must be a domain or home farm land as understood in law.
The mere fact that particular lands are described in popular province as pan nai, kambattam, sir, khas, is not decisive of the question unless the lands so called partake of the characteristics of domain or home farm lands.
The test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in `Mallikarjuna Prasad vs Somayya ', i.e. land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a season.
Whenever a question therefore arises whether a land is private land technically so called, as defined in sub clause (1) of clause (b) to section 3(10) the presumption is that it is not a private land.
The recitals in the leases, pattas etc.
after 1918 must be excluded and the recitals in similar documents prior to 1918 in them selves are not sufficient evidence.
There must be in addi tion direct evidence that these lands were either domain or home farm lands in the sense that they were in their origin lands directly cultivated by the landlord or reserved by him for his direct cultivation.
We are not concerned in this case with the question whether ryoti lands could be convert ed into private lands.
" The trend not to confine the concept of private lands only to domain or home farm lands but to include in it lands situate outside in which land holder had granted leases or made arrangements for cultivation with a view to resume them for personal cultivation did not find favour in the above three decisions.
In Chidambaram Chettiar (supra) involved lands in Orathur 417 Padugai in Tanjore Palace Estate.
The Raja of Tanjore having died without leaving any male issue the East India Company took possession of all his properties including his private property.
Later, on representation of the senior widow of the late Raja, the Government of India in 1962 "sanctioned the relinquishment of the whole of the landed property of the Tanjore Raja in favour of the heirs of the late Raja.
" The Tanjore Palace Estate thus came into existence.
In 1948 the appellant purchased the suit lands situate in Orathur Padugai within Tanjore Palace Estate and instituted suits for possession from the various defendants.
The Trial Court having dismissed the suits on the ground that the lands were situated in an estate as defined in section 3(2)(d) of the Madras Estates Land Act and they were ryoti lands as defined in section 3(16) in which the defendants have acquired occupancy rights.
The Madras High Court having affirmed that decree in appeal, the appellant came to this Court contending that the lands did not form an `estate ' under section 3(2)(d) because the restoration did not amount to a fresh grant but only resto ration of status quo ante; that Orathur Padugai was not a whole village to be an estate and that the widows of the late Raja enjoyed both the varams and the lands purchased by the appellant were private lands under section 3(10)(b) so that the defendants did not have any occupancy rights therein.
Holding that the relinquishment by the Government in 1962 amounted to a fresh grant and that since 1830 onwards Ora thur Padugai was a whole village and therefore an estate, their Lordships enunciated the tests as to private land thus: "Under section 3(10) of the Act, private land comprises of two categories, private lands technically so called, and lands deemed to be private lands.
In regard to private lands technically so called, it must be the domain or home farm land of the landholder as understood in law.
The mere fact that particular lands are described in popular parlance as pannai, kambattam, sir, khas, is not decisive of the ques tion unless the lands so called partake of the characteris tics of domain or home fair lands.
In our opinion the cor rect test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR , that is whether it is land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a sea son.
The Legislature did not use the words `domain or home farm land without attaching to them ,a meaning; and it is reasonable to suppose that the Legislature would 418 attach to these words the meaning which would be given to them in ordinary English.
It seems to us that the sub clause (b)(i) of the definition is intended to cover those lands which come obviously within what would ordinarily be recog nised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
The home farm is land which the landlord cultivates himself, as distinct from land which he lets out to tenants to be farmed.
The first clause is, therefore meant to include and signify those lands which are in the ordinary sense of the word home farm lands.
The other clauses of the definition appear to deal with those lands which would not necessarily be regarded as homefarm lands in the ordinary usage of the term; and with reference to those lands there is a proviso that lands purchased at a sale for arrears of revenue shall not be regarded as private lands unless cultivated directly by the landlord for the required period.
It seems to us that the definition reads as a whole indicates clearly that the ordinary test for `private land ' is the test of retention by the landholder for his personal use and cultivation by him or under his personal supervi sion.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive character; but it is not the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short term leases.
There must, in our opinion be something in the evidence either by way of proof of direct cultivation or by some clear indication of an intent to regard these lands as retained for the personal use of the landholder and his establishment in order to place those lands in the special category of private lands in which a tenant under the Act cannot acquire occupancy rights.
" The concept of home farm does not appear to be much different from that of domain.
According to Black 's Law Dictionary, a farm means body of land under one ownership devoted to agriculture, either to raising crops or pasture or both.
The word farm means a considerable tract of land or number of small tracts devoted wholly or partially to agri cultural purposesor pasturage of cattle but may also include woodland.
The term does not necessarily include only the land 419 under cultivation and within a fence.
It may include all the land which forms part of the tract and may also include several connected parcels under one control.
According to Collins English Dictionary, farm means a tract of land usually with house and buildings cultivated as unit or used to rear livestock.
According to Webster 's Comprehensive Dictionary, International Edition, farm means a tract of land forming a single property and devoted to agricultural stock raising dairing and some allied activity.
We are therefore of the view that home farm necessarily implies a farm with the home of the landholder.
Pollock & Maitland in The History of English Law, 2nd Edn.
Vol. 1, at pp 362 363 describing the manorial arrange ment in England wrote: "Postponing until a late time any debate as to whether the term manor bore a technical meaning, we observe that this term is constantly used to describe a proprietary unit of common occurrence: the well to do landholder holds a manor or many manors.
Now speaking very generally we may say that a man who holds a manor has in the first place a house or homestead which is occupied by himself, his bailiffs or servants.
Along with this he holds cultivable land, which is in the fullest sense (so far as feudal theory permits) his own; it is his demesne land.
Then also, as part of the same complex of rights, he holds land which is holden of him by tenants, some of whom, it may be, are freeholders, holding in socage or by military service, while the remainder of them, usually the large majority of them, hold in villein age, by a merely customary tenure.
In the terms used to describe these various lands we notice a certain instructive ambiguity.
The land that the lord himself occupies and of which he takes the fruits he indubitably holds `in demesne '; the land holden of him by his freehold tenants he indubita bly does not hold `in demesne; his freehold tenants hold it in demesne, unless indeed, as may well be the case, they have yet other freeholders; below them.
But as to the lands holden of him by villein tenure, the use of words seems to fluctuate; at one moment he is said to hold and be seized of them in demesne, at the next they are sharply distinguished from his demesne lands, that term being reserved for those portions of the soil in which no tenant free or villein has any rights.
In short, `language reflects the dual nature of tenure in villeinage; it is tenure 420 and yet it is not tenure.
The king 's courts, giving no protection to the tenant, say that the lord is seized in demesne; but the manorial custom must distinguish between the lands holden in villeinage and those lands which are occupied by the lord and which in a narrower sense of the word are his demesne.
Describing the field system they wrote: " We have usually therefore in the manor ,lands of three kinds, (1) the demesne strictly so called, (2) the land of the lord 's freehold tenants, (3) the villenagium, the land holden of the lord by villein or customary tenure.
Now in the common case all these lands are bound together into a single whole by two economic bonds.
In the first place, the demesne lands are cultivated wholly or in part by the labour of the tenants of the other lands, labour which they are bound to supply by reason of their tenure.
A little labour in the way of ploughing and reaping is not out of the free hold tenants; much labour of the many various kinds is obtained from the tenants in villeinage, so much in many cases that the lord has but small, if any, need to hire labourers.
Then in the second place, these various tenements lie intermingled; neither the lord 's demesne nor the ten ant 's tenement can be surrounded by one ring fence.
The lord has his house and homestead; each tenant has his house with more or less curtilage surrounding it; but the arable por tions of the demesne and of the various other tenements lie mixed up together in the great open fields.
" In paragraph 758 of Halsbury 's Laws of England, 4th Edn., Vol. 9, on the destruction of customs it is said: "As manorial customs attached to the tenure as distinguished from the mere locality of the lands, it followed that upon the destruction of the tenure by enfranchisement of the lands at common law the customs were also destroyed.
A statutory enfranchisement must have effect, however, in accordance with the terms of the statute, and where the statute preserves rights notwithstanding the enfranchisement and the extent of the rights so preserved depended upon custom, the custom remains relevant to define the rights preserved by the statute.
" 421 The basic concept of domain or home farm land and the concept of cultivation as private land by the landholders used in the definition had, therefore, to be borne in mind in determining private land.
The observation of the Division Bench in the impugned Judgment that it is not possible to regard the pronouncement in Zamindar of Chellapalli vs Somayya, (supra) as an authority for the proposition that domain within the meaning of section 3 (10) of the Estates Land Act must be held to mean land around the mansion home of lord and appurtenant thereto, has therefore to be rejected.
The decision of the High Court of Madras in Chellapalli case was confirmed by the Privy Council in Yerlagadda Mallikarju na Prasad Nayudu vs Somayya, (supra).
The learned Single Judge in the instant case also relied on the observations in Chellapalli 's case (supra).
The learned Single Judge rightly observed that the test laid down by Wadsworth, Offg.
C.J. were approved by the Supreme Court in Chidambaram 's case in identical language and that the legislature did not use the word domain or home farm land without attaching to them a meaning and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurte nant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is distinct from land let to tenant to be formed without any control from the lord of the manor other than such control as incident to the lease.
We respectfully agree.
To this extent the propositions of the learned Judges in Periannan 's case (supra) the tenability of which we doubted, can no longer be held to be good law in view of this Court 's decision in Chidambaram 's case (supra) and P. Venkataswami vs
D.S. Ramireddy, In P. Venkataswami vs
D.S. Ramireddy (supra) the question was whether the landlord was entitled to ryotwari patta.
The High Court applied the tests in Pariannan 's case.
Referring to the provisions of Sections 13 and 15(1) of the Estates Abolition Act (which we have quoted earlier).and reiterating what was said in Chidambaram 's case this Court held: "Thus even on the provisions of the Madras Estat is Land Act, 1908 considered by the Madras Full Bench, this Court appears to have taken a different view.
Apart from this, the provisions we are concerned with, namely, Section 13(b)(iii) of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 requires as a condition `that the landholder has cultivated such lands himself, by his own servants or hired labour '.
We are unable to agree that the 422 words `has cultivated ' could imply a mere intention to cultivate.
Apart from Article 141 of the Constitution of India we are of the opinion that the decision in Chidambaram and Venka taswarni are in consonance with the objects and purposes of the Estates Land Act, the Estate Abolition Act, the Inam (Abolition and Conversion into Ryotwari) Act and the accept ed objectives of the land reforms legislation.
We now take up the question as to who were entitled to ryotwari pattas in this case.
The landholders admitted that if the Pariannan 's tests were not applicable, they would not be entitled to ryotwari patta.
Even so we proceed to examine the question on the facts on record.
As defined in section 3(15) of the Estates Land Act, "ryot" means a person who holds for the purpose of agriculture ryoti land in an estate on condi tion of paying to the landholder the rent which is legally due upon it.
Under the Explanation, a person who has occu pied ryoti land for a continuous period of 12 years shall be deemed to be a ryot for all the purposes of this Act.
This Explanation was added by the Estates Land Amendment Act, 1934 (Act VIII of 1934).
The conferment of occupancy right on the ryot in ryoti land was an object of the Estates Land Act.
The original Section 6 dealing with occupancy right in ryoti land was substituted by Section 5 of the Amendment Act VIII of 1934.
Thereafter also it has undergone several amendments.
At the relevant time it stood as follows: "6.
Occupancy right in ryoti land: (1) Subject to the provi sions of this Act, every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding.
Explanation: (1) For the purposes of this sub section, the expression `every ryot now in possession ' shall include every person who, having held land as a ryot, continues in possession of such land at the commencement of this Act.
Explanation: (2) In relation to any inam village which was not an estate before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, but became an estate by virtue of that Act, or in relation to any land in an inam village which ceased to be part 423 of an estate before the commencement of that Act, the ex pression `now ' and `commencement of this Act ' in this sub section and Explanation (1) shall be construed as meaning the thirtieth day of June, 1934, and the expression `hereaf ter ' in this sub section shall be construed as meaning the period after the thirtieth day of June, 1934.
Explanation: (3) In relation to any hamlet, or khandriga in an inam village which was not an estate before the commence ment of the Andhra Pradesh (Andhra Area) Estates Land (Amendment) Act, 1936, but became an estate by virtue of that Act, the expressions `now ' and `commencement of this Act ', in this sub section and Explanation (1) shall be construed as meaning the Seventh day of January 1948, and the expression `hereafter ' in this sub section shall be construed as meaning the period after the seventh day of January, 1948.
Explanation: (4) Every landholder who receives or recovers any payment under Section 163 from any person unauthorizedly occupying ryoti land shall be deemed to have thereby admit ted such person into possession unless within two years from the date of receipt of recovery of payment or the first of such payments, if more than one, he shall file a suit in a Civil Court for ejectment against such person.
(2) Admission to waste land under a contract for the pasturage of cattle and admission to land reserved bona fide by a landholder for raising a garden or tope or for forest under a contract for the temporary cultivation there of with agricultural crops shall not by itself confer upon the person so admitted a permanent right of occupancy; nor shall such land, by reason only of such letting or temporary cultivation, become ryoti land." (3, 4, 5 and 6 are not extracted) Section 6 A which was inserted by the Amendment Act VIII of 1934 provided that a person having a right of occupancy in land does not lose it by subsequently becoming interested in the land as landholder or by subsequently holding land as an ijaadar or farmer of rent.
Section 8 provided for merger of occupancy rights and said: 424 "Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in the landholder, he shall have no right to hold the land as a ryot but shall hold it as a landholder, but nothing in this sub section shall prejudicially affect the rights of any third person.
(2) Whenever before or after the commencement of this Act the occupancy right in any ryoti land vests in any co landholders, he shall be entitled to hold the land sub ject to the payments to his co landholders of the shares of the rent which may from time to time payable to them and if such co landholder lets the land to a third person; such third person, shall be deemed to be a ryot in respect of the land.
(3) The merger, if any, of the occupancy right under sub sections (1) and (2) shall not have the effect of converting ryoti land into private land.
(4) Where after the passing of the Act, the inter est of the ryot in the holding passes to the landholder by inheritance, the landholder shall notwithstanding anything contained in this Act have the right, for a period of twelve years from the date of succession, of admitting any person to the possession of such land on such terms as may be agreed upon between them.
(5) If before the first day of November 1933, the landholder has obtained in respect of any land in an estate within the meaning of sub clause (d) of clause (2) of Sec tion 3 a final decree or order of a competent Civil Court establishing that the tenant has no occupancy right in such land, and no tenant has acquired any occupancy right in such land before the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, the land holder shall, if the land is not private land within the meaning of this Act, have the right, notwithstanding any thing contained in this Act, for a period of twelve years from the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936, of admitting any person to the possession of such land on such terms as may be agreed upon between them; 425 Provided that nothing contained in this sub section shall be deemed during the said period of twelve years or any part thereof to affect the validity of any agreement between the landholder and the tenant subsisting at the commencement of the Andhra Pradesh (Andhra Area) Estates Land (Third Amendment) Act, 1936".
Section 9 provided that no landholder shall as such be entitled to eject a ryot from his holding or any part hereof otherwise than in accordance with the provisions of this Act.
Section 10 made the occupancy rights heritable and transferable providing that "all rights of occupancy shall be heritable, and shall be transferable by sale, gift or otherwise.
" If a ryot dies intestate without leaving any heirs except the Government, his right of occupancy shall be extinguished but the land.
in respect of which he has such right of occupancy shall not cease to be ryoti land.
The Estates Abolition Act accepted the same definitions of occupancy right and ryot as in the Estate Land Act.
The above provisions conferred permanent, heritable and trans ferable right of occupancy on the tenant.
This right stemmed from the will of the legislature and involved an element of social engineering through law star pro ratione voluntas populi: the will of the people stands in place of a reason.
The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper per spective.
Statuta pro publico late interpretatur.
Statute made for the public good ought to be liberally construed.
The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant.
The aforesaid doubtful propositions formulated by the learned Judges in Periannan 's case must, therefore, be held to be erroneous.
For the same reason the observation of the Division Bench in this case that the decision in Periannan 's case is still good law in face of the decision of this Court in Chidambaram (supra), and subsequent deci sion in Venkataswami 's case (supra) must be held to be equally erroneous and to that extent must be overruled and the decisions in Zamindar of Chellapalli vs Rajalapati Somayya, (supra); Jagadeesam Pillai vs Kuppammal, (supra) and in Parish Priest of Karayar Parish vs Thiagarajaswami Devasthanam, (supra) must be held to have been correctly decided.
We have no doubt that the formation and development of the land revenue system in Madras will justify the view we have taken in the facts of this case.
The formation of the Madras Presidency was by 426 successive acquisitions by the East India Company.
The State of Andhra Pradesh was curved out of Madras.
Baden Powell in Land System of British India, Vol.
3 p. 5 wrote in 1892: "In tracing the progress of the Madras Land Revenue System, it will be advisable in the first place to review the gener al course of acquisition, by which the Madras district became British, and next to describe, in a brief and general manner, the various stages of the history of the early revenue management.
Commencing with the settlement (above alluded to) in the Baramahal (1792 98), which was soon followed by those of Coimbatore (1799), the ceded districts (1800), and the Carnatik Districts (1801), we shall see how the first raiyatwari system, or rather systems, were over thrown for a time by an attempt to make a general zamindari settlement (1801 1808); how on the failure of the attempt, a proposal for `village settlements ' (in the sense of granting leases for the whole village, to a renter, a headman, or a joint body of inhabitants) was tried with various success for a few years; and how, in the end, a raiyatwari assess ment was finally ordered ( 18 12 18 18).
" Ryotwari indicates a system where each field or holding is dealt with separately, and where the holder is free to pay the revenue and keep the field, or free himself by giving it up, as he pleases.
The first general acquisition of territory by the East India Company the first from a revenue point of view, was the country around Madras, known as `Jagir ' because it was originally granted by the Nawab of the Karnatik as a Jagir; the revenue thus assigned was intended as a contribution towards the expenses of the wars undertaken in aid of the Nawab.
The next acquisition in point of time was that of the Northern Sirkars (often written `Circar ').
These territories were granted in 1765 by the Delhi Emperor; but the Madras Government, looking to the practical claim of the Nizam of Dakhan, who was hardly even in name subject to Delhi, also obtained a grant from him in 1768.
The five administrative divisions known to the Mughal system as `Sirkar ' were those of chicacole (chikakol) Srikakulam, Rajahmundry (Rajamahen driveram), Eliore (Alur), Mustafanagar .(or Kandafiti), and Murtazanagar (Gantur or Kandavid).
Later they formed the districts of Vizagapatam (Visakhapatnam), Gangam, Kishna and Godavari.
427 The northern Sikars had been brought under Muhammadan domin ion first in 1471 A.D., and had various fortunes under the different contending dynasties.
In 1687, Aurangazeb 's con quest of the Dakhan added them to the Mughal empire, and they were ultimately taken over by the Subedar of the Dakhan (Nizam ul Mulk) nominally from the Emperor Karukhsir in 1713 A.D. "These came at once under British administration.
It was found that they consisted (1) of lands settled under zamin dars, as in Bengal, (2) of haveIi lands, those reserved for the support of the royal family and its immediate depend ants, and therefore `crown ' property.
Such a state of things invited the application of the Bengal system; the zamindars were accordingly left in possession and the haveIi lands were parcelled out and leased to revenue farmers for a term of years.
The Jagir lands were in 1780, divided into blocks and put under a similar system of revenue leases.
" When the Board of Revenue issued instructions to adopt a system of village lesses so as to prepare for some form of zamindari settlement, i.e. one man should be made answerable for the revenue of each village or other estate after the passing of Permanent Settlement Regulations in Bengal.
The Zamindari Regulation No. XXV was passed in 1802 and by 1805 introduction of the system was effected.
In the Northern Sirkars land was permanently settled with the zamindars; and the `HaveIi ' lands were made into percels or mutthas, and sold to the highest bidder.
The Mutthadars (or Mittadars) became the proprietors and permanent settlement holders.
Each settlement became an estate.
In some districts the `poligars ' became landlords holding sanad i milkiat i istim rar or title deed of perpetual ownership their estates being called `settled polliems '.
According to Paden Powell the zamindari estates were found chiefly in the North East ern districts and especially in the Ganjam and Vizagapatam districts.
There were also few Feudatory States which paid only a fixed tribute.
The village leases continued with some form of joint or individual middlemen with varying periods of 3 to 10 years made with a view to eventual permanency.
But the system was not successful.
Between the ryotwari and village lease system the general difference was that the ryotwari only assessed the `field ' or survey unit, and left the ryot. to hold it or not as he pleased, provided he gave notice of his intention in proper time; if he kept the field he must pay the assessment that was all.
The lease system involved payment of a certain sum for a fixed area, whether the land was cultivated or not.
It was no use 428 for the middlemen lease holder to throw up his land, for that would not relieve him of his contract liability.
The idea was to make the villagers jointly and severally respon sible, though the lease was to the head inhabitants of each village.
Desire was to see a system under which the proprie tary inhabitants at large of each village should enter into engagements with the Government, and derive a common and exclusive interest in the cultivation of their lands in proportion of their right of property.
Ultimately the Ryotwari system was adopted.
The end of the lease proposals and the village system inquiry was that the home authorities, as Baden Powell says, probably influ enced by the opinion of Munro, who visited England in 1807, finally decided for the Ryotwari system as it was believed that the village system failed.
Hence the Estates Abolition Act protected the rights of the ryots by defining private land on the one hand and preserving the occupancy rights of the ryots on the other.
In doing so the two concepts of `private land ' and `ryoti ' land along with those of `estate ' and `occupancy ' assumed significance.
The two villages concerned in the instant case are said to be inam viiages.
But the origin of the lands in dispute was admittedly not known.
The characteristics of the inam estates and the rights and liabilities of the Inamdars from time to time have therefore to be taken into account.
Baden Powell wrote at pp.78 80 Vol. 3: Section Ill Settlement of inam Claims. "The Settlement, as we have seen, only assesses the land under raiyatwari tenure.
If, however, there is land in the village, consisting of a few fields or even a division of the village, held revenue free, or at a reduced rate, such an area is shown in the village registers.
But it may be that a whole village is `inam '.
If so, it constitute a separate estate, like a Zamindari or a `pollam ', and does not come within the scope of the Settle ment.
Government has no claim to the land or to the revenue, unless there is a fixed quit rent, which is recorded as is the permanently settled revenue or `peshkash ' of the Zamind ari or pollam estate.
There was accordingly a special proce dure under which the right and title of the holders of these favoured estates was elucidated and put on a sound 429 basis; and the quit rent, Or reduced rate, where the estate is not entirely revenue free, determined by rule.
All native governments were in the habit of reward ing favourites, providing for the support of mosques, tem ples, religious schools, shrines, and for almsgiving and the maintenance of Brahmans or Muhmmadan saints, & C., by grant ing the revenue on the land, whether they granted the land itself or not." The Inam Commission of Madras appointed on 16.11.
1858 had the task of validating and issuing title deeds for inams lawfully in possession for fifty years and in resuming others, or commuting them for money pensions.
The Commission dealt with all kinds whether they included right in the lard or only Government revenue; they were: (1) Inams proper, where the land granted, was either a field, or a village, or a group of villages.
(2) Muhammadan jagirs, which were personal grants and might or might not include the land.
(3) Shrotriyams (Srotriyam) and agraharams, grants certain (different) classes of Branmans which did not give more than the revenue, leaving the land in its original occupancy, unless it could be shown that the occupancy was also granted.
The following nine kinds of inams (classified according to their object or purpose) were enumerated: (1) For religious institutions and services connect ed therewith.
Nearly a million and a half acres were so assigned, including temples, pagodas, and mosques.
The largest grants were in the southern districts.
(2) For purposes of public utility.
Such as support of chatrams (places where refreshment was given gratuitous ly), water pandais (drinking places), topes or groves, flower gardens for temple service (mandavanam), schools (Patshalas), for maintaining bridges, ponds and tanks, etc.
430 (3) `Dasabandham ' inams for the construction, mainte nance, and repair of irrigation works in the Ceded dis tricts, in Kistna, Nellore, North Arcot and Salem.
(4) To Brahmans and other religious persons for their maintenance called `Bhatavritti ' and (Muhammadan `Khairat '.
They formed nearly half the inams of the Presidency, and covered more than three and a half million acres.
(5) Maintenance grants for the families of poligars and ancient land officers.
These were grants to families of dispossessed poligars in Baramahal and the ceded districts; to Kanungos (Chingleput), and to Deshmukhs etc.
(6) Lands alienated for the support of members of the family (also for religious persons) by poligars, etc.
These were the `bisai ' (bissoye), doratanam, mukhasa, jivitham, arearam (North Arcot) umlikai, etc.
(7) Grants connected with the general police of the country under former rulers: Such were `kattubadis '.
(8) Grants to village headmen, karnams, and village police (Gramamaniyam, etc. ).
(9) Grants to village artisans, where they were not paid by the fees called merai (or in addition to them).
The Commission also took up enfranchisement of the inams, i.e. to convert into his own private property by payment of a moderate quit rent.
From this the inams could be classified as (1) still unenfranchised; (2) enfranchised but liable to jodi or quit rent as the case may be; (3) enfranchised, the rent being commuted or redeemed.
The Commission work was closed in November 1869.
A member of the Board of Revenue continued thereafter.
The nature and histo ry of the inam villages would, therefore, have been helpful in deciding the claims.
It was perhaps easier for the landholders to trace the origin of the inam villages than for the tenants to do so.
Admittedly that was not done.
We have also considered the question of practice and pre sump 431 tions if any in this regard.
By Madras Act VIII of 1865 it was enacted that inamdars and other landholders should enter into written agreements with their tenants, the engagements of the land owners being termed pattas and those of tenants being termed Muchlika.
The patta should contain, amongst other things, "all other special terms by which, it is intended the parties shall be bound.
The muckhlika should at the option of the landholders, be counterpart of the patta, or a simple engagement to hold according to the terms of the patta.
In the instant case the pattas and the muchlikas are not claimed to have shown anything to establish the lands to be private lands.
Only the facts of occasional change of tenants and rents have been shown.
The Privy Council in Suryanarayana vs Patanna, [1918] 41 ILR Madras 10 12, where the decision of the appeal mainly depended on the question whether the Agraharam Village of Korraguntapalem in the Northern Circars of then Presidency of Madras was an estate, observed that the "term kudivaram is not defined in the Act.
It is a tamil word, and literally signifies a cultivator 's share in the produce of the land held by him as distinguished from the landlord 's share in the produce of the land received by him as the rent.
The landlord 's share is sometimes designated `melvaram" The Privy Council held that there was no presumption of law to the effect that in the case of an inamdar it should be presumed, in the absence of inam grant under which he held, that the grant was of the royal share of the revenue only.
"In their Lordships ' opinion there is no such presump tion of law.
But a grant of a village by or on behalf of the Crown under the British rule is in law to be presumed to be subject to such rights of occupancy, if any, as the cultiva tors at the time of grant may have had.
" As against the above, we now have the statutory presumptions in Section 185(3) of the Estates and Act, namely, "that the land shall be presumed not to be private land until the contrary is proved," and in case of estate within the meaning of sub clause (d) of clause (2) the second proviso (i) and (ii).
This evolution of the land revenue system concerned is likely to remind one of what Sir Henry Maine showed in his Ancient Law, "that in early times the only social brother hood recognised was that of kinship, and that almost every form of social organisation, tribe, guild, and religious fraternity, was conceived under a similitude of it.
Feudal ism, converted the village community based on a real or assumed consanguinity of its members, into the fief in which the relations of tenant and lord were those of contract, while those of the 432 unfree tenant rested on status.
" It also reminds one what was said in the context of rights over land. "This earth", says Jagannatha, "is the cow which grants every wish; she affords property of a hundred various kinds (inferior, if the owner need the assent of another proprietor superior, if his right precede assent); while she deludes hundred owners, like a deceiving harlot, with the illusion of false enjoy ment; for, in truth, there is no other lord of this earth but one, the Supreme Lord.
" For the foregoing reasons we set aside the impugned Judgment, restore that of the learned Single Judge and allow the appeals.
We leave the parties to bear their own costs in these appeals.
R.S.S. Appeals allowed.
| IN-Abs | The appellants are the tenants and the respondents are the landholders in respect of the tenanted agricultural lands of the hitherto inam estates.
After the coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948.
the inam estates were abolished, the land stood vested in the Government free of all encumbrances, and the pre existing rights, title and interest of erstwhile landholders ceased except to claim ryotwari patta.
The respondents landholders claimed that the lands, in question, were either under their personal cultivation or they intended to resume those for private cultivation, and as such those were their private lands and they were enti tled to ryotwari pattas.
The appellants tenants on the contrary claimed that those lands were neither under the personal cultivation of the landholders nor the landlords intended to resume those for personal cultivation, but were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates.
The Settlement Officer, after making inquiry under section 15 of the Estates Abolition Act, held that the landholders failed to establish that they were personally cultivating the lands or that they intended to resume the lands for personal cultivation, and as such rejected their claims.
The landholders ' appeals to the Estates Abolition Tribu nal were allowed.
The Tribunal held that the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3 (10)(b)(i) of the Andhra Pradesh (Andhra Area) Estates Land Act, 1908 and that the tenants were not entitled to ryotwari pattas in respect of the same.
394 The appellants tenants moved writ petitions before the High Court.
The learned Single Judge observed that it was common ground before the Subordinate Tribunal, as well as before him, that the nature of the lands at the inception, whether ryoti or private, was not known; that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and the lands were sometimes leased under short term leases, there were no other circumstances indi cating that the landholders intended to resume cultivation of the lands.
The learned Single Judge held that after the pronouncement of this Court in Chidambaram Chettiar vs Santhanaramaswamy Odayar, the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (F.B.) could no longer be considered good law, and further that the decision in Jag deesam Pillai vs Kuppammal, ILR and in Perish Priest of Narayar vs Thingaraja Swami Devasthanam, App.
176 178 and 493 of 1946, once more held the field.
It was also observed that since in all the cases the only mode of proof attempted by the landholders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no attempt was made to prove personal cultivation or any intention to resume personal cultivation.
The Division Bench, in writ appeals filed by the land holders, held that, in the first place, the observations of this Court in Chidambaram 's case were in accord with the rule in Periannan 's case, and secondly, even if some of the dicta in the judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been impliedly overruled by this Court.
Before this Court, it was inter alia contended on behalf of the appellants tenants (i) that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as these were neither under their personal cultivation nor they were intended to be resumed for personal cultivation, and applying the rule in Chidambaram 's case, the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; (ii) that the learned Single Judge correctly held that Perriannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, it was held that the definition of private land in section 3(10) of the Estate Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the 395 test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases; (iii) that it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases; and (iv) that the Division Bench erred in holding that Periannan 's tests were still applicable.
On the other hand, it was contended that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case, and the Division Bench correct ly applied those tests to find that the lands were private lands of the landholders.
Allowing the appeals, setting aside the judgment of the Division Bench, and restoring that of the learned Single Judge, this Court, HELD: (1) To find out whether a village was designated as inam village or not, prima facie the revenue accounts of the Government which were there at the time of the Inam Abolition Act came into force had to be looked into.
If it was so shown, no further proof was necessary.
Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the Evidence Act.
[406H; 407A B] (2) An interpretation of the words "private land" and "ryoti land" had to be made in consonance with the legisla tive purpose, provisions and scheme of the enactment.
Inter pretare at Concordare leges legibus, est optimus interpre tundi modus.
To interpret and in such a way as to harmonize laws with laws in the best mode of interpretation.
[410E] (3) The Estate Abolition Act accepted the definitions of occupancy right and ryoti as in the Estates Land Act, 1908.
The above provisions conferred permanent, heritable and transferable right of occupancy on the Tenant.
This right stemmed from the will of the legislature and involved an element of social engineering through law star pro rationa voluntas populi: the will of the people stands in place of reason.
The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper perspective.
Statuta pro publico late interpretaur.
Statute made for the public good ought to be liberally construed.
[425E F] 396 (4) The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant.
[425E] The learned Single Judge in the instant case rightly observed that the legislature did not use the word domain or home farm land without attaching to them a meaning, and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurtenant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is dis tinct from land let to tenant to be farmed without any control from the lord of the manor other than such control as incident to the lease.
To that extent, the propositions of the learned Judges in Periannan 's case can no longer be held to be good law in view of this Court 's decisions in Chidambaram 's case and Venkataswami 's case, and the decision in Zamindar of Challapali vs Rajalapati/Jagadesan Pillai vs Kuppamal, and in Parish Priest of Karayar Perish vs Thiapa rajaswami Devasthanam mast be held to have been correctly decided.
[421C E] Zamindar of Chellapalli vs Rajalapato Somayya, 39 Mad. 341; Jagadeesam Pillai vs Kuppamal, ILR ; Parish Priest of Karayar Parish vs Thiagarajaswami Devastha nam, App.
176 178 & 493 of 1946; Chidambaram Chettiar vs Santhanaramaswamy Odayar, ; ; Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR PC; P. Venkataswami
D.S. Ramireddy, ; Suryanara yana vs Patanna, , referred to.
Periannan vs Amman Kovil, AIR 1952 Mad.
323 F.B. partly overruled.
(6) In the instant case the pattas and the muchilkas are not claimed to have shown anything to establish the lands to be private lands.
Only the facts of occasional change of tenants and rents have been shown.
[431B]
|
No. 13347 of 1983.
(Under Article 32 of the Constitution of India).
K.K. Venugopal, C.S. Vaidyanathan and K.V. Viswana than for the Petitioner.
P.K. Goswami,Additional Solicitor General, P.S. Poti, K. Parasaran, S.S. Javalai, and F.S. Nariman, B.V. Acharya, Advocate General, P.R. Ramasesh, Ms. A. Subhashini, T.T. Kunhikanan, V. Krishnamurthy, K. Ramkumar and R. Karuppan, in person the Respondents.
86 The Judgment of the Court was delivered by RANGANATH MISRA, J.
This is an application under Article 32 of the Constitution filed by the Tamil Nadu Cauvery Neerppasana Vilaiporulgal Vivasayigal Nala Urimal Padhugappu Sangam which is said to be a society registered under the Tamil Nadu Societies Registration Act asking this Court for direction to the Union of India, respondent No. 1, to refer the dispute relating to the water utilisation of the Cauvery river and equitable distribution thereof in terms of section 4 of the , and for a mandamus to the State of Karnataka not to proceed with the construction of dams, projects and reservoirs across the said river and/or on any of its tributaries within the State and to restore supply of water to the State of Tamil Nadu as envisaged in the agreements dated 18th of February, 1924.
To the petition States of Karnataka, Tamil Nadu and Kerala and the Union Territory of Pondicherry have been added as re spondents 2 to 5 respectively.
In the petition it has been alleged that the petition er 's society is an organisation of agriculturists of Tamil Nadu and they are entitled to the lower reparian rights of Cauvery river for cultivating their lands over the years.
The petitioner alleges that inflow into the Cauvery at the Mettur dam point as also down the stream has considerably diminished due to construction of new dams, projects and reservoirs across river Cauvery and its tributaries by the State of Karnataka within its own boundaries.
In the year 1970 the State of Tamil Nadu had requested the Union of India to set up a tribunal and refer the question of equita ble distribution of Cauvery waters under section 3 of the Act.
A suit filed under Article 131 of the Constitution by the Tamil Nadu State in this Court was withdrawn on politi cal consideration and in anticipation of the evolving of a mutual and negotiated settlement.
Petitions of the present type had also been filed in this Court being writ petitions Nos. 303 and 304 of 1971 but on 24.7.75 they were withdrawn on account of suspension of the Fundamental Rights during the period of Emergency.
Petitioner has further alleged that the sharing of the Cauvery waters between the then Madras State and the then princely State of Mysore was covered by a set of agreements reached in 1892 and 1924.
According to the petitioner several attempts were made through bilateral and multilateral talks for a negotiated settlement for equitable distribution of the Cauvery waters but no solution could be reached and the problem continued.
Since we are not on the merits of the matter relating to distribution of waters it is unnecessary to give any details of the further pleadings.
87 The State of Karnataka by filing several affidavits has opposed the maintainability of the petition as also the tenability of the plea for relief.
The Union of India in the Ministry of Water Resources has also opposed the maintain ability of the application.
Reliance has been placed on section 11 of the Act to which we shall presently made a reference.
At the hearing, Mr. Nariman on behalf of the State of Karnataka along with the Advocate General of the State and the Solicitor General appearing for the Union of India have reiterated the aforesaid stands.
The State of Tamil Nadu filed an affidavit in this Court on 6th of May, 1987, wherein it not only supported the contention of the petitioner but effectively joined the dispute by adopting the stand of the petitioner.
The State of Kerala has left the matter to the good sense of Union of India to bring about an amicable settlement.
At the hearing of the matter the Union Territory of Pondicherry was not represented though we were told that their stand was common with that of the State of Tamil Nadu.
This petition was filed on November 18, 1983; on 12.12.83 this Court directed issue of notice and as already pointed out the State of Tamil Nadu by its affidavit of 6th of May, 1987, came to the support the petitioner in toto.
The adoption by the State of Tamil Nadu of the petitioner 's stand by associating itself with the petitioner is perhaps total.
Before this Court, societies like the petitioner as also the State of Tamil Nadu and earlier applied for the same relief as the petitioner seeks.
In view of the fact that the State of Tamil Nadu has now supported the petitioner entirely and without any reservation and the Court has kept the matter before it for about 7 years, now to throw out the petition at this stage by accepting the objection raised on behalf of the State of Karnataka that a petition of a society like the petitioner for the relief indicated is not maintainable would be ignoring the actual state of affairs, would be too technical an approach and in our view would be wholly unfair and unjust.
Accordingly, we treat this petition as one in which the State of Tamil Nadu is indeed the petitioner though we have not made a formal order of transposition in the absence of a specific request.
The main stream of river Cauvery has its origin in the hills of Coorg.
Some tributaries have their origin in the State of Kerala while some having their origin in Karnataka have joined the river.
The 88 river flows for a distance of about 300 Kms.
within the State of Karnataka and almost an equal span within the State of Tamil Nadu before it ultimately joins the Bay of Bengal.
It has not been disputed that Cauvery is an inter State.
river within the meaning of Article 262 of the Constitution.
Entry 56 of List I of the Seventh Schedule to the Constitu tion runs thus: "56.
Regulation and development of inter State rivers and river valleys to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
" Article 262 provides: "Adjudication of disputes relating to waters of inter State rivers or river valleys (1) Parliament may by law provide for the adjudication of any dispute or complaint with re spect to the use, distribution or control of the waters of, or in, any inter State river or, river valley.
(2) Notwithstanding anything in this Constitution, Parlia ment may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause (1).
" It is not disputed before us that the (33 of 1956) is a legislation within the meaning of this Article.
Section 3 of the Act provides: "3.
If it appears to the Government of any State that a water dispute with the Government of another State has arisen or is likely to arise by reason of the fact that the interests of the State, or of any of the inhabitance there of, in the waters of an inter State river or river valley have 1Seen, or are likely to be, affected prejudicially by (a). . . . (b). . . . (c). . . . 89 the State Government may, in such form and manner as may be prescribed, request the Central Government to refer the water dispute to a tribunal for adjudication.
" Section 11 of the Act provides: "11.
Notwithstanding anything contained in any other law, neither the Supreme Court nor any other court shall have or exercise jurisdiction in respect of any water dispute which may be referred to a Tribunal under this Act.
It is thus clear that section 11 of the Act bars the juris diction of all courts including this Court to entertain adjudication of disputes which are referable to a tribunal under section 3 of the Act.
Therefore, this Court has no juris diction to enter upon the factual aspects raised in the writ petition.
No serious dispute, however, has been raised before us challenging our jurisdiction to consider the claim in the writ petition confined to the question of a reference of the dispute to a tribunal within the meaning of section 3 of the Act.
Section 4 of the Act provides: "4.
(1) When any request under section 3 is received from any State Government in respect of any water dispute and the Central Government is of opinion that the water dispute cannot be settled by negotiations, the Central Government shall, by notification in the official Gazette, constitute a Water Disputes Tribunal for the adjudication of the water dispute.
(2). . . . (3). . . .
Undoubtedly section 4 while vesting power in the Central Government for setting up a Tribunal has made it conditional upon the forming of the requisite opinion by the Central Government.
The dispute in question is one over which the people and the State of Tamil Nadu have been clamouring for more than 20 years now.
The matter has been pending in this Court for more than 6 1/2 years.
It is on record that during this period as many as 26 sittings spread over many years have been held in which the Chief Ministers of the Karnataka and Tamil Nadu have unsuccessfully tried to bring about settlement; some of 90 these have been at the instance of the Central Government in which the Union Minister for Water Resources and others have participated.
There was a time, after the dispute arose, when the Governments in the States of Karnataka and Tamil Nadu as also at the Centre were run by one common political party.
Perhaps if the Centre had intervened in an effective way during that period there was considerable chance of settle ment by negotiation.
No serious attempt seems to have been made at that time to have the dispute resolved and it has been shelved and allowed to catch up momentum and give rise to issues of sensitivity.
This case after a number of ad journments freely granted by this Court in view of the nature of the subject matter, was called on 26.2.1990 when the following order was made: "The writ petition is adjourned to 24.4.1990 for final hearing and is to be listed at the top of the board.
No further adjournment shall be granted.
The Advocate Generals of the States of Karnataka and Tamil Nadu are present in Court.
Learned Solicitor General is also present.
Counsel in W.P. No. 13347/83 in sists that the matter should not be further adjourned as several adjournments on the same plea of reconciliation between the two States have not borne any fruit.
Learned Solicitor General has told us that in course of the month of March, the Chief Ministers of the two States shall meet.
He has also told that in the month of February a meeting of Chief Ministers of Kerala, Karnataka, Tamil Nadu and Pondi cherry had been called but that could not be held on account of the air crash at Bangalore.
In these circumstances, leaving the parties to negotiate, we have decided that the matter shall now be heard on merits in the event no settle ment takes place by then.
" A long adjournment of about two months was then granted to provide a further opportunity of negotiation.
We have now been told that the two Chief Ministers met on the 19th of April, 1990, and a further meeting was stipulated to be held on the following day when the Minister of Water Resources of the Central ' Government was also to participate.
The meeting of the two Chief Ministers failed to bring about any result and the meeting stipulated for the following day for some reason or the other did not take place.
When we heard the matter on the 24th of April, 1990, the counsel for the State of Tamil 91 Nadu in clearest terms indicated that the Chief Minister of the State was not further prepared to join the negotiating table.
An affidavit along with the telex message received from Madras supporting its stand has now been made a part of the record.
26 attempts within a period of four to five years and several more adjournments by this Court to accommodate these attempts for negotiation were certainly sufficient opportu nity and time to these two States at the behest of the Centre or otherwise to negotiate the settlement.
Since these attempts have failed, it would be reasonable undoubtedly to hold that the dispute cannot be settled by negotiations.
Yet, since the requisite opinion to be formed is of the Central Government as required by s 4 of the Act when we reserved judgment on the 24th of April, 1990, we allowed two days ' time to the learned Additional Solicitor General for the Central Government to report to the Court the reaction of the Central Government.
Mr. Goswami, learned Additional Solicitor General appearing for the Union of India informed us on the 26th April, 1990, in the presence of the counsel for the other parties that the Central Government did not want to undertake any further negotiation and left the matter for disposal by the Court.
In these circumstances, we have no option but to conclude that a clear picture has emerged that settlement by negotiation cannot be arrived at and taking the developments in the matter as indicated above it must be held that the Central Government is also of that opinion particularly when the Chief Minister of Tamil Nadu has indicated that he is no more prepared to loin the nego tiations.
We are cognizant of the fact that the matter is a very sensitive one.
Judicial notice can be taken of the fact that the Government at the Centre is by one political party while the respective Governments in the two States are run by different political parties.
The dispute involved is, howev er, one which affects the southern States of Kerala, Karna taka and Tamil Nadu and the Union Territory of Pondicherry.
The disputes of this nature have the potentiality of creat ing avoidable feelings of bitterness among _the peoples of the States concerned.
The longer the disputes linger, more the bitterness.
The Central Government as the guardian of the interests of the people in all the States must, there fore, on all such occasions take prompt steps to set the Constitutional machinery in motion.
Fortunately, the Parlia ment has by enacting the law vested the Central Government with the power to resolve such disputes effectively by referring the matter to an impartial Tribunal.
There was no reason, therefore, for the dispute to protract for such a long time.
Any further delay in taking the statutorily 92 mandate action is bound to exasperate the feelings further and lead to more bitterness.
It is, therefore, necessary that the legal machinery provided by the statute is set in motion before the dispute escalates.
A stitch in time saves nine.
What is true for an individual is perhaps more true for the nation.
Section 4 indicates that on the basis of the request referred to in section 3 of the Act, if Central Government is of the opinion that the water dispute cannot be settled by negotiation, it is mandatory for the ' Central Government to constitute a Tribunal for adjudication of the dispute.
We were shown the Bill where in section 4 the word 'may ' was used.
Parliament, however, substituted that word by 'shall ' in the Act.
Once we come to the conclusion that a stage has reached when the Central Government must be held to be of the opin ion that the water dispute can no longer be settled by negotiation, it thus becomes its obligation to constitute a Tribunal and refer the dispute to it as stipulated under section 4 of the Act.
We therefore, direct the Central Government to fulfil its statutory obligation and notify in the official gazette the constitution of an appropriate tribunal for the adjudication of the water dispute referred to in earlier part of this judgment.
We further direct that the same should be done within a period of one month from today.
The writ petition is accordingly allowed.
There shall, however, be no order as to costs.
S.B. Petition allowed.
| IN-Abs | The appellant is a registered society of agriculturists of Tamil Nadu, who are entitled to riparian rights of Cauv ery river in cultivating their lands over the years.
It seeks from this Court that directions be given to the Union of India Respondent No. 1 to refer the dispute relating to the water utilization of the Cauvery river and equitable distribution thereof in terms of section 4 of the Inter State Water Disputes Act 1956.
Also to issue a mandamus to the State of Karnataka not to proceed to construct dam projects, reservoirs across the said river or its tribu taries within the state and to restore supply of water to the State of Tamil Nadu as envisaged in the agreements dated 18th February, 1924.
In this petition State of Karnataka, Tamil Nadu, Kerala and Union Territory of Pondicherry have also been added as Respondent No. 2 to 5 respectively.
In the year 1970, the State of Tamil Nadu requested Union of India to set up a Tribunal for settling the ques tion of equitable distribution of waters under sec.
3 of the Act.
A suit was filed under Article 131 of the Constitution in this Court but was withdrawn on political consideration so as to evolve a mutual and negotiated settlement.
According to the petitioners it is submitted that sever al attempts were made through bilateral and multilateral talks for a negotiated settlement but no solution could be reached and the problem continued 84 The State of Karnataka filed several affidavits opposing the maintainability of the petition and the Union of India has also opposed the application on the basis of section 11 of the Act.
The petition was filed on November 18, 1983 and on 12.12.83 the Court directed issue of notice.
The State of Tamil Nadu supported and associated itself with the peti tioner seeking the same relief on 6.5.87 the State also filed an affidavit in this Court supporting the contention of the petitioner and also effectively joined the dispute by adopting the stand of the petitioner.
The mainstream of the river Cauvery has its origin in the hills of Coorg.
Some tributaries of the river have origin in the State of Kerala and others in the State of Karnataka.
The river flows for about 300 Kms.
in the State of Karnataka and almost for an equal span within the State of Tamil Nadu before joining the Bay of Bengal.
It is an inter state river as per Article 262, Entry 56 of List I of 7th Schedule of the Constitution, so the regulation and development of the said river is under the control of the Union of India and is declared by Parliament by law to be expedient in the public interest.
Article 262 of the constitution provides for adjudica tion of disputes (1) with respect to the use, distribution and control of the waters (2) Parliament may by law provide that neither the Supreme Court or any other Court shall exercise jurisdiction in respect of any such dispute as is referred to in clause (1).
As per section 3 of the Act if it appears to the Govern ment of any State that a water dispute with the Government of another State has arisen or likely to arise and the interests of the State or of any of the inhabitance, thereof are likely to be affected prejudicially, the State Govern ment in the prescribed manner request the Central Government to refer the Water dispute to a Tribunal for adjudication.
Allowing the petition, this Court, HELD: This dispute in question is one over which the people and the State of Tamil Nadu have been clamouring for more than 20 years.
The matter has been pending in this Court for the last 6 1/2 years.
It is on 85 record that over these years 26 sittings of the Chief Minis ters of Karnataka, Tamil Nadu have been there and in some of these even the Central Ministers of Water Resources have also participated but have not succeeded in bringing about negotiated settlement.
No serious attempt seems to have been made to have the dispute resolved.
This Court has given several adjournments to accommodate the attempts for negoti ations because of the nature of the subject matter.
Ulti mately on 26.2.90 order by the Court was given that the Writ Petition would be listed for final hearing on 24.4.90 since sufficient opportunity and time to these two states at the behest of the Central Government or otherwise has been given to arrive at negotiated settlement.
On 26th April 1990 the Union of India also informed the Court that Central Govern ment did not want to undertake any further negotiations and left the matter for the disposal by this Court.
[89G H; 90B C; 91D] There was no reason for the dispute to protrect for such a long period.
Any further delay in taking statutority mandated action is bound to exasperate the feelings further and lead to more bitterness.
[91H; 92A] Section 4 of the Act indicates that on the basis of the request referred to in Section 3, if Central Government is of the opinion that water dispute cannot be settled by negotiation, it is mandatory for the Central Government to constitute a Tribunal for adjudication of the dispute.
[92B] The Central Government to fulfil the statutory obliga tion notify in the official Gazette the constitution of an appropriate tribunal for the adjudication of the Water Dispute.
The same should be done within a period of one month.
|
t Petition No. 869 of 1988.
(Under Article 32 of the Constitution of India.) Govind Mukhoty, Naresh Kaushik and Ms. Lalitha Kaushik for the Petitioner.
V.C. Mahajan, Girish Chandra and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This is a petition under Article 32 of the Constitution of India, filed by the petitioner Union or Behalf of the employees of the Grih Kalyan Kendra for a declaration the Girh Kalayan Kendra wherein the Workers are employed is 'State ' within the meaning of Article 12 of the Constitution and for the issuance of a writ of mandamus directing the Union of India and the respondents to pay regular pay scales in parity with other employees performing similar work under the Union of India like New Delhi Municipal Committee and other Departments of Delhi Administration.
Grih Kalyan Kendra is a Society registered under the .
Its objectives as set out in the memorandum of Association are as follows: "(a) To promote social, economic, cultural and educational activities for the betterment of the Central Government employees and their families; (b) To impart technical and vocational training in home crafts and other house hold arts for useful utilisation of leisure time; and (c) To organise and promote economic activities that may provide opportunities for gainful employment to families Central Government employees for supplementing family incomes.
" 18 For attaining the aforesaid objectives, the Kendra has been conducting various activities including; (i) holding of craft classes for training in cutting, tailoring and embroidering for the house wives and grown up girls during their leisure hours; (ii) imparting nursery education for children in the age group of 3 to 7 years; (iii) running of creches or day care centres for children between the age of 90 days and 7 years; (iv) providing the recreational facilities like T.V. shows, libraries,gymnasia and in door games and sports at the samaj sadans (Community Halls); (v) conducting stitching of liveries for Class III (Group C) and Class IV (Group D) employees of Government Departments and Public Sector Undertakings.
The Kendra runs 29 nursery centres out of which 21 are in Delhi, 3 in Dehradun and one each at Faridabad, Nagpur, Jaipur, Bombay and Madras.
It also runs 43 crafts centres out of which 23 are in Delhi, 5 in Bombay, 8 in madras, 2 in Dehradun and one each at Jaipur, Nagpur, Faridabad, Narela and Bahadurgarh.
The Kendra also runs 19 centres for day care called creches out of which 16 are in Delhi and one each at Faridabad, Madras and Jaipur.
The Kendra conducts two production centres, one located at Delhi and the other at madras.
In these centres stitching of liveries for class III and Class IV employees of Government Departments and Public Sector Undertakings are undertaken with a view to provide gainful employment for dependent ladies members of the Government servants.
The Grih Kalyan Kendra is a welfare organisation working under the aegis of the Department of Personnel and Administrative Reforms, Ministry of Home Affairs.
The purpose and object of establishing the Kendras were to help needy Government servants especially those belonging to the lower income group by providing to their dependents opportunity of gainful work or training during their leisure time.
The scheme stipulated to ensure that the dependents of such Government servants should be able to supplement to meagre income of the family and to acquire skill and experience for obtaining employment elsewhere.
Initially, the employees of Kendra were paid honorarium only and at no time they had any regular scales of pay.
Some of the employees who work at the Centres are paid on piece rate basis.
The control and management of the Kendras vest in a board which consist of officers of the Department of Personnel.
The Union of India supplements the income of the Kendras by providing grants and monetary support.
The employees of the Grih Kalyan Kendra fall in two broad categories; (i) regular staff taken on deputation from other Central Government offices who draw their salaries in regular scale of pay alongwith the deputation and other allowances as admissi 19 ble to the Central Government employees; (ii) employees employed at the various centres of the kendra on ad hoc basis some of whom have been working on fixed salary called honorarium while others are working on the piece rate wages at the production centres without there being any provision for any scale of pay and other benefits like,gratuity, pension, provident fund etc.
The terms and conditions of tenure of service have not been regulated by any Rules framed by the Kendra.
The services of the employees falling in the second category are terminable at any time at the sweet will of the officers of the Kendras.
The petitioner has asserted that the employees of the Kendra are paid low wages and their salaries are far less than what is paid to the employees doing similar nature of work in the organisations like NDMC and other Departments of the Delhi Administration.
It is asserted that the Kendra is a 'State ' within the meaning of Article 12 of the Constitution and therefore the respondents are under constitutional obligation to prescribe similar scales of pay as applicable to the employees of NDMC and Delhi Administration and who are doing the same work as performed by the employees of the Kendra.
The petitioner has claimed relief for declaring the kendra to be an instrumentality of State and for the issue of a direction directing the respondents to pay equal pay as paid to the similar employees doing similar work in NDMC and other Departments of Delhi Administration, along with other benefits like gratuity, pension and provided fund.
The petitioner 's claim for equal pay as paid to the employees of NDMC and Delhi Administration is contested by the respondents.
In the counter affidavit filed on behalf of the respondents,it is asserted that the Grih Kalyan Kendra was started as a welfare society with the aim of helping the needy Government servants especially those belonging to lower income group by providing to their dependents opportunity of gainful work, so that, they might be able to supplement the meagre income of their family and at the same time they may also gain skill and experience in order to improve their career elsewhere.
Grih Kalyan Kendra was expected to be a stepping stone for such dependents of the poor Government servants and there was no intention to provide them with any regular employment.
it is further stated that in the nature of things and in consonance with original aim the employees of the Grih Kalyan Kendra were expected to leave the organisation once they have acquired skill and experience and seek other opportunity of employment for the betterment of their career elsewhere.
The employees of the Kendra were expected to leave the organisation once they lost the status of dependent of low paid 20 Government employees.
However, the employees of the Kendra have not met any of these expectations.
Some of the employees once inducted into the organisation have continued for a number of years.
The employees working in the Kendra are not regular employees and the duties performed by them are not comparable to any of the employees working under NDMC or any Department of Delhi Administration or under the Union of India.
The status of the kendra is a unique one where the work and duties performed by its employees are quite different in nature than those performed by the employees of NDMC and Delhi Administration.
Shri Govind Mukhoty learned counsel for the petitioner contended that though the Grih Kalyan Kendras are managed by the Board as contemplated by the Rules of the Registered Societies, the Union of India have the pervasive control over its functions, it is an instrumentality and agency of the Union Government and therefore it is a State within the meaning of Article 12 of the Constitution.
He placed reliance on decisions of this Court in Ramana Dayaram Shetty vs International Airport Authority of India & Ors., ; ; P. K. Ramachandra Lyer & Ors.
vs Union Of India & Ors.
, ; ; B.S. Minhas vs Indian Statistical Institute & Ors., ; ; Bihar State Harijan Kalyan Parishad vs Union of India & Ors., ; and Surya Narain Yadav & Ors.
vs Bihar State Electricity Board & Ors., ; WE do not think it necessary to consider this question in detail as in our opinion given on an assumption that the Grih Kalyan Kendra is an instrumentality of a State within the meaning of Article 12 of the Constitution and the petitioners are entitled to enforce their fundamental rights against it, it is difficult to uphold this contention that the respondents have violated any of the fundamental rights of the petitioners.
We accordingly proceed on the assumption that the Grih Kalyan kendra is a State for the purposes of Chapter IV of the Constitution and consequently this petition under Article 32 of the Constitution is maintainable and the petitioners are entitled to invoke the jurisdiction of the Court for the enforcement of their fundamental right founded on the principle of equal pay for equal work.
Equal pay for equal work is not expressly declared by the Constitution as a fundamental right but in view of the Directive Principles of State Policy as contained in Article 39(d) of the Constitution "Equal pay for equal work" has assumed the status of fundamental right in service jurisprudence having regard to the constitutional mandate of equality in Articles 14 and 16 of the Constitution.
Equal pay for equal 21 work and providing security for service by regularising causal employment within a reasonable period has been accepted by this Court as a constitutional goal to our socialistic pattern.
It has ceased to be a judge made law as it is the part of the constitutional philosophy which ensures a welfare socialistic pattern of a State providing equal opportunity to all and equal pay for equal work for similarly placed employees of the State.
This Court has zealously enforced the fundamental right to equal pay for equal work in effectuating the constitutional goal of equality and social justice in a number of decisions.
See: Randhir Singh vs Union of Ind, ; ; Daily Rated Casual Labour Employed under P & T Department vs Union of India, ; Dhirendra Chamoli V. State of U.P., ; Surinder Singh vs Engineer in Chief CPWD, ; R.D. Gupta vs Lt.
Governor Delhi Administration, ; Bhagwan Dass vs State of Haryana, [1987] 4 SCC 634; Jaipal vs State of Haryana, [1988] 3 SCC 354 and Dharwad District P.W.D. Literate Daily Wage Employees Association & Ors.
vs State of Karnataka & Ors.
, ; Therefore, the principle of equal pay for equal work even in an establishment which is an instrumentality of a State is applicable to its full vigour.
The question then arises whether the respondents have practised discrimination in denying the employees of the kendra pay which the Union of India has been paying to other similarly placed employees doing the same or similar work.
This question is of primary importance which requires investigation of facts.
Unless, it is demonstrated that the employees of the Grih Kalyan Kendra are discriminated in matters relating to pay and other emoluments with the other similarly placed employees, the principle of equal pay for equal work cannot be applied.
While considering this question, it is not necessary to find out similarity by mathematical formula but there must be a reasonable similarity in the nature of work, performance of duties, the qualification and the quality of work performed by them.
It is permissible to have classification in services based on hierarchy of posts, pay scale, value of work and responsibility and experience.
The classification must, however, have a reasonable relation to the object sought to be achieved.
In Federation of All India Customs and Central Excise Stenographers vs Union of India, ; Sabyasachi Mukharji, J. (as he then was) observed: "There may be qualitative difference as regards reliability and responsibility.
Functions may be the same but the responsibilities make a difference.
One cannot deny that 22 often the difference is a matter of degree and that there is an element of value judgment by those who are charged with the administration in fixing the scales of pay and other conditions of service.
So long as such value judgment is made bona fide, reasonable or an intelligible criteria which has a rational nexus with the object of differentiation, such differentiation will not amount to discrimination.
It is important to emphasise that equal pay for equal work if a concomitant of Article 14 of the Constitution.
But it follows naturally that equal pay for unequal work will be a negation of that right.
" Elaborating the aforesaid observation the learned Judge further observed thus: "The same amount of physical work may entail different quality of work, some more sensitive, some requiring more tact, some less it varies from nature and culture of employment.
The problem about equal pay cannot always be translated into a mathematical formula.
If it has a rational nexus with the object to be sought for, as reiterated before a certain amount of value judgment of the administrative authorities who are charged with fixing the pay scale has to be left with them and it cannot be interfered with by the court unless it is demonstrated that either it is irrational or based on no basis or arrived mala fide either in law or in fact.
" The petitioners have referred to the scale of pay paid to the similar employees of NDMC and Delhi Development Authority under the Delhi Administration for the various employees to demonstrate that the employees of the Kendra are being discriminated as they are paid lower amount of salary although they perform the same duties and functions as performed by corresponding employees holding corresponding posts under the NDMC and Delhi Administration.
The chart as set out in the petition is as under: _________________________________________________________________ section No. Designation GKK Salaries per month NDMC DDA/C.Govt.
____________________________________________________________________ 1.
Incharge Creche 788 1139 1380 2.
Creche Attendants 758 1139 1139 3.
Creche Ayahs 592 792 792 4.
Craft Teachers 786 1260 1444 5.
Nursery Teachers 712 1260 1260 6.
Nursery Ayahs 430 792 792 7.
Office Incharge of Crech Centre etc. 1140 8.
Office Asstt./Typist 880 1140 9.
i) Cutters (Tailors) 1140 ii) Stitchers (Checker)870 1140 iii) Drivers 565 1140 iv) Peons 1140 v) Chowkidars 750 792 10.
Sweepers 225 In 1984 the employees filed Writ Petition No. 13924 of 1984 in this Court claiming relief for the payment of wages on the principle of equal pay for equal work, seeking parity with the employees of NDMC and other Departments of Delhi Administration and Union of India.
Since, the matter involved investigations of facts, this Court with a view to find out as to which other employees similarly situated were paid more than the employees working in the Kendra and also to ascertain whether the principle of equal pay for equal work was being violated by the kendra, on the suggestion of the parties referred the matter to Former Chief Justice Shri Y.V. Chandrachud, for his report and recommendation.
The Court requested the Former Chief Justice make recommendations taking into account the following matters: "1.
Whether other similarly situated employees (engaged in similar comparable work, putting in comparable hours of work, in a comparable employment) are paid higher pay and if so what should be the entitlement of the complaining employees in order not to violate the equal pay for equal work principle; 2.
If there is no other comparable employment, whether the remuneration of the complaining employees deserves 24 to be revised on the ground that their remuneration is unconscionable or unfair and if so to what extent.
The organisation is not disabled form continuing its benign motivity and even extending it.
" Pursuant to the directions of the Court, the parties including the petitioners appeared before the Former Chief Justice.
After hearing the parties and considering the entire material placed before him, the Former Chief Justice submitted and elaborate report to the Court making comprehensive suggestions.
The respondents to the writ petition agreed to implement the recommendations made by the Former Chief Justice.
Thereupon the writ petition was disposed of by an order dated 6 th May 1988 stating that the employees of the Kendra are entitled to the benefits recommended in the Report of the Former Chief Justice.
In order to appreciate the controversy, we consider it necessary to refer to the concluding part of the Report which contains the recommendations, it is as follows: "Having given a careful thought to these unusual considerations, I am of the opinion that until such time as the Government formulates a new scheme for giving an orderly shape to the Kendra so that, by the application of a rational policy the remuneration of the Kendra employees could be fixed on a fair basis, an ad hoc method of stepping up their meagre honorarium should be adopted, linked to the length of service put in by the employees.
No other test seems feasible since, especially, the Kendra employees are not prohibited from taking any other employment, they are not recruited through an open competition, there is no age bar for their recruitment or retirement and since, being dependents of Government servants, they are eligible in that capacity for receiving other benefits like free medical aid and leave travel concessions.
In view of these circumstances, to place the Kendra employees on par with other employees would be treating unequals as equals which would conceivably draw a constitutional challenge.
For the foregoing reasons, I recommend that the employees of the Kendra belonging to category (b) described earlier in this Report should be paid a fixed monthly honorarium according to the following scale: 25 1.
Employees who have put in a service of 20 years of more should be paid 100% (one hundred per cent ) more of the honorarium which is paid to them at present.
Employees who have put in a service of 15 to 20 years should be paid 90% (ninety per cent) more of the honorarium which is paid to them at present.
Employees who have put in a service of 10 to 15 years should be paid 80% (eighty per cent) more of the honorarium which is paid to them at present.
Employees who have put in a service of 5 to 10 years should be paid 70% (seventy per cent) more of the honorarium which is paid to them at present.
Employees who have put in a service of 1 to 5 years should be paid 60% (sixty per cent) more of the honoratium which is paid to them at present.
These recommendation should operate retrospectively with effect from 1st August 1986, being the date on which the Supreme Court passed its order referring the matter to me.
The delay in making these recommendations is not due to any default on the part of the employees.
The employees of the Kendra of the (b) category should be paid arrears of honorarium upon the revised basis, before 31st October, 1987.
" The Court accepted the Report of the Former Chief Justice and disposed of the petition on a statement made on behalf of the respondents that they would implement the recommendations made in the Report of the Former Chief Justice.
There is no dispute that the recommendations made by the Former Chief Justice have been implemented and the employees of the Kendra are being paid remuneration accordingly.
The Former Chief Justice 's recommendation for ad hoc method of stepping up of honorarium until such time as the Government formulates a new scheme for giving orderly shape of the Kendra has been accepted by the respondents and a Sub Committee has been set up by the Grih Kalyan Kendra Board to review the organisational and operational arrangements in the Kendra at the headquarters and in the cities and to suggest measures for the improvement of its functioning.
The Committee has been directed 26 with reference to the original objectives of Kendra of imparting skills to a steady stream of dependents of Government employees and to make suggestions for making further improvements.
The Committee has not yet submitted its report.
We hope and trust that the Committee will submit its report and the Girh Kalyan Kendra will take steps to improve the functioning of the Kendras including the remuneration of its employees.
In the instant writ petition the petitioners have raised precisely the same question as raised in the earlier Writ Petition 13924 of 1984.
Their grievance of discrimination in matters relating to payment of scale of pay and other emoluments was examined in the earlier writ petition and the Former Chief Justice held that there was no employment comparable to the employment held under the Grih Kalyan Kendra and therefore they could not seek parity with other employees working under NDMC or the Delhi Administration or Union of India.
We consider it necessary to refer to the relevant part of the Report of the Former Chief Justice, which is as under: "The first consideration which I am required by the Supreme Court to take into account is "whether other similarly situated employees (engaged in similar comparable work, putting in comparable hours of work, in a comparable employment) are paid a higher pay and as to what should be the entitlement of the complaining employees in order not to violate the equal pay for equal work principle.
" The facts and the statistical data set out above will show that the employment in the Kendra is unique in character, that is to say, it is not comparable with any other employment.
Its motivation and genesis coupled with the absence of rules governing service conditions elude even a broad comparison between the employees of the Kendra and the employees of other organisations holding somewhat similar post, that is, posts bearing similar duties and designation.
It is difficult to conceive of any other service which one can enter at any age, regardless of educational qualifications, and from which one can retire when one chooses.
It is something like "come if you like, go when you please".
Since there is no other employment which can bear a reasonable comparison with employment in the service of the Kendra, it is difficult to perceive employees similarly situated as those in the service of the Kendra.
27 Therefore, the fact that those other employees may be drawing higher pay will not justify the conclusion that the employees of the Kendra of Category(b), with whom alone we are concerned are denied the benefit of the principle "Equal pay for equal work".
It is trite that the concept of equality implies and requires equal treatment for those who are situated equally.
One cannot draw comparisons between unequals.
If the facts of a given case fail to establish that persons who are aggrieved are not situated equally with others, the benefits available to those others cannot ipso facto be given to the former though, of course, the question as to whether persons are situated equally has to be determined by the application of broad and reasonable tests and not by the application of a mathematical formula of exactitude.
Try howsoever as one may be applying broad and reasonable criteria, the conclusion is inescapable that there are no other employment comparable to the employment in the (b) category of the Kendra, that means that the aggrieved employees are not situated similarly as any others.
This then in my answer to the first question referred by the Supreme Court for my consideration.
Putting it briefly, there being no other Government or semi Government employees who can be regarded, even broadly, as being situated similarly as the employees of the Kendra with whom we are concerned, the principle of equal pay for equal work cannot be said to be violated by the payment of mere honorarium to these employees.
" The above findings recorded by the Former Chief Justice are findings of facts founded on the material placed before him by the parties.
These findings were accepted by this Court and the Writ petition was accordingly disposed of by an order dated 6th May 1988.
Now it is not open to the petitioner to reopen the same question by means of the present writ petition.
In the Supplementary affidavit filed on behalf of the petitioner an attempt was made to dispute the findings recorded by the Former Chief Justice but in fairness, Shri Govind Mukhoty made a candid statement before us during the course of the arguments that the findings of the Former Chief Justice are not disputed.
The findings recorded by the Former Chief Justice clearly show that there has been no discrimination as the petitioners are not being discriminated from those who are situated equally.
The petitioners ' claim 28 for the benefit of equal pay for equal work, therefore must fail.
Since the petitioner 's claim for parity in pay with regard to the employees working in the New Delhi Municipal Committee and other Departments of the Delhi Administration and Union of India has failed, their claim for the issue of direction to the respondents to provide for the pension, gratuity and provident fund for the employees of the Grih Kalyan Kendra must also fail.
In the result the petition fails and is accordingly dismissed.
There will be no order as to costs.
Y.Lal Petition dismissed.
| IN-Abs | Grih Kalyan Kendra is a Society registered under the Societies Registration Act 1960.
It is a welfare organization working under the aegis of the Department of Personnel and Administrative Reforms, Ministry of Home Affairs.
Its object is to establish Kendras to help needy Government servants especially those belonging to the lower income group by providing to their dependents opportunity of gainful work and training during their leisure time so that the dependents of such Government servants may be able to supplement to the meagre income of the family and to acquire skill and experience for obtaining employment elsewhere.
In furtherance of this object, the kendra has set up nursery centres, craft centres, and creches etc.
In Delhi and other cities where the work of imparting necessary training is carried on.
The management of the Kalayan Kendras vests in the Board which consists of officers of the Department of Personnel and in order to augment its resources the Ministry gives grant to the kendras.
The terms and conditions or tenure of service of its employees have not been regulated by any Rules framed by the kendra.
The staff of the Kendras fall in two categories viz. (i) regular staff taken on deputation from other central government offices who draw their salaries in regular scales of pay with the deputation and other allowances as admissible to the central government employees and (ii) employees employed at the various centres of the kendra on ad hoc basis, some of whom have been working an fixed salary called honorarium while others are working on the piece rate wages, without any gratuity or pension or Provident fund.
The Workers ' Union of the Kendra has filed this writ petition for a declaration that the kendra wherein the workers are employed is a 'State ' within the meaning of Article 12 of the Constitution and such it is prayed by them that a writ of mandamus be issued directing the respondents to pay regular pay scale on par with other employees 16 performing similar work under the Union of India, New Delhi Municipal Committee and other Departments of the Delhi Administration, as according to them wages paid to them are low as compared to the employees performing identical duties in the said Departments.
Their contention is that the Kendra being a 'State ', the respodents are under constitutional obligation to pay them higher scale of pay prescribed for the Government Departments, on the principle "equal pay for equal work".
They have raised claim to pension, gratuity and provident fund etc.
The respondents contest their claim on the plea that the employees working in the kendra are not regular employees and the duties performed by them are not comparable to any of the employees working under NDMC or any other DEPARTMENT OF THE Delhi Administration or Union of India, the Status of the Kendra being unique.
Dismissing the writ petition the Court, HELD: There being no other Government or semi Government employees who can be regarded, even broadly, as being situated similarly as the employees of the Kendra, the principle of equal pay for equal work cannot be said to be violated by the payment of mere honorarium to these employees.
[27E] The findings recorded by the former Chief Justice to whom the matter was referred earlier clearly shows that there has been no discrimination as the petitioners are not being discriminated from those who are situated equally.
The petitioner 's claim for the benefit of equal pay for equal work, therefore must fail.
Their claim for the issue of direction to the respondents to provide for the pension, gratuity and provident fund for the employees of the Grih Kalyan must also fail.
[27H; 28A B] Ramana Dayaram Shetty vs International Airport Authority of India and ors.
; , ; P.K. Ramachandra lyer & Ors.
vs Union of India and Ors.
, ; ; B.S. Minhas vs
Indian Statistical Institute and Ors., ; ; Bihar State Harijan Kalyan Parishad vs Union of india and ors.
; , ; Surya Narain Yadav & Ors.
vs Bihar State Electricity Board and Others, ; ; Randhir Singh vs Union of India, ; ; Daily Rated Casual Labour Employed under P Dhirendra Chamoli vs State of U.P.,[1986] 1 SCC 637, Engineer in Chief, CPWD R.D. Gupta vs Lt. Governor, Delhi Administration, ; ; Bhagwan Dass vs
State of 17 Haryana, [1987] 4 SCC 634; Jaipal vs State of Haryana, [1988] 3 SCC 354; Dharwad District P.W.D. Literate Daily Wage Employees Association and Ors.
vs State of karnataka and Others; , ; Federation Of all India Customs and Central Excise Stenographers vs Union of India, [19890 3 SCC 1, referred to.
|
etition (C) No. 381 of 1998.
8 (Under Article 32 of the Constitution of India).
S.K. Sinha for the Petitioner.
D. Goburdhan, Ms. A. Subhashini, K.K. Lahiri, Ms. Lira Goswami and D.N. Misra for the Respondents.
The Judgement of the Court was delivered by SINGH,J. We heard the arguments in detail on 13.12.
1990 and dismissed the petition with costs amounting to Rs. 5,000 with the direction that the reasons shall be delivered later on.
We are, accordingly, delivering our reasons.
This petition is under Article 32 of the Constitution by Subhash Kumar for the issue of a writ or direction directing the director of Collieries, West Bokaro Collieries at Ghatotand, District Hazaribagh in the State of Bihar and the Tata from & Steel Co. Ltd. to stop forthwith discharge of slurry/sludge from its washeries at Ghatotand in the District of Hazaribagh into Bokaro river.
This petition is by way of public interest litigation for preventing the pollution of the Bokaro river water from the sludge/slurry discharged form the washeries of the Tata Iron & Steel Co. Ltd. The petitioner has alleged that the Parliament has enacted the (hereinafter referred to as `the Act ') providing for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment of Board for the prevention and control of water pollution.
Under the provisions of the Act the State Pollution Control Board constituted to carry out functions prescribed under Section 17 of the Act which among other things provide that the Board shall inspect sewage or trade effluents and plants for the treatment of sewage and trade effluents and to review plans, specifications or other data set up for the treatment of water and to lay down standards to be complied with by the persons while causing discharge of sewage or sullage.
Section 24 of the Act provides that no person shall knowingly cause or permit any poisonous, noxious or polluting matter to enter into any stream or well, which may lead to a substantial aggravation of pollution.
The petitioner has asserted that Tata Iron and Steel Co respondent No.5 carries on mining operation in coal mines/washeries in the town of Jamshedpur.
These coal mines and collieries are known as West Bokaro Collieries and the Collieries have two coal washeries where the coal after its extraction from the mines is brought and broken into graded pieces and there 9 after it is processed for the purpose of reducing its ash contents.
A chemical process is carried out which is known as `froth floatation process '.
Under this process the graded coal is mixed with diesel oil, pine oil and many other chemical ingredients and thereafter it is washed with the lacs of gallons of water.
The end water is washed coal with reduced quantity of ash content fit for high graded metallurgical process for the purposes of manufacture of steel.
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 which are carried away by the water is called the slurry which is ash free, it contains fine quality of coal which is used as fuel.
The petitioner has alleged that the surplus waste in the form of sludge/slurry is discharged as an effluent from the washeries into the Bokaro river which gets deposited in the bed of the river and it also gets settled on land including the petitioner 's land bearing Plot No.170.
He was further alleged that the sludge or slurry which gets deposited on the agricultural land, is absorbed by the land leaving on the top a fine carbonaceous product or film on the soil, which adversely affects the fertility of the land.
The petitioner has further alleged that the effluent in the shape of slurry is flown into the Bokaro river which is carried out by the river water to the distant places polluting the river water as a result of which the river water is not fit for drinking purposes nor it is fit for irrigation purposes.
The continuous discharge of slurry in heavy quantity by the Tata Iron & Steel Co. from its washeries posing risks to the health of people living in the surrounding areas and as a result of such discharge the problem of pure drinking water has became acute.
The petitioner has asserted that inspite of several representations, the State of Bihar and State Pollution Control Board have failed to take any action against the Company instead they have permitted the pollution of the river water.
He has further averred that the State of Bihar instead of taking any action against the Company has been granting leases on payment of royalty to various persons for the collection of slurry.
He has, accordingly, claimed relief for issue of direction directing the respondents which include the State of Bihar, the Bihar Pollution Control Board, Union of India and Tata Iron & Steel Co. to take immediate steps prohibiting the pollution of Bokaro river water from the discharge of slurry into the Bokaro river and to take further action under provisions of the Act against the Tata Iron & Steel Co. 10 The respondents have contested the petition and counter affidavits have been filed on behalf of the respondent Nos. 2, 4 and 5 State of Bihar, State Pollution Board, Directors of Collieries and Tata Iron & Steel Co. Ltd. In the counter affidavits filed on behalf of the respondents, the petitioner 's main allegation that the sludge/slurry is being discharged into the river Bokaro causing pollution to the water and the land and that the Bihar State Pollution Board has not taken steps to prevent the same is denied.
In the counter affidavit filed on behalf of the Bihar State Pollution Board it is asserted that the Tata Iron & Steel Co. operates open case and underground mining.
The Company in accordance to Sections 25 and 26 of the Water (Prevention Control of Pollution) Act, 1974 applied for sanction from the Board of discharge their effluent from their outlets.
The Board before granting sanction analysed their effluent which was being watched constantly and monitored to see that the discharges does not affect the water quality of the Bokaro river adversely.
In order to prevent the pollution the Board issued direction to the Director of the Collieries to take effective steps for improving the quality of the effluent going into the Bokaro river.
The State Pollution Board imposed conditions requiring the Company to construct two settling tanks for settlement of solids and rewashing the same.
The Board directed for the regular samples being taken and tested for suspended solids and for the communication of the results of the tests to the Board each month.
The State Board has asserted that the Company has constructed four ponds ensuring more storing capacity of effluent.
The Pollution Board has been monitoring the effluent.
It is further stated that on the receipt of the notice of the instant writ petition the Board carried out an inspection of the settling tanks regarding the treatment of the effluent from the washeries on 20th June, 1988.
On inspection it was found that all the four settling tanks had already been completed and work for further strengthening of the embankment of the tanks was in progress, and there was no discharge of effluent from the washeries into river Bokaro except that there was negligible seepage from the embankment.
It is further stated that the Board considered all the aspects and for further improvement it directed the management of the collieries for removal of the settle slurry from the tanks.
The Board has directed that the washeries shall perform desludging of the settling tanks at regular intervals to achieve the proper required retention time for the separation of solids and to achieve discharge of effluents within the standards prescribed by the Board.
It is further asserted that at present there is no discharge from any of the tanks of the Bokaro river and there is no question of pollution of the river water of affecting the fertility of land.
In their affidavits files on behalf of the respondent 11 Nos. 4 and 5, they have also denied the allegations made in the petition.
They have asserted that the effective steps have been taken to prevent the flow of the water discharge from the washeries into the river Bokaro.
it is stated that infact river Bokaro remains dry during 9 months in a year and the question of pollution of water by discharge of slurry into the river does not arise.
However, the management of the washeries have constructed from different ponds to store the slurry.
The slurry which settles in the pounds is collected for sale.
The slurry contains highly carbonaceous materials and it is considered very valuable for the purpose of fuel as the ash contents are almost nil in the coal particles found in the slurry.
Since, it has high market value, the Company would not like it to go in the river water.
The Company has taken effective steps to ascertain that no slurry escapes from its ponds at the slurry is highly valuable.
The Company has been following the directions issued by the State Pollution Control Board constituted under the 1974 Act.
On the facts as appearing from the pleadings and the specific averments contained in the counter affidavit filed on behalf of the State Pollution Control Board of Bihar, prima facie we do not find any good reason to accept the petitioner 's allegation that the water of the river Bokaro is being polluted by the discharged of sludge or slurry into it from the washeries of the respondent company.
On the other hand we find that the State Pollution Control Board has taken effective steps to check the pollution.
We do not consider it necessary to delve into greater detail as the present petition does not appear to have been filed in public interest instead the petition has been made by the petitioner in his own interest.
On a perusal of the counter affidavit filed on behalf of the respondent Nos. 4 and 5 it appears that the petitioner has been purchasing slurry from the respondent Nos. 4 and 5 for the last several years.
With the passage of time he wanted more and more slurry, but the respondent company refused to accept his request.
The petitioner is an influential businessman, he had obtained a licence for coal trading, he tried to put pressure through various sources on the respondent company for supplying him more quantity of slurry but when the Company refused to succumb to the pressure, he started harassing the Company.
He removed the Company 's slurry in an unauthorised manner for which a Criminal Case No., 173 of 1987 under Sections 379 and 411 of the Indian Penal Code read with Section 7 of the Essential Commodities Act was registered against the petitioner and Pradip Kumar his brother at Police Station Mandu, which is pending before 12 the Sub Judge, Hazaribagh.
One Shri Jugal Kishore Jayaswal also filed a criminal complaint under Section 379 and 411 of the IPC against the petitioner and his brother Pradip Kumar in the Court of Judicial Magistrate, First Class, Hazaribagh, which is also pending before the Court of Judicial Magistrate, 2nd Class Hazaribagh.
The petitioner initiated several proceedings before the High Court of Patna under Article 226 of the constitution for permitting him to collect slurry from the Raiyati land.
These petitions were dismissed on the ground of existence of dispute relating to the title of the land.
The petitioner filed a writ petition C.W.J.C. No. 887 of 199o in the High Court of Patna for taking action against the Deputy Commissioner, Hazaribagh for implementing the Full Bench judgment of the Patna High Court in Kundori Labours Cooperative Society Ltd. & etc.
vs State of Bihar & Ors.
, AIR 1986 Patna 242 wherein it was held that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine, not subject to the provisions of the Mines and Mineral (Regulation and Development) Act, 1957.
Consequently the collection of slurry which escaped from the washeries could be settled by the State Government with any person without obtaining the sanction of the Central Government.
The petitioner has been contending before the High Court that the slurry which was discharged from washeries did not belong to the Company and he was entitled to collect the same.
Since the respondent company prevented the petitioner from collecting slurry from its land and as it further refused to sell any additional quantity of slurry to him, he entertained grudge against the respondent company.
In order to feed fat his personal grudge he has taken several proceedings against the respondent company including the present proceedings.
These facts are quite apparent from the pleadings of the parties and the documents placed before the Court.
Infact,there is intrinsic evidence in the petition itself that the primary purpose of filling this petition is not to serve any public interest instead it is in self interest as would be clear from the prayer made by the petitioner in the interim stay application.
The petitioner claim interim relief from this Court permitting him to arrest/collect sludge/slurry flowing out of the washeries of the respondent Nos. 4 and 5 and with a direction to the State of Bihar, its officers and other authorities for not preventing him from collecting the sludge/slurry and transporting the same.
The prayer for the interim relief made by the petitioner clearly indicates that he is interested in collecting the slurry and transporting the same for the purposes of his business.
As already state a Full Bench of the Patna High Court held that the slurry was not coal and the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 were not applicable, the State Government was tree to settle the same 13 and the Tata Steel & Iron Co. had no right to collect the slurry which escaped from its washeries.
The respondent company filed an appeal before this Court.
During the pendency of the aforesaid appeal, the petitioner filed the present petition.
The appeal preferred by the Tata Iron & Steel Co. Ltd. and Bharat Coking Coal Ltd. was allowed by this Court and judgment of Patna High Court was set aside.
The judgment of this Court is reported in Judgments today Vol. 3 wherein it has been held that the slurry/coal deposited on any and continues to be coal and the State Government has no authority in law to deal with the same and the slurry deposited on the Company 's land belongs to the Company and no other person had authority to collect the same.
Article 32 is designed for the enforcement of Fundamental Rights of a citizen by the Apex Court.
It provides for an extraordinary procedure to safeguard the Fundamental Rights of a citizen.
Right to live is a fundamental right under Art 21 of the Constitution and it includes the right of enjoyment of pollution free water and air for full enjoyment of life.
If anything endangers or impairs that quality of life in derogation of laws, a citizen has right to have recourse to Art, 32 of the Constitution for removing the pollution of water or air which may be detrimental to the quality of life.
A petition under article 32 for the prevention of pollution is maintainable at the instance of affected persons or even by a group of social workers or journalists.
But recourse to preceeding under article 32 of the Constitution should be taken by a person genuinely interested in the protection of society on behalf of the community.
Public interest litigation cannot be invoked by a person or body or person to satisfy his or its personal grudge and enmity.
if such petitions under Article 32, are entertained it would amount to abuse of process of the Court, preventing speedy remedy to other genuine petitioner from this Court.
Personal interest cannot be enforced through the process of this Court under article 32 of the Constitution in the garb of a public interest litigation.
Public interest litigation contemplates legal proceeding for vindication or enforcement of fundamental rights of a group of persons or community which are not able to enforce their fundamental rights on account of their incapacity, poverty or ignorance of law.
A person invoking the jurisdiction of this Court under article 32 must approach this Court for the vindication of the fundamental rights of affected persons and not for the purpose of vindication of his personal grudge or enmity.
It is duty of this Court to discourage such petitions and to ensure that the course of justice is not obstructed or polluted by unscrupulous litigants by invoking the extraordinary jurisdiction of this Court for personal matters under the garb 14 of the public interest litigation see Bandhua Mukti Morcha vs Union of India, ; ; Pandey vs State of West Bengal, ; at 331; Ramsharan Autyanuprasi & Anr. vs Union of India & Ors., [1989] Suppl.
1 SCC 251 and Chhetriya Pardushan Mukti Sangharsh Samiti vs State of U.P. & Ors., [1990] 4 SCC 449.
In view of the above discussion we are of the opinion that this petition has been filed not in any public interest but for the petitioner 's personal interest and for these reasons we dismissed the same and directed that the petitioner shall pay Rs. 5,000 as costs.
These costs are to be paid to the respondent Nos. 3,4 & 5.
| IN-Abs | The petitioner filed a writ petition in this court by way of public interest litigation alleging that the respondents, West Bokaro Collieries and Tata Iron and Steel Company (TISCO) were polluting the river Bokaro by discharging surplus waste in the form of sludge/slurry as effluent from their washeries into river making the river water unfit for drinking and irrigation purposes thereby causing risk to the health of the people; the State of Bihar and the State Pollution Control Board have failed to take appropriate steps for prevention of the pollution and instead the State of Bihar has granted leases on payment of royalty to various persons for collection of slurry.
Accordingly the petitioner prayed for directions to the respondents to take immediate steps prohibiting the pollution of the river and to take legal action against TISCO under the .
The petitioner also claimed interim relief from this Court that he should be permitted to collect sludge/slurry flowing out of washeries of the respondents.
6 The respondents contested the petition denying the petitioner 's allegations.
Bihar State Pollution Board asserted that directions have been issued to the Bokaro Collieries to take effective steps for improving the quality of the effluent going into the river Bokaro and that the TISCO Company has been granted permission to discharge their effluents from their outlets in accordance with sections 25 and 26 of the 1974 Act.
On behalf of TISCO and the Bokaro Collieries it was contended that all effective steps have been taken to prevent the pollution and they have complied with the instructions of the State Pollution Board.
By an order dated 13.12.1990, this Court dismissed the writ petition with costs.
Giving reasons for dismissal of the petition, this Court, HELD: 1.
Article 32 is designed for the enforcement of Fundamental Rights of a citizen by the Apex Court.
It provides for an extra ordinary remedy to safeguard the fundamental rights of a citizen.
Right to life is a fundamental right under Article 21 of the Constitution and it includes the right of enjoyment of pollution free water and air for full enjoyment of life.
If anything endangers or impairs that quality of life in derogation of laws, a citizen has right to have recourse to Article 32 of the Constitution for removing the pollution of water or air which may be detrimental to the quality of life.
A petition under Article 32 for the prevention of pollution is maintainable at the instance of affected persons or even by a group of social workers or journalists.
But recourse to proceeding under Article 32 of the Constitution should be taken by person genuinely interested in the protection of society on behalf of the community.
Public interest litigation cannot be invoked by a person or body of persons to satisfy his or its personal grudge and enmity.
If such petitions under Article 32 are entertained it would amount to abuse of process of the Court, preventing speedy remedy to other genuine petitioners from this Court.
Personal interest cannot be enforced through the process of this Court under Article 32 of the Constitution in the garb of a public interest litigation.
Public interest litigation contemplates legal proceeding for vindication or enforcement of fundamental rights of a group of persons or community which are not able to enforce their fundamental rights on account of their incapacity, poverty or ignorance of law.
A person invoking the jurisdiction of this Curt under Article 32 must approach this Court for the vindication of the fundamental rights of affected persons and not for the purpose of vindication of his personal grudge or enmity.
It is duty of this Court to 7 discourage such petitions and to ensure that the course of justice is not obstructed or polluted by unscrupulous litigants by invoking the extra ordinary jurisdiction of this Court for personal matters under the garb of the public interest litigation.
[13C H; 14A] Bandhua Mukti Morcha vs Union of India, ; ; Sachindanand Pandey vs State of West Begal, ; ; Ramsharan Autyanuprasi & Anr.
vs Union of India & Ors.
, [1989] Suppl.
1 SCC 251; Chetriya Pardushan Mukti Sangharsh Samiti vs State of U.P. & Ors., [1990] 4 SCC 449, referred to. 2.
The present petition is not filed in public interest instead the petition has been made by the petitioner in his own interest.
Infact there is intrinsic evidence in the petition itself that the primary purpose of filing this petition is not to serve any public interest instead it is in self interest.
The petitioner has been purchasing slurry from the respondents for the last several years.
With the passage of time he wanted more and more slurry but the Company refused to accept his request.
He removed the Company 's slurry in an unauthorised manner for which criminal cases are pending against him and his brother.
Since the respondent company refused to sell additional slurry he entertained a grudge against the company and in order to feed fat his personal grudge he resorted to several proceedings against the company including the present one.
The prayer for the interim relief made by the petitioner i.e. permitting him to arrest/collect sludge/slurry flowing out of the washeries of the respondents with a direction to the State of Bihar, its officers and other authorities for not preventing him from collecting the sludge/slurry and transporting the same also collecting the sludge/slurry and transporting the same clearly indicates that he is interested in collecting the slurry and transporting the same for the purposes of his business.
Therefore, there is no good reason to accept the petitioner 's allegation that the water of the river Bokaro is being polluted by the discharge of sludge or slurry into it form the washeries of the respondent company.
On the other hand it is evident from records that the State Pollution Control Board has taken effective steps to check the pollution.
[14B;12F G] Kundori Labours Cooperative Society Ltd. & etc.
vs State of Bihar & Ors.
, AIR 1986 Patna 242; Bharat Cokin Coal Ltd. vs State of Bihar & Ors. ; Judgments Today, vol.
3, , referred to.
|
utory Application No. 1 of 1989.
IN W.P. No. 16093 of 1984 etc.
(Under Article 32 of the Constitution of India).
S.M. Jain, S.K. Jain, Ms. Pratibha Jain and Pradeep Agarwal for the petitioner.
Arun Jaitly, Additional Solicitor General, Kailash Vasdev and Ms. A. Subhashini for the Respondent.
The following order of the Court was delivered: Petitioner was a member of the Rajasthan Judicial Service and was elevated as a Judge of the Rajasthan High Court on July 1, 1975.
He was transferred to the Delhi High Court from where he retired on July 21, 1984.
A dispute relating to his pension became the subject matter of a writ petition before this Court and was disposed of on April 9, 1985 This Court fixed his pension at Rs. 21,500 per annum.
In the meantime, certain changes in the High Court Judges (Conditions of Service) Act,1954, were brought about, firstly, by Central Act 38/86 and again by Central Act 20/88.
Petitioner applied to this Court in Civil Miscellaneous Petition No. 18044/88 asking for benefits under the Amending Act.
This Court by its decision on August 18, 1988, refixed petitioner 's pension at Rs. 41,600 per annum with effect from January 1, 1986, and at Rs. 46,100 per annum with effect from November 1,1986, keeping the two amendments referred to above in view ; In paragraph 19 of this Court 's order, it was stated: "We refrain from expressing any opinion as to the effect of lifting of the ceiling on the special additional pension at Rs. 8,000 per annum placed by clause (b) of paragraph 2 of Part III of the First Schedule.
The question really does not arise for our consideration at the moment and is left open.
" 100 The petitioner has now applied to this Court challenging the ceiling on additional pension appearing in clause (b) of paragraph 2 of Part III of the first Schedule to the of 1954.
The First Schedule Deals with pension of Judges.
Judges in High Court are recruited from three sources: (a) from the Bar; (b) Members belonging to the former Indian Civil Service; and (c) Officers of the State Judicial Service.
In this case we are concerned with as petitioner had been elevated as a Judge of High Court from the Rajasthan State Judicial Service.
In respect of such a Judge the pension payable is prescribed to be: "(a) the pension to which he is entitled under the ordinary rules of his service if he had not been appointed a Judge, his service as a Judge being treated as service therein for the purpose of calculating that pension; and (b) a special additional pension or Rs.1,600 per annum in respect of each completed year of service for pension,but in no case such additional pension together with the additional or special pension, if any, to which he is entitled under the ordinary rule of his service exceed Rs.8,000 per annum.
Provided that the pension under clause (a) and additional pension under clause (b) together shall in no case exceed Rs.54,000 per annum in the case of a Chief Justice and Rs. 48,000 per annum in case of any other Judge.
" Since this Court had fixed the pension at Rs. 46,100 and petitioner 's claim for being put at par with other Judges by fixing his pension at Rs. 48,000 per annum had not been accepted, petitioner has approached this Court challenging the ceiling of Rs. 8,000.
According to the petitioner, he had put in nine years of completed service as a Judge and on the basis of the provision for special additional pension of Rs. 1,600 per annum in respect of each completed year of service for pension he was entitled to Rs.14,400 but the limit in the proviso would have the effect of fixing ceiling at Rs. 48,000 per annum.
There was no justification to introduce a further ceiling of Rs. 8,000 per annum irrespective of the years of completed service rendered and allow a discrimination to operate.
Once the proviso has a limit which meets the purpose there is no basis for the further limit of Rs. 8,000 as contained in paragraph (2) above.
The counter affidavit filed on behalf of the Ministry of Law and Justice sought to justify the limit by referring to cases of Central Civil Service Officers retiring as Secretaries to Government where full credit was not being given for the entire period of service rendered and aceiling was fixed.
Such a ceiling actually is fixed in respect of all the three situations covered by the First Schedule.
A Member of the Bar with 14 years of completed service out of which six years are served as a Chief Justice or as a Judge of the Supreme Court gets the maximum pension of Rs. 54,000 and in the event of his retirement without becoming Chief Justice or a Judge of the Supreme Court, his pension entitlement is Rs. 48,000 per annum.
Similar is the provision relating to the members of the Indian Civil Service who were earlier elevated as Judges.
It is the contention of the petitioner that once a ceiling limit was fixed as contained in the proviso of the Third Part, there was no further justification for the Paragraph 2(b) ceiling.
We find full force in the submission.
The reasons which weighed with this Court on the earlier occasion for enhancing the petitioner 's pension fully apply to the present aspect.
The ceiling of Rs. 8,000, therefore, is not necessary to be imposed and if that is applied, a situation giving rise to the application of article 14 of the Constitution does arise.
In fact, the presence of the proviso clearly brings out the intention that no ******** sought to be made between Judges recruited from the different sources for the matter of the ceiling on pension.
We, therefore, modify the order of this Court fixing petitioner 's pension at Rs. 46,100 and require his pension to be fixed at Rs. 48,000 per annum by holding that the ceiling in paragraph 2(b) of Part III of the First Schedule is unsustainable under article 14 of the Constitution and would not be operative.
We direct that petitioner 's pension from November 1, 1986, shall be fixed at Rs. 48,000 a year.
We would make it clear that as we have held that paragraph 2(b) is ultra vires, it will follow that all cases to which the present situation applied should be revised by the Union of India without requiring representations or applications from the retired Judges concerned.
There would be no order as to costs.
V.P.R. Petition allowed.
| IN-Abs | Petitioner was a member of the state Judicial Service and was elevated as a Judge of the High Court on 1.7.1975, and was later transferred to another High Court where he retire on 21.7.1984.
A dispute relating to pension was disposed of by this Court on 9.4.1985 fixing it at Rs.21,500 per annum.
Meanwhile, the High Court Judges (Conditions of Services) Act,1954 was amended by Central Acts 38/86 and 20/88, and he applied under the said Amending Acts asking for benefits there under, and this Court refixed the petitioner 's pension at Rs.41,600 per annum w.e.f 1.1.1986 and at Rs. 46,100 per annum w.e.f. 1.11.1986.
In an interlocutory petition the petitioner challenged the ceiling on additional pension appearing in clause (h) of paragraph 2 of Part III of the First Schedule to the .
Allowing the petition, this Court, HELD: 1.
There was no justification to introduce a further ceiling of Rs.8,000 per annum irrespective of the years of completed service rendered and allow a discrimination operate.
Once the proviso has a limit which meets the purpose there is no basis for the further limit of Rs 8,000.
[101A} 2.
The ceiling of Rs. 8,000 is not necessary to be imposed and if that is applied, a situation giving rise to the application of Article 14 of the Constitution does arise.
[101E] 3.
Fixing the pension at Rs. 48,000 per annum held that the ceiling in paragraph 2(b) of Part III of the First Schedule is unsustainable under Article 14 of the Constitution and would not be operative.
[101F]
|
: Criminal Appeal No. 37 of 1991.
From the Judgment and Order dated 7.3.
1989 of the Kerala High Court in Crl.
Appeal No. 321 of 1986.
P.S Poti and T.T. Kunhikannan for the Appellants.
T.S Krishnamoorthy lyer and N. Sudhakaran for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
The respondents were found guilty by the trial Court for contravention of para 21 read with para 18 of the Drugs (Prices Control) Order, 1979 (hereinafter referred to as 'the Order") issued under Section 3 of the (hereinafter referred to as 'the Act ') and accordingly convicted under Section 7 of the Act.
Respondent No. 1 firm was sentenced to a fine of Rs.2,000 while respondents 2 and 3 who were the managing partner and pharmacist of the firm were sentenced to three months simple imprisonment.
The High Court of Kerala at Ernakulam (hereinafter referred to as 'the High Court ') allowed their appeal against the con 67 viction and sentence and acquitted all of them.
Hence, this special leave petition against their acquittal.
Leave granted.
The allegation on which the prosecution of the respondents was based is that they collected Rs. 90 in excess of the maximum retail price fixed for the sale of 15 tablets of Largactil of 100 mg each and 60p.
in excess for 100 tablets of Hipnotex of 5 mg each from one Sepastian Joseph, a Nursing Assistant in the Medical College Hospital, Kottayam, on 4.2.1985.
It is alleged that recovery of the amount in excess of the maximum retail price fixed for the sale of these medicines under the drugs (Prices Control) Order, 1979 was a contravention of the provisions contained therein which is punishable under Section 7 of the .
The trial Court rejected the several defences raised by the respondents and found them guilty of contravention of para 18 read with para 21 of the Order which is an offence punishable under Section 7 of the .
The respondents were accordingly convicted and sentenced as aforesaid.
As earlier stated, the respondents ' appeal to the High Court has succeeded and they have all been acquitted.
The High Court has taken th view that on these allegations, contravention of para 18 of the Order is not made out.
The High Court has summarised its conclusion as under: "The upshot of the above discussion is that Largactil and Hipnotex Chlorpromazine and nitrazepam are only bulk drugs and not formulation.
The appellants, none of whom is a manufacturer or distributor, cannot be convicted for contravention of paragraph 18 of the Order.
(The position is seemingly different in the Order of 1987 because paragraph 18 of the Order of 1987 contains inhibition against sale of bulk drugs also).
In the result, I allow this appeal and set aside the conviction and sentence.
The appellants are acquitted and are directed to be set at liberty.
The real question for decision in the present case is the correctness of the construction made by the High Court of the provisions of the 'Order '.
Shri P.S. Poti, learned counsel for the appellants contended that the grievance in this appeal is really to the construction 68 made by the High Court of the provisions of the 'Order ' which is affecting a large number of similar matters are not to the outcome of individual matter before us.
Learned Counsel contended that the appellants are not much interested in assailing the acquittal in the present individual matter, but the correct construction of the provisions of the Order is necessary for future guidance.
In our opinion, it is necessary to examine the provisions of the 'Order. ' and to indicate their correct meaning in view of the general importance thereof.
The Order was made by the Central Government in exercise of the powers conferred by Section 3 of the .
Para 2 of the order contains the definitions, some of which may be referred.
Clause (a) of para 2 defines 'bulk drug ' to mean any substance. . 'which is used as such, or as an ingredient in any formulations '.
'Dealer ' is defined in clause(b) to mean a person carrying on the business of purchase or sale of drugs, whether as a wholesaler or retailer and includes an agent of a dealer. 'Drug ' is defined in clause (d) to include 'bulk drugs and formulations '.
Clause (f) defines 'formulation ' to mean a medicine processed out of, or containing 'one or more bulk drugs or drug '.
Clause (q) defines 'price list ' to mean a price list referred to in this Order.
Clause (r) defines 'retail price ' to mean the retail price of a drug arrived at or fixed in accordance with the provisions of this Order.
The other clauses of Para 2 contain other definitions including the definitions of 'retailer ' and 'wholesaler.
It is not necessary to refer to them in detail.
Para 3 contains the power to fix the maximum sale price of indigenosly manufactured bulk drugs specified in First or Second Schedule of the Order.
Para 19 requires every manufacturer or importer of a formulation to furnish to the dealers, State Drug Controllers and the Government, a price list showing the price at which the formulation is sold to a retailer and every dealer is required to display the price list at a conspicuous part of his business premises.
Part 20 required every manufacturer, importer or distributor of a formulation to display on label of the container the maximum retail price of that formulation.
Paras 18, 21 and 22, the construction of which is in dispute, read as under: "18.
Certain provisions of this Order to apply to formulations not included in Category I, Category II or Category III of Third Schedule.
The provision of this Order, other than those contained in paragraphs 10 to 14 (both inclusive), shall apply, to any formulation not specified in Category I, Category II or Category III of the Third Schedule." 69 :21.
Control of sale prices of formulations specified in Third Schedule.
No retailer shall sell any formulations specified in any of the categories in the Third Schedule to any person at a price exceeding the price specified in the current price list or the price indicated on the label of the container or pack thereof whichever is less plus the local taxes, if any, payable.
Explanation.
For the purposes of this paragraph, "local taxes" include sales tax and octroi actually paid by the retailer under any law in force in a particular area." "22.
Sale of split quantities of formulations.
No dealer shall sell loose quantity of any formulation drawn from a bottle pack of such formulation at a price which exceeds the pro rate price of the formulation plus 5 per cent thereof.
provided that nothing in this behalf shall apply to any formulation compounded at the premises of the dealer.
" The view taken by the High Court is that the two formulations, namely, Largactil and Hipnotex, the sale of which at an excess price is alleged to be the contravention of the Order, not being formulations specified in any of the categories in the Third Schedule to the Order, the prohibition contained in para 21 of the Order has no application.
On this basis, the view taken is that the sale of these two formulations in excess of the retail price fixed for their sale is not a contravention of any provision of the Order to attract the punishment provided under Section 7 of the .
It has also been held by the High Court that none of these two medicines is a formulation as defined in clause (f) of para 2 of the Order but merely a bulk drug, which fact also excludes the application of para 21 of the Order.
It appears that this position was not seriously contested even by the learned public prosecutor in the Courts below.
In our opinion, such a view results from a mis reading of the material provisions of the Order.
The definition of 'bulk drug ' given in clause (a) of para 2 shows that it means any substance 'which is used as such ' or 'as an ingredient in any formulations '.
Thus a bulk drug is one which may be capable of use by itself or as an ingredient in any formulation.
Drug is defined in clause (d) of para 2 to include 'bulk drugs ' and 'formulations '.
Clause 70 (f) then defines `formulation ' to mean any medicine processed out of or containing one or more bulk drugs or drug.
Thus formulation is a medicine which may comprise even of one bulk drug by itself or more than one bulk drug.
The definition of 'formulation ' is thus very wide and includes even one bulk drug where that one bulk drug by itself is treated as a medicine.
It is difficult to uphold the view that the two medicines, namely, Largactil and Hipnotex, do not fall within the definition of 'formulation ' contained in clause (f) of para 2 of the Order.
One of the two difficulties pointed out by the High Court in applying para 21 of the Order to the present case is clearly out of the way.
The only surviving question now is whether para 21 of the Order is rendered inapplicable merely because none of these formulations is specified in any of the categories in the Third Schedule to the Order.
In other words: is the High Court correct in taking the view that notwithstanding the fixation of the maximum retail price of these formulations in accordance with the provisions of the Drugs (Prices Control) Order, 1979, there is no provision made therein to prohibit their sale at an amount in excess of the maximum retail price fixed under the Order to attract the punishment provided in Section 7 of the ? In our opinion, it is not so.
There is no controversy that by an amendment made in 1987 to which we shall refer later, the matter has been placed beyond the scope of any argument.
However, even prior to that amendment, the matter is clear by the express provision contained in para 18 as it existed even then.
Para 18 clearly says that the provisions of this Order 'other than those contained in paragraphs 10 to 14 (both inclusive) ' shall apply to any formulations not specified in Category I, Category II or Category III of the Third Schedule.
It is plain that the provisions of the Order except paragraphs 10 to 14 which have been expressly excluded, are specifically made applicable to formulations which are not specified in the Third Schedule.
It is, therefore, clear that the provisions of para 21 which in terms are meant to control sale prices of formulations specified in the Third Schedule as also the other provisions of the Order which in terms may be of limited application are specifically made applicable to all formulations as defined in the Order except only paragraphs 10 14 which have been expressly excluded.
It is by virtue of para 18 that the prohibition contained in para 21 has been made applicable to formations not specified in the Third Schedule.
This is also the logical view to take.
The contrary view would lead to the conclusion that inspite of the price fixation made for the formula 71 tions not specified in the Third Schedule, there is no prohibition made against its sale for an amount in excess thereof with the result that the price fixation would be an exercise in futility.
The Drugs (Prices Control) Order, 1987, which has replaced the Drugs (Prices Control) Order, 1979, contains paras 18 and 21 differently worded to show clearly that such an argument is now not even available under the 1987 Order.
We are clearly of the opinion that the High Court misconstrued the provisions of the Drugs (Prices Control) Order, 1979, to take the view that none of the aforesaid two medicines, namely, Largactil and Hipnotex are 'formulations ' as defined in Section 2(f) of the Drugs (Prices Control) Order, 1979; and that the sale of these two medicines for an amount in excess of the maximum retail price fixed is not punishable under para 21 read with para 18 of the Order.
The only question now is of the order we should make in this matter.
Shri T.S. Krishnamurthy lyer, learned counsel for the respondents very fairly stated that the construction we have made of the several provisions of the 1979 Order including paras 18 and 21 thereof cannot be seriously disputed.
However, he contended that the respondents had raised several defences none of which has been considered by the High Court since it acquitted the respondents only on the construction it made of these provisions.
He, therefore, argued that setting aside the High Court 's order should not automatically lead to restoration of conviction and sentence made by the trial court since other defences raised by the respondents remain for consideration.
He suggested that in view of the lapse of several years from the date of the alleged offence and the peculiar facts of this case, we may merely set aside the High Court 's order but not restore the conviction and sentence of the respondents.
He pointed out that the customer to whom the medicines are alleged to have been sold at an excess price is himself a member of the nursing staff of a hospital and it is unreasonable to take the view that he would pay Rs. 99 for 15 tablets of Largactil against its retail price of Rs. 9 only, particularly when he had been purchasing these drugs for a long time.
We find merit in the contention of learned counsel for the respondents and we are inclined to adopt the course suggested by him in the light of peculiar facts of this case.
In our opinion, it would be inappropriate after the lapse of several years to send back the case to the High Court for the deciding the remaining defences raised by the respondents which would further prolong conclusion of the trial.
It is also clear that without rejecting the other defences, it is not possible to uphold the conviction and sentence 72 awarded by the trial court.
In such a situation, the course suggested by Shri T.S. Krishnamurthy lyer, particularly in view of the stand taken by Shri P.S. Poti on behalf of the appellants, that the appellants are more keen to know the correct meaning of the provisions of the Order, appears to be the proper course to adopt in the present case.
Consequently, we reject the High Court 's construction of the provisions of the 'Order ' and hold that allegations in the present case, if proved, would amount to a contravention of para 21 read with para 18 of the Drugs (Prices Control) Order, 1979, which is punishable under Section 7 of the .
However, for the reasons already given, we do not interfere with the acquittal of the respondents.
The appeal is disposed of accordingly.
Y.L. Lal Appeal allowed partly.
| IN-Abs | Respondent No. 1 is a firm dealing in medicines and respondents 2 and 3 are its managing parnter and pharmacist.
In contravention of the provisions of Drugs (Price Control) Order 1979, para 21 read with para 18 they charged from a Nursing Assitant of the Medical College Hospital, Kottayam, Rs. 90 in excess of the maximum retail price fixed for the sale of 15 tablets of Largactil of 100 mg each and 60p in excess for 100 tablets of Hipnotex of 5mg each.
According to the prosecution this act of their 's being in contravention of the provisions of the Order, was punishable under Section 7 of the and accordingly prosecution was initiated against the respondents.
The trial court found the respondents guilty and convicted them and sentenced respondent No. 1 firm to a fine of Rs. 2.000 and respondents 2 and 3 to three months simple imprisonment.
On appeal, the High Court of Kerala acquitted them taking the view that none of the aforesaid two medicines, namely Largactil and Hipnotex were 'formulations ' as defined in Section 2(f) of the Drugs (Price Control) Order 1979 and as such the sale of these drugs at higher rates than the prescribed was not punishable under paras 21 read with para 18 of the order.
The appellants have thus filed this appeal after obtaining special leave.
The question for decision in the present case relates to the correctness of the construction made by the High Court of the provisions of the 'Order '.
Partly allowing the appeal, this Court, HELD: A bulk drug is one which may be capable of use by itself or as an ingredient in any formulation.
[69G] Formulation is a medicine which may comprise even of one bulk 66 drug by itself or more than one bulk drug.
The definition of 'Formulation ' is very wide and includes even one bulk drug where that one bulk drug by itself is treated as a medicine.
[70B] The provisions of para 21 which in terms are meant to control sale prices of formulations specified in the Third Schedule as also the other provisions of the Order which in terms may be of limited application are specifically made applicable to all formulations as defined in the Order except only paragraphs 10 to 14 which have been expressly excluded.
It is by virtue of para 18 that the prohibition contained in para 21 has been made applicable to formulations not specified in the Third Schedule.
[70G H] The High Court misconstrued the provisions of the Drugs (Price Control) Order 1979.
The Court rejected that construction and held that the allegations in the present case, if proved, would amount to a contravention of para 21 read with para 18 of the 'Order ' which is punishable under Section 7 of the .
The Court however did not interfere with the acquittal of the respondents.
[72B C]
|
ivil Appeal Nos.
2646 52 of 1986.
From the Judgement and order dated the 12.10.1981 of the Punjab and Haryana High Court in Regular First Appeal Nos. 758, 760, 787, 814, 769, 1011 and 789 of 1979.
Govind Mukhoty, R.P. Bhatt, D.K. Garg, Prem Malhotra, K.C. Sharma and R.C. Kaushik for the Appellants.
S.P. Goel and Mahabir Singh for the Respondents.
The Judgement of the Court was delivered by PUNCHHI, J.
This bunch of appeals and special leave petitions are at the instance of the dissatisfied land owners whose lands were acquired in bulk by the State of Haryana, in the town of Hissar, for establishing a residential cum commercial complex.
The land totalled approximately 331 acres.
The Acquisition Collector appointed to determine the compensation belted the land in three parts awarding for block `A ' compensation at the rate of Rs. 4.13 per sq.
; for block `B ' at the rate of Rs. 2.43 per sq.
and for block `C ' at Rs. 1.65 per sq. yd.
The dissatisfied claimants took the matter in reference to the Addl.
District Judge, Hissar who maintained the belting, but raised the compensation for block `A ' to Rs. 10 per sq.
, block `B ' to Rs. 6 per sq.
and block `C ' to Rs. 4.50 per sq.
When the matter was taken up in First Appeal before the High Court, it was persuaded to wipe out `C ' and confine it to belting `A ' & `B '.
The entire evidence was considered by the High Court meticulously to come to the conclusion that belt `A ' should fetch compensation at the rate of Rs. 23 per sq.
and belt `B ' Rs. 16 per sq.
Still 3 not satisfied the claimants/appellants by special leave have approached this Court for further enhancement.
The goal of the appellants is that the belting as such should go and the land should uniformally be assessed to compensation at the rate of Rs. 42 per sq.
The foundation for the argument in the first instance is that the acquired land comprises of a large area, situated alongside the G.T. Road leading from Delhi to Hissar town in a strip approximately 3 kms.
in length on the other side of which was the railway line.
It was also commented that the belting had been done in a haphazard way.
Keeping in regard the nature of the land, it was asserted that the land having been acquired for building purposes, its quality as agricultural land should not have weighed with the courts below and compensation should have assessed uniformally space wise.
These arguments does not appeal to us.
Though the acquisition of ground space is the object in view, yet the tiller 's affect to keep his land more productive cannot be lost sight of in awarding compensation.
In fact the belting has kept in regard the quality of the land.
This is the reason for its appearing to be a haphazard line on the plan.
On the second limb of the argument, that it should have fetched uniform rate of compensation, we find no supportive material on record and done has been pressed before us on which we could change the decision, merely on the comment that belting is normally not resorted to.
We are not persuaded in the instant case to discard the belting system and lean towards uniformity.
The rate of Rs. 42 per sq.
is claimed on the basis that a part of land measuring about 125 sq.
which formed part of the acquired land, was, before the acquisition, purchased by a purchaser at the rate of Rs. 42 per sq.
and that was an indication that the land acquired would have fetched Rs. 42 per sq.
The High Court had rejected the contention of the appellants taking the twin view that firstly the land involved was small in measure and secondly it was fully constructed having a house and a godown facing the G. T. Road itself.
We find this reasoning sound.
Having not been able to persuade us, each of learned counsel for the appellants differently putforth that the sole instance which the High Court had rejected had later been relied by it in another case pertaining to other land under acquisition under the same notification and having awarded the rate of Rs. 42 per sq.
We regret our inability to entertain the argument because there is nothing on record to support the same.
The judgement in which such view has statedly been taken has not been brought on record as a piece of evidence to be relied upon by the claimants and no permission has 4 been sought to adduce additional evidence.
The said judgement cannot be used as a precedent even to persuade us to take the view that the rate should be Rs. 42 per sq.
for belt `A ' if not uniformally.
All these factors cumulatively lead us to the view that appellants have no case for enhancement and have been adequately compensated for the land acquired.
No interference is thus required in the instant case.
Accordingly for the view above taken, we dismiss the appeals as also the special leave petitions.
I.A. for condonation of delay in SLP unnumbered titled Kanhya Lal vs State of Haryana, is dismissed as withdrawn at the askance of the learned counsel for the appellant.
There shall be no order as to costs in all these cases.
V.P.R Appeals dismissed.
| IN-Abs | The appellants were the claimants land owners, whose lands were acquired for establishing a residential cum commercial complex.
The Land Acquisition Collector belting the land in three parts awarded compensation for block `A ' at the rate of Rs. 4.13 per sq.yd.; for block `B ' at the rate of Rs. 2.43 per sq.yd.
and for block `C ' at Rs. 1.65 per sq.
In First Appeal the High Court was persuaded to confine to belting `A ' & `B '.
The High Court fixed compensation at the rate of Rs. 23 per sq.yd.
for belt `A ' and for belt `B ' Rs. 16 per sq.yd.
The Claimants by special leave filed present appeals for enhancement contending that the acquired land comprises of a large area, situated alongside the G.T. Road in a strip approximately 3 kms.
in length on the other side of which was the railway line; that the belting had been done in a haphazard way; that the land having been acquired for building purposes, its quality as agricultural land should not have weighed; and compensation should have been assessed uniformally.
Dismissing the appeals, this Court, HELD: 1.
The rate of Rs. 42 per sq.yd. is claimed on the basis that a part of land measuring about 125 sq.yd. which found part of the acquired land, was, before the acquisition, purchased by a purchaser at the rate of Rs. 42 per sq.
and that was an indication that the land acquired would have fetched Rs. 42 per sq.yd.
[3E] 2.
The High Court had rejected the contention of the appellants taking the twin view that firstly the land involved was small in measure and secondly it was fully constructed having a house and a godown facing the G.T. Road itself.
This reasoning is sound.
[3F] 3.
The judgement in which Rs. 42 had been awarded in another 2 case has not been brought on record as a piece of evidence to be relied upon by the claimants, and no permission has been sought to adduce additional evidence.
The said judgement cannot therefore be used as a precedent even to persuade this Court to take the view that the rate should be Rs. 42 per sq.yd.
for belt `A ' if not uniformally.
All these factors cumulatively lead to the view that appellants have no case for enhancement and have been adequately compensated for the land acquired.
[3H; & A B]
|
Civil Appeal No. 763 of 1977.
From the Judgment and Order dated 30.7.1976 of the Calcutta High Court in Appeal No. 167 of 1972.
Raja Ram Agrawal, K.B. Rana and Praveen Kumar for Khaitan & Co. for the Appellant.
A. Subba Rao, P. Parmeshwaran and A.D.N. Rao for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
This appeal by special leave has been preferred against the judgment dated 30th July, 1976 of the Calcutta High Court in Appeal from Original Order No. 167/1972.
The facts in nutshell necessary for the decision of this appeal are that the Appellant Company, a licensee under the Central Excise and Salt Act, 1944 (hereinafter referred to as the Act) carried on during the relevant time, namely, 1st September, 1961 to 26th September, 1963, business of manufacturing different types of glasswared which were excisable goods under the Act.
The appellant used to present A.R.I. forms accompanied with price list of the goods and after paying excise duties calculated on the basis of the price lists used to remove the goods.
The appellant 's office was searched by the Excise Authorities on 26 September, 1963 and several documents, books and papers were seized.
As a consequence of this search and seizure it transpired that the appellant was maintaining two sets of bills.
The bills of one set were those on the basis of which the appellant used to pay excise duty 46 before clearance of the goods and those of the other were such which were never issued to the dealers.
In these two sets of bills inter alia the rate of discount was differently shown.
A notice dated 26th March, 1968 was served on the appellant by the Assistant collector of Central Excise, Calcutta II Division, Calcutta stating that it appeared that the appellant had, during the relevant period, not paid excise duty on the goods at the prices at which they were sold but duty was paid at lower rates declared by it.
The appellant was required to show cause as to why duty amounting to Rs. 1,43,633.84 p. on the prices at which the goods were actually sold, as found on scrutiny of sale vouchers/sale documents should not be recovered under rule 10A of the Central Excise Rule, 1944 (hereinafter referred to as the Rules.) The appellant, in reply to the show cause notice, inter alia asserted that it was the provisions of Rule 10 and not Rule 10A of the Rules which were attracted to the facts of the instant case and that consequently the initiation of proceedings against the appellant was barred by time.
This plea did not find favour with the Excise Authorities and the appellant was required, by order dated 26th August, 1968, to pay to the Central Government, an additional duty of Rs. 1,41,829.11 p.
This order was challenged by the appellant before the High Court under Article 226 of the Constitution of India.
A learned Single Judge of the High Court accepted the contention of the Rule 10 and not Rule 10A of the Rules was applicable and on this view the order dated 26th August, 1968 was quashed.
Aggrieved by that order, the respondents preferred an appeal before a Division Bench of the High Court.
The judgment of the learned Single Judge was reversed and on the finding that it was a case falling under Rule 10A, the writ petition was dismissed by the judgment under appeal.
The only point which has been urged by learned counsel for the appellant in support of this appeal is that the learned Single Judge was right in taking the view that the case fell within the purview of Rule 10 of the Rules and the Division Bench committed an error in reversing his judgment.
For the respondents on the other hand, it has been urged that on the fact found by the division Bench and indeed on the case set up by the appellant itself no exception could be taken to the finding of the Division Bench that it was Rule 10A of the Rules and not Rule 10 which was attracted to the facts of the instant case.
In order to appreciate the respective submissions made by learned counsel for the parties it would be useful to extract Rules 10 and 10A.
They read as hereunder: "10.
Recovery of duties or charges short levied or errones 47 ously refunded When duties or charges have been short levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owning to such cause, erroneously refunded, the person chargeable with the duty or charge so short levies, or to whom such refund has been erroneously made, shall pay the deficiency or the amount paid to him in excess as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners ' account, current, if any, or from the date of making the refund." "10A. Residuary powers for recovery of sums due to Government Where these Rules do not make any specific provision for the collection any duty, or of any deficiency in duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall on a written demand made by the proper officer, be paid to such person and at such time and place as the proper officer may specify.
In elaboration of his submission that it was a case covered by Rule 10 of the Rules learned counsel for the appellant pointed out that since the case of the respondents was that on the basis of the documents seized during the search of the appellant 's office on 26th September, 1963 it was found that the duty paid by the appellant on the basis of price lists furnished by the appellant at the time of clearance of the goods was deficient, it was a case where duty had been short levied "through mis statement as to the quantity, description or value of such goods on the part of the owner" as contemplated by Rule 10.
We find it difficult to agree with the submission.
The procedure adopted by the appellant/was indicated by the appellant under its letter dated 23rd March, 1961, a portion whereof as extracted by the learned Single Judge reads as hereunder: "We enclose herewith our three price lists for 1) Bottles and phials 2) Glass Wares and 3) Fancy Wares for the purposes of provisional assessment.
These price are inclusive of Central Excise duty.
As regards Trade discounts to 48 be deducted from the said prices as per Section 4 of the Act we declare that 1) 25% should be deducted from the price list for bottles and phials.
2) 35% from the price list for glass wares and 3) 20% from the price list for fancy wares over and above necessary deduction for Central Excise duty included in the prices.
" The learned Single Judge has also pointed out that the appellant used to clear the goods by executing bond and that in the specimen copy of the bond produced in court it was stated that whereas final assessment of excise duty of glass and glasswares made by the appellant from time to time could not be made for want of full particulars as regards value, description, quality or proof thereof or for non completion of chemical or other tests and whereas the appellant had requested the Excise Authorities as per Rule 9B of the Rules to make provisional assessment of excise duty of the goods pending final assessment, the appellent was giving a guarantee to the extent of the sum mentioned in the bond for payment of the duties.
The learned Single Judge has also pointed out that it appeared to be the common case of the parties that in order to facilitate the assessment of the goods by Excise Authorities, the appellant used to file the price list in advance and after acceptance provisionally of the price list, the goods used to be cleared and if subsequently and discrepancy was detected or found, the same used to be paid by the appellant.
The question as to whether Rule 10 or Rule 10A of the Rules was applicable has to be determined in the background of the appellant as indicated above.
The legal position that Rule 10A does not apply where the case is covered by Rule 10 of the Rules is well settle in view of the decision of this Court in N.B. Sanjana vs Elphinstone Mills, ; , on which reliance has been placed by learned counsel for the appellant.
Consequently, Rule 10A could be attracted only if the case does not fall within the purview of Rule 10.
It was conceded before the learned Single Judge on behalf of the respondents that the respondents were not proceeding under the provision of Rule 9B.
On this basis and on his own finding also that Rule 9B was not attracted, the learned Single Judge held that it was not a case of provisional assessment but a case of regular assessment in pursuance whereof duty was paid by the appelant and that since the case of the respondents was that the appellant had manufactured documents as was revealed as a consequence of the search and seizure referred to above it was a case of short levy due to mis statement by the appellant.
Consequently, the case clearly fell 49 within the purview of Rule 10 of the Rules.
The Division Bench of the High Court in appeal did not, and in our opinion rightly, subscribe to the aforesaid finding.
Simply because Rule 9B of the Rules was conceded not to have been taken recourse to by the respondents so that a provisional assessment could be said to have come into existence in its statutory sense as contemplated by the said rule when duty was paid at the time of clearance of the goods, the conclusion was not inescapable, that a final assessment had come into being at that time.
In our opinion, in view of the procedure adopted by the appellant referred to above it was apparently a case where duty was calculated on the basis of price lists supplied by the appellant to facilitate the clearance of the goods and the correct amount of duty payable was yet to be determined after subsequent varification and appellant was under an obligation to pay, on the basis of the bond executed by them, the difference of the amount of the duty paid at the time of clearance of the goods and the amount found payable after subsequent verification.
In the judgment appealed against the Division Bench of the High Court has found that there was no assessment as is understood in the eye of law but only a mechanical settlement or adjustment of duties on the basis of the sale prices filed by the appellant had been made and at best, it was a case of an incomplete assessment which the Excise Authorities were entitled to complete under Rule 10A.
In taking this view the Division Bench of the High Court has relied on a decision of this Court in Assistant Collector of Central Excise, Calcutta Division vs national Tobacco Co. of India Ltd.; , In that case also the Company used to furnish quarterly price lists which used to be accepted for purpose of enabling the Company to clear its goods and according to the Excise Authorities these used to be verified afterwards by obtaining evidence of actual sale in the market before issuing final certificates that the duty had been fully paid up.
The prices of the goods to be cleared were furnished by the Company on forms known as A.R.I. forms in that case also.
It was held that only a mechanical adjustment for settlement of accounts by making debit entries was gone through and that it could not be said that any such adjustment was assessment which was a quasi judicial process and involved due application of mind to the fact as well the requirements of law.
With regards to the debit entries it was held that the making of such entries was only a mode of collection of tax and even if payment or actual collection of tax could be spoken of as a de facto "levy" it was only provisional and not final.
It could only be clothed or invested with the validity after carrying out the obligation to make an assessment to justify it.
It was also held that it was the process of adjustment that really determined whether levy was short or complete.
It was not a factual or presumed levy which could in 50 a disputed case prove an "assessment.
" This had to be done by proof of the actual steps taken which constitute assessment.
We are of the opinion that in view of the procedure adopted by the appellant in the instant case referred to above and the law laid down by this Court in the case of national Tobacco Co. of India Ltd. (supra) it is not possible to take any exception to the finding of the Division Bench in the judgment appealed against that it was a case which fell within the purview of Rule 10A and not Rule 10 of the Rules.
In the result, we find no merit in this appeal.
It is accordingly dismissed with costs.
N.V.K. Appeal dismissed.
| IN-Abs | The appellant company a licensee under the central Excises and Salt Act, 1944 and during the relevant period namely 1st September, 1961 to 26th September, 1963 carried on the business of manufacturing different types of glass wares which were excisable goods under the Act.
The appellant used to present A.R.I. forms accompanied with price lists of the goods and after paying excise duties calculated on the basis of the price lists used to remove the goods.
The office of the appellant was searched by the Excise Authorities on 26th September, 1963 and several documents, books and papers were seized, and as a consequence thereof it transpired that the appellants were maintaining two sets of bills.
The bills of one set were those on the basis of which the appellant used to pay excise duty before clearance of the goods and those of the other were such which were never issued to the dealers.
In these two sets of bills, the rate of discount was differently shown.
A notice dated 26th March, 1968 was served on the appellant by the Assistant Collector stating that it appeared that during the relevant period the appellant had not paid excise duty on the goods at the prices at which they were sold, but duty was paid at lower rates and requiring it to show cause as to why duty on the prices at which the good were actually sold, as found on scrutiny of sale vouchers/sale documents should not be recovered under Rule 10A of the Central Excise Rules, 1944.
In reply the appellant asserted that it was the provision of Rule 10 and not Rule 10A which was attracted to the facts and consequently the initiation of proceedings was barred by time.
This plea did not find favour with the Excise Authorities, and the appellant was required to pay the additional duty of Rs. 1.41 lakhs.
The aforesaid order was challenged by the appellant before the 44 High Court under Article 226 of the Constitution and a Single Judge accepted the contention of the appellant the Rule 10 and not Rule 10A of the Rules was applicable and on this view quashed the order dated 26th August, 1968 The respondents preferred and appeal to the Division Bench which has reversed the order of the Single Judge, on the finding that it was a case falling Rule 10A and dismissed the writ petition.
In the appeal to this Court it was contended that the single Judge was right in taking the view that the case fell within the purview of Rule 10 of the Rules and that the Division Bench committed an error in reversing the Judgment, while the Revenue contested the appeal urging that on the facts found by the division Bench, and indeed on the case set up by the appellant itself no exception could be taken to the finding of the Division Bench that it was Rule 10A and not Rule 10 which was attracted to the facts of the case.
Dismissing the Appeal, this Court, HELD: 1.
The question as to whether Rule 10 or Rule 10A was applicable has to be determined in the background of the procedure which was followed.
The legal position is that Rule 10A does not apply where the case is covered by Rule 10 of the Rules.
[48E] N.B. Sanjana vs Elphinstone Mills, ; relied on.
Simply because Rule 9B of the Rules, was conceded not to have been taken recourse to by the respondents so that provisional assessment could be said to have come into existence in its statutory sense as contemplated by the said rule when duty was paid at the time of clearance of the goods, the conclusion was not inescapable, that a final assessment had came into being at that time.
[49A B] 3.
In view of the procedure adopted by the appellant it was apparently a case where duty was calculated on the basis of price lists supplied by the appellant to facilitate the clearance of the goods and the correct amount of duty payable was yet to be determined after subsequent verification, and appellant was under an obligation to pay, on the basis of the bond executed by them, the difference of the amount of the duty paid at the time of clearance of the goods and the amount found payable after subsequent varification.
[49B C] 4.
The Division Bench of the High Court has found that there was no assessment as is understood in the eye of law, but only a mechanical settlement or adjustment of duties on the basis of the sale prices filed by the appellant had been made and at best, it was a case of incomplete assessment which the Excise Authorities were entitle to complete under Rule 10A.[49D] Assistant Collector of Central Excise, Calcutta Division vs National Tobacco Co. of India Ltd., ; , referred to.
The instant case therefore falls within the purview of Rule 10A and not Rule 10 of the Rules.
|
13 & 38.
41 of 57 and 55 of 1958.
Petitions under Article 32 of the Constitution of India for the enforcement of Fundamental rights.
V. M. Limaye and section section Shukla, for the petitioners (In Petitions Nos. 13, 38 411/57).
492 Purshottam Tricumdas and J. B. Dadachanji, for the petitioner (In Petition No. 55/58).
H. N. Sanyal, Additional Solicitor General of India, H. J. Umrigar, K. L. Hathi and R. H. Dhebar, for the respondent.
November 18.
The Judgment of the Court was delivered by BHAGWATI, J.
These six petitions under article 32 of the Constitution challenge the vires of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1956 (Bom.
XIII of 1956) (hereinafter referred to as the " impugned Act ").
It was an Act further to amend the Bombay Tenancy and Agricultural Lands Act, 1948 (Bom.
LXVII of 1948) (hereinafter called the 1948 Act ").
The petitioners are citizens of India and landholders within the meaning of the 1948 Act holding several acres of land within the State of Bombay out of which a few acres are under their own cultivation, the bulk of the lands being under the cultivation of tenantsexcept in the case of the petitioners in Petition No. 58 of 1958 where the whole of the lands are under the cultivation of tenants.
The 1948 Act had been passed by the State Legislature as a measure of agrarian reform on December 28, 1948, with a view to amend the law relating to tenancies of agricultural lands and to make certain other provisions in regard to those lands and the objectives sought to be achieved were thus set out in the second paragraph of the preamble: " AND WHEREAS on account of the neglect of a landholder or disputes between a landholder and his tenants, the cultivation of his estate has seriously suffered, or for the purpose of improving the economic and social conditions of peasants or ensuring the full and efficient use of land for agricultural purposes, it is expedient to assume management of estates held by landholders and to regulate and impose restrictions on the transfer of agricultural lands, dwelling houses, sites and lands appurtenant thereto belonging to or occupied by agriculturists, agricultural labourers and (1) 493 artisans in the Province of Bombay and to make provisions for certain other purposes hereinafter appearing. . .
Section 2(8) of the said Act defined " Land " to mean: "(a) land which is used for agricultural purposes, and includes (a) the sites of farm buildings appurtenant to such land; and used for agricultural purposes, and (b). . . . . . . . . . (i) the sites of dwelling houses occupied by agriculturists, agricultural labourers or artisans and land appurtenant to such dwelling houses.
(ii). . . . . . . . . . " "Landholder " was defined in section 2(9) of the said Act to mean: "a zamindar, jagirdar, saranjandar, inamdar, talukdar, malik or a khot or any person not hereinbefore specified who is a holder of land or who is interested in land, and whom the State Government has declared on account of the extent and the value of the land or his interests therein to be a land bolder for the purposes of this Act.
" Under section 2(21) of the said Act the words and expressions used in the Act but not defined were to have the meaning assigned to them in the Bombay Land Revenue Code, 1879, and the , as the case may be.
With a view to achieve the objective of establishing 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 Legislature, 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 good thus eliminating concentration of wealth and means of production to the common detriment.
The said Act received the assent of the President on March 16, 1956, was published in the Bombay Government 494 Gazette on March 29, 1956, and came into force throughout the State on August 1, 1956.
In about November, 1956, certain landholders from Kolhapur and Sholapur districts in the State of Bombay filed petitions in the Bombay High Court under article 226 of the Constitution challenging the constitutionality of the impugned Act on various grounds. ' A Division Bench of the Bombay High Court pronounced its judgment on February 21, 1957, dismissing those petitions with costs except in regard to a declaration as regards the invalidity of section 88D of the Act.
The petitioners herein thereupon filed these petitions under article 32 of the Constitution challenging the vires of the impugned Act and praying for a writ of mandamus against the State of Bombay ordering them to forbear from enforcing or taking any steps in enforcement of the act, costs and further reliefs.
Petition No. 13 of 1957 appears to have been filed on December 3, 1956, but effective steps therein were taken only when an application for, stay with a prayer for an ex parte order being C.M.P. No. 359 of 1957 was filed herein on March 21, 1957.
Petitions Nos.
38 to 41 of 1957 were filed on March 21, 1957, and Petition No. 55 of 1958 was filed on March 19, 1958.
All these petitions followed a common pattern and the main grounds of attack were: that the State Legislature was not competent to pass the said Act, the topic of legislation not being covered by any 'entry in the State List; that the said Act was beyond the am bit of article 31 A of the Constitution and was therefore vulnerable as infringing the fundamental rights enshrined in articles 14, 19 and 31 thereof; that the provisions of the said Act in fact infringed the fundamental rights of the petitioners conferred upon them by articles 14.
119 and 31 of the Constitution; that the said Act was a piece of colourable legislation and in any event a part of the provisions thereof suffered from the vice of excessive delegation of legislative power.
The answer of the State was that the impugned Act was covered by Entry No. 18 in List 11 of the Seventh Schedule to the Constitution, that it was a piece of legislation for the extinguishment or modification of 495 rights in relation to estates within the definition thereof in article 31 A of the Constitution and that therefore it was not open to challenge under articles 14, 19 and 31 thereof and that it was neither a piece of colourable legislation nor did any part thereof come within the mischief of excessive delegation.
As to the legislative competence of the State Legislature to pass the impugned Act the question lies within a very narrow compass.
As already stated, the impugned Act was a further measure of agrarian reform enacted with a view to further amend the 1948 Act and the object of the enactment was to bring about such distribution of the ownership and, control of agricultural lands as best to subserve the common good.
This object was sought to be achieved by fixing ceiling areas of lands which could be held by a per son and by prescribing what was an economic holding.
It sought to equitably distribute the lands between the landholders and the tenants and except in those cases where the landholder wanted the land for cultivating the same personally for which due provision was made in the Act, transferred by way of compulsory purchase all the other lands to tenants in possession of the same with effect from April 1, 1957, which was called the " tillers day ".
Provision 'Was also made for disposal of balance of lands after purchase by tenants and the basic idea underlying the provisions of the impugned Act was to prevent the concentration of agricultural lands in the hands of landholders to the common detriment.
The tiller or the cultivator was brought into direct contact with the State eliminating thereby the landholders who were in the position of intermediaries.
The enactment thus affected the relation between landlord and tenant, provided for the transfer and alienation of agricultural lands, aimed at land improvement and was broadly stated a legislation in regard to the rights in or over land: categories specifically referred to in Entry 18 in List 11 of the Seventh Schedule to the Constitution, which specifies the head of legislation as " land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of 496 rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization ".
It is well settled that these heads of legislation should not be construed in a narrow and pedantic sense but should be given a large and liberal interpretation.
As was observed by the Judicial Committee of the Privy Council in British Coal Corporation vs The King (1): "Indeed, in interpreting a constituent or organic statute such as the Act, that construction most beneficial to the widest possible amplitude of its powers must be adopted.
" The Federal Court also in the United Provinces V. Atiqa Begum (2) pointed out that none of the items in the Lists is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it.
This Court in Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City (3) also expressed the same opinion and stated: "The cardinal rule of interpretation, however, is that words should be read in their ordinary, natural and grammatical meaning subject to this rider, that in construing words in a constitutional enactment conferring legislative power the most liberal construction should be put upon words so that the same may have effect in their widest amplitude." (See also Thakur Amar Singhji vs State of Rajasthan(4)).
Having regard to the principle of construction enunciated above, it is clear that the impugned Act is covered by Entry 18 in List II of the Seventh Schedule to the Constitution and is a legislation with reference to "land " and this plea of legislative incompetence of the State Legislature to enact the impugned Act therefore fails.
If, then, the State Legislature was competent to enact the impugned Act, is the Act ultra vires the Constitution as infringing any of the fundamental (1) ,518.
(3) [1955] 1 S.C.R. 829, 836, 837.
(2) , 134.
(4) [1955]2S.C.R 303,329.
497 rights conferred upon the petitioners ? In the course Of the arguments before us learned counsel for the petitioners confined their attack only to the constitutionality of sections 5, 6, 7, 8, 9, 17A, 31A to 31D and 3 to 32R of the impugned Act as violative of the fundamental right guaranteed under article 19(1)(g) of the Constitution.
The first question to consider in this context however is whether the impugned Act is protected by article 31 A of the Constitution because if it in so protected, no challenge on the score of the provi sions thereof violating articles 14,19 and 31 of the Con stitution would be available to the petitioners.
The relevant portions of article 31 A which fall to be considered here read as follows: "(1) Notwithstanding anything contained in article 13, no law providing for: (a) the acquisition by the State of any estate or of any rights therein or the extinguishment 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, article 19 or article 31.
Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent. . . (2) In this article, (a)the expression " estate " shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam, or muafi or other similar grant and in the States of Madras and TravancoreCochin any janmam rights.
(b) the expression " rights " in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure holder, raiyat, 63 inder raiyat or other intermediary and any rights or Privileges in respect of land revenue.
" The question which we have to address ourselves intially is whether the lands held by the petitioners,who are admittedly landholders within the 8 Act, are of the term contained in section 2.(9) of the 194 "estates " within the meaning of article 31 A of the constitution.
Before we launch upon that enquiry it would perhaps be of helP to note how the various land tenures originated.
Baden Powell in his Land Systems of British India (1892 Ed.), Vol. 1, dealing with the general view of land tenures traced the origin and growth at @p.
97 of different tenures in the manner following at pp.
97 99 (Chapter IV): " 4.
Effects of Land Revenue Administration and Revenue farming.
Then again the greater Oriental governments which preceded ours, have always, in one form or another, derived the bulk of their State revenues and Royal property from the land.
In one system known to us, "Royal lands " were allotted in the principal villages, and this fact may have suggested to the Mughals their plan of allotting spcial farms and villages to furnish the privy Purse, and has had other survivals.
But, speaking generally, the universal plan of taking revenue was by taking a share of the actual grain heap on the the threshing floor from each payment levied on each estate or each field as the case might be. . .
To collect this revenue, the ruler appointed or recognized not only a headman and accountant in each village, but also a hierarchy of graded officials in districts and minor divisions of territory formed for administrative purposes.
These officers were often remunerated by holdings of land, and a class of land tenures will be found in some parts of India owning its origin to these hereditary official holding section Not only so, but during the decline which Oriental governments have usually undergone, the Revenue official have been commonly found to merge in, or be superseded, by revenue farmers persons who 499 contracted for a certain sum of revenue to be paid int, the Treasury from a given area, I as representing the State dues exigible from the land holdings within that area.
Such revenue farmers, or officials, whatever their origin, have always tended to absorb the interest of the land holders and to become in time the virtual landlords over them.
Nor is it only that landlord tenures arise in this way.
No sooner does the superior right take shape than we find many curious new tenures created by the landlord or arising out of his attempts to conciliate or provide for certain eminent claims in the grade below him.
section 5.
Effects of Assignment or Remission of LandRevenue.
Yet another class of tenures arises in connection with the State Revenue administration; and that is when the ruler either excuses an existing land holder from paying his revenue, either wholly or in part; or " alienates " or assigns the revenue of a certain estate or tract of country in favour of some chief, or other person of importance, or to provide funds for some special objects, or to serve as a recompense for services to be rendered.
At first such grants are carefully regulated, are for life only, and strictly kept to their purpose, and to the amount fixed.
But as matters go on, and the ruler is a bad or unscrupulous one, his treasury is empty, and he makes such grants to avoid the dificulty of finding a cash salary.
The grants become permanent and hereditary; they are also issued by officials who have no right to make them; and not only do they then result in landlord tenures and other curious rights, but are a burden to after times, and have furnished a most troublesome legacy to our own Government when it found the revenues eaten up by grantees whose titles were invalid, and whose pretensions, though grown old in times of disorder, were inadmissible.
Such grants may have begun with no title to the land but only a right to the revenue, but want of 500 supervision and control has resulted in the grantee seizing the landed right also.
Here we find the distinction between the State owned lands which are unalienated where the tenures arise out of the exigencies of revenue collection and alienated lands the revenue whereof is remitted either wholly or in part or in other words " alienated " or assigned to grantees for various purposes.
Various land tenures thus developed and series of proprietorships came into existence.
The main tenures which the British found when they came into power comprised: (1) the Khas or tenure by Government; (2)the Raiyatwari tenure; (3) the Zamindari or landlord tenure and (4) the Taluqdari or double tenure.
It is interesting to note in this connection that in the table compiled by Baden Powell in Vol.
III of his Book at p. 142 giving some idea of the distribution of the different classes of landed estates in Madras the different classes of landed estates described therein included not only Zamindaris but also " estates " hold by Raiyats paying diverse sums as and by way of land revenue.
So far as the area within the State of Bombay was concerned the position is thus summed up in Dande kar 's Law of Land Tenures, Vol. 1 at p. 12: Section III.
Classification of land according to the interest of the holder: "Land is either Government land or not Government land; that is, it is either unalienated or alienated.
The expression for unalienated land is khalsa or ryatawari in some parts as opposed to dumala or inam lands, that is, alienated lands In Gujrat Government lands are called " sarkari " as opposed to "baharkhali"lands meaning alienated lands lands the produce.of which had not to be brought to the common threshing ground.
In some parts of Gujrat there are," talpad " (Government) lands as opposed to " Wanta " lands.
In old Regulations two kinds of land have been referred to, namely, malguzarry land and lakhiraj land.
The former meant land paying 501 assessment to Government, whereas the latter meant land free from payment of assessment.
Khalsa land in the permanent occupation of holders was denominated, before the survey settlements, in the different parts of 'the Presidency by the expressions mirasi, dhara, suti and muli.
I Government arable land not in the permanent occupation of an occupant was and is described by the name sheri.
In alienated villages, lands corresponding to Government "sheri " lands are denominated by the expressions, "sheri " ".Khas Kamath " and " Ghar Khedu ".
Lands in leasehold or farmed villages are called khoti lands.
Lands which are given under leases and the assessment of which is regulated by the terms thereof are called kauli lands.
" It will be observed that Mirasi, Dhara, Suti and Muli were all tenures in regard to unalienated lands, the tenure holders being permanent holders of land having hereditary interests in their holdings. , The Khoti tenures in the Konkan and the Bhagdari and Narvadari tenures in some parts of Gujrat were also tenures in regard to unalienated lands, there venue being assessed on those lands on entire villages and not on specific pieces of land either in lump or on the basis of a fixed Bighoti assessment on each field and the tenure holders being responsible for the payment of the, sum in certain specified modes.
The general prevailing tenure, however, was the Raiyatwari tenure where the Raiyat or the tenant had the right of an occupant in his holding.
The right of an occupant was a heritable right and on the death of a registered occupant the name of his heir was entered in his place.
All these were land tenures in respect of unalienated lands and the Bombay Survey and Settlement Act (Bom. 1 of 1865) passed in 1865.
applied, generally to the same.
There were of course certain Acts which dealt with specific tenures mentioned above, e.g., Bhagdari and Narvadari Tenures Act (Bom.
V of 1862), and Khoti Settlement Act (Bom.
1 of 1880); but by and large they were tenures in regard to unalienated lands and were governed by the Bombay Survey and Settlement Act, 1865.
In 1879 the State Legislature 502 enacted, the Bombay Land Revenue Code (Bom.
V of 1879) with a view to consolidate and amend the law relating to Revenue Officers, to the assessment and recovery of land revenue and to other matters connected with land revenue administration.
This Act extended to the whole of the State of Bombay excluding the City of Bombay and certain other areas therein mentioned.
We shall have occasion to refer to certain provisions of this Act hereafter.
Turning now to alienated lands in which category were comprised lands not belonging to government and lands not paying revenue to government which were exceptions to the principles of State proprietorship and of liability of land holders to pay land revenue to government we find that the alienations were classified as: (1) political tenures such as Jagirs and Saranjams; (2) Service Inams ; (3) Personal Inams and (4) Religious endowments.
The principal alienations were Inams, Jagirs or Saranjams and Watans.
Each of them was considered as a tenure, had got its own history, its own features and peculiarities.
Summary settlements were effected by the government with these tenure holders and their rights as such recognized.
There were Taluqdari tenures or estates in Gujrat which also came under this category and it may be noted that several pieces of legislation were passed by the State Legislature in regard to those several tenures of alienated lands, e. g., Titles to Rent Free Estates Act (Bom.
XI of 1852); Ahmedabad Taluqdar 's Act (Bom.
VI of 1862); Bombay Hereditary Offices Act (Bom.
III of 1874); Broach and Kaira Encumbered Estates Act (Bom.
XIV of 1877); Broach and Kaira Encumbered Estates Act (Bom.
XXI of 1881); Matadars Act (Bom.
VI of 1887) and Gujrat Taluqdars Act (Bom.
VI of 1888).
Our attention was also drawn in this connection to the various Acts passed by the State Legislature (between 1949 and 1955) abolishing the several land tenures in Bombay where the government was not in direct contact with the tiller of the soil but there was an interposition of intermediaries between them, the intermediaries having leased out parts of 503 the lands to the tenants who actually cultivated the soil and it was urged that the interests of these intermediaries were estates properly so called.
It is to be noticed, however, that the several land tenures which were thus abolished were not only tenures in respect of alienated lands but also comprise unalienated lands, e.g., the Bombay Bhagdari and Narvadari Tenures Abolition Act, 1949 (Bom.
XXXII of 1949); The Bombay Khoti Abolition Act, 1949 (Bom.
VI of 1950) and the Bombay Merged Territories (Janjira and Bhor) Khoti Tenure Abolition Act, 1953 (Bom.
LXXI of 1953).
There was no distinction made thus between land tenures in regard to alienated lands and those in regard to unalienated lands.
It may also be noted that all these Acts followed a common pattern, viz., the abolition of these land tenures, award of compensation to the tenure holders whose tenures were thus abolished and the establishment of direct relations between the government on the one hand and the tenure holders cultivating the lands personally and the tenants cultivating the soil on the other.
All these persons, thus cultivating the soil were given the status of occupants and direct relationship was thus established between the government and them.
These Acts so far as our present purpose is concerned are only mentioned to show the different types of land tenures which existed in the State of Bombay prior to their abolition as aforesaid.
These were the various land tenures known in the State of Bombay and we may at this stage appropriately refer to the statistics (1886 87) of these tenures given by Baden Powell in Vol.
III of his said Book at p. 251 504 Tenure Number of Number of Area in Remarks.
estates or Village.
acres holding Village land holders: 1284,238 30,118 1/2 475,016 I have added Raiyatwari (occupied together Village.
land only) these paying at full rates and the much smaller number paying at privileged rates the latter are 213,405 and how far these repre sent bhagdar etc.
,I have no means of tra velling.
Overlord 530 1/2 530 1/2 1,419,397 tuners (gross area) Taluqdari 41 41 79334 Mewasi Udhad 123 123 194,830 Jambandi Kot 17,32 1/2 17,32 1/2 2160,517 Issafat 7 7 3608 Revenue free 2165 3/4 2165 3/4 4483,343 These refer to i.e.inam & whole villages Jagir or estates not to revenue privileges on individual fields,etc., which are includeded in village land holding.
505 It is to be noted that the holdings of the landholders in Ryatwari villages apart from others were also styled therein as estates or holdings.
It was vehemently urged before us by learned counsel for the petitioners that the expression " estate " aptly applied only to lands held by the various tenure holders of alienated lands above referred to, and that it could not apply to the holdings of occupants who had merely a right of occupancy in specific pieces of unalienated lands.
The word " estate " had been defined in the Bombay Land Revenue Code, 1879, in section 2(5) to mean : " any interest in lands and the aggregate of such interests vested in a person or aggregate of persons capable of holding the same," and would prima facie cover not only an interest in alienated lands but also in unalienated lands.
It was however urged that the expression " estate " should be construed in a narrower sense having regard to the legislative history and particularly to the fact that the lands held by the tenure holders of alienated lands only had prior to 1879 been recognized as estates and the holding of an occupant was not treated as such.
The distinction thus sought to be made between holders of unalienated lands and holders of alienated lands.
is not of much consequence because even in regard to unalienated lands besides the occupants there were tenure holders called Bhagdars and Narwadars and Khotes who had interests in lands held by them under those several tenures which lands were unalienated lands.
The interests which these tenure holders enjoyed in the lands held by them were " estates " and it could not therefore be predicated of the expression "estate" that it could only be used in connection with alienated lands.
If this distinction was therefore of no avail, we have only got to consider if there is any reason why a narrow interpretation should be put upon the expression "estate" as suggested by the petitioners.
Reliance was placed by the learned counsel for the petitioners on a decision of this Court in Hariprasad Shivshankar Shukla vs A. D. Divikar (1) where the word retrenchment " as defined in section 2(00) and the word (1) [1957] S.C.R. 121, 132. 64 506 retrenchment " in section 25F of the , as amended by Act XLIII of 1953 were held to have no wider meaning than the ordinary accepted connotation of those words and were held to mean the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishments inflicted by way of disciplinary action, and did not include termination of services of all workmen on a bona fide closure of industry or on change of ownership or management thereof.
Even though the word " retrenchment" was defined as meaning the termination of services by an employer of the workmen for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, which words were capable of including within their scope the termination of services of all workmen on a bona fide closure of industry or on change of ownership or management thereof, the word " retrenchment " was construed in a narrow sense because the word " retrenchment " connoted in its ordinary acceptance that the business itself was being conducted and a portion of the staff or labour force was discharged as surplusage.
This Court observed in the course of the judgment at page 132: " 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 expression altogether from its context to give it such a wide meaning as is contended for by learned counsel for the respondent.
What is being defined is retrenchment, and that is the context of the definition.
It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation 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.
" 507 Reliance was also placed on a decision of the Court of Appeal in England in Re The Vexatious Actions Act, 1896, In re Bernard Boaler (1) where the words " legal proceedings " were held not to include criminal proceedings, in spite of the words being prima facie capable of including the same.
Kennedy, C. J., expressed his view at page 32 that it was impossible to say that the meaning of the expression " legal proceedings " was in itself and by itself clear and unambiguous and followed the dictum of Lord Esher in Rex vs City of London Court(2): " If the words of an Act admit of two interpretations then they are not clear ; and if one interpretation leads to an absurdity and the other does not, the Court will conclude that the Legislature did not intend to lead to an absurdity, and will adopt the other interpretation.
" Scrutton, J., also expressed the same opinion at p. 41 : " I find general words used in the Act capable of two meanings, a wider and a narrower one.
On the whole I think the language is more suited to the narrower than the wider meaning.
The narrower meaning will affect the liberties of the subject to some extent; the wider meaning will most seriously affect the liberties of the subject in a matter, his personal liberty and safety, which I see no reason in the Act to believe was in the contemplation of the Legislature.
I decline to make this more serious interference with the liberty of the subject, unless the Legislature uses language clear enough to convince me that that was its intention, and I think ample meaning is provided for its words, and ample remedy is provided for the grievance in respect of which Parliament was legislating by putting the narrower construction on the general words it has used.
" Are there any circumstances in the present case which would compel us to put a narrower construction on the expression " estate " in section 2(5) of the Bombay Land Revenue Code, 1879 ? It is true that the expression " estate " was used prior to 1879 in connection (1) (2) , 290.
508 with the interests which the various tenure holders of alienated lands held in their respective lands but it does not therefore follow that that expression could be used only in connection with those interests and no others.
The Watandars, Saranjamdars, Inamdars and Taluqdars and the like were no doubt holders of " estates " but does that fact militate against the occupants also holding " estates " in the lands which were the subject matter of their tenures.
The words of the definition contained in section 2(5) of the Bombay Land Revenue Code, 1879, were clear and unambiguous.
They meant any interest in lands and the expression " lands " was capable of comprising within its ambit alienated and unalienated lands.
As a matter of fact, the definition of " Superior holder " in section 2(13) and the definition of " alienated " in section 2(20) of the Code, provisions of section 111 in regard to revenue management of villages or estates not belonging to the Government, of section 113 with regard to the partition of estates and of section 36 prescribing liability for revenue amongst others refer not only to alienated lands but also to unalienated lands and the expression " estates " used therein can have reference not only to alienated lands but also to unalienated lands.
If the definition of the expression " estate " in the context of the Code is thus clear and unambiguous as comprising both the types of lands, there is no reason why a narrower construction as suggested by the petitioners should be put upon the expression " estate ".
(See the observations of Kennedy, L. J., in Vexatious Actions Act, 1896, In re.
Boaler (1) at p. 31 and the observations of this Court in Baia Sri Sailendra Narayan Bhanja Deo vs The State of Orissa (2).
Even if there was any ambiguity in the expression, the wider significance should be adopted in the context of the objectives of the Act as stated above.
We are, therefore, of opinion that the expression estate " had the meaning of any interest in land and it was not confined merely to the holdings of landholders of alienated lands.
The expression applied not only to such " estate " holders but also to land holders and occupants of unalienated lands.
(1) (2) ; 509 It was however contended on behalf of the petitioners that the Bombay Land Revenue Code was not a law relating to land tenures in force in the State of Bombay and therefore the definition of the expression " estate " contained therein would not avail the respondent.
It was urged that the Code was passed by the State Legislature in order to consolidate and amend the law relating to Revenue Officers, and to the assessment and recovery of Land Revenue, and to other matters connected with the Land Revenue Administration in the Presidency of Bombay and was merely concerned with the collection of land revenue by the State and had nothing to do with land tenures as such.
This argument, however, ignores the various provisions of the Code which define the status as also the rights and obligations of the occupant who has been defined in section 2(16) of the Code to mean the holder in actual possession of unalienated lands other than a tenant provided that where the holder in actual possession is a tenant, the landholder or superior landlord, as the case may be, shall be deemed to be the occupant.
Chapter VI deals with the Grant, Use and Relinquishment of unalienated lands and section 65 thereof prescribes the uses to which an occupant of land for purposes of agriculture may put his land.
Under section 68 an occupant is entitled to the use and occupation of his land for the period therein prescribed on fulfilling the conditions therein mentioned and under section 73 occupancy is stated to be transferable and heritable.
Section 73 as it was enacted in 1879 read as follows: " The right of occupancy shall subject to the provisions contained in section 56, and to any conditions lawfully annexed to the occupancy and save as otherwise prescribed by law, be deemed an heritable and transferable property.
" Certain amendments have been made in this section by various Bombay Land Revenue Amendment Acts, (Bom.
VI of 1901 and Bom.
IV of 1913) and the section as it stands at present reads:" An occupancy shall, subject to the provisions contained in section 56, and to any conditions lawfully annexed to the tenure, and save as otherwise prescribed by law, be deemed an heritable and transferable 510 property.
" This goes to show that an occupant holds the land under a tenure and occupancy is a species of land tenures.
The provisions contained in section 73(A) relating to the power of the State Government to restrict the right of transfer and the provisions in regard to relinquishments contained in sections 74, 75 and 76 also point to the same conclusion.
These and similar provisions go to show that occupancy is one of the varieties of land tenures and the Bombay Land Revenue Code, 1879, comes within the description of " existing laws relating to land tenures in force" in the State of Bombay within the meaning of article 31A (2)(a).
BadenPowell has similar observations to make in regard to these provisions in his Land Systems in British India, Vol. 1 at p. 321: "Nothing whatever is said in the Revenue Code about the person in possession (on his own account) being " owner " in the Western sense.
He is simply called the " occupant ", and the Code says what he can do and what he cannot.
The occupant may do anything he pleases to improve the land, but may not without permission do anything which diverts the holding from agricultural purposes.
He has no right to mines or minerals.
These are the facts of the tenure; you may theorize on them as you please; you may say this amounts to proprietorship, or this is a dominium minus plenum; or anything else.
" There is no doubt therefore that the Bombay Land Revenue Code, 1879, was an existing law relating to land tenures in force in Bombay at the time when the Constitution (Fourth Amendment) Act, 1955, was passed and article 31A in its amended form was introduced therein and the expression "estate " had a meaning given to it under section 2(10) there, viz., " any interest in land " which comprised within its scope alienated as well as unalienated lands and covered the holdings of occupants within the meaning thereof.
The 1948 Act was passed by the State Legislature in order to amend the law which governed the relations between landlords and tenants of agricultural lands the object sought to be achieved being as hereinbefore 511 set out.
Section 2 of the Act defined the expressions " to cultivate personally " (section 2(6)); ,landholder " (section 2(9)); " protected tenant " (section 2(14) ) amongst other expressions and provided in section 2(21) that words and expressions used in this Act but not defined shall have the meaning assigned to them in the Bombay Land Revenue Code, 1879, and the , as the case may be.
This brought in the definition of the expression " estate " which had the mean ing assigned to it in that Code, viz., any interest in land ".
The expression " landholder in section 2(9) above was defined to mean " a zamindar, jagirdar, saranjamdar, inamdar, talukdar, malik or a khot or any person not hereinbefore specified who is a holder of land or who is interested in land, and whom the State Government has declared on account of the extent and value of the land or his interests therein to be a landholder for the purposes of this Act.
" The latter part of this definition is significant and shows that not only holders of alienated lands but also holders of unalienated lands were comprised therein provided, however, the extent and value of the land or their interests therein were such as to deserve a declaration in that behalf at the hands of the State Government.
The only point to note here is that no distinction was made even in this Act between alienated lands and unalienated lands and all interests in land howsoever acquired were treated on a par so far as the holdings were concerned, necessarily implying that even an occupant would come within the description of landholder and his interests therein would come within the definition of " estate " as defined in the Bombay Land Revenue Code, 1879.
Chapter III made provisions for protected tenants, their special rights and privileges and whoever came within the category of protected tenant was given the right to purchase from the landlord the land held by him as such protected tenant notwithstanding any.
thing contrary in law, usage or contract subject to the provisions of sub section 6 which imposed restrictions on the holdings of landlords as well as tenants.
These provisions were analogous to the provisions contained in sections 32 to 32 R of the impugned Act except that in the 512 1948 Act the protected tenant had the option to purchase the land whereas under the impugned Act there was a provision for compulsory purchase of the land by the tenant on a specified date subject to certain conditions therein mentioned.
Section 34 of the 1948 Act gave the landlord the right to determine protected tenancy under certain conditions and was analogous to section 31 of the impugned Act which empowered the landlord to terminate the tenancy for personal cultivation and non agricultural purposes.
50 acres of land were prescribed as the limit of the holding either by the landlord or the protected tenant which provision was analogous to the one found in the impugned Act in regard to ceiling area and economic holdings.
Power was given to the State Government under section 36 to reduce the limit of 50 acres by a notification in the official gazette and power was also given similarly to direct that the limits of fifty acres or the reduced limit specified in such notification shall comprise such kind or kinds of lands in the area as may be specified in the notification.
This power was analogous again to the power given to the State Government under section 7 of the impugned Act to vary the ceiling area or economic holding originally prescribed in sections 5 and 6 of the Act.
These instances culled out from some of the provisions of the 1948 Act go to show that the agrarian reform which was initiated by that Act was designed to achieve the very same purpose of distribution of the ownership and control of agricultural lands so as to subserve the common good and eliminate the concentration of wealth to the common detriment which purpose became more prominent when the Constitution was ushered in on January 26, 1950, and the directive principles of State Policy were enacted inter alia in articles 38 and 39 of the Constitution.
With the advent of the Constitution these provisions contained in the 1948 Act required to be tested on the touch stone of the fundamental rights enshrined in Part III thereof and when the Constitution (First Amendment) Act, 1951, was passed introducing articles 31A and 31B in the Constitution, care was taken to specify the 1948 Act in the Ninth Schedule so as to make it immune from 513 attack on the score of any provision thereof being violative of the fundamental rights enacted in Part III of the Constitution.
The 1948 Act was the second item in that schedule and was expressly saved from any attack against the constitutionality thereof by the express terms of article 31B.
The impugned Act which was passed by the State Legislature in 1956 was a further measure of agrarian reform carrying forward the intentions which had their roots in the 1948 Act.
Having regard to the comparision of the various provisions of the 1948 Act and the impugned Act referred to above it could be legitimately urged that if the cognate provisions of the 1948 Act were immune from attack in regard to their constitutionality, on a parity of reasoning similar provisions contained in the impugned Act, though they made further strides in the achievement of the objective of a socialistic pattern of society would be similarly saved.
That position, however, could not obtain because whatever amendments were made by the impugned Act in the 1948 Act were future laws within the meaning of article 13(2) of the Constitution and required to be tested on the self same touchstone.
They would not be in terms saved by article 31B and would have to be scrutinized on their own merits before the courts came to the conclusion that they were enacted within the constitutional limitations.
The very terms of article 31B envisaged that any competent legislature would have the power to repeal or amend the Acts and the Regulations specified in the 9th Schedule thereof and if any such amendment was ever made the vires of that would have to be tested.
(Vide Abdul Rahiman Jamaluddin Hurjuk vs Vithal Arjun Undare That brings us back to the provisions of article 31A and to a consideration as to whether the impugned Act was a legislation for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights within, the meaning of sub article (1)(a) thereof We have already held that the Bombay Land Revenue Code,, 1879, was (11)(1957)59:Bom L.R.579.
65 514 an existing law relating to land tenures in force in the State of Bombay and that the interests of occupants amongst others fell within the expression " estate " contained therein.
That, however, was not enough for the petitioners and it was further contended on their behalf that even though the impugned Act may be a law in regard to an " estate " within the meaning of the definition contained in article 31A(2)(a) it was not law providing for the acquisition by the State of any estate or any rights therein or for the extinguishment or modification of any such rights.
The impugned Act was certainly not a law for the acquisition by the State of any estate or of any rights therein because even the provisions with regard to the compulsory purchase by tenants of the land on the specified date transferred the title in those lands to the respective tenants and not to the State.
There was no compulsory acquisition of any " estate " or any rights therein by the State itself and this provision could not help the respondent.
The respondent, however, urged that the provisions contained in the impugned Act were enacted for the extinguishment or modification of rights in " estates " and were, therefore, saved by article 31A(1)(a).
It was on the other hand urged by the petitioners (1) that the extinguishment or modification of any such, rights should only be in the process of the acquisition by the ,State of any estate or of any rights therein and (2) that the provisions in the impugned Act amounted to a suspension of those rights but not to an extinguishment or modification thereof We shall now proceed to examine these contentions of the petitioners.
article 31A(1)(a) talks of two distinct objects of legislation; one being the acquisition by the State of any estate or of any rights therein and the other being the extinguishment or modification of any such., rights,.
If the = acquires an estate or any rights therein that acquisition would have to be a compulsory acquisition within the meaning of article 31(2)(A) which was also introduced in the Constitution by the Constitution (Fourth Amendment) Act, 1955, simultaneously with article 31A(1) thereof.
There was no provision made for the transfer of the ownership of any property to the 515 State or a Corporation owned or controlled by 'the State with the result that even though,these provisions deprived the landholders of their property they did not amount to a compulsory acquisition of the property by the State.
If this part of article 31A(1)(a) is thus eliminated what we are left with is whether these provisions of the impugned Act provided for an extinguishment or modification of any rights in " estates ".
That is a distinct concept altogether and could not be in the process of acquisition by the State of any " estate " or of any rights therein.
Acceptance of the interpretation which is sought to be put upon these words by the petitioners would involve the addition of words " in the process of the acquisition by the State of any estate or of any rights therein " or " in the process of such acquisition " which according to the well known canons of construction cannot be done.
If the language of the enactment is clear and unambiguous it would not be legitimate for the Courts to add any words thereto and evolve therefrom some sense which may be said to carry out the supposed intentions of the legislature.
The intention of the Legislature is to be gathered only from the words used by it and no such liberties can be taken by the Courts for effectuating a supposed intention of the Legislature.
There is no warrant at all, in our opinion, ' for adding these words to the plain terms of article 31A (1)(a) and the words extinguishment or modification of any such rights must be understood in their plain grammatical sense without any limitation of the type suggested by the petitioners.
It, therefore, remains to consider whether the relevant provisions of the impugned Act were designed to bring about an extinguishment or modification of the landlord 's rights in their " estates ".
These provisions are contained in sections 32 to 32R of the impugned Act and are under the heading " Purchase of lands by Tenants ".
Section 32 provides that " on the first day of April, 1957 (hereinafter referred to as " the tillers day ") every tenant shall, subject to the provisions of the next succeeding sections, be deemed to have purchased from his landlord, free of all incumbrances 516 subsisting thereon on the said day, the land held by him as tenant. . . . provided certain conditions are fulfilled.
Under section 32A the tenant shall be deemed to have purchased the lands up to the ceiling area and the tenant shall not be deemed to have purchased lands held by him as such tenant if he holds lands partly as owner and partly as tenant but the area of the land held as owner is equal to or exceeds the ceiling area (section 32B).
Section 32C empowers the tenant to chose the land to be purchased if he holds lands separately from more than one landlord and in spite of anything contained in the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947 (Bom.
LXII of 1947) the tenant shall be deemed to have purchased even such fragments of the land held on tenancy (section 32D).
The balance of any land after the purchase by the tenant as above is to be disposed of as if it were land surrendered by the tenant (section 32E); and the right of the tenant to purchase such land where the landlord is a minor, or a widow, or a person subject to any mental or physical disability or a serving member of the armed forces is postponed till one year after the cessation of disability.
The price to be paid by the tenant is to be determined by the Tribunal as soon as may be after the tiller 's day and the Tribunal is in the first instance to record in the prescribed manner the statement of the tenant whether lie is willing or is not willing to purchase the land held by him as a tenant and if the tenant fails to appear or makes a statement that he is not willing to purchase the land, the Tribunal is to declare by an order in writing that such tenant is not willing to purchase the land and that the purchase is ineffective (section 32G).
These provisions also apply to a sub tenant of a permanent tenant who is deemed to have purchased the land subject to the conditions specified in sections 32 to 32E (section 321).
Section 32J provides for an appeal to the State Government against the decision of Tribunal.
Section 32K prescribes the mode of payment of price by the tenant; and the purchase price is recoverable as arrears of land revenue (section 32L).
Under section 32M on the deposit of the price in lump sum or of 517 the last instalment of such price, the Tribunal is to issue a certificate of purchase to the tenant in respect of the land, which certificate of purchase shall be Conclusive evidence of purchase.
If a tenant fails to pay the lump sum within the period prescribed or is at any time in arrears of four instalments the purchase is to be ineffective and the land is to be at the disposal of the Collector and any amount deposited by such tenant towards the price of the land is to be refunded to him.
Section 32N gives the landlord a right to recover rent when purchase becomes ineffective, as if the land had not been purchased at all.
Section 32P gives the power to the Collector to resume and dispose of land not purchased by tenants.
The amount of purchase price is to be applied towards satisfaction of debts (section 320) ; and the, purchaser is to be evicted from the land purchased by him as aforesaid if he fails to cultivate the land personally (section 32R).
It is argued on the strength of these provisions that there is no effective purchase or effective sale of the land between the landlord and the tenant on the tiller 's day or the alternative period prescribed in that behalf until certain conditions are fulfilled.
To start with it is only an inchoate right which is given to the tenant to purchase the land which he can perfect on a statement being made by him before the Tribunal that he is willing to purchase the land.
Even if he does so, the land does not vest in him because only on the payment of the purchase price either in lump or by instalments can he get the certificate of purchase from the Tribunal.
If he commits default in pay ment, the purchase is ineffective and he gets no title to the land.
These provisions, it is submitted, do not vest the title to the land in the tenant at all until all these conditions are fulfilled and if any one or more of them is not fulfilled the purchase becomes ineffective in fact it is no purchase at all with the result that the title to the land which is already vested in the landlord is not at, all transferred to the purchaser.
If that is so, there is no compulsory sale or compulsory purchase of the land in question on the tiller 's day or the alternative period of time prescribed therefor and 518 there is no extinguishment of the rights of the landlord.
His rights in the land are merely suspended and such suspension is certainly not an extinguishment of his rights therein nor a modification thereof within the meaning of the expression used in article 31A (1)(a).
Reliance is placed in support of this proposition on the observations of this Court in Thakur Raghubir Singh vs Court of Wards, Ajmer (1).
In that case, this Court considered the provisions of section 112 of the Ajmer Tenancy and Land Records Act (XLII of 1950) which provided that if a landlord habitually infringes the rights of a tenant under the Act he would be deemed to be a landlord who is disqualified to manage his own property and his property would be liable to be taken under the superintendence of the Court of Wards.
Mahajan, J., (as he then was) observed at p. 1055: " Section 112 of the Act XLII of 1950, intended to regulate the rights.
of landlords and tenants, is obviously not a law providing for " the acquisition by the State " of the estates of the landlords, or of any rights in those estates.
It is also not a law providing for the extinguishment or modification of any such rights.
The learned Attorney General laid emphasis on the word " modification" used in Article 31 A.
That word in the context of the article only means a modification of the proprietary right of a citizen like an extinguishment of that right and cannot include within its ambit a mere suspension of the right of management of estate for a time, definite or indefinite.
" These observations were confined to suspension of the right of management of the estate and not to a suspension of the title to the estate.
Apart from the question whether the suspension of the title to the estate for a time, definite or indefinite would amount to a modification of a right in the estate within the meaning of article 31A (1)(a), the position as it obtains in this case is that there is no suspension of the title of the landlord at all.
The title of the landlord to the land passes immediately to the tenant on the tiller 's (1) ; 519 day and there is a completed purchase or sale thereof as between the landlord and the tenant.
The tenant is no doubt given a locus penitentiae and an option of declaring whether he is or is not willing to purchase the land held by him as a tenant.
If he fails to appear or makes a statement that he is not willing to purchase the land, the Tribunal shall by an order in writing declare that such tenant is not willing to purchase the land and that the purchase is ineffective.
It is only by such a declaration by the Tribunal that the purchase becomes ineffective.
If no such declaration is made by the Tribunal the purchase would stand as statutorily effected on the tiller 's day and will continue to be operative, the only obligation on the tenant then being the payment of price in the mode determined by the Tribunal.
If the tenant commits default in the payment of such price either in lump or by instalments as determined by the Tribunal, section 32M declares the purchase to be ineffective but in that event the land shall then be at the disposal of the Collector to be disposed of by him in the manner provided therein.
Here also the purchase continues to be effective as from the tiller 's day until such default is committed and there is no question of a conditional purchase or sale taking place between the landlord and tenant.
The title to the land which was vested originally in the landlord passes to the tenant on the tiller 's day or the alternative period prescribed in that behalf.
This title is defeasable only in the event of the tenant failing to appear or making a statement that he is not willing to purchase the land or committing default in payment of the price thereof as determined by the Tribunal.
The tenant gets a vested interest in the land defeasable only in either of those cases and it cannot therefore be said that the title of landlord to the land is suspended for any period definite or indefinite.
If that is so, there is an extin guishment or in any event a modification of the landlord 's right in the estate well within the meaning of those words as used in article 31A(1)(a).
We have, therefore, come to the conclusion that the impugned Act is covered by article 31A and is protected 520 from attack against its constitutionality on the score of its having violated the fundamental rights, enshrined in articles 14, 19 and 31 of the Constitution.
That being so, the attack levelled against sections 5, 6, 8, 9, 17A, 31 A to 31 D and 32 to 32R on the score of their being violative of the fundamental rights conferred upon the petitioners is of no avail to the petitioners.
This being the true position it is not necessary for us to consider the interesting questions which were argued before us at some length, viz., the nature, scope and extent of the provisions contained in articles 31(1) and 31(2) of the Constitution and the line of demarcation between them as also the impact of article 31(1) on the fundamental right enshrined in article 19(1)(f) of the Constitution.
Suffice it to say that under the circum stances no fundamental right of the petitioners before us is infringed by the impugned Act or the provisions thereof and the petitions under article 32 cannot be sustained.
The impugned Act being within the legislative competence of the State Legislature no question as to its being a piece of colourable legislation can arise.
It is not a legislation resorted to by the State Legislature with a view to by pass the provisions of List II of the seventh schedule to the Constitution, attempting to do something which it was otherwise not competent to do.
The legislation being covered by Entry 18 of the said List is really a further measure for agrarian reform which it was well within its competence to enact.
It is not an expropriatory legislation in the guise of one covered by Entry 18 in the said List.
It only fixes the ceiling area for the holding of the land lord cultivating the land personally and transfers the excess holding to the tenant in actual cultivation thereof and there too the price of the land as fixed by the Tribunal has got to be paid by the tenant to the landlord.
The tenant also is not entitled to hold land beyond the ceiling area and there is a balance sought to be struck between the interests of the landlord and those of the tenants so that the means of production are not concentrated in the hands of one party to the common detriment.
The price payable is also either 521 in lump or in such instalments as may be determined by the Tribunal and on default committed by the tenant in payment thereof the purchase becomes ineffective and the land deemed to have been purchased by the tenant reverts to the Collector to be dealt with in accordance with the provisions contained in the Act in that behalf.
It may be that instalments may be spread over a particular period which may thus be determined by the Tribunal and unless default is committed by the tenant in payment of four instalments the purchase does not become ineffective.
That, however, is not a provision which makes the payment of price in any manner illusory.
The landlord is entitled to the rents of the land as if there had been no purchase of the land by the tenant and the payment of such rent is made the first charge on the land.
There is, therefore, no scope for the argument that the provisions in this behalf contained in the Act were illusory or that the impugned Act is a piece of colourable legislation.
The only question that now survives is whether section 7 of the impugned Act is bad by reason of excessive delegation of legislative power.
Section 7 invests the Government with the power to vary the ceiling area and economic holding which have been prescribed in sections 5 and 6 of the Act.
Sections 5, 6 and 7 of the Act read as under : " 5.
Ceiling area: (1) For the purposes of this Act, the ceiling area of land shall be (a) 48 acres of jirayat land, or (b) 24 acres of seasonally irrigated land or paddy or rice land, or (c) 12 acres of perennially irrigated land.
(2) Where the land held by a person consists of two or more kinds of land specified in sub section (1), the ceiling area of such holding shall be determined on the basis of one acre of perennially irrigated land being equal of two acres of seasonally irrigated land or paddy or rice land, or four acres of jirayat land.
66 522 6.
Economic holding (1) For the purposes of this Act an economic holding shall be (a) 16 acres of jirayat land, or (b) 8 acres of seasonally irrigated land, or paddy or rice land, or (c) 4 acres of perennially irrigated land.
(2) Where the land held by a person consists of two or more kinds of land specified in sub section (1) an economic holding shall be determined on the basis applicable to the ceiling area under sub section (2) of section 5. 7.
Power of Government to vary ceiling area and economic holding: Notwithstanding anything contained in sections 5 and 6, it shall be lawful for the State Government, if it is satisfied that it is expedient so to do in the public.
interest, to vary, by notification in the Official Gazette, the acreage of the ceiling area or economic holding, or the basis of determination of such ceiling area or economic holding, under subsection (2) of section 5, regard being had to (a) the situation of the land, (b) its productive capacity, (c) the fact that the land is located in a backward area, and (d) any other factors which may be prescribed.
" It is contended that section 7 does not fix any criteria for the guidance of the State Government and that the power which is given to the State Government to vary the ceiling area and economic holding is unguided and unfettered and that it is possible to exercise it at the sweet will and discretion of the State Government even in favour of a, single individual or in favour of political sufferers and the like.
It is urged that no broad principle or policy is enunciated by the Legislature in this behalf and it would be open to the State Government to exercise this power arbitrarily and even in a discriminatory manner and that such entrustment of power to the State Government amounts to excessive delegation of legislative power and section 7 therefore must be held to be void.
523 The principles by which the courts are guided in the determination of this question are now well settled.
In the State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga (1) Mahajan, J., (as he then was observed): The legislature applied its mind to the question Of the method and manner of payment of compensation.
It settled its policy and the broad principles.
It gave the State Government the power to determine matters of detail after having settled vital matters of policy.
It cannot be said that the legislature did not apply its mind to the subject matter of the legislation and did not lay down a policy.
The proportion in which compensation was payable in cash or in bonds or whether the whole of it was to be paid in cash is a matter which only the State Government could fix and similarly, the interval of instalments and the period of redeemability of the bonds were also matters of detail which the executive could more appositely determine in exercise of its rule making power.
It cannot be said in this case that any essential legislative power has been delegated to the executive or that the legislature did not discharge the trust which the Constitution had reposed in it.
If the rule making authority abuses its power or makes any attempt to make the payment illusory the expropriated proprietor will not be without a remedy.
" If the legislature settles the policy and the broad principles of legislation, there is no bar against leaving the matters of detail to be fixed by the executive and such delegation will not amount to excessive delegation of legislative power such as to vitiate the enactment.
In the case before us the preamble to the Act says what the policy of the impugned Act is, viz., further to amend the 1948 Act which as we have already observed sets out specific objectives to be achieved.
Sections 5 and 6 prescribe the ceiling area and the economic holding which are fixed by the legislature itself having regard to the normal conditions then prevailing within the State.
The legislature knew what were the different types, of land, their situation (1) , 954. 524 and productive capacity and having regard to all the relevant factors determined the ceiling area as also the economic holding.
There were, however, bound to be differences between district and district and one part of the State and another and having therefore enunciated the broad principles and policy which were embodied in sections 5 and 6 of the Act the legislature enacted section 7 empowering the State Government to vary the ceiling area and the economic holding if it was satisfied that it was expedient so to do in the public interest, regard being had to the various criteria therein specified.
The State Government was to be guided in arriving at its satisfaction in regard to the expediency thereof by (a) the situation of the land, (b) its productive capacity, (c) the fact that the land is located in a backward area, and (d) any other factors which may be prescribed.
In so far as the situation of the land and its productive capacity were variable factors, more so if the land was located in a backward area, the State Government was enjoined to have regard to these factors as determining the variations one way or the other from the normal standard adopted by the Legislature in sections 5 and 6 of the Act.
" Any other factors which may be prescribed " would be factors ejusdem generis to the factors mentioned earlier in the section and could not be any and every factor which crossed the mind of the executive.
The very terms of the section preclude any single individual being treated in this manner because it talks of the variation in the ceiling area and the economic holding being considered by the State Government to be expedient in the public interest and the satisfaction of any individual interest could hardly be said to be a matter of public interest.
No doubt individuals would be benefited by the variations contemplated in section 7 but for that purpose the State Government has got to be satisfied that it is expedient in the public interest to do so and no variation in regard to ceiling area or the economic holding of a single individual can ever be said to have been contemplated within the terms of section 7.
It appears however that this argument found favour with the Bombay High Court in its decision in Parashram Damodhar vs 525 State of Bombay (1) where the Court observed that the power to issue a notification may be exercised in favour of a single individual under the authority reserved under section 7 and may lay the State Government open to a charge of favouritism.
With great respect to the learned judges of that High Court, we are of the view that no such thing is ever contemplated in the terms of section 7 of the Act.
There is also no warrant for the suggestion that the State Government might vary the ceiling area and the economic holding, say for instance, for benefiting the political sufferers within the State.
If the situation of the land and its productive capacity as also the fact that the land is located in a backward area are the criteria to be determined before the State Government is satisfied that it is expedient to vary the ceiling area and the economic holding in the public interest and " any other factors which may be prescribed " are to be read ejusdem generis with the above as already observed, no question of benefiting political sufferers can ever enter into the picture.
That would be an extraneous consideration.
It does not come within the criteria specified in section 7.
of the Act on a true construction thereof.
Such considerations therefore do not militate against the validity of the provisions contained in that section.
In our opinion, the broad principles and policy have been laid down by the legislature, the criteria have been fixed according to which the State Government has to be satisfied that it is expedient to vary the ceiling area and economic holding already prescribed by the legislature and the mere matter of working out the details having regard to those criteria which are specifically mentioned therein which has been delegated to the State Government does not amount to any excessive delegation of legislative power.
It is also to be remembered that this power of variation of the ceiling area and the economic holding is vested in the State Government and is left to its subjective satisfaction having regard to the criteria therein specified.
As was observed by Kania, C. J., in Dr. N. B. Khare vs The State of Delhi (2): (1) A. I. R. (2) ; , 526.
526 This whole argument is based on the assumption that the Provincial Government when making the order will not perform its duty and may abuse the provisions of the section.
In my opinion, it is not proper to start with such an assumption and decide the legality of an Act on that basis.
Abuse of the power given by a law sometimes occurs; but the validity of the law cannot be contested because of such an apprehension.
" These observations of Karda, C. J., were quoted with approval by Patanjali Sastri, C. J., in The State of West Bengal vs Anwar Ali Sarkar (1) where it was stated: " Whether a law conferring discretionary powers on an administrative authority is constitutionally valid or not should not be determined on the assumption that such authority will act in an arbitrary manner in exercising the discretion committed to it.
" The above observations of Kania, C. J., were then quoted and the judgment proceeded: " On the contrary, it is to be presumed that a public authority will act honestly and reasonably in the exercise of its statutory powers. . . . . . .
We may lastly refer to the observations of this Court in Pannalal Binjraj vs Union of India (2): " It may also be remembered that this power is vested not in minor officials but in top ranking authorities like the Commissioner of Income tax and the Central Board of Revenue who act on the information supplied to them by the Income tax Officers concerned.
This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials.
(Vide Matajog Dobey vs H. section Bhari, [1955] 2 section C. R. 925, 932).
There is moreover a presumption that public officials will discharge their duties honestly and in accordance with the rules of law.
(Vide People of the State of New York vs John E. Van De Carr, etc., (1950 310 199 U. section 552; ; It has also been observed by this Court in A. Thangal Kunju (1) (1952] section C. R. 284, 301.
(2) ; 257, 258.
527 Musaliar vs M. Venkitachalam Potti, ; , with reference to the possibility of discrimination between assessees in the matter of the reference of their cases to the Income tax Investigation Commission that " it is to be presumed, unless the contrary were shown, that the administration of a particular law would be done " not with an evil eye and unequal hand " and the selection made by the Government of the cases of persons to be referred for investigation by the Commission would not be discriminatory.
" This presumption, however, cannot be stretched too far and cannot be carried to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain individuals or corporations to hostile and discriminatory treatment (Vide Gulf, Colorado, etc.
vs W. H. Ellis; , ; 41 L. Ed. 666).
There may be cases where improper execution of power will result in injustice to the parties.
As has been observed, however, the possibility of such discriminatory treatment cannot necessarily invalidate the legislation and where there is an abuse of such power, the parties aggrieved are not without ample remedies under the law (Vide Dinabandhu.
Sahu vs Jadumony Mangaraj; , ,146).
What will be struck down in such cases will not be the provision which invests the authorities with such power but the abuse of the power itself.
" It, therefore, follows that section 7 of the Act cannot be impugned on the ground of excessive delegation of legislative power.
All the various contentions urged by the petitioners therefore fail and the result is that the petitions filed by the petitioners before us must be dismissed with costs.
The State of Bombay which is the only respondent in all these petitions will however get only one set of costs therein.
Petitions dismissed.
| IN-Abs | The petitions challenged the constitutional validity of the Bombay Tenancy and Agricultural lands (Amendment) Act, 1956, (1) ; 62 490 (Bom.
XIII of 1956) which, in further amending the Bombay Tenancy and Agricultural Lands Act, 1948 (Bom.
LXVII of 1948), ;Ought to distribute the ownership and control of agricultural lands in implementation of the Directive principles of State policy laid down by articles 38 and 39 of the Constitution.
The impugned Act sought to distribut equitably the lands between the landholders and the tenants, except where the landholder required the same for cultivation by himself, by way of compulsory _Purchase of all surplus lands by tenants in possession thereof with effect from April 1, 1957, called the 'tiller 's day '.
The basic idea underlying the Act was to prevent concentration of agricultural lands in the hands of the landholders.
The Act thus, being a legislation in respect of rights in and over land, affected the relation between landlord and tenant and provided for the transfer and alienation of agricultural lands.
The petitioners, who were landholders as defined by section 2(9) of the Act contended that (1) the impugned legislation was beyond the competence of the State Legislature, (2) that, not being protected by article 31A, of the Constitution, it infringed articles 14, 19 and 31 of the Constitution and (3) that it was a piece of colourable legislation vitiated in part by excessive delegation of legislative power to the State.
On behalf of the respondent it was urged that the impugned legislation fell within Entry 18 in List 11 Of the Seventh Schedule to the Constitution, that 'provided for the extinguishment or modification of rights to estates and was as such protected by article 31A of the Constitution and that there was no excessive delegation of legislative power.
Held, that it was well settled that the heads of legislation specified in Entry 18 in List 11 of the Seventh Schedule to the Constitution should not be construed in a narrow and pedantic sense but should be given a large and liberal interpretation.
There could, therefore, be no doubt that the impugned Act fell within the purview of Entry 18 in List 11 of the Seventh Schedule to the Constitution and the plea of legislative incompetence must fail.
British Coal Corporation vs The King, ; United Provinces v .
Atiqa Begum, and Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City, [1955] 1 S.C.R. 829, relied on.
There could be no doubt that the Bombay Land Revenue Code, 1879, was the existing law relating to land tenures in force in the State of Bombay within the meaning of article 31A(2)(a) of the Constitution and the word 'estate ' as defined by section 2(5) Of the Code clearly applied not only to lands held by the various tenure holders of alienated lands but also to land holders and occupants of unalienated lands.
There was no ambiguity in that definition and, therefore, no justification for putting a narrower construction on that word so as to mean the land holders of the former category alone and not of the latter; even if there was any, the wider meaning of the word was the one to be adopted in the context of the objective of the Act.
491 Case law discussed.
The word 'landholder ' as defined in section 2(9) of the Act also made no distinction between alienated and unalienated lands and showed that the interest of such a landholder fell within the definition of 'estate ' contained in section 2(5) of the Code.
There was no warrant for the proposition that extinguishment or modification of any rights in estates as contemplated by article 31A(1)(a) of the Constitution must mean only what happened in the process of acquisition of any estate or of any rights therein by the State.
The language of the Article was clear and unambiguous and showed that it treated the two concepts as distinct and different from each other.
Sections 32 to 32R of the impugned Act clearly contemplated the vesting of the title in the tenure on the titter 's day, defeasible only on certain specified contingencies.
They were designed to bring about an extinguishment or in any event a modification of the landlord 's rights in the estate within the meaning of article 31A(1)(a) of the Constitution.
The impugned Act, therefore, was not vulnerable as being violative of Arts.14, 19 and 31 of the Constitution.
It would not be correct to contend that the sections merely contemplated a suspension of the landholders ' right and not their extinguishment.
Thakur Raghubir Singh vs Court of Wards, Ajmer, ; , held inapplicable.
Where the Legislature settled the policy and broad principles of the legislation, there could be no bar against leaving matters of detail to be fixed by the executive and such delegation of power could not vitiate the enactment.
In the instant case, since the Legislature had laid down the policy of the Act in the preamble, enunciated the broad principles in sections 5 and 6 and fixed the four criteria in section 7 itself, the last of which had necessarily to be read ejusdem generis with the others, it was not correct to say that the impugned Act by section 7 had conferred uncontrolled power on the State Government to vary the ceiling area or the economic holding or that section 7 was vitiated by an excessive delegation of legislative power to the State.
Parshram Damodhar vs State of Bombay, A.I.R. 1957 Bom.
257, disapproved.
Dr. N. B. Khare vs The State of Delhi, ; ; The State of West Bengal vs Anwar Ali Saykar, [1952] S.C.R. 284 and Pannalal Binjraj vs Union of India, [1957] S.C.R. 233, referred to.
|
ivil Appeal No. 1535 (NT) of 1978.
From the Judgement and Order dated 10.2.1976 of the Calcutta High Court in Income Tax Reference No.220 of 1969.
S.C. Manchanda, K.P. Bhatnagar and Ms. A. Subhashini for the Appellant.
C.S.S. Rao for the Respondent.
The Judgement of the Court was delivered by KASLIWAL, J.
This appeal by grant of certificate under Section 261 of the Income Tax Act, 1961 by High Court of Calcutta rises the following question for consideration: "Whether on the facts and circumstances of the case in an appeal filed under Section 248 of the Income Tax Act, 1961, the A.A.C. had juridiction to deal with the quantum of the sum chargeable under the provision of the said Act from which the assessee was liable to deduct tax under Section 195 thereof?" Brief facts of the case are that the respondent assessee is a private limited company incorporated in India.
The assessee company carried on some business in collaboration with M/s. Wilhelm Ruppmann, Industrieofenbau, Stuttgart W, Gutenbergstr.
By an agreement entered on 1st January, 1963 it was agreed that the foreign collaborators would grant to the Indian company during the term: (a) the exclusive right to manufacture the licenses equipment in India.
(b) the exclusive right to sell the licensed equipment in India under the "Wesman Ruppnan" such sale to be effected by the agency agreed upon, (c) permit licensees to export the licensed equipment freely outside India, except to countries where the licensors have similar license arrangements.
Clause 5 of the agreement provided for payment to the licensees of the following sums: 120 (a) "A payment of 5 per cent towards the cost of detailed working drawings in terms of clause 3 (b).
The payment for these drawings shall be admissible in those cases where new drawings are supplied by the Licensors abroad i.e. from their or their associates works design offices at Stuttgart or elsewhere in Europe.
This payment shall not be admissible for minor modification of drawings and designs which have already been purchased from the Licensors and paid for by the Licensees nor on repeat orders executed by the Licensees.
This fee shall be calculated on the ex factory selling price of the licensed products after deducting the value of imported components used in the manufacture thereof, if any, payment for cost of drawings shall be arranged by the Licensees against supply of individual furnance designs, such payment being effected forthwith against delivery of drawings." (b) "A royalty at 5 per cent (five) which will be subject to Indian taxes on the annual net ex factory sale value of each licensed equipment manufactured by the Licensees shall be payable to the Licensors.
The value of imported components, if any, that may be used in the manufacture of the Licensed equipment shall be deducted in computing the ex factory price of the licensed equipment for purpose of payment of royalty.
The payment has to be effected together with the report referred to under Clause 6".
The assessment year involved in the case is 1964 65.
In the matter of remittance to the non resident company, the assessee vide applications dated June 4, 1964 and 18.8.64 requested the Income Tax Officer to grant necessary certificate in order to enable them to approach the Reserve Bank of India for remittance to their collaborators.
The said applications related to the invoice in regard to supply of drawings for manufacture of furnances in India in accordance with their collaboration agreement.
The Income Tax Officer placing reliance on the terms of the agreement came to the conclusion that the payments made by the applicant company to the non resident collaborators in Germany could be grouped under the heads Royalties and remuneration for labour or personal services.
According to the Income Tax Officer neither the remittance fell within the exempted 121 category nor did the agreement for avoidance of double taxation between Indian and the Federal German Republic apply to the facts of the instant case.
According to him, the payment of the remittances in respect of which the applications had been made represented payment for supply of technical know how and for use of trade name and manufacturing right of the licensor company.
He did not agree with the submissions of the assessee company and disposed of the said applications vide order dated 5th September, 1964 under Sec.
195(2) of the Income Tax Act, 1961 directing the assessee company to deduct tax @ 65% on the entire sum proposed to be remitted.
The assessee company preferred an appeal to the Appellate Assistant Commissioner.
It did not dispute the assessability of the royalty @ 5% mentioned in Clause 5(b) of the agreement aforesaid.
It, however, challenged that the whole of the sum of 5% specified in clause 5(a) was not chargeable to income tax in India.
In regard to the same the assessee submitted that there was no liability to deduct tax in terms of the order of the Income Tax Officer as, in its opinion, (a) the services, if any, enumerated under clause 5(a) of the agreement were performed outside India and the payments were also being made outside India so that the amount paid was not chargeable to tax under the Indian Statute, (b) there was a bar to assessment under the Income Tax Act, 1961 in terms of an agreement for avoidance of Double Taxation between India and the Federal German Republic referred to above and (c) in the alternative, since the cost of the work drawings to the foreign collaborators exceeds the remuneration, the same was not taxable.
The Appellate Assistant Commissioner did not accept the first two of the aforesaid contentions of the assessee.
With regard to the third contention, however, the Appellate Assistant Commissioner came to the conclusion that it would be reasonable to determine the said cost by estimate which he did at 75 per cent of the amount paid to the non resident.
In his opinion the net profit chargeable to tax was accordingly 25% of the amount paid.
The department filed an appeal against the aforesaid order of the Appellate Assistant Commissioner and the assessee filed a cross objection, before the Income Tax Appellate Tribunal.
Both the departmental appeal and the assessee 's cross objections were heard together and decided by a consolidated order of the Tribunal.
The departmental representative made two submissions.
The first was that the A.A.C.was wrong in holding that the quantum of income could be determined 122 in an appeal under Section 248.
The second was that the A.A.C. was wrong in allowing expenses at 75% of the remittance.
The first point of the assessee 's cross objection was covered by the first ground of the departmental appeal mentioned above.
The second point raised in the assessee 's cross objection was to the effect whether the payment for the cost of drawings were exempt from the tax under the provisions of Double Taxation Avoidance Agreement or not.
The Tribunal, taking the points raised in the departmental appeal first, came to the conclusion that it was difficult to accept the argument that a total denial enable an appeal to be filed but not a part denial with reference to part of the payment subjected to deduction of tax.
In the opinion of the Tribunal the interpretation of Section 248 of the Income Tax Act as given by the A.A.C. was correct.
According to the Tribunal the A.A.C. could pass an order regarding the quantum.
The Tribunal held that the same could not be said to be unreasonable.
In the result the departmental appeal was dismissed.
In regard to the assessee 's cross objection, the Tribunal held that first part of the cross objection had already been dealt with in the appeal preferred by the departmental and to that extent the assessee 's cross objection on the said issue automatically succeeded.
In regard to the second issue, the Tribunal came to the conclusion that the amount brought to charge by the Income Tax Officer was not exempt under the Double Taxation Avoidance Agreement between India and the Federal Republic of Germany vide Articles 3(1) and 16 of the Agreement.
The assessee;s cross objection was thus, partly allowed.
At the instance of the Commissioner of Income Tax, West Bengal 1 the Tribunal referred the above mentioned question for the opinion of the High Court.
The High Court followed its earlier Judgement dated 12th August, 1970 in Income Tax Reference No. 31 of 1970 (Commissioner of Income Tax West Bengal 1 Calcutta vs M/s. Beni Ltd., Calcutta) and answered the said question in the affirmative and in favour of the assessee by order dated 10th February, 1976.
The department filed an application for leave to appeal to the Supreme Court and the High Court by order dated 8.9.1977 certified it to be a fit case for appeal to the Supreme Court under Section 261 of the Income Tax Act, 1976 and issued a certificate accordingly.
We have heard Mr.
S.C. Manchanda, Sr.
Advocate for the appellant but nobody appeared for the respondent.
The High Court in answering the reference placed reliance on its earlier Judgement dated August 12, 1970 but the copy of the said Judgement has not been supplied in the paper book as such we were derived to go through the 123 reasoning given by the High Court in answering the reference in the affirmative and in favour of the assessee.
It was contended by Mr. Manchanda that the order passed by the Income Tax Officer under Sec. 195(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was not appealable to A.A.C. under Sec. 248 of the Act.
His further contention was that the order passed by A.A.C. was totally without juridiction and the only remedy available to the assessee was to file a writ petition to High Court under Article 226 of the Constitution of India.
In our opinion this question does not arise before us nor such question was raised in the reference before the High Court.
The Commissioner of Income Tax only sought to refer the following question for the opinion of the High Court: "Whether, on the facts and circumstances of the case in appeal filed under Section 248 Income Tax Act, 1961, the Appellate Assistant Commissioner had jurisdiction to deal with the quantum of the sum chargeable under the provision of the said Act from which the assessee was liable to deduct tax under Section 195 thereof?" The above question does not contain the objection that no appeal was maintainable under Section 248 of the Act against the order of the Income Tax Officer passed under Section 195(2) of the Act.
The High Court was not called upon to decide any question of juridiction as sought to be raised by Mr. Manchanda before us nor the High Court has granted any certificate in this regard.
So far as the question referred to the High Court is concerned, its language shows that there was no controversy about the appeal filed under Sec. 248 of the Act and the only question raised was whether the A.A.C. had jurisdiction to deal with the quantum of the sum chargeable under the provisions of the said Act from which the assessee was liable to deduct tax under Sec.
195 thereof.
The argument thus raised by Mr. Manchanda before us that Order under Sec.
195 (2) was not appealable under Sec.
248 of the Act, is not available.
Even otherwise the language of Sec.
248 of the Act is wide enough to cover any order passed under Sec. 195 of the Act.
The case Meteor Satellite Ltd. vs Income Tax Officer, Companies Circle IX, Ahmedabad, [1980] 121 ITR p. 311 cited in support of the above contention by Mr. Manchanda is of no relevance.
It was next contended by Mr. Manchanda that the A.A.C. was wrong in holding that the quantum of income could be determined in an appeal under Section 248.
It was also argued that the A.A.C. was 124 also wrong in allowing the expenses at 75% of the remittance.
It would be proper to reproduce Section 248 of the Act which reads as under: Section 248: Appeal by Person Denying Liability to Deduct Tax: "Any person having in accordance with the provisions of Sections 195 and 200 deducted and paid tax in respect of any sum chargeable under this Act, other than interest, who denies his liability to make such deduction, may appeal to the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to be declared not liable to make such deduction.
" It was argued by Mr.
Manchanda that under Section 248 a person could deny his liability to make such deduction but there was no power to determine the quantum and to say as to what extent the said remittance will be taxed.
We find no force in the above contention.
Section 248 makes a mention of Sections 195 and 200 and it does not speak of the sub clauses of Sec. 195 either (1) or (2).
When once an appeal has been preferred to the A.A.C. on the matter of liability of the company to deduct taxes, the A.A.C. is well within his competence to pass an order on the quantum also.
In our opinion the A.A.C. was also competent to pass an order with regard to quantum when once he is seized of the matter.
Under Section 248 a person having deducted and paid tax under Section 195 may appeal to the A.A.C. denying his liability to make such deduction and for a declaration that he is not liable to make such deduction.
It is thus difficult for us to accept the arguments that total denial may enable an appeal to be filed but not a part denial with reference to part of the payment subjected to deduction of tax.
The right of appeal given under Section 248 is clear and we cannot accept the view sought to be propounded by Mr. Manchanda that such a right is restricted and the A.A.C. was not competent to fix the quantum or to revise the proportion of the amount chargeable under the provisions of the Act as determined by the Income Tax Officer.
251 of the Act provides with the powers of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals).
Clause (c) of Sub Sec.
(1) of Sec.
251 reads as under: "Sec. 251(1)(c): "In any other case, he may pass such orders in the appeal as he thinks fit".
125 The above provision gives full power to the Appellate authority to pass such orders in the appeal as he thinks fit.
There is no controversy before us that appeal could lie before A.A.C. under Sec. 248 of the Act.
We are thus in agreement with the view taken by the High Court and the Income Tax Appellate Tribunal.
The appeal thus fails and is dismissed with no order as to costs as nobody has appeared on behalf of the respondent.
R.P. Appeal dismissed.
| IN-Abs | The respondent assessee, a private limited company and a licensee, under an agreement was required to pay to its foreign colaborators (licensors) certain amounts towards cost of working drawings and royalty.
It applied to the Income Tax Officer to grant the necessary certificate to enable it to approach the Reserve Bank of India for remittance to its foreign collaborators.
The Income Tax officr held that the remittance represented payment for supply of technical know how and for use of the trade name and manufacturing right of the licenser company and that the said amount neither fell within the exempted category nor did the agreement for avoidance of double taxation apply to the case, and directed the assessee to deduct tax @ 65% on the sum to be remitted.
The assessee did not dispute the assessability of the royalty, but challenged in appeal, that since the whole of the sum towards the cost of working drawings exceeded the remuneration, the same was not taxable, and that the assessment was barred by the Double Taxation Avoidance Agreement.
The Appellate Asstt.
Commissioner rejected the Double Taxation Avoidance plea, but determined the cost of the working drawings at 75% and the net profit chargeable at 25% of the amount to be remitted to the non resident company.
The Revenue appealed before the Appellate Tribunal challenging the jurisdiction of the appellate authority under section 248 to determine the quantum of income, and that the Appellate Asstt.
Commissioner was wrong in allowing expenses @ 75% of the remittance.
The assessee filed cross objection.
Holding that the Appellate Asstt.
Commissioner could pass an order regarding the quantum, that the amount fixed by him 118 could not be said to be unreasonable, and that the amount brought to charge by the Income Tax Officer was not exempt under the Double Taxation Avoidance Agreement, the Tribunal dismissed the Department 's appeal and partly allowed the assessee 's cross objection.
At the instance of the Revenue, the Tribunal referred the question to the High Court which was answered in favour of the assessee.
In the appeal by certificate to this Court, it was contended that: the order passed by the Income Tax Officer under section 195(2) was not appealable to the Appellate Asstt.
Commissioner under section 248, and that the appellate authority had no jurisdiction to deal with the quantum of the sum chargeable under the provision of the Income Tax Act from which the assessee was liable to deduct tax under section 195.
Dismissing the appeal, this Court, HELD: 1.1 Once an appeal has been preferred to the Appellate Asstt.
Commissioner under section 248 of the Income Tax Act, 1961, on the matter of liability of the company to deduct taxes, the appellant authority was well within its competence to pass an order on quantum also.
[124D] 1.2 Section 251(1)(c) gives full power to the appellate authority to pass such orders in the appeal as it thinks fit.
[125A] 1.3 The right to appeal under section 248 of the Income Tax Act is clear and it cannot be said that such a right is restricted and the Appellate Asstt.
Commissioner was not competent to fix the quantum or to revise the proportion of the amount chargeable under the provisions of the Act as determined by the Income Tax Officer.
[124F] 2.
The language of section 248 of the Income Tax Act, 1961 is wide enough to cover any order passed under section 195.
The Appellate Asstt.
Commissioner was also competent to pass an order with regard to quantum when once he is seized of the matter.
[123F; 124D] 3.
Under section 248 a person having deducted and paid tax under s.195 may appeal to the Appellate Asstt.
Commissioner denying his liability to make such deduction and for a declaration that he is not liable to make such deduction.
[124E] Meteor Satellite Ltd. vs Income Tax Officer Companies Circle IX, Ahmedabad, , held inapplicable.
|
Civil Appeal No. 936 of 1977.
From the Judgement and Order dated 16.9.1976 of the Bombay High Court in S.C.A. No. 2741 of 1971.
Shishir Sharma and P.H. Parekh for the Appellant.
Dr. N.M. Ghatate, S.V. Deshpande for the Respondent.
83 The Judgement of the Court was delivered by K.N. SAIKIA, J.
This appeal by Special Leave is from the Judgement of the High Court of Bombay, dated 16th September, 1976, in Special Civil Application N. 2741 of 1971 upholding the Judgement of the Maharashtra Revenue Tribunal.
The suit land bearing Survey No. 182, owned by Shankarlal Kunjilal, was taken under Government management as per order of the Assistant Collector, Jalgaon bearing No. TEN.
WS 946 dated 14.12.1950 as the land was lying fallow for two consecutive years.
The Mallatdar, Raver was appointed as a Manager thereof under Section 45 of the Bombay Tenancy and Agricultural Lands Act, 1948, hereinafter referred to as "the Act. ' After assuming the management the land was leased out to the appellant Dhondu Choudhary by the Mamlatdar for a period of 10 years by an agreement of lease dated 7.12.1951.
The period of lease accordingly expired on 6.12.1951.
The period of lease accordingly expired on 6.12.1961.
However, the management of the land was terminated by the Government by the Assistant Collector 's order dated 27.7.1963, and the possession thereof was ordered to be restored to the respondent landlord.
There was nothing on the record to show that the lease which expired on 6.12.1961 was extended by the Manager thereafter till the termination of management by order dated 27.7.1963.
The appellant claimed that he was paying rent to the Mamlatdar during the period of 7.12.1961 to 27.7.1963 and thus continued to a be tenant in respect of the land.
He filed a Civil Suit against the respondent in the Court of Civil Judge, Raver, who made a reference to the Mamlatdar, Raver who held that the appellant continued to be tenant.
The respondent 's appeal to the Assistant Collector having failed, he moved a revision application before the Maharashtra Revenue Tribunal, hereinafter referred to as `the Tribunal ' wherein the question arose whether the appellant 's tenancy was subsisting on 27.7.1963, and whether he had become the tenant in respect of the land since that date under the Act.
Relying on a bench decision of the Bombay High Court in Special Civil Application No. 1077 of 1961 Ghambhir Lal Laxman Das vs Collector of Jalgaon, (decided on 20.12.1962) wherein it was held that the person to whom lease was granted by the Manager of the land which was taken under Government management, could not continue to be the tenant after the expiry of the period of 10 years without a fresh lease, and that after the management was terminated by the 84 Government on expiration of the lease, the tenancy under the lease could not be said to be subsisting on the date on which the management was terminated.
The Tribunal held that the appellant could not continue as tenant since termination of the lease on 27.7.1963.
The Tribunal further held that since the land was taken under the Government management by the order of the Assistant Collector under Section 88(1) of the Act the provision s of Sections 1 to 87 were not applicable and the appellant, therefore, could not continue to be tenant after expiration of the period of lease on 6.12.1961.
The High Court in the Special Application under Article 227 of the Constitution of India having upheld the above finding of the Tribunal, the appellant obtained Special Leave.
The only submission of the learned counsel for the appellant Mr. Shishir Sharma is that the appellant having continued payment of rent to Mamlatdar even after expiry of lease till the termination of management, he continued to be a tenant which the landlord could not avoid on resumption of the land.
Dr. N.M. Ghatate, the learned counsel for the respondent, submits that the appellant could by no means continue to be a tenant after his lease expired and no fresh lease was granted to him and more so after the management was terminated on 27.7.1963.
We find force in Dr. Ghatate 's submission.
Admittedly the management of the land was assumed by the State Government under Section 65 of the Act.
Section 65 deals with assumption of management of lands which remained unclutivated, and says: "65.
(1) If it appears to the State Government that for any two consecutive years, any land has remained uncultivated or the full and efficient use of the land has not been made for the purpose of agriculture, through the default of the holder or any other cause whatsoever not beyond his control the State Government may, after making such inquiry as it thinks fit, declare that the management of such land shall be assumed.
The declaration so made shall be conclusive.
(2) On the assumption of the management, such land shall vest in the State Government during the continuance of the management and the provision of Chapter IV shall mutatis mutandis apply to the said land: 85 Provided that the manager may in suitable cases give such land on lease at rent even equal to the amount of its assessment: Provided further that, if the management of the land has been assumed under sub section (1) on account of the default of the tenant, such tenant shall cease to have any right or privilege under Chapter II or III, as the case may be, in respect of such land, with effect from the date on and from which such management has been assumed.
" Admittedly, the Manager was appointed under Section 45 of the Act, Section 45 deals with vesting of estate in management, and says: "45.
(1) On the publication of the notification under section 44, estate the in respect of which the notification has been published shall, so long as the management continues, vest in the State Government.
Such management shall be deemed to commence from the date on which the notification is published and the State Government shall appoint a Manager to be in charge of such estate.
(2) Notwithstanding the vesting of the estate in the State Government under sub section (1), the tenant holding the lands on lease comprised in the estate shall, save as otherwise provided in this Chapter, continue to have the same right and shall be subject to the same obligations, as they have or are subject under the proceeding Chapters in respect of the lands held by them on lease.
" Section 61 deals with termination of management, and says: "61.
The State Government, when it is of opinion that it is not necessary to continue the management of the estate, by order published in the Official Gazette, direct that the said management shall be terminated.
On the termination of the said management, the estate shall be delivered into the possession of the holder, or, if he is dead, of any person entitled to the said estate together with any balances which may be due to the credit of the said holder.
All acts done or purporting to be done by the Manager during the continuance of the management of the estate shall be binding on the holder or to any person to whom the possession of the estate has been delivered.
" 86 Thus on termination of the management the suit land in the instant case was to be delivered into the possession of the respondent holder and all acts done or purporting to be done by the Manager during the continuance of the management of the estate should be binding on the holder or on any person to whom the possession of the estate had been delivered.
In the instant case the finding of the Courts below is that after expiry of the lease no fresh lease was granted by the Manager.
In view of this finding, the appellant 's claim to have continued as the tenant even after expiry of the lease on 6.12.1961 and till 27.7.1963, the date of termination, by paying rent for the period to the Mamlatdar would be of no avail, in the absence of fresh lease after expiry of the 10 years lease on 6.12.1961.
The Tribunal followed the binding decision of the Bombay High Court holding that there was no lease in favour of the appellant and that by mere holding over he could not have continued the status of a tenant.
This would be so because the Act does not envisage the Government as a landholder but only as Manager.
While delivering back the land into the possession of the landholder, it could not be burdened with any tenancy created or resulting while under management.
Besides, there could be no privacy between the landlord and the erstwhile tenant under Government in the matter of tenancy.
Between the appellant and the respondent landlord, therefore, no question of the former continuing as tenant of the latter could arise after the land was reverted to the landholder.
Mr. Sharma 's submission that the appellant was a deemed tenant is also not tenable.
The appellant could not have been a deemed tenant under Section 4 or 4B of the Act inasmuch as Section 88 of the Act grants exemption inter alia to lands held on lease from the Government.
It says: "88.
(1) Save as otherwise provided in sub section(2), nothing in the forging provisions of this Act shall apply (a) to lands belonging to, or held on lease from, the Government; xxx xxx xxx xxx xxx xxx xxx xxx (d) to an estate or land taken under management by the State Government under Chapter IV or section 65 except as provided in the said Chapter IV or section 65, as the case may be, and in sections 66, 80A, 82, 83, 84, 85, 86 and 87: 87 Provided that from the date on which the land is released from management, all the foregoing provisions of this Act shall apply thereto; but subject to the modification that in the case of a tenancy, not being a permanent tenancy, which on that date subsists in the land. xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx" In Keshav Vithal Mahatre vs Arbid Ranchhod Parekh, [1973] Bom.
L.R. LXXXV 694, a learned Single Judge has held that a lease of land granted by a Manager under section 47 of the Bombay Tenancy and Agricultural Lands Act, 1948, comes to an end with the termination of the management of the land by virtue of section 61 of the Act.
If the tenant continues to remain on the land thereafter, he would be cultivating it unlawfully as a trespasser and he cannot, therefore, claim to be a deemed tenant under section 4 of the Act.
This is consistent with the decision in Ghambhir Lal 's case(supra) relied on by the Tribunal.
Thus, Sections 4 and 4B were not applicable during the period from expiry of the lease to the termination of management.
In the result, we find no merit in this appeal and it is dismissed, but without any order as to costs.
V.P.R Appeal dismissed.
| IN-Abs | The suit land was taken under Government management as it was lying fallow for two consecutive years.
The Mamlatdar, appointed as a Manager thereof under Section 45, of the Bombay Tenancy and Agricultural Lands Act, 1948, after assuming management, leased out the said land to the appellant for a period of 10 years by an agreement of lease dated 7.12.1951.
The period of lease expired on 6.12.1961.
However, the management of the land was terminated by Government by the Assistant Collector 's order dated 27.7.63 and possession thereof was ordered to be restored to the respondent landlord.
The appellant filed a Civil Suit against the respondent contending that he was paying rent to the Mamlatdar during the period 7.12.1961 to 27.7.1963 and thus continued to be a tenant in respect of the land.
The Civil Judge made a reference to the Mamlatdar, who held that the appellant continued to be tenant.
The respondent 's appeal to the Assistant Collector having failed, a revision application was moved before the Revenue Tribunal wherein the question arose whether the appellant 's tenancy was subsisting on 27.7.1963, the date of termination of the management.
The Tribunal held that the appellant could not continue as tenant on the termination of the management, since the land was taken under the Government management under Section 88(1) of the Act.
82 The High Court in the Application under Article 227 of the Constitution of India having upheld this finding of the Tribunal, the appellant filed Special Leave petition to this Court.
The appellant contended that having continued payment of rent to the Mamlatdar even after expiry of the lease till the termination of management, he continued to be a tenant which the landlord could not avoid on resumption of the land, while the respondent submitted that the appellant could by no means continue to be a tenant after the expiry of lease, and that no fresh lease was granted to him after the management was terminated.
Dismissing the appeal, this Court, HELD: 1.
On the finding of the courts below that after the expiry of the lease, no fresh lease was granted by the Manager, the appellant 's claim to have continued as the tenant even after expiry of the lease on 6.12.1961 and till 27.7.1963, the date of termination, by paying rent for the period to the Mamlatdar would be of no avail, in the absence of fresh lease after expiry of the 10 years lease on 6.12.1961.
This would be so because the Act does not envisage the Government as a landholder but only as Manager.
While delivering back the land into the possession of the landholder, it could not be burdened with any tenancy created or resulting while under management.
Besides, there could be no privacy between the landlord and the erstwhile tenant under Government in the matter of tenancy.
Between the appellant and the respondent landlord, therefore, no question of the former continuing as tenant of the latter could arise after the land was reverted to the landholder.
[86B D] 2.
The appellant could not have been a deemed tenant either under Section 4 or 4B of the Act inasmuch as Section 88 of the Act grants exemption inter alia to lands held on lease from the Government.[86E]
|
N: Criminal Appeal No. 326 of 1979.
From the Judgement and Order dated 4.5.1979 of the Gujarat High Court in Criminal Appeal No. 389 of 1976.
T.U. Mehta, P.H. Parekh and Ms. Geetanjali Mathrani for the Appellant.
D.A. Dave, Anip Sachthey and B.R. Jad for the Respondent.
The following Order of the Court was delivered.
The appellant was charged under Section 302 I.P.C. for causing murder of Gangaben, her brother 's wife , in the early hours of 11th June, 1975 by pouring kerosene on her person and setting her aflame.
The marriage had taken place with Jayantilal, the brother of the appellant, hardly three months before the incident in question.
On the date of the incident the deceased was in the husband 's house when the unfortunate incident took place.
On hearing the cries a neighbor Prahladbhai went to the house and found that the deceased was inside the kitchen.
He pushed opened the door and saw the deceased aflame.
The said Prahladbhai, Bhanubhai, the brother of the appellant, and others took her to Shardaben Hospital for treatment.
They reached the casualty department at about 6.45 a.m. and thereafter she was admitted to the Burns Ward as an indoor patient at about 6.50 a.m.
Within five minutes thereafter PW 5 Dr. Kritikumar Solanki examined her.
While taking her case history he enquired of the injured as to what had happened.
The injured replied "my nanad (sister in law) burnt me".
He prescribed certain medicines, noted the case history and thereafter instructed the nurse.
PW 4 Pankajben, to give the treatment.
Dr. Solanki was incharge of the Burns Ward at the relevant time as PW 2.
Dr. Suresh Ambvani, was absent.
Dr. Ambvani arrived at about 8.30 a.m. in the ward and examined the patient.
After noting her pulse, etc., he asked her how she had received the burns.
She told him that she had been burnt.
On further questioning she stated that her husband 's sister and burnt her.
Dr. Ambvani thereupon asked her the name of her husband 's sister which she disclosed as Padma, the appellant before us.
Dr. Ambvani later made a note about the information divulged by the victim on the police `yadi ' which was received.
92 at about 2.45 p.m. to ascertain if the victim was in a fit condition to make a dying declaration.
After the victim was brought to the hospital a telephone message was sent to Madhupura Police Station.
The investigating officer in the course of investigation recorded the panchnama of the scene of occurrence at about 10.15 a.m.
The panchnama shows that the residence of the victim was on the first floor.
In the outer room pieces of burnt clothes and a peeled skin piece were found.
To the south thereof was the kitchen which was smelling of kerosene.
Pieces of burnt clothes were also lying in that kitchen.
There was a primus with a burner and broken match box soiled with water lying alongside certain garments,namely, two blouses, two petti coats and two half burnt sarees.
There was water on the floor.
Inspector Nagori claims to have interrogated the accused on the same day but arrested her on the next day at about 5.00 p.m.
The investigation thereafter proceeded in usual course and ultimately the appellant came to be charged as stated above.
The prosecution mainly relies on the evidence of the two medical men PW 2 Dr. Ambvani and PW 5 Dr. Solanki.
In addition thereto reliance is placed on the evidence of the two nurses PW 3 Rukshmaniben and PW 4 Pankajben.
The neighbor PW 7 Prahladbhai was also examined but he turned hostile.
On an appreciation of the evidence of these witnesses the learned City Session Judge, Ahmedabad, came to the conclusion that this was a case of homicidal death.
That conclusion has been confirmed by the High Court and has not been contested before us.
With regard to the evidence of the two medical men the trial judge concluded that there was no reason to doubt their testimony since the same was corroborated by the contemporaneous entries made by them in the case paper and the police `yadi '.
Taking note of the evidence of PW 1 Dr. Purohit who performed the post mortem a nd the evidence of PW 5 Dr. Solanki, he came to the conclusion that the victim was in a position to speak.
having regard to the fact that she had 90% of burns, her pulse was 130, respiration was 20 and her general condition was not good, he concluded, relying on the decisions of this Court in Balak Ram & Anr.
vs State of U.P., ; (1975 Crl.
Appeals Reporter 39) and Lallubhai vs State of Gujarat, that the deceased could not be in a fit state of mind when she made the dying declaration.
He thought it unsafe to place implicit reliance on the said evidence particularly because it was the appellant 's contention that she was not on good 93 terms with her brother i.e. the husband of the deceased.
The learned trial Judge also thought that the possibility of torturing could not be ruled out.
In this view, that he took, he gave the benefit of doubt to the appellant and acquitted her.
The State feeling aggrieved, filed an appeal, being Criminal Appeal No. 389 of 1976, which was heard and decided by a Division Bench of the High Court of Gujarat on 4th may 1979.
The High Court on a re appreciation of the prosecution evidence concluded that the view taken by the learned Sessions Judge was thoroughly untenable.
The High Court pointed out that two main reasons which weighed with the learned Sessions Judge for acquitting the appellant were "(1) that the deceased had not the requisite mental condition so as to make acceptable dying declaration: and (ii) that her husband was very much near the cot of the deceased, and hence, the possibility of tutoring the deceased cannot be ruled out".
The High Court closely examined both these reasons and concluded that they could not be supported by the evidence on record.
Being conscious of the fact that while dealing with an acquittal appeal, the High Court should give due weight to the views of the trail court on the question of credibility of the prosecution evidence and should not lightly interfere with its appreciation, it carefully scrutinized the evidence, particularly in regard to the two oral dying declarations, and concluded that there was no possibility of tutoring nor was the deceased mentally unfit to make the dying declarations.
In that view of the matter it reversed the order of acquittal, convicted the appellant of murder and sentenced her to life imprisonment.
Mr. Mehta, the learned counsel for the appellant, has taken us through the entire evidence as well the case law on which the learned trial Judge has based his order of acquittal.
He also invited our attention to a number of decisions of this Court in support of his contention that the High Court ought not to have interfered with the order of acquittal.
According to him the High Court should have given due regard to the appreciation of evidence by the trial court and should not have lightly brushed aside its conclusion on facts.
Counsel submitted that an order of acquittal strengthens the presumption of innocence which should not be dislodged unless the appellate court comes to the conclusion that the trial court has committed a manifest error of judgement resulting in miscarriage of justice.
His submission was that this Court should approach the question by inquiring if the High Court had adhered to the well settled principle that if two views are possible and the trial court accepts one view which the High Court considers less probable, the High Court will not reverse the trial court.
Lastly he 94 contented that although a conviction can be based solely on a dying declaration, courts should be slow to accept a dying declaration as true where it is not recorded in question and answer from and is cryptic in nature, since it is a piece of evidence not tested by cross examination.
The weight to be attached to a dying declaration must largely depend on whether or not the deceased was a fit state of mind to make it and since in the present case the trial court had ruled against the prosecution, the High Court was not justified inreversing the trial court, more so because if was doubtful if she could speak at all having regard to the burns on her lips and tongue.
In support of his submission he cited a host of decisions of this Court but it is unnecessary to refer to them as on principle there can be no dispute with the propositions of law stated by the appellant 's counsel.
We have given given our anxious considerations to these submissions but we are afraid we cannot accede to them because in the facts of the present case we are satisfied that the High Court would have failed in its duty if it had not reversed the decision of the trial court.
The evidence on record shows that the marriage had taken place hardly three months before the incident.
Even on the appellant 's own showing her relations with the deceased were not strained.
The appellant is the only sister of the husband of the deceased.
The word 'nanad ' means the husband 's sister.
Therefore, when the deceased told PW 5 Dr. Solanki that her 'nanad ' had set her on the fire, she meant the appellant and none else.
The evidence of nurse PW 4 Pankajben corroborates the evidence of Dr. Solanki.
Both these witness have deposed that the deceased was in a fit state of mind and was able to speak, elbeit with difficulty.
If there was any doubt on the question of identity it was cleared by PW 2, Dr. Suresh Ambvani to whom the deceased gave the name of her tormentor as padma.
The learned Sessions Judge, also came to the conclusion that notwithstanding the extensive burns the patient was conscious and was able to speak at the time she made the dying declarations.
Her condition soon deteriorated and by 2.45 p.m. she was not in a position to make any statement to the police as recorded by PW 2 Dr. Ambvani on the police 'yadi '.
Dr. Ambvani had,however, recorded what the patient had told him.
Therefore, besides the oral evidence of two medical men there are contemporaneous documents which go to show that the deceased made the statements in question.
Even the learned Sessions Judge did not doubt the correctness of truth of what both the medical men deposed but in his view the deceased was not mentally fit when she named the appellant.
It is well settled by a catena of cases that a dying declaration is 95 admissible in evidence on the principle of necessity and can form the basis for conviction if it is found to be reliable.
While it is in the nature of an exception to the general rule forbidding hearsay evidence, it is admitted on the premises that ordinarily a dying person will not falsely implicate an innocent person in the commission of a serious crime.
It is this premiss which is considered strong enough to set off the need that the maker of the statement should state so on oath and be cross examined by the person who is sought to be implicated.
In order that a dying declaration may form the sole basis for conviction without the need for independent corroboration it must be shown that the person making it had the opportunity of identifying the person implicated and is thoroughly reliable and free from blemish.
If, in the facts and circumstances of the case, it is found that the maker of the statement was in a fit state of mind and had voluntarily made the statement on the basis of personal knowledge without being influenced by others and the court on strict scrutiny finds it to be reliable there is no rule of law or even of prudence that such a reliable piece of evidence cannot be acted upon unless it is corroborated.
A dying declaration is an independent piece of evidence like any other piece of evidence neither extra strong nor weak and can be acted upon without corroboration if it is found to be otherwise true and reliable.
In the present case there can be no doubt that the deceased had an opportunity to see her tormentor as the incident happened in broad day light.
Since the incident occurred in the early hours of the day there was the possibility of a family member being involved.
There being no dispute that death was homicidal, the question is who did it? As no relative from the side of her parents was present, the possibility of tutoring by them must be ruled out.
The theory that her husband prompted her to name the appellant because his relations with the appellant were strained must be brushed aside as devoid of merit.
Except the appellant 's statement in this behalf, there is no other evidence no such foundation was laid in the cross examination of the investigating officers.
Since it is conceded that the appellant 's relations with the deceased were not bad, it is difficult to understand why the latter should falsely involved her, assuming her husband did prompt her, and allow her real tormentor to escape.
Since the appellant is the only sister of her husband, there remains no doubt about the identity of the 'nanad ' (husband 's sister or sister in law).
Doubt, if any, is removed by PW 2 Dr. Ambvani 's evidence to whom she disclosed the name `Padma '.
Both the medical men were conscious about her condition and, therefore, they would not have attached any importance to her statement if they had any doubt about her mental capacity.
Even Mr. Mehta had to concede that he was not in a position to say that the two medical men were motivated in giving false evidence.
96 Mr. Mehta, however,contented that apart from the fact that the appellant had 90% burns, her pulse rate was high and she had respiratory difficulty, the evidence of PW 5 Dr. Solanki shows that he had prescribed morphine injection and, therefore, by the time PW 2 Dr. Ambvani examined her she could not be in a conscious state to make the dying declaration to him.
In this connection he relied on the statement of PW 4 Pankajben who stated that she had given the treatment prescribed by Dr. Solanki.
Mr. Mehta, however, overlooks PW 4 Pankajben 's categorical statement that she had not given any injection to the victim.
On the other hand the other nurse PW 2 Rukshmaniben deposed that she had given the morphine injection intravenously after Dr. Ambvani left the ward.
Therefore, the submission has no merit.
Mr. Mehta then submitted that having regard to the fact that the victim had 90% burns and her general condition was poor, it would be hazardous to hold that her statements to the two medical men were true.
He also argued that she had burns on her lips and her tongue was swollen making it doubtful if she could talk.
We do not think there is any merit in this submission.
In Suresh vs State of M.P., this Court was required to deal with a more or less similar situation.
In that case the victim had sustained 100% burns of the second degree and her dying declaration was recorded by Dr. Bhargava in the hospital.
Dr. Bhargava had deposed that the victim was in a fit state of health.
The evidence, however,disclosed that while Dr. Bhargave was recording her statement the victim had started going into a coma.
Yet this Court accepted the dying declaration made by the victim to Dr. Bhargava.
Therefore, the mere fact that she had suffered 90% burns and her general condition was poor is no reason to discard the testimony of both of medical men when they say that she was in a fit state of mind and was able to make the dying declaration in question.
Lastly, the contention that since the dying declarations were not in question and answer from they must be discarded altogether is not correct.
Dr. Solanki had merely asked the patient how she was burnt to record the history of her case.
The victim answered by stating that her 'nanad ' (husband ' sister) had burnt her.
Dr. Ambvani too had merely tried to ascertain from the deceased how she was burnt and it was only after she stated that she was burnt by her sister in law that he tried to find the name of her tormentor.
In these circumstances we do not think that the failure on the part of the medical men to record her statement in question and answer from can in any manner affect the probative value to be attached to their evidence.
In Rabi Chandra Padhan & Ors.
vs State of Orissa, at p. 244 this Court 97 merely stated that dying declaration should preferably be in the question and answer form.
That would be so when the statement of the victim is sought to be recorded as a dying declaration.
But in the instant case as seen from the evidence of both the medical men they merely questioned her for the limited purpose of stating they history of the case.
Even otherwise having regard to her condition they could not have questioned her in detail.
In such circumstances the fact of the statements being cryptic is understandable.
See Bankey Lal vs State of U.P. We, therefore, do not think that it would be reasonable to discard the prosecution evidence in regard to the dying declaration on such slender grounds.
In the result we see no merit in this appeal and dismiss the same.
The appellant will submit to her bail within fifteen days from today.
Bail bond will stand canceled.
R.P. Appeal dismissed.
| IN-Abs | The wife of appellant 's brother was found aflame in the early hours of 11.6.1975 in the kitchen of her husband 's house.
She was taken to hospital and admitted to Burns ward where the doctor in charge (PW 5) examined her and while taking her case history enquired of the injured as to what happened, to which she replied, "my nanad (sister in law) burnt me".
She had suffered 90% of burns.
The nurse (PW 4) was instructed to give treatment.
Later another doctor (PW 2) attended on her.
When he asked her as to how she had received the burns, she told him that her husband 's sister had burnt her.
In reply to his further query, she named the appellant as her tormentor.
He made a note of this information by the victim on the police `yadi ' which was sent to him to ascertain if the victim was in a fit condition to make a dying declaration.
As her condition deteriorated, the victim was not in a position to make any statement to the police.
The investigation culminated in the appellant being charged under section 302, I.P.C. for causing the murder of her brother 's wife by pouring kerosene on her person and setting her aflame.
On trial, the Sessions Court held that the deceased had not the requisite mental condition so as to make an acceptable dying declaration, and that her husband was very much near the cot, and hence possibility of tutoring the deceased could not be ruled out.
Giving the benefit of doubt it acquitted the appellant.
89 In the State 's appeal against acquittal, a Division Bench of the High Court re appreciated the prosecution evidence and after closely examining the reasons given by the Sessions court, held them thoroughly untenable and not supported by the evidence on record.
It set aside the order of acquittal, convicted the accused of murder and sentenced her to imprisonment for life.
The appellant accused appealed to this Court challenging in aforesaid conviction and sentence on the ground that the High Court erred in law in holding the view taken by the trial court as less probable.
It was contended that the deceased having suffered 90% of burns and her general condition being poor, she was not in a fit mental state to make the dying declaration; that the dying declarations were not in question and answer form; and that the possibility of tutoring the deceased could not be ruled out.
Dismissing the appeal, this Court, HELD: 1.
A dying declaration is admissible in evidence on the principle of necessity and can form the basis for conviction if it is found to be reliable.
While it is in the nature of an exception to the general rule forbidding hearsay evidence, it is admitted on the premiss that ordinarily a dying person will not falsely implicate an innocent person in the commission of a serious crime.
It is this premiss which is considered strong enough to set off the need that the maker of the statement should state so on oath and be cross examined by the person who is sought to be implicated.
[94H; 95A B] 2.1 Being an independent piece of evidence like any other piece of evidence Neither extra strong nor weak a dying declaration can be acted upon without corroboration if it is found to be otherwise true and reliable, and in order to form the sole basis for conviction without the need for independent corroboration it must be shown that the person making it had the opportunity of indentifying the person implicated and is thoroughly reliable and free from blemish.[95d; 95B] 2.2 If it is found that the maker of the statement was in a fit state of mind and had voluntarily made the statement on the basis of personal knowledge without being influenced by others and the court on strict scrutiny finds it to be reliable, there is no rule of law or even of prudence that such a reliable piece of evidence cannot be acted upon unless it is corroborated.
[95C] 3.1 In the instant case, since the incident occurred in the early hours of the day, there was possibility of a family member being involved; and as the incident took place in broad day light, there could be no doubt that the deceased had an opportunity to see her tormentor.
The deceased told the doctor (PW 5) that her `nanad ' had set her on fire.
Since the appellant was the only sister of her husband, there remained no doubt about the identity of the `nanad ' (husband 's sister or sister in law).
Doubt, if any, was removed by another doctor 's evidence (PW 2) to whom she disclosed the name of the appellant.
[95D, 94D, 95F G] 3.2 The mere fact that the deceased had suffered 90% burns and her general condition was poor, was no reason to discard the testimony of both the medical men when they said that she was in a fit state of mind and was able to make the dying declarations in question.
Both the doctors were conscious of her condition and would not have attached any importance to her statement if they had any doubt about her mental capacity.
Besides the oral evidence of the two medical men, there were contemporaneous documents showing that the deceased made the statements in question.
[96E; 95G; 94G] Suresh vs State of M.P., , relied on.
3.3 The doctors (PW 2 and PW 5) merely questioned the victim for the limited purpose of recording the case history.
Having regard to her condition, they could not have questioned her in detail.
In the circumstances, the fact of the statements being cryptic was understandable; and the failure on their part to record her statements in question and answer form could in no manner affect the probative value to be attached to their evidence.
[97A B; 96G] Bankey lal vs State of U.P., , relied on and Rabi Chandra Padhan & Ors.
vs State of Orissa, , held inapplicable.
Being conscious of the fact that while dealing with an acquittal appeal, the court should give due weight to the views of the trial court on the question of credibility of the prosecution evidence and should not lightly interfere with its appreciation, the High Court carefully scrutinised the evidence, particularly in regard to the two oral dying declarations, and rightly concluded that there was no possibility of tutoring nor was the deceased mentally unfit to make the said dying declarations.
[93C E] 91 Balak Ram & Anr.
vs State of U.P., ; and Lallubhai vs State of Gujrat, , referred to.
|
Civil Appeal No. 1309 of 1986.
From the Judgment and Order dated 8.8.1985 of the Punjab and Haryana High Court in Regular Second Appeal No. 307 of 1985.
A.B. Rohtagi, Ranbir Singh Yadav and H.M. Singh for the Appellant.
75 A.G. Prasad and Mahabir Singh for the Respondents.
The Judgment of the Court was delivered by RAY, J.
This appeal on special leave is against the judgment and order passed by the High Court of Punjab & Haryana in Regular Second Appeal No. 307 of 1985 whereby the High Court upheld the order of termination of services of services of the appellant made on November 17, 1980 passed by the respondent No. 2, the Directer of Food and Supplies and Deputy Secretary to Government of Haryana, Chandigarh.
The salient facts that gave rise to the instant appeal are as follows: The appellant we appointed as Sub Inspector, Food and Supplies in the Department of Food and Supplies by the Respondent No.2 by order dated April 13, 1975 on and hoc basis against the ex servicemen quota.
As per the service rules the terms and conditions of the said appointment are as hereunder: "(i) The post is purely temporary.
Your appointment is purely on ad hoc basis and shall not exceed six months.
Your services are liable to be terminated at any time during this period without any notice and without assigning any reason.
Your services are also liable to be terminated at any time without notice on arrival of regular candidates from the Haryana Subordinate Services Selection Board.
" The appellant had been continuing in the said post of Sub Inspector without any break till November 17, 1980 i.e. the date of termination of his services.
The appellant, however, was served with an order of suspension made by the Respondent No. 2 on April 15, 1980 in view of the criminal proceedings pending against the appellant u/s 420 of the Indian Penal Code during the pendency of which the order of termination was made on November 17, 1980.
The said criminal proceeding being Criminal Case No. 1413 of 1981 was decided on October 21, 1981 wherein he has been acquitted of the said charge.
The Additional Chief Judicial Magistrate, Narnual had found that: ". .
Babu Ram accused was not present at the spot and he had no role to play in the distribution of the cement.
The Appellant could not point out even a single factor from the file by which the participation of this accused can be said to 76 have been proved by the prosecution.
As such, accused, Babu Ram cannot be held guilty of the offence charged and he is acquitted of the same.
" The plaintiff appellant immediately on receiving the order of termination after giving the requisite notice brought an action being Civil Suit No.453 of 1981 in the court of Senior Sub Judge, Narnual praying for a declaration to the effect that the order of suspension dated 15.4.1980 and the order of termination dated 17.11.1980 passed by the respondent No.2 were illegal, wrong, arbitrary and without jurisdiction and the appellant is entitled to reinstatement with effect from the date of his suspension and so further entitled to be regularised and to all the benefits of the service.
It had been stated in the pleadings of the appellant that a notification dated 1st January, 1980 issued by the Chief Secretary to the Government of Haryana addressed to all the Head of the Departments vide memo No. G.S.R./Const./ article 309/80 stating that such ad hoc employees who hold the class III posts for a minimum period of two years on 31.12.1979 are to be regularised if they fulfill the following conditions: (a) Only such ad hoc employees as have completed a minimum of two years service on 31.12.1979 should be made regular.
However, break in service rendered on ad hoc basis upto a period of one month may be condoned but break accruing because the concerned employee had left service of his own volition or where the ad hoc appointment was against a post/vacancy for which no regular recruitment was required/intended to be made, i.e. leave arrangements or filling up of other short time vacancies, may not be condoned.
(b) Only such ad hoc employees as have been recruited through the Employment Exchange should be made regular.
(c) The work and conduct of the ad hoc employees proposed to be regularised should be of an overall good category.
The plaintiff appellant pleaded that he having put in the minimum period of two years of service on 31.12.1979 became entitled to have his service regularised in view of the said Notification.
He further pleaded that the alleged order of termination was in fact an order of dismissal and so it amounts to punishment and the same being penal in nature is null and void because it contravened the provisions of Constitution of India.
The Senior Sub Judge, Narnaul after hearing the 77 parties held that as the petitioner appellant was acquitted of the said offence, the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension.
The Court further held that the appellant will be entitled to all the benefits of his service.
Against this judgement and decree, an appeal was filed being C.A. No. 129 of 1983 in the Court of Addl.
District Judge, Narnaul by the State.
The Addl.
District Judge by his judgement dated 18.10.1984 affirmed the judgement and decree of the learned Sub Judge holding that no enquiry was conducted before termination of the service of the appellant.
The Addl.
District Judge also held that: ". the plaintiff had completed two years of service and according to executive instructions his services were bound to be regularised.
Reasonable opportunity to defend was not given to the plaintiff before termination of his services.
Order of termination of services was merely a camouflage for an order of dismissal for misconduct.
He was still under suspension when he was terminated.
All these facts lead only to one conclusion that the impugned order of termination of the services of the plaintiff is bad in law . " Against this judgement and order R.S.A. No. 307 of 1985 was filed by the said respondents in the High Court of Punjab and Haryana at Chandigarh.
The High Curt allowed the appeal on setting aside the judgement and decree of the courts below holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the Notification.
It was further held that when the case of the appellant came up for regularisation the Department found that the appellant 's work and conduct was not of the required standard so as to justify his regularisation and consequently his services were not regularised.
It was further held that since the appellant was ad hoc employee therefore, the Department instead of waiting for the result of the criminal proceedings thought it fit under the circumstances to dispense with the services of the appellant in accordance with the terms of his appointment.
This judgement is under challenge in this appeal.
The pivotal question that poses itself for consideration before this Court is firstly whether during the period of suspension in view of the criminal proceeding which ultimately ended with the acquittal, an order of termi 78 nation can be made against the appellant by the respondent No.2 terminating his ad hoc services without reinstating him as he was acquitted from the charge u/s 420 I.P.C. and secondly whether the impugned order of termination from his service can be made straight away without reinstating him in the service after he earned acquittal in the criminal case and thereafter without initiating any proceeding for termination of his service as the impugned order of termination was of penal nature having civil consequences.
It has also to be considered in this connection that the respondent No.2 has also not considered the case of the appellant for regularisation of his services even though he had completed two years of service as on 31.12.1979 fulfilling all the requisite terms and conditions mentioned in the said Notification.
The order of suspension made by the respondent No.2 is admittedly on the sole ground that criminal proceeding was pending against the appellant.
The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant.
It is the settled position in law that the appellant who was suspended on the ground of pendency of criminal proceeding against him, on being acquitted of the criminal charge is entitled to be reinstated in service.
His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment.
Furthermore as the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31.12.1979 is entitled to be considered for regularisation in the post Sub Inspector, Food and Supplies.
The High Court had observed that: ". .
In these circumstances, when his case came up for regularisation, the Department found that the plaintiff 's work and conduct was not of the required standard so as to justify his regularisation and consequently his services were not regularised.
" This finding of the High Court is totally baseless in as much as the counsel for the said respondent could not produce any order or documentary evidence to show that the respondents considered the case of the appellant for the purpose of regularisation in accordance with the Notification dated 1st January, 1980.
As such the finding of the High Court is wholly bad and illegal.
The other finding of the High Court that the acquittal of the appellant by the criminal court was of no consequence as his services were terminated before the order of acquittal was made because the appellant was no more in service is also 79 against the well settled legal position.
It has also to be borne in mind that under the Notification dated 1st January, 1980 issued by the Government, the appellant having fulfilled the condition of two years of service is entitled to be considered by the Government for regularisation of his service in accordance with the said executive instructions issued by the Government.
As we have said herein before that there is nothing on record to show that the Government has ever considered the case of the appellant for regularisation of his service in the light of the instructions contained in the said Notification dated 1st January, 1980, the impugned order of termination of service made by the Government is illegal and arbitrary and so it is liable to be quashed and set aside.
Moreover, from the sequences of facts of his case the inference is irresistible that the impugned order of termination of the service of the appellant is of penal nature having civil consequence.
It is well settled by several decisions of this Court that though the order is innocuous on the face of it still then the Court that though the order is innocuous on the face of it still then the Court if necessary, for the ends of fair play and justice can lift the veil and find out the real nature of the order and if it is found that the impugned order is penal in nature even though it is couched with the order of termination in accordance with the terms and conditions of the order of appointment, the order will be set aside.
Reference may be made in this connection to the decision of this Court in Smt.
Rajinder Kaur vs State of Punjab and Another, in which one of us is a party.
It has been held that: "The impugned order of discharge though stated to be made in accordance with the provisions of Rule 12.21 of the Punjab Police Rules, 1934, was really made on the basis of the misconduct as found on enquiry into the allegation behind her back.
Though couched in innocuous terms, the order was merely a camouflage for an order of dismissal from service on the ground of misconduct.
This order had been made without serving the appellant any charge sheet, without asking for any explanation from her and without giving any opportunity to show cause against the purported order f dismissal from service and without giving any opportunity to show cause against the purported order of dismissal from service and without giving any opportunity to cross examine the witness examined.
The order was thus, made in total contravention of the provisions of Article 311(2) and was therefore, liable to be quashed and set aside.
" This case relied on the observations made by this Court in the case of Anoop Jaiswal vs Government of India, ; 80 wherein it has been observed that: ".
Where the form of order is merely a camouflage for an order of dismissal for misconduct it is always open to the court before which the order is challenged to go behind the form and ascertain the true character of the order.
If the court holds that the order though in the form is merely a determination of employment is in reality a cloak for an order of punishment, the court would not be debarred, merely because of the form of the order, in giving effect to the rights conferred by law upon the employee".
Similar observation has been made by this Court in the case of Hardeep Singh vs State of Haryana and Ors.
, It has been held in this case as under: "In the instant case, it is clear and evident from the averments made in paragraph 3, sub para (i) to (iii) and paragraph (v) of the counter affidavit that the impugned order of removal/dismissal from service was in substance and in effect an order made by way of punishment after considering the service conduct of petitioner.
There is no doubt the impugned order casts a stigma on the service career of the petitioner and the order being made by way of punishment, the petitioner is entitled to the protection afforded by the provisions of Article 311(2) of the Constitution as well as by the provisions of Rule 16.24 (Ix)(b) of the Punjab Police Rules, 1984. " In the premises aforesaid, we are constrained to hold that the judgement rendered by the High Court is wholly illegal and unwarranted and as such we quash and set aside the same and affirm the judgement of the courts below.
We direct that the appellant be reinstated in the service immediately and be paid all his emoluments i.e. pay and allowances from the date of the order of his suspension i.e. 15.4.1980 till the date of reinstatement into service minus the suspension allowance that had been received by the appellant during the period of his suspension (if any).
The respondents are at liberty to consider the case of the appellant for regularisation in the light of the norms laid down in the executive instructions issued on 1st January,1980 by Notification No. G.S.R./Const./Art.
309/80.
The appeal is allowed.
There will be no order as to costs in the facts the circumstances of the case.
Y.Lal Appeal allowed.
| IN-Abs | The appellant was appointed an Sub Inspector, food & Supplies by respondent No. 2 on 13.4.1975 on ad hoc basis against service man quota; the post being purely temporary liable to be terminated without notice and without assigning any reasons or on arrival of a regular candidate.
The appellant continued in service on that post till November 17, 1980, when his services were terminated.
Prior to the termination of his services he was placed under suspension on April 15, 1980 in view of the criminal proceedings under Section 420, IPC pending against him and before the culmination of criminal proceedings, his services were terminated by order dated November 17, 1980, as aforesaid.
Criminal case against the appellant was decided on October 21, 1981 wherein he was acquitted of the charge.
The appellant on receiving the order of termination of his services filed Civil Suit 453 of 1981 in the court of Senior Sub Judge, narnaul praying for a declaration that the orders of suspension as also termination were illegal, wrong, arbitrary and without jurisdiction and that the appellant was entitled to reinstatement and regularisation of his service under the Government notification dated 1.1.1980 issued by the Chief Secretary to the Government of Haryana authorising regularisation of such ad hoc employees who held the Class III posts for a minimum period of two years.
According to the appellant his case was covered by the said notification and as such he was entitled to all the benefits of service.
The Senior Sub Judge held that as the appellant was acquitted of the offence, the authorities should have revoked the suspension order and have paid the pay for the period for which the appellant remained under suspension and thus allowed to the appellant all the benefits.
An appeal was taken by the respondents to the Addl.
District Judge who affirmed the order of the trial court holding that no enquiry was conducted before termination of the service of the appellant.
Against the order of the Addl.
District Judge, the respondents preferred an appeal 74 before the High Court and the High Court allowed the appeal holding that the appellant was not entitled to be regularised automatically unless he fulfilled all the conditions given in the notification.
It was also held that the case of the appellant was considered for regularisation by the Department but the same was not found suitable; the services of the appellant were terminated in accordance with the terms of his appointment.
The appellant has filed this appeal against that order in this court after obtaining special leave.
Allowing the appeal, this Court, HELD: The order of suspension made by the respondent No. 2 is admittedly on the sole ground that criminal proceeding was pending against the appellant.
The order of termination had been made illegally during the pendency of the order of suspension and also during the pendency of the criminal proceeding which ultimately ended with the acquittal of the appellant.
The settle position in law is that the appellant who was suspended on the ground of pendency of criminal proceeding against him, on being acquitted of the criminal charge is entitled to be reinstated in service.
His acquittal from the criminal charge does not debar the disciplinary authorities to initiate disciplinary proceedings and after giving an opportunity of hearing to the appellant pass an order of termination on the basis of the terms and conditions of the order of his appointment.
[78C E] As the appellant whose name was sent through Employment Exchange and who was appointed and has completed two years service on 31.12.1979, he is entitled to be considered for regularisation in the post of Sub Inspector, Food and Supplies.
[78E] Smt.
Rajinder Kaur vs State of Punjab and Anr.
, ; ; Anoop Jaiswal vs Government of India, ; ; Hardeep Singh vs State of Haryana and Ors.,[1987] 4 S.L.R. 576, referred to.
|
ivil Appeal No. 5020 of 1989.
From the Judgment and Order dated 7.12.1989 of the Bombay High Court in W.P. No. 5021 of 1989.
Dr. Y.S. Chitale, V.N. Ganpule, B. Rastogi, Ms. Suman and Ms. Punam Kumari for the Appellant.
V.M. Tarkunde, Ejaz Iqbal, H.S. Anand, R.F. Nariman and H.D. Adhar for the Respondents.
54 The Judgment of the Court was delivered by AHMADI, J.
This is a tenant 's appeal by special leave directed against the judgment of the High Court of Maharashtra at Bombay whereby it confirmed the eviction order passed by the 6th Additional District Judge, Pune, in Civil Appeal No. 662 of 1988 in reversal of the order of dismissal of the suit passed by the Learned Additional Judge of the Court of Small Causes, Pune, in Civil Suit No. 348/85 on 30th April, 1988.
The brief facts giving rise to this appeal are as under: On 5th February, 1976 the appellant executed a lease agreement in respect of a part of the ground floor of property bearing City Survey No. 1205/2/9 situate at Shivaji nagar, Pune city, more particularly described in paragraph 1 of the said agreement.
The said premises were taken on rent for the purposes of restaurant business on monthly rental basis.
By clause 3 of the agreement the appellant undertook to pay a total rent of Rs. 1,000 per month for the demised premises (Rs.900 for the hotel portion and Rs. 100 for the garage); the said rent being payable every month in advance.
Clause 5 of the agreement prohibited sub letting of the premises or parting with the possession thereof in any other manner.
As the appellant committed a default in the payment of rent from June, 1983 to December, 1984 in respect of hotel portion and from November, 1979 to December, 1984 in respect of the garage, the first respondent despatched a notice dated 31st December, 1984 terminating the appellant 's tenancy as required by Section 106 of the Transfer of Property Act.
The appellant failed to respond to the said notice and neglected to pay the amount of arrears of rent claimed therein within one month from the date of receipt of the notice.
Consequently, the first respondent filed the suit which has given rise to this appeal on 26th February, 1985, being Civil Suit No. 348 of 1985, seeking eviction on four grounds, namely, (i) the tenant was in arrears of rent for more than six months and had failed and neglected to pay the amount due within one month from the date of receipt of the eviction notice, (ii) the tenant had raised a permanent structure in the suit premises in breach of section 13(1)(b) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter called 'the Act '), (iii) the tenant was guilty of causing nuisance and annoyance to the neighbors and (iv) the tenant had sub let the premises to second respondent without his consent.
The suit was contested by the appellant tenant by his written statement Exh. 25 and the supplementary written statements Exhs.
56 and 60 filed after the amendments in the plaint.
The second respon 55 dent, the alleged sub tenant, adopted the written statement of the appellant by his purshis Exh. 30.
During the pendenacy of the suit Section 12(3) of the Act was amended by Section 25 of the Amendment Act 18 of 1987 whereby clauses (a) and (b) of sub section 3 of section 12 were deleted and instead a new sub section 3 was substituted which restricted the court 's right to pass a decree for eviction on the ground of arrears o standard rent and permitted increases, if on the first date of the hearing of the suit or on such other date as the Court may fix, the tenant paid or tendered in court the standard rent and permitted increase then due together with simple interest on the amount of arrears at the rate of 9% per annum and thereafter continued to pay or tender in court regularly such standard rent and permitted increases till the final decision of the suit and also paid the cost of the suit as directed by the court.
The appellant contended that the said amendment had retrospective effect and he was entitled to the benefit thereof.
In the alternative he also contended that he had paid the rent to the first respondent but the latter had failed to issue rent receipts.
He also questioned the validity of the notice terminating his tenancy.
He denied the allegation that he had sub let the premises or had aparted with the possession thereof in favour of the second respondent or that he was guilty of causing nuisance and annoyance to the neighbours.
The allegation that he had raised a structure of a permanent nature in the hotel premises without the permission of first respondent was also disputed.
He, therefore, contended that the suit was liable to fail.
The learned Additional Small Causes Judge, Pune raised issues at Exh. 36 and came to the conclusion that the agreed rent for the hotel and the garage was Rs. 900 per month and in addition thereto the tenant had agreed to pay Rs. 120 per month for education cess and other taxes.
He also concluded that the tenant had failed to pay the rent in respect of the garage from November, 1979 and in respect of hotel from June, 1983.
Since the tenant had failed to pay or deposit the arrears claimed by the eviction notice dated 31.12.1984 within one month from the receipt thereof, the Court held he was liable to be evicted under section 12(3)(a) of the Act but in view of the substituted Section 12(3), he was entitled to protection as he had paid the entire arrears together with interest and costs before the passing of the decree.
He also held that there was no reliable evidence to show that the tenant had sub let the premises or had made any alteration of a permanent nature without the consent of the first respondent.
The allegation of nuisance and annoyance was held not proved on facts and was even otherwise found to relate to a post suit incident of 1986.
on 56 these findings the learned Trial Judge dismissed the suit with no order as to costs.
The first respondent, felling aggrieved by the order of dismissal of his suit, preferred an appeal being Civil Appeal No. 662/88.
The appellate court reversed the decree of the trial court holding that the rent was payable by the month and there being no dispute regarding standard rent and permitted increases and the tenant having failed to pay the arrears within one month from the date of receipt of a valid eviction notice dated 31st December, 1984, he was liable to be evicted under section 12(3)(a) of the Act since the amended section 12(3) introduced by Amending Act 18 of 1987 was prospective in nature.
It also took the view that since the premises was sub let by the appellant to the second respondent on a rental of Rs. 2,000 per month, the former was guilty of profiteering.
So far as the other two contentions regarding raising of a permanent structure and allegation of nuisance and annoyance were concerned, the appellate court concurred with the findings recorded by the trial court.
In this view that the appellate court took it allowed the appeal and ordered both the tenant and sub tenant to deliver vacant possession of the demised premises within two months from the date of the order with costs throughout.
The appellant tenant, feeling aggrieved by the order of eviction passed by the learned 6th Additional District Judge, Pune, preferred a writ petition No. 5021 of 1989 to the High Court.
The writ petition was rejected at the admission stage by a short speaking order.
The High Court observed that the eviction notice was legal and proper and the lower appellate court was right in concluding that the appellant had sub let the premises to the second respondent as alleged.
The request for extention of time to vacate was rejected as the tenant was unwilling to file an undertaking in the usual form.
Feeling aggrieved by the said order the tenant has preferred the present appeal after obtaining special leave.
The standard rent in respect of the demised premises has been found by all the three courts to be Rs. 900 per month (Rs. 750 in respect of the hotel premises and Rs. 150 in respect of the garage).
In addition thereto the tenant had undertaken to pay a lump sum of Rs. 120 per month by way of education cess and other taxes in respect of the demised premises.
Thus the tenant was required to pay a consolidated sum of Rs. 1020 per months as rent to the first respondent.
By 31st December, 1984 the appellant tenant had failed to pay the rent in respect of the hotel premises from 1st June, 1983 and in respect of the 57 garage area from 1st November, 1979; thus the arrears of rent in respect of hotel premises came to Rs.16,530 and in respect of the garage premises Rs.9,300 aggregating to Rs.25,830.
The first respondent, therefore, served the appellant with a notice terminating the tenancy by the end of 31st January, 1985 and called upon the appellant to pay the arrears of rent and vacate and handover peaceful possession of the demised premises by that date.
Even after the receipt of this notice, the appellant neither paid the amount due within one month of the receipt of the notice nor filed any application for fixation of standard rent and/or the permitted increases under section 11 of the Act.
On the failure of the appellant to comply with the requirement of the eviction notice, the first respondent filed a suit for eviction on 26th February, 1985 on the grounds stated earlier.
In the said eviction suit the first respondent claimed the arrears of rent upto the end of December, 1984 as set out in the eviction notice and damages of Rs. 1020 for month of January, 1985 together with Rs. 250 by way of notice charges.
The total claim made came to Rs.27,100.
The appellate Court and the High Court came to the conclusion that the newly substituted section 12(3) had no application and the case was governed by section 12(3)(a) as it stood before the amendment.
Dr. Chattel, the learned counsel for the appellant frankly conceded that in view of the decision of this Court in Arjun Khiamal Makhijani vs Jamnadas C. Tuliani & Ors., , the case would be governed by section 12(3) as it stood before its amendment by Amending Act 18 of 1987, since the substituted section 12(3) was found to be prospective in nature.
This Court in paragraph 14 of the judgment at page 624 repelled the submission that it was retrospective in operation in the following words: "In our opinion, the tenants are not entitled even to the benefit of the amended sub section (3) of Section 12 of the Act inasmuch as on a plain reading of the sub section it is not possible to give it a retrospective operation." Dr. Chitale was, therefore, justified in submitting that the decision of this case must rest on the question whether it attracted section 12(3)(a) or section 12(3)(b) as it stood prior to the amendment.
According to Dr. Chitale since the tenant was obliged to pay the education cess and other taxes by way of permitted increases which were payable at the end of the year, the case would not attract section 12(3)(a) as a part of the rent became payable annually and not monthly.
He further contended that there was nothing on the record to show that the landlord 58 had paid the amount of education cess and other taxes and unless payment of the taxes to the local authority was established the land lord had no right to claim the same from the tenant.
According to him, the landlord 's right to recover the taxes arises not at the end of the financial year but on the date on which he makes the payment to the local authority.
Dr. Chitale, therefore, submitted that the case attracted section 12(3)(b) and when the tenant deposited a sum of Rs.37,740 on 18th January, 1986 before the issues were settled on 13th February, 1986 he could be said to have made the full payment of the rent then due and therefore the courts below were not justified in granting an eviction decree for arrears of rent under section 12(3)(a) of the Act.
In support of his contention he invited our attention to four decisions of the Gujarat High Court, namely,Pancha Mohanlal Ishwardas vs Maheshwari Mills Ltd., ; Prakash Surya vs Rasiklal Ishverlal Mehta, ; Vanlila Vadilal Shah vs
Mahendrakumar J. Shah, AIR 1975 Guj. 163 and Vishwambar Hemandas vs Narendra Jethalal Gajjar, AIR 1986 Guj. 153.
He also placed reliance o a Bombay High Court decision in Muktabai Gangadas Kadam vs Muktabai Laxman Palwankar, and the decision of this Court in Bombay Municipal Corporation vs Life Insurance Corporation Of India, Bombay; , On the question of sub letting he stated that the Trial Court had rightly pointed out that the evidence falls far short of proof of sub tenancy and the Appellate Court as well as the High Court were in error in reversing that view of the Trial Court.
Mr. Tarkunde, the learned Advocate for the landlord, on the other hand submitted that once the four ingredients of section 12(3)(a) were shown to be satisfied, the Court had no alternative but to decree the suit.
According to him, the standard rent in respect of the demised premises was shown to be Rs. 900 per month and in addition thereto the tenant had agreed to pay a quantified sum of Rs. 120 per month by way of education cess and other taxes.
It was proved as a fact that the tenant had failed to pay the rent in respect of the garage from 1st November, 1979 and the rent in respect of the hotel from 1st June,1983.
The tenant had also failed to pay the tax amount at the rate of Rs. 120 per month from 1st June, 1983.
Since there was no dispute in regard to standard rent or permitted increases in this case, the tenant was under an obligation to pay the entire amount due from him by way of rent and taxes within one month of the receipt of the eviction notice dated 31st December, 1984.
Under section 12(1) of the Act a landlord is not entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of standard 59 rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, insofar as they are consistent with the provisions of the Act.
Section 12(2) places a restriction on the landlord 's right to sue his tenant for recovery of possession on the ground of non payment of the standard rent and/or permitted increases due from him.
According to that section no suit for recovery of possession can be instituted on the aforesaid ground until the expiration of one month next after notice in writing of the demand of the standard rent and/or permitted increases has been served upon the tenant in the manner set out in section 106 of the Transfer of Property Act.
To comply with this requirement the landlord had issued a notice on 31st December, 1984 calling upon the tenant to pay the standard rent which was in arrears along with the quantified tax amount in arrears upto that date as detailed in the notice.
The tenancy was terminated w.e.f. 31st January, 1985.
Admittedly, the tenant did not respond to this notice nor did he pay or deposit the amount of arrears as claimed in the notice within one month of the receipt thereof.
He also did not file any application for fixation of standard rent and/or permitted increases under section 11 of the Act.
There was, therefore, no question of the Court specifying the amount of interim rent or permitted increases under sub section (3) of Section 11 during the pendency of such an application.
Mr. Tarkunde, therefore, submitted that the case was clearly governed by the provisions of section 12(3)(a) since indisputably the rent inclusive of the quantified tax amount was payable by the month; there was no dispute as regards the standard rent/permitted increases: the tenant was found to be in arrears of rent for more than six months and he had failed to pay or deposit the rent within one month after the receipt of the notice under section 12(2) of the Act.
According to Mr. Tarkunde the submission that because the education cess was payable by the year, a part of the rent was not payable by the month and therefore section 12(3)(a) had no application is clearly misconceived for the simple reason that in the present case the landlord as well as the tenant had by agreement quantified the amount of education cess and other taxes at Rs.120 per month and had not left the determination of the amount to fluctuations in the tax amount from time to time.
Once the quantum in respect of the tax liability is determined by agreement between the parties, the same forms part of the rent and it is not open to contend that notwithstanding the agreement the tax amount remains payable by the year and the tenant is obliged to pay the same only after the landlord has paid the taxes to the local authority.
He, therefore, contended that the case law on which Dr. Chitale had placed reliance can have no application to the special facts and circumstances of the present case.
60 On the second question regarding sub letting Mr. Tarkunde submitted that this Court should not interfere with a finding of fact recorded by the Appellate Court and affirmed by the High Court since it is nobody 's case that the finding is perverse and not based on evidence.
In this connection, he took us through the relevant part of the pleadings and the evidence to support his contention that the conclusion reached by the Appellate Court and the High Court was based on evidence and was not perverse or against the weight of evidence.
He submitted that even if two views are possible this Court in exercise of its powers under Article 136 of the Constitution should refrain from disturbing a possible and plausible view.
We have given our anxious consideration to the rival views propounded by the learned counsel for the appellant tenant as well as the respondent landlord.
On a consideration of the submissions made at the bar and having regard to the provisions of law we are inclined to think that the view taken by the Appellate Court and the High Court does not demand interference.
There is no dispute regarding the standard rent of the demised premises.
under clause 3 of the lease agreement the rent was fixed at Rs. 1,000 per month but subsequently it seems to have been revised by consent of parties to Rs.1,020 per month (Rs. 900 for the demised premises and Rs.120 for education cess and taxes).
The rent was payable 'every month regularly in advance ' under clause 3 of the agreement.
Clause 2 of the agreement states that the premises have been hired for restaurant business 'on monthly rental basis.
It is , therefore, clear from the terms of the lease agreement that the parties intended the tenancy to be a monthly tenancy.
The two clauses of section 12(3) as they stood before the Amendment Act 18 of 1987 provided as under: "12(3)(a).
Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period or one month after notice referred to in sub section (2), the Court shall pass a decree for eviction in any such suit for recovery of possession.
(b) In any other case no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the 61 tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.
" Explanation I states that if there is any dispute regarding standard rent or permitted increases the tenant shall be deemed to be ready and willing to pay if, before the expiry of the period of one month after notice referred to in sub section (2), he makes an application to the Court under sub section (3) of section 11 and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court.
Mr. Tarkunde, therefore, argued that even if the case is covered by section 12(3)(b) since the tenant had failed to pay or deposit the full amount due to the landlord as claimed in the eviction notice by the first date of hearing of the suit, i.e. 13th February, 1986, and had also failed to make an application under section 11(3) of the Act, the tenant was not entitled to the protection of that provision also.
Mr. Tarkunde further submitted that the tenant was not regular in the payment of rent and permitted increases for the subsequent period also and there were long intervals between two payments made during the pendency of the litigation.
He, therefore, submitted that even if section 12(3)(b) was invoked the tenant had failed to comply with the requirement of the provision and was, therefore, not entitled to its protection.
Since we are of the opinion that the case is covered by section 12(3)(a) we do not consider it necessary to examine this submission based on the true interpretation of section 12(3)(b) of the Act.
The only submission which Dr. Chitale made for taking the case out of the purview of section 12(3)(a) was that the entire rent was not payable by the month which was the first condition to be satisfied for invoking the said provision.
According to him, since the tenant was bound to pay education cess and other taxes in respect of the demised premises which were payable from year to year, a part of the rent was not payable by the month and therefore the first condition of section 12(3)(a) was not satisfied.
Hence, submitted Dr. Chitale, the case fell within the phrase 'in any other case ', by which clause (b) of section 12(3) opens.
Before we answer the submission of Dr. Chitale it may be advantageous to refer to the relevant provisions of the Maharashtra Education (Cess) Act (Maharashta Act XXVII of 1962).
Section 4(a) of the said Act provides for the levy and collection of tax (cess) on 62 lands and buildings at the rates specified in Schedule A on the annual letting value of such lands or buildings.
The primary responsibility to pay this tax is cast by section 8 on the owner of the land or building irrespective of whether or not he is in actual occupation thereof.
Section 13 next provides that on payment of the amount of the tax in respect of such land or building the owner shall be entitled to receive that amount from the person in actual occupation of such land or building during the period for which the tax was paid.
Under section 15 any person entitled to receive any sum under section 13 is conferred for the recovery thereof the same rights and remedies as if such sum were rent payable to him by the person from whom he is entitled to receive the same.
It thus seems clear that education cess is a tax and the owner is primarily responsible to pay the same to the local authority and on such payment a right is conferred on him to recover the same from the actual occupant in addition to the standard rent in respect of the demised premises.
Sub section (3) of section 13 in terms states that the recovery of any amount of tax from an occupier under this provision shall not be deemed to be an increase for the purposes of section 7 of the Act.
It is, therefore, obvious that the landlord has a statutory right to recover the amount of education cess paid by him in respect of the demised premises from the tenant occupant and such recovery shall not be an unlawful increase under of section 7 of the Act but would squarely fall within the expression 'permitted increases ' as defined by section 5(7) of the Act.
This statutory right to recover the amount of education cess in respect of the demised premises from the occupant tenant can be quantified by agreement of parties so long as the amount quantified does not exceed the total amount actually paid by the owner by way of education cess.
In the present case, it is nobody 's contention that the amount of Rs. 120 per month payable by way of education cess and other taxes was in excess of the amount actually payable under the relevant statues to the local authority.
The Gujarat High Court has taken a consistent view that where the tenant is obliged under the terms of the tenancy or by virtue of the statute to pay the tax dues to the landlord, since such taxes which form part of the rent are payable annually the case ceases to the governed by section 12(3)(a) and falls within the purview of section 12(3)(b) of the Act.
In Maheshwari Mills Ltd., under the terms of the tenancy the tenant was obliged to pay the municipal taxes and property taxes in respect of the demised premises.
The Court took the view that such payment was by way of rent and since the municipal taxes and property taxes were payable on year to year basis, a part of the rent was admittedly not payable by the month and, therefore, section 12(3)(a) was not attracted.
In Prakash Surya the tenant had agreed to pay the municipal tax 63 and education cess.
The amount payable towards these taxes constituted rent and since the same was payable at the end of the year the Court held that the rent had ceased to be payable by the month and hence section 12(3)(a) had no application.
The same view was reiterated in Vanlila 's case where education cess was payable by the tenant by virtue of section 21 of the Gujarat Education Cess Act, 1962.
Since it constituted a part of the rent, to be precise permitted increase under section 5(7) of the Act, it was held that it took the case outside the scope of section 12(3)(a) of the Act.
In the case of Vishwambhar Hemendas also since the rent was inclusive of taxes the Court held that the case was governed by section 12(3)(b) of the Rent Act.
The Bombay High Court has expressed the same view in Muktabai 's case.
This Court in the Bombay Municipal Corporation 's case held that while section 7 of the Act prohibits increase above the standard rent it does not prohibit the recovery of increase to which a landlord is entitled under the other provisions of the said statue, namely, increase by way of 'permitted increases '.
Education cess is specifically recoverable as rent by virtue of section 13 and as sub section (3) thereof provides that it shall not be treated as increase in rent under section 7 of the Act, there can be no doubt that such an increase falls with the definition of 'permitted increases under section 5(7) of the Act.
It, therefore, seems to be well settled that education cess is a part of 'rent ' within the meaning of the Act and when the same is claimed in addition to the contractual or standard rent in respect of the demised premises it constitutes a permitted increase within the meaning of section 5(7) of the Act and being payable on a year to year basis, the rent ceases to be payable by the month within the meaning of section 12(3)(a) of the Act.
But the question still survives whether the parties can be agreement quantity the said amount and make it payable on a month to month basis provided of course the said amount does not exceed the tax liability of the landlord; if it exceeds that liability it would infringe section 7 of the Act and the excess would not be allowed as permitted increase within the meaning of section 5(7) of the Act.
A right to recover a certain tax amount from the tenant occupant under the provisions of a statute can be waived by the owner or quantified by agreement at a figure not exceeding the total liability under the statue.
If by agreement the amount is so quantified and is made payable by the month not withstanding the owner 's liability to pay the same annually to the local authority, the question is whether is such circumstances the 'rent ' can be said to be payable by the month within the meaning of section 12(3)(a) of the Act? We see no reason why we should take the view that even where the parties mutually agree and quantify the tax amount payable by the tenant to the landlord on monthly basis, the 64 rent should not be taken to be payable by the month within the meaning of section 12(3)(a) of the Act.
A statutory right to recover the tax amount by way of reimbursement can be waived or limited by the holder of such right or the recovery can be regulated in the manner mutually arranged or agreed upon by the concerned parties so also as it is not in violation of statute.
If for convenience and to facilitate payment, the parties by mutual consent work out an arrangement for the enforcement of the owner 's statutory right to recover the tax amount and for discharging the tenant occupant 's statutory obligation to reimburse the owner, we see no reason for refusing to uphold such a contract and if thereunder the parties have agreed to the tenant occupant discharging his liability by a fixed monthly payment not exceeding the tax liability.
The said monthly payment would constitute 'rent ' payable by the month within the meaning of section 12(3) (a) of the Act.
The view expressed by the Gujarat High Court in Vishwambar Hemandas does not, with respect, state the law correctly if it holds that even in cases where the entire tax liability is on the landlord and the tenant had to pay a gross rent of Rs. 19.50 p.m .
the mere recital in the lease that the rent is inclusive of taxes the case outside the purview of section 12(3)(a) of the Act.
We are, therefore, in respectful agreement with the view taken by the Appellate Court and the High Court in that behalf.
We, therefore, hold that as the tenant had failed to comply with the requirement of section 12(3)(a) to seek protection from eviction, the Courts below were justified in ordering his eviction.
In the view that we take on the first point discussed above, it is unnecessary for us to examine the second point regarding sub tenancy.
In the result we see no merit in this appeal and dismiss the same with costs.
We, however, grant time upto 31st December, 1991 to the tenant to vacate.
R.S.S. Appeal dismissed.
| IN-Abs | The appellant tenant executed a lease agreement of the demised premises on a standard rent of Rs. 900 per month.
In addition thereto, the tenant also undertook to pay a lump sum of Rs. 120 per month by way of education cess and other daxes in respect of the premises.
The 1st respondent filed a suit for eviction of the tenant inter alia on the ground that he was in arrear of rent for more than six months and had failed and neglected to pay the amount within one month from the date of receipt of the notice served on him terminating the tenancy and for eviction.
During the pendency of the suit, section 12(3) of the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947 was amended whereby clauses (a) and (b) of sub section 3 of section 12 were deleted and instead a new sub section 3 was substituted which restricted the court 's right to pass a decree of eviction on the ground of arrears of standard rent, etc., if the tenant paid or tendered in Court the arrears as stipulated in the amended clause.
The appellant claimed that the said amendment had retrospective effect and he was entitled to the benefit thereof.
The Trial Court dismissed the suit.
The Court held that since the tenant had failed to pay or deposit the arrears claimed by the eviction notice within one one month from the receipt thereof, he was liable to be evicted under section 12(3)(a) of the Act, but in view of the substituted section 12(3), he was entitled to protection he had paid the entire arrears together with interest and costs before the passing of the decree.
On appeal, the Appellate Court reversed the decree of the trial 52 Court.
The Appellate Court held that the tenant having failed to pay arrears within one month of receipt of a valid notice, he was liable to be evicted under section 12(3)(a) of the Act, since the amended section 12(3) was prospective in nature.
The appellant tenant preferred a writ petition to the High Court, which was dismissed on the ground of sub letting.
Before this Court it was inter alia contended on behalf of the appellant that (i) since the tenant was obliged to pay the education cess and other taxes, by way of permitted increases, which were payable at the end of the year, the case would not attract section 12(3)(a) as a part of the rent became payable annually and not monthly and therefore the case attracted section 12(3)(b); and (ii) the tenant having deposited the arrears, etc., in time, the courts below were justified in granting and eviction decree for arrears of rent under section 12(3)(a).
On the other hand, it was contended on behalf of the respondent that the case was clearly governed by the provisions of section 12(3)(a) since indisputably the rent inclusive of the quantified tax amount was payable by the month.
It was argued that once the quantum in respect of the tax was determined by agreement between the parties, same formed part of the rent and it was not open to contend that notwithstanding the agreement the tax amount remained payable by the year and the tenant was obliged to pay the same only after the landlord had paid the taxes to the local authority.
Dismissing the appeal, this Court, HELD:(1) In view of the decision of this Court, the case would be governed by section 12(3) as it stood before its amendment, since the substituted section 12(3) was found to be prospective in nature.
[57G] Arjun Khaimal Makhijani vs Jamnadas C. Tuliani, , followed.
(2) It is clear from the term of the lease agreement that the parties intended the tenancy to be a monthly tenancy.
[62C] (3) The statutory right to recover the amount of education cess in respect of the demised premises from the occupant/tenant can be quantified by agreement of parties so long as the amount quantified does not exceed the total amount actually paid by the owner by way of education case.
[62E] 53 (4) It seems to be well settled that education cess is a part of 'rent ' within the meaning of the ACt and when the same is claimed addition to the contractual or standard rent in respect of the demised premises it constitutes a permitted increase within the meaning of section 5(7) of the Act and being payable on a year to year basis, the rent ceases to be payable by the month within the meaning of section 12(3)(a) of the Act.
[63D E) Panchal Mohanlal Ishwardas vs Maheshwari Mills Ltd.
,[1962] ; Prakash Surya vs Rasiklal Ishverlal Mehta, ; Vanlila Vadilal Shah vs Mahendrakumar J. Shah, A.I.R. 1975 Guj. 163; Muktabai Gangadas Kadam vs Muktabai Laxman Palwankar,[1969] 71 B.L.R. 752; Bombay Municipal Corporation vs Life Insurance Corporation of India, Bombay, ; (5) If for convenience and to facilitate payment, the parties by mutual consent work out an arrangement for the enforcement of the owner 's statutory right to recover the tax amount and for discharging the tenant occupant 's statutory obligation to reimburse the owner, no reasons are seen for refusing to uphold such a contract and if the parties have agreed thereunder to the tenant occupant discharging his liability by a fixed monthly payment not exceeding the total tax liability, the said monthly payment would constitute 'rent ' payable by the month within the meaning of section 12(3) (a) Act.
[64B.C] Vishwambar Hemandas vs Narendra Jethalal Gajjar, A.I.R. 1986 Guj.
153 overruled.
(6) As the tenant had failed to comply with the requirement of section 12(3)(a) to seek protection from eviction, the Courts below were justified in ordering his eviction.
|
ivil Appeal (C) No. 137 of 1991.
From the Judgment and Order dated 20.2.1989 of the Allahabad High Court in W.P. No. 3096 of 1980.
Yogeshwar Prasad and Ms. Shoba Dixit for the Appellants.
R.B. Datar, R.K. Khanna and Surya Kant for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
Leave granted.
This appeal is directed against the judgment of the Allahabad High Court (Lucknow Bench) setting aside the order dated 23.9.1980 terminating the respondent 's services.
The sole question which falls for consideration in this appeal is whether the order dated 23.9.1980 terminating the respondent 's services, who was admittedly an ad hoc and temporary employee is vitiated in law.
The High Court has held that since juniors to the respondent were retained in service while the respondent 's services were terminated, the order of termination was discriminatory in nature.
It further held that since the order of termination was founded on an adverse entry awarded to the respondent his character roll without giving him any opportunity on the ground that he was not suitable, the order "cannot be said to be a decision given in good faith.
" The High Court further observed: "Even if any punishment was to be awarded, it should have been proportionate to the alleged offence , if any." On these findings the High Court held that the order of termination suffered from apparent error of law, it accordingly allowed the respondent 's writ petition and quashed the order of termination.
The factual matrix of the case is in a short compass.
The respon 32 dent, was appointed on ad hoc basis on 18.2.1977 as an Assistant Auditor under the Local Funds Audit Examinater of the State of Uttar Pradesh, for a fixed period ending on 31.8.1977.
In December, 1977 the respondent was again appointed on ad hoc basis for a period ending on 28.2.1978.
Since the regular appointment could not be made in time, the respondent 's services were extended from time to time.
The last extension was granted on 21.1.1980 and the extended period of service was to expire on 28.2.1981.
The terms and conditions of respondent 's service as contained in the order of appointment stated that the appointment was ad hoc, purely temporary for the term fixed in the order and his services were liable to be terminated at any time without assigning any reason.
He was awarded an adverse entry in his character roll for the year 1977 78.
The entry stated that the respondent 's work was poor and he should work hard and take interest in the work.
The respondent made representation against the entry but the same was rejected.
The respondent and Rajendra Prasad Pandey another Sub Auditor both were deputed to audit the accounts of Raja Raghunbar Dayal Inter College, Sitapur for the year 1979 80.
While carrying on the Audit the respondent and Rajendra Prasad Pandey both are alleged to have acted in excess of their authority in auditing the "Boys Fund Accounts" of that College for the year 1978 79 on their own accord without any authority for the same.
They issued audit note under their own signatures and also irregularly demanded a high amount of Rs. 13,250.70 as audit fee and collected an amount of RS.
2,000 as audit fee for which they issued receipts under their own signatures.
On receipt of complaint a preliminary inquiry was held that it was found that the allegations against the respondent and Rajendra Prasad Pandey were correct and both of them had acted beyond their authority and collected a sum of Rs. 2,000 as audit fee for the audit of the Boys Fund Accounts, although the Boys Fund of the Institution did not fall within the purview of audit of the Local Funds Audit and no fee was chargeable for the audit of such Fund.
After the preliminary inquiry report, the respondent was relieved from his duties from Sitapur and directed to join his duties at Allahabad, but the respondent proceeded on leave and did not join his duties at Allahabad.
Ultimately, the respondent 's services were terminated by the order dated 32.9.1980 and on the same day by another order, service of Rajendra Prasad Pandey were also terminated.
Both the aggrieved persons filed writ petitions in the High Court at Lucknow Bench under Article 226 of the Constitution contending that their termination orders were illegal, having been passed in violation of Article 311 of the Constitution.
The writ petition filed by Rajendra prasad pandey was dismissed but the respondent 's writ petition was allowed by a 33 Division Bench of the High Court on the ground as noted earlier.
There is no dispute that the respondent was an ad hoc and temporary employees and the terms and conditions of his employment were regulated by the U.P. Temporary Government Servant (Termination of Services0 Rules, 1975.
The contract of service as contained in the appointment letter also stipulated the terms and conditions of the respondent 's employment that his services were liable to be terminated at any time without assigning any reason or compensation.
In the counter affidavit filed before the High Court the order of termination was defended on the ground that the respondent 's work and conduct were not satisfactory and he was unsuitable for the service, therefore his services were terminated.
To support that contention the appellant placed reliance on the adverse entry awarded to the respondent in the year 1977 78 and also on the allegations made against him with raged to the audit of the Boys Fund of Raja Raghubar Dayal Inter College.
The High Court held that since junior persons to the respondent in service were retained, the order of termination was rendered illegal.
In our opinion, the principle of 'last come first go ' is applicable to a case where on account of reduction of work or shrinkage of cadre retrenchment takes place and the services of employees are terminated on a count of retrenchment.
In the event of retrenchment the principle of 'last come first go ' is applicable under which senior in service is retained while the junior 's services are terminated.
But this principle is not applicable to a case where the services of a temporary employee are terminated on the assessment of his work and suitability in accordance with terms and conditions of his service.
if out of several temporary employees working in a department a senior is found unsuitable on account of his work and conduct, it is open to the competent authority to terminate his services and retain the services of juniors who may be found suitable for the service.
Such a procedure does not violate principle of equality, enshrined under Articles 14 and 16 of the Constitution.
if a junior employees is hard working, efficient and honest his services could not be terminated with a view to accommodate the senior employee even though he is found unsuitable for the service.
if this principle is not accepted there would be discrimination and the order of the termination of a junior employee would be unreasonable and discriminatory.
On the admitted set of facts, the order of termination in the instant case, could not be rendered illegal or unjustified on the ground of juniors being retained in service.
The view taken by the High Court is not sustainable in law.
34 The High Court held that the termination of respondent 's services on the basis of adverse entry in the character roll was not in good faith and the punishment imposed on him was disproportionate.
it is unfortunate that the High Court has not recorded any reasons for this conclusion.
The respondent had earned an adverse entry and complaints were made against him with regard to the unauthorised audit of the Boys Fund in an educational institution, in respect of which a preliminary inquiry was held and thereupon, the competent authority was satisfied that the respondent was not suitable for the service.
The adverse entry as well as the preliminary inquiry report with regard to the complaint of unauthorised audit constituted adequate material to enable to competent authority to form the requisite opinion regarding the respondents suitability for service.
Under the service jurisprudence a temporary employee has no right to hold the post and his services are liable to be terminated in accordance with the relevant service rules and the terms of contract of service.
If on the perusal of the character roll entries or on the basis of preliminary inquiry on the allegations made against an employee, the competent authority is satisfied that the employee is not suitable for the service whereupon the services of the temporary employee are terminated, no exception can be taken to such an order of termination.
A temporary Govt.
Servant has no right to hold the post, his services are liable to be terminated by giving him one month 's notice without assigning any reason either under the terms of the contract providing for such termination or under the relevant statutory rules regulating the terms and conditions of temporary Govt.
servants.
A temporary Govt.
servant can, however, be dismissed from service by way of punishment.
Whenever, the competent authority is satisfied that the work and conduct of a temporary servant is not satisfactory of that his continuance in service is not in public interest on account of his unsuitability, misconduct or inefficiency, it may either terminate his services in accordance with the terms and conditions of the service or the relevant rules or it may decide to take punitive action against the temporary Government servant.
if it decides to take punitive action may hold a formal inquiry by framing charges and giving opportunity to the Govt.
servant in accordance with the provisions of article 311 of the Constitution.
since, a temporary Govt.
servant is also entitled to the protection of Article 311(2) in the same manner as a permanent Govt.
servant, very often, the question arises whether an order of termination is in accordance with the contract of service and relevant rules regulating the temporary employment or it is by way of punishment.
It is now sell settled that the form of the order is not conclusive 35 and it is open to the Court to determine the true nature of the order.
in Parshotam Lal Dhingra vs Union of India; , a Constitution Bench of this Court held that the mere use of expressions like 'terminate ' or 'discharge ' is not conclusive and in spite of the use of such expressions, the Court may determine the true nature of the order to ascertain whether the action taken against the Govt.
servant is punitive in nature.
The Court further held that in determining the true nature of the order the Court should apply two tests namely: (1) whether the temporary Govt.
servant had a right to the post or the rank or (2) whether he has been visited with evil consequences; and if either of the tests is satisfied, it must be held that the order of termination of a temporary Govt.
servant is by way of punishment.
It must be borne in mind that a temporary Govt.
servant has no right to hold the post and termination of such a Govt.
servant does not visit him with any evil consequences.
The evil consequences as held in Parshotam Lal Dhingra 's case (supra) do not include the termination of services of a temporary Govt.
servant in accordance with the terms and conditions of service.
The view taken by the Constitution Bench in Dhingra 's case has been reiterated and affirmed by the Constitution Bench decisions of this Court in the State or Orrisa and anr.
vs Ram Narayan Das; , ; R.C. Lacy vs The State of Bihar & Ors., C.A. No. 590/62 decided on 23.10.1963; Champaklal Chimanlal Shah vs The Union of India, ; Jagdish Mitter vs The Union of India, ; A.G. Benjamin vs Union of in`ia, C.A. No. 1341/66 decided on 13.12.1966 and Shamsher Singh & Anr.
vs State of Punjab,[1975] 1 SCR 814, These decisions have been discussed and followed by a three Judge Bench in State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; Learned counsel for the respondent urged that the allegations made against the respondent in respect of the audit of Boys Fund of an educational institution were incorrect and he was not given any opportunity of defence during the inquiry which was held ex parte.
had he been given the opportunity, he would have placed correct facts before the inquiry officer.
His services were terminated on allegation of misconduct founded on the basis of an ex parte enquiry report.
He further referred to the allegations made against the respondent in the counter affidavit filed before the High Court and urged that these facts demonstrate that the order of termination was in substance, an order of termination founded on the allegations of misconduct, and the ex parte enquiry report.
In order to determine this question, it is necessary to consider the nature of the respondent 's right to hold the post and to ascertain the nature and purpose of the inquiry held against 36 him.
As already observed, the respondent being a temporary Govt.
servant had no right to hold the post, and the competent authority terminated his services by an innocuous order of termination without casting any stigma on him.
The termination order does not indict the respondent for any misconduct.
The inquiry which was held against the respondent was preliminary in nature to ascertain the respondent 's suitablity and continuance in service.
There was no element of punitive proceedings as no charges had been framed, no inquiry officer was appointed, no findings were recorded, instead a preliminary inquiry was held and on the report of the preliminary inquiry the competent authority terminated the respondent 's services by an innocuous order in accordance with the terms and conditions of his service.
Mere fact that prior to the issue of order of termination, an inquiry against the repondent in regard to the allegations of unauthorised audit of Boys Fund, was held does not change the nature of the order of termination into that of punishment as after the preliminary inquiry the competent authority took no steps to punish the respondent instead it exercised its power to terminate the respondent 's services in accordance with the contract of service and the Rules.
In State of Orissa & Anr.
vs Ram Narain Dass, ; a Constitution Bench of this court considered the question and indicated "the fact of the holding of an inquiry is not decisive of the question.
What is decisive is whether the order is by way of punishment in the light of the tests laid down in Purshottam Lal Dhingra 's case." In Jagdish Mitter 's case (supra) a Constitution Bench of this Court held that every order terminating the services of a temporary public servant does no amount to dismissal or removal from service merely because an inquiry was held before the order of termination was passed.
The Court observed that the appropriate authority has power to terminate a temporary public servant either by discharging him under the terms of contract or the relevant rules or by holding departmental disciplinary inquiry and dismissing him from service.
Before passing order of termination the competent authority may hold inquiry in fairness to ascertain whether the temporary servant should be continued in service or not.
While discussing the nature of preliminary inquiry the Court observed as under: "There is no element of punitive proceedings in such an enquiry; the idea in holding such an enquiry is not the punish the temporary servant but just to decide whether he 37 deserves to be continued in service or not.
If as a result of such an enquiry, the authority comes to the conclusion that the temporary servant is not suitable to be continued, it may pass a simple order of discharge by virtue of the powers conferred on it by the contract or the relevant rule; in such a case, it would not be open to the temporary servant to invoke the protection of article 311 for the simple reason that the enquiry which ultimately led to his discharge was held only for the purpose of deciding whether the power under the contract or the relevant rule should be exercised and the temporary servant discharged.
" In Champaklal chiman lal Shah 's case (supra) the appellant therein was a temporary employee of the Union Government.
His services were terminated without assigning any reasons and without affording him opportunity of showing cause.
Before passing the order of termination the competent authority had issued a notice to Champaklal Chimanlal Shah calling upon him to explain certain irregularities and to show cause why disciplinary action should not be taken against him.
In response to the notice, he submitted his explanation thereupon, certain preliminary enquiries were held, but he was not given opportunity to place his case during the preliminary enquiry.
However, after the preliminary enquiry to regular departmental enquiry was held instead proceedings for departmental enqiury were dropped and the services of Chimanlal Shah were terminated in accordance with the terms and conditions of service of a temporary Govt.
servant.
The termination order was assailed on the ground that the order of termination was in substance an order of punishment.
the Constitution Bench held that the order of termination was not an order of punishment and the appellant was not entitled to the protection of Article 311(2) of the Constitution.
The Court emphasised that when a preliminary enquiry is held against a temporary Govt.
employee, it must not be confused with the regular departmental inquiry which usually follows the preliminary inquiry, after the government decides to frame charges and to get a departmental enquiry made, with a view to inflict one of the three major punishments on the Govt.
servant.
So far as the preliminary enquiry is concerned, there is no question of it being governed by Article 311(2) of the Constitution, as it is made for the purpose of collection of facts to enable to the competent authority to decide whether punitive action should be taken or action should be taken in terms and under the contract of service or the rules applicable to a temporary government servant.
A Govt.
servant has no right to insist for affording him opportunity during such enquiry and such an 38 ex parte enquiry is not initiated in law in view of the purpose and object of preliminary enquiry.
On an elaborate discussion, the Court observed as under: "In short a preliminary enquiry is for the purpose of collection of facts in regard to the conduct and work of a government servant in which he may not be associated so that the authority concerned may decide whether or not to subject the servant concerned to the enquiry necessary under article 311 for inflicting one of the three major punishments mentioned therein.
Such a preliminary enquiry may even be held ex parte for it is merely for the satisfaction of government, though usually for the sake of fairness, explanation is taken from the servant concerned even at such an enquiry.
But at that stage he has no right to be heard for the enquiry is merely for the satisfaction of the Government, and it is only when the government decides to hold a regular departmental enquiry for the purposes of inflicting one of the three major punishments that the government servant gets the protection of article 311 and all the rights that protection implies as already indicated above.
There must therefore be no confusion between the two enquiries and it is only when the government proceeds to hold a departmental enquiry for the purpose of inflicting on the government servant one of the three major punishments.
indicated in article 311 that the government servant is entitled to the protection of that Article.
That is why this Court emphasised in Parshotam Lal Dhingra 's case (supra) and in Shyamlal vs The State of Uttar pradesh; , that the motive or the inducing factor which influences the government to take action under the terms of the contract of employment or the specific service rule is irrelevant.
" The above principles were reiterated by another Constitution Bench of this Court in R.C. Lacy 's case (supra) dealing with the case of reversion of a permanent Govt.
servant officiating on a higher post.
The Bench observed that the Government might find it necessary to terminate the services of a temporary employee if it is not satisfied with the conduct or work of an employee and the same reasoning applies to a public servant who is reverted from a higher post to his substantive lower post, if the higher post was held in a temporary nature.
Before terminating the services of a temporary servant or reverting the person 39 officiating in a higher post to his substantive post, the Govt.
may hold a preliminary enquiry to form the requisite satisfaction for the continuance of the officiating govt.
servant.
Such an inquiry does not change the nature of the order of the termination or reversion.
In A.G. Benjamin 's case (supra) the appellant was temporarily employed as a Store Officer in the Central Tractor Organisation, his services were terminated under the Central Civil Service (Temporary Service) Rules, 1949 by granting him one month 's salary in lieu of notice.
Benjamin contended that the order of termination was in fact an order of punishment, which had been passed without affording him the protection under Article 311(2) of the Constitution.
In that case before the issue of termination order, a notice had been issued to Benjamin for showing cause as to why disciplinary action should not be taken on the allegations made against him in respect of which the charges had been framed and an enquiry officer had been appointed.
After the charges were framed and the explanation of Benjamin was obtained, the Chairman of the Central Tractor Organisation submitted a note to the Government that the departmental proceedings may take much longer time and he was not sure that after going through all the formalities of departmental enquiry Benjamin will be dealt in the way he deserved, therefore, he suggest that action should be taken under Rule 5 of the Central Civil Service (Temporary Service) Rules, 1949 for terminating his services by giving him one month 's salary in lieu of notice as he was a temporary Govt.
servant.
The Minister concerned accepted the recommendations, whereupon, order of termination was issued terminating the services of Benjamin.
While assailing the order of termination, it was seriously contended before this Court that in view of the charges being framed and the enquiry officer having been appointed the order of termination in substance was an order of punishment and the recourse to the temporary service rules had been taken only to circumvent article 311 of the Constitution.
The Constitution Bench repelled the contention and held that the preliminary enquiry held against the Govt.
servant must not be taken to mean that the Govt. had taken decision to inflict major punishment on Benjamin.
The Court held that no temporary Govt.
servant is entitled to opportunity in the preliminary inquiry as "there is no element of punitive proceedings in such an inquiry; the idea in holding such an inquiry is not to punish the temporary government servant but just to decide whether he deserves to be continued in service or not.
" Further the Constitution Bench held that even if formal departmental inquiry is initiated against the temporary Govt.
servant, it is open to the competent authority to drop further proceedings in the departmental enquiry 40 against the temporary govt.
servant and to have recourse to Rules applicable to a temporary Govt.
servant for terminating his services.
The Court observed as under: "If therefore the authority decides, for some reason, to drop the formal departmental enquiry even though it had been initiated against the temporary govt.
servant, it is still open to the authority to make an order of discharge simpliciter in terms of the contract of service or the relevant statutory rule.
In such cases the order of termination of services of the temporary govt.
servant which in form and in substance is no more than his discharge affected under the terms of contract or the relevant rule cannot, in law, be regarded as his dismissal, because the appointing authority was actuated by the motive that the said servant did not deserve to be continued in service for some alleged inefficiency or misconduct.
" We have referred to the above decision in detail to dispel any doubt about the correct position of low.
It is erroneous to hold that where a preliminary enquiry into allegations against a temporary govt.
servant is held or where a disciplinary enquiry is held but dropped or abandoned before the issue of order of termination, such order is necessarily punitive in nature.
Learned counsel for the respondent placed reliance on the decisions of this Court in Nepal Singh vs State of U.P. & Ors.; , and Ishwar Chand Jain vs High Court of Punjab & Haryana & Anr., ; in support of his contention that the termination order is punitive in nature.
In Nepal Singh 's case a disciplinary inquiry was instituted against Nepal Singh who was a temporary sub Inspector of Police, on the charge of having contracted a second marriage during the life time of his first wife without prior permission of the Government in violating of Rule 29 of the U.P. Government Servants ' Conduct Rules, 1956.
Before any finding could be rendered the inquiry was dropped for want of territorial jurisdiction of the concerned Superintendent of Police, and thereafter, his services were terminated in accordance with the rules applicable to the temporary Government servants by giving him one month 's pay in lieu of notice.
nepal Singh unsuccessfully challenged the order of termination before the High Court, but his appeal was allowed by a three Judge Bench of this Court.
This Court quashed the order of termination on three grounds.
Firstly,it held that the order of termination was arbitrary, violative of 41 Articles 14 and 16 of the Constitution as power of termination had not been exercised honestly, in good faith for valid considerations.
Secondly, the grounds mentioned in the report of the superintendent of Police on the basis of which the services of the Sub Inspector had been terminated were mere allegations and there was no definite material for terminating his services.
Thirdly, the Court held that since the inquiry against Nepal Singh on the charges had been dropped for want of jurisdiction and since no attempt was made to institute a proper inquiry, instead his services were terminated on the allegation of misconduct the order of termination was violative of Article 311(2) of the Constitution.
The Court further held that the termination order had been passed to circumvent the constitutional provision of article 311(2) of the Constitution.
The facts and circumstances in Nepal Singh 's case were quite different than those in the instant case.
However, Nepal Singh 's case is no authority for the proposition that the services of an ad hoc and temporary employee cannot be terminated even if the competent authority on an assessment of the work and the conduct of the employee finds him unsuitable for the service.
The Court 's observations in Nepal Singh 's case that since the enquiry against nepal Singh on certain charges was dropped and his services were terminated under the rules applicable to the temporary govt.
servant with a view to circumvent the protection of Art 311(2) of the Constitution and as such the order of termination was illegal, must be confined to the facts of that case.
It appears that he decisions in the case of Champaklal (supra) and R.C. Lacy (supra) and the principles laid down therein were not brought to the notice of the Bench.
Had those decisions been placed before the Court, the finding that the termination order had been passed to circumvent the provision of article 311(2) merely because departmental inquiry was dropped and the termination order had been passed, may not have been made.
The decision of Nepal Singh 's case in this regard is per incurium.
In Ishwar Chand Jain 's case the order of termination of Probationary Judicial Officer was set aside by this Court on the ground that no relevant material had been taken into consideration in assessing the satisfactory nature of the work and conduct of the Officer on probation.
The Court held that some of the material which had been taken into account in adjudging the Judicial Officer 's work and conduct as unsatisfactory was not relevant.
The decision has no relevance to the instant case.
We are, therefore, of the opinion that neither of the two cases relied upon by the respondent lend any support to his case.
On the other hand our view is fully supported by the decision of three Judge Bench of this Court in R.K. Misra vs U.P. State Handloom Corporation, In the instant case the repondent was a temporary Government servant and there was adverse report regarding his work which was reflected in the adverse remarks made for the year 1977 78.
The competent authority held a preliminary inquiry in the allegations of improper conduct in carrying out unauthorised audit of Boys Fund of an educational institution, On result of the preliminary enquiry no charges were framed against the respondent, no officer was appointed for holding the departmental inquiry instead the competent authority chose to terminate the respondent 's services in exercise of its power under the terms of contract as well as under the relevant rules applicable to a temporary Govt.
servant.
It never intended to dismiss the respondent from service.
Holding of preliminary inquiry does not affect the nature of the termination order.
The allegations made against the respondent contained in the counter affidavit by way of a defence filed on behalf of the appellants also do not change the nature and character of the order of termination.
The High Court failed to consider the question in proper perspective and it interfered with the order of termination in a casual manner.
We, accordingly, allow the appeal and set aside the order of the High Court and dismiss the respondent 's Writ Petition.
There will be no order as to costs.
Y.Lal Appeal allowed.
| IN-Abs | The respondent was appointed on 18.2.1977 as an Assistant Auditor under the Local Funds Audit Examiner of State of U.P. on ad hoc temporary basis for the term fixed in the order of his appointment and his services were liable to be terminated at any time without assigning any reason.
After his initial appointment, his services were extended from time to time till 28.2.1981.
He was awarded an adverse entry in his character roll for the year 1977 78 both regarding his conduct as also his work.
The respondent alongwith one Rajendra Prasad Pandey, another Sub Auditor, were deputed to audit the accounts of Raja Raghbar Dayal Inter College, Sitapur in respect of the year 1979 80.
It is alleged that while auditing the account, they acted in excess of their authority in as much as they audited the 'Boys Fund Accounts ', issued audit note and also irregularly demanded and collected Rs. 2,000 as audit fee, and issued receipt under their signature.
On complaint a preliminary enquiry was held and the allegations were found to be correct.
After the preliminary inquiry report, the respondent was relieved from his duties from Sitapur and directed to join his duty at Allahabad.
Whereupon the respondent proceeded on leave and did not join his duty at Allahabad.
The respondent 's services were therefore terminated by order dated 23.9.1980 and by another order services of Pandey were also terminated.
Both of them filed writ petitions in the High Court contending that their termination orders were illegal having been passed in violation of Article 311 of the Constitution.
Whereas the writ petition filed by Pandey was dismissed, the one filed by the respondent was allowed.
The High Court held that since juniors to the respondent were retained in service while the respondent 's services were terminated, the order of termination was discriminatory in nature.
The High Court further held that the order of termination was founded on an adverse entry awarded to the respondent hence it was not in good faith; the punishment awarded to the respondent was not proportionate to the alleged offence.
Against the 30 said order, the State of U.P. filed a appeal after obtaining special leave.
The question involved for consideration is whether the order terminating the services of the respondent is vitiated in law? Allowing the appeal, this Court, HELD: Holding of preliminary inquiry does not affect the nature of the termination order.
[42C) In the instant case the respondent was a temporary Government Servant and there was adverse regarding his work which was reflected in the adverse remarks made for the year 1977 78.
The competent authority held a preliminary inquiry in regard to the allegations of improper conduct in carrying out unauthorised audit of Boys Fund of educational institution.
On result of the preliminary inquiry no charges were framed against the respondent, no officer was appointed for holding the departmental inquiry instead the competent authority chose to terminate the respondent 's services in exercise of its powers under the terms of contract a well as under the relevant rules applicable to a temporary Government servant.
[42A C] The principle 'last come first go ' is applicable to a case where on account of reduction of work or shrinkage of cadre, retrenchment takes place and the services of employees are terminated on account of retrenchment.
But this principle is not applicable to a case where the services of a temporary employee are terminated on the assessment of his work and suitability in accordance with term and conditions of his service.
On the admitted set of facts, the order of termination in the instant case, could not be rendered illegal or unjustified on the ground of juniors being retained in service.
The view taken by the High Court is not sustainable in law.
[33D H] Appeal allowed, High Court order set aside as it interfered with order of termination in a casual manner.
[42D] Parshotam Lal Dhingra vs Union of India.
[1958] S.C.R. 828; The State of Orissa & Anr.
vs Ram Narayan Das, ; ; R.C. Lacy vs The State of Bihar & Ors., C.A.No 590/62 decided on 23.10.1963; Champaklal Chimanlal Shah vs The Union of India, [1964] AIR S.C.449; A.G. Benjamin vs Union of India, C.A. No. 1341/66 decided on 13.12.1966; Shamsher Singh & Anr.
vs State of Punjab, [1975] 1 S.C.R. 814; State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, [1968] 3 S.C.R. 31 234; R.K. Misra vs U.P. State Handloom Corporation, , referred to.
Nepal Singh vs State of U.P. & Ors., [1985] 1 S.C.C. 56; Ishwar Chand Jain vs High Court of Punjab & Haryana & Anr., ; distinguished.
|
N: Writ Petition (Crl.) No. 508 of 1989 etc.
(Under Article 32 of the Constitution of India).
107 Harjinder singh R.N. Joshi, A. Acharjee, Navin Malhotra, Jagan M. Rao and Raju Ramchandran for the Petitioners.
V.C. Mahajan, B. Parthasarthy.
P. Parmeswaran and M. Veerappa for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
A Division Bench of this Court while expressing the view that the decisions in J.V. Jain vs Shri Pradhan and Ors., ; and Om Prakash Bahl vs Union of India and Ors, W.P. No. 845 of 1979 decided on 15.10.1979 (Unreported) require re consideration has referred these matters to the Constitution Bench.
It is convenient at this point to refer to the statement of law laid down in the aforesaid two cases.
In both the cases, as in present case the persons were detained under the ("the Act ').
The detenu made representation to the appropriate government.
By then the Advisory Board was already constituted and it was scheduled to meet to consider the case of the detenu.
The Government forwarded the detenu 's representation to the Advisory Board.
The Advisory Board considered the case of the detenu and also the representation and submitted report expressing the opinion that there was sufficient cause for the detention of the person.
The Government after considering that report confirmed the order of detention.
It appears that the representation of the detenu was not considered before confirming the detention order and it came to be considered and rejected only thereafter in vs
J. Jain case this Court observed that the representation of the detenu should be considered by the detaining authority as early as possible before any order is made confirming the detention.
The confirmation of the detention order without the consideration of representation would be invalid and the subsequent consideration of the representation would not cure the invalidity of the order of confirmation.
This view has been reiterated in the unreported judgement in Om Prakash Bahl case.
The relevant facts of the present case may now be narrated: On 1 December, 1988, the officers of the Directorate of Revenue Intelligence upon getting information that the contraband gold has been secreted in the room occupied by K.M. Abdulla Kunhi, searched the room in the presence of independent witnesses.
Another person called 108 Mohammed Ali was also present inside the room.
The officers recovered one Samsonite pouch and some bundles of the Indian currencies amounting to Rs. 34,800 from the table drawer in the room.
Inside the said pouch, there were five gold biscuits of 24 ct.
purity and of foreign origin.
under the Mahazar, the officer seized the gold biscuits along with the Indian currency.
On 24 February 1989, the State Government passed two separate orders of detention under Section 3(1)(iv) of the Act, directing the detention of K.M. Abdulla Kunhi, the common petitioner in W.P. (Crl.) No. 508 of 1989 and SLP (crl.) 2009 of 1989, and B.L. Mohammed Ali, the common petitioner in W.P. (Crl.) No. 542 of 1989 and SLP (Crl) No 2117 of 1989.
On 9 March 1989, Mohammed Ali was taken into custody.
both of them were detained in Central Prison, Banglaore.
On 17 April, 1989, the detenus made representations to the Government.
The representations could not be immediately considered since they required translation and collection of information and comments from different authorities.
In the meantime, the case was referred to the Advisory Board which had its meeting on 20 April 1989.
The Board considered the case of the detenus and reported that there was sufficient cause for their was unexplained delay in considering the representation of the detenu.
Indeed, counsel for the petitioners very fairly submitted that they are not raising the question of delay.
They also did not argue that the rejection of the representation after the confirmation of detention was not an independent consideration.
There are two constitutional safeguards, namely, clause (4) of Article 22, and clause (5) of Article 22.
the former requires that if a detenu is liable to be detained for a longer period than three months, his case shall be referred to the Advisory Board which must report before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention.
The function of the Board is purely advisory and its report will enable the Government to detain the person beyond three months provided the detention is valid on its merits and does not otherwise offend the Constitution.
Clause (5) of Article 22 provides that when any person is detained in pursuance of an order made under any law providing for preventive detention the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
The detenu has two rights under clause (5) of Article 22 of the constitution: (i) to be informed, as soon as may be, of the grounds on 109 which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority, and (ii) to be afforded the earliest opportunity of making a representation against the order of detention.
There are also statutory safeguards with regard to detention of persons under the Act in tune with the Constitutional requirements.
Section 3 of the Act provides power to make detention orders.
Sub Section (1) speaks of authorities who are competent to make detention orders.
Sub section (2) states that when an order of detention is made by the State Government or by an officer empowered by the State Government, the State Government shall, within ten days, forward to the Central Government a report in respect of that order.
Sub section (3) thereof provides that a person detained in pursuance of a detention order shall be furnished with the grounds of detention order as soon as may be, but ordinarily not later than five days after the detention.
But in exceptional circumstances and for reasons to be recorded in writing, the grounds shall be furnished not later than fifteen days from the date of detention.
Section 8 of the Act provides for reference of the detenu 's case to the Advisory Board, the Chairman and members of which shall possess the qualification specified in sub clause (a) of clause (4) of Article 22 of the Constitution.
They must be persons who are, or have been, or are qualified to be appointed as, Judges of a High Court.
Clause (b) of Section 8 makes it obligatory for the Government to refer the case of the detenu to Advisory Board within five weeks from the date of detention.
Clause (c) of Section 8 provides that the Board shall after considering the reference and other material place before it and after hearing the detenu if he desires to be heard in person, give its report as to whether or not there is sufficient cause for the detention of the person concerned.
The Board shall submit the report within eleven week from the date of detention of the person concerned.
Clause (f) of Section 8 states that in every case where the Advisory Board has reported that there is in its opinion sufficient cause for the detention of a person, the Government may confirm the detention order and continue his detention for such period as the Government deems fit subject to the maximum period permissible under the Act.
In every case where the Advisory Board has reported that there is in its opinion no sufficient cause for the detention of the person, the Government shall revoke the detention order and release the person forthwith.
This provision, of course, is subject to Section 9 with which we are not concerned.
110 Section 10 prescribes the maximum period for which any person may be detained.
Section 11 provides power to the State Government or the Central Government to revoke the detention order without prejudice to the provisions of Section 21 of the General Clauses Act.
This revocation shall not bar the making of another detention order under section 3 against the same person.
It is now beyond the pale of controversy that the constitutional right to make representation under clause (5) of Article 22 by necessary implication guarantees the constitutional right to a proper consideration of the representation.
Secondly, the obligation of the Government to afford to the detenu an opportunity to make representation and to consider such representation is distinct from the Government 's obligation to refer the case of detenu along with the representation to the Advisory Board to enable it to form its opinion and send a report to the Government.
It is implicit in clauses (4) and (5) of Article 22 that the Government while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation.
It has to consider the representation on its own without being influenced by any such view of the Board.
The obligation of the Government to consider the representation is different from the obligation of the Board to consider the representation at the time of hearing the references.
The Government considers the representation to ascertain essentially whether the order is in conformity with the power under the law.
The Board, on the other hand, considers the representation and the case of the detenu to examine whether there is sufficient case for detention.
The consideration by the Board is an additional safeguard and not a substitute for consideration of the representation by the Government.
The right to have the representation considered by the Government, is, safeguarded by cl.
(5) of Article 22 and it is independent of the consideration of the detenu 's case and his representation by the Advisory Board under cl.
(4) of article 22 read with section 8(c) of the Act.
(See: Sk.
Abdul Karim & Ors.
vs State of West Bengal; , ; Pankaj Kumar Chakrabarty & Ors.
vs State of west Bengal; , ; Shayamal Chakraborty vs The Commissioner of Police Calcutta and Anr., ; ; B. Sundar Rao and Ors.
vs State of Orissa, ; John Matrin vs State of West Bengal, [1975] 3SCR 211; S.K. Sekawat vs State of West Bengal, and haradhan Saha & Anr.
vs State of West Bengal and Ors.
,[1975] The representation relates to the liberty of the individual, the highly cherished right enshrined in Article 21 of our Constitution.
111 Clause (5) of Article 22 therefore, casts a legal obligation on the Government to consider the representation as early as possible.
it is a constitutional mandate commanding the concerned authority to whom the detenu submits his representation to consider the representation and dispose of the same as expeditiously as possible.
The words "as soon as may be" occuring in clause (5) of Article 22 reflects the concern of the Framers that the representation should be expeditiously considered and disposed of with a sense of urgency without an avoidable delay.
However, there can be no hard and fast rule in this regard it depends upon the facts and circumstances of each case.
There is no period prescribed either under the Constitution or under the concerned detention law, within which the representation should be dealt with.
The requirement however, is that there should not be supine indifference slackness or callous attitude in considering the representation.
Any unexplained delay in the disposal of representation would be a breach of the constitutional imperative and it would render the continued detention impermissible and illegal.
This has been emphasised and re emphasised by a series of decisions of the Court.
(See: Jayanarayan Sukul vs State of West bengal, {1970] 1 SCC 219; Frances Coralie Mullin vs W.C. Kambra and Ors.
, ; ; Rama Dhondu Borade vs V.K. Saraf, Commissioner of Police and Ors., and Aslam Ahmed Zahire Ahmed Shaik vs Union of India and ors.
; , In Jayanarayan Sukul case, A.N. Ray, J., as he then was, speaking for the Constitution Bench has laid down four principles which should govern the consideration of representation of detenus (at p.224): "First the appropriate authority is bound to give an opportunity to the detenu to make a representation and to consider the representation of the detenu as early as possible.
Secondly, the consideration of the representation of the detenu by the appropriate authority is entirely independent of any action by the Advisory Board including the consideration of the representation of the detenu by the Advisory Board.
Thirdly, there should not be any delay in the matter of consideration.
It is true that no hard and fast rule can be laid down as to the measure of time taken by the appropriate authority for consideration but it has to be remembered that the Government has to be vigilant in the governance of the citizens.
A citizen 's right raised a correlative duty of the state.
fourthly, the appropriate 112 Government is to exercise its opinion and judgment on the representation before sending the case along with the detenu 's representation to the Advisory Board.
If the appropriate Government will release the detnu the Government will not send the matter to the Advisory Board.
If, however, the Government will not release the detenu the Government will send the case along with the detenu 's representation to the Advisory Board.
If thereafter the Advisory Board will express an opinion in favour of release of the detenu the Government will release the detenu.
If the the Advisory Board will express any opinion against the release of the detnu the Government may still exercise the power to release the detenu.
" In frances Coralie Mullin vs W.C. Khambra and Ors., Chinappa Reddy, J., while dealing with the time imperative for consideration of the representation has emphasised (at 279): "We, however, hasten to add that the time imperative can never be absolute or obessive.
The Court 's observations are not to be so understood.
There has to be lee way, depending on the necessities (we refrain from using the word 'circumstances ') of the case.
One may well imagine a case where a detenu does not make representation before the Board makes its report making it impossible for the detaining authority either to consider it or to forward it to the Board in time or a case where a detenu makes a representation to the detaining authority so shortly before the Advisory Board takes up the reference that the detaining authority cannot consider the representation before then but may merely forward it to the Board without himself considering it.
Several such situations may arise compelling departure from the time imperative.
But no allowance can be made for lethargic indifference.
No allowance can be made for needless procrastination .
But allowance must surely be made for necessary consultation where legal intricacies and factual ramifications are involved.
The burden of explaining the necessity for the slightest departure from the time imperative is on the detaining authority.
" In Frances Coralie Mullin 's case the detenu 's representation was received by the detaining authority on December 26, 1979.
Without any loss of time copy of the representation was sent to the customs 113 authorities for their remarks which was obviously necessary because the information leading to the order of detention was collected by the customs authorities.
The fact were undoubtedly complex since allegation against the detenu revealed an involvement with an international gang of dope smugglers.
The comments of the customs authorities were received on January 4, 1980.
The Advisory Board was meeting on january 4, 1980 and so there could be no question of the detaining authority considering the representation of detenu before the board met, unless it was done in a great and undue haste.
After obtaining the comments of the customs authorities, it was found necessary to take legal advice as the representation posed many legal and constitutional question, so, after consultation with the Secreatary (Law and Judicial) Delhi Administration, the representation was finally rejected by the Administrator or January 15, 1980.
it was held that if there appeared to be any delay it was not due to any want of care but because the representation required a thorough examination in consultation with investigation agencies and advisers of law We agree with the observations in frances Coralie Mullin case.
The time imperative for consideration of representation can never be absolute or obsessive.
it depends upon the necessities and the time at which the representation is made.
The representation may be received before the case is referred to the Advisory Board, but there may not be time to dispose of the representation before referring the case to the Advisory Board.
In that situation the representation must also be forwarded to the Advisory Board along with the case of the detenu.
The representation may be received after the case of the detenu isreferred to the Board.
Even in this situation the representation should be forwarded to the Advisory Board provided the Board has not concluded the proceedings.
In both the situations there is no question of consideration of the representation before the receipt of report of the Advisory Board.
Nor it could be said that the government has delayed consideration of the representation, unnecessarily awaiting the report of the Board.
It is proper for the Government in such situations to await the report of the Board.
If the Board finds no material for detention on the merits andreports accordingly, the Government is bound to revoke the order of detention.
Secondly, even if the Board expresses the view that there is sufficient cause for detention, the Government after considering the representation could revoke the detention.
The Board has to submit its report within eleven weeks from the date of detention.
The Advisory Board may hear the detenu at his request.
The Constitution of the Board shows that it consists of eminent persons who are Judges or person qualified to be Judges of 114 The High Court.
It is therefore, proper that the Government considers the representation in the aforesaid two situations only after the receipt of the report of the Board.
If the representation is received by the Government after the Advisory Board has made its report, there could then of course be no question of sending the representation to the Advisory Board.
It will have to be dealt with and disposed of by the Government as early as possible.
The crucial question that remains for consideration is whether the Government should consider and dispose of the representation before confirming the detention.
This Court in V.J. Jain case has observed (at 405) that it is a constitutional obligation under clause (5) of Article 22 to consider the representation before confirming the order of detention.
if it is not so considered, the confirmation becomes invalid and the subsequent consideration and rejection of the representation could not cure the invalidity of the order of confirmation.
To reach this conclusion, the Court has relied upon two earlier judgments of this Court: (i) Khudiram Das vs State of West Bengal and Ors., ; and (ii) Khairul Haque vs State of West Bengal, W.P. No.246/69 decided on 10.9.1969(Unreported).
The decision in Khudiram case is of title assistance to the principle stated in V.J. Jain case.
It was a case of belated consideration of the representation without acceptable explanation.
The decision in Khairul Haque case, however, relevant.
It is also unreported decision.
The facts of the case and the principles stated therein may be furnished.
There the petitioner was detained by an order dated 5 June 1969 of the District Magistrate, 24 Parganas, West bengal, under Section 3(2) of the .
He was arrested and detained in Dum Dum Central Jail on 6 June 1969.
The District magistrate informed the State Government of his said order on 9 June 1969.
On 14 June 1969, the Governor gave his approval and reported the case of the Central Government.
On or about 23 June 1969, the Government received the representation of the petitioner.
On 30 June 1969 the Governor referred the case of the petitioner to the Advisory Board.
The Advisory Board made its report on 11 August 1969 to the effect that there was sufficient cause for the detention of the petitioner.
Thereafter, on 12 August 1969, the Governor confirmed the order of detention.
On 29 August 1969, the Governor rejected the petitioner 's representation.
The Court while referring these facts said that there was unaccounted delay of little more than two months in the consideration of the representation .
Doubtless the detention was invalid on this delay alone and the Court could have quashed the 115 detention on that ground.
But the Court, however, observed that it is doubtful whether the Government 's consideration of the representation was independent as implicit in the language of Article 22(5).
If the confirmation by the Government of the order of the District magistrate is made first and the Government rejects the representation thereafter, such rejection is not an independent consideration but as the result of its decision to confirm the order of detention.
It was also observed that the process of decision making has to be the other way about, that is to say, the Government must first consider the representation and only later decide whether it should confirm the order of the District magistrate on the basis of the report of the Advisory Board.
The decision in Khairul Haque case has been followed in V.J. Jain case which in turn was followed in Om Prakash Bahl case.
There is no constitutional mandate under cl.
(5) of Article 22, much less any statutory requirement to consider the representation before confirming the order of detention.
As long as the Government without delay considers the representation with an unbiased mind there is no basis for concluding that the absence of independent consideration is the obvious result if the representation is not considered before the confirmation of detention.
Indeed, there is no justification for imposing this restriction on the power of the Government.
As observed earlier, the Government 's consideration of the representation is for a different purpose, namely to find out whether the detention is in conformity with the power under the statute.
This has been explained in Haradhan Saha case, where Ray, C.J., speaking for the Constitution Bench observed that the consideration of the representation by the Government is only to ascertain whether the detention order is in conformity with the power under the law.
There need not be a speaking order in disposing such representation.
There is also no failure of justice by the order not being a speaking order.
All that is necessary is that there should be real and proper consideration by the Government.
It is necessary to mention that with regard to liberty of citizen the Court stands guard over the facts and requirement of law, but Court cannot draw presumption against any authority without material.
It may be borne in mind that the confirmation of detention does not preclude the Government from revoking the order of detention upon considering the representation.
Secondly, there may be cases where the Government has to consider the representation only after confirmation of detention.
Clause (5) of Article 22 suggests that the representation could be received even after confirmation of the order 116 of detention.
The words 'shall afford him the earliest opportunity of making a representation against the order ' in clause (5) of Article 22 suggest that the obligation of the Government is to offer the detenu an opportunity of making a representation against the order, before it is confirmed according to the procedure laid down under Section 8 of the Act.
But if the detenu does not exercise his right to make representation at that stage, but presents it to the government after the Government has confirmed the order of detention, the Government still has to consider such representation and release the detenu if the detention is not within the power conferred under the statute.
The confirmation ofthe order of detention is not conclusive as against the detenu.
It can be revoked suo motu under Section 11 or upon a representation of the detenu.
It seems to us therefore, that so long as the representation is independently considered by the Government and if there is no delay in considering the representation, the fact that it is considered after the confirmation of detention makes little difference on the validity of the detention or confirmation of the detention.
The confirmation cannot be invalidated solely on the ground that the representation is considered subsequent to confirmation of the detention.
Nor it could be presumed that such consideration is not an independent consideration.
With all respect, we are not inclined to subscribe to the views expressed in V.J. Jain.
Om Prakash Bahl and Khairul Haque cases.
They cannot be considered to be good law and hence stand overruled.
Counsel however, submitted that the representation of the detenu was not sent to the Advisory Board for consideration.
This question was not raised before the High Court, nor in the Writ Petitions before us and hence rejected.
These petitions will now be placed before the Division Bench for final disposal.
N.V.K. Petitions disposed of.
| IN-Abs | A division Bench of this Court in V.J. Jain vs Shri Pradhan and Ors., ; observed that the representation of the detenu should be considered by the detaining authority as early as possible before any order is made confirming the detention.
The confirmation of the detention order without the consideration of representation would be invalid and the subsequent consideration of the representation would not cure the invalidity of the order of confirmation.
This view was reiterated in the later case of Om Prakash Bahl vs Union of India, W.P.No. 845 of 1979 decided on 15.10.1979.
As the aforesaid view required reconsideration, the instant SLPs and WPs had been referred to and heard by a constitutional bench.
On December 1, 1988, the officers of the Directorate of Revenue Intelligence upon getting information that contraband gold has been secreted in the room of petitioner No. 1 searched the room in the presence of independent witnesses.
Another person was also present inside the room.
The officers recovered one Samsonite punch, and some bundles of Indian currencies from the table drawer in that room.
Inside the said pouch, there were five gold biscuits of 24 ct.
purity and of foreign origin, and seized the same under a Mahazar.
On 24th February, 1989, that State Government passed two separate orders of detention under section 3(1)(iv) of the Conservation of 103 Foreign Exchange and Prevention of Smuggling Activities Act 1974 and the petitioners were taken into custody and detained in the Central pension.
On 17th April, 1989, the detenus made representation to the Government, which could not be immediately considered since they required translation, and collection of information and comments.
In the meanwhile, the matter was referred to the Advisory Board, which had its meeting on 20th April, 1989 considered the case of the detenus, and reported that there was sufficient cause for detention.
On 27th april, 1989, the Government accepted the report and confirmed the detention orders.
On 6th and 7th May, 1989 the Government considered and rejected on representation of the detenus and they were informed of the same.
The detention orders were challenged in the High Court through a writ petition but the High Court dismissed the same.
In the appeals and writ petition to this Court, the main question for consideration was, whether the confirmation of detention order upon accepting the report of the Advisory Board renders itself invalid solely on the ground that the representation of the detenu was not considered, and the subsequent consideration of the representation would not cure that invalidity.
Disposing of the matters, the Court, HELD: 1(a) With regard to liberty of citizens the Court stands guard over the facts and requirements of law, but Court cannot draw presumption against any authority without material.
[115G] (b) The confirmation of detention does not preclude the Government from revoking the order of detention upon considering the representation of the detenu.
[115G] (c) There may be cases where the Government has to consider the representation only after the confirmation of the detention.
[115H] 2(a) There are two constitutional safeguards, viz: Clause (4) of Article 22, and Clause(5) of Article 22.
The former requires that if a detenu is liable to be detained for a longer period than three months, hiscase shall be referred to the Advisory Board which, must report before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention.
The latter provides that when any person is detained in pursuance of an order made under any 104 law providing for preventive detention the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
[108E G] 2(b) The detenu has two rights under clause (5) of Article 22 of the Constitution: (i) to be informed, as soon as may be, of the grounds on which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority, and (ii) to afforded the earliest opportunity of making a representation against the order of detention.
[108H; 109A] 3.
The function of the Advisory Board is purely advisory and its report will enable the Government to detain the person beyond three months provided the detention is valid on its merits and does not otherwise offend the Constitution.
[108F] 4(a) The constitution right to make representation under clause (5) of Article 22 by necessary implication guarantees the constitutional right to a proper consideration of the representation.
The obligation of the Government to afford to the detenu an opportunity to make representation and to consider such representation is distinct from the Government 's obligation to refer the case of detenu along with the representation to the Advisory Board to enable it to from its opinion and send a report to the Government.
[110B C] 4(b) It is implicit in clause (4) and (5) of Article 22 that the Government while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation.
it has to consider the representation on its own without being influenced by any such view of the Board.
The obligation of the Government to consider the representation is different from the obligation of the Board to consider the representation at the time of hearing the reference.
The Government consider the representation to ascertain essentially whether the order is in conformity with the power under the law.
[110C D] 4(c) The Board, on the other hand, considers the representation and the case of the detenu to examine whether there is sufficient case for detention.
The consideration by the Board is in additional safeguard and not a substitute for consideration of the representation by the Government.
[110E] 4(d) The right to have the representation considered by the 105 Government, is safeguarded by clause (5) of Article 22, and it is independent of the consideration of the detenu 's case and his representation by the Advisory Board under clause (4) of Article 22 read with section 8(c) of the .
[110F] SK.
Abdul Karim & Ors.
vs State of West Bengal, ; , Pankaj Kumar Chakrabarty & Ors.
vs State of West bengal; , ; Shayamal Chakraborty vs The Commissioner of Police Calcutta and Anr.,[1969] 2 SCC 426; B. Sundar Rao & Ors.
vs State of Orissa, ; John Martin vs State of West Bengal, [1975] 3SCR 211; .
S.K. Sekawat vs State of West Bengal, and Haradhan Saha & Anr.
vs State of West Bengal & Ors.
,[1975] , referred to.
5(a) The representation relates to the liberty of the individual, the highly cherished right enshrined in Article 21 of our Constitution.
Clause (5) of Article 22 therefore, casts a legal obligation on the Government to consider the representation as early as possible.
It is a constitutional mandate commanding the concerned authority to whom the detenu submits his representation to consider the representation and dispose of the same as expeditiously as possible.
[110H;111A] 5(b) The words "as soon as may be" occuring in clause (5) of Article 22 reflect the concern of the Framers that the representation should be expeditiously considered and disposed of with a sense of urgency without an avoidable delay.
However, there can be no hard and fast rule in this regard.
It depends upon the fact and circumstances of each case.
There is no period prescribed either under the Constitution or under the concerned detention law, within which the representation should be dealt with the requirement however, is that there should not be supine indifference slackness or callous attitude in considering the representation.
Any unexplained delay in the disposal of the representation would be a breach of the constitutional imperative and it would render the continued detention impermissible and illegal.
[11B D] Jayanarayan Sukul vs State of West Bengal, ; ; Frances Coralie Mullin vs W.C. Khambra and Ors., ; ; Rama Dhondu Borade vs V.K. Saraf, Commissioner of Police & Ors., ; and Aslam Ahmed Zahire Ahmed Shaik vs Union of India & Ors.
, ; , referred to.
6(a) There is no constitutional mandate under clause (5) of Arti 106 cle 22, much less any statutory requirement to consider the representation before confirming the order of detention.
As long as the Government without delay considers the representation with an unbiased mind there is no basis for concluding that the absence of independent consideration is the obvious result if the representation is not considered before the confirmation of detention.
indeed there is no justification for imposing the restriction on the power of the Government.
[115C D] 6(b) Clause 5) of Article 22 suggests that the representation could be received even after confirmation of the order of detention.
The words "shall afford him the earliest opportunity of making a representation against the order" in clause (5) of Article 22 suggest that the obligation of the Government is to offer the detenu an opportunity of making a representation against the order, before it is confirmed according to the procedure laid down under section 8 of the Act.
But ifthe detenu does not exercise his right to make representation at that stage, but presents it to the Government after the Government has confirmed the order of detention, the Government still has to consider such representation and release the detenu if the detention is not within the power conferred under the statue.
The confirmation of the order of detention is not conclusive as against the detenu.
It can be revoked suo motu under Section 11 or upon a representation of the detenu.
[116A B] 6(c) So long as the representation is independently considered by the government and if there is no delay in considering the representation, the fact that it is considered after the confirmation of detention makes little difference on the validity of the detention or confirmation of the detention.
The confirmation cannot be invalidated solely on the ground that the representation is considered subsequent to confirmation of the detention.
Nor it could be presumed that such consideration is not an independent consideration.
[116C D] V.J. Jain vs Shri Pradhan & Ors.
, ; ; Om Prakash Bahl vs Union of India & Ors., W.P. No. 845 of 1979 decided on 15.10.1979 and Khairul Haque vs State of West Bengal W.P.No.
246/69 decided on 10.9.1969, over ruled; Khudiram Das vs State of West Bengal & Ors., ; , distinguished.
|
il Appeal No. 2341 of 1978.
From the Judgement and Decree dated 16.11.1977 of the Andhra Pradesh High Court in Writ Appeal No. 358 of 1976.
Altaf Ahmed, Additional Solicitor General, P. Parmeshwaran and Dilip tandon for the Appellant.
128 A.S. Nambiar and B. Parthasarthy for the Respondent.
The Judgement of the Court was delivered by AHMADI, J.
This appeal, on certificate, is directed against the decision of the High Court of Andhra Pradesh which was quashed the imposition of duty and levy of penalty on the ground that the show cause notice was issued after the expiry of the period of six months from the accrual of the cause of action.
The facts leading to this appeal are as follows: The respondent M/s. Ramdev Tobacco Company, a sole proprietory concern, was at all material times a dealer in tobacco having a licenced warehouse at Guntur.
The dealer was liable to pay duty on the tobacco received at his warehouse and transported to another dealer.
On August 30, 1972 the appellant issued a notice calling upon the respondent to show cause why duty should not be demanded under Rule 160 of Central Excise Rules, 1944 (`the Rules ' hereafter) on 64,444 kgs.
of VFC Farmash Tobacco removed from his warehouse and not accounted for in the warehouse register maintained under the Rules.
The respondent was also asked to show cause why penalty should not be imposed for infraction of Rules 151 and 32(1) of the Rules for illicit removal of the aforementioned quantity of tobacco.
This show cause notice was founded on the allegation that in 1970 the respondent obtained six transport permits (T.P. 2) dated January 13, 1970, February 10, 1970, March 26, 1970, May 16, 1970, July 24, 1970 and August 5, 1970 and transported under each permit more than the quantity of tobacco allowed thereunder in contravention of the aforementioned rules.
The respondent sent a detailed reply to the said show cause notice on November 4, 1972.
After giving a personal hearing to the respondent on September 18, 1973 the appellant came to the conclusion that the respondent had evaded payment of duty on 1272 bags weighing 48,304 Kgs, of VFC Farmash tobacco and issued a demand under Rule 160 in the sum of Rs.1,66,165.76 under adjudication order No. 173/74 dated April 9, 1974.
In addition thereto the appellant imposed a penalty of Rs. 100 for contravention of Rules 151 and 32(1) of the Rules.
Thereupon the respondent filed a writ petition No.2600 of 1974 under Article 226 of the Constitution challenging the aforesaid order of the appellant.
This writ petition was heard and disposed of by a learned Single Judge of the High Court who took the view that the appellant 's action was time barred inasmuch as it was initiated after the expiry of the period of six months from the accrual of the cause of action.
According to the learned Judge under section 129 40(2) of the (`the ' hereinafter) no suit, prosecution or other legal proceeding could be instituted for anything done or ordered to be done under the law after the expiration of six months from the accrual of the cause of action.
Since a period of more than six months had indisputably expired from the dates on which the excess tobacco was transported under the six transport permits in question, the action was clearly time barred.
In this view of the matter the writ petition was allowed and the demand made under the impugned adjudication order both in respect of duty and penalty was quashed.
The present appellant questioned the correctness of this view in appeal, Writ Appeal No. 358 of 1976, but in vain.
The Division Bench found the view taken by the learned Single Judge in accord with its view in Writ Petition No. 2516 of 1974 decided on April 1, 1976.
It, therefore, dismissed the appeal but since it had granted a certificate to appeal in the case relied on, it also granted a similar certificate which has given rise to this appeal.
Sub section (2) of section 40 of the as it stood at the relevant point of time before its amendment by Amendment 22 of 1973 read as under: "No suit, prosecution or other legal proceeding shall be instituted for anything done or ordered to be done under the after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of".
Before we proceed to analyse this sub section it would be advantageous to bear in mind that sub section (1) of this section bars the institution of any suit, prosecution or other legal proceeding against the Central Government or its officer in respect of any order passed in good faith or any act in good faith done or ordered to be done under the .
The second sub section prescribes a period of limitation for suits, prosecutions and other legal proceedings instituted, lodged or taken for anything done or ordered to be done under the .
That is why in Public Prosecutor, Madras vs R.Raju & Anr., etc.; , it was urged on a conjoint reading of the two sub sections that sub section (2) applied only to Government and could not come to the rescue of a tax payer.
Rejecting this contention this Court held: "The two sub sections operate in different fields.
The first sub section contemplates bar of suits against the Central Government or against the officers by protecting them in 130 respect of orders passed in good faith or acts done in good faith.
It is manifest that the second sub section does not have any words of restriction or limitation of class of persons unlike sub section (1).
Sub section (2) does not have any words of qualification as to persons.
Therefore, sub section (2) is applicable to any individual or person.
" This the appellant 's contention that sub section (2) was confined only to the Government officers was found to be unwarranted on the plain words of the provision and was also repelled by reference to other comparable statutes which went to show that whenever the legislature intended to limit the application against the Government officers, the Legislature had chosen appropriate words of limitation to restrict the operation of the provision.
It follows, therefore, that the application of the sub section extended to any person, not being a Government Officer, against whom any suit, prosecution or other legal proceeding was commenced for anything done or ordered to be done under the .
The next contention convassed in that case by the learned counsel for the appellant was that the words "anything done or ordered to be done" employed in the sub section would not include anything done in violation of the .
This Court after referring to the definition of the word `act ' in the , which extended to illegal omissions also, and the case law on the subject observed at page 820 as under: "These decisions in the light of the definition of the word `act ' in the establish that non compliance with the provisions of the statute by omitting to do what the act enjoins will be anything done or ordered to be done under the .
The complaint against the respondents was that they wanted to evade payment of duty.
Evasion was by using and affixing cut and torn banderols.
Books of account were not correctly maintained.
There was shortage of banderols in stock.
Unbanderolled matches were found.
These are all infraction of the provisions in respect of things done or ordered to be done under the .
" It is, therefore, clear from the above observation that any omission or infraction of the statutory provision would also fall within the ambit of the provision.
Non payment of duty or dues which a dealer is under an obligation to pay under the statute was, therefore, held to fall within 131 the scope of the provision.
In that case the complaint against the respondents was that to evade the payment of duty they had used and affixed cut and torn banderols and had failed to maintain the accounts correctly resulting in shortage in stocks.
The respondents were prosecuted for contravention of the Rules punishable under sections 9(b) and 9(d) of the as also under section 420 read with section 511 and 109, I.P.C. The respondents pleaded the bar of section 40 of the as it then stood.
The High Court upheld the contention that the prosecution was barred by the rule of limitation incorporated in section 40 as the same was instituted after the expiry of six months from the date of the commission of the alleged offences.
This Court on the aforesaid line of reasoning affirmed the High Court 's decision.
But the question is whether the issuance of a show cause notice and the initiation of the consequential adjudication proceedings can be described as `other legal proceedings ' within the meaning of sub section (2) of section 40 of the ? If the said departmental action falls within the expression `other legal proceeding ' there can be no doubt that the action would be barred as the same indisputably was initiated six months after the accrual of the cause action.
So the crucial question is whether the issuance of the show cause notice dated August 30, 1972 and the passing of the impugned order in adjudication proceedings emanating therefrom constitutes `other legal proceeding ' within the meaning of section 40(2) of the to fall within the mischief of that sub section which bars such proceedings if commenced after a period of six months from the accrual of the cause of action.
The learned Additional Solictor General submitted that the expression `other legal proceeding ' must be read ejusdem generis with the proceeding expressions `suit ' and `prosecution ' and if so read it becomes crystal clear that the department 's action cannot come within the purview of `other legal proceeding '.
How valid is this contention is the question which we are called upon to answer in the present appeal.
The rule of ejusdem generis is generally invoked where the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined.
By the application of this rule the scope and ambit of the general words which follow certain specific words constituting a genus is restricted to things ejusdem generis with those preceding them, unless the context otherwise requires.
General words must ordinarily bear their natural and larger meaning and need not be confined ejusdem generis to things previously enumerated unless the language of the statute spells out an intention to that effect.
Courts 132 have also limited the scope of the general words in cases where a larger meaning is likely to lead to absurd and unforeseen results.
To put it differently, the general expression has to be read to comprehend things of the same kind as those referred to by the preceding specific things constituting a genus, unless of course from the language of the statute it can be inferred that the general words were not intended to be so limited and no absurdity or unintended and unforeseen complication is likely to result if they are allowed to take their natural meaning.
The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted by the application of this rule and they may be required to fall in line with the specific things designated by the preceding words.
But unless there is genus which can be comprehended from the preceding words, there can be no question of invoking this rule.
Nor can this rule have any application where the general words precede specific words.
There can be little doubt that the words `other legal proceeding ' are wide enough to include adjudication and penalty proceedings under the .
Even the learned Additional Solicitor General did not contend to the contrary but what he said was that since this wide expression is preceded by particular words of a certain genus, namely, words indicating reference to proceedings taken in courts only, the wide words must be limited to things ejusdem generis and must take colour from the preceding words and should, therefore, receive a limited meaning to exclude proceedings of the type in question.
There can be no doubt that `suit ' or `prosecution ' are those judicial or legal proceedings which are lodged in a court of law and not before any executive authority, even if a statutory one.
The use of the expression `instituted ' in section 40(2) strengthens this belief.
Since this sub section has been construed by this Court in Raju 's case (supra) not to be confined in its application to only Government servants but to extend to others including the assessees and since the words `for anything done or ordered to be done under this ' are found to be comprehensive enough to include acts of non compliance or omissions to do what the and the Rule enjoin, the limitation prescribed by section 40(2) would undoubtedly hit the adjudication and penalty proceedings unless the expression `other legal proceeding ' is read ejusdem generis to limit its ambit to legal proceedings initiated in a court of law.
The scope of section 40(2) as it stood before its amendment pursuant to Raju 's case came up for consideration before a Division 133 Bench of the Madhya Pradesh High Court in Universal Cables Ltd. vs Union of India, [1977] ELT (J92) wherein the question raised for determination was whether penalty procedings taken under Rule 173Q for the infraction of Rule 173C with a view to evading payment of duty fell within the expression `other legal proceeding ' used in the said sub section.
The High Court conceded that the expression when read in isolation is wide enough to include any proceeding taken in accordance with law, whether so taken in a court of law or before any authority or tribunal but when read with the preceding words `suit ' or `prosecution ' it must be given a restricted meaning.
This is how the High Court expressed itself at page J 106: "Now the language of section 40 (2) is: `no suit, prosecution or other legal proceeding shall be instituted '.
`Suit ' and `prosecution ' which precede the expression `other legal proceeding ' can be taken only in a Court of Law".
After stating the expanse of the ejusdem generis rule, as explained in Amar Chandra vs Excise Collector, Tripura, AIR.
at 1868 (Sutherland, Volume 2 pages 399 400) the High Court observed that there was no indication in the said sub section or elsewhere in the that the said general words were intended to receive their wide meaning and were not to be construed in a limited sense with the aid of the ejusdem generis rule.
A departmental proceeding like penalty proceedings were, therefore, placed outside the scope of the said sub section.
This view was quoted with approval by a learned Single Judge of the Bombay High Court in C.C. Industries & Others vs H.N. Ray and Another, at 453.
These two cases, therefore, clearly support the view canvassed before us by the learned Additional Solicitor General.
We have given our careful consideration to the submission made on behalf of the appellant, reinforced by the view expressed in the aforesaid two decisions.
In considering the scope of the expression `other legal proceeding ' we have confined ourselves to the language of sub section (2) of section 40 of the before its amendment by 22 of 1973 and should not be understood to express any view on the amended provision.
On careful consideration we are in respectful agreement with the view expressed in the aforesaid decisions that the wide expression `other legal proceeding ' must be read ejusdem generis with the preceding words `suit ' and `prosecution ' as they constitute a genus.
In this view of the matter we must uphold the contention of the learned Additional Solicitor General that the penalty and adjudication 134 proceedings in question did not fall within the expression `other legal proceeding ' employed in section 40 (2) of the as it stood prior to its amendment by 22 of 1973 and therefore, the said procedings were not subject to the limitation prescribed by the said sub section.
Mr. Nambiar, the learned counsel for the respondents strongly argued that we should not entertain the submission based on the ejusdem generis rule since it was not raised before the High Court.
That indeed is true but being a pure question of law we have though it fit to entertain the same.
We therefore, do not entertain this objection.
In the result we allow this appeal and set aside the order passed by the learned Single Judge as well as the Division Bench which affirmed it and dismiss the respondent 's writ petition itself.
We also set aside the order by which the appellant was directed to pay costs.
We restore the adjudication order dated April 4, 1974 and all consequential orders, if any, passed thereunder.
Interim stay granted on August 16, 1979 is vacated and the appellant will be entitled to recover the dues from the security furnished pursuant to that order.
The appeal is allowed accordingly with no order as to costs.
R.S.S. Appeal allowed.
| IN-Abs | The appellant issued a notice calling upon the respondent who was a dealer in tobacco to show cause why duty should not be demanded under Rule 160 of the Central Excise Rules, 1944 on the tobacco removed from his warehouse and not accounted for, and further to show cause why penalty should not be imposed for infraction of the Rules.
The respondent sent a detailed reply, and after hearing him the appellant came to the conclusion that the respondent had evaded payment of duty.
Thereupon the appellant issued a demand notice for the duty payable and further imposed a penalty.
The respondent filed a writ petition in the High Court challenging the order of the appellant.
The learned Single Judge allowed the petition taking the view that the appellant 's action was time barred because under section 40(2) of the no suit, prosecution or other legal proceedings could be instituted for anything done or ordered to be done under the law after the expiration of six months from the accrual of the cause of action.
The Division Bench dismissed the appellant 's appeal.
Before this Court it was inter alia contended on behalf of the appellant that the expression `other legal proceeding ' is preceded by particular words of a certain genus, i.e., `suit ' and `prosecution ', indicating reference to proceedings taken in courts only, and, therefore, the wide words must be limited to things ejusdem generis and must take colour from the preceding words and receive a limited meaning to exclude proceedings of the type in question.
Allowing the appeal of the Revenue, this Court, HELD: (1) The rule of ejusdem generis is generally invoked where 127 the scope and ambit of the general words which follow certain specific words (which have some common characteristic and constitute a genus) is required to be determined.[131G] (2) The cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language of the statute gives a different indication or such meaning is likely to lead to absurd results in which case their meaning can be restricted by the application of the rule of ejusdem generis and they may be required to fall in line with the specific things designated by the proceding words.
But unless there is a genus which can be comprehended from the preceding words, there can be question of invoking this rule.
Nor can this rule have any application where the general words precede specific words [132B C] (3) The wide expression `other legal proceeding ' must be read ejusdem generis with the preceding words `suit ' and `prosecution ' as they constitute a genus.
[133H] (4)`Suit ' or `prosecution ' are those judicial or legal proceedings which are lodged in a court of law and not before any executive authority, even if a statutory one.
[132E F] (5) The penalty and adjudication proceedings in the instant case did not fall within the expression `other legal proceeding ' employed in section 40(2) of the Act, as it stood prior to its amendment by Art.22 of the 1973, and therefore, the said proceedings were not subject to the limitation prescribed by the said sub section.
[ 133H; 134A] Public Prosecutor, Madras vs R. Raju & Anr.
; , ; Universal Cables Ltd. vs union of India, [1977] E.L.T. (J92); Amar Chandra vs Excise Collector, Tripura, ; ; C.C. Industries & Ors.
vs H.N. Ray & Anr., , referred to.
|
ivil Appeal No, 3201 of 1989.
From the Judgement and Order dated 28.2.1989 of the Punjab and Haryana High Court in C.W.P. No. 7769 of 1988.
Dr. N.M. Ghatate and C.V.S. Rao for the Appellants.
P.P.Singh for the Respondent.
The Judgement of the Court was delivered by K. JAYACHANDRA REDDY, J. Whether a personal hearing is required before disposing of a petition filed under Section 117(2) of The (`Act ' for short) against an order of the Summary Security Force Court? This in short is the question involved in this appeal filed by the Union of India.
The facts that give rise to this appeal may be noted at the outset.
The sole respondent who was working as Mounted Constable in the Border Security Force (`BSF ' for short) was charged for an offence under Section 31(b) of the for extracting a sum of Rs. 14,000 from a person without proper authority.
A chargesheet was issued to the respondent.
The evidence in support of the same was recorded.
Thereafter a Summary Security Force Court as provided under the was constituted and the respondent was put on trial on 17,2.1988.
During the recording of the evidence, though the respondent was given an opportunity to cross examine the witnesses he declined to do so and according to the enquiring authorities, he pleaded guilty and prayed that a lenient view may be taken.
During the trial he was also given an opportunity to examine defence witnesses, if any but he did not do so.
It is also averred that since the respondent pleaded guilty, Summary Security Force Court passed the orders and sentenced him to rigourous imprisonment for one year in civil prison and also to be dismissed from service.
Aggrieved by the said order the respondent preferred a petition under Section 117(2) of the to the Director General, BSF who 185 after going through the petition as well as other records of the case rejected the same as devoid of any merit.
The said decision was informed to the respondent.
Aggrieved by the same, the respondent filed a petition under Articles 226 and 227 of the Constitution of India before the High Court of Punjab & Haryana.
It was urged that there was violation of principles of natural justice e since he had not been heard before disposing of the petition filed under Section 117(2) of the .
The High Court without going into the merits allowed the writ petition and directed a fresh hearing of the petition filed by the respondent in accordance with law after hearing him.
Aggrieved by the saidorder the Union of India has filed the present appeal.
Learned counsel for the appellants submitted that Section 117 (2) of the does not provide for personal hearing and that the courts, which examined the similar provisions in the Army , have held that the personal hearing need not be given particularly having regard to the nature of the act and the post held.
The learned counsel appearing for the respondent, on the other hand, submitted that the statute does not expressly exclude a personal hearing and that an employee cannot be condemned without observing the principles of natural justice.
Before we examine the decisions cited by either side, it is necessary to refer to some of the provisions of the and the Army .
The BSF is an armed force of the Union of India constituted under Item 2 of List I of Schedule 7 of the Constitution of India and is primarily connected with the defence of the country.
The preamble states that the is to provide for the constitution and regulation of an Armed Force of the Union for ensuring the security of the borders of India and for matters connected therewith.
Section 4 provides for constitution of an Armed Force of the Union called the Border Security Force for ensuring the security of the borders of India and subject to the provisions of the , the Force shall be constituted in such manner as may be prescribed and the conditions of service of the members of the Force shall be such as may be prescribed.
Chapter III deals with offences and Chapter IV with punishments that can be awarded by the Security Force Court.
Chapter VI deals with the constitution of the Security Force Courts and their powers of try the offences punishable under the .
Chapter VII contains the procedure, the witnesses can be summoned and examined.
Section 87 lays down that the Evidence , shall, subject to the provisions of the , apply to all proceedings before the Security Force Courts.
For the purpose of this appeal it may not be necessary to go into the details of this procedure.
As per Section 107 no finding or sentence of a Security 186 Force Court shall be valid except so far as it may be confirmed as provided under the .
Sections 108 and 109 deal with the authorities empowered to confirm the decision of the General Security Force Court or an ordinary Security Force Court.
Under Section 117, the aggrieved person is entitled to file a petition to the concerned authority mentioned therein against the order passed by any Security Force Court.
Section 117 reads as under: "117(1) Any person subject to this who considers himself aggrieved by any order passed by any Security Force Court may present a petition to the officer or authority empowered to confirm any finding or sentence of such Security Force Court, and the confirming authority may take such steps as may be considered necessary to satisfy itself as to the correctness, 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 who considers himself aggrieved by a finding or sentence of any Security Force Court which has been confirmed, may present a petition to the Central Government, the Director General, or any prescribed officer superior in command to the one who confirmed such finding or sentence, and the Central Government, the Director General, or the prescribed officer, as the case may be, may pass such order thereon as it or he thinks fit.
" The next relevant Section is Section 118 which reads thus: "The Central Government, the Director General, or any prescribed officer may annul the proceedings of any Security Force Court on the ground that they are illegal or unjust.
" In the instant case, we are concerned with the post confirmation petition presented under Section 117(2) to the Director General, BSF.
As already mentioned the Director General rejected the same holding that it is devoid of merit without giving any personal hearing.
The petition filed by the respondent under Section 117(2) is marked as Annexure `C ' in this appeal before us.
We have gone through the same and we find that request for personal hearing as such has not been made.
With this background we shall now examine whether it is ob 187 ligatory that a personal hearing should be given and whether there has been violation of principles of natural justice? The doctrine of principles of natural justice and audi alteram partem are part of Article 14 and there are any number of decisions rendred by this Court regarding the scope of this doctrine.
We shall, however, refer to one or two important cases relied upon by the learned counsel for the appellants.
In Maneka Gandhi vs Union of India, [1978] 2 SCR 621 all the earlier important cases are referred to.
Suffice it to say that it is laid down that principles of natural justice apply to administrative orders affecting the rights of citizens.
But it is also observed that: "The audi alteram partem rule may, therefore, by the experimental test, be excluded, if importing the right to be heard has the effect of paralysing the administrative process or the need for promptitute or the urgency of the situation so demands.
But, at the same time, it must be remembered that this is a rule of vital importance in the field of administrative law and it must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands.
It is a wholesome rule designed to secure the rule of law and the Court should not be too ready to eschew it in its application to a given case.
The Court must make every effort to salvage this cardinal rule to the maximum extend permissible in a given case.
" In State of Haryana vs Ram Krishan and Others, ; the question was whether in a case of premature termination of mining leases by the Government, it was necessary to give an opportunity of hearing.
The Court held that: "Since there is no suggestion in the section to deny the right of the affected persons to be heard, the provisions have to be interpreted as implying to preserve such a right.
The Section must be interpreted to imply that the person who may be affected by such a decision should be afforded an opportunity to prove that the proposed step would not advance the interest of mines and mineral development.
Not to do so will be violative of the principles of natural justice.
Reference may be made to the observations of this Court in Baldev Singh vs State of Himachal Pradesh, , that where exercise of a power results in civil 188 consequences to citizens, unless the statute specifically rules out the application of natural justice, such rule would apply.
The learned counsel appearing for the Union of India, however, submitted that the courts have not gone to the extent of holding that in every petition or revision by way of representation filed against an order of a Tribunal under special statute should also be given an opportunity of hearing before disposal of the same.
Most of the other decisions cited deal with the question of giving an opportunity before disposal of a petition filed under Section 164(2) of the Army which is in pari materia to Section 117(2) of the .
We may usefully extract Section 164 of the Army which reads thus: "164.
Remedy against order, finding or sentence of court material Any person subject to this 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 finding 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 correctness, legality or propriety of the order passed or as to the regularity of any proceedings to which the order relates.
(2) Any person subject to this 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 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 thereon as it or he thinks fit.
" In Som Datt Datta vs Union of India & Ors., ; a question came up whether it was necessary for the confirming authority or upon the Central Government to give reasons while disposing of a petition under Section 164.
It was held that: "Apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, 189 we are unable to accept the contention of Mr. Dutta 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." (emphasis supplied) In Union of India vs Jyoti Prakash Mitter, ; a question came up whether an order passed by President acting under article 273 of the Constitution of India is justiciable.
This Court held that the appreciation of the evidence by the President is entirely left to him but the Court will not sit in appeal over the judgement of the President.
Now coming to the question of personal hearing it was further held that: "The President had given ample opportunities at diverse stages to the respondent to make his representations.
All evidence placed before the President when he considered the question as to the age of the respondent was disclosed to him and he respondent was given an opportunity to make his representation thereon.
There is nothing in clause (3) of Article 217 which requires that the Judge whose age is in dispute, should be given a personal hearing by the President.
The President may in appropriate cases in the exercise of his discretion give to the Judge concerned an oral hearing, but he is not bound to do so.
An order made by the President which is declared final by clause (3) of Article 217 is not invalid merely because no oral hearing was given by the President to the Judge concerned".
(emphasis supplied) In Lt. Col.
K.N.S. Sidhu vs The Union of India and Others, All India Service Law Journal, a Division Bench of the Punjab & Haryana High Court has considered this very question and held that the rejection of a representation made under Section 164(2) of the Army without giving a personal hearing does, not suffer from any illegality and after referring to A.K. Gopalan vs State of Madras, ; and Union of India vs Jyoti Prakash Mitter, ; , held that: "From the observations reproduced above, it is abundantly clear that there is no hard and fast rule for the applicability of principles of natural justice and that in each case it has to be definitely ascertained if the statute governing it leaves 190 any discretion for involving their assistance.
" It was further observed that: "The applies to a class of people who are the backbone of the country.
They are governed by the codified law.
Discipline is maintained by resorting to the provisions of the codified law.
There would hardly be any justification for importing the principles of natural justice in a completely codified statute".
In Captain Harish Uppal vs Union of India and Others, ; also the question whether an opportunity to be heard is necessary before confirmation under Section 164 of the Army , was considered and it was held that: "The contention that Brig.
Bhilla should either have given a hearing to the petitioner or the Chief of Army Staff should have given a hearing to the petitioner before confirming the subsequent sentence by the court martial is not a requirement under the .
While it can be at least said that there is some semblance of reasonableness in the contention that before he ordered what in effect was an upward revision of the sentence passed on the petitioner, he should have been given a hearing, to insist that the confirming authority should give a hearing to the petitioner before it confirmed the sentence passed by the court martial, is a contention which cannot be accepted.
To accept this contention would mean that all the procedure laid down by the Code of Criminal Procedure should be adopted in respect of the court martial, a contention which cannot be accepted in the face of the very clear indications in the Constitution that the provisions which are applicable to all the civil cases are not applicable to cases of Armed Personnel.
It is not a requirement of the principles of natural justice.
Indeed when he was informed that the subsequent sentence passed on him had been sent to the Chief of the Army Staff for confirmation it was open to the petitioner to have availed himself of the remedy provided under Section 164 of presenting a petition to the confirming officer, i.e. the Chief of the Army Staff in this case.
He does not appear to have done so." (emphasis supplied) In this decision this Court has held in unambiguous terms that the confirming authority need not give a personal hearing and this ratio applies with equal force to a post confirmation petition under Section 164(2) and consequently to an application under Section 117(2) of the .
In a recent decision in Shri S.N. Mukherjee vs Union of India, JT (1990) 3 630 a Constitution bench of this Court having noted the principle that requirement to record reasons can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities, however, proceeded to hold that "There is nothing in the language of sub section (2) of Section 164 which indicates that recording of reasons for an order passed on the post confirmation petition was necessary".
In arriving at this finding, the Bench referred to the ratio laid down in Som Datt Datt 's case.
At this stage we may refer to another decision of this Court in Union of India vs cor.
J.N. Sinha and Anr., [1971] 1 SCR 791 wherein it is held: "Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights.
As observed by this Court in Kraipak and Ors.
vs Union of India, AIR 1970 SC 150, "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules can operate only in areas not covered by any law validly made.
In other words they do not supplant the law but supplement it.
xx xx xx Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power".
From the above discussion it emerges that in cases of special enactments like Army , all the principles of natural justice cannot be imported.
The same ration applies to a petition under Section 117(2) of the also.
We may also point out her that Chapter XIII consisting of Rules 167 to 169 of the BSF Rules deals with petitions filed under Section 117 of the .
Even in them there is nothing to indicate that a hearing has to be given before disposal of a petition.
192 As noted above, under Section 117(2) the respondent in only entitled to file a petition but the disposal of such a petition does not attract principles of natural justice.
The respondent has been tried by observing the due process of law and the verdict of the Security Force Court was confirmed and it is only a post confirmation petition that was filed under Section 117(2) of the and authority which disposed of the same is not a court any every order passed administratively cannot be subjected to the rigours of principles of natural justice.
For the aforesaid reasons, the order of the High Court is set aside and the matter is remitted back to the High Court for disposal on merits.
The appeal is accordingly allowed.
In the circumstances of the case, there will be no order as to costs.
R.P. Appeal allowed.
| IN-Abs | The respondent in the appeal, a Mounted Constable in the Border Security Force, was charged for an offence under section 31(b) of the for extracting a sum of money from a person without proper authority.
A charge sheet was issued, evidence in support of the same was recorded, and thereafter a Summary Security Force Court as provided under the Act was constituted and the respondent was put on trial.
During the recording of evidence, the respondent was given an opportunity to cross examine prosecution witnesses, but he declined, pleaded guilty and prayed for a lenient view to be taken.
The Summary Security Force Court passed an order sentencing him to rigorous imprisonment for one year civil prison and also to be dismissed from service.
Aggrieved by the aforesaid order, the respondent preferred a petition under section 117(2) of the Act to the Director General, B.S.F., who after going through the petition and the records of the case, rejected the same as devoid of any merit.
The respondent thereupon filed a petition under Articles 226 and 227 of the Constitution before the High Court urging that there was violation of the principles of natural justice since he had not been heard before disposing of his petition.
The High Court allowed the writ petition, and directed fresh hearing of the petition of the respondent, after giving him an opportunity of being heard.
The Union of India appealed to this Court against the decision of the High Court contending that section 117(2) of the Act does not provide for 183 a personal hearing.
The appeal was contested by the respondent contending that as the ` does not expressly exclude a personal hearing and that an employee cannot be condemned without observing the principles of natural justice.
On the question: whether a personal hearing is required before disposing of a petition under s.117(2) of the against an order of the Summary Security Force Court, Allowing the appeal, this Court, HELD: 1.
The doctrine of principles of natural justice and audi alteram partem are part of Article 14 of the Construction.
Although principles of natural justice apply to administrative orders affecting the rights of citizen yet it is also clear that in cases of special enactments, like Army Act, all the principles of natural justice cannot be imported.
The same ratio applies to a petition under section 117(2) of the also.
[187A B; 191G] 1.2 Chapter XIII consisting of Rules 167 to 169 of the Border Security Force Rules deals with petitions filed under s.117 of the .
Even in them there is nothing to indicate that a hearing has to be given disposal of a petition.
[191G H] Maneka Gandhi vs Union of India, [1978] 2 SCR 621; Som Datt Datta vs Union of India & Ors., [1969] 2SCR 177; Union of India vs Jyoti Prakash Mitter,[1971] 1 SCC 396; Captain Harish Uppal vs Union of Inida and Others, ; ; Shri S.N. Mukherjee vs Union of India, JT 1990 (3) 630 and Union of India vs Col. J.N. Sinha and Anr.
,[1971], 1 SCR 791, relied on.
Lt. Col.
K.N.S. Sidhu vs The Union of India and Others, All India Service Law Journal 1977 page 721, referred to.
2.1 Under section 117(2) of the , the person aggrieved is only entitled to file a petition but the disposal of such a petition does not attract principles of natural justice.
[192A] 2.2 The authority disposing of the petition under section 117(2) is not a court, and every order passed administratively cannot be subjected to the rigours of principles of natural justice.
[192B] 3.
In the instant case, the respondent had been tried by observing 184 the due process of law, and the verdict of the Summary Security Force Court was confirmed and it was only a post confirmation petition that was filed under s.117(2) of the .
The order was passed by an authority and not by a court and every order passed administratively could not be subjected to the rigours of principles of natural justice.
[192A B]
|
Civil Appeal No. 1046 of 1982.
From the Order dated 20.9.1980 of the Madhya Pradesh High Court in M.P. No. 84 of 1978.
Dr. N.M. Ghatate, S.V. Deshpande and S.K. Agnihotri for the Appellants.
Aman Vachher, S.K. mehta, Mrs. Anjali Verma, D.N. Mishra (for JBD & Co.) and Ashok Srivastava for the Respondents.
The Judgment of the Court was delivered by T.K. THOMMEN, J.
This appeal by the State of Madhya 176 Pradesh arises from the Order of the Madhya Pradesh High Court in Misc.
Petition No.84 of 1978 quashing Order dated 1.10.1977 of the Additional Collector, Gwalior, whereby he initiated proceedings against the 3rd respondent, the Gwalior Dairy Limited (hereinafter called `the Company ') under section 182(2)(i) of the M.P. Land Revenue Code, 1959 (`the Code ').
Respondent Nos.
1,2 and 4 are shareholders of the third respondent.
The High Court by the impugned Order held that the Company was not a Government lessee within the meaning of section 181 [read with section 2(h)] and was, therefore, not liable to be proceeded against in terms of section 182.
The Order of the Additional Collector, Gwalior, which was impugned in the High Court, was made consequent on the failure of the Company to pay the rent agreed upon between the Government and the Company subsequent to the unconditional withdrawal by the Company of its Civil Appeal No. 299 of 1967 which was pending in this Court.
That appeal had been brought to this Court by the Company against an earlier judgement of the High Court dated 30.6.1`964 in First Appeal No. 1 of 1961 whereby the High Court, confirming the judgement of the trial court and dismissing the Company 's appeal, held that the land admeasuring 495.05 acres was held by the Company in terms of the lease granted by the State and the Company was not a `pakka ' tenant and did not enjoy the status of a " Gair Maurusi" tenant.
The Company entered into a contract of lease with the Gwalior State Government (Sanitary Engineering Department) for a period of one year in Samvat 1999.
The lease was extended for a further period of ten years in Samvat 2000.
When proceedings were initiated on 16.7.1952 to eject the Company, the Company filed Suit No. 14 of 1960 for declaration of title and perpetual injunction.
Issue No. 1(1) in that Suit was in the following words: "Whether the plaintiff in accordance with paras 5 & 6 of the Plaint was a `gair Maurusi tenant ' and now by virtue of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act of Samwat 2007 has become a `Pakka Tenant '.
If so, what is its effect on the suit?" That issue was answered in the negative.
The Court held that the Company did not enjoy the status of Gair Maurusi tenant and that it had not become a `pakka ' tenant under section 54(vii) of Part II of Act 177 No. 66 of 1950 in respect of the land in question.
The Court held that the Company was "a Government lessee under section 181 of the M.P. Land Revenue Code, 1959 with the rights and liabilities enumerated in section 182".
It was also held that the Company was not an occupancy tenant under section 185 of the Code as it had not become an ordinary tenant earlier in Madhya Bharat under Act No. 66 of 1950.
This judgement, as stated earlier, was affirmed by the High Court by its judgement dated 30.6.1964 in First Appeal No. 1 of 1961.
The High Court observed that the land held by the Company under the lease was neither zamindari nor ryotwari land.
The Zamindari Abolition Act did not apply to the land as it had become vested in the State long prior to the Act.
The High Court observed: ". .the lands comprised in the Gwalior Sewage Farm were never notified to be a Ryotwari village.
The lands which have been acquired by the Gwalior State in connection with the Gwalior Sewage Farm could not, after their acquisition for a public purpose be notified to be part of a Ryotwari village. the lands were not `Pandat ' lands nor were the lands included in Ryotwari village.
Special leases granted by the erstwhile Gwalior State in respect of such lands as had been acquired for a public purpose, namely construction of a sewage system were governed not by any law for the time being in force but by the terms of lease in each case.
I have already explained above that to these lands the provisions of the Zamindari Abolition Act did not apply, since they were already held by the State when that came into force. the defendant (the State) has been successful in showing that the plaintiff (the Company) never acquired the status of a Gair Maurusi tenant in respect of the land in dispute at any time prior to the coming into force of the Act No. 66 of 1950 and that he could not, by virtue of the provisions of that Act become a Pukka tenant thereof".
It was from that judgement that the Company had brought to this Court Civil Appeal No. 299 of 1967 and that appeal was, as stated earlier, unconditionally withdrawn by the Company in 1971.
Subsequently, the State entered into an agreement with the Company to grant a fresh lease for a period of ten years from 9.2.1971 subject to the payment of enhanced rent as agreed upon between the parties.
Since the Company failed to pay the agreed rents and thus contravened the conditions of the lease, proceedings were initiated by the 178 Additional Collector by his Order dated 1.10.1977 for eviction of the Company from the land in question.
That Order was made under section 182(2)(i) of the Code.
It was that Order which was quashed by the High Court by its impugned Order dated 20.9.1980.
The High Court held that the lease in question was not covered by section 181 of the Code and that the Company could not be evicted by the summary proceeding provided for under that section.
As stated earlier, the High Court had, in the earlier proceeding held that the Company was not a `pakka ' tenant.
That judgement of the High Court became by the unconditional withdrawal of the appeal filed in this Court against it.
The Madhya Pradesh Land Revenue and Tenancy Act, Samvat 2007 (Act No 66 of 1950), which was the law in force until repealed by the M.P. Land Revenue Code, 1959, defined "pakka tenant" as follows: "section 54 (vii).
Pakka tenant means a tenant who has been or whose predecessor in interest had been lawfully recorded in respect of his holding as a `Ryot Pattedar ', `Mamuli Maurusi ' `Gair Maurusi ', and `Pukhta Maurusi ' when this Act comes into force or who may in future be duly recognised as such by a competent authority.
Explanation The term `Pukhta Maurusi ' included Istmurardar tenants, Malikana Haq holder tenants, Hakkiyat Mutafarrikat Sharah Muayyana and Sakitul Mikiyat tenants".
An `ordinary tenant ' is defined by Act No. 66 of 1950 as "a tenant other than a Pakka tenant and shall not include a sub tenant".
The position, therefore, was that, in terms of Act No. 66 of 1950, the Company was not a pakka tenant, as found by the High Court in the earlier judgement, and, therefore, it was, according to the said Act, an ordinary tenant.
The High Court had found in the earlier proceeding that the land in question was held by the Company under lease from the Government after it had been acquired by the Government for a public purpose of the State.
The question, therefore, is whether the Company was, as found by the Additional Collector, a Government lessee within the meaning of the Code.
It is to be noticed that subsequent to the withdrawal of the appeal from this Court, fresh terms were agreed upon between the Company and the Government to enable the Com 179 pany to remain in possession of the land as a lessee.
The Company is thus a person holding the land from the State Government.
This is so whether or not the Company is deemed to be holding over under the old lease or holding, upon termination of that lease, under and in terms of the fresh conditions agreed upon between the parties to enable the Company to remain in possession of the land as a lessee.
In either event, the Company has been holding the land from the State.
It is not and cannot be disputed that the original lease was obtained from the predecessor State and the Company continued to remain in possession of the land under the newly stipulated terms agreed upon between the Company and the successor State, namely, the Madhya Pradesh State.
A `Government Lessee ' is defined under the M.P. Land Revenue Code, 1959 as "a person holding land from the State Government under section 181", Section 181 of the Code reads: "181.
Government Lessees.
(1) Every person who holds land from the State Government or to whom a right to occupy land is granted by the State Government or the Collector and who is not entitled to hold land as a Bhumiswami shall be called a Government lessee in respect of such land.
(2) Every person who at the coming into force of this Code (a) hold any land in the Madhya Bharat region as an ordinary tenant as defined in the Madhya Bharat Land Revenue and Tenancy Act, Samvat2007 (66 of 1950); or (b). . . . . . . . . (c). . . . . . . . . shall be deemed to be a Government lessee in respect of such land".
These provisions show that whether or not the Company has been holding the land in terms of the original lease or under the newly stipulated terms of the lease, the Company has been holding the land 180 from the State Government and it has never been an ordinary terms as defined in the Madhya Bharat Act No. 66 of 1950.
Accordingly whether considered in terms of sub section (1) or sub section (2) of section 181, the Company has been at all material times a Government lessee in respect of the land in question.
Accordingly, section 182 of the Code is attracted.
That section reads: "182.
Rights and liabilities of Government lessee (1) A Government lessee shall, subject to any express provision in this Code, hold his land in accordance with the terms and conditions of the grant, which shall be deemed to be a grant within the meaning of the (XV of 1985).
(2) A Government lessee may be ejected from his land by order of a Revenue Officer on one or more of the following grounds, namely: (i) that he has failed to pay the rent for a period of three months from the date on which it became due; or (ii) that he has used such land for purpose other than for which it was granted; or (iii) that the term of his lease has expired or (iv) that he has contravened any of the terms and conditions of the grant: Provided that no order for ejectment of a Government lessee under this sub section shall be passed without giving him an opportunity of being heard in his defence".
It was in terms of sub section 2(i) of section 182 that the Additional Collector made his order for eviction of the Company.
The finding of the Additional Collector is a finding of fact based on evidence and is not liable to be questioned in these proceedings.
His finding shows that large amounts are due and payable by the Company as rent and that the rents have remained unpaid for a period far in excess of three months from the dates on which they became due.
In the circumstances, the Additional Collector was well justified in having recourse to the proceeding prescribed under section 182 of the 181 Code.
The finding of the High Court to the contrary was, in our view, totally unjustified and opposed to law.
In the circumstances, the impugned Order of the High Court dated 20.9.1980 in Misc.
Petition No 84 of 1978 is set aside.
The Order of the Additional Collector dated 1.10.1977 in Case No. 1 75 76A 39: 182 shall stand restored.
The appeal by the State is allowed with costs throughout.
V.P.R. Appeal allowed.
| IN-Abs | The Company Respondent No. 3 entered into a contract of lease with the State Government for a period of one year and later it was extended for a further period of ten years.
When proceedings were initiated on 16.7.1952 to eject the Company, the Company filed suit for declaration of title and perpetual injunction.
The trial Court holding that the Company did not become a `pakka ' tenant under Section 54(vii) of Part II of Act No. 66 of 1950 in respect of the suit land and that the Company was "a Government lessee under section 181 of the M.P. Land Revenue Code, 1959, and was not an occupancy tenant under section 185 of the Code, dismissed the suit.
This judgment, was affirmed by the High Court in First appeal, observing that the land held by the Company under the lease was neither zamindari nor ryotwari land.
Against that judgment, the Company filed an appeal in this Court which was withdrawn in 1971.
Subsequently, the State entered into an agreement with the Company to grant a fresh lease for a period of ten years from 9.2.1971 subject to the payment of enhanced rent as agreed upon between the parities.
Since the Company failed to pay the agreed rents and contravened the conditions of the lease, proceedings were initiated under Section 182(2)(i) of the Code, for eviction of the Company from the land in question.
175 Eviction order was quashed by the High Court holding that the lease in question was not covered by section 181 of the Code and that the Company could not be evicted by the summary proceeding provided for under that section, against which the appeal has been filed.
Allowing the appeal, this Court, HELD: 1.
A `Government lessee ' is defined under the M.P. land Revenue Code, 1959 as "a person holding land from the State Government under section 181".
[178E] 2.
As per the provisions in section 181 of the M.P. Land Revenue Code, 1959 whether or not the company has been holding the land in terms of the original lease or under the newly stipulated terms of the lease, the Company has been holding the land from the State Government and it has never been an ordinary tenant as defined in the Madhya Bharat Act No. 66 of 1950.
Accordingly, whether considered in term of sub section (1) or sub section (2) of section 181, the Company has been at all material times a Government lessee in respect of the land in question.
[179 G 180 A] 3.
It was in terms of sub section 2(i) of section 182 that the Additional Collector made his Order for eviction of the Company.
The finding of the Additional Collector is a finding of fact based on evidence and is not liable to be questioned in these proceedings.
Large amounts are due and payable by the Company as rent.
In the circumstances, the Additional Collector was well justified in having recourse to the proceeding prescribed under section 182 of the Code.
[180 F 181 A]
|
Appeal No. 125 of 1955.
Appeal from the judgment and decree dated November 20, 1951, of the former Court of Judicial Commissioner, Vindhya Pradesh, in Civil First Appeal No. 47 of 1951, arising out of the judgment and decree dated June 4, 1951, of the Court of Additional District Judge, Umaria, in Civil Original Suit No. 17/19/17 of 1950.
Sardar Bahadur, for the appellants.
Achhru Ram, B. C. Misra and P. K. Chakravarty, for the respondents.
December 9.
The Judgment of the Court was delivered by S.K. DAS, J.
This is an appeal on a certificate granted by the erstwhile Judicial Commissioner of Vindhya Pradesh, which is now part of the State of Madhya Pradesh.
On behalf of respondent No. 1, Nagar Mal, who was defendant No. 1 in the suit, a preliminary objection has been taken to the effect that the suit was not maintainable by reason of the provisions of section 4 of the Rewa State Companies Act, 1935, and the appeal filed by the plaintiffs must, therefore, be dismissed.
As this preliminary objection was not taken in any of the two courts below, learned counsel for the appellants wanted time to consider the point.
Accordingly, on October 28, 1958, we adjourned the hearing of the appeal for about a month.
The appeal was then heard on November 27, 1958.
As we are of the opinion that the preliminary objection must succeed, it is necessary to state the facts only in so far as they have a bearing on it.
When cloth control came into force in Rewa State, the cloth dealers of Budhar a town in that State, formed themselves into an Association to collect the quota of cloth to be allotted to them and sell it on profit wholesale and retail.
The, Association at Budhar consisted of 25 members who made contributions to the initial 771 capital of the association which was one lac of rupees.
No formal Articles of Association were written; nor Se was it registered.
The Association functioned through a President and a pioneer worker; they kept accounts and distributed the profits.
Respondent No. 1, Nagar Mal, was the President of the said Association from January 1946 to June 26, 1946.
Before that, Seth Badri Prasad, one of the plaintiffs appellants before us, was the President.
Nagar Mal ceased to be President after June 26, 1946, and Seth Badri Prasad again became President.
The Association worked till Febr uary 1948 ; then cloth was decontrolled and the work of the Association came to an end.
On June 25, 1949, thirteen members of the Association out of the twenty five brought a suit, and in the plaint they alleged that respondent No. 1, who was President of the Association, from January 1946 to June 1946, had given an account of income and expenditure for the months of January, February and March, 1946, but had given no accounts for the months of April, May and June, 1946.
They, therefore, prayed (a)that defendant No. 1 (Nagar Mal) be ordered to give the accounts of the Cloth Association, Budhar, from the beginning of the month of April 1946 to June 26, 1946; (b)that defendant No. 1 be ordered to pay the amount, whatever is found due to the plaintiffs on account being done, along with interest at the rate of annas 12 per cent.
per month; and (c)that interest for the period of the suit and till the realisation of the dues be allowed.
Besides Nagar Mal the other eleven businessmen, who were members of the Association, were joined as proforma defendants, some of whom later filed an application to be joined as plaintiffs.
Though the plaint did not mention any particular transaction of the Association during the period when Nagar Mal was its President, the judgments of the courts below show that the real dispute between the parties related to the sale of cloth of a consignment known as the Gwalior consignment.
It appears that in April 1946 a consignment of 666 bales of cloth had come from Gwalior 772 and an order was passed by the Cloth Control Officer that the consignment would be allotted to Nagar Mal who would give the Association an option of taking over the consignment; if the Association did not exercise the option, the consignment would be taken over by Nagar Mal.
It appears that there was some dispute as to whether the other members of the Association were willing to take over the consignment of Gwalior cloth.
We are not concerned now with the details of that dispute because we are not deciding the appeal on merits.
It is enough if we say that ultimately there was an order to the effect that only 390 bales should be allotted to the Association out of which Nagar Mal had given the Association benefit of the sales of 106 bales, and the dispute related to the share of profits made on the remaining 284 bales.
Respondent No. 1, Nagar Mal, raised various points by way of defence, his main defence being that none of the members of the Association were entitled to any share in the profits on the sales of 284 bales of Gwalior cloth.
The learned District Judge, who dealt with the suit in the first instance, passed a preliminary decree in favour of the plaintiff appellants.
The decree directed Nagar Mal to render accounts of the Cloth Association at Budhar from April 1, 1946 to June 26, 1946, and it further directed that leaving out 106 bales of Gwalior cloth which Nagar Mal gave to the Association, an account should be rendered of the rest of the 390 bales and the profits on the sale thereof shall be according to the capital shares of the members of the Association.
Nagar Mal preferred an appeal to the learned Judicial Commissioner of Vindhya Pradesh, who reversed the finding of the learned District Judge and came to the conclusion that the other members of the Association were not entitled to participate in the profits made on the sale of 284 bales of the Gwalior cloth and inasmuch as Nagar Mal had rendered accounts with regard to all other transactions, the suit for accounts must fail.
He accordingly allowed the appeal and dismissed the suit.
The preliminary point taken before us is founded on 773 the provisions of section 4 of the Rewa State Companies Act, 1935.
Sub section (1) of section 4 relates to banking business.
We are concerned with sub section
(2) of section 4 which is in these terms: " 4(2).
No company, association or partnership, consisting of more than twenty persons shall be formed for the purpose of carrying on any other, business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of a Charter from the Durbar." Mr. Sardar Bahadur, who has appeared on behalf of the appellants and who took time to consider the point, has now conceded before us that the aforesaid provision was in force in the Rewa State at the relevant time when the Association was formed at Budhar and he, has further conceded that the said provision was in force till the Indian Companies Act came into force in the said area in 1950.
We must, therefore, decide the preliminary point on the basis of the provision in section 4(2) of the Rewa State Companies Act, 1935.
Now, the preliminary point taken on behalf of respondent no.1 is this.
It is contended that by reason of section 4(2) aforesaid, the Cloth Association at Budhar was not a legal Association, because it was formed for the purpose of carrying on a business which had for its object the acquisition of gain by the individual members thereof and further because it was not registered as a Company under the Rewa State Companies Act, 1935; nor was it formed in pursuance of a charter from the Durbar.
It has been contended before us on behalf of respondent no.1 that by reason of the illegality in the contract of partnership the members of the partnership have no remedy against each other for contribution or apportionment in respect of the partnership dealings and transactions.
Therefore, no suit for accounts lay at the instance of the plaintiffs appellants, who were also members of the said illegal Association.
We consider that this contention is sound and must be upheld.
On behalf of the appellants, Mr. Sardar 774 Bahadur has urged the following points in answer to the preliminary objection: firstly, he has contended that we should not allow the preliminary objection to be raised at this late stage; secondly, he has contended that even though the Association was in contravention of section 4(2) of the Rewa State Companies Act, 1935, the purpose of the Association was not illegal and a suit was maintainable for recovery of the contributions made by the appellants and also for accounts; thirdly, he has contended that on the analogy of section 69(3)(a) of the , it should be held that the appellants had a right to bring a suit for accounts of the Association which was dissolved in February 1948.
We proceed now to consider these contentions of learned counsel for the appellants.
The first contention that respondent No. 1 should not be allowed to raise an objection of the kind which he has now raised at this late stage can be disposed of very easily.
The objection taken rests on the provisions of a public statute which no court can exclude from its consideration.
The question is a pure question of law and does not require the investigation of any facts.
Admittedly, more than twenty persons formed the Association in question and it is not disputed that it was formed in contravention of section 4(2) of the Rewa State Companies Act, 1935.
A similar question arose for consideration in Surajmull Nargoremull vs Triton Insurance Company Ltd. (1).
In that case sub section
(1) of section 7 of the Indian Stamp Act (11 of 1899) was pleaded as a bar before their Lordships of the Privy Council, the section not having been pleaded earlier and having passed unnoticed in the judgments of the courts below.
At p. 128 of the report Lord Sumner said:,, The suggestion may be at once dismissed that it is too late now to raise the section as an answer to the claim.
No court can enforce as valid that which competent enactments have declared shall not be valid, nor is obedience to such an enactment a thing from which a court can be dispensed by the consent of the parties, or by a failure to plead or to argue the (1)(1924) L.R. 52 I.A. 126, 128.
775 point at the outset: Nixon vs Alibion Marine Insurance Co., (1867) L. R. ; The enactment is prohibitory.
It is not confined to affording a party a protection, of which he may avail himself or not as he pleases ".
In Sri Sri Shiba Prasad Singh vs Maharaja Srish Chandra Nandi (1), the provisions of section 72 of the Indian Contract Act were overlooked by the High Court; the section was only mentioned in passing by the Subordinate Judge and it appears that the bar of section 72 of the Indian Contract Act was not argued or only faintly argued before the Subordinate Judge or in the High Court.
In these circumstances, their Lordships of the Privy Council held that they were unable to exclude from their consideration the provisions of a public statute.
In our view, the same principle applies in the present case and section 4(2) of the Rewa State Companies Act, 1935, being prohibitory in nature cannot be excluded from consideration even though the bar of that provision has been raised at this late stage.
On his second contention learned counsel for the appellants has relied on U. Sein Po vs U. Phyu (2).
That was a case in which three members of an association formed for carrying on a rice business claimed a decree (1) declaring the respective shares of the subscribers to that association and (ii) directing that the plaintiffs be repaid their shares after reconverting the property of the association into cash and after payment of all debts and liabilities.
The association, it was found, consisted of twenty seven members; it was not registered and its formation was in contravention of sub section
(2) of section 4 of the Indian Companies Act.
The lower court granted the decree asked for and this was affirmed in appeal by the High Court.
The learned Judges referred to the decision in Sheppard vs Oxenford(3) and Butt vs Monteaux (4), and rested their decision on the following passage of " Lindley on Partnership " (the learned Judges quoted the passage at p. 145 of the 9th edition but the same passage will be found at pp.
148 149 of the 11th edition): (1) (1949) L.R. 76 I.A. 244.
(2) Ran. 540.
(3) ; ; (4) ; ; 69 E.R. 345. 776 Although, therefore, the subscribers to an illegal company have not a right to an account of the dealings and transactions of the company and of the profits made thereby, they have a right to have their subscriptions returned; and the necessary account taken; and even though the moneys subscribed have been laid out in the purchase of land and other things for the purpose of the company the subscribers are entitled to have that land and those things reconverted into money, and to have it applied as far as it will go in payment of the debts and liabilities of the concern, and then in repayment of the subscriptions.
In such cases no illegal contract is sought to be enforced; on the contrary, the continuance of what is illegal is sought to be prevented.
" We do not think that the decision aforesaid, be it correct or otherwise, is of any help to the appellants in the present case.
The appellants herein have not asked for a return or refund of their subscriptions; on the contrary, they have asked for a rendition of accounts in enforcement of an illegal contract of partnership.
The reliefs they have asked for necessarily imply a recognition by the court that an association exists of which accounts ought to be taken.
When the association is itself illegal, a court cannot assist the plaintiffs in getting accounts made so that they may have their full share of the profits made by the illegal association.
The principles which must apply in the present case are those referred to in the following passage at p. 145 of Lindley on Partnership (11th edition): " The most important consequence, however, of illegality in a contract of partnership is that the members of the partnership have no remedy against each other for contribution or apportionment in respect of the partnership dealings and transactions.
However ungracious and morally reprehensible it may be for a person who has been engaged with another in various dealings and transactions to set up their illegality as a defence to a claim by that other for an account and payment of his share of the profits made thereby, such a defence must be allowed to prevail in 777 a court of justice.
Were it not so, those who ex hypothesi have been guilty of a breach of the law, would obtain the aid of the law in enforcing demands arising out of that very breach; and not only would all laws be infringed with impunity, but, what is worse, their very infringement would become a ground for obtaining relief from those whose business it is to enforce them.
For these reasons, therefore, and not from any greater favour to one party to an illegal transaction than to his companions, if proceedings are instituted by one member of an illegal partnership against another in respect of the partnership transactions, it is competent to the defendant to resist the proceedings on the ground of illegality It is true that in order that illegality may be a defence, it must affect the contract on which the plaintiff is compelled to rely so as to make out his right to what he asks.
It by no means follows that whenever money has been obtained in breach of some law, the person in possession of such money is entitled to keep it in his pocket.
If money is paid by A to B to be applied by him for some illegal purpose, it is competent for A to require B to hand back the money if B has not already parted with it and the illegal purpose has not been carried out: see Greenberg vs Cooperstein (1).
The case before us stands on a different footing.
It is a claim by some members of an illegal association against another member on the footing that the association should be treated as legal in order to give rise to a liability to render accounts in respect of the transac tions of the association.
Such a claim is clearly unten able.
Where a plaintiff comes to court on allegations which on the face of them show that the contract of partnership on which he sues is illegal, the only course for the courts to pursue is to say that he is not entitled to any relief on the allegations made as the courts cannot adjudicate in respect of contracts which the law declares to be illegal (Senaji Kapurchand vs Pannaji Devichand(2)).
The same view, which we (1) (2)A.I.R. 98 778 think is correct, was expressed in Kumaraswami vs Chinnathambi (1).
As to the last contention of learned counsel for the appellants, based on the analogy of section 69(3)(a) of the Partnership Act, it is enough to point out that under the , an unregistered firm is not illegal; there is no direct compulsion that a partnership firm must be registered, though the disabilities consequent on non registration may be extremely inconvenient.
Moreover, the suit before us was not one for accounts of a dissolved firm, but for accounts of an illegal association which was in existence at the relevant period for which accounts were asked.
We do not think that the argument by analogy is of any help to the appellants; in our opinion, the analogy does not really apply.
For the reasons given above, we hold that the preliminary objection succeeds.
The appeal is accordingly dismissed.
As the preliminary objection was taken at a very late stage, we direct that the parties must bear their own costs of the hearing in this Court.
Appeal dismissed.
(1) I.L.R. [1951] Mad 593.
| IN-Abs | When cloth control was introduced in Rewa State, 25 cloth dealers of Budhar, including the thirteen appellants, formed themselves into an Association to collect the quota of cloth to be allotted to them and to sell it on profit.
The Association functioned through a President and a pioneer worker; they kept accounts and distributed profits.
After cloth had been decontrolled and the work of the Association had come to an end, the appellants filed a suit against the first respondent for rendition of accounts for a portion of the period that he had been President of the Association and for realisation of the amount found due with interest.
The suit was decreed by the trial Court but was, on appeal, dismissed by the judicial Commissioner.
In appeal before the Supreme Court, the first respondent raised, for the first time, a preliminary objection that the suit was not maintainable as the Association consisting of more than 20 persons was not registered as required by section 4(2) Of the Rewa State Companies Act, 1935, and that consequently the members of the Association had no remedy against each other in respect of its dealings and transactions.
The appellants objected to the raising of the new plea and contended that, nevertheless, the suit was maintainable Held, that the suit was not maintainable.
In view of section 4(2) of the Act the Association was illegal.
The reliefs claimed for rendition of accounts in enforcement of the illegal contract of partnership necessarily implied recognition by the Court that the Association existed of which accounts were to be taken.
The Court could not assist the plaintiffs in obtaining their share of the profits made by the illegal Association.
U.Sein Po vs U. Phyu, Rang.
540, not applicable.
Held further, that the new point ought to be allowed to be raised.
The question was a pure question of law and did not require the investigation of any facts.
The objection rested on the provisions of a public statute which no court could exclude from its consideration.
Surajmull Nargoremull vs Triton Insurance Company Ltd., (1924) L.R. 52 I.A. 126; Sri Sri Shiba Prasad Singh vs Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, followed.
The analogy of section 69(3)(a) of the , did not apply, an under that Act an unregistered firm was 97 770 not illegal.
Besides, the suit was not one for accounts of a dissolved firm but of an illegal Association which was in existence id at the relevant time.
|
Civil Appeal No. 578 of 1991.
From the Judgment and Order dated 8.11.1990 of the Bombay High Court in W. P. No. 4497 of 1991.
Ashok Desai, N. Serwai, Dilip Udeshi, P.H. Parekh and J.P. Pathak for the Appellants.
U.R. Lalit, K.K. Singhvi and Soli J. Sorabjee, A.M. Khanwilkar, Ravinder Narain, section Ganesh, D.N. Misra and section Kachwaha, S.K. Dholakia and A.S. Bhasme for the Respondents.
K.K. Venugopal, E.C. Agrawala, Ashwini Kumar, Ms. Purnima Sethi and A.V. Pilli for the Applicant.
The Judgment of the Court was delivered by KANIA, J.
This Special Leave Petition is directed against the judgment of a Division Bench of the Bombay High Court in Writ Petition No. 4497 of 1990.
The High Court allowed the said writ petition and struck down a communication from the Bombay Municipal Corporation.
respondent No. 2 herein, informing the petitioners in the said writ petition, who are arrayed as respondents nos.
3 to 13 before us, that their application for permission to develop the property, namely, the land in question situated at Village Balkum near Thane, was rejected in view of the representations submitted to the Government by the owners of chemical factories situated in the said village, who are the appellants/petitioners herein that no building construction permission should be granted within a certain distance from the said factories.
The petitioners in the Special Leave Petition are some of the said chemical factories.
They were not joined in the writ petition as respondents and have prayed for leave to file the Special Leave Petition on the ground that the judgment adversely affects them and they are aggrieved by the same.
Permission is granted.
Leave is granted.
Counsel heard.
We find that appellants can be said to be parties aggrieved by the impugned judgment, even if they are not regarded as necessary parties 252 in the writ petition.
In the facts and circumstances of the case, we find that there is no need to set aside the impugned judgment of the Bombay High Court at the instance of the appellants.
The appellants are.
however, given liberty to file a review petition before the Bombay High Court for reviewing the impugned judgment, within a period of four weeks from today.
9 In our opinion, it is proper that the entire controversy to which the judgment relates should be determined in the light of the submissions which may be made by the appellants.
In these circumstances, we direct that the review petition, if filed, shall be entertained by the Bombay High Court and the appellants will be given a hearing as if the matter were heard afresh as far as they are concerned.
It is clarified that the hearing of the review application will not be confined to the normal grounds on which a review can be sought but the entire controversy will be regarded as open as between the appellants herein and the respondents.
The interim order made by this Court on January 8, 1991 will continue to remain in operation till the review petition is decided by the High Court.
However, it will be open for the High Court to vary or vacate the interim order on appropriate applications made to it by any of the parties or by any of the interveners here.
If the review petition is not filed within the said period of four weeks, the appeal shall stand dismissed and all interim orders passed by us shall be deemed to be vacated.
In our opinion, the review petition deserves to be disposed of with expedition and we would, therefore, request the High Court to dispose of the review petition, if filed as aforestated, within four months from today and in any event, by the 30th September, 1991.
The matter shall now be placed before learned Chief Justice of the Bombay High Court for passing appropriate directions.
The appeal is disposed of as aforestated with no order as to costs.
V.P.R. Appeal disposed of.
| IN-Abs | A writ petition was filed in the High Court challenging the communication of Respondent No. 2 Corporation, directing that no development be made in the disputed land, and no building construction permitted within a certain distance from the chemical factories in view of the representations of the owners of the factories.
The High Court allowed the writ petition and struck down the aforesaid communication.
Being aggrieved and adversely affected by the judgment, some of the owners of the chemical factories, even though they were not parties in the writ petition, filed a special leave petition.
Disposing of the Appeal, this Court, HELD: (1) Appellants can be said to be parties aggrieved by the judgment, even if they are not regarded as necessary parties in the writ petition.
[251G 252A] (2) In the facts and circumstances of the case, there is no need to set aside the judgment of the High Court at the instance of the appellants.
They are, given liberty to file a review petition before the High Court.
The review petition, if filed, shall be entertained by the High Court and the appellants given a hearing as if the matters were heard afresh as far as they are concerned.
It is clarified that the review application will not be confined to the normal grounds on which a review can be sought but 251 the entire controversy will be regarded as open as between the appellants and the respondents.
[252A D]
|
Special Leave Petition No.12541 of 1990.
From the Judgement and Order dated 21.8.1990 of the Bombay High Court in W.P. No. 2677 and 4128 of 1983.
U.R. Lalit, A.M. Khanwilkar and Mrs. V.D. Khanna for the Petitioner.
M.C. Bhandare, V.N. Ganpule, Satish K. Agnihotri and Mrs. Suman B. Rastogi for the Respondent.
The Judgement of the Court was delivered by K. JAGANNATHA SHETTY, J. The shop premises belonging 154 to the respondent landlady was taken on rent by the petitioner for business purposes.
The premises are within the scope of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (`The Bombay Rent Act ').
The petitioner has been carrying on business in sweet meats and farsen.
The landlady brought action to recover possession of the premises under Section 13(1)(c) on the ground that the tenant has been convicted of using the premises.
It is not in dispute that the tenant was convicted on three occasions, first in 1968 for selling adulterated Desi butter and second, in 1972 for selling sugar garlands coloured with meantanil yellow a coaltar dye which is a prohibited colouring agent.
In the second judgement of conviction, it has been stated that the tenant had admitted two previous convictions and in one of the cases he was sentenced to six months simple imprisonment and a fine of Rs. 1,000.
All the convictions and sentences were under the Prevention of Food Adulteration Act.
The Bomaby High Court has accepted the claim of the landlady and ordered eviction under Section 13(1)(c).
The tenant seeks leave to appeal against the order of the Bomaby High Court.
Section 13(1)(c) of the Bombay Rent Act reads: "13(1) Notwithstanding anything contained in the Act, but subject to the provisions of sections 15 and 15A, a landlord shall be entitled to recover possession of any premises if the Court is satisfied, (c) that the tenant or any persons residing with the tenant has been guilty of conduct which is a nuisance or annoyance to the adjoining or neighbouring occupiers, or has been convicted of using the premises or allowing the premises to be used for immoral or illegal purposes; or that the tenant has in respect of the premises been convicted of an offence of contravention of any provision of clause (a) of sub section (1) of section 394 or of Section 394 A of the Bombay Municipal Corporation Act.
" Underlining is ours Section 13(1)(c) inter alia, provides that the landlord shall be entitled to recover possession of any premises if the Court is satisfied that the tenant or any person residing with the tenant has been guilty of conduct or has been convicted of using the premises or allowing the premises to be used for immoral or illegal purposes etc.
155 Counsel for the tenant submits that the expression "convicted of using the premises" must be limited to offences which involve ,the user of the premises and user of the premises must by itself be an offence under law.
By way of illustration, reference was made to the Immoral Traffic (Prevention)Act, 1956 and the Bomaby Prevention of Gambling Act, 1887 whereunder the use of the premises for illegal purposes has been defined as an offence and punishable.
It is only such conviction, counsel contends that it would expose the tenant to the risk of ejectment under Section 13(1)(c).
It is also argued that Section 13(1)(c) does not cover non residential premises and it covers only the residential premises.
We will consider the second question first.
The contention is based on the term used in clause(c), namely "that the tenant or any person residing with the tenant has been. " and it is said that the expression "residing with the tenant" indicates that clause (c) is applicable only to residential premises.
The essence of the submission is that business premises are not used for residence.
A Division Bench ofthe Bombay High Court in a separate judgement connected with this case has not accepted that interpretation.
It has expressed the view that clause (c), covers equally residential and non residential premises and the expression "residing with the tenant" used in clause (c) only indicates that the offence contemplated in clause(c) could be committed by the tenant or any person residing with tenant.
We concur with this view.
Section 13(1)(c) applies to any premises.
Section 5(8) defines `premises ' to mean amongst others, any building or part of a building let or given on licence separately other than a farm building.
If clause (c) is not applicable to business premises, there is no other similar provision in the Bombay Rent Act relating to the business premises.
The consequence would be that the tenant in business premises could use the premises for committing any offence or he could commit nuisance and annoyance to the adjoining or neighbouring occupiers and yet claim that he is not liable to be evicted on that grounds.
Whereas, the tenant of residential premises would not be able to commit such offence without the penalty of eviction.
Such an interpretation would render the Section vulnerable to attack under Article 14 of the Constitution.
We must avoid such construction.
Section 13(1)(c), in our opinion, covers both residential as well as non residential premises.
This takes us to the more difficult question, whether the offence leading to conviction which exposes the tenant to the risk of ejectment should involve the user of premises, or is to enough if the tenant was 156 convicted for an offence committed in the premises although the conviction is not of using the premises.
Counsel for the tenant contends thatthe Section 13(1)(c) means the former.
But the acceptance of such construction would unreasonably narrow down the Section defeating the very object of the provision, since there are very few crimes that can properly be so described and brought within its operation.
We therefore, reject the contention.
But at the same time the expression "convicted of using the premises" cannot be given too liberal construction so as to cover every case or conviction of ,the tenant.
In this regard, we have a useful guidance from the decision in section Schneiders and Sons Ltd. vs Abrahams, [1925]1 KB 301, where a similar question arose for consideration.
There the tenant was convicted of an offence under Section 33 of the Larceny Act, 1916 of receiving at the demised premises the property of the landlord well knowing the same to have been stolen.
The landlord brought an action to recover possession of the premises under Section 4 of the Rent & Mortgage Interest Restrictions Act, 1923.
Section 4 provided that no judgement for the recovery of possession of any house to which the Act applies shall be given "unless the tenant. . has been convicted of using the premises or allowing the premises to be used for an immoral or illegal purpose . ." Bankers L.J. explaining the scope of the expression "convicted of using the premises" inter alia, observed that the said expression cannot be given a strictly technical construction and that would exclude so many offences which would seem naturally to fall within the purview of the Section.
He however, emphasised that it is necessary to show that the tenant has taken advantage of his tenancy of the premises and of the opportunity they afford for committing the offence.
He also dealt with the scope of the expression "using the premises", whether it requires something more than a single act of user or a continuous, frequent or repeated use.
On this aspect, he said that "it may be that the mere fact of a crime being committed on the premises would not constitute a user of the premises by the tenant for an illegal purpose; for example, if the tenant was convicted of an assault upon some one who happened to be on the premises in the occupation of the tenant, and if that were the only evidence, I doubt whether the tenant could be said to have been convicted of "using the premises for an. illegal purpose within the meaning of Section 4".
But if the tenant used the premises as coiner 's den or as a deposit for stolen goods, a single instance of such user seems to me quite enough to satisfy the language of the statute".
Scrutton, L.J. while agreeing with the above views has added that Section 4 was not intended to cover the conviction of a crime with which the premises have nothing to do beyond merely being the scene of its commission.
Atkin, L.J. has also reiterated the above views.
157 With due regard to these principles and giving the matter the best consideration.
It seems to us that Section 13(1)(c) was not intended to be a moral code of conduct for the tenant.
For each and every offence committed at the premises, the tenant cannot be exposed to the risk of eviction.
The crime .may be forced upon the tenant at the premises by third parties.
There may be casual or incidental crimes.
There may be technical offences connected with the trade or licence to trade.
There may be crimes where use of the premises has nothing to do except being the scene of the offence.
All such cases cannot satisfy the requirements of Section 13(1)(c).
It is necessary as Bankers, L.J. has observed in the Schneiders case that the tenant must take advantage of his tenacy of the premises and of the opportunity they afford for committing the crime.
Only such crimes could fall within the scope of Section 13(1)(c).
However, there need not be continuous or repeated user of the premises for committing such crimes.
In the instant case, the tenant used the premises for carrying out illegal sale of adulterated food along with his usual business in sweet meats and farsen.
Indeed, he has used the premises deliberately and taken advantage of his tenancy for committing the offences in the course of his trade.
He cannot, therefore, legitimately contend that he is not entitled to be evicted under Section 13(1)(c).
In this view of the matter, we dismiss this petition, but we make no order as to costs.
V.P.R. Petition dismissed.
| IN-Abs | Respondent Landlady started an eviction proceeding under Section 13(1)(c) of the Bombay Rent Act against the petitioner tenant, running a shop, selling sweet meats and farsen on the tenanted premises, as he was convicted twice under the Prevention of Food Adulteration Act.
Accepting claim of the land lady the High Court ordered eviction.
Tenant contending that "convicted of using the premises" in Section 13(1)(c) be limited to offences involving the user of the premises that the provision does not cover non residential premises, filed the Special Leave Petition.
Dismissing the petition, this Court, HELD: 1.
Section 13(1)(c) covers both residential as well as non residential premises.
If clause (c) is not applicable to business premises, there is no other similar provision in the Bombay Rent Act relating to the business premises.
The consequence would be that the tenant in business premises could use the premises for committing any offence or he could commit nuisance and annoyance to the adjoining or neighbouring occupiers and yet claim that he is not liable to be evicted on that grounds.
Whereas, the tenant of residential premises would not be able to commit such offence without the penalty of eviction.
Such an interpretation would render the Section vulnerable to attack under Article 14 of the Constitution.
[155D G].
153 2.
The expression "convicted of using the premises:" cannot be given too liberal construction so as to cover every case of conviction of the tenant.[156B] 3.
Section 13(1)(c) was not intended to be a moral code of conduct for the tenant.
For each and every offence committed at the premises, the tenant cannot be exposed to the risk of eviction.
The crime may be forced upon the tenant at the premises by third parties.
There may be casual or incidental crimes.
There may be technical offences connected with the trade or licence to trade.
There may be crimes where use of the premises has nothing to do except being the scene of the offence.
All such cases cannot satisfy the requirements of Section 13(1)(c).
[157A B] 4.
The tenant must take advantage of his tenancy of the premises and of the opportunity they afford for permitting the crime.
Only such crimes could fall within the scope of Section 13(1)(c).
There need not be continuous for repeated user of the premises for committing such crimes.
[157B C] [In the instant case, the tenant used the premises for carrying out illegal sale of adulterated food along with his usual business in sweet meats and farsen.
He used the premises deliberately and taken advantage of his tenancy for committing the offences in the course of his trade.
He can be evicted under Section 13(1)(c).] [157C D] section Schneiders and Sons Ltd. vs Abrahams,
|
: Criminal Appeal Nos. 810 811 of 1989.
From the Judgement and Order dated 22.9.1989 of the Delhi High Court in Crl.
W.P. No. 622 of 1988 and Crl.
Main Petition No. 1132 of 1988.
J.S. Arora, Sudhansu section Das, Satish Agrawal and N.P. Kaushik for the Appellant.
V.C. Mahajan, A.K. Ganguli Ashok Bhan, A. Subhashini, P.P. Tripathi and S.K. Sabharwal for the Respondents.
The Judgement of the Court was delivered by K. JAYACHANDRA REDDY, J. The High Court of Delhi by a common order in two petitions filed under The Narcotic Drugs & Psychtropic Substances Act, 1985 (`NDPS Act ' for short) held that the restrictions placed on the powers of the Court to grant bail in certain offences under the amended Section 37 of the NDPS Act are not applicable to the High Court.
Aggrieved by the said order, the Narcotic Control Bureau has filed these two appeals.
The peritioners before the High Court in two different cases were arrested for offences under various Sections of the NDPS Act.
They were refused bail and remanded to judicial custody.
On the basis of the report the Magistrate concerned took cognizance and remanded them to judicial custody.
The petitioners filed a writ petition as well as a criminal miscellaneous petition seeking bail firstly on the ground that they are entitled to be released on bail as required under Section 167(2) of the Code of Criminal Procedure as the charge sheet was filed at a belated stage and secondly on the ground of illness.
A learned Single Judge referred this matter to a Division Bench and the Division Bench by the impugned order held that the limitations placed on the Special Court under Section 37(2) of the NDPS Act cannot be read as 142 fetters on the High Court in exercise of powers under Section 439 Cr.
P.C. for granting bail.
The only limited question to be decided in these appeals is whether the view taken by the High Court is right or wrong and we may also mention that leave was granted only to this limited extent.
The learned counsel appearing for,the appellants submitted that the High Court has misconstrued the provisions of Section 36 A and 37 of the NDPS Act and that latter Section as amended starts with the non obstante clause limiting the scope of provisions of the Cr.
P.C. in the matter of granting bail and as such the High Court has no untremelled powers to grant bail inasmuch as the provisions of the amended Section 37 of the NDPS Act override the provisions of Section 439 Cr.
We may at this stage note the relevant provisions of NDPS Act.
The preamble to the NDPS Act shows that the object of the Act is to consolidate and amend the law relating to narcotic drugs and to make stringent provisions for the control and regulation of operations relating to narcotic drugs and psychotrophic substances etc.
Sections 15 to 35 deal with various offences and penalties.
Section 36 provides for constitution of Special Courts and empower the Government to constitute Special Courts and a person shall not be qualified for appointment as a Judge of the Special Court unless he is immediately before such appointment, a Sessions Judge or an Additional Sessions Judge.
Section 36 A enumerates the offences triable by Special Courts and also deals with the procedure regarding the detention of the accused when produced before a Magistrate.
Sub section (b) of Section 36 A lays down that if the Magistrate to whom an accused is forwarded under Section 167 Cr. P.C., considers that the detention of such person for fifteen days is unnecessary he shall forward him to the Special Court having jurisdiction who shall take cognizance and proceed with the trial.
Sub section (3) of Section 36 A reads thus: "Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under Section 439 of the Code of Criminal Procedure, 1973 (2 of 1974), and the High Court may exercise such powers including the power under clause (b) of sub section (1) of that section as if the reference to "magistrate" in that section included also a reference to a "Special Court" constituted under Section 36.
" 143 Now let us note Section 37 as amended in the year 1989 and the same is in the following terms: "37.
Offences to be cognizable and non bailable (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), (a) every offence punishable under this Act shall be cognizable; (b) no person accused of an offence punishable for a term of imprisonment of five years or more under this Act shall be released on bail or on his own bond unless (i) The Public Prosecutor has been given an opportunity to oppose the application for such release, and (ii) where the Public Prosecutor oppose the application, 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.
(2) The ,limitations on granting of bail specified in clause (b) of sub section (1) are in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974), or any other law for the law being in force on granting of bail.
" Now it becomes necessary to extract Section 439 Cr.
P. C. which reads as under: "439.
Special powers of the High Court or Court of Section regarding bail (1) A High Court or Court of Session may direct (a) that any person accused of an offence and in custody be released on bail, and if the offence is of the nature specified in sub section (3) of Section 437 , may impose any condition which it considers necessary for the purposes mentioned in that sub section; (b) that any condition imposed by a magistrate when releasing any person on bail be set aside or modified; Provided that the High Court or the Court of Session shall, 144 before granting bail to a person who is accused on anoffence which is triable exclusively by the Court of Session or which, though not so triable, is punishable with imprisonment for life, give notice of the application for bail to the Public prosecutor unless it is, for reason to be recorded in writing , of opinion that it is not practicable to give such notice.
(2) A High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody.
" The High Court having taken into consideration sub section (3) of Section 36 A took the view that the limitations placed on the Special Courts cannot be read as fetters in its exercise of the powers under Section 439 Cr.
In this context, the Division Bench referred to to sub sections(8) and (9) of Section 20 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 ( 'TADA Act ' for short) which are similar to Section 37 of NDPS Act and also relied on a judgment of this Court in Usmanbhai Dawoodbhai Memon and Others vs State of Gujarat, ; a case which arose under the TADA Act.
We shall refer to this judgment at a later stage after analysing the scope and effect of Section 37 of NDPS Act.
Section 37 as amended starts with a non obstante clause stating that notwithstanding anything contained in the Code of Criminal Procedure, 1973 no person accused of an offence prescribed therein shall be released on bail unless the conditions contained therein were satisfied.
The nDPS Act is a special enactment as already noted it was enacted with a view to make stringent provision for the control and regulation of operations relating to narcotic drugs and psychotropic substances.
The being the underlying object and particularly when the provisions of Section 37 of NDPS Act are in negative terms limiting the scope of the applicability of the provisions of Cr.
P.C. regarding bail, in our view, it cannot be held that the High Court 's powers to grant bail under Section 439 Cr.
P.C. are not subject to the limitation mentioned under Section 37 of NDPS Act.
The non obstante clause with which the Section starts should be given its due meaning and clearly it is intended to restrict the powers to grant bail.
In case of inconistency between Section 439 Cr.
P.C. and Section 37 of the NDPS Act, Section 37 prevails.
In this context Section 4 Cr.
P.C. may be noted which read thus: 145 "(4) Trial of offences under the Indian Penal Code and other laws (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provision hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provision, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.
" It can thus be seen that when there is a special enactment in force relating to the manner of investigation, enquiry or otherwise dealing with such offences, the other powers under Cr.
P.C. should be subject to such special enactment.
In interpretating the scope of such a statute the dominant purpose underlying the statute has to be borne in mind.
In Lt. Col. Prithi Pal Singh Bedi etc.
vs Union of India & Others, regarding the mode of interpretation the Supreme Court observed as follows: "The dominant purpose in construing a statute is to ascertain the intention of Parliament.
One of the well recognised canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision, the Court should adopt literal construction if it does not lead to an absurdity.
" As already noted, Section 37 of the nDPS Act starts with a non obstante clause stating that notwithstanding anything contained in the Conde of Criminal Procedure, 1973 no personaccused of an offence prescribed therein shall be released on bail unless the conditions contained therein are satisfied.
Consequently the power to grant bail under any of the provisions of Cr.
P.C. should necessarily be subject to the conditions mentioned in Section 37 of the NDPS Act.
We shall now refer to some of the decisions of the Court dealing with the analogous provision in other special enactments.
Rule 184 of the Defence and Internal Security of India Rules, 1971 which is analogous to Sec.
37 of the NDPS Act runs as follows: 146 "Rule 184.
Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (V of 1898) no person accused or convicted of a contravention of these Rules or orders made thereunder shall, if in custody, be released on bail or his own bond unless (a) the prosecution has been given an opportunity to opposed the application for such release, and (b) where the prosecution opposes the application and the contravention is of any such provision of these Rules or orders made thereunder as the Central Government or the State Government may be notified order specify in this behalf, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such contravention.
" The Rule commences with a non obstante clause and in its operative part imposes a ban on release on bail of a person accused or convicted of a contravention of the Rules.
it imposes fetters on the exercise of the power of granting bail in certain kinds of cases.
In Balchand Jain vs State of Madhya Pradesh, ; a question arose whether the power to grant anticipatory bail under Section 438 can stand side by side with Rule 184 of whether former provision is overridden by the latter.
This Court held that Rule 184 does not stand in the way of Court of Session or High Court granting anticipatory bail on the ground that the two provision operate at two different stages.
Of course, in the instant case, we are not concerned with Section 438 but the observation regarding the scope of Rule 184 are relevant which read thus: "But even if Rule 184 does not apply in such a case, the policy behind this Rule would have to be borne in mind by the Court while exercising its power to grant 'anticipatory bail ' under Section 438.
The Rule making authority obviously though offences arising out of contravention of Rules and orders made there under were serious offences as they might imperil the defence of India or civil defence or internal security or public safety or maintenance of public order or hamper maintenance of supplies and services to the life of the community and hence it provided in Rule 184 that no person accused or convicted or contravention of any Rule or order made under the Rules, shall be 147 released on bail unless the prosecution is given an opportunity to oppose the application for such release and in case the contravention is of a Rule or order specified in this behalf in a notified order, there are reasonable grounds for believing that the person concerned is not guilty of such contravention.
If these are the conditions provided by the Rule making authority for releasing on bail a person arrested on an accusation of having committed contravention of any Rule or order made under the Rules, it must follow a fortiori that the same conditions must provide the guidelines while exercising the power to grant 'anticipatory bail 'to a person apprehending arrest on such accusation, though they would not be strictly applicable." (emphasis supplied) Fazal Ali, J. in his concurring judgment also held thus: "(4)_that in cases covered by r. 184 of the Rules the Court exercising power under section 436 or section 438 of the Code has go to comply with the conditions mentioned in clauses (a) & (b) of r. 184 and only after the Court has complied with those conditions that an order under any of these section of the Code in respect of such offences could be passed.
" In Usmanbhai 's case a question whether the provisions of sub sections (8) and (9) of Section 20 of the TADA Act limit the scope of Sections 437 and 439, came up for consideration.
The language of sub sections (8) and (9) of section 20 is analogous to Section 37 of NDPS Act and they read thus: "(8) Notwithstanding anything contained in the Code, no person accused on an offence punishable under this Act or any rule made thereunder shall, if in custody, if in custody, be released on bail or on his own bond unless (a) the Public Prosecutor has been given an opportunity to oppose the application for such release, and (b) where the Public Prosecutor opposes the application, 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.
(9) The limitation on granting of bail specified in sub section (8) are in addition to the limitations under the Code or any other law for the time being in force or granting of bail.
" It may be noted at this stage that the power of the High Court or the Sessions Court to grant anticipatory bail has been completely taken away under Section 20(7) of the TADA Act.
The contention was that the sources of power of a designated court to grant bail is under Section 437 subject to some limitations under Section 20(8) and that it does not in any manner affect the power of the High Court independently under Section 439 to grant bail.
It is also contended that to take away the power of the High Court would tantamount to strike at the very foundation of an independent judiciary free from executive control.
After considering these submissions this Court held that: "Though there is no express provision excluding the applicability of Section 439 of the Code similar to the one contained in Section 20(7) of the Act in relation to a case involving the arrest of any person on an accusation of having committed an offence punishable under the Act or any rule made thereunder, but that result must, by necessary implication, follow.
it is true that the source of powerof a Designated Court to grant bail is no Section 20(8) of the Act as it only places limitations on such power.
This is made explicit by Section 20(9) which enacts that the limitations on granting of bail specified in Section 20(8) are 'in addition to the limitations under the Code or any other law law for the time being in force '.
But it does not necessarily follow that the power of a Designated Court to grant bail is relatable to Section 439 of the Code.
it cannot be doubted that a Designated Court is 'a court other than the High Court or the Court of Session ' within the meaning of of section 437 of the Code.
The exercise of the power to grant bail by a Designated Court is not only subject to the limitations contained therein, but is also subject to the limitations placed by Section 20(8) of the Act." (emphasis supplied) Having held so, the learned Judge proceeded to consider the controversy as to the power of the High Court to grant bail under Section 439 Cr.
P.C. Act excluding the jurisdiction of the High Court entertain an 149 appeal or revision against the judgment of the designated court, it is held that the High Court had no jurisdiction to entertain an application for bail under Section 439 or Section 482 of the Code of Criminal procedure.
however, regarding the construction of non obstante clause in Sec.
20(8) of the Act, this Court held as under: "The controversy as to the power of the High Court to grant bail under Section 439 of the Code must also turn on the construction of Section 20(8) of the Act.
It commences with a non obstante clause and in its operative part by the use of negative language prohibits the enlargement on bail of any person accused of commission of an offence under the Act, if in custody, unless two conditions are satisfied.
The first condition is that the prosecution must be given an opportunity to oppose the application for such release and the second condition is that where there is such opposition, the court must be 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.
If either of these two conditions is not satisfied, the ban operates and the person under detention cannot be released on bail.
it is quite obvious that the source of power of a Designated Court to grant bail is not section 20(8) of the Act but it only places limitations on such powers.
This is implicit by Section 20(9) which in terms provides that the limitations or granting of bail specified in sub section (8) are in addition to the limitations under the Code or any other law for the time being in force on granting of bail.
it therefore follows that the power derived by a Designated Court to grant bail to a person accused of an offence under the Act, if in custody, is derived from the Code and not from section 20(8) of the Act.
It can thus be seen that even in Usmanbhai 's case also there is no observation supporting the view taken by the High Court in the impugned judgment.
As a matter of fact in Usmanbhai 's case Sen, J. who spoke for the Bench, after referring to the ratio laid down in Balchand Jain 's case observed thus: "The view expressed in Balchand Jain case is not applicable at all for more than one reason.
There was nothing in the defence and Internal Security of India Act or the Rules framed there under which would exclude the jurisdiction 150 and power of the High Court altogether.
On the contrary, Section 12(2) of that Act expressly vested in the High Court the appellate jurisdiction in certain specified cases.
In view of the explicit bar in Section 19(2), there is exclusion of the jurisdiction of the High Court.
It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an interlocutory order, of a Designated Court.
The Act by Section 16(1) confers the right of appeal both on facts as well as on law to the Supreme Court.
Further while it is true that Chapter XXXIII of the Code is still preserved as otherwise the Designated Court would have no power to grant bail, still the source of power is not Section 439 of the Code but Section 437 being a court other than the High Court or the Court of Session.
Any other view would lead to an anomalous situation.
If it were to be held that the power of a Designated Court to grant bail was relatable to Section 439 it would imply that not only the High Court but also the High Court of Session would be entitled to grant bail on such terms as they deem fit.
The power to grant bail under Section 439 is unfettered by any conditions and limitations like Section 437.
It would run counter to the express prohibition contained in Section 20(8) of the Act which enjoins that notwithstanding anything 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 unless the conditions set forth in clauses (a) and (b) are satisfied." (emphasis supplied) The High Court in the impugned judgment, however, referred to Usmanbhai 's case and held that the limitations placed under Section 37 of the NDPS Act are exactly similar to the ones in sub section (8) and (9) of Section 20 of the TADA Act and they are applicable only to special courts.
But we may point out that in paragraph 16 in Usmanbhai 's case it is observed: "As a murder of construction, we must accept the contention advanced by learned counsel appearing for the State Government that the Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482.
" 151 However, as already mentioned, the learned Judges held that the view expressed in Balchand Jain 's case is not applicable to the facts in Usmanbhai 's case and the same is clear from the observations made in Usmanbhai 's case which read as under: "Lastly both the decision in Balchand Jain and that in Ishwar Chand turn on the scheme of the Defence and Internal Security of India Act, 1971.
They proceed on the well recognised principle that an outer of jurisdiction of the ordinary courts is not to be readily inferred, except by express provision or by necessary implication.
It all depends on the scheme of the particular Act as to whether the power of the High Court and the Court of Session to grant bail under Sections 438 and 439 exists.
We must accordingly uphold the view expressed by the High Court that it had no jurisdiction to entertain an application for bail under Section 439 or under Section 482 of the Code" From the above discussion it emerges that in Usmanbhai 's case the Supreme Court did not express anything contrary to what has been observed in Balchand Jain 's case and on the other hand at more than one place observed that such enactments should prevail over the general enactment and the non obstante clause must be powers of the High Court to grant bail under Section 439 are subject to the limitations contained in the amended Section 37 of the NDPS Act and the restrictions placed on the powers of the Court under the said section are applicable to the High Court also in the matter of granting bail.
The point of law is ordered accordingly.
The two accused respondents in these two appeals have been on bail pursuant to the order of the High Court, for a long time.
The learned counsel appearing for the Narcotics Control Bureau, the appellant herein, is also not pressing cancellation of the bail.
Therefore, we are not remitting the matters of the High Court for fresh consideration.
Pending the proceedings, they would continue to be on bail.
Subject to the above clarification of law, the appeals are disposed of.
R.P. Appeals disposed of.
| IN-Abs | The respondents in the appeals who were arrested for offences under various sections of the narcotic Drugs and Psychotropic Substances Act, 1985, were refused bail, and were remanded to judicial custody.
On the basis of the report the Magistrate took cognizance, and remanded them to judicial custody.
The respondents filed writ petition and criminal miscellaneous petition before the High Court seeking bail under section 167(2), Criminal Procedure Code on the grounds of belated submission of the chargesheet, and on account of illness.
The matter was referred to a Division Bench held that the limitations placed on the Special Court under section 37 (2) of the Narcotic Drugs and Psychotropic Substances Act could not be read as fetters on the High Court in exercise of its power under section 439, Cr.
P.C. to grant bail.
Aggreieved, the Narcotics Control Bureau appealed to this Court, and contended that the High Court had no untremelled powers in the matter of granting bail, as the provisions of section 37 of the NDPS Act override those of section 439, Cr.
On the question: whether the limitation placed on the Special Court under section 37(2) of the NDPS Act is to be treated as fetters on the powers of the High Court also in granting bail under section 439, Cr.
P.C. Disposing of the appeals, this Court, 140 HELD: 1.
The powers of the High Court to grant bail under section 439, Cr. p.
C. are subject to the limitations contained in the amended s.37 of the , and the restrictions placed on the powers of the Court under the said section are applicable to the High Court also in the matter of granting bail.
[151E] 2.
When there is a special enactment in force relating to the manner of investigation, enquiry or otherwise dealing with offences, the other powers under the Code of Criminal Procedure should be subject to such special enactment.
In interpreting the scope of such a statute the dominant purpose underlying the statute has to be borne in mind.
[145C] 3.1 The is a special enactment, enacted with a view to make stringent provisions for the control and regulation of operations relating to narcotic drugs and psychotropic substances.
That being the underlying object and particularly when the provisions of s.37 of the NDPS Act are in negative terms limiting the scope of the applicability of the provisions of the Criminal Procedure Code regarding bail, it cannot be said that the High Court 's power to grant bail under section 439, cr.
P.C. are not subject to the limitation mentioned under section 37 of the NDPS Act.
[144E G] 3.2 Section 37 of the NDPS Act starts with a non obstinate clause stating that notwithstanding anything contained in the Code of Criminal Procedure, 1973 no person accused of an offence prescribed therein shall be released on bail unless the conditions contained therein were satisfied/[144E; 145F] 3.3 The non obstante clause with which section 37 of the NDPS Act starts should be given its due meaning and clearly it is intended to restrict the powers to grant bail [144G] 3.4 In case of inconsistency between section 439, Cr.
P.C. and S.37 of the NDPS Act, section 37 prevails.
3.5 Consequently the power to grant bail under any of the provisions of the Code of Criminal Procedure should necessarily be subject to the conditions mentioned in section 37 of the NDPS Act.
[145F,G] Lt. Col. Prithi Pal Singh Bedi etc.
vs Union of India & Others, and Balchand Jain vs State of Madhya Pradesh, [1977] 2 SCR page 52, relied on.
141 Usmanbhai Dawoodbhai Memon and Others vs State of Gujarat, ; , referred to.
The two accused respondents being on bail for a long time under the orders of the High Court and the Narcotics Control Bureau not passing the cancellation of bail, the matter need not be remitted to the High Court, and the respondents would continue to be on bail.
[151F]
|
Civil Appeal No. 3634 (NEC) of 1989.
From the Judgment and Order dated 11.8.1989 of the Karnataka High Court in Election Petition No. 6 of 1988.
M.C. Bandare, Ranjit Thomas and Mrs. C.K. Sucharita for the Appellant.
Shanti Bhushan, B.R.L. Iyenger, R.B. Mehrotra and E.C. Vidyasagar, for the Respondents.
For the (State of Karnataka) M. Veerappa.
Raju to the State Legislative Coun cil, and directing the recount of the votes after excluding those of 242 nominated members.
The election was held by adopting the 'single transferable vote method '.
The polling took place on 3.7.
1988 and the counting was taken up on the next date, that is, 4.7. 1988.
After several rounds of counting the appellant was declared as the successful candi date.
The election in question relates to the Chitradurga Local Authorities Constituency, comprising 121 Mandal Pan chayats.
The last date and time fixed for receiving nomina tion papers was 3.00 p.m. on 3.6.
According to the appellant 's case, a decision was taken by the Chitradurga Zilla Parishad in its special meeting held on 28.5.
1988 to nominate two members from each Mandal Panchayat, that is, a total number of 242 members.
Accordingly, steps were taken under the provisions of the Karnataka Zilla Parishads, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya Panchayats Act, 1983 (hereinafter referred to as the Parishads Act) read with the rules framed thereunder, and 242 members were duly nominated in time to be included in the electoral roll.
This has been denied by the election 340 petitioner respondent No. 1, as also some of the respondents who contested the election.
According to their case, the inclusion of the names of the nominated members in the electoral roll took place after the period for nomination was over and they were, therefore, not included in the electoral roll in the eye of law.
The main question in the case which thus arises is as to whether the names of the 242 nominated members were included in the electoral roll within the time permitted by the law.
The Deputy Commissioner, who was impleaded in the elec tion petition as the 5th respondent (in this appeal also he is respondent No. 5), had triple role to play in connection with the disputed election.
He was authorised under the Parishads Act and the Karnataka Zilla Parishads, Taluk Panchayat Samithis, Mandal Panchayats and Nyaya Panchayats (Conduct of Election) Rules, 1985 (hereinafter referred to as the Parishads Rules) to take steps for completing the nomination of the members; under section 13B of the Representa tion of the People Act, 1950, he was the Electoral Registra tion Officer for preparation and revision of the electoral roll; and he was also the Returning Officer under the Repre sentation of the People Act, 1951.
According to the case of the appellant, a resolution was passed by the Zilla Parishad on 28.5.
1988 nominating the aforementioned 242 members, and the Chief Secretary of the Zilla Parishad sent the list of the names to the Deputy Commissioner on 30.5.
The Deputy Commissioner was, under section 5(9) of the Parishads Act, required to publish the said names so as to complete the process of nomination.
He was also vested with the jurisdic tion to include the names in the electoral roll under the provisions of the Representation of the People Act, 1950.
It is relevant to note at this stage that the question of inclusion of the names in the electoral roll could arise only after the nomination was complete in the eye of law.
A nominated person was entitled to be included as a voter for the election to the Council Constituency after he became a member of the Mandal Panchayat and not before.
Having learnt about the nominations on the eve of the election, some persons challenged the same and objected before the Deputy Commissioner to the proposed publication.
However, the Deputy Commissioner on 1.6.1988 passed an order directing the necessary steps to be taken under the Parishads Act, and accordingly a list of the nominated members was pasted on the notice board of the office of the Deputy Commissioner.
Before the nominated persons could be treated to have become members of the Panchayats it was necessary that certain other steps also were taken in accordance with the Parishads Act and the Parishads Rules.
Subsection (1) of section 40 of the Parishads Act, which is mentioned below, 341 makes it clear that a nominated person becomes the member of a Mandal Panchayat only on the publication of his name under section 5(9): "40.
Commencement of term of Office (1) The term of office of the members elected at a general election or at a second election held under sub section (7) of section 5, or nominated shall commence on the date imme diately after the expiry of the term of office of the out going members of the Mandal Panchayat or the period of appointment of an Administrative Committee or Administrator under section 8, or on the date of publication of their names under sub section (9) of section 5, whichever is later.
" The manner of publication of the names has been prescribed by r. 73 of the Parishads Rules in the following terms: "73.
Publication of names of members elected or nominated to Mandal Panchayat.
The Deputy Commissioner shall, as soon as conveniently may be, publish the list containing the names of the members elected or deemed to have been elected or nominated to the Mandal Panchayat by causing such list to be affixed on the notice board of his office, office of the Tahsildar, concerned Mandal Panchayat and in the Chavadi.
" With a view to complete the nomination, the Deputy Commis sioner sent out the names for affixing the same on the notice boards of the office of the concerned Tahsildars and Mandal Panchayats and in the Chavadis.
The Deputy Commis sioner could have taken steps for inclusion of the names in the electoral roll of the State Council Constituency after receipt of the information of their due publication in the offices situated at different places.
There is a serious dispute as to when the necessary information became avail able at Chitradurga and the formal steps of including those names in the electoral roll were actually taken.
After examining the evidence led by the parties, the High Court has held that the names were not included in the electoral roll by 3.00 p.m. on 3.6.1988.
Mr. M.C. Bhandare, the learned counsel appearing in support of the appeal, has contended that the High Court fell in grave error in deciding the disputed issue against the appellant as it failed to 342 take note of the provisions of the Explanation to section 40(1) of the Parishads Act, which reads as follows: "Explanation.
When the names of members elected at a general election or at a second election held under sub section (7) of section 5 or nominated are published on more than one date, the date by which the names of not less than 2/3rd of the total number of members has been published shall be deemed to be the date of publication for ' purposes of this section.
" The learned counsel argued that the evidence on the record establishes that information of the publication of the names of more than 2/3rd of the total number of nominated persons had reached the Deputy Commissioner in time for the amend ment of the Council Constituency roll and the Deputy Commis sioner had actually made an order for the inclusion of the names in the roll on 2.6.1988.
Accordingly, the final elec toral roll including the nominated members was ready in the office of the Returning Officer, and the appellant, as a matter of fact, had inspected the same.
Reliance has been placed on his deposition as well as on the documentary evidence in the case.
The most important evidence in the case is to be found in the statement of the Deputy Commissioner examined as P.W. 4.
Besides, the election petitioner examined several other witnesses.
An examination of evidence on record leads to the conclusion that the Chief Secretary of the Zilla Parishad had sent the list of the nominated members to the Deputy Commissioner on 30.5.
1988 and a copy thereof was placed on the notice board of the Deputy Commissioner 's office on 1.6.1988.
However, that did not complete the process of nomination.
The provisions of section 40(1) of the Parishads Act make it abundantly clear that a nominated person would become a member of the Panchayat only after due publication of his name in accordance with r. 73.
It was therefore necessary to have the names of the nominated persons affixed on the notice board of the office of the Tahsildars, the notice boards of the Mandal Panchayats and in the Chavadis.
Mr. Bhandare is right that in view of the Explanation to section 40(1) it was not necessary for the Deputy Commissioner to have waited for the information in this regard from all the places.
On his satisfaction that the publication of 2/3rd of the total number of the names were complete, he was free to proceed further and to revise the electoral roll under the Representation of the People Act, 1950 by including all the nominated members.
But the ques tion is as to when the Deputy Commissioner 343 did receive the information about the 2/3rd of the total number, and further whether he, as a matter of fact, revised the electoral roll before 3.00 p.m. on the 3rd of June, 1988.
It is significant to note that the electoral roll did not get automatically amended on the completion of the process of nomination of the additional members.
Ordinarily the question of inclusion of a new name in the electoral roll arises only when an application is made before the Electoral Registration Officer in this regard, but the power can be exercised by the Officer even without such an appli cation.
In the present case it appears that a tactical battle was going on in the political arena between the two rival groups; one attempting to get the electoral roll amended by the inclusion of the nominated members and the other trying to foil it.
The Deputy Commissioner was under pressure from both sides, and as the evidence discloses, he had to consider the different stands taken before him, which slowed down the entire process.
Let us examine the evidence in this background.
The Deputy Commissioner has, in his evidence, stated that his office received the information about the nomina tion from the Zilla Parishad on 30.5.
1988 when he was at Bangalore.
He returned back to Chitradurga on 31.5.
1988 and examined a copy of the resolution of the Parishad as also the list of the nominated persons.
Soon thereafter he was approached by the two groups, one supporting the resolution and the other opposing it.
Ultimately he decided to publish the list as required by section 5(9) of the Parishads Act read with r. 73 of the Parishads Rules.
Accordingly, a copy of the list was placed on the notice board of his office and lists for the publication in the Taluk offices were handed over to the Tahsildars who were already present in Chitra durga The lists for the publication in the offices of the Mandal Panchayats and Chavadis, which were scattered at considerable distances, were sent to the Chief Secretary of the Zilla Parishad.
The Deputy Commissioner postponed the further step for modification of the electoral roll awaiting the report on publication from the different offices.
Some reports from the Taluk offices were received on 1.6.1988 itself, but the Deputy Commissioner in his evidence was not in a position to give the details.
His examination in chief was, therefore, discontinued and he was asked to bring the documents on the next date with reference to which he could answer the further questions.
Accordingly, he later appeared with the papers and stated that the last reports regarding the publication from the Taluk Office of certain places were received on 4.6.1988.
In his cross examination the Deputy Commissioner stated that on the basis of his records he could say that he had received reports from 5 Taluk Offices only on 1.6.1988, and 344 none from the Mandal Pancnayats; and on 2.6.1988 he had received reports about the publication in the Mandal Pan chayats from 2 Taluks.
As there were only 9 Taluks in his district, it can be presumed that information about the publication of 2/3rd number at Taluk offices had reached the Deputy Commissioner by the evening of the 2nd June, 1988.
However, there does not appear to be any relevant evidence available on the records, and none has been shown to us by the learned counsel, with regard to the publication of the requisite number of names in the Mandal Panchayat offices and in the Chavadis.
It has been contended on behalf of the appellant that since the burden is on the election petition er to prove such facts which may vitiate the election, he must fail in the present state of evidence.
Before adverting to this aspect we propose to consider the other evidence relating to the revision of the electoral roll.
The electoral roll was produced before the High Court and was marked as Ext.
Although it ought to have borne the dates of its preparation and revision, none is to be found there.
The inclusion of the names of the nominated members was, according to the evidence, done by attaching slips to Ext.
The Deputy Commissioner was unable to state as to the date on which Ext.
P 6 was prepared and typed.
So far the "updated Voters ' List" was concerned, it was placed on the notice board of the office of the Deputy Commissioner at 8.55.
p.m. on 3.8.1988, after a lot of wrangling between the rival groups.
In answer to a question in cross examination the Deputy Commissioner stated, "I cannot say if the preparation of this list was complete by 3.00 p.m. on 3.6.1988 as it is a ministerial part of it." As has been mentioned earlier, the dispute about the validi ty of the belated nominations had been raised on 31.5.
1988 before the Deputy Commissioner when he returned to Chitra durga from Bangalore and he took a decision on 1.6.1988 to proceed with the publication so as to complete the process of nomination.
According to his statement, which he made after verifying from the documents, the necessary informa tion from the Mandal Panchayats and Chavadis started reach ing him on 2.6.1988.
But they were inadequate as they were only from two Taluks.
At the earliest the information about the publication of the necessary number of names reached Chitradurga on 3.6.1988 when the two groups were arrayed against each other in his office, one urging the revision of the electoral roll and the other opposing it.
The deadline was 3.00 p.m. on 3.6.1988 which was approaching fast.
But it 345 is important to note that the Deputy Commissioner was not aware that the period available for the revision of the electoral roll was expiring in the afternoon.
He was under a wrong impression that the entire calender date of 3.6.1988 was available for the purpose.
Towards the end of paragraph 3 in his written statement the Deputy Commissioner categori cally stated that he "was under a bona fide impression that direction for the inclusion of the name in the electoral roll of the constituency shall be given under Section 23 at any time on the last date for making nominations".
In the earlier writ petition between the parties (in which the issue raised was not decided) the respondent No. 5 had made a similar statement in paragraph 2 of his reply.
Being under that wrong impression he was not in a hurry to take the decision in regard to the revision of the electoral roll quickly.
The election petitioner, P.W. 1, was himself not a candidate but was an active supporter of one of the candi dates and was seriously involved in the question of the revision of the roll, and, as stated in his evidence, the publication of the names under r. 73 of the Parishads Rules was complete by 3.6.1988 only in some of the Mandal Panchay ats.
After the deadline at 3.00 p.m. on 3.6.1988 was crossed an application, which has been marked as 'Annexure R III ', signed by the Secretary, District Janata Party, was given to the Deputy Commissioner asserting that no further additions or deletions in the electoral roll were permissible and an endorsement to that effect should be made by the Returning Officer.
The Deputy Commissioner did not immediately give his reply thereto.
The parties were also insisting for the publication of the electoral roll in its final shape.
Ac cording to the further evidence of P.W. 1, the Deputy Com missioner promised them that he would contact the Chief Electoral Officer at Bangalore by telephone and only there after he would decide on his further action.
The party workers including the witness awaited the further develop ment and at 8.55 p.m. the Deputy Commissioner declared that the names of the newly nominated members were included in the voters list.
Soon thereafter he also replied to the letter of the Janata Party Secretary by a letter headed as "ENDORSEMENT", stating, "With reference to the above, you are hereby informed that action has been taken to include the nominated members by the Zilla Parishad to the Mandal Panchayat in the District and as per Section 27(c) read with Section 23(3) of the R.P. Act, 1950, the Electoral Roll for Local Authority Constituency has been up dated and a copy pasted in the office on 3rd June 1988 at 8.55 P.M." 346 Two other Janata Party members have been examined as P.Ws, 2 and 3 in the case supporting the above version.
Mr. Bhandare has relied upon the oral evidence of the appellant wherein he claimed to have gone to the office of the Deputy Commissioner on 2.6. 1988 to secure a prescribed form for filing his nomination as a candidate in the elec tion and was allowed to examine the electoral roll which was kept on a table in the office.
He asserts that after verify ing his name and serial number in the list he discovered that the names of nominated members were also included therein.
He stuck to this story in the cross examination and insisted that it was at 11.00 in the morning on 2.6.1988 that he had seen the revised roll.
It is difficult to accept his case on this evidence.
According to the Deputy Commis sioner himself the report about the publication in the office of the Mandal Panchayats from only two Taluks were received by the evening of 2.6.
1988 and it is, therefore, not believable that the Deputy Commissioner had amended the roll before 3.6.1988.
The Deputy Commissioner has not claimed to have revised the roll on 2.6.1988.
On the other hand, he made a very significant assertion in his written statement in the present election petition which is quoted below: "The Deputy Commissioner issued direction for the inclusion of the names of nominated members on 3.6.1988 and the elec toral roll for local Authorities Constituency has been up dated and a copy pasted in the office on 3.6.1988 at 8.55 P.M." In the earlier writ petition also he had made a similar statement, as mentioned below, towards the end of paragraph 2 of his reply: "The Deputy Commissioner issued direction for the inclusion of the name of Respondents 3 to 246 on 3 6 1988 and the electoral roll for Local Authorities Constituency has been up dated and a copy pasted in the office on 3 6 1988 at 8 55 P.M." A plain reading of the above statement suggests that both the updating of the electoral roll and pasting a copy there of took place on 3.6.
1988 at 8.55 p.m.
The statement cannot be interpreted to mean that the revision of the electoral roll had been done about 6 hours earlier.
The circumstances that (i) the Deputy Commissioner was not able to assert in his evidence before the Court that the revision of the roll had taken place before 3.00 p.m.; (ii) he was under an impression 347 that the revision was permissible till the midnight; and (iii) in spite of the available documents to him he was not in a position to assert that the report of publication of the names of 2/3rd or more of the nominated persons in the offices of the Mandal Panchayats had been received in his office before the deadline, strongly support the case of the election petitioner.
It has been contended on behalf of the appellant that the burden to prove that the names of the nominated members were not included in the electoral roll in time is on the election petitioner and unless he is able to lead acceptable evidence to discharge the same, the election petition is bound to fail.
The argument is that the oral evidence led by the petitioner cannot be accepted for recording a finding that the controversial names had not actually been included in the electoral roll before 3.00 p.m. which was in the custody of the Deputy Commissioner.
The fact that political opponents of the appellant who were opposing the inclusion of the names were repeatedly asking the Deputy Commissioner orally as well as in writing to inform them whether the names were actually included in the electoral roll or not itself shows that they could not be sure of the actual position till 8.55 p.m.
The bald assertion of the witnesses for the petitioner in this regard cannot be given much weight.
Thus the position, according to the learned counsel, available from the records of the case is that there is no reliable evidence on the crucial issue and, therefore, the election petition must be dismissed.
Apart from supporting the finding of fact recorded by the High Court in favour of the election petitioner, Mr. Shanti Bhushan, learned counsel for the respondents, argued that the electoral roll must be held to have been modified in the eye of law only at 8.55 p.m. when the alleged inclu sion of the names was made public and not earlier.
He rea lied upon the decision in Bachhittar Singh vs State of Punjab, [1962] Supp.
3 SCR 713.
The appellant in that case was appointed as a Kanungo and later promoted as Assistant Consolidation Officer in the former State of Pepsu.
A de partmental inquiry was held against him as a result of which he was dismissed by the Revenue Secretary.
He preferred an appeal to the State Government.
The Revenue Minister ex pressed his opinion in writing that instead of his dismissal he should be reverted to his original post of Kanungo.
The said remarks were, however, not communicated to the appel lant officially and the State of Pepsu was merged with the State of Punjab.
The matter was thereafter re examined and the Chief Minister passed an order confirming the dismissal of the appellant.
This order was com 348 municated to the appellant which led to the filing of the writ petition in the High Court.
The High Court dismissed the writ application and the appellant appealed before this Court by special leave.
One of the questions considered by this Court was as to the effect of the order in writing by the Revenue Minister, Pepsu, recommending reversion of the appellant in place of his dismissal.
For the reasons, men tioned below, the Court held that the order of the Revenue Minister was of no avail to the appellant.
"Thus it is of essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order.
For until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communi cation the order cannot be regarded as anything more than provisional in character.
As has been pointed out earlier, the evidence of the appellant that he had actually seen the final voters list in the office of the Deputy Commissioner must be rejected as unreliable.
There is no acceptable evidence at all to show as to when the alleged corrections were made in the voters list.
At 8.55 p.m. on 3.6.1988 the inclusion of the names was made public for the first time.
The question is as to whether the electoral roll will be deemed to have been modified when it was made public at 8.55 p.m. or earlier when the actual correction in the list was made in the Deputy Commissioner 's office which fact was kept confiden tial in spite of repeated demands for information.
Besides fixing the identity of the persons to be allowed to vote at the election, the purpose of the prepara tion of the roll is to enable the persons included therein to decide as to whether they would like to contest the election.
It is also helpful to such persons in assessing their chances of success by reference to the voters finally included in the roll.
For the purpose of canvassing also, the intending contestant requires a copy of the final vot ers ' list.
The intending contestants and their supporters thus heavily depend upon the final electoral roll for decid ing their future conduct, and it is, therefore, extremely essential that it is made available to them before the expiry of the period fixed for filing the nomination papers.
It the roll as it stood earlier, was confidentially correct ed by the Electoral Registration Officer concerned sitting in his office which did not see the light of the day, the same cannot be considered to have been prepared according to law.
349 The observations in Bachhittar Singh 's case will be fully applicable in as much as the Officer here also could recon sider the list again.
Mr. Bhandare in reply relied upon the judgment in B.K. Srinivasan and Others vs State of Karnataka and Others, , and argued that unlike the Karnataka Town and Country Planning Act, 1961 and the Rules which were under consideration in the said case, the Representation of the People Act does not require a display of the electoral roll.
The learned counsel is correct and he rightly said that putting the final voters list on the notice board is not a necessary requirement under the law.
But that does not lead to the further conclusion that the electoral roll can be prepared secretly and kept in the drawers of the Officer without any information or knowledge to persons who are interested in finding out its final shape.
The reported case was dealing with the principle of subordinate legislation and in paragraph 15 of the judgment made important observa tions which support the respondents ' point of view.
It was stated thus: "There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified direct ly and reliably of the law and all changes and additions made to it by various process.
Whether law is viewed from the standpoint of the 'conscientious good man ' seeking to abide by the law or from the standpoint of Justice Holmes 's 'Unconscientious bad man ' seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known.
" It was further observed that unlike Parliamentary legisla tion which is publicly made, delegated or subordinate legis lation is often made unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary and it was, therefore, necessary that subordinate legislation in order to take effect must be published or promulgated in some suitable manner whether such publication or promulgation is prescribed by the parent statute or not.
It will then take effect from the date of such publication or promulgation The decision instead of helping the appel lant is clearly against him.
The vital difference between an Act of a legisla ture and a subordinate legislation was earlier noted in Harla vs State of Rajasthan, ; The Acts of the legislature are passed by the accredited representatives of the people who in theory can be trusted to 350 see that their constituents know what has been done, and this is done only after debates take place which are open to the public.
The matter receives wide publicity through the media.
But the case is different with the delegated legisla tion and, if we may add, also in the case of orders passed by the authorities like that in the present appeal before us.
The mode of publication can vary but there must be reasonable publication of some sort.
A reference may also be made to the decision in Fatma Haji Ali Mohammad Haji and Others vs The State of Bombay,, ; , where the question as to whether certain powers given to the Govern ment for issuing a direction to the Collector not to act in accordance with the prescribed rules had been actually exercised or not was under consideration.
It was stated that the power had to be exercised in clear and unambiguous terms and, "the decision that the power has been exercised should be notified in the usual manner in which such decisions are made known to the public." Before closing this discussion we should refer to the case of State of Maharashtra vs Mayer Hans George, [1965] 1 SCR page 123, where the English decision of Johnson vs Saragant & Sons, , relied upon by this Court in Harla 's case came to be considered.
The respondent Mayer Hans George was a German Smuggler who was carrying gold from Switzerland to Manila by an aeroplane which stopped at Bombay for sometime.
The respondent did not get down from the plane but he was searched by the Indian Officers and was found to be carrying gold illegally.
He was charged with criminal activity on the basis of a notification requiring him to declare the gold as transhipment cargo in the mani fest of the aircraft, which he had failed to do.
His defence was that he had no knowledge of this notification.
After his conviction by the trial court, the High Court on appeal acquitted him.
The Supreme Court by a majority judgment reversed the decision and found him guilty on the ground that the notification had been published in the official gazette of India.
The defence plea that since he was a foreigner and was, therefore, not expected to be aware of the notification was rejected.
While discussing the argu ments addressed in the case, the Court appreciated the criticism of Prof. C.K. Allen against the judgment in John son vs Sargant, but there was no comment or suggestion against the correctness of the judgment in Harla vs The State of Rajasthan.
On the other hand, the observations at page 163 G H are on the same lines.
It was stated that where there is no statutory requirement as to the mode or form of publication, "we conceive the rule to be that it is necessary that it should be published in the usual 351 form i.e., by publication within the country in such media as generally adopted to notify to all persons concerned the making of the rules." Having regard to the nature and pur pose of the power for rectification of the electoral roll by the Electoral Registration Officer, the principle enunciated in the abovementioned cases must be held to be applicable.
We accordingly hold that in the eye of law the electoral roll in question was not modified by the inclusion of the names of the nominated members before 8.55 p.m. on 3.6.1988.
We, therefore, affirm the decision of the High Court and dismiss the appeal with costs.
R.S.S. Appeal dismissed.
| IN-Abs | The appellant contested the election to the Karnataka State Legislative Council from the Chitradurga Local Author ities Constituency, comprising 121 Mandal Panchayats.
The last date and time fixed for receiving nomination papers was 3.00 p.m. on 3.6.1988.
and revision, if any, of the elector al roll had to be completed before that time.
The polling took place on 3.7.1988 and the appellant was declared as the successful candidate.
Earlier, a decision had been taken by the Chitradurga Zilla Parishad on 28.5.1988 to nominate two members from each Mandal Panchayat, that is, a total number of 242 mem bers.
With a view to complete the nomination, the Deputy Commissioner took the necessary steps in accordance with the Karnataka Zila Parishads, Taluk Panchayat Samithis, Mandal panchayats and Nyaya Panchayats Act, 1983, read with the rules framed thereunder, and sent out the names for affixing the same on the notice boards of the office of the concerned Tehsildar and Mandal Panchayat and in the Chavadis.
On his satisfaction that the publication of 2/3rd of the total number of the names was complete, the Deputy Commissioner was free to proceed further and to revise the electoral roll under the Representation of the People Act, 1950 by includ ing all the nominated members.
In this regard, in his writ ten statement before the High Court the Deputy Commissioner stated that the electoral roll had been up dated and a copy pasted in the office on 3.6.1988 at 8.55 p.m. Sub section (1) of section 40 of the Parishads Act made it abundantly clear that a nominated person became the member of a 337 Panchayat only on the publication of his name under section 5(9) of the Parishads Act read with rule 73 of the Parishads Rules.
A petition was filed in the High Court challenging the appellant 's election on the ground that the inclusion of the 242 nominated members in the electoral roll took place after the period for nomination was over and they were, therefore, not included in the electoral roll in the eye of law.
After examining the evidence led by the parties the High Court held that the names were not included in the electoral roll by 3.00 p.m. on 3.6.1988.
Accordingly, the High Court set aside the election of the appellant and directed recount of votes after excluding those of 242 members.
Before this Court in appeal it was inter alia contended on behalf of the appellant that (i) the evidence on the record established that information of the publication of the names of more than 2/3rd of the total number of nominat ed persons had reached the Deputy Commissioner in time for the amendment of the Council Constituency roll, and that the Deputy Commissioner had actually made an order for the inclusion of the names in the roll on 2.6.1988 (ii) putting the final voters list on the notice board was not a neces sary requirement under the law; and (iii) since the burden was on the election petitioner to prove such facts which may vitiate the election, he must fail in the present state of evidence.
On behalf of the respondents it was contended that the electoral roll must be held to have been modified in the eye of law only at 8.55 p.m. on 3.6.1988 when the alleged inclu sion of the names was made public and not earlier.
Dismissing the appeal, this Court, HELD: (1) A plain reading of the evidence suggests that both the up dating of the electoral roll and pasting a copy thereof took place on 3.8.1988 at 8.55 p.m. [346G] (2) The circumstances that (i) the Deputy Commissioner was not able to assert in his evidence before the Court that the revision of the roll had taken place before 3.00 p.m.; (ii) he was under an impression that the revision was per missible till the midnight; and (iii) in spite of the docu ments available to him he was not in a position to assert that the 338 report of publication of the names of 2/3rd or more of the nominated persons in the offices of the Mandal Panchayats had been received in his office before the deadline, strong ly support the case of the election petitioner.
[346H; 347A] (3) Besides fixing the identity of the persons to be allowed to vote at the election, the purpose of the prepara tion of the roll is to enable the persons included therein to decide as to whether they would like to contest the election and to help such persons in assessing their chances of success.
[348F] (4) The intending contestants and their supporters thus heavily depend upon the final electoral roll for deciding their future conduct, and it is, therefore, extremely essen tial that it is made available to them before the expiry of the period fixed for filing the nomination papers.
[348G] (5) If the roll as it stood earlier, was confidentially corrected by the Electoral Registration Officer concerned sitting in his office which did not see the light of the day, the same cannot be considered to have been prepared accordingly to law.
[348H] Bachhittar Singh vs The State of Punjab, [1962] Supp. 3 SCR 713, referred to.
(6) It is correct that putting the final voters list on the notice board is not a necessary requirement under the law.
But that does not lead to the further conclusion that the electoral roll can be prepared secretly and kept in the drawers of the Officer without any information knowledge to persons who are interested in finding out its final shape.
[349B] S.K. Srinivasan and others vs State of Karnataka and Others, , referred to.
(7) The Acts of the legislature are passed by the ac credited representatives of the people who in theory can be trusted to see that their constituents know what has been done, and this is done only after debates take place which are open to the public.
The matter thus receives wide pub licity through the media.
But the case is different with the delegated legislation and, if one may add, also in the case of orders passed by the authorities like that in the present appeal.
The mode of publication can vary but there must be reasonable publication of some sort.
[349H; 350A B] 339 Harla vs State of Rajasthan, ; ; Fatma Haji Ali Mohammad Haji vs State of Bombay, ; ; State of Maharashtra vs Mayer Hans George, ; and Johnson vs Sargant & Sons, , referred to.
|
Civil Appeal No. 633 of 1991.
From the Judgment and Order dated 1.8.1989 of the Himachal Pradesh High Court in F.A.0.
(H.M.A.) No. 28 of 1989.
Dhruv Mehta, Aman Vachher and S.K. Mehta for the Appellant.
Subhagmal Jain and H.K. Puri for the Respondent.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Special Leave granted.
This appeal from a decision of the Himachal Pradesh High Court concerns the validity of a decree of dissolution of marriage by mutual consent, and is said, probably rightly, to raise an important issue.
The issue is whether a party to a petition for divorce by mutual consent under Section 13B of the ( 'Act ') can unilaterally withdraw the consent or whether the consent once given is irrevocable.
The appellant is the wife of the respondent.
They were married on 21 November 1968.
They lived together for about six to seven 277 months.
Thereafter, it is said that the wife did not stay with the husband except from 9 December 1984 to 7 January 1985.
That was pursuant to an order of the Court, but it seems that they did not live like husband and wife during that period also.
On 8 January 1985, both of them came to Hamirpur.
The wife was accompanied by her counsel, Shri Madan Rattan.
After about an hour discussion, they moved a petition under Section 13 B for divorce by mutual consent in the District Court at Hamirpur.
On 9 January 1985, the Court recorded statements of the parties and left the matter there.
On 15th January 1985, the wife filed an application in the Court, inter alia, stating that her statement dated 9 January 1985 was obtained under pressure and threat of the husband and she was not even allowed to see or meet her relations to consult them before filing the petition for divorce.
Nor they were permitted to accompany her to the Court.
She said that she would not be party to the petition and prayed for its dismissal.
The District Judge made certain orders which were taken up in appeal before the High Court and the High Court remanded the matter to the District Judge for fresh disposal.
Ultimately, the District Judge dismissed the petition for divorce.
But upon appeal the High Court has reversed the order of the District Judge and granted a decree for dissolution of the marriage by mutual consent.
The High Court has observed that the spouse who has given consent to a petition for divorce cannot unilaterally withdraw the consent and such withdrawal however, would not take away the jurisdiction of the Court to dissolve the marriage by mutual consent, if the consent was otherwise free.
The High Court also recorded a finding that the wife gave her consent to the petition without any force, fraud or undue influence and therefore she was bound by that consent.
Section 13 B was not there in the original .
It was introduced by the Amending 68 of 1976.
Section 13 B provides: 13 B(l) Subject to the provisions of the a petition for dissolution of marriage by a decree of divorce may be presented to the district court by both the parties to a marriage together, whether such marriage was solemnized before or after the commencement of the Marriage Laws (Amendment) Act, 1976, on the ground that they have been living separately for a period of one year or more, that they have not been able to live together and that they have mutually agreed that the marriage should be dissolved.
278 (2) On the motion of both the parties made not earlier than six months after the date of the presentation of the petition referred to in sub section (1) and not later than eighteen months after the said date, if the petition is not withdrawn in the meantime, the Court shall, on being satisfied, after hearing the parties and after making such inquiry as it thinks fit, that a marriage has been solemnized and that the averments in the petition are true, pass a decree of divorce declaring the marriage to be dissolved with effect from the date of the decree.
" It is also necessary to read Section 23(l)(bb): 23(1) In any proceeding under this Act, whether defended or not, if the Court is satisfied that (bb) When a divorce is sought on the ground of mutual consent, such consent has not been obtained by force, fraud or undue influence, and . ." Section 13 B is in pari materia with Section 28 of the .
Sub section (1) of Section 13 B requires that the petition for divorce by mutual consent must be presented to the Court jointly by both the parties.
Similarly, sub section (2) providing for the motion before the Court for hearing of the petition should also be by both the parties.
There are three other requirements in sub section (1).
There are: (i) They have been living separately for a period of one year.
(ii) They have not been able to live together, and (iii) They have mutually agreed that marriage should be dissolved.
The 'living separately ' for a period of one year should be immediately preceding the presentation of the petition.
It is necessary that immediately preceding the presentation of petition, the parties must have been living separately.
The expression 'living separately ', connotes to our mind not living like husband and wife.
It has no reference to the place of living.
The parties may live under the same roof by force of circumstances, and yet they may not be living as 279 husband and wife.
The parties may be living in different houses and yet they could live as husband and wife.
What seems to be necessary is that they have no desire to perform marital obligations and with that attitude they have been living separately for a period of one year immediately preceding the presentation of the petition.
The second requirement that they 'have not been able to live together ' seems to indicate the concept of broken down marriage and it would not be possible to reconcile themselves.
The third requirement is that they have mutually agreed that the marriage should be dissolved.
Under sub section (2) the parties are required to make a joint motion not earlier than six months after the date of presentation of the petition and not later than 18 months after the said date.
This motion enables the Court to proceed with the case in order to satisfy itself about the genuineness of the averments in the petition and also to find out whether the consent was not obtained by force, fraud or undue influence.
The Court may make such inquiry as it thinks fit including the hearing or examination of the parties for the purpose of satisfying itself whether the averments in the petition are true.
If the Court is satisfied that the consent of parties was not obtained by force, fraud or undue influence and they have mutually agreed that the marriage should be dissolved, it must pass a decree of divorce.
The question with which we are concerned is whether it is open to one of the parties at any time till the decree of divorce is passed to withdraw the consent given to the petition.
The need for a detailed study on the question has arisen because of the fact that the High Courts do not speak with one voice on this aspect.
The Bombay High Court in Jayashree Ramesh Londhe vs Ramesh Bhikaji Londhe, AIR 1984 Bom.
302, has expressed the view that the crucial time for the consent for divorce under Section 13 B was the time when the petition was filed.
If the consent was voluntarily given it would not be possible for any party to nullify the petition by withdrawing the consent.
The court has drawn support to this conclusion from the principle underlying Order XXIII Rule 1 of the Code of Civil Procedure which provides that if a suit is filed jointly by one or more plaintiffs, such a suit or a part of a claim cannot be abandoned or withdrawn by one of the plaintiffs or one of the parties to the suit.
The High Court of Delhi adopted similar line of reasoning in Smt.
Chander Kanta vs Hans Kumar and Anr., AIR 1989 Delhi 73 and the Madhya Pradesh High Court in Meena Dutta vs Anirudh Dutta, [1984] 11 DMC 388 also took a similar view 280 But the Kerala High Court in K.L Mohanan vs Jeejabai, AIR 1988 Kerala 28 and the Punjab and Haryana High Court in Harcharan Kaur vs Nachhattar Singh, AIR 1988 Punjab & Haryana 27 and Rajasthan High Court in Santosh Kumari vs Virendra Kumar, AIR have taken a contrary view.
It has been inter alia, held that it is open to one of the spouses to withdraw the consent given to the petition at any time before the Court passes a decree for divorce.
The satisfaction of the Court after holding an inquiry about the genuineness of the consent, necessarily contemplates an opportunity for either of the spouses to withdraw the consent.
The Kerala High Court in particular has ruled out the application of analogy under Order XXIII Rule I of the Code of Civil Procedure since it is dissimilar to the situation arising under Section 13 B of the Act.
From the analysis of the Section, it will be apparent that the filing of the petition with mutual consent does not authorise the court to make a decree for divorce.
There is a period of waiting from 6 to 18 months.
This interregnum was obviously intended to give time and opportunity to the parties to reflect on their move and seek advice from relations and friends.
In this transitional period one of the parties may have a second thought and change the mind not to proceed with the petition.
The spouse may not be party to the joint motion under sub section (2).
There is nothing in the Section which prevents such course.
The Section does not provide that if there is a change of mind it should not be by one party alone, but by both.
The High Courts of Bombay and Delhi have proceeded on the ground that the crucial time for giving mutual consent for divorce is the time of filing the petition and not the time when they subsequently move for divorce decree.
This approach appears to be untenable.
At the time of the petition by mutual consent, the parties are not unaware that their petition does not by itself snap marital ties.
They know that they have to take a further step to snap marital ties.
Sub section (2) of Section 13 B is clear on this point.
It provides that "on the motion of both the parties . if the petition is not withdrawn in the meantime, the Court shall pass a decree of divorce What is significant in this provision is that there should also be mutual consent when they move the court with a request to pass a decree of divorce.
Secondly, the Court shall be satisfied about the bonafides and the consent of the parties.
If there is no mutual consent at the time of the enquiry, the court gets no jurisdiction to make a decree for divorce.
If the view is otherwise, the Court could make an enquiry and pass a divorce decree even at the instance of one of the parties and against the consent of the other.
Such a decree cannot be regarded as decree by mutual consent.
281 Sub section (2) requires the Court to hear the parties which means both the parties.
If one of the parties at that stage says that "I have withdrawn my consent", or "I am not a willing party to the divorce", the Court cannot pass a decree of divorce by mutual consent.
If the Court is held to have the power to make a decree solely based on the initial petition, it negates the whole idea of mutualitly and consent for divorce.
Mutual consent to the divorce is a sine qua non for passing a decree for divorce under Section 13 B. Mutual consent should continue till the divorce decree is passed.
It is a positive requirement for the court to pass a decree of divorce.
"The consent must continue to decree nisi and must be valid subsisting consent when the case is heard".
[See (i) Halsbury Laws of England, Fourth Edition Vol.
13 para 645; (ii) Rayden on Divorce, 12th Ed.
1 p. 291 and (iii) Beales vs Beales, [ at 674].
In our view, the interpretation given to the section by the High Courts of Kerala, Punjab & Haryana and Rajasthan in the aforesaid decisions appears to be correct and we affirm that view.
The decisions of the High Courts of Bombay, Delhi and Madhya Pradesh (supra) cannot be said to have laid down the law correctly and they stand overruled.
In the result, we allow the appeal and set aside the decree for dissolution of the marriage.
In the circumstances of the case, however, we make on order as to costs.
T.N.A. Appeal allowed.
| IN-Abs | The appellant wife and the respondent husband filed a petition under section 13 B of the for divorce by mutual consent in the District Court and their statements were recorded.
Subsequently, the appellant filed an application in the Court for dismissal of the petition stating that she was not willing to be a party to the petition and that her statement was obtained under threat and pressure of husband.
The District Judge dismissed the petition but on appeal the High Court reversed the order of the District Judge and granted a decree of divorce by holding that the consent to a petition for divorce by mutual consent cannot be unilaterally withdrawn and such a withdrawal would not take away the jurisdiction of the Court, if the consent was otherwise free; and since the wife 's consent was without any force, fraud or undue influence she was bound by the consent.
Hence this appeal by the wife.
Allowing the appeal and setting aside the decree of divorce, this Court, HELD: 1.
An analysis of Section 13 B makes it apparent that the filing of the petition under section 13 B(l) with mutual consent does not authorise the Court to make a decree for divorce.
The parties are required to make a joint motion under sub section (2) which should not be earlier than six months after the date of presentation of the petition 275 and not later than 18 months after the said date.
This motion enables the court to proceed with the case in order to satisfy itself about the genuineness of the averments in the petition and also to find out whether the consent was not obtained by force, fraud or undue influence.
The Court may make such inquiry as it thinks fit including the hearing or examination of the parties for the purpose of satisfying itself whether the averments in the petition are true.
If the Court is satisfied that the consent of the parties was not obtained by force, fraud or undue influence and they have mutually agreed that the marriage should be dissolved, it must pass a decree of divorce.
[280D, 279C D] 2.
The period of waiting from 6 to 18 months referred to in section 13 B(2) is intended to give time and opportunity to the parties to reflect on their move and seek advice from relations and friends.
In this transitional period one of the parties may have a second thought and change the mind not to proceed with the petition i.e. it may not be a party to the joint motion under sub section (2).
This sub section requires the court to hear the Parties which means both the parties, But the section does not provide that if there is a change of mind it should not be by one Party alone, but by both.
Therefore, if one of the parties at that stage withdraws its consent the Court cannot pass a decree of divorce by mutual consent.
If the Court is held to have the power to make a decree solely based on the initial petition it negates the whole idea of mutuality and consent for divorce.
Mutua consent to the divorce is a sine qua non for passing a decree for divorce under section 13 B. Mutual consent should continue till the divorce decree is Passed.
it is a positive requirement for the Court to Pass a decree of divorce.
[280D, 281A.B] K.I. Mohanan vs Jeejabai, A.I.R. 1988 Ker. 28; Harcharan Kaur vs Nachhattar Singh, A.I.R. 1988 P & H. 27 and Santosh Kumari vs Virendra Kumar, A.I.R. ; approved.
Jayashree Ramesh Londhe vs Ramesh Bhikaji Londhe, A.I.R. 1984 Bom.
302; Smt.
Chander Kanta vs Hans Kumar and Anr., A.I.R. 1989 De. 4 73; and Meena Dutta vs Anirudh Dutta, 1984 11 DMC 388 (MP); overruled.
Halsbury Laws of England, 4th Edn.
13 para 645; Rayden on Divorce, 12 Edn Vol 1 p. 291 and Beales vs Beales, ; referred to.
Section 13 B of the is in para materia with 276 Section 28 of the .
Sub Section (1) of section 13 B requires that the petition for divorce by mutual consent must be presented to the Court jointly by both the parties.
There are three other requirements in sub section (1).
Firstly, it is necessary that immediately preceding the presentation of the petition the parties must have been living separately for a period of one year or more.
The expression 'living separately ' connotes not living like husband and wife.
It has no reference to the place of living.
The parties may live under the same roof by force of circumstances, and yet they may not be living as husband and wife.
The parties may be living in different houses and yet they could live as husband and wife.
What seems to be necessary is that they have no desire to perform marital obligations and with that mental attitude they have been living separately for a period of one year immediately preceding the presentation of the petition.
The second requirement is that they 'have not been able to live together ' which indicates the concept of broken down marriage and it would not be possible to reconcile themselves.
The third requirement is that they have mutually agreed that the marriage should be dissolved.
[278E H, 279A B]
|
ivil Appeal No. 1484 of 1974.
From the Judgment and Decree dated 26.4.1974 of the Jammu & Kashmir High Court in Civil Second Appeal No. 4 of 1973.
A.K. Sen, E.C. Agrawala, Ms. Purnima Bhat, Atul Sharma and A. V. Palli for the Appellant.
S.K. Bhattacharya (NP) for the Respondent.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Hazrat Baba Ibrahim, a Saint, lived in the area called Rakhbahu in the city of Jammu.
After his demise in the year 1872 his grave became a place of worship for those who had faith in him.
The place was called Ziarat Hazrat Baba Ibrahim (hereinafter called "the Ziarat").
The Ziarat was managed by Sain Ladha, a nephew of Baba Hazrat Ibrahim After Sain Ladha 's death his son Mian Lal Din succeeded him.
At present the Ziarat is being managed by the sons of Mian Lal Din who died in the year 1963.
The Jammu & Kashmir Muslim Wakf Act came into force in the year 1959 (hereinafter called "the Act") whereunder a committee of muslim Wakf (hereinafter called "the Committee") has been incorporated.
The Committee filed a suit against Anayatullah and eight others (sons of Mian Lal Din) restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat.
According to the plaintiff, the Government of Jammu & Kashmir vide two orders dated September, 22, 1955 and November, 29, 1958 granted land measuring 3 acres and 6 acres 2 kanals 6 Marlas respectively to the Ziarat.
It was alleged that the defendants were treating the property to be their personal property.
They were mismanaging and also alienating the same.
The defendants in their written statement resisted the suit on a number of grounds and 256 stated that the land in dispute was transferred by the Government in favour of their father in lieu of his possessory right over about 400/500 Kanals of land which was taken over by the Government.
It was further claimed that the land was the absolute property of their father and the same has devolved upon the defendants by succession.
It was further claimed that notwithstanding the word "Ziarat" in the Government Orders the grants were in favour of the defendants father in his personal capacity.
The transfer of the land was not in the form of any dedication and as such was not a property of the Ziarat.
The defendants claimed the right to deal with the property in any manner they liked on the ground that the same belonged to them.
The Trial Court by its Judgment dated August 6, 1970 came to the conclusion that the two grants by the State Government were in fact made in favour of Mian Lal Din and not in favour of the Ziarat.
The suit of the committee was dismissed with costs.
The District Judge, Jammu by his Judgment dated February 28, 1973 upheld the findings of the Trial Court and dismissed the appeal of the committee.
The committee went up in second appeal before the Jammu & Kashmir High Court.
Murtaza Fazal Ali, C.J. (as the learned Judge then was) by his judgment dated April 26, 1974 set aside the judgments of the courts below and allowed the appeal of the committee.
The Learned Chief Justice decreed the plaintiff 's suit for injunction as prayed for.
This appeal via Special Leave Petition is against the judgment of the High Court.
Mr. Ashok Sen, learned counsel appearing for the appellant has taken us through the judgment of the Trial Court and that of the Lower Appellate Court.
According to him, the High Court has erred in upsetting the findings of the courts below based on appreciation of evidence.
Mr. Sen contended that the appellant 's ancestors were in possession of ' more than 140 Kanals of land for a very long period and had established possessory title over the said land.
According to him, the Government took over the said land from the father of defendants and in lieu of that two grants in the years 1955 and 1958 were given to Mian Lal Din in his personal capacity.
It was contended that on appreciation of the evidence produced before the Trial Court the courts below found as a fact that the defendants were the owners of the property subject matter of the Government grants and as such the High Court acted illegally in upsetting the same.
The learned counsel relied upon the following findings of the Lower Appellate Court in support of his contention: 257 "As discussed above, the possession of the defendants and their father and grand father and Hazrat Baba Ibrahim over 40 kanals of land as Arak and about 100 kanals of land under cultivation is proved, and it is further proved from the Government order Ext.
D.A./4 refusing the recommendation of the Financial Commissioner that the basis for the grant of proprietary rights in respect of 74 kanals of land was the personal possession of the father of the defendants and his predecessors and it was in lieu of the possession of that chunk of land that the Government parted with 74 kanals of land.
The counsel for the plaintiff has further argued that because the Government orders of 1955 and 1958 mentions the word "Ziarat" as the grantee it is not permissible for the Civil Court to hold that the grant was in favour of the father of the defendants.
Keeping in view the back ground as discussed above, I am unable to agree with the contention of the learned counsel for the plaintiff.
The mere fact that Mian Lal Din was associated with the Ziarat as a descendant of Hazrat Baba Ibrahim Sahib and the mere fact that the word "Ziarat" was used in the Government orders of 1955 and 1958 would not preclude this Court from holding that the grant was not in favour of the Ziarat but was in fact in favour of the father of the defendants.
The contents of the Government orders of 1955 and 1958 referred to above are to be considered with the facts that Mian Lal Din and his ancestor possessed the land in their individual capacity; that the Government repelled the claim of Mian Lal Din for additional grant of land on the simple ground that the land already granted to him was costlier than the land which he held in possession; that there was no intention on the part of the Government to dedicate the land to the Ziarat out of any pious intention; that it was a sort of bargain between Mian Lal Din, the father of the Defendants and the Government where under the land measuring 74 kanals was parted within the proprietary rights by the Government in consideration of Lal Din 's having abandoned possession of over 400 kanals Of land; the fact that the Committee plaintiff also treated the grant in favour of Lal Din as is evident from Ext.
PD also supports my view.
The fact that the defendants and their father leased out a part of the property on a long lease to third parties, the fact that the defendants got compensation for a portion of the land acquired by the Government; the fact that there was no claim laid to the land by the Wakf 258 Committee upto the year 1966 even when the Government orders were passed in 1955 and 1958, the fact that no demand was ever made from Lal Din to render accounts in respect of the income specially derived by him from the suitland, the fact that a large number of shops, khokhas and buildings have been constructed by the defendants (assuming that one room was constructed by the Wakf Committee) also is determinative of the fact that the transfer was infact made in favour of Lal Din and not in favour of the Ziarat as such.
" It is not disputed that the property which is subject matter of the dispute was granted by the State Government under the two orders dated September 22, 1955 and November, 29, 1958.
The respondent plaintiff claims that the grant was in favour of the Ziarat whereas the appellant defendants claim that the property was given to the father of the defendants absolutely and in his personal capacity.
The two documents of title by which the grant was made may now be referred to.
The Government order dated September 22, 1955 is as under: "It is ordered that 3 acres of land of Rakhbahu of the Rakhs and Farms Deptt.
surrounding the Ziarat Shareef of Baba ibrahim Shah be granted to the said Ziarat e Shareef permanently.
By order of the Cabinet.
Sd/ (G.M. Bakshi) Prime Minister".
The Government order dated November, 1958 runs thus; "(1) The confirmation of the action taken by the Prime Minister in granting land measuring 6 acres 2 kanals and 6 marlas to Ziarat Shareef Baba Ibrahim Shah Sahib at Ghandi Nagar Jammu and (2) The grant of compensation amounting to Rs. 12,500 by debit to Housing grant in favour of the said Ziarat for 12.5 kanals of land @ Rs. 1000 per kanal, taken over by the Public Works Department for development of Gandhi Nagar out of the area of 3 acres sanctioned vide Cabinet Order No. 1418 C dated 20.9.55.
By order of the Jammu and Kashmir Government Sd/ Noor Mohd Secretary to Government" 259 The above quoted orders of the Government are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to Ziarat alone and not to the appellant defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The High Court interpreted the above quoted two orders as under: " The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shared of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of these orders that the land was given not to the Ziarat but to the defendant who was Mujawar of the Ziarat either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
Since the recitals in the documents are absolutely clear and are expressed in unmistakable terms, there is no room for adducing evidence adduced to contradict the recitals of these two documents.
Thus the evidence adduced by the defendants to show that the grant was made not to the Ziarat but to them is clearly hit by sections 91 and 92 of the Evidence Act and is, therefore, inadmissible.
Further more the grant was made in 1955 and 1958, that is to say several years before and the Government has not come forward after such a long lapse of time to support the stand of the defendants that the grant was intended for them in their personal capacity and not for the Ziarat.
I fail to understand how in face of such clear recitals in the documents the courts below have by a process of evisceration and interpolation construed the documents to means as if it was a grant in favour of the defendants.
The courts below appear to have been influenced by the fact that when the defendants represented to the Government that the lands in their cultivating possession had been taken over by the Government without paying compensation, some Government Officers replied that a substantial grant of land had been made to the Ziarat.
This obviously was a wrong stand taken by the Government Officers and could not clothe the defendants with the right of wiping out the legal validity of the grant made year before the officers gave this reply.
Indeed the remedy of the defendants was to sue for damages or for compensation for, the land unlawfully acquired by the Government.
There was no justification for the 260 defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same which was an managers or trustees and asset a hostile title to it.
The law on the subject is absolutely clear that a manager or a trustee in possession of a religious shrine cannot be allowed to asset a hostile title unless he formally surrenders possession to the lawful authority.
Before going into this point of law at some length it may be necessary to refer to certain proved facts in the case: (1) It is not disputed that the present Ziarat existed since a long time and became a Wakf by long public user.
(2) That the first defendant was the Sajadanashin or caretaker of the Ziarat.
(3) That the land belonged to the Government originally.
(4) That the Government granted the land in dispute to the Ziarat and not to the defendants.
(5) That the defendants were admittedly in possession of the Ziarat as also the properties appurtenant thereto.
In these circumstances it is clear that even if the defendants were in possession of the lands, their possession would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words the possession of the defendants would be for the benefit of the Ziarat.
We agree with the above quoted findings of ' the High Court and approve the same.
We do not agree with the argument of Mr. Ashok Sen that the High Court was in error in upsetting the findings of the courts below.
The question before the High Court was the interpretation of two government orders which was essentially a question of law.
The High Court was justified in observing that in the face of clear and unambiguous terms of the Government orders it was not permissible for the appellant defendants to adduce evidence to show that the grant was made to them and not to the Ziarat.
No other point was raised before us.
We, therefore, dismiss the appeal.
The respondent plaintiff shall be entitled to costs throughout which we quantify as Rs. 15,000.
N. P. V. Appeal dismissed.
| IN-Abs | The Ziarat Shareef of Hazrat Baba Ibrahim, a holy place of worship, in the Rakhbahu area of Jammu City was granted certain land to the Ziarat by the State Government vide two orders dated September 22, 1955 and November 29, 1958.
The Ziarat was being managed by the 1st appellant and his brothers, since the death of their father in 1963.
The Committee of Muslim Wakf, incorporated under the Jammu and Kashmir Muslim Wakf Act, which came into force in 1959, file a suit for restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat, on the allegation that the appellants defendants were treating the lands granted to the Ziarat, as their personal property and mismanaging and also alienating the same.
Resisting the suit, the appellants, defendants contended, inter alia, that notwithstanding the use of the word "Ziarat" in the two Government orders the transfer of the land in dispute was in their father 's favour in his personal capacity, in lieu of his possessory right over about 400/500 kanals of land which was taken over by the Government, and not in the form of any dedication, and as such the land was not the property of the Ziarat but their father 's absolute property, and had devolved upon them by succession and, therefore, they had the right to deal with the property in any manner they liked.
The trial court dismissed the suit, holding that the two grants were in fact made in favour of defendants ' father and not the Ziarat.
254 The first appellate court upheld the trial court 's findings.
However, in second appeal, the High Court held that from the recitals of the two orders of the Government of 1955 and 1958 it was clear that the two grants were in favour of the Ziarat.
Hence, the appellants defendants filed the appeal, by special leave before this Court contending that the High Court had erred in upsetting the findings of the courts below, based on appreciation of the evidence that, as a fact, the appellants defendants were the owners of the property, the subject matter of the Government grants.
Dismissing the appeal, the Court, HELD: 1.1 The two orders of the Government dated September 22, 1955 and November 29, 1958 are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to the Ziarat alone and not to the appellants defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shareef of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of those orders that the land was given not to the Ziarat but to the father of the appellants defendants, who was Majawar of the Ziarat, either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
[259A, B C] 1.2 A manager or a trustee in possession of a religious shrine cannot be allowed to assert a hostile title unless he formally surrenders possession to the lawful authority.
[260B] In the instant case, there was no justification for the appellants defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same, which was as managers or trustees and assert a hostile title to it.
Even if they were in possession of the lands, it would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words, the possession would be for.
the benefit of the Ziarat.
[259H, 260A, E] 1.3 In the face of clear and unambiguous terms of the Government orders, it was not permissible for the appellants defendants to adduce evidence to show that the grant was made to them and not to the 255 Ziarat.
The question was of interpretation of two Government orders, which was essentially a question of law.
[260G] In the circumstances, the High Court was not in error in upsetting the findings of the courts below.
[260F]
|
Civil Appeal No.2215 of 1977.
From the Judgement and Order dated 237 1976 of the Madhya Pradesh High Court in Misc.
Appeal No.23 of 1976.
T.U.Metha, S.K. Gambhir, Vivek Gambhir and Surinder Karnail for the Appellants.
Uday U. Lalit and A.G.Ratnaparkhi for the Respondents.
The Judgement of the Courtwas delivered by SHAREMA,J,.
The question for decision in this appeal by special leave is whether a petition under s.11 of the , for declaring the marriage of the petitioner as nullity is maintainable after the death of the petitioners ' spouse.
The appellent No. 1, hereinafter referred to as the Maharani, was marriedto Maharaja Rameshwarsighji in1960 and a daughter, the appellant no.2, was born of the wedlock in 1964.
The relationship between the husband and the wife thereafter ceased to be cordial and the appellants started living in Bombay and the Maharaja within his estate in Madhya Pradesh.
According to the case of the respondent no.1 the Maharaja decided to remarry without legally separating from the appellant Maharani.
The respondent who is a relation of the Maharaj 's mother, respondent No.2, was misled both by theMaharaja and his mother in believing that the first marriage of the Maharaja had been dissolved and under the belief she married the Maharaja and the couple got several issues.
In 1974 when the Maharaja died, an application for grant of Letters of Administration was filed by the appellant Maharani and the respondent applied for probate on the basis of an alleged will which is denied by the appellant.
The proceedings are still pending.
In this background the respondent 197 No. 1 filed the present application under section 11 of the for declaring her marriage as nullity.
The Maharaja 's mother was impleaded as the sole respondent.
When the appellants learnt about the case, they intervened and were joined as parties.
The appellants challenged the maintainability of the application on the ground that the marriage could not be declared nullity after the death of the Maharaja.
Both the trial court and the High Court have rejected the appellants ' plea. 4.
mr. Mehta, the learned counsel for the appellants, has contended that having regard to the very special relationship between husband and wife, a marriage cannot dissolved or declared to be a nullity unless both of them are parties thereto.
The marital status of a person stands on a much higher footing than other positions one may hold in the society or may have in relation to a property; and cannot be allowed to be challenged lightly.
The marriage of a person, therefore, cannot be declared as a nullity after his death when he does not have an opportunity to contest.
He relied upon the language of s.11.
After its amendment in 1976 the section read this: "11.
Void marriages: Any marriage solemnized after the commencement of this Act shall be null and void and may , on a petition presented by either party thereto against the other party, be so declared by a decree of nullity if it contravenes any one of the conditions specified in clauses (i),(iv) and (v) of Section 5." (emphasis added) 5.
The present proceeding was started in 1974, that is, before the amendment, and the section did not contain the words which have been underlined by us above.
At that time all that was required was that the application had to be filed by a party to the marriage under challenge.
On the plain language of the section as it stood then, it could not be claimed that in absence of the other spouse as a party to the proceeding, the same would not be maintainable.
The argument of Mr. Mehta is that the section had the same meaning before and after the amendment and the addition of the words in 1976 was merely clarificatory in nature.
He strongly relied upon the 69th Report of the Law Commission. 6.
The Report recommended several amendments in the which led to the passing of the Amending Act of 1976.
198 Reliance was placed on paragraph 6.1A of Chapter 6 of the Report which referred to the divergent views taken by the High Courts of Punjab and Madras on the question of maintainability of a petition under s.11 after the death of the other spouse.
The Commission, thereafter, observed thus: "We ought, however, to point out that in such a case, the proper remedy is a suit under the Specific Relief Act.
A petition under section 11 of the cannot be appropriate, because the other spouse is an essential party to any such petition.
This should be clarified by an amendment.
" It has been argued before us that the view of the Madras High Court referred to in the Report is the correct view which was accepted by the Law Commission, and since there was scope for controversy on the language of the section, the legislature agreeing with the Law Commission added the aforementioned additional words by way of clarification.
It is urged that such interpretation of the section did not lead to any injustice inasmuch as a suit for such a declaration was and is maintainable in the civil court.
Reliance has also been placed on "Rayden and Jackson 's Law and Practice in Divorce and Family matters." (15th Edn.), and several English cases in support of the proposition that on the death of a party to a matrimonial action the cause of action does not service.
Reference has been made to the case of Butterfield vs Butterfield, I.L.R. (Vol.50) Calcutta 153, where after the wife had obtained a decree nisi for dissolution of her marriage the husband died.
Following the English case of Stanhope vs Stanhope,[1886] 11 P.D.103, it was held that the decree could not be confirmed.
The learned counsel for the respondent relied upon certain observation made in other High Courts ' judgments supporting his stand.
He pointed out that having regard to the language of section 16, as it stood before the amendment, the children born of the respondent would not have been entitled to the benefit of the section in the absence of a decree declaring the marriage of their parents as nullity, and this was precisely the reason that the respondent had to commence the present litigation.
We have considered the argument of Mr. Mehta closely but do not find ourselves in a position to agree with him.
It is not correct to suggest that one uniform rule shall apply for deciding the maintainability of all proceedings involving issues relating to marital status.
The 199 question will be dependent upon the nature of the action and law governing the same.
The provisions of the relevant statute relating to a proceeding in question will be very material.
This aspect has been taken note of by Rayden and Jackson also in their book which has been relied upon by Mr. Mehta.
The passage at page 650 summarises the position in the following words: "Death of a party: effect on suit.
In many cases the fact of the death of one of the parties will render the process meaningless by reason of the circumstances that a marriage brought to an end by death could no longer be dissolved by an Act of the court.
But there is no general rule that, where one of the parties to a divorce suit has died, the suit abates, so that no further proceedings can be taken in it.
It has been said that it is unhelpful to refer to abatement at all.
The real question in such cases is whether, where one of the parties to a divorce suit has died, further proceedings in the suit can or cannot be taken.
The answer to that question, when it arises, depends in all cases on two matters and in some cases also on a third.
The first matter is the nature of the further proceedings sought to be taken.
The second matter is the true construction of the relevant statutory provision or provisions, or of a particular order made under them, or both.
The third matter is the applicability of section I (I) of the Law Reforms (Miscellaneous Provisions) Act 1934.
The dispute issue in the present appeal has to be answered by considering the nature of the proceedings and the true construction of the relevant provisions of the .
Under the general law a child for being legitimate has to be born in lawful wedlock, and if the marriage is void or declared to be so by the court, it will necessarily have the effect of bastardising the child born of the parties to such a marriage.
By enacting section 5(i) of the Act, the legislature abolished polygamy, which had always remained permissible and prevalent among the Hindus in the past.
The Act was bringing about a very significant departure in this regard; and taking into account the possibility of violation of the law in numerous cases atleast for sometime to come special provisions were included under s.16 of the Act with the object of protecting the legitimacy of the children.
The original section before the amendment of 1976 read as follows: "16.
Where a decree of nullity is granted in respect 200 of any marriage under section 11 or section 12, any child begotten or conceived before the decree is made who would have been the legitimate child of the parties to the marriage if it had been dissolved instead of having been declared null and void or annulled by a decree of nullity shall be deemed to be their legitimate child notwithstanding the decree of nullity.
Provided that nothing contained in this section shall be construed as conferring upon any child of a marriage which is declared null and void annulled by a decree of nullity any rights in or to the property of any person other than the parents in any case where, but for the passing of this Act, such child would have been incapable of possession of acquiring any such rights by reason of his not being the legitimate child of his parents.
" It will be seen that the benefit of the section was confined to only such cases where a decree of nullity was granted under section 11 or s.12.
it did not extend to other cases.
In 1976 s.11 was amended by inserting the words "against the other party", and along with the same s.16 was amended as it read now.
the following words in section 16(i). ". and whether or not a decree of nullity is granted in respect of that marriage under this Act and whether or not the marriage is held to be void otherwise than on a petition under this Act." enlarged the applicability of the beneficial provisions, so as not to deny the same to children who are placed in circumstances similar to those of the present respondent.
By the amendment in s.11, in so far the cases where marriage can be declared as nullity, the application of the rule protecting the legitimacy was widened.
If that had not been done, the children born of such marriage would have been deprived of the advantage on the death of either of the parents.
By the simultaneous amendment of the two sections it can safely be deduced that the Parliament did not hold identical views as expressed by the Law Commission 's Report.
Even if it be assumed that the meaning of the section was not free from ambiguity, the rule of beneficial construction is called for in ascertaining its meaning.
The intention of the legislature in enacting s.16 was to protect the legitimacy of the children who would have been 201 legitimate if the Act had not been passed in 1955.
There is no reason to interpret s.11 in a manner which would narrow down its field.
With respect to the nature of the proceeding, what the court has to do in an application under s.11 is not bring about any change in the marital status of the parties.
The effect of granting a decree of nullity is to discover the flaw in the marriage at the time of its performance and accordingly to grant a decree declaring it to be void.
we, therefore, hold that an application under s.11 before its amendment in 1976, was maintainable at the instance of a party to the marriage even after the death of the other spouse.
Accordingly, this appeal is dismissed with costs.
| IN-Abs | The appellant No.1 Maharani was married to a Maharaja in 1960 and the daughter appellant no.2 was born of the wedlock in 1964.
The relationship between the husband and the wife thereafter ceased to be cordial and the appellant started living in Bombay and the Maharaja within his estate in Madhya Pradesh.
It is the case of the respondent No.1 that the Maharaja decided to remarry without legally separating from the appellant.
The respondent who is a relation of the Maharaja 's mother, respondent No.2,was misled both by the Maharaja and his mother, respondent No.2 was misled both by the Maharaja and his mother in believing that the first marriage of the Maharaja had been dissolved and under that belief she married the Maharaja had been dissolved and under that belief she married the Maharaja and several issues were born of this wedlock.
In 1974 when the Maharaja died, on application for grant of Letters of Administration was filed by the appellant Maharani, and the respondent No.1 applied for probate on the basis of an alleged will.
This will was denied by the appellants.
These proceedings are still pending.
Respondent No.1 filed an application under Section 11 of the for declaring her marriage as nullity, and the Maharaja 's mother was impleaded as the sole respondent.
The appellants intervened and were impleaded as parties.
The maintainability of the aforesaid application was challenged by the appellants on the ground that the marriage could not be declared 194 a nullity after the death of the Maharaja but both the trial court and the High Court have rejected this plea.
In the appeal to this Court it was contended on behalf of the appellants that having regard to the very special relationship between husband and wife,a marriage cannot be dissolved or declared to be a nullity unless both of them are parties thereto.
The martial status of a person sands on a much higher footing than other positions one may hold in the society and cannot be allowed to be challenged lightly,and that the marriage of a person, therefore, cannot be declared as nullity after his death when he does no have an opportunity to contest.
Reliance was placed upon the language of Section 11 of the .
On behalf of the respondent, it was pointed out that having regard to the language of Section 16 of the as it it stood before its amendment in 1976,he children born of the respondent would not have been entitled to the benefit of the section in absence of a decree declaring the marriage of their parents as nullity, and this was precisely the reason that the respondent had to commence the present litigation On the question: whether a petition under Section 11 of the for declaring the marriage of the petitioner as a nullity is maintainable after the death of the petitioner 's spouse.
Dismissing the appeal, this Court, HELD: 1 .An application under Section11 of the before its amendment in 1976, was maintainable at the instance of a party to the marriage even after the death of the other spouse.[201B].
In the instant case, the proceeding was started in 1974 that is, before the amendment was made in the Hindu Marriage Act,1955.
Section II did not contain the words "against the other party".
At that time all that was required was that the application had to be filed by a party to the marriage under challenge.
On the plain language of the section as it stood then,it could not be claimed that in absence of the other spouse as a party to the proceedings, the same would not be maintainable.[197F] 3.Under the general law a child for being legitimate has to be 195 born in lawful wedlock and if the marriage is void or declared to be so by the Court, it will necessarily have the effect ofbastardising the child born of the parties to such a marriage.[199F] 4.
By enacting Section 5(i) of the the legislature abolished polygamy, which had always remained permissible and prevalent among the Hindus in the past.
The Act was bringing about a very significant departure in this regard; and taking into account the possibility of violation of the law in numerous cases at least for sometime to come special provisions were included under Section 16 of the Act with the object of protecting the legitimacy of the children.[199G] 5.
The benefit of Section 16 was confined to only such cases where a decree of nullity was granted under Section 11 or section 12.
It did not extend to other cases.
in 1976 section 11 was amended by inserting the words "against the otherparty" and alongwith the same section 16 was amended.[200D] 6.
By the amendment in section 11, in so far the cases where marriage can be declared as nullity, the application of the rule protectingthe legitimacy was widened.
If that had notbeen,the children born of such marriages would have been deprived of the advantage on the death of either of the parents.
By the simultaneous amendment of the two sections it can safely be deducted that the Parliament did not hold identical views as expressed by the law Commission in its59th Report.[200F G] 7.
The intention of the legislature in enacting section 16 was to protect the legitimacy of the children who would have been legitimate if the Act had not been passed in 1955.[200H] 8.
There is no reason to interpret section 11 in a manner which would narrow down its field.
With respect to the nature of the proceedings, what the court has to do in an application under section 11 is not to bring about any change in the marital status of the parties.
The effectof granting a decree of nullity is to discover the flow in the marriage at the time of its performance and accordingly to grant a decree declaring it tobe void.
[201A B] Butterfield vs Butterfield; I.L.R.(Vol.50) Calcutta 153 and Stanhope vs Stanhope, , and Law Commission of India 59th Report Chapter 6, para 6.1A referred to.
196 9.It is not correct to suggest that one uniform rule shall apply for deciding the maintainability of all proceedings involving issues relating to marital status.
The question will be dependent upon on the nature of the action and law governing the same.
The provisions of the relevant statue relating to a question will be very material.[198H 199A] Rayden and Jackson 's Law and Practice in Divorce and Family Matters, (15th Edn.).
p.650, referred to.
|
ivil appeal Nos.
552 554 of 1991.
From the Judgment and Order dated 9.10.1989 of the Central Administrative Tribunal, New Bombay in Transfer Applications No. 430, 431 and 433 of 1987.
B.K. Mehta, C.P. Pandey, M. Chopra and V.S. Sharma for the Appellants.
K. Lahiri, Ms. Kitti Kumaramangalam and Ms. Sushma Suri (NP) for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted The appellants and the writ petitioners are presently serving in the Time Keeping Department of the Naval Dockyard, Bombay, which is under the administrative control of the Vice Admiral, Flag Officer, Commanding in chief, Western Naval Command, Bombay.
In the said department there are several posts of Junior Time Keepers and only two posts of Senior Time Keepers.
Since the promotional posts were limited in number there was stagnation at the base level of Junior Time Keepers.
With a view to removing this stagnation, the cadre of Time Keepers was sought to be amalgamated with the clerical cadre in the same department.
On 14th September, 1966, the Under Secretary to the Government of India, Ministry of Defence, wrote a letter to the Chief of Naval Staff on the subject of amalgamation of the Time Keepers cadre with the clerical cadre.
The text of the letter reads as under: "Sir, I am directed to convey the sanction of the President to the merger of the cadre of time keepers with the clerical cadre in all Naval Establishments.
Consequent on this merger, 223 Senior Time Keeper will be redesignated as Upper Division Clerks.
The authorised ratio of 1:4 between UDCs and LDCs will be maintained after this merger but where because of the merger and redesignation of Senior Time Keepers as Upper Division Clerks the number of Upper Division Clerks exceeds the authorised ratio, no reservations will be made and the excess vacancies of Upper Division Clerks will be adjusted against vacancies of Upper Division Clerks becoming available by way of increase in Establishment, retirement, etc.
The existing pay of the time keepers will be protected and they will continue to draw increments in the new cadre on the due dates: 3.
Any subsidiary instructions regarding seniority promotion etc.
will be issued by you.
4.This letter issue with the concurrence of Ministry of Finance (Defence/Navy) vide their u.o.
No. 3161 NA dated 31.8.1866.
" A few days later another letter dated 5th December, 1966 was issued by the office of the Rear Admiral, Western Naval Command, Bombay, on the same subject which reads as under; "In accordance with the Govt.
of India, Ministry of Defence letter No. CP(A)/4895/NHQ/8364/D/N II dated 14th September 1966 the Cadre of Time Keepers will be merged with that of LDC/UDC with effect from 1st December, 1966.
This merger is intended only to give promotion to the Time Keepers alongwith the LDC/UDC.
Their duties, terms and conditions of service will remain the same and their hours of work will also continue to be 45 in a week.
Consequent upon the issue of this order and in order to distinguish them from the UDC/LDC and UDC(s)/LDC(s) the suffix "T" will be added after their designation.
All records and correspondence relating to them should also be indicated by this suffix".
224 The employees working in the Time Keeping Department were entitled to the benefit of over time and productivity linked bonus since they were considered to belong to the industrial wing.
Lower Division Clerks and Upper Division clerks belonging to the clerical cadre who were working in different administrative offices of the Naval Dockyard were not entitled to this benefit.
Therefore, when one Thoppil Ramakrishnan was transferred in August, 1980 as UDC(T) in the Spare Parts Distribution Centre, he challenged his transfer by filing a Writ Petition No. 1065/80 in the High Court of Bombay on the ground that since he was appointed as Junior Time keeper in 1953 and was promoted as UDC(T) in 1967 he belonged to a special cadre and could not be transferred to the general cadre as that would entail loss of the benefit of over time and productivity linked bonus.
His petition was allowed by the High Court by the judgement and order dated 1st March, 1984.
The High Court, treating the letter of 5th December, 1966 as clarificatory, concluded that the merger was intended for the sole purpose of making available to the Time Keepers avenues of promotion in the clerical cadre but their terms and conditions of service were to remain in tact and it is for that purpose that they were to be designated by the suffix"T".
The High Court, therefore, held that there was no complete merger of the two cadres.
The High Court, however, realised that Time Keepers could not be given promotion to more responsible assignments unless they received the required experience of administrative work normally available to Lower Division Clerks and Upper Division Clerks, but rested content on the statement made by the counsel for the petitioner that the pertitioner will not claim the benefit of promotion in the clerical cadre.
On this statement the High Court made the rule absolute.
Against this judgement a Letters Patent Appeal was filed but without success.
Another Writ Petition No.1066/80 files by Chob Singh Tomar was similarly disposed of by the same learned Judge on the next day i.e. 2nd March 1984.
Both the above Judgement were mainly based on the language of the letter of 5th December, 1966.
Realising the difficulty created by the saidletter, the Flag Officer, Commanding in Chief, Western Naval Command, Bombay, cancelled the said letter by his communication dated 27th August, 1984.
The subsequent communication reads as under: "1.
Ministry of Defence Letter CP(A)/4895/NHQ/8634/D(N II) dated 14 Sep. 66 is reproduced as Annexure I to this order for information.
225 2.This Headquarters Civilian Establishment Order Part II of 1966 No.6 dated 05 Dec. 66 and 50/80 dated 23 Aug. 80 are hereby cancelled.
" By a subsequent letter dated 20th November, 1984 it was further directed that the suffix"S" and suffix "T" should bed removed from all records and the incumbents should be redesigned as LDCs/UDCs.
On the cancellation of the letter of 5th December, 1966 and the removal of the suffix "T", what survived was only the merger order of 14th September, 1966.
Consequently inter se transfers from the Time keeping Department to the various administrative departments of the Naval Dockyard became possible.
Thereupon, R.A. Sawant and R.D. Jawakar who were working in the Time Keeping Department were transferred on promotion as UDC by orders dated 17th April, 1985 and 5th October, 1985 respectively to other administrative departments of the naval establishment.
These transfers triggered off certain writ petitions in the High Court of Bombay.
On the constitution of the Central Administrative Tribunal for that area, those writ petitions were transferred to the Tribunal for disposal in accordance with law.
The Tribunal by its impugned common judgement dated 9th October, 1989 came to the conclusion that after the cancellation of the order dated 5th December, 1966 the field was held by the Presidential Order referred to in the letter of 14th September, 1966.
The Tribunal held that the employees in the Time Keeping Department no longer belonged to separate cadre and the authorities were entitled to transfer them to the other ministerial branches in the Naval establishment under the Merger Scheme.
In regard to the judgements delivered by the High Court of Bombay on 1st and 2nd March, 1984, it opined that on the cancellation of the order of 5th December, 1966 those decisions had lost their force and the question had to be answered solely on the basis of Presidential Order referred to in the letter of 14th September, 1966.
In this view of the matter the Tribunal dismissed the applications and vacated the interim orders.
It is against the said judgement of the Tribunal that the aforesaid appeals have been filed.
Certain other employees who apprehended transfer from the Time Keeping Department to other administrative departments in the Naval establishment approached this Court directly by way of a writ petition.
Their contention is identical to the contention raised in the appeals preferred against the impugned order of the Tribunal.
We will, therefore, dispose of the appeals as well as the writ petition by this common judgement.
226 Mr. Mehta, the learned counsel for the appellant petitioners contended that the employees working in the Time Keeping Department of the Naval establishment perform duties which are distinct from ordinary clerical duties and therefore they constitute a separate and distinct cadre to which are attached certain additional monetary benefits, such as, over time payment, productivity linked bonus, etc., which would be lost to them if they are transferred to other administrative departments of the naval establishment.
He submitted that since the Junior Time Keepers did not have sufficient avenues for promotion and were stagnating at the base leval and the Senior Time Keepers had no promotional avenue altogether, their grievance was sought to be redressed by providing them further avenues of promotion under the Presidential Order, without depriving them of their identity and special benefits available as belonging to the industrial wing of the establishment.
According to him the Presidential Order of merger contained in the letter dated 14th September, 1966 was issued for this limited purpose only of giving the Time Keepers an opportunity of career advancement which was available to their counter part in the administrative (Non industrial) departments of the Naval establishment but it was never intended to deprive them of the additional monetary benefits to which they were entitled as belonging to the industrial wing.
In other words according to Mr. Mehta the merger of the Time Keepers ' cadre with the clerical cadre was only notional and limited to opening avenues for promotion for the former but there was no actual merger in the sense of the Time Keepers losing their identity and that is why in the subsequent letter of 5th December, 1966 the department rightly observed that their duties, terms and conditions of service will remain the same and their hours of work will continue to be 45 in a week and they should be distinguished by the use of the suffix "T" after their designation.
The cancellation of the order of 5th December, 1966 by the subsequent order of 22nd August, 1984 does not alter the situation contended Mr. Mehta and, therefore, said he, the Tribunal was in error in coming to the conclusion that the earlier two decisions of the Bombay High Court had lost their force.
He, therefore, submitted that the Tribunal 's approach was clearly erroneous and this Court must correct the same.
Mr. Lahiri, the learned counsel for the department contended that the Presidential Order referred to in the letter of 14th September, 1966 had merged both the cadres and the Time Keepers were, therefore, redesignated as Lower Division Clerks and Upper Division Clerks.
He submitted that there was no indication in the Presidential Order that these Time Keepers who were redesignated as LDCs/ 227 UDCs will continue to constitute a separate cadre and yet be entitled to promotion in the clerical cadre.
He, therefore, submitted that the subsequent order of 5th December, 1966 was issued on an erroneous reading of the Presidential Order and when the department realised the mistake after the High Court 's judgements, it promptly cancelled the said order and restored the position as on the issuance of Presidential Order.
He, therefore, submitted that the Tribunal was right in coming to the conclusion that as the High Court 's judgements were based on the subsequent order of 5th December, 1966 and the same was since cancelled, the judgements no longer held the field and the appellants petitioners were not entitled to the benefit thereof.
He further pointed out that under the Presidential Order the ` pay ' of the Time Keepers has been protected and therefore, they can have no cause to complain but such of those LDCs/UDCs who are posted in the Time Keeping Department are allowed to draw overtime wages as well as bonus admissible under the relevant law.
These benefits are attached to the post and not the individual and the one who is manning the same is entitled to them and not others.
He, therefore, submitted that this Court should not interfere with the view taken by the Tribunal and should dismiss these appeals as well as the writ petition.
We have carefully considered the contentions urged before us by the learned counsel for the contesting parties.
The letter of 14th September, 1966 clearly refers to the Presidential sanction"to the merger of the cadre of Time Keepers with the clerical cadre in all Naval establishments".
Consequent on this merger the Junior Time Keepers were to be redesignated as Lower Division Clerks and there Senior Time Keepers as Upper Division Clerks.
There is nothing in this letter to convey that they were to retain their identity as Time Keepers.
The letter further states that their entry into the clerical cadre should not disturb the authorised ratio of 1:4 between UDCs and LDCs but where because of the merger and redesignation of Senior Time Keepers as UDCs, the numbers of UDCs exceeds the authorised ratio, there should be no revision but in the excess should be adjusted against vacancies becoming available by way of increase in establishment, retirement, etc.
Paragraph 2 of that letter states that the existing pay of the Time Keepers will be protected and they will continue to draw increments in the new cadre on the due dates.
It is clear from the above text of the letter of 14th September, 1966 that the intention was to merge the cadre of Time Keepers with the clerical cadre and to adjust the imbalance.
If any, caused on account of such merger in a manner so as not to disturb the authorised ratio.
The pay and increments of the Time Keepers were protected by the said order.
There 228 can, therefore, be no doubt that the plain language of the Presidential Order as reproduced in the letter of 14th September, 1966, clearly manifests an intention to merge the existing Time Keepers ' cadre with the clerical cadre, albeit with a view to opening avenues for promotion for the Time Keepers.
The subsequent order of 5th December, 1966 issued by the Western naval Command could not alter this Presidential Order.
If that subsequent order was found to be inconsistent with the Presidential Order, it had to be ignored for the simple reason that the officers of the Naval establishment were not competent to alter, vary or modify a Presidential Order.
The interpretation placed on that subsequent letter by the Bombay High Court in the judgements delivered on 1st and 2nd March, 1984 does give the impression that the High Court thought that there was no complete merger and the personnel meaning the Time Keeping Department retained their identity and were, therefore, entitled to the additional benefits of over time and productivity linked bonus.
After the judgements were delivered the department instead of approaching this Court thought it wise to undo the mischief by cancelling the subsequent order of 5th December, 1966 which was the source of trouble.
Since the conclusion reached by the High Court was based on the language of the subsequent order of 5th December, 1966, the Tribunal was not bound to follow the same on the cancellation of that order.
We may also state, with respect to the learned judge in the High Court, that we find it difficult to persuade ourselves to his point of view for diverse reasons.
Firstly, the plain language of the text of the Presidential Order manifests a clear intention to merge the cadre of Time Keepers with the clerical cadre on the establishment.
Secondly, the subsequent order of 5th December, 1966 had to be read consistently with the Presidential Order as to fulfil the purpose or objective and not to impede or stifle it.
Thirdly, even if the subsequent order was found to be inconsistent with the Presidential Order in certain respects, the inconsistency had to be ignored for the obvious reason that the officer issuing the order could not have altered or modified the Presidential Order and lastly, if there was any confusion caused by the subsequent order it should have been read harmoniously with the Presidential order Order so as to advance its objective or merger of the Time Keepers ' cadre with the clerical cadre.
In order to appreciate Mr. Mehta 's contention that by the Presidential Order only a notional merger for the limited purpose of providing the Time Keepers with promotional avenues was intended and not actual merger so as to deprive the Time Keepers of their distinct identity, it is necessary to realise that the sole purpose of the exercise 229 indisputably was to make career advancement possible for the Time Keepers.
At the time of issuance of the Presidential Order there were only two layers in the Time Keeping Department of the establishment.
The base level which was fairly large comprised Junior Time Keepers and above them were Senior Time Keepers.
Since there were only two posts of Senior Times Keepers, the prospects of promotion for Junior Time Keepers were very dim.
As there was no further promotional avenue for the Senior Times Keepers, the mobility was restricted and they too suffered on that account.
There was, therefore, large scale stagnation and with a view to overcoming the same the question of merger of the Time Keepers ' cadre with the clerical cadre was examined.
On the same being found feasible, the Presidential Order came to be issued.
The High Court realised that if the Time Keepers do not gather sufficient exprience of administrative work they would not be able to handle responsible work at higher levels in the heierarchy and hence their movement to the ministerial posts is absolutely necessary.
But the High Court resolved this situation by obtaining a statement from the incumbent that he would not claim the benefit of promotion to which he may otherwise be entitled by reason of the merger policy.
Would this advance the policy of merger or fulfil the purpose of opening avenues of promotion for the Time Keepers? If the mobility from Time Keepers ' post to the clerical post is halted on account of the former 's unwillingness to move to the clerical side to gain experience and equip himself to discharge higher responsibilities in future merely to retain the monetary benefit accruing from overtime wages and bonus, it is difficult to understand how even the limited objective of providing promotional avenues to Time Keepers would be satisfied.
And it is all the more difficult to understand how those incumbents who entered the Time Keepers Department after the Presidential Order became effective can claim that they have a vested right to continue in the department because they would suffer a monetary loss if they are transferred to the clerical posts.
The list Annexure C to the appeals would show that except for those at serial Nos.
1 to 3, 8 and 12, the rest of the incumbents had either joined as LDC in the Time Keeping Department after the Presidential Order became effective or had been transferred to that department from the other administrative departments where they were working as LDCs.
It is difficult to understand how those who entered that department after the merger via the other administrative branches of the establishment can refuse to go back on the specious plea that they would suffer a financial loss.
They can have no right to the post in the Time Keeping Department.
So long as they are posted there and are discharging the functions of the Keeper they would be entitled to overtime wages 230 and bonus but on that plea they cannot contend that they are not transferable to the ministerial posts on the establishments.
We have,therefore, no hesitation in concluding that those who joined the Time Keeping Department after the Presidential Order became effective,either by a direct posting in that department as LDC or on transfer to that department,have no right to continue in that department merely because their would entail economic loss since they are governed by the merger scheme which had become operative before their entry in that department.
, They were borne on the common cadreand werenever members of the earlier Time Keeper 's cadre.
But the case of those Time Keepers who were serving as such in the Time Keeping Department,such as, the incumbents at serial Nos.1 to 3, 8 and 12 (S.P.Jadhav,V.S.Khot,P.J. Rodrigues, B.J.Dhamba and V.S. Shinde), must be viewed differently.
They belonged to a separate cadre of Time Keepers at the date of the issuance of the Presidential Order.
Their terms and conditions of service couldnot be altered,varied ormodified to their detriment without giving them an opportunity to exercise their option.
If their transfer outside the Time Keeping Department becomes possible by the merger of their cadre with the clerical cadre but the same entails civil consequences in the form of loss of overtime wages and bonus, justice demands that they must be given an option to choose which course is beneficial to them and if they decide or opt in favour of the status quo they must be allowed to continue as Time Keepers and not be transferred outside that department without their consent, because to do so would render the scheme vulnerable unless the department agrees to make good the economic loss suffered on transfer.
Therefore,so far as those Time Keepers who were serving in the Time keeping Department on and before the date of the implementation of the Presidential Order and who continue to serve in the same department are concerned, the department should give them an option if they are proposed to be transferred outside that department or the department should undertake to make good the economic loss which they are likely to suffer on transfer.
Such a reading of the Presidential Order is permissible on the plain language of theorder and saves it from being rendered vulnerable.
See: The State of Kerala vs M.K.Krishnan Nair & Ors.
, ; at 571.
In the result we allow the appeals partly insofar as they concern the aforenamed five persons to the extent indicated above and dismiss them in respect of the remaining appellants.
Since the writ petitioners 231 are not shown to belong to the category of employees who were borne on the cadre of Time Keepers and were actually working in the Time Keeping Department on or before the issuance of the Presidential Order, their writ petition fails and is dismissed.
There will,however, be no order as to costs in the appeals as well as the writ petition.
| IN-Abs | The appellants and Writ Petitioners are serving the Time Keeping Department of the Naval Dockyard, Bombay under the control of the Western Naval Command.
With a view to removing the stagnation in the cadre of Time Keepers for lack of promotion avenues, the Government of India, Ministry of Defence, by its letter dated 14.9.1966 addressed to the Chief Naval Staff conveyed the sanction of the President to the merger of the Time Keepers Cadre with the Clerical Cadre in all Naval establishments.
Consequent to this merger the Jr. Time Keepers were to be re designated as Lower Division Clerks and Sr.
Time Keepers as Upper Division Clerks.
A few days thereafter the office of the Rear Admiral, Western Naval Command, issued a letter dated 5.12.1966 which reads as under: ". . . . . . . 2.
This merger is intended only to give promotion to the Time Keepers along with the LDC/UDC.
Their duties, terms and conditions 220 of Services will remain the same and their hours of work will also continue to be 45 in a week.
Consequent upon the issue of this order and in order to distinguish them from the UDC/LDC and UDC(s)/LDC(s) the suffix "T" will be added after their designation.
As per their conditions of service the employees serving in the Time keeping Department were entitled to the benefit of over time and productivity linked bonus but those belonging to the clerical cadre working in the Administrative Offices of the Dockyard were not entitled to these benefits.
One Thoppil Ramakrishnan on being transferred in August 1980 as UDC(T) in the Spare Parts Distribution Centre, challenged his transfer by a Writ Petition in the High Court of Bombay wherein he contended that as he was initially appointed Jr. Time Keeper and promoted as UDC(T) in 1967 he belonged to a special cadre and could not be transferred to the general cadre as that would entail loss of benefit of over time and bonus.
The High Court treating the letter dated 5th December, 1966 as merely clarificatory, held that there was no complete merger of the two cadres and on the statement of the counsel for the petitioner that the petitioner will not claim the benefit of promotion in the clerical cadre, allowed the writ petition quashing the transfer order.
Realising the situation created by its letter of 5th December, 1966 the western Naval Command cancelled the said letter and consequently inter se transfer became possible.
Thereafter, some employees in the Time Keeping Department were transfered by orders dated 17.4.1985 and 5.10.1985.
The affected employees filed a Writ Petitions in the High Court which were later transfered to the Central Administrative Tribunal.
The Tribunal came to the conclusion that after the cancellation of the Order dated 5.12.1966, the field was held by the Presidential Order dated 14.9.1966, that under the merger Scheme envisaged by the said order the employees in the Time Keeping Department no longer belonged to a separate Cadre and as such the Authorities were entitled to transfer them to other ministerial branches.
The Petitions were accordingly dismissed by a common judgment dated 9th October, 1989.
This judgment is assailed by the concerned employees in the appeals before this court.
One Writ Petition has also been filed by some other 221 employees apprehending similar transfers.
Allowing the appeals partly insofar as they relate to five employees who belonged to the separate cadre of the Time Keeping Department at the date of issuance of the Presidential Order and dismissing the same in respect of the remaining appellants and also dismissing the Writ Petition, this Court, HELD: The letter of 14th September, 1966 clearly refers to the Presidential sanction "to the merger of the cadre of Time Keepers with the clerical cadre in all Naval establishments".
Consequent on this merger, the Junior Time Keepers were to be redesignated as Lower Division Clerks and the Senior Time Keepers as Upper Division Clerks.
There is nothing in this letter to convey that they were to retain their identity as Time Keepers.[227E] The subsequent order of 5th December, 1966 issued by the Western Naval Command could not alter this Presidential Order.
If that subsequent order was found to be inconsistent with the Presidential Order, it had to ignored for the simple reason that the Officers of the Naval establishment were not competent to alter, very or modify a Presidential Order.
[228B] It is difficult to understand how those who entered the Time Keeping Department after the merger order, can refuse to go on transfer on the plea that they would suffer a financial loss.
They can have no right to the post in the Time Keeping Department.
So long as they are there and are discharging the functions of the Time Keeper, they would be entitled to the special benefit of over time and bonus but on that plea they cannot contend that they are not transferable to the ministerial posts.
We have, therefore, no hesitation in concludingthat those who joined the Time Keeping Department after the Presidential Order became effective, have no right to continue in that department merely because their transfer would entail economic loss since they are governed by the merger scheme which had become operative before their entry in that department.
They were borne on the common cadre and were never members of the original Time Keepers Cadre.
[229G 230B] So far as those Time Keepers who were serving in the Time Keeping Department on and before the date of implementation of the Presidential Order and who continue to serve in the same department are concerned, the department should give them an option if they are proposed to be transferred outside that department or the depart 222 ment should undertake to make good the economic loss which they are likely to suffer on transfer.
[230F G] The State of Kerala vs M.K. Krishnan Nair & Ors., , referred to.
|
ivil Appeal No. 1277 of 1979.
From the Judgment and Decree dated 4.8.1977 of the Kerala High Court in A. section No. 640 of 1971.
G. Viswanath lyer, F.S. Nariman, K. Parasaran, K.R. Nambiar, P. K. Pillai, section Balakrishnan, section Ganesh, Joy Joseph, Mrs. A.K. Verma, section Sukumaran for J.B.D. & Co., Baby Krishnan and V.J Francis for the appearing parties.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The dispute before us is regarding the ownership rights over the timber clear felled from about 150 acres of jungle area in Kallar Valley and the right to transport the timber so felled from the said area.
The Kallar Valley area forms part of the tract of land originally known as Kanan Devan Anchanatu Mala in the erstwhile Travancore territory of Kerala State.
This area is generally called the Kanan Devan Hills concession (hereinafter called the 'Concession Area ') ' The Poonjar Rajs, held free hold proprietary rights in the Concession Area.
Originally the Raja was exercising sovereign rights but later on he came under the suzerainty of Travancore State.
The Poonjar Rajsa, by a deed dated July 11, 1877 (hereinafter called 'First Concession '), conveyed the concession area with all the hills and forests therein to one J.D. Munro for cash consideration of Rs.5,000 and a deferred perpetual annual payment of Rs 3,000 from 1884 onwards.
Thereafter on July 26, 1879 a second document was executed between the same parties (hereinafter called 'Second Concession ').
The terms of the first concession were reiterated enuring to Munro, his heirs, successors and assigns absolute right for ever to make all kinds of cultivations and improvements on the Concession Area.
The grant of rights to Munro by the First Concession was ratified by the Travancore Government by a deed of ratification dated November 28, 1878.
Munro assigned the Concession Area to The North Travancore Land Planting and Agricultural Society Limited by a deed dated December 8, 1879.
Thereafter an agreement was executed between the Travancore Government and the Society on August 2, 1886.
264 By virtue of the agreement dated September 18, 1889 between the Poonjar Raja and the Travancore Government and the proclamation of the Maharaja of Travancore dated August 24, 1899 the territory comprising the Kanan Devan Hills including the Concession Area was declared part of the Travancore State.
There were various transfers in respect of the Concession Area but finally by a deed dated July 16, 1900, the Concession Area came to be vested in the Kanan Devan Hills Produce Company Limited, (hereinafter called 'the company ').
In and around May 1963 the company clear felled about 150 acres in the Concession Area for cultivation.
The Company applied to the State Government for grant of free passes to transport the timber from the Concession Area.
The State Government by an order dated November 25, 1966 informed the company that it could not take away timber outside the limits of the Concession Area except in accordance with the Rules of the forest department and on payment of levy in the shape of Kuttikanam.
According to the Government in terms of the deeds of conveyance/ratification the company was liable to pay Kuttikanam in respect of the timber taken out of the Concession Area.
The company filed a suit in the year 1968 in the Court of Subordinate Judge, Kottayam against the State of Kerala and its officers.
In the suit, the company prayed for the following reliefs: (a) A declaration that the plaintiff company has full and unqualified ownership and title over, and right of removal of the said timber from the Concession Area; (b) Declaration that the State has no right to claim seigniorage, Kuttikanam or any other payment in respect of the said timber; (c) A mandatory injunction directing the defendants to grant the necessary free passes for the free transit of the timber outside the Concession Area; (d) Prohibitory injunction restraining the defendants from taking any steps under the order dated 25.11.1966.
The State Government resisted the suit and controverted the interpretation placed by the company on the deeds of conveyance/ ratification.
According to the State the company was only a lessee of the Concession Area and in terms of the deeds of conveyance/ratification the State Government had the absolute right over the trees and 265 timber in the Concession Area.
The company only acquired the right to use and remove the timber subject to the restrictions imposed in the said documents.
It was further contended by the State Government that the title and ownership in the trees and timber in the Concession area always remained with the State Government and the company could only take the timber outside the limits of the Concession Area in accordance with the rules framed by the State Government and on payment of Kuttikanam.
The Trial Court in a detailed and well reasoned judgment dismissed the suit of the company.
The Trial Court on the interpretation of First Concession (Exhibit P 1), Second Concession (Exhibit P 2), deed of ratification (Exhibit P 62) and the Government agreement with the Society dated August 2, 1866 (Exhibit P 64) came to the conclusion that the company did not acquire absolute proprietary rights over the Concession Area or the trees and timber in the said area.
It was held that the Poonjar Chief had only conveyed heritable and transferable possessory rights over the Concession area to the grantee.
It was also held that absolute rights over the trees and timber in the Concession Area did not pass to the grantee and it had only the right to use and remove timber subject to the restrictions imposed in the deeds of conveyance/ratification.
The Court further held that the relevant rules framed under the Travancore Forest Act, 1952 for levy of Kuttikanam were applicable to the timber transported from the Concession Area.
The contention of the company that it was entitled to free passes for transportation of timber outside the Concession Area under the Transit Rules was rejected.
The suit of the company was thus dismissed with costs.
The company went up in appeal before the High Court.
It was contended that the Trial Court misinterpreted the documents P 1, P 2, P 62 and P 64.
It was contended that the Poonjar Raja had conveyed absolute possession to the grantee to be enjoyed perpetually with heritable and transferable right and it ought to have been held that the natural consequence of such a conveyance was to grant the company absolute title to the trees standing on the area so conveyed.
It was argued before the High Court that the State Government had no right over the trees and the timber within the Concession Area.
Before adverting to the various contentions raised by the parties before it the High Court indicated the approach it adopted to the questions involved in the case in the following words: 266 "For resolving the real controversy in the case we do not think there should be an enquiry into the question whether the plaintiff company is the absolute owner of the Concession Area as alleged by them or the company is only a lessee as contended by the defendants.
Nor do we think any decision is necessary here as to whether at the time, the agreement and proclamation of 1899 came into existence, the Poonjar Chief had vested in him any proprietary rights over the Concession Area which he could pass to the government.
We also do not think we should make a general enquiry as to the nature and extent of the rights conveyed and secured by the First Poonjar Concession of 11.7.1877 and second Poonjar Concession of 26.7.1879 (Exs.
P 1 and P2).
We can well proceed in the matter on the basis, as stated by the court below, that absolute rights over the Concession Area had not been conveyed under Exs.
P 1 and P 2, that by virtue of the transactions the plaintiff had only absolute possession with heritable and transferable interest and the right to enjoy the land subject to the terms and conditions declared and defined in the Ratifica tion Deed and agreement of modification, namely Exs.
P 62 and P 64.
The question is what is the plaintiff 's right over the timber and tree growth in the area on the basis of the grant under Exs.
P 1 and P 2, wherein it gets wide rights in regard to the jungles and forest in the Concession Area unqualified rights to clear the land and improve the source.
It is no doubt true that the rights which the plaintiff has acquired as per the grant of the Poonjar Raja are subject to the terms and conditions imposed by the Sovereign power of the Maharaja under exhibit P 62 and P 64.
In short the question for a decision in the appeal will revolve round the interpretation of the relevant clauses in these documents.
" The High Court then considered the contents of the documents P 62 and P 64 and came to the conclusion that the company had full rights over the timber clear felled from the Concession Area and it had right of removal of the timber with the necessary free passes issued under the timber transit rules.
It was further held that the State of Kerala had no right or claim for the seigniorage or Kuttikanam or any other payment in respect of the said timber.
The High Court allowed the appeal of the company and set aside the judgment and decree of the Trial Court.
This appeal via special leave petition is against the judgment of the High Court.
267 The High Court proceeded on the basis that absolute rights over the Concession Area had not been conveyed under the documents of conveyance/ratification and the right to enjoy the land was subject to the terms and conditions declared in the ratification deed P 62 and the agreement of modification P 64.
We agree with the approach of the High Court.
The question, therefore, is what are the company 's rights over the timber and the tree growth in the Concession Area.
This takes us to clause 5 of P 62 and clause 7 of P 64 which are relevant.
Clause fifth of the ratification dated November 28, 1878 Exhibit P 62 is as under: "Fifth: The grantee can appropriate to his own use within the limits of the grant all timber except the following and such as may hereafter be reserved, viz., Teak, Coal teak, Black wood, Aboney, Karinthali Sandalwood.
Should he carry any timber without the limits of the grant it will be subject to the payment of Kuttikanam or customs duty or both as the case may be in the same way as timber ordinarily felled.
In the case of the excepted timber the grantee is required to pay seigniorage according to the undermentioned scale. .
The grantee is bound to deliver to the Poonjar Chief, to enable him to make over to the Sirkar, all ivory, cardamoms and other royalties produced in the land and all captured elephants and he will be paid by the said Chief according to agreement with him the regulated price for the articles of produce and the regulated reward for the elephants.
Clause 7 of the agreement dated August 2, 1886 Exhibit P 64 is as under: "7.
The society, its successors and assigns may use and appropriate to its own use within the limits of the said tract of land all timber except the following and such as may hereafter be reserved, viz., Teak, Coak teak, Black wood, Aboney, Karinthali and Sandalwood.
But such society, its successors and assigns shall not fell any timber beyond what is necessary for clearing the ground for cultivation and for building, furniture and machinery within the limits of the grant.
No unworked timber or articles manufactured therefrom shall be carried outside the limits of the grant except in conformity with the rules of the forest and 268 customs department for the time being in force.
In the case of the excepted timber the society for itself, its successors and assigns agrees to pay seigniorage according to the undermentioned scale. . .
The society for itself, its successors and assigns agrees to deliver to the said Poonjar Raja or Chief to enable him to make over the same to the government of Travancore, all ivory and cardamoms and other royalties. . captured elephants. .
Mr. Parasaran, learned counsel appearing for the respondent company contended that in P 62 it was provided that the grantee could not carry timber beyond the limits of the grant without payment of Kuttikanam but by the time the agreement P 64 was executed in the year 1886 Kuttikanam had been abolished and as such there was no provision for the payment of Kuttikanam in the document P 64.
Clause 7 of P 64 reproduced above makes it clear that the respondent company may use and appropriate to its own use within the limits of the Concession Area all timber except to the extent mentioned therein.
It was further provided that. . . society, its successors and assigns shall not fell any timber beyond what is necessary for clearing the ground for cultivation and for building, furniture and machinery within the limits of the grant.
No unworked timber or articles manufactured therefrom shall be carried outside the limits of the grant except in conformity with the rules of the forest and customs department for the time being in force".
It is thus clear that the company has no right under the said clause to carry the unworked timber beyond the limits of the grant.
The company could not fell timber beyond what was necessary for clearing the ground for cultivation and for building, furniture and machinery within the limits of the grant.
Clause 7 clearly indicates that the grantee has no absolute right of ownership over the tree growth and the timber within the Concession Area.
The ownership remains with the Government and the grantee has been given the right to fell the trees for clearing the ground for cultivation and to use the timber for specified purposes within the limits of the grant.
An identical clause in another grant entered into by the Travancore Government came for consideration before a Full Bench of the Kerala High Court in George A Leslie vs State of Kerala, [ K. K. Mathew, J. (as the learned Judge then was) interpreted the clause as under: "We think that if title to the reserved trees passed to the grantees, a provision of this nature would have been 269 quite unnecessary.
There was no purpose in stating that the grantees will be free to appropriate the reserved trees for consumption within the limits of the grant, if title to the trees passed to the grantees; the provision is a clear indication that the grantees were allowed to cut and appropriate the reserved trees for consumption within the limits of the grant as a matter of concession.
We agree with the interpretation given to the clause by Mathew, J. and hold that the respondent company did not acquire absolute proprietary rights over the Concession Area or the trees and the timber therein.
The company acquired the right to fell the trees and use the timber subject to the restrictions imposed in clause 7 of P 64.
Since the respondent company has no right to remove the timber beyond the limits of the Concession Area, the State Government was justified in refusing to permit free transportation of timber from the said area.
We do not agree with Mr. Parasaran that Kuttikanam having been abolished in the year 1884 the respondent company was not liable to pay Kuttikanam while transporting the timber from within the Concession Area.
In Leslie vs State of Kerala (supra) the term "Kuttikanam" was explained as under: "In the Malayalam and English Dictionary by Rev. H. Gundert D. Ph. page 278, 'Kuttikanam ' is defined as meaning 'the price of timber; fee cliambable by the owner for every tree cut down by the renter '.
In 'The Manual of Malabar Law ' by Kadaloor Ramachandra lyer, Chapter, VII, page 44, it is stated: 'Kuttikanam is a mortgage of forests by which the landlord assigns on mortgage a tract of forest land receiving a stipulated fee for every trees felled by the mortgagee, the entire number of the trees, to be cut down and the period within which they are to be felled being expressly fixed in the karar entered into between the parties. .
In the Glossary attached to the Land Revenue Manual (1916) Vol.
IV, at page 883, the word 'Kutti kanam ' is said to mean 'a fee paid to the Sirkar for felling trees other than royal trees and tax paying trees '.
In the 270 Glossary of Administrative Terms, English Malayalam, by the Official Language Committee, at page 302, 'seigniorage ' is defined as meaning. .
We do not think that 'Kuttikanam ' is either a fee or tax.
A tax or fee is levied in the exercise of sovereign power.
We think that in the context 'Kuttikanam ' means the Government 's share of the value of the reserved trees.
" It was further held by Mathew, J. that Kuttikanam being the Government 's share of the value of the trees owned by the Government it has the power to fix the value of the trees.
We agree with the reasoning and conclusions reached by Mathew J. Since the ownership cover the tree growth and timber in Concession area vests with the Government it has a right to impose Kuttikanam on the removal of the trees from within the Concession area.
We may examine the justification for levying Kuttikanam from another angle.
Clause 7 of P 64 states that no unworked timber or articles manufactured therefrom shall be carried outside the limits of the grant except in conformity with the rules of the forest department for the time being in force.
The Government of Kerala, in exercise of its rule making power under Section 93 of the Travancore Cochin Forest Act, 1951, framed rules regulating the levy of Kuttikanam on trees, standing on Government land by a notification dated July 9, 1958.
The said rules are reproduced hereinafter.
"TRAVANCORE COCHIN FOREST ACT, 1951 (111 OF 1952) RULES REGULATING THE LEVY OF KUTTIKANAM ON TREES IN GOVERNMENT LANDS.
(Section 93(2)(d)(dd) and (e) Notification No. 14824/58 3/Agri./F.(B) 3 dated 9th July 1958 published in the Gazette dated 15th July 1958 Part In exercise of the powers conferred by sub section (2)(d)(dd) and (e) of Section 93 of the Travancore Cochin Forest Act, 1951 (Act Ill of 1952) the Government of Kerala hereby make the following rules, regulating the levy of Kuttikanam on trees, standing on Government lands, namely: 271 1.
All trees standing on land temporarily or permanently assigned, the right of Government over which has been expressly reserved in the deed of grant or assignment of such land, shall be the absolute property of Government.
It shall not be lawful to fell, lop, cut or maim or otherwise maltreat any tree which is the property of Government without proper sanction in writing granted by an officer of the Forest Department not below the rank of an Assistant Conservator: Provided that in cases where the holder of the land is allowed under the title deed to lop or fell any such tree, such lopping or felling may be done by such holder in the manner and subject to such conditions and payment as may be specified in the title deed in that behalf.
Any lopping or felling of such trees otherwise than in accordance with the conditions and limitation specified in the deed of grant shall be unlawful.
Government may, in the absence of any provision to the contrary in the title deed, sanction the sale of timber which is the property of Government to the holder of the land on which such timber is standing, on payment of Kuttikanam or Seigniorage or such other rates as may be specified by Government in each individual case.
In cases where the title deed specified the rate at which the timber will be sold to the holder of the land, such rates only will be levied.
Explanation: 'Kuttikanam ' means the seigniorage rate that may be in force in the Forest Department from time to time and notified by Government.
The Collector of each District shall forward to the Chief Conservator of Forests a statement showing the full details of the trees standing on such lands at the disposal of Government as may hereafter be granted for permanent cultivation, under the Land Assignment Act and the rules framed thereunder.
On receipt of such statement, the Chief Conservator of Forests will take appropriate action for the disposal of such tree growth within the period allowed under Section 99 of the Forest Act.
272 The Travancore Cochin Forest Act 1951 was repealed by the Kerala Forest Act, 1961 but Section 85(3) of the said Act saves the rules framed under the repealed Act.
It is thus obvious that the rules reproduced above were holding the field at the relevant time.
The trial Judge primarily relied on these rules for holding that the Government was justified in demanding Kuttikanam from the respondent company.
The High Court, however, did not take into consideration these rules while interpreting clause 7 of Exhibit P 64.
We agree with the findings of the trial court to the effect that the above quoted rules read with clause 7 of Exhibit P 64 empowers the State Government to levy and demand Kuttikanam from the respondent company in respect of timber taken out of the limits of the Concession area.
Mr. Parasaran invited our attention to a letter dated May 21, 1932 (Exhibit P 4) from Chief Secretary to Government to the General Manager of the respondent company.
The letter reads as under: "With reference to your letter dated the 25th January, 1928 regarding the payment of seigniorage on reserved trees felled from the K.D.H.P Company 's Concession Area, I have the honour to inform you that Government accept your view that no seigniorage is due from the Company on trees other than the Royal Trees specifically mentioned in Clause 7 of the Agreement and sanction accordingly." Mr. Parasan contended that the State Government interpreted clause 7 of P 64 to mean that no seigniorage (Kuttikanam) was due from the company on trees other than the Royal Trees specified in the said clause.
He argued that in the face of the Government decision in the above letter the Government could not demand Kuttikanam from the respondent company in respect of the non Royal Trees removed from within the limits of the Concession Area.
We do not agree with the contention of the learned counsel.
The letter re produced above refers to the letter dated January 25, 1928 (exhibit P 3) written by the General Manager of the company to the Government.
The letter P l states as under: "The question arose through the Forest Department claiming seigniorage on certain species of timber, used by this Company within the concession area for building purposes, and which have been reserved under the Forest Regulation.
273 The letter also states as under: A ". .
I think it advisable that the whole question of Timber Rights in the Concession should be considered and settled if possible.
" It is no doubt correct that while focusing the controversy in respect of the timber used by the company within the Concession Area the General Manager dealt with the larger question of timber rights in the Concession Area but reading the two letters P 3 and P 4 together the only conclusion which could be reached is that the letter P 4 was with respect to the use of timber by the company within the Concession Area.
The letter P 4 cannot be read to mean that no Kuttikanam was leviable on the timber removed by the respondent company outside the Concession Area.
In any case the wording of clause 7 of P 64 is clear and unambiguous.
The Government letter P 4 is to be read in the light of clear phraseology of clause 7 and not the vice versa.
We allow the appeal and set aside the judgment of the High Court.
We uphold and approve the judgment and findings of the Trial Court.
The suit of the respondent plaintiff is dismissed with costs which we quantify as Rs.5,000 R. N. J. Appeal allowed.
| IN-Abs | The dispute between the parties is regarding the ownership rights and right of removal of timber clear felled from 150 acres of jungle area in Kallar Valley in the erstwhile Travancore territory of Kerala State commonly called the Kanan Devan Hills Concession area over which the Poonjar Raja held free hold proprietary rights under the suzerainty of Travancore State.
By a deed dated July 11, 1877 called the 'First Concession ' (Exhibit P 1) the Raja conveyed the concession area with all the Hills and Forests to one J.D. Munro for a certain cash consideration and a deferred perpetual annual payment from 1884 onwards.
This was followed by another deed (exhibit P 2) between the same parties reiterating all the original terms.
This grant to Munro was ratified by the Travancore Government by a deed dated November 28, 1878 (Exhibit P 62).
Munro in turn assigned the area to the North Travan core Land Planting & Agricultural Society Ltd. Later an agreement was executed between the Travancore Government and the Society in August 1886 (Exhibit P 64).
In 1899 the entire territory comprising the Kanan Devan Hills including the concession area was declared part of Travancore State.
After several transfers the concession area finally came to be vested in the Respondent Company in virtue of a Deed dated July 16, 1900.
Somewhere in 1963 the Respondent Company clear felled about 150 acres in the concession area for cultivation and sought permission from the State Government for grant of free passes to carry the felled timber out of the concession area.
The Government by order dated 25.11.1966 informed the company that it could not take out the timber 262 from the concession area without payment of Kuttikanamin terms of the deeds of conveyance/ratification.
Thereupon the company filed a suit against the State praying inter alia for a declaration claiming full ownership, title and right to remove the timber without payment of Kuttikanam, a mandatory injunction directing the defendants to grant free passes for removal of the timber and a prohibitory injunction to restrain it from taking any further steps under its order dated 25.11.1966.
On the interpretation of Exhibits P 1, P 2, P 62 and P 64 the trial court came to the findings that the company did not acquire absolute proprietary rights over the concession area or the trees and timber.
It also held that the Government was justified in demanding Kuttikanam in terms of the Rules framed under the Travancore Cochin Forest Act, 1951.
Accordingly the suit was dismissed.
The Company preferred an appeal to the High Court which was allowed and the decree of the Trial Court set aside.
The decision of the High Court has been challenged by the State in this appeal by way of special leave.
This court while allowing the appeal and setting aside the judgment of the High Court, HELD: The respondent company did not acquire absolute proprietary rights over the Concession Area or the trees and the timber therein.
The company only acquired the right to fell the trees and use the timber subject to the restrictions imposed in clause 7 of the agreement Exhibit P 64.
Since the respondent company has no right to remove the timber beyond the limits of the Concession Area, the State Government was justified in refusing to permit free transportation of timber from the said area.
[269C] Clause 7 states that no unworked timber or articles manufactured therefrom shall be carried outside the limits of the grant except in conformity with the rules of the forest department for the time being in force.
[270D] The Government of Kerala, in exercise of its rule making power under Section 93 of the Travancore Cochin Forest Act, 1951 had by a notification dated July 9, 1958 framed rules regulating the levy of Kuttikanam on trees standing on Government land.
[270E] The rules were holding the field at the relevant time and the Government was justified in demanding Kuttikanam from the Company.
[272A B] 263
|
minal Appeal No. 118 of 1958.
Appeal from the judgment and order dated May 14, 1958, of the Allahabad High Court in Criminal Revision No. 1594 of 1956, arising out of the judgment and order of the Court of Additional Sessions Judge at Kanpur in Criminal Revision No. 13 of 1956.
C. P. Lal, for the appellant.
640 Gopi Nath Dikshit, for the respondent.
November 24.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
The facts leading up to this appeal are these: On April 26, 1954, the appellant was arrested by the Sisamau Police for offences under sections 420, 482,483, 485 and 486 of the Indian Penal Code on the allegation that he was in possession of 25 packets of Chand Chhap Biri, which were alleged to bear counterfeit trade marks.
On May 26, 1954, one Harish Chandra Jain acting on behalf of Messrs. Mohan Lal Hargovind Das filed a complaint charging that the appellant was in possession of counterfeit bidis, wrappers and labels and praying that a case under the sections above mentioned be registered and investigated.
On that, the Magistrate passed the following order : " section O. Sisamau.
Please investigate and register a case.
" After investigation, the police submitted their chargesheet on September 30, 1954, and summons was ordered to the appellant on July 22, 1955.
On September 17, 1955, the appellant filed an application before the Magistrate wherein he raised a preliminary objection that the proceedings were barred by section 15 of the (4 of 1889), hereinafter referred to as the Act.
That section provides : " No such prosecution as is mentioned in the last foregoing section shall be commenced after the expiration of three years next after the commission of the offence, or one year after the first discovery thereof by the prosecutor, whichever expiration first happens.
" The contention of the appellant was that the offence was discovered on April 26, 1954, when he was arrested and the goods seized, and that, in consequence, the issue of process on July 22, 1955, was beyond the period of one year provided under section 15 of the Act, and that the proceedings should therefore be quashed as barred by limitation.
The Magistrate rejected this contention, and a Revision Petition preferred against this order to the Additional Sessions Judge, Kanpur, 641 shared the same fate.
The appellant then filed a further Revision Petition to the High Court of Allahabad, being Criminal Revision No. 1594 of 1956, and the same was heard along with other similar Revision Petitions by a Bench consisting of James and Takru, JJ.
By their judgment dated May 13, 1958, the learned Judges held that the prosecution commenced when the complaint was presented on May 26, 1954, and that as the discovery was on April 26, 1954, the proceedings were within time under section 15 of the Act.
In view of the importance of the question raised, they granted leave to appeal to this Court under article 134 (1)(c) of the Constitution, and that is how the matter comes before us.
The point for decision is, when does a prosecution commence for purposes of section 15 of the Act, whether on the date when the complaint is preferred, or when the process is issued thereon? The word "prosecution " is not defined in the Act, nor are there any provisions therein bearing on this question.
Now, under the law and apart from statutory prescriptions, a prosecution commences, where it is at the instance of a private prosecutor, when the complaint is preferred.
The position is thus stated in Halsbury 's Laws of England, Vol.
X, 3rd Edn., p. 340, para.
630: " Criminal prosecutions, except where there are statutory provisions to the contrary, may be commenced at any time after the commission of the offence.
A prosecution is commenced, when an information is laid before a justice, or, if there is no information, when the accused is brought before a justice to answer the charge, or, if there is no preliminary examination before a justice, when an indictment is preferred.
" It is further stated there that different statutes provide for various periods of limitation within which a prose cution could be commenced after the commission of the offence, and that three years is the period provided for an offence under the Merchandise Marks, Act, 1887, which corresponds to the .
It is therefore settled law that unless 642 there is something to the contrary in the statute, when a private complaint is presented it is the date of pre sentation thereof that marks the commencement of the prosecution.
Now, what is the nature of the prosecution under section 15 of the Act ? It is relevant in this connection to refer to sections 13 and 14, which run as follows: section 13: ',In the case of goods brought into India ' by sea, evidence of the port of shipment shall, in a prosecution for an offence against this Act or section 18 of the , as amended by this Act, be prima facie evidence of the place or country in which the goods were made or produced.
" section 14(1): " On any such prosecution as is mentioned in the last foregoing section or on any prosecution for an offence against any of the sections of the Indian Penal Code, as amended by this Act, which relate to trade, property and other marks, the Court may order costs to be paid to the defendant by the prosecutor or to the prosecutor by the defendant, having regard to the information given by and the conduct of the defendant and prosecutor respectively.
(2) Such costs shall, on application to the Court, be recoverable as if they were fine.
" The object of the above provisions is to protect the rights of persons who manufacture and sell goods with distinct trade marks against invasion by other persons passing off their goods fraudulently and with counterfeit trade marks as those of the manufacturers.
Normally, the remedy for such infringement will be by action in Civil Courts.
But in view of the delay which is incidental to civil proceedings and the great injustice which might result if the rights of manufacturers are not promptly protected, the law gives them the right to take the matter before the Criminal Courts, and prosecute the offenders, so as to enable them effectively ,and speedily to vindicate their rights.
It is for this, reason that a short period of limitation is provided heir preferring a complaint under a. 15 of the and there is also a special provision for award of costs of the proceedings to or by the complainant.
in Ruppell vs Ponnuswami Tewan (1), the question &rose whether a prosecution launched by the complainant in 1898 in respect of goods sold and marked with what was alleged to be, a counterfeit trade mark in 1893 was in time.
In deciding that it was a barred under section 15 of the Act, the Court observed as follows: Section 15 of the Merchandise Mark,% Act IV of 1889, enacts that no prosecution such as the present shall be commenced after the expiration of one year after the first discovery of the offence by the prosecutor.
The reason for this limitation is clear.
Ordinarily the infringement of a trade.
mark is rather a civil than a criminal wrong, but as civil proceedings may require much time and expenditure to bring them to a conclusion, the Legislature, in its anxiety to protect traders, has allowed resort to the criminal courts to provide a speedy remedy in cases where the aggrieved party is diligent and does not by his conduct show that the case.
is not one of urgency.
if, therefore, the person aggrieved fails to resort to the criminal courts within a year of the offence coming to his knowledge, the law assumes that the case is not one of urgency, and it leaves him to his civil remedy by an action for injunction.
" It will be noticed that the complainant is required to resort to the Court within one year of the discovery of the offence if he is to have the benefit of proceeding under the Act.
That means that if the complaint is presented within one year of such discovery, the requirements of section 15 are satisfied.
The period of limitation, it should be remembered, is intended to operate against the complainant and to ensure ' diligence on his part in prosecuting his rights, and not against the Court.
Now, it will defeat the object of the enactment and de Drive traders of the protection which the law intended to give them, if we were to hold that unless process is issued on their complaint within one year of the discovery of the offence, it should be thrown out.
It will be an unfortunate state of the law if the trader whose rights had been infringed and who takes lip the matter promptly before the Criminal (1) Mad. 488.
644 Court is, nevertheless, denied redress owing to the delay in the issue of process which occurs in Court.
The appellant relies on certain decisions as showing that.
the prosecution must be held to commence only when process is issued and not when complaint is filed.
In Sheik Meeran Sahib vs Ratnavelu Mudali (1), De Rozario vs Gulab Chand Anundjee (2) and Golap Jan vs Bholanath Khettry (3) cited by the appellant, the question was whether an action for damages for malicious prosecution would lie when the complaint was dismissed without notice to the plaintiff.
It was held that the plaintiff could not be held to have been prosecuted unless process was issued to him and that where the complaint was dismissed without such process being issued, there was no prosecution and no action for damages in respect of such prosecution would lie.
These decisions have no bearing on the present question.
In suits for damages for malicious prosecution, one of the points to be decided is, whether the plaintiff was, in fact, prosecuted; and if he was, no question arises as to when the prosecution commenced.
On the other hand, the point for decision in a prosecution under the Act is, not whether there was a prosecution but when it was instituted ; and a question as to whether there was prosecution or not would be wholly foreign to it.
Indeed, in an action for damages for malicious prosecution, when it is held that there was prosecution, that could properly be held to have commenced when the complaint was filed and not when the process was issued.
Vide the observations of Woodroffe, J., in the course of the argument in Golap Jan vs Bholanath Khettry (3) at p. 884.
The decisions in Sheik Meeran Sahib vs Ratnavelu Mudali (1), De Rozario vs Gulab Chand Anundjee (2) and Golap Jan vs Bholanath Khettry (3) therefore do not throw any light on the matter now under consideration.
It may be that these decisions may have to be reconsidered in the light of the recent decision of the Privy Council in Mohamed Amin vs Jogendra Kumar Bannerjee (4), wherein it was observed: (1) Mad.
181 (2) Cal.
(3) Cal.
(4) , 331. 645 " The test is not whether the criminal proceedings have reached a stage at which they may be described as a prosecution; the test is whether such proceedings have reached a stage at which damage to the plaintiff results.
" Vide also Ramaswami Iyer on The Law of Torts, 4th Edn., p. 318.
The decision in R. R. Chari vs The State of Uttar Pradesh (1) was relied on by the appellant as showing that until process was issued, there was no prosecution.
There, the appellant was proceeded against under the provisions.
of the Prevention of Corruption Act No. 2 of 1947.
The Deputy Magistrate, Kanpur, issued a warrant for his arrest on October 22, 1947.
Thereafter, on December 6, 1948, the prosecution obtained the necessary sanction under the Act.
The contention of the appellant was that the prosecution must be held to have been instituted against him on October 22, 1947, when he was arrested, that as no sanction for his prosecution had been obtained at that time, the proceedings were bad, and that the defect was not cured by sanction being obtained subsequently on December 6, 1948.
This Court held that under the special provisions of the Prevention of Corruption Act, the police had the power to arrest the appellant pending investigation and that was all the effect of the order of the Deputy Magistrate dated October 22, 1947, and that therefore there was no prosecution on the date of the arrest.
But here, we are dealing with a private complaint, and as pointed out at p. 315 of the Report, section 190(1)(a) of the Criminal Procedure Code would apply to such cases, and the Magistrate must be held to have taken cognizance when the complaint was received.
This decision, in our opinion, does not assist the appellant; nor does the decision in Gopal Marwari vs King Emperor (2).
There, considering sections 200 and 202 of the Criminal Procedure Code, the learned Judges observed that there was a distinction between initiation of proceedings before the Magistrate and his taking cognizance of the same.
It is Sufficient to say that that is not (1) ; (2) Pat 433. 646 the question 'which we have got to decide here, and on the language of section 15 of the Act, which is what we are concerned with in this appeal, all that is required is that a private 'prosecutor ' should prefer this complaint within one year of the discovery of the offence ', and if that is done, ' the bar under that section cannot apply.
We agree with the decision of the learned Judges of the Court.
below that the, proceedings are not barred by section 15 of the Act.
This appeal is accordingly dismissed.
Appeal dismissed.
| IN-Abs | On April 26, 954, the appellant was arrested for offences under sections 420, 482, 483, 485 and 486 Indian Penal Code and bidis alleged to bear counterfeit trade marks were seized from him.
On this a complaint was filed on May 26, against the appellant that he was in possession of counterfeit bidis, wrappers and labels.
After investigation, the police submitted a charge sheet on September 30, 1954, and summons was ordered to the appellant on July 22, 1955.
The appellant raised a preliminary objection before the Magistrate that the proceedings were barred by section 15 of the Indian Merchandise Marks Act.
He contended that the offence was discovered on April 26, 1954, when he was arrested and the prosecution which commenced with the issue of process against him on July 22, 1954, was beyond the period of one year provided by section 15.
Held, that the prosecution was not barred by section 15 as the prosecution commenced on the presentation of the complaint which was within one year of the discovery of the offence and not on the issuing of the process.
It is settled law that unless there is something to the contrary in the statute, when a private complaint is presented it is the date of presentation thereof that marks the commencement of the prosecution.
The period of limitation is intended to operate against the complainant and not against the Court.
It will defeat the object of the Act and deprive traders of the protection of the law if it were held that the complaint should be thrown out unless process was issued within one year.
of the discovery of the offence.
|
Civil Appeal No. 653 of 1991.
284 From the Judgment and Order dated 11.
12.1989 of the Central Administrative Tribunal, Chandigarh in O.A. No. 694 of 1988.
Avadh Behari, A.K. Sharma and Inderjit Singh Mehra for the Appellants.
Dr. Anand Prakash, B. Krishna Prasad and S.M. Ashri for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
Leave granted.
Whether family pension payable under the service rules could be bequeathed by means of a will by the deceased employee during his life time, is the question involved in this appeal.
Briefly, the facts giving rise to this appeal are that, Issac Alfred was employed in the Railway Workshop, Jagadhri as a Skilled Mechanic, Tool Shop, he died in harness on 16.10.1984.
On his death a dispute arose between Mrs. Violet Issac, widow of the deceased Railway employee, his sons, daughters and Elic Alfred, brother of the deceased regarding family pension, gratuity and other emoluments, payable by the Railway Administration.
Violet Issac, widow of the deceased employee made an application before the competent Railway Authority for the grant of family pension and for payment of gratuity and other dues to her, her four sons and one daughter, who are appellant Nos. 2 to 6.
The Railway Authorities did not pay any amount to the appellants as an injunction order had been issued by the Sub Judge, 1st Class, Jagadhri in Civil Suit No. 365/85 filed by Elic Alfred, brother of the deceased employee, restraining the appellants from claiming or receiving any amount which were to the credit of the deceased Railway employee towards C.T.D. Account, gratuity, family pension and other dues.
It appears that the relations between late Issac Alfred and his widow Smt.
Violet Issac and the children were not cordial, as a result of which he had made nomination in favour of his brother and further he had executed a will dated 9.9.1984 in favour of Elic Alfred bequeathing all his properties to him including the family pension, gratuity etc.
When the appellants raised claim for family pension and other dues before the Railway Authorities, Elic Alfred filed Civil Suit No. 365/85 for the issue of a permanent injunction restraining the appellants from receiving or claiming any monetary benefits from the Railway Administration.
In his suit Elic Alfred had 285 pleaded that in view of the will, his deceased brother 's widow and children were not entitled to any benefit from the Railway Authorities, instead he was entitled to the deceased 's estate including the right to receive family pension and other dues.
The Civil Court issued an injunction order restraining the appellants from receiving any amount from the Railway Authorities as a result of which the Railway Administration did not pay any amount to them.
The appellants, thereupon, made an application before the Central Administrative Tribunal, Chandigarh for the issue of a direction for the release of the amounts on account of gratuity, group insurance, provident fund, CTD account, and family pension.
The appellants pleaded that the will relied upon by Elic Alfred was a forged one and Elic Alfred was not entitled to receive pensionary benefits.
On an application made by the appellants the suit pending before the Civil Court was also transferred to the Tribunal 's file.
The Tribunal by its order dated 11.
12.1989 held that since the dispute related to rival claims based on title arising from relationship in one case and from a will in the other, it has no jurisdiction to decide the same.
The Tribunal further directed for the transfer of the civil suit to the Civil Court for trial in accordance with law.
The appellants have challenged the order of the Tribunal by means of the present appeal.
The dispute between the parties relates to gratuity, provident fund, family pension and other allowances, but this Court while issuing notice to the respondents confined the dispute only to family pension.
We would therefore deal with the question of family pension only.
Family Pension Rules 1964 provide for the sanction of family pension to the survivors of a Railway Employee.
Rule 801 provides that family pension shall be granted to the widow/widower and where there is no widow/widower to the minor children of a Railway servant who may have died while in service.
Under the Rules son of the deceased is entitled to family pension until he attains the age of 25 years, an unmarried daughter is also entitled to family pension till she attains the age of 25 years or gets married, which ever is earlier.
The Rules do not provide for payment of family pension, to brother or any other family member or relation of the deceased Railway employee.
The Family Pension Scheme under the Rules is designed to provide relief to the widow and children by way of compensation for the untimely death of the deceased employee.
The Rules do not provide for any nomination with regard to family pension, instead the Rules designate the persons who are entitled to receive the family pension.
Thus, no other person except those designated under the Rules are entitled to receive family pension.
The Family Pension Scheme confers monetary benefit on the 286 'wife and children of the deceased Railway employee, but the employee has no title to it.
The employee has no control over the family pension as he is not required to make any contribution to it.
The Family Pension Scheme is in the nature of a welfare scheme framed by the Railway Administration to provide relief to the widow and minor children of the deceased employee.
Since, the Rules do not provide for nomination of any person by the deceased employee during his life time for the payment of family pension, he has no title to the same.
Therefore, it does not form part of his estate enabling him to dispose of the same by testamentary disposition.
In Jodh Singh vs Union of India & Anr., [ ; this Court on an elaborate discussion held that family pension is admissible on account of the status of a widow and not on account of the fact that there was some estate of the deceased which devolved on his death to the widow.
The Court observed: "Where a certain benefit is admissible on account of status and a status that is acquired on the happening of certain event, namely, on becoming a widow on the death of the husband, such pension by no stretch of imagination could ever form part of the estate of the deceased.
If it did not form part of the estate of the deceased it could never be the subject matter of testamentary disposition.
The Court further held that what was not payable during the life time of the deceased over which he had no power of disposition could not form part of his estate.
Since the qualifying event occurs on the death of the deceased for the payment of family pension, monetary benefit of family pension cannot form part of the estate of the deceased entitling him to dispose of the same by testamentary disposition.
We, accordingly hold that Mrs. Violet Issac the widow of the deceased Railway employee is entitled to receive the family pension, notwithstanding, the will alleged to have been executed by the deceased on 9.9.1984 in favour of his brother Elic Alfred.
As regards appellant Nos. 2 to 6 are concerned, it has been stated on behalf of the Railway Administration that they are not minors, therefore, under the Rules they are not entitled to any family pension.
We, accordingly allow the appeal, set aside the order of the Tribunal and direct the respondent Railway Adminstration to sanction family pension in accordance with the Rules to the appellant No. 1 and to pay the arrears within two months.
The respondent 's suit, so far as it relates to the 287 family pension cannot proceed but we do not express any opinion, with regard to other claims raised therein.
It has been brought to our notice on behalf of the respondent Railway Administration that the appellants have been occupying the Railway quarter which had been allotted to late Issac Alfred, even though they are not entitled to occupy the same.
On behalf of the appellants, it was urged that since they had not been paid any dues by the Railway Administration they were not in a position to vacate the premises.
The Railway Administration is free to evict them in accordance with the Rules, only after arrears of family pension are paid to Mrs. Violet Issac.
The Railway Administration will charge rent from the appellants at the rate on which the quarter had been let out to the deceased Railway employee.
There will be no order as to costs.
V.P.R. Appeal allowed.
| IN-Abs | On the death of a Railway employee, dispute arose among his wife, sons, daughters and brother for the family pension, gratuity and other emoluments.
The brother of the deceased employee filed a civil suit in the court of Sub judge for a permanent injunction restraining the appellants. the wife, sons and daughter from claiming or receiving any monetary benefits from the Railway Administration, contending that by a will dated 9.9.1984 of the deceased employee, he was entitled to receive the benefits to the deceased employee 's widow.
The Railway Authority did not pay any amount, as an injunction had been issued by the Civil Court.
The appellants there upon made an application before the Central Administrative Tribunal for a direction for the release of the amounts on the grounds that the will was a forged one, and the beneficiary was not entitled to receive pensionary benefits.
The Tribunal held that since the dispute related to rival claims based on title arising from relationship, it had no jurisdiction to decide the same.
It also directed transfer of the case to the Civil Court for trial.
In the appeal to this court on the question was: whether family pension payable under the service rules could be bequeathed by means of a will.
Allowing the appeal, this Court, HELD: 1.
Family Pension Rules, 1964 provided for the sanction of family pension to the survivors of a Railway Employee.
Rule 801 provides that family pension shall be granted to the widow/widower and where there is no widow/widower, to the minor children of a Railway servant, who may have died while in service.
Under the Rules, son of 283 the deceased is entitled to family pension until he attains the age of 25 years, an unmarried daughter is also entitled to family pension till she attains the age of 25 years or gets married, whichever is earlier.
The Rules do not provide for payment of Family Pension to brother or any other family member or relation of the deceased Railway employee.
The Family Pension Scheme under the Rules is designed to provide relief to the widow and children by way of compensation for the untimely death of the deceased employee.
The rules do not provide for any nomination with regard to family pension, instead the Rules designate the persons who are entitled to receive the family Pension.
Thus, no other person except those designated under the Rules are entitled to receive family pension.
[285E H] 2.
The Family Pension Scheme confers monetary benefit on the wife and children of the deceased Railway employee, but the employee has no title to it.
The employee has no control over the family pension as he is not required to make any contribution to it.
The family pension Scheme is in the nature of welfare scheme framed by the Railway administration to provide relief to the widow and minor children of the deceased employee.
[285H 286B] 3.
Since, the Rules do not provide for nomination of any person by the deceased employee during his life time for the payment of family pension, he has no title to the same.
Therefore, it does not form part of his estate enabling him to dispose of the same by testamentary dis position.
[286B C] [The appellant No. 1, widow of the deceased Railway employee is entitled to receive the family pension, notwithstanding the will alleged to have been executed by the deceased on 9.9.1984 in favour of his brother.
As regards appellant Nos. 2 to 6 are concerned, they are not minors, therefore, under the Rules they are not entitled to any family pension.
[286F H] The Railway Administration is free to evict them in accordance with the Rules, only after arrears of family pension are paid to the widow.] [287B C] Jodh Singh V. Union of India & Anr., [1980] 4 S.C.C. 306, followed.
|
ivil Appeal Nos.
2959 60 of 1980.
WITH Writ Petition Nos.
5548 50 of 1980.
From the Judgment and Order dated 9.9.
1980 of the Karnataka High Court in W.P. Nos.
20298 of 1979 and 1031 of 1980.
Soli J. Sorabjee, Rajinder Sachhar, H. Raghavendra Rao and Vineet Kumar for the Appellants/Petitioners.
M. Veerappa, K.H. Nobin Singh and P.R. Ramasesh for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The two appeals and the three writ petitions challenge the validity of the provisions of the Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distributions) Act, 1959 (Act No. 5 of 1960), hereinafter referred to as 'the impugned Act '.
The challenge was repelled by the Karnataka High Court by its common judgment dated 9.9.
1980 in two writ petitions, which is the subject matter of appeals.
It is perhaps in view of this judgment that writ petitions No. 5548 5550 of 1980 have been filed directly in this Court raising a similar contention.
At the outset, it is necessary to clarify two important points.
The first is that the validity of the Act above mentioned and certain notifications issued thereunder were challenged in Civil Appeal Nos. 450 and 451 of 1966 and 542 of 1964.
These Civil appeals were disposed of 308 by a judgment of this Court dated 6.1.1967 in State of Mysore & Ors.
vs Hanumiah.
By the said judgment this Court repelled the contentions then put forward.
The validity of certain provisions of the impugned Act had then been challenged on the footing that the said provisions as well as the rules made and the notifications issued thereunder imposed unreasonable restrictions on the fundamental right of the petitioners to carry on trade or business under Article 19(1)(g) of the Constitution.
Again, the Mysore High Court in Mohammed Hussain vs State of Mysore, (W.P. 45 of 1971) and this Court in Syed Ahmed Agha vs State, A. I. R. were called upon to consider contentions as to the validity of certain amendments effected by Mysore Act 29 of 1969 to the impugned Act, in the light of the provisions of Articles 301 to 304 of the Constitution of India.
The contentions were repelled with the result that the statutory regulations providing for protection to readers by the establishment of regulated cocoon markets and forbidding the sale or purchase of silk worm cocoons except in such markets were held to be valid.
The present challenge, however, is on different grounds.
The contention now is that certain amendments effected to the impugned Act by Karnataka Act No. 33 of 1979 have to be struck down as the State Legislature was not competent to enact the same.
Thus, the contention now addressed is different from those which were considered by this Court on the earlier occasions.
The second aspect which we wish to clarify at the outset is that, though several grounds were raised before the High Court as well as in the writ petitions, the argument before us was limited to a single contention.
This was that the impugned provisions lack legislative competence after the enactment, by Parliament, of the Central Silk Boards Act (Act 61 of 1948), (hereinafter referred to as 'the Central Act ') which contains a declaration contemplated under Entry 52 of List I in the Seventh Schedule to the Constitution of India.
We shall be addressing ourselves only to this argument.
Mysore Act 5 of 1960 was passed since it was considered expedient to consolidate the laws providing for the regulation of the production, supply and distribution of silk worm seed and cocoon in the State of Mysore.
This Act contained several restrictions in regard to the production, supply and distribution of silk worm seed and cocoon.
Basically, sections 3, 4, 5, 6, 7 and 8 of the Act required a person to obtain a licence for production, sale and distribution of silkworm seed, for rearing silkworms from silkworm seed, for possession of silkworm seed, for disposal of silkworm cocoons for reeling or for reproduction, for sale or purchase of silkworm cocoons for reeling, and for carrying on the business of reeling silk worm cocoons.
Section 10 enabled the 309 Government to specify the manner of marketing the above goods, the places at which cocoon markets, cocoon market yards and cocoon stores could be located, specify the sericultural areas to be served by each cocoon market, assign zones and markets in which any licensed buyer could carry on his business.
It also provided that all transactions involving the sale or purchase of cocoons in a cocoon market shall be by weight, in open auction and in cash.
The above Act, (and in particular the provisions contained in Sections 6 and 7), was amended by the Karnataka Act 29 of 1969.
But these amendments are not relevant for our present purposes.
There were further amendments effected to the Act by Karnataka Act 33 of 1979.
The petitioner is challenging the amendments carried out by this Act.
The principal amendments carried out were, briefly, these.
References to 'Mysore ' were replaced by references to 'Karnataka '.
In the preamble, in addition to the 'silk worm seed ' and 'cocoon ', reference was added to silk yarn '.
Definition of 'silk yarn ' and various categories thereof were inserted Section 5A was introduced under which no person could be in possession of silk yarn in excess of a prescribed quantity unless he is a reeler, a licensed trader, a twister, a weaver or a person authorised in writing by the prescribed officer.
Section 10A provided for the establishment of silk exchanges at specified places.
It enabled the Government to appoint for each silk exchange, a silk Market Officer and also to constitute a marketing committee with the Market Officer as the Chairman and with representatives of reelers, twisters and traders for regulating the conduct of business in the exchange.
It also provided that all transactions involving sale or purchase of silk yarn in a silk exchange should be by weight, by open auction and in cash.
Section 8A placed certain restrictions on reelers, twisters and traders after the establishment of a silk exchange.
It prohibits a reeler or twister from selling or agreeing to sell silk yarn reeled or twisted by him.
It permitted only licensed traders to purchase or agree to purchase silk yarn from a reeler or a twister and that too only in a silk exchange and in accordance with such conditions and in such manner as may be prescribed.
Sub section (2) of section 8A provided that no person shall, except in such silk exchange, use, or permit the use or assist in the use of any building, room, tent, enclosure, vehicle, vessel or place for the sale of silk yarn by or purchase of silk yarn from a reeler or a twister or in any manner aid or abet the sale or purchase of silk yarn.
To put it very shortly, the amendments of 1979 imposed on the production, supply, distribution and sale of silk yarn restrictions in a manner more or less analogous to those that earlier existed in respect of silk worm seeds and cocoons.
310 The short point made on behalf of the petitioners is that any legislation in respect of 'silk industry ' can be enacted only by Parliament and the State Legislature is incompetent to legislate on this matter.
This is because Section 2 of the Central Silk Board Act, which reads as follows: "It is hereby declared that it is expedient in the public interest that the Union should take under its control the silk industry.
" enacts a declaration in terms of Entry 52.
This removes the 'silk industry ' from the purview of the State 's legislative powers thus rendering the State legislature incompetent to legislate thereafter on this topic.
In this context, it is emphasised that originally the Central Act and the declaration in section 2 had been restricted to 'raw silk industry ' but, by an amendment of 1953 effective from 25.3.1954, their scope was widened to include the entire 'silk industry '.
The long title of the Central Act is that it is "an Act to provide for the development under Central control of the silk industry and for that purpose to establish a Central Silk Board".
Under Section 4, the Central Government is empowered to constitute a Board to be called the Central Silk Board with a constitution as set out in sub section (3).
The functions of the Board are set out in section B, which may be set out: "(1) It shall be the duty of the Board to promote the development of the silk industry by such measures as it thinks fit.
(2) Without prejudice to the generality of the foregoing provision, the measures referred to therein may provide for (a) undertaking, assisting or encouraging scientific, technological and economic research; (b) devising means for improved methods of mulberry cultivation rearing, developing and distributing healthy silkworm seeds, reeling or, as the case may be, spinning of silkworm cocoons and silk waste, improving the quality and production of raw silk, if necessary, by making it compulsory for all raw silk to be marketed only after the same has been tested and graded in properly equipped raw silk conditioning houses: 311 (c) x x x x x (d) improving the marketing of raw silk; (e) the collection of statistics from such persons as may be prescribed; (f) carrying out any other duties which may be vested in the Board under rules made under this Act.
" The Board has also a duty to advise the Central Government on all matters relating to the development of the raw silk industry and to prepare and furnish such reports relating to the industry as the Central Government may call for from time to time.
Two further provisions of the Central Act which need to be referred to are Ss. 10 and 13.
section 10 enables the Central Government to levy and collect as a cess, a duty of excise on all filature raw silk and on all spun silk reeled in the territories of India.
D Section 13 empowers the Central Government, by notification, to make rules to carry out the purposes of this Act.
Sub section (2) specifies certain enumerated matters in relation to which rules could be framed but these mostly relate to the functioning of the Board the only two topics on which such rules could be framed which may be relevant purposes are those contained in clause (xviii), (xix) and (xx) which read as follows: "(xviii) the collection of any information or statistics in respect of raw silk or any product of silk; (xix) the manner in which raw silk shall be graded and marketed; (xx) any other matter which is to be or may be prescribed.
In the context of these provisions the short argument which has been pressed before us was dealt with by the High Court in paragraphs 13 and 14 which can be conveniently set out: 13.
The first question to be examined in this context is, whether the amending legislations are beyond the legislative competence of the State Legislature.
It was urged that silk industry is a controlled industry declared by Parliament 312 by law to be expedient in the public interest under Entry 52 of List 1.
By section 2 of the Central Silk Boards Act, 1948.
Parliament has declared that it is expedient in the Public interest that the Union should take under its control the silk industry.
Again, by Section 2 of the Industries (Development and Regulation) Act, 1951 Parliament has declared that it is expedient in the public interest that the Union should take under its control the industries specified in the first Schedule to the Act.
Item 23(4) of the first Schedule thereunder specifies "textile (including those dyed, printed or otherwise processed) made wholly or part of silk, including silk yarn and hosiery".
Having regard to these provisions and Entry 52 of List I of the Seventh Schedule, the State Legislature, as urged for the petitioners, has no power to enact the impugned Acts: 14.
It seems to us that this argument is bereft of substance.
It is now well settled by a series of pronouncements of the Supreme Court commencing with Tika Ramji and Others vs State of Uttar Pradesh and Others, A.I.R. 1956 S.C. page 676 down to the decision in Ganga Sagar Corporation Ltd. vs State of Uttar Pradesh and Others, A.I.R. 1980 S.C. page 286 that merely because an industry is controlled industry as declared by Parliament under Entry 52 in List I, the State is not deprived of its legitimate power to legislate within its own sphere in respect of such industry.
Referring to the scope of Entry 52 of List 1, in the context of legislation dealing with regulation of supply and purchase of sugar cane required for use in sugar factories.
Supreme Court in Tika Ramji 's, A.I.R. 1956 S.C. page 676, case observed: [Ibid Note 12 pages 695 6961: "Industry in the wide sense of the term would be capable of comprising three different aspects: (1) raw materials which are an integral part of the industrial process, (2) the process of manufacture or production, and (3) the distribution of the products of the industry.
The raw materials would be goods which would be comprised in Entry 27 of List 2.
The process of manufacture or production would be comprised in Entry 24 of List 2 except where the industry was a controlled industry when it would fall within Entry 52 of List 1 and the products of the industry 313 would also be comprised in Entry 27 of List 2 except where they were the products of the controlled industries when they would fall within Entry 33 of List 3.
" It is clear from the above observations that it is not all aspects of the industry (that) fall within the scope of Entry 52 of List 1.
It is only one aspect of the industry, that is, the process of manufacture or production that falls under Entry 52 of List 1.
It does not include raw materials used in the industry or the distribution of the products of the industry.
This view was reaffirmed by the Supreme Court in Harakchand Ratanchand Banthia and Others vs Union of India and Others, A.I.R. 1970 S.C. page 1453, and in the Kannan Devan Hills Produce Company Ltd. vs The State Of Kerala, A.I.R. 1972 S.C. 2301 and Ganga Sugar Corporation Ltd. vs The State of Uttar Pradesh, A.I.R. 1980 S.C. 286.
The question that arose in those cases was the scope and effect of Entry 52 of List I in relation to Entries 24 and 27 of List 11 and Entry 33 of List III.
The effect of these decisions is that though expressions in legislative entries refer to broad topics and fields of legislation and require a liberal construction, and though the particular expression 'industries ' in Entry 52 of List I in its wide sense may comprise many aspects, however, having regard to the scope of other entries in the other lists, the ambit of Entry 52 of List I should be limited and confined only to the 'process of manufacture or production of an industry. ' The impugned legislations do not fall into this category and we, therefore, reject the contention urged for the petitioners.
" It will at once be seen that the point raised by the petitioners/ appellants has been repelled by the High Court on the basis of a series of decisions of this Court regarding scope of Entry 52 of List I in the Seventh Schedule to the Constitution.
The High Court has pointed out that when Entry 52 talks of control of industry it does not mean all aspects of the industry in question.
An industry comprises of 3 important aspects (i) raw materials (ii) the process of manufacture or production; and (iii)the distribution of the products of the industry.
314 Legislation in regard to raw materials would be permissible under Entry 27 of List 2, notwithstanding a declaration of the industry under Entry 52 to be one within the purview of parliamentary legislation.
The process of manufacture or production can be legislated on by States under Entry 24 of List 2 so long as the industry is not a controlled industry within the meaning of Entry 7 or Entry 52 of List I. So far as the third aspect viz. the distribution of the products of the industry are concerned, the State Legislature would be quite competent to legislate thereto in regard thereto under Entry 27 of List II.
However, when the industry is also a controlled industry legislation in regard to the products of the industry would be permissible by both the Central and the State Legislatures by virtue of Entry 33 of List 3.
This in short is the decision of the High Court based, as already pointed out on a series of decisions of this Court.
Observations by this Court to a like effect in Calcutta Gas Co. (P) Ltd. vs State, [1962] Supp. 3 S.C.R. 1 may also be seen.
We entirely agree with this view.
On behalf of the appellants/petitioners, Shri Soli Sorabji contended that the validity of the enactment has now to be tested in the light of the decision of this Court in I.T.C. Ltd. & Ors.
vs State of Karnataka & Ors.
, [19851 Supp.
S.C.C. 476, where in, in a similar context, a State legislation was held to be ultra vires.
He also brings to our notice that the correctness of this decision has been doubted by a Bench of this Court and the matter has been referred to a larger Bench and is pending consideration by such a larger Bench.
He, therefore, submits that we should either hold following the above decision, that the State legislation in this case is also incompetent or we should refer this matter also to a larger Bench.
We are of the opinion that it is unnecessary, for the purposes of the present case, to consider the contentions raised in the I. T. C. case (supra).
That was a case in which the State enactment was held to be competent by the High Court on the narrow ground that the central legislation covered only virginia tobacco and did not deal with the industry in so far as it related to other varieties of tobacco.
On a consideration of the provision of the Act, this Court came to the conclusion that this interpretation of the Act was not correct and that the central legislation did purport to regulate and control 'the entire tobacco industry.
In the light of this conclusion the court declared the State law to be incompetent, having regard to the provisions of Entry 52 of List I and the declaration in the Indian Tobacco Act under that provision.
In the present case, however, the matter is on a totally different footing.
It is true that the Central Silk Board Act purports to 315 control the raw silk industry in the territory of India.
But, as pointed out by the High Court in the light of the earlier decisions of this Court therein referred to the control of the industry vested in Parliament was only restricted to the aspect of production and manufacture of silk yarn or silk.
It did not obviously take in the earlier stages of the industry, namely, the supply of raw materials.
For instance, as already pointed out, even in regard to the silk industry, the reeling, production, development and distribution of silkworm seeds and cocoons was regulated by Act 5 of 1960.
These items can be perhaps legitimately described as the raw materials of the silk industry.
The control being vested in Parliament under Entry 52 of silk industry did not in view of the earlier ruling of this Court affect the control over these raw materials.
This is perhaps the reason why the industry did not challenge the provisions of the 1959 Act, when it was originally enacted, on the ground that is now being put forward.
The present legislation, as a result of the amendments, controls the supply and distribution of the goods produced by the industry.
As rightly pointed out by the High Court this is the third aspect of the industry which falls outside the purview of the control postulated under Entry 52.
In other words, though the production and manufacture of raw silk cannot be legislated upon by the State Legislature in view of the provisions of the Central Act and the declaration in section 2 thereof, that declaration and Entry 52 do not in any way limit the powers of the State Legislature to legislate in respect of the goods produced by the silk industry To interpret Entry 52 otherwise would render Entry 33 in List 3 of the Seventh Schedule to the Constitution otiose and meaningless.
In this view of the matter the limitation contained in Entry 52 does not affect the validity of the present legislation.
This is an aspect which was not touched upon and which did not arise in the Indian tobacco case.
There both the Central Act and the State Act purported to legislate in regard to the industry, namely, in regard to the production and manufacture of tobacco.
In view of our conclusion above, the State legislation would be quite valid unless it is repugnant to the provisions of a Central legislation on the subject.
A persual of the Central Act makes it clear that the pith and substance of the legislation is the constitution of a silk Board for research into the scientific, technological and economic aspects of the industry.
It does not have anything to do with the aspects covered by entry 33 in List III.
There is, therefore, no infirmity in the legislation under consideration.
316 In this view of the matter, we agree with the conclusion reached by the High Court.
As this is the only point that was argued before us we dismiss the appeals and writ petitions but make no orders regarding costs.
G.N. Appeals and Petitions dismissed.
| IN-Abs | The Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distribution) Act, 1959 provided for the regulation of production, supply and distribution of silk worm seed and cocoon in the State of Mysore.
The said Act was amended in 1969 and 1979.
The 1979 amendments imposed restrictions on the production, distribution and sale of silk yarn, and were analogous to the restrictions imposed earlier in respect of silk worm seeds and cocoons.
The appellants filed Writ Petitions before the High Court challenging the validity of the provisions of the Act on several grounds, Including lack of legislative competence since the Central Silk Boards Act, 1948 has already been passed by the Parliament The High Court negatived the contentions and dismissed the Writ Petitions.
The present appeals challenged the correctness of the said judgment.
The Writ Petitions filed directly in this Court also challenged the validity of the Provisions of the said Act.
The main contention raised in these matters was that the Provisions of the Act lack legislative competence after the enactment by Parliament of the Central Silk Boards Act, 1948 which contained a declaration contemplated under Entry 52 of List I in the Seventh 306 Schedule to the Constitution of India, taking the Silk industry within the purview of Parliamentary legislation.
Dismissing the matters, this Court, HELD: 1.
Legislation in regard to raw materials would be permissible under Entry 27 of List II, notwithstanding a declaration of the industry under Entry 52, to be one within the purview of parliamentary legislation.
The process of manufacture or production can be legislated on by States under Entry 24 of List II so long as the industry is not a controlled industry within the meaning of Entry 7 or Entry 52 of List 1.
So far as the distribution of the products of the industry is concerned, the State Legislature would be quite competent to legislate under Entry 27 of List II.
However, when the industry is also a controlled industry, legislation in regard to the products of the industry would be permissible by both the Central and the State Legislatures by virtue of Entry 33 of List III.
[314A C] Calcutta Gas Co. (P) Ltd. vs State, [1962] Supp.
3 S.C.R. 1, relied on 2.
It is true that the Central Silk Boards Act purpots to control the raw silk industry in the territory of India.
But the control of the industry vested in Parliament was only restricted to the aspect of production and manufacture of silk yarn or silk.
It did not obviously take in the earlier stages of the industry, namely, the supply of raw materials.
Even in regard to the silk industry, the reeling, production, development and distribution of silkworm seeds and cocoons was regulated by the Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distribution) Act, 1959.
These items can perhaps be legitimately described as the raw materials of the silk industry.
The control being vested in Parliament under Entry 52, of silk industry, did not affect the control over the raw materials.
That is perhaps the reason why the industry did not challenge the provisions of the Act, when it was originally enacted, on the ground that is now being put forward.
The present legislation, as a result of the amendments, controls the supply and distribution of the goods produced by the industry.
Though the production and manufacture of raw silk cannot be legislated upon by the State Legislature in view of the provisions of the Central Act and the declaration in section 2 thereof, that declaration and Entry 52 do not in any way limit the powers of the State Legislature to legislate in respect of the goods produced by the silk industry.
To interpret Entry 52 otherwise would render Entry 33 in List III of the Seventh Schedule 307 to the Constitution otiose and meaningless.
In this view of the matter the limitation contained in Entry 52 does not affect the validity of the present legislation.
[314H; 315A F] I.T.C. Ltd. & Ors.
vs State of Karnataka & Ors.
, [1985] (supp.) S.C.C. 476, distinguished.
The State legislation would be quite valid unless it is repugnant to the provisions of a Central legislation on the subject.
A perusal Of the Central Act makes it clear that the pith and substance of the legislation is the constitution of a silk Board for research into the scientific, technological and economic aspects of the industry.
It does not have anything to do with the aspects covered by Entry 33 in List III.
There is, therefore, no infirmity in the State Legislation.
[315G H]
|
ON: Criminal Appeal No. 50 of 1979.
From the Judgment and Order dated 23.12.1977 of the Delhi High Court in Criminal Appeal No. 162 of 1975.
R.K. Garg, R.K. Jain, Ranjan Mahapatra and P.K. Jain for the Appellant.
V.C. Mahajan, Ashok Bhan (NP) and Ms. A. Subhashini (NP) for the Respondent.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The appellant, the sole accused in this case, has been convicted under Section 302 I.P.C. and sentenced to imprisonment for life by the High Court of Delhi for causing the murder of one Champat Rai, the deceased in the case.
The prosecution case mainly rests on the evidence of P.W. 2, the sole eye witness.
Learned counsel for the appellant contended that the uncorroborated testimony of P.W. 2 is not wholly reliable and therefore the conviction cannot be sustained.
However, we may at this stage point out that the main submission has been that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence.
Even otherwise, according to the learned counsel, having regard to the fact that as the appellant is alleged to have inflicted only a single injury which proved fatal, the offence committed would be one amounting to culpable homicide.
To appreciate these submissions in a proper perspective, we 205 think it necessary to state the facts of the case.
The deceased was married to Agya Devi examined as P.W. 3.
He lived with his wife in a house in East Azad Nagar, Shahdra, Delhi.
In the adjoining house were living his mother, P.W. 1 and his two brothers P.Ws 2 and 5.
The appellant was married to a cousin of Agya Devi, P.W. 3 and he used to visit the house of the deceased ostensibly as a relative.
The deceased, P.Ws 1,2 and 5 objected to the appellant 's visit as they suspected illicit relation between the appellant and Agya Devi P.W. 3, wife of the deceased.
On August 18, 1973 at about 11 P.M. when the deceased was not in the house , the appellant came to visit Agya Devi.
A few minutes later the deceased also came home and he objected to the presence of the appellant.
On this there was an altercation and exchange of hot words.
Then the appellant took out a kirpan (churra) from his waist and stabbed the deceased in the chest.
The deceased fell down crying that the appellant has killed him.
The appellant with the weapon ran out of the house.
The incident was witnessed by P.W. 2 from the roof where he had retired for sleeping during the night.
P.W. 2 and his another brother P.W. 5 chased the appellant but as the appellant who was armed with a lethal weapon threatened them and made good his escape.
On return they found the deceased dead.
P.W. 3 was sitting next to the body and was crying.
The information was sent to the police and P.W. 18, the Sub Inspector, Kotwali Police Station came to the scene of occurrence and recorded the statement of P.W. 2 on the basis of which the case was registered against the appellant.
He seized certain incriminating articles, held the inquest and sent the dead body for post mortem.
He also recorded the statement of the material witness.
One of the recoveries made by him consisted of a sheath of the kirpan.
The Doctor, P.W. 17, examined the dead body and conducted the post mortem.
He found one incised stab wound on the left chest which proved fatal.
The particulars of the injury are: (1) One incised stab wound, horizontally placed on the (L) side of the chest 1" lateral to the left side and 2" below and medial to the (L_) Nipple size 1" x 1/2" x with spindle shaped appearance and with either margins pointed.
The margins of the wound were smooth and the collection of blood in the soft tissues.
(2) One incised wound over right little finger at the base of second phalynx on dorcal surface size 3/4" x 4/10" x bone deep.
There is collection of blood in the soft tissues and there was cut 206 mark on the base of second phalnyx right little finger.
The wound was bandaged with a piece of bandage and cotton soiled in blood.
The wound is not spindle shaped in appearance.
The margins were smooth.
This injury was a simple one and not due to a separate blow.
The Doctor opined the injury NO.1 was sufficient to cause death in the ordinary course of nature.
The cause of death was haomorrhage and shock due to injuries.
The accused was arrested on 28.8.73 and at his instance the kirpan was recovered.
After completion of the investigation, the charge sheet was laid.
The accused pleaded not guilty and denied the recoveries.
The prosecution examined P.W. 2, the brother of the deceased and P.W. 3 Agya Devi, wife of the deceased.
But P.W. 3 turned hostile.
Consequently the prosecution was left with the testimony of P.W. 2, the remaining eye witness.
Both the courts below relied on the evidence of P.W. 2 and they also held that his evidence was corroborated by that of P.Ws 1 and 5.
As hereinbefore mentioned, the learned counsel for the appellant submitted that the evidence of P.W. 2 on which the case entirely rests, cannot be accepted.
We have gone through his evidence carefully as well as that of P.Ws. 1 and 5.
The evidence of P.W. w does not suffer from any serious infirmity.
At any rate there is other corroborative evidence also.
We see absolutely no reason to disagree with the findings of the courts below regarding their evidence.
The learned counsel, however, submitted that the accused must have acted in right of self defence.
According to the learned counsel, P.W. 2 himself has deposed that there was exchange of hot words between the appellant and the deceased which would have resulted in a fight and the appellant having reasonably apprehended danger to his life, inflicted the injury on the deceased in self defence.
We see no basis for this submission.
P.W. 2 has no doubt stated that there was exchange of hot words between the appellant and the deceased but he did not speak about any fight between the two.
On the other hand his evidence shows that when the deceased came and questioned the accused then there was exchange of hot words.
The accused immediately took out a kirpan (churra) from his waist and stabbed the deceased.
Both the courts below also have rightly rejected this plea.
Therefore we see absolutely no grounds to come to a different conclusion.
207 The next and rather the main submission is that the offence committed by the appellant would only amount to culpable homicide inasmuch as he has inflicted only one injury.
In support of his submission, he relied on some of the decisions of this Court.
In Tholan vs State of Tamil Nadu, the accused who dealt a single knife below on the chest found to be sufficient to cause death, was convicted under Section 304 Part II I.P.C., disagreeing with the contention on behalf of the State that Clause III of Section 300 I.P.C. would be attracted in such a case.
In arriving at such a conclusion, this Court took into consideration various surrounding circumstances namely that the presence of the deceased at the scene of occurence was wholly accidental and that the accused dealt only one blow.
It must also be mentioned that the deceased, who was a stranger in that case, came out of his house and cautioned the accused not to indulge in abusive language as ladies were present in that area.
The accused thereupon questioned him and when both were remonstrating, he took out a knife from his waist and stabbed the deceased on the right side of the chest.
On these facts, this Court held: "We are satisfied that even if Exception I is not attracted, the requisite intention cannot be attributed to the appellant.
But in the circumstances herein discussed he wielded a weapon like a knife and therefore he can be attributed with the knowledge that he was likely to cause an injury which was likely to cause death.
In such a situation, he would be guilty of committing an offence under Section 304 Part II of the Indian Penal Code.
" In support of this view, reliance is placed on some earlier decision of this Court in Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab, ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, and Ram Sunder vs State of U.P., Criminal Appeal No. 555/83 decided on 24.10.1983.
The learned counsel submitted that the observations made in these cases apply on all fours to the facts of this case.
According to him, there was an altercation and during the same the appellant suddenly whipped out a kirpan and inflicted only one injury and it is therefore reasonable to infer that he would not have intended to cause that particular injury and consequently Clause Thirdly of Section 300 is not attracted.
The submission though put forward in a simple way leads to an important legal quandary regarding the interpretation of Clause Thirdly Section 300 I.P.C. which is considered be a 208 difficult and interact issue by the courts.
However, Virsa Singh vs State of Punjab, ; is considered to be an authoritative pronouncement in this regard.
But perhaps inspired by some of the decisions rendered thereafter both by the High Courts and the Supreme Court there is a marked change in the trend of the contentions regarding the scope of Clause Thirdly Section 300 I.P.C.
It has reached a stage over simplification and it is very often argued that whenever death is due to a single blow the offence would be a culpable homicide and not murder.
Somewhat to the same effect is the contention in the instant case.
In our view it is fallacious to contend that when death is caused by a single blow Clause Thirdly is not attracted and therefore it would not amount to murder.
The ingredient `Intention ' in that Clauses is very important and that gives the clue in a given case whether offence involved is murder or not.
For the purpose of considering the scope of Clause 3 it is not necessary for us to embark upon an examination of the entire scope of Section 299 and 300 I.P.C.
It is enough if we start with Virsa Singh 's case.
Clause Thirdly of Section 300 I.P.C. reads thus: "3rdly If it is done with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, or " We may note at this stage that `intention ' is different from `motive ' or `ignorance ' or `negligence '.
It is the `knowledge ' or `intention ' with which the act is done that makes difference, in arriving at a conclusion whether the offence is culpable homicide or murder.
Therefore, it is necessary to know the meaning of these expressions as used in these provisions.
Before doing so we shall first refer to the to the ratio laid down in Virsa Singh 's case and the meaning given to the expression `intention '.
The appellant Virsa Singh was sentenced to imprisonment for life under Section 302 I.P.C.
There was only one injury on the deceased and that was attributed to him.
It was caused as a result of the spear thrust and the Doctor opined that the injury was sufficient in the ordinary course of nature to cause death.
The Courts also found that the whole affair was sudden and occurred on a chance of meeting.
Peritonit is also supervened which hastened the death of the deceased.
It was contended that the prosecution has not proved that there was an intention to inflict a bodily injury that was sufficient to cause death in 209 the ordinary course of nature and therefore the offence was not one of murder.
This contention was rejected.
After analysing the Clause Thirdly it is held the Court that the prosecution must prove: "First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; there are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and, Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
" The Court Further added thus: "One of these four elements is established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under Sec.
300, 3rdly.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can 210 only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" (emphasis supplied) The learned Judge also observe thus: "In the absence of evidence, or reasonable explanation, that the prisoner did not intend to stab in the stomach with a degree of force sufficient to penetrate that far into the body, or to indicate that his act was a regrettable accident and that he intended otherwise, it would be perverse to conclude that he did not intend to inflict the injury that he did.
Once that intent is established (and no other conclusion is reasonable possible in this case and in any case it is a question of fact), the rest is a matter for objective determination from the medical and other evidence about the nature and seriousness of the injury.
" Adverting to the contention that there is only a single blow, it is further held: "The question is not whether the prisoner intended to inflict a serious injury or a trivial one but whether he intended to inflict the injury that is proved to be present.
If he can show that he did not, or if the totality of the circumstances justify such an inference, then, of course, the intend that the section requires is not proved.
But if there is nothing beyond the injury and the fact that the appellant inflicted it, the only possible inference is that he intended to inflict it.
Whether he knew of its seriousness, or intended serious consequences, it neither here nor there.
The question, so far as the intention is concerned, is not whether he intended to kill, or to inflicit an injury of a particular degree of seriousness, but whether he intended to inflict the injury in question; and once the existence of the injury is proved the intention to cause it will be presumed unless the evidence or the circumstances warrant an opposite conclusion.
But whether the intention is there or not is one of fact and not one of law.
Whether the wound is serious or otherwise, and if serious, how serious, is a totally separate and distinct question and has nothing to do with the question whether the prisoner intended to inflict the injury in question.
" 211 At another passage which has to be noted in this context reads thus: "It is true that in a given case the enquiry may be linked up with the seriousness of the injury.
For example, if it can be proved, or if the totality of the circumstances justify an inference, that the prisoner only intended a superficial scratch and that by accident his victim stumbled and fell on the sword or spear that was used, then of course the offence is not murder.
But that is not because the prisoner did not intended the injury that he intended to inflict to be a serious as it turned out to be but because he did not intend to inflict the injury in question at all.
His intention in such a case would be to inflict a totally different injury.
The difference is not one of law but one of fact; and whether the conclusion should be one way or the other is a matter of proof, where necessary, by calling in aid all reasonable inferences of fact in the absence of direct testimony.
It is not one for guesswork and fanciful conjecture.
Referring to these observations, Divisional Bench of this Court in Jagrup Singh 's case observed thus: "These observations of Vivian Bose, J. have become locus classicus.
The test laid down in Virsa Singh 's case for the applicability of clause Thirdly is now ingrained in our legal system and has become part of the rule of law.
" The Division Bench also further held that the decision in Virsa singh 's case has throughout been followed as laying down the guiding principles.
In both these cases it is clearly laid down that the prosecution must prove (1) that the body injury is present, (2) that the injury is sufficient in the ordinary course of nature to cause death, (3) that the accused intended to inflict that particular injury that is to say it was not accidental or unintentional or that some other kind of injury was intended.
In other words the 3rd Clause consists of two parts.
The first part is that there was an intention to inflict the injury that is found to be present and the second part that the said injury is sufficient to cause death in the ordinary course of nature.
Under the first part the prosecution has to prove from the given facts and circumstances that the intention of the accused was to cause that particular injury.
whereas the second part whether it was sufficient to cause the death is an objective enquiry and it is a matter of inference or deduction from the particulars of the injury.
The language of Clause Thirdly of Section 300 212 speaks of intention at two places and in each the sequence is to be established by the prosecution before the case can fall in that Clause.
The `intention ' and `knowledge ' of the accused are subjective and invisible state of mind and their existence has to be gathered from the circumstances, such as the, weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances.
The framers of the code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the samething as the intention that such consequences should ensue.
Firstly, when an act is done by a person, it is presumed that he, must have been aware that certain specified harmful consequences would or could follow.
But that knowledge is bare awareness and not the same thing as intention that such consequences should ensue.
As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposeful doing of a thing to achieve a particular end.
Kenny in "Outline of Criminal Law" (17th Edition at page 31) has observed: "Intention: To intend is to have in mind a fixed purpose to reach a desire objective; the noun `intention ' in the present connexion is used to denote the state of mind of a man who not only forsees but also desires the possible consequences of his conduct.
Thus if one man throws another from a high tower or cuts off his head it would seem plain that the both foresees the victim 's death and also desires it: the desire and the foresight will also be the same if a person knowingly leaves a helpless invalid or infant without nourishment or other necessary support until death supervenes.
It will be noted that there cannot be intention unless there is also foresight, since a man must decide to his own satisfaction, and accordingly must foresee, that to which his express purpose is directed.
Again, a man cannot intend to do a thing unless he desires to do it.
It may well be a thing that he dislikes doing, but he dislikes still more the consequences of his not doing it.
That is to say he desires the lesser of two evils, and therefore, has made up his mind to bring about that one." Russel on Crime (12th Edition at Page 41) has observed: 213 "In the present analysis of the mental element in crime the word `intention ' is used to denote the mental attitude of a man who has resolved to bring about a certain result if he can possibly do so.
He shapes his line of conduct so as to achieve a particular end at which he aims.
" it can thus be seen that the `knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive.
On the otherhand, `intention ' is a conscious state in which mental faculties are aroused into activity and summoned into action for the purpose of achieving a conceived end.
it means shaping of one 's conduct so as to bring about a certain event.
Therefore in the case of `intention ' mental faculties are projected in a set direction.
Intention need not necessarily involve premediation.
Whether there is such an intention or not is a question of fact.
In Clause Thirdly the words "intended to be inflicted" are singnificant.l; As noted already, when a person commits an act, he is presumed to expect the natural consequences.
But from the mere fact that the injury caused is sufficient in the ordinary course of nature to cause death it does not necessarily follow that the offender intended to cause the injury of that nature.
However, the presumption arises that he intended cause that particular injury.
In such a situation the Court has to ascertain whether the facts and circumstances in the case are such as to rebut the presumption and such facts and circumstances cannot be laid down in an abstract rule and they will vary from case to case.
However, as pointed out in Virsa Singh 's case the weapon used, the degree of force released in wielding it, the antecedent relation of the parties, the manner in which the attack was made that is to say sudden or premeditated, whether the injury was inflicted during a struggle or grappling, the number of injuries inflicted and their nature and the part of the body where the injury was inflicted are some of the relevant factors.
These and other factors which may arise in a case have to be considered and if on a totality of these circumstances a doubt arises as to the nature of the offence, the benefit has to go to the accused.
In some cases, an explanation may be there by the accused like exercise of right of private defence or the circumstances also may indicate the same.
Likewise there may be circumstances in some cases which attract the first exception.
In such cases different considerations arise and the Court has to decide whether the accused is entitled to the benefit of the exception, though the prosecution established that one or the other clauses of Section 300 I.P.C. is attracted.
In the present enquiry we need not advert to that aspect since we are concerned only with scope of clause Thirdly of Section 300 I.P.C. 214 The decision in Virsa Singh 's case has throughout been followed in a number of cases by the High Courts as well as by the Supreme Court.
Such decisions are too numerous and it may not be necessary for us to refer to all those cases.
However, it would be useful to refer to a few decisions which have a bearing to the point in issue.
In Chahat Khan vs State of Haryana, the deceased was waylaid by the accused who were armed with lathis.
The accused had both gun and a lathi but he used only the lathi and struck a blow on the head with sufficient force and the solitary below with the lathi was found to be sufficient in the ordinary course of nature to cause death and it was held that the case fell within clause Thirdly as there was clear intention to cause such bodily injury which in the ordinary course of nature was sufficient to cause death.
In Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652 there was exchange of abuses between the two parties armed with lathis and in the course of the fight, the accused struck one lathi blow on the head of the deceased which causes a fracture of the skull resulting in death, and it was held that he had given the blow with the knowledge that it was likely to cause death.
In Willie (Williams) Slaney vs State of Madhya Pradesh, there was a sudden quarrel leading to an exchange of abuses and in the heat of the moment a solitary blow with a hockey stick had been given on the head.
It was held that the offence amounted to culpable homicide punishable under Section 304 Part II I.P.C.
In Harjinder Singh (alias Jinda) vs Delhi Admn.
, ; the facts are that there was a sudden commotion and when the deceased intervened in the fight, the accused took out a knife and stabbed the deceased and the deceased was in crouching position presumably to intervene when he received the blow.
Though the injury was found sufficient in the ordinary course of nature to cause death.
, he was convicted for the offence of culpable homicide.
The intention to cause that particular injury was not present.
To the same effect is the decision in Laxman Kalu Nikalji vs State of Maharashtra; , where the accused lost his temper and took out a knife and gave one blow during a sudden quarrel.
In all these cases the approach has been to find out whether the ingredient namely the intention to cause the particular injury was present or not and it is held that circumstances like a sudden quarrel in a fight or when the deceased intervenes in such a fight, would create a doubt about the ingredient of intention as it cannot definitely be said in such circumstances that the accused aimed the blow at a particular part of the body.
When an accused inflicts a blow with a deadly weapon the presumption is that he intended to inflict that injury but 215 there may be circumstances like those, as mentioned above, which rebut such presumption and throw a doubt about the application of clause Thirdly.
Of course much depends on the facts and circumstances of each case.
Now let us examine some of the cases relied upon the learned counsel for the appellant.
In Kulwant Rai 's case a Bench consisting of D.A. Desai and R.B. Misra, JJ.
held in a hit and run case that where it cannot be said that the accused intended to inflict the very fatal injury, clause Thirdly is not attracted.
That was a case were only one blow was given with the dagger in the epigastrium area and the facts would go to show that there was no pre meditation, no prior enmity and a short quarrel preceded the assault.
However, we do not find any discussion about the scope of clause Thirdly.
Randhir Singh 's case was decided by a Bench consisting of D.A. Desai and Baharul Islam, JJ.
In that case, a single head injury was inflicted by a college student on the deceased with a weapon supplied by his father and the deceased died after six days and there also an assault was preceded by a quarrel between the father of the accused and the deceased.
The Bench observed that: "Merely because the blow landed on a particular spot on the body divorced from the circumstances in which the blow was given it would be hazardous to say that the accused intended to cause that particular injury.
The weapon was not handy.
He did not possess one.
Altercation took place between his father and the deceased and he gave blow with kassi.
In our opinion in these circumstances it would be difficult to say that the accused intended to cause that particular injury.
" Before the same Bench, in Gurmail Singh and others vs State of Punjab, this question again came up for consideration.
In that case, an indecent joke cut by the accused with the wife of a P.W. led to a quarrel and the deceased who was nowhere in the picture tried to intervene, two of the accused gave some blow on him.
Then Gurmail Singh, the appellant therein, gave a single blow with spear on the chest which proved fatal.
It was contended by the State that clause Thirdly of Section 300 I.P.C was attracted.
it is observed that: "But it was said that the case would be covered by Para 3 of Section 300 in that Gurmail Singh intended to cause an injury and the injury intended to be inflicted was proved to 216 be sufficient in the ordinary course of nature to cause death.
This argument is often raised for consideration by this Court and more often reliance is placed on Virsa Singh vs State of Punjab; , We would have gone into the question in detail but in Jagrup Singh vs State of Haryana ; , Sen. J. after examining all the previous decisions on the subject, observed that in order to bring the case within Para 3 of Section 300, I.P.C., it must be proved that there was an intention to inflict that particular bodily injury which in the ordinary course of nature was sufficient to cause death.
This view was further affirmed in a decision rendered in Randhir Singh vs State of Punjab, We are of the opinion that in the facts found by the High Court it could not be said that accused 1 Gurmail singh intended to cause that particular bodily injury which in fact was found to have been caused.
May be, the injury inflicted may have been found to be a sufficient in the ordinary course of nature to cause death.
What ought to be found is that the injury found to be present was the injury that was intended to be inflicted.
It is difficult to say that with confidence in the present case keeping in view the facts found by the High Court that accused 1 Gurmail Singh intended to cause the very injury which was found to be fatal." Therefore this decision also affirms the view taken in Virsa Singh 's case.
Then came the decision in Jagtar Singh 's case rendered by a Bench consisting of D.A.Desai and Amarendra Nath Sen, JJ.
In that case a single knife blow was inflicted in the chest and it was found to be sufficient in the ordinary course of nature to cause death.
The Bench held that clause Thirdly was not attracted in view of circumstances i.e. there the accused was a young man and inflicted the injury on the spur of the moment and some extent on deceased 's provocation in a sudden chance quarrel and on a trivial issue.
The Bench observed that: "The cause of quarrel though trivial was just sudden and in this background the appellant, a very young man gave one blow.
He could not be imputed with the intention to cause death or the intention to cause that particular injury which proved fatal.
" In this case, there is no reference to Virsa Singh 's case but there is a 217 references to Jagrup Singh 's case which decision, as noted already, has followed the ratio in Virsa singh 's case.
Then came the decision in Tholan 's case on which the counsel has heavily relied upon.
In that case also the appellant inflicted only a single knife blow on the chest of the deceased sufficient to cause death but it was on the spur of the moment.
The Division Bench, consisting of D.A. Desai and R.B.Misra, JJ.
took into the consideration that the deceased had nothing to do with the chit organised by one K.G. Rajan in respect of which there was a quarrel between the appellant and the organisers of the chit and when the accused was abusing the organisers, the deceased seemed to have told the accused not to misbehave in the presence of the ladies and not to use vulgar and filthy language.
The presence of the deceased was wholly accidental and the appellant on the spur of the moment inflicted the fatal injury on the chest.
The Division Bench relying on the earlier decision under similar circumstances convicted the accused under Section 304 Part II.
A reference is also made to the decision in Jagrup Singh 's case.
Therefore in this case also, the ratio laid down in Virsa Singh 's case is presumably followed.
In all these cases, injury by a single blow was found to be sufficient in the ordinary course of nature to cause death.
The supreme Court took into consideration the circumstances such as sudden quarrel, grappling etc.
as mentioned above only to assess the state of mind namely whether the accused had the necessary intention to cause that particular injury i.e. to say that he desired expressly that such injury only should be the result.
It is held in all these cases there was no such intention to cause that particular injury as in those circumstances, the accused could have been barely aware i.e only had knowledge of the consequences.
These circumstances under which the appellant happened to inflict the injury it is felt or atleast a doubt arose that all his mental faculties could not have been roused as to form an intention to achieve the particular result.
We may point out that we are not concerned with the intention to cause death in which case it will be a murder simpliciter unless exception is attracted.
We are concerned under clause Thirdly with the intention be cause that particular injury which is subjective inquiry and when and when once such intention is established and if the intended injury is found objectively to be sufficient in the ordinary course of nature to cause death, clause Tirdly is attracted and it would be murder, unless one of the exceptions to Section 300 is attracted.
If on the otherhand this ingredient of `intention ' is not established or if a reasonable doubt arises in this regard then only it would be reasonable to infer that Clause Thirdly is not 218 attracted and that the accused must be attributed knowledge that in inflicting the injury he was likely to cause death in which case it will be culpable homicide punishable under Section 304 Part II I.P.C. Bearing these principles in mind, if we examine the facts in the present case, clause Thirdly of Section 300 I.P.C. is fully attracted.
The appellant was having illicit relation with Agya Devi, wife of the deceased and his visits to her house were resented and objected.
On the day of occurence, the accused visited the house when the deceased was not there and he went there armed with a kirpan.
When the deceased came and objected to his presence there was only an altercation and exchange of hot words, and not a fight.
Thereupon he took out a knife and stabbed on the chest of the deceased resulting instantaneous death of the deceased.
The above circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one.
All the above circumstances would certainly indicate such a state of mind namely he aimed and inflicted that injury with a deadly weapon.
As observed in Virsa Singh 's case in the absence of evidence or reasonable explanation show that the appellant did not intend to stab in the chest with a kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did.
When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death.
Therefore an offence of murder is made out.
Accordingly the appeal is dismissed.
Y.Lal Appeal dismissed.
| IN-Abs | The appellant, had illicit connection with Agya Devi (P.W. 3), wife of the deceased and in that connection he used to visit her house quit frequently to which the deceased and his two brothers & mother living separately in the adjacent house used to object.
It may be pointed that the Agya Devi was related to the appellant 's wife.
On August 18, 1973, at about 11 p.m. when the deceased was not in house, the appellant came to visit Agya Devi.
A shortwhile later, the deceased also came home and he objected to the presence of the appellant whereupon an altercation and exchange of hot words ensued between the appellant and the deceased.
The appellant took out a kirpan (chhurra) from his waist and stabbed the deceased in the chest.
The deceased fell down crying that the appellant has killed him and the appellant fled away with the weapon.
the incident was witnessed by Agya Devi (P.W. 3) and P.W. 2, deceased 's brother from the roof of the house.
The deceased died as a result of the injury.
The prosecution was thereupon launched against the appellant and the prosecution examined and amongst others P.W. 2 and P.W. 3.
P.W. 3 turned hostile, with the result the prosecution was left with only P.W. 2 (brother of the deceased) as eye witness.
The trial court relied on the evidence of P.W. 2 and also held that his evidence was corroborated by the P.Ws. 1 and 5 and recorded the conviction under section 302, I.P.C. and sentenced him to imprisonment for life for causing the death of Champat Rai, the deceased, which order was later affirmed by the Delhi High Court.
Hence this appeal by the appellant, after obtaining special leave.
The main contention of the appellant is that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence; even otherwise the accused having inflicted only one injury which proved fatal, the offence would be one amounting to culpable homicide.
203 Dismissing the appeal, this Court, HELD: `Intention ' is different from ``motive ' or ignorance or ``negligence '.
It is the `knowledge ' or `intention ' with which that act is done that makes difference, in arrival at a conclusion whether the offence is culpable homicide or murder.
[208 E] The language of Clause Thirdly of Section 300 speaks of intention at two places and in each the sequence is to be established by the prosecution before the can can fall in that Clause.
The `intention ' and `knowledge ' of the accused are subjective and invisible states of mind and their existence has to be gathered from the circumstances, such as the weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances.
The framers of the Code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the same thing as the intention that such consequences should ensue.
Firstly, when an act is done by a person, it is presumed that he , must have been aware that certain specified harmful consequences would or could follow.
But the knowledge is bare awareness and not the same thing as `intention ' that such consequences should ensue.
As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposely doing of a thing to achieve a particular end.[211H 212C] `Knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive.
On the other hand, `intention ' is a conscious state in which mental faculties are aroused into actively and summoned into action for the purpose of achieving a conceived end.
[213B C] The circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one.
All the circumstances would certainly indicate such a state of mind namely that he aimed and inflicted that injury with a deadly weapon.
In the absence of evidence or reasonable explanation to show that the appellant did not intend to stab in the chest with kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did.
When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death.
Therefore an offence of murder is made out.
[218D E] 204 Tholan vs State of Tamil Nadu, ; Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, ; Ram Sunder vs State of U.P., Crl.
Appeal No. 555/83 decided on 24.10.1983; Chahat Khan vs State of Haryana ; Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652; Willie (William) Slaney vs State of Madhya Pradesh, ; ; Harjinder Singh alias Jinda vs Delhi admn.
; , ; Laxman Kalu Nikalji vs State of Maharashtra, ; ; Gurmail Singh and Ors.
vs State of Punjab, , referred to.
Virsa Singh vs State of Punjab, ; , followed.
|
Civil Appeal No. 699 of 1985.
From the Judgment and Order dated 17.5.1984 of the Orissa High Court in O. J. C. No. 936 of 1979.
G.L. Sanghi, Adv., R.K. Mehta, Ms. Uma Jain, M.A. Firoz and P.N. Misra for the appearing parties.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
These three appeals are against the judgment of the Orissa High Court in O.J.C. No. 936 of 1979.
The Division Bench allowed the writ petition and quashed the gradation lists of sub Asstt.
Engineers (Electrical) and Sub Asstt Engineer (Mechanical), Annexures 5 & 6 before the High Court and the promotions given to the respondents Nos. 4 and 5 therein Annexure 7.
The Government and the Corporation were directed to consider the question of promotion treating the writ petitioner and the respondents as belonging to two cadres of Sub Asstt.
Engineer (Electrical) And (Mechanical).
These three appeals were filed, one by the Corporation, another by the State Government and the third one by the aggrieved employees.
344 The facts are simple.
Shri Bidura Charan Mohapatra, the 6th respondent/first appellant in the third appeal, a diploma holder in Mechanical and Electrical Engineering, was appointed as Mechanical Supervisor on August 24, 1962 in the pay scale of Rs.215 396.
Shri Parijat Ray, the 7th respondent/2nd appellant, equally possessed of diploma in Electrical and Mechanical Engineering, was appointed in the same scale of pay as a Mechanical Supervisor on November 5, 1962.
Shri P.K. Mohanty, the writ petitioner in the High Court and the respondent in these appeals holds diploma in Electrical Engineering and was appointed as Hand Driller in the pay scale of Rs. 100 155, on October 23, 1963 and Sub Assistant Engineer (Electrical) in the payscale of Rs. 185 325 on September 1, 1965.
The Lift Irrigation Corporation Ltd., a part of the Government Organisation, was carved out separately and the three persons alongwith others were drawn on deputation from the Government service to the Corporation in the year 1963.
Three categories of services were existing in the Corporation, namely, Mechanical, Electrical and Mechanical Electrical Composite unit.
In the year 1971, three tentative gradation lists were prepared for classification purpose of those three divisions as Sub Assistant Engineer (Mechanical), Sub Assistant Engineer (Electrical), Supervisors, Electrical and Mechanical which includes Electrical Supervisors, Mechanical Supervisors, Drilling Supervisors and Foreman cum Instructors.
In 1977 the Corporation decided to reorganise its set up and to classify the employees into two categories, namely, Sub Assistant Engineer (Electrical), Sub Assistant Engineer (Mechanical) to attend to the respective works, namely, mechanical and electrical.
The Corporation invited objections to amalgamate Composite Electrical and Mechanical Engineering Diploma Holders, either in Electrical or Mechanical Wing.
Options were called for from the persons holding only the composite diploma, namely, Mechanical and Electrical Engineering Supervisors.
The respondent writ petitioner did not file any objection to the scheme.
On consideration of the objections filed by others, two gradation lists were prepared in the order of seniority from the respective dates of appointment to the posts and higher scale of pay held by respective persons and fitted them in the respective lists as per options.
As stated earlier the respondent questioned their gradation in the Electrical Wing in the High Court and the High Court quashed it and the appellants obtained leave of this Court under article 136.
The contention of the appellants is that the respondent has no right to be kept in a particular wing.
The Corporation, with a view to H create two categories, namely, Mechanical and Electrical sought to 345 amalgamate the third Composite Mechanical/Electrical Wing and sought for options from the persons holding the composite posts.
This was taken due to administrative exigency.
The Corporation has power to carve out by amalgamating three sections, into two divisions and to prepare the seniority lists from the respective date of their initial appointment, etc.
The High Court, therefore, was unjustified to quash the gradation lists.
It was contended for the respondent by Sri Misra, his learned counsel, that the persons from the three wings are only deputationists holding lien on Government posts.
The Corporation did not frame any scheme of its own to appoint its own employees, nor given options to all the deputationists for confirmation as its employees.
So long as the employees are continuing on deputation, they are entitled to have seniority in the respective wings.
The writ petitioner admittedly has been working on the Electrical Wing and was No. 2 in the order of seniority as Sub Assistant Engineer (Electrical).
His right to seniority, cannot be disturbed by taking Mechanical Supervisor into the Electrical Wing, offending his right to promotion enshrined under articles 14 and 16 of the Constitution.
The writ petitioner holds only Diploma in Electrical Engineering.
S/Shri Bidura Charan Mohapatra and Parijat Ray hold double diploma of Mechanical and Electrical Engineering.
It is settled law that the Government or the Corporation, due to administrative exigencies, is entitled to and has power to reorganise the existing cadres of amalgamate some or carve out separate cadres.
The pre existing three separate cadres, namely, Electrical, Mechanical and the composite cadre, namely, Electrical Mechanical were sought to be amalgamated into two cadres by absorbing the personnel working in the composite cadre, namely, Electrical Mechanical in either Electrical cadre or Mechanical cadre.
Options have been called for in that regard from all the persons working in the Electrical Mechanical cadre and the appellants exercised their options for absorption in Electrical cadre.
The employees working in the Electrical and Mechanical cadres were also aware of the same.
It was, therefore, open to the respondent to raise any objection to the policy at that stage.
But he failed to so.
The decision to amalgamate the existing cadres by reorganising into two cadres was a policy decision taken on administrative exigencies.
The policy decision is not open to judicial review unless it is mala fide, arbitrary or bereft of any descernable principle.
On account of the amalgamation and adjusting the composite Electrical Mechanical cadre in either of the Electrical or Mechanical cadre as per the options given, the order of seniority of the employees working in Electrical or Mechanical cadres is likely to be reviewed.
When the persons in the 346 composite Electrical Mechanical cadre opted to the Electrical cadre, they are entitled to be considered for their fitment to the cadre as per the seniority from the date of their initial appointment vis a vis their scale of pay.
This was the procedure adopted by the Corporation in fixing the inter se seniority.
The procedure adopted is just, fair and reasonable and beneficial to all the employees without effecting their scales of pay or loosing the seniority from the date of initial appointment.
Undoubtedly, in this process the respondent/writ petitioner lost some place in seniority which is consequential to amalgamation.
He has not been deprived of his right to be considered for promotion, only his chances of promotion have been receded.
It was not the case of the respondent that the action was actuated by mala fide or colourable exercise of power.
There is no fundamental right to promotion, but an employee has only right to be considered for promotion, when it arises, in accordance with the relevant rules.
From this perspective in our view the conclusion of the High Court that the gradation list prepared by the Corporation is in violation of the right of the respondent/ writ petitioner to equality enshrined under article 14 read with article 16 of the Constitution, and the respondent/writ petitioner was unjustly denied of the same is obviously unjustified.
The appeals are accordingly allowed and the writ petition stands dismissed.
But in the circumstances, parties are directed to bear their respective costs.
N.P.V. Appeals allowed.
| IN-Abs | The Lift Irrigation Corporation Ltd. had three categories of services, namely, Mechanical, Electrical and Composite unit of Mechanical Electrical when it was carved out of the Government organisation.
Subsequently, due to administrative exigency, the Corporation decided to reorganise its set up and classify the employees into two categories ' namely, Electrical and Mechanical by amalgamating the composite Electrical and Mechanical Engineering diploma holders either in Electrical or Mechanical wing, and invited objections to the scheme.
It also called for options from persons holding only the composite diploma, namely, Mechanical and Electrical Engineering Supervisors.
On consideration of options received, the Corporation prepared two gradation lists in the order of seniority from the respective dates of appointment to the posts and higher scale of pay held by respective Persons and fitted them in the respective lists as per options.
Respondent No. 1, a diploma holder in Electrical Engineering, who 342 was working as Sub Assistant Engineer (Electrical) in Government service, and had been drawn on deputation to the Corporation along with Respondents No. 6 and 7, appellants in third appeal, holders of double diploma in Mechanical and Electrical Engineering, and working as Mechanical Supervisors, along with others, had not filed any objection to the scheme, but questioned before the High Court the gradation of Respondents No. 6 and 7 and others in the Electrical Wing.
The High Court quashed the gradation lists and directed the Government and the Corporation to treat Respondent No. 1 and the other respondents as belonging to two cadres of Sub Assistant Engineer (Electrical) and (Mechanical) respectively.
The Corporation, the State Government and the aggrieved employees filed separate appeals, by special leave, contending that the Corporation had the power to amalgamate the three sections into two, due to administrative exigency and to prepare seniority lists from respective dates of employees ' initial appointment, etc.
Respondent No. 1 contended that his seniority as No. 2 in the Electrical Wing could not be disturbed by taking Mechanical Supervisors into the Electrical Wing offending his right to promotion enshrined under Articles 14 and 16 of the Constitution.
Allowing the appeals, this Court, HELD: 1. 1 The Government or the Corporation, due to administrative exigencies, is entitled to and has power to reorganise the existing cadres or amalgamate some or carve out separate cadres.
The decision to amalgamate the existing cadres by reorganising them into two cadres being a policy decision, taken on administrative exigencies, is not open to judicial review unless it is mala fide, arbitrary or bereft of any discernible principle.
[345E, G] 1.2 On account of amalgamation into two cadres by absorbing the personnel working in the composite cadre, namely, Electrical Mechanical in either Electrical or Mechanical cadre, and their adjustment, the order of seniority of the employees working in Electrical or Mechanical cadres is likely to be reviewed.
When the persons in the composite Electrical Mechanical cadre opted to the Electrical cadre, they were entitled to be considered for their fitment in the cadre as per the seniority from the date of their initial appointment vis a vis their scale of pay.
This was the procedure adopted by the Corporation in fixing the 343 inter se seniority.
The procedure adopted is just, fair and reasonable and benificial to all the employees without affecting their scales of pay or losing the seniority from the date of initial appointment.
[345G H, 346A B] Undoubtedly, in this process, the first respondent lost some place in seniority which is consequential to amalgamation.
He has not been deprived of his right to be considered for promotion; only his chances of promotion have been receded.
1.3 There is no fundamental right to promotion.
An employee has only right to be considered when it arises, in accordance with the relevant rules.
[346C] 1.4 In the circumstances, the High Court was not right in holding that the gradation list prepared by the Corporation was in violation of Respondent No. 1 's right to equality enshrined in Article 14 read with Article 16 of the Constitution, and that he was unjustly denied of the same.
[346D]
|
Civil Appeal No. 692 & 693 of 1981.
From the Judgment and Order dated 19.5.1980 of the Delhi High Court in W.P. Nos.
883 of 1978 and 1079 of 1979.
R.K. Habbu, R.B. Hathikhanwala and B.R. Aggarwala for the Appellants.
Soli J. Sorabjee, Attorney General (NP), Kapil Sibal, Additional Solicitor General, Ms. Indu Malhotra, P. Parmeshwaran and C.V.Subba Rao for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN J.
These two appeals involve a common question and can be disposed of by a common judgment.
The question is whether the appellant companies (hereinafter referred to as the 'assessees ') are entitled to full "draw back ' of the customs duty which they had paid on the import of di methyl terephthalate (shortly referred to as 'DMT ') for manufacture of polyester staple fibre yarn.
The assessees converted the DMT into polyester staple fibre in their factory at Thane and then sent it to Bhilwara in Rajasthan where the Rajasthan Spinning and Weaving Mills blended it with indigenous viscose staple fibre to spin out certain varieties of blended yarn.
It is common ground that the product manufactured by this process was exported by the assessees to Imperial Chemical Industries Pvt.
Ltd. Singapore, who had supplied the DMT free of charge to the assessees.
The answer to the question revolves around the interpretation of Section 75 of the read with the Customs and Central Excise Duty Draw Back Rules, 1971.
291 Section 75 of the empowers the Central Government, by notification in the official gazette, to direct, in respect of goods of any class or description manufactured in India and exported to any place outside India, that draw back should be allowed of the duties of customs chargeable under the Act on any imported materials of a class or description used in the manufacture of such goods, in accordance with and subject to the rules framed under sub section (2) of the said section.
Sub section 2, which confers a rule making power, enacts that such rules may, among other things, provide: "(a) for the payment of draw back equal to the amount of duty actually paid on the imported materials used in the manufacture of the goods or as is specified in the rules as the average amount of duty paid on the materials of that class or description used in the manufacture of export goods of that class or description either by manufacturers generally or by any particular manufacturer;" There is a similar provision in section 37 of the Central Excises & Salt Act, 1944 enabling grant of draw back of the excise duty paid in relation to such manufacture.
The Central Government framed the Customs and Central Excise Duties Drawback Rules, 1971 (hereinafter referred to as 'the rules '), in exercise of the powers conferred on it under these two statutes.
These are composite rules under the above two provisions and enable drawback being availed of in relation to customs duty as well as in relation to duties of central excise.
Some relevant provisions of these rules may be quoted here.
Rule 3, in so far as it is relevant for our present purposes, reads as follows: Rule 3: Drawback: (1) Subject to the provisions of (a) the (52 of 1962) and the rules made thereunder.
(b) the (1 of 1944) and the rules made thereunder, and (c) these rules, (a) drawback may be allowed on the export of goods specified in Schedule II at such amount, or at such rates, as 292 may be determined by the Central Government.
xxx xxx xxx (2) In determining the amount or rate of drawback under this rule, the Central Government shall have regard to: (a) the average quantity or value of each class or description of the materials from which a particular class of goods is ordinarily produced or manufactured in India.
(b) the average quantity or value of the imported materials or excisable materials used for production or manufacture in India of a particular class of goods.
(c) the average amount of duties paid on imported materials or excisable materials used in the manufacture of semis, components, and intermediate products which are used in the manufacture of goods.
(d) the average amount of duties paid on materials wasted in the process of manufacture and catalytic agents: Provided that if any such waste or catalytic agent is used in any process of manufacture or is sold, the average amount of duties on the waste or catalytic agent so used or sold shall also be deducted.
(e) the average amount of duties paid on imported materials or excisable materials used for containing or packing the exported goods.
(f) the average amount of duties of excise paid on the goods specified in Schedule 1: and (g) any other information which the Central Government may consider relevant or useful for the purpose.
Rule 4.
Revision of rates: The Central Government may revise the amounts or rates determined under rule 3.
xxx xxx xxx 6.
Cases where amount or rate of drawback has not been determined: 293 (1)(a) Where no amount or rate of drawback has been determined in respect of any goods, any manufacturer or exporter of such goods may, before exporting such goods, apply in writing to the Central Government for the determination of the amount or rate of drawback therefor stating all relevant facts including the proportion in which the materials or components are used in the production or manufacture of goods and the duties paid on such materials or components.
(b) On receipt of an application under clause (a) the Central Government shall after making or causing to be made such inquiry as it deems fit, determine the amount or rate of drawback in respect of such goods.
Cases where amount or rate of drawback determined is low (l) Where in respect of any such goods, the manufacturer or exporter finds that the amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4 for that class of goods is less than three fourths of the duties paid on the materials or components used in the production or manufacture of the said goods, he may make an application in writing to the Central Govermment for fixation of the appropriate amount or rate of drawback stating all relevant facts including the proportion in which the materials or components are used in the production or manufacture of the goods and the duties paid on such materials or components.
(2) On receipt of the application referred to sub rule (1) the Central Government may, after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate if the amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4, is in fact less than three fourth of such amount or rate determined under this sub rule.
Schedule II to the notification by which the rules were promulgated listed the items the export of which entitles an assessee to avail of the drawback facility.
Item 25 of the list reads thus: "Synthetic and regenerated fibre, textile yarn, thread, twines, cords and ropes 294 It is common ground that the goods exported by the assessees fall under item 25 above.
There is also no controversy that the DMT imported by the assessees was used for the manufacture of the above commodity and that, on the import of the DMT, the assessees have paid customs duty.
The rates of drawback available in respect of various goods were notified by the Central Government in due course.
Against serial no 25, the notification set out the rates of drawback as follows: Serial Sub Si.
Description of Rate of No. No. goods Drawback 25.
SYNTHETIC AND REGENERATED FIBRES AND/TEXTILE YARN/ THREAD, TWINES, CORDS AND ROPES Brand rate to be 2501 Synthetic and regenerated fixed on an fibre and textile yarn, application from thread, twines, cords and the individual ropes not elsewhere manufacturer specified.
exporter.
2502 (a) Yarn of above 21 BWS Counts or above 14 n.f. counts, spun wholly out of either viscose rayon fibre or acetate fibre or polyster fibre, polyamide fibre or acrylic fibre or wool, or from a combination of two and not more than two of the above mentioned fibres, or a combination of any one of the above mentioned fibres with either cotton or silk (but excluding yarn spun out of fibres obtained from fibre wastes, yarn waste or fabric wastes, by gernetting or by any other process: (a) Cellulosic fibre content: Rs. 1.80 (Rupees one and paise eighty only) per kg.
295 (b) Polyester fibre content: Rs.43.15 (Rupees forty three and paise fifteen only) per kg.
(c) Acrylic fibre content: Rs.37.75 (Rupees thirty seven and paise seventy five only) per kg.
(d) Polyamide fibre content: Rs. 16.40 (Rupees Sixteen and paise forty only) per kg.
(e) Wool contents: (i) in the worsted yarn of Rs. 18.95 (Rupees Weaving quality made wool Eighteen and paise top.
ninety five only) per kg.
(ii) in the worsted yarn of Rs. 13.55 (Rupees weaving quality not made from Thirteen and paise fifty wool top.
five only) per kg.
(iii) in the worsted Hosiery Rs. 16.65 (Rupees Sixteen yarn and worsted hand knitting and paise sixty five yarn made from wool top.
only) per kg.
(iv) in the worsted hosiery yarn Rs.11.25 (Rupees Eleven and worsted hand knitting yarn and Paise twenty five not made from wool top.
only) per kg.
(v) Bye content if the yarn is Rs.0.85 (Eighty five dyed paise only) per kg.
xxx xxx xxx It will be seen from the above table that the assessees are entitled to a drawback of Rs.43.15 per kg.
of the polyester fibre content of the yarn exported by them.
We are informed that this is the rate of central excise duty payable in respect of the manufacture of yarn having polyester fibre content.
For reasons to be stated presently, the assessees had to pay no central excise duty for the manufacture and hence there was admittedly no question of the assessee getting a drawback to this extent.
The point raised by the assessee is that, having paid customs duty on the DMT , it was entitled to a drawback in respect of the customs duty paid by it on the DMT.
Since this was not included in the notification of the Central Government, the assessees made an application to the Ministry of Finance on 23.3.1977 requesting that drawback of the entire customs duty may be sanctioned.
This request, 296 however, was rejected by the Central Government by a communication dated 12.3.1978.
This communication was in the following terms: "Under Rule 3 of the Customs and Central Excise Duties Drawback Rules 1971, all industry rates of drawback on polyester viscose blended yarn have been determined and announced under serial No. 2502 of the Drawback Schedule.
The said rates have been determined at the material time, after taking into consideration: (a) duty incidence of raw materials used in the manufacture of viscose fibre, plus the Central Excise duty on viscose fibre and (b) the Central Excise duty on polyester fibre in respect of polyester yarn.
However, no raw material duty for manufacture of polyester yarn was taken into account, as the same (DMT) is available indigenously and is exempted from Central Excise Duty.
For the rates determined effective from 18.8.1977 however the duty incidence on DMT has also been taken into consideration on the basis of weighted average of imported and indigenous material.
" The assessees, dissatisfied with this decision of the Central Government, preferred a writ petition in the Delhi High Court, which was dismissed by the High Court on 19.5.80.
Hence the present appeals.
At this stage, it may be necessary to outline some facts which may be relevant for appreciating the background in which the assessees ' counsel urged strongly the equitable, if not also legal, claims of the appellant for the drawback of the customs duty.
Counsel claims that the assessees were almost the first group of entrepreneurs in India to manufacture polyester fibre yarn.
They had been fortunate enough to obtain a contract from the Imperial Chemical Industries, Singapore.
By a letter dated 2.4.75 this concern agreed to supply free of cost the DMT required for the manufacture of blended yarn consisting of 67 per cent polyester and 33 per cent viscose fibre.
The DMT was to be converted in polyester fibre, blended with viscose indigenously and shipped to a customer of the ICI in Sri Lanka.
Thereupon, on 2.6.75, the assessees obtained customs clearance permits for import of 392 tons of DMT and also of 178 tons of viscose staple fibre.
Eventually, however, the viscose staple fibre was obtained indigenously and the import permit, to this extent, was not utilised by the assessee.
At the 297 time of obtaining this permit, the assessees also obtained permission to convert the imported DMT into polyester fibre under customs bond.
The condition attached to the Customs Clearance permit was in the following terms: "The firm will convert the imported DMT into polyester fibre under Customs bond.
The firm will then move the polyester fibre so manufactured and the imported viscose staple fibre under bond to the bonded warehouse of Rajasthan Spinning and Weaving Mills, Bhilwara Messrs. Rajasthan Spinning and Weaving Mills will then manufacture under bond polyester viscose yarn on behalf of the firm.
The polyester viscose fibre yarn will then be exported by the firm to the overseas buyers who have supplied the DMT and viscose staple fibre on CCP basis or their nominees. .
If these conditions had been fulfilled the assessees would have had no problems.
The polyester fibre would have been manufactured under customs bond and this would have obviated payment of customs duty by the assessees.
So also, the production of the blended yarn at the Rajasthan Spinning and Weaving Mills would have been under Central excise supervision and no excise duty would have been payable on the manufacture.
Unfortunately, however, the customs authorities were not in a position to permit the conversion of the DMT into polyester fibre under customs bond for reasons which are not at present relevant and which are not being challenged in these proceedings.
The assessees 's request for the manufacture of polyester fibre under: customs bond was declined by the customs authorities on 2.4.1976.
Perhaps anticipating this difficulty, the Association of Polyester Staple Fibre Manufacturers at Bombay made an application to the Central Government on 26.3.1976 praying for exemption from customs duty on DMT required for the manufacture of polyester staple fibre.
This letter points out: "Members of this Association manufacture polyester staple fibre.
One of our members has received an advance licence for the import of DMT, a photostat copy of which we attach herewith.
This DMT is to be used for manufacture in polyester fibre and the polyester fibre then converted into yarn to be supplied against export orders.
Our members wish to explore possibility of larger export business in this manner.
Indigenous supplies of both DMT and glycol are 298 insufficient to meet the domestic market requirements and export business can only be done by import of the two materials.
Fulfilling export orders by using advance licences as the one issued to our member poses certain problems because the licence stipulated manufacture under Customs Bond.
You will appreciate the difficulty in manufacturing under bond when the fibre for export constitutes only a portion of the total manufacture of the factory.
If DMT and glycol could be included in the schedule to the customs Notification GSR 183, the procedural difficulties in manufacturing under Bond will not apply.
Exports of yarn made from raw materials obtained against advance licences could earn considerable foreign exchange because of the value added during processing.
One of the assessees also made a similar request and, eventually, a notification was issued on 2nd August, 1976 under section 25 of the exempting DMT from customs duty.
The Government of India also wrote to one of the present appellants on 9.9.76 drawing attention to the said notification and stating that with the issue of this notification.
The assessees ' problem would appear to have been solved.
This, however, was not correct.
The notification exempted future imports of DMT from customs duty but the assessees, having imported the DMT earlier, had to clear the same after paying customs duty thereon.
Hence their request for a drawback of the customs duty already paid by them, the refusal of which has led to the present litigation.
On behalf of the appellants, it is contended that the contains provisions enabling thd Government either to exempt goods under section 25 from the levy of Customs duty at the time of import or failing this, to permit a drawback of customs duty paid in the event of the conditions set out in section 75 being fulfilled.
In the present case, an exemption under section 25 of the was in fact notified but unfortunately this happened only in August, 1976.
By this time, the assessees had already imported the DMT.
This they were obliged to do because of a time bound programme for export of the manufactured fibre to Sri Lanka.
Counsel states that, from the very outset, the assessees had proceeded on the footing that they would be obtaining exemption from customs and excise duty because, apart from getting some conversion charges from the ICI, their own margin of profit on the transaction was not substantial.
That is why even at the time of obtaining the customs clearance permit they had sought for permission to convert DMT into polyester under customs bond.
If that had been 299 done, there would have been no necessity to pay customs duty at all.
Unfortunately, because the department lacked facilities to supervise such an operation, the attempt of the assessees was only partially successful in that they were able to get only the production of the blended fibre done under Central Excise supervision.
The initial stage of conversion from DMT to polyester fibre could not be done under customs bond.
It is pointed out that the Government of India had exempted DMT from customs duty only on the basis of the representations made by the assessees and it is urged that the refusal to grant drawback of customs duty to assessees is wholly unjustified.
The object of section 75 of the , read with section 27 of the Central Excise Act, is obviously to provide that in cases where certain goods are imported for complete utilisation in the manufacture of goods which are exported, the importer should be able to obtain relief in respect of customs and excise duties.
In the present case there is no controversy that the D.M.T. imported by the assessee was utilised for the manufacture of polyester staple fibre and that the final product was fully exported to Sri Lanka.
The notification made under the rules framed for this purpose, however, provides only for a drawback in respect of the excise duty involved in the manufacture of polyester staple fibre but not the customs duty on the raw material actually imported.
Sri Habbu, learned counsel, contends that this notification, in fact, is contrary to the provision contained in rule 3 which obliges the Government, in determining the amount or rate of drawback, to have regard, among other things, to the amount of duties paid on imported or excisable material used in the manufacture of the exported goods.
He submits that, in so far as the rates prescribed by the Central Government do not take into account the element of import duty on DMT, the fixation is not in accordance with the rule.
According to him, therefore, this case 'falls under rule 6 which enables an assessee to apply to the Central Government to determine a drawback where none has been determined.
The Central Government, he submits, was in error in rejecting the assessees ' application as one falling under rule 7 and, therefore not maintainable both in law and equity.
Having heard the learned counsel for the assessees at some length, we are of opinion that the High Court was right in rejecting the assessees contentions.
We think that the assessees ' arguments are based on a basic misapprehension that, under the Acts and rules, a manufacturer is automatically entitled to a drawback of the entire customs and excise duties paid by him if the terms and conditions of 300 section 75 are fulfilled.
Though section 75 of the and section 37 of the Central Excises & Salt Act empower the Government to provide for the repayment of the customs and excise duties paid by individual manufacturers also, the rules as framed (rule 3 in particular) provides only for a refund of the "average amount of duty paid on materials" of any particular class or description of goods used for the manufacture of export goods of that class or description by manufacturers generally, except to the extent prescribed under rule 7 (to be noticed presently).
The rules do not envisage a refund of an amount arithmetically equal to the customs duty or central excise duty which may have been actually paid by an individual importer cum manufacturer.
If that had been the statutory intendment, it would have been simple to provide that in all cases where imported raw materials are fully used in the manufacture of goods which are exported, the assessee would be entitled to a drawback of the customs or excise duties paid by him for the import or on the manufacture.
On the other hand, section 75(2) requires the amount of drawback to be determined on a consideration of all the circumstances prevalent in a particular trade and the fact situation relevant in respect of each of various classes of goods imported and manufactured.
The need for providing an elaborate process of determination as envisaged in rule 3 is this.
There may be different manufacturers of a particular manufactured item.
Some of them may be using indigenous material and some may be importing some of the raw material.
Similarly, in the process of manufacture also, there may be difference between manufacturer and manufacturer.
That is why the drawback rules provide for a determination of the drawback after taking into account the "average" amount in respect of each of the various items specified in rule 3 in relation to each type of goods listed in Schedule II.
The notification issued also determines the composite drawback available in respect of both customs and excise duties to importers cum manufacturers in respect of various categories of goods.
In other words, the amount of drawback is not intended to be the amount of the duties that may have been paid by individual manufacturers; it is to be determined by considering the overall position prevalent in the country in respect of each of the categories of trade in the goods specified in Schedule II.
We think that, if this basic principle is understood, the decision of the Govermment would become intelligible and rational.
There is no controversy that, in this case, the goods exported fall under item 25.
Learned counsel sought to contend that the goods here fall under sub item 2501 but this is clearly untenable.
Sub item 2501 represents a residuary category which will not be attracted to the 301 goods here which clearly fall under sub item 2502.
The notification prescribes different amounts of drawback under this it@m depending on the composition of the yarn and the nature of its contents.
It specifies an amount of Rs.43.15 per Kg.
as the relief by way of drawback available against the goods with which we are concerned which fall under clause (b) of item 2502.
This much indeed, was conceded before the High Court.
Once we understand the principles on which and the scheme according to which the rates of drawback are to be and are determined as explained earlier, the plea of the appellants, that the amount of drawback determined is nothing more than the excise duty payable on manufacture of blended fibre with polyester fibre, content and that the notification has erred in overlooking the customs duty paid on imported DMT, is wholly untenable.
We say this for two reasons.
First, the rates prescribed constitute a composite rate of drawback fixed having regard to the liabilities under the as well as the Central Excises & Salt Act.
It would not be correct, in principle, to bifurcate the amount so fixed into its two constituents and to say, merely because the amount fixed is equal to one of the duties, that the other has not been taken into account.
In theory, the drawback determined could have taken into account both sets of duties in part only.
It cannot be said to be merely the customs duty drawback or central excise duty drawback.
Though it does appear that the various rates of drawback prescribed under item 2502 are equal to the rates of excise duty payable on the manufacture of the various items referred to therein, the nature of exemption granted is one of relief under both enactments.
It is immaterial whether this quantum of relief benefits the assessee in respect of one or other or both of the levies which he has to discharge.
The attempt to identify and correlate the rebate granted to the central excise duty paid does not therefore appear to be correct in principle.
But, this ground apart, we think there is force in the point made by the learned counsel for the Union of India and accepted by the High Court that at the time when these drawback rates were fixed, the Government of India took into account both the import duty as well as the excise duties which would be payable on the manufacture of the goods the export of which was intended to be encouraged.
After examining the condition in the trade, it was found that D.M.T. was easily available in India at that time and that, therefore, it would not be necessary to grant any relief in respect of drawback of customs duty on the imported material because that would only result in assessees 302 attempting unnecessarily to import a raw material which was available in the country itself.
In fact, this is the aspect on which the Delhi High Court has laid considerable emphasis.
Learned counsel for the appeallants contends that this is factually and that this is clearly shown by the very fact that Government of India itself, in August, 1976, decided to grant exemption in respect of customs duty for the import of D.M.T. He submits that if D.M.T. had been easily available indigenously at that time, the question of granting exemption under section 25 would not have appealed to the Government at all.
He, therefore, submits that, in fixing the rate of drawback the Central Government had proceeded on the footing that no import duty would be payable on the DMT and that it will be sufficient to grant relief in respect of Central excise duty alone.
We find that, on this aspect, the position is not so simple as submitted by the learned counsel for the appellants.
We have already extracted reply of the Government of India to the assessees ' representation which clearly mentions that DMT is available indigenously and that, therefore, no duty in manufacture of polyester yarn was taken into account.
This is a statement of fact and there is no material placed before us to contradict the same except for the cor respondence referred to earlier.
If one looks carefully at the corres pondence, one will find that it does not support the assessees 'case.
For one thing the memorandum submitted by the Association of March 1976 itself proceeds on the footing that DMT is available locally but not sufficient to meet the domestic market requirments.
This, clearly, is a reference to something which happened after the present appellants had imported their goods and started the manufacture.
Indeed, it is their claim that they were fore runners in this field.
Fol lowing up on the assessees ' attempt to obtain imports of DMT and exporting the goods manufactured, other polyester staple fibre manufacturers also proposed to explore the possibilities of such imports and exports and what the letter says would only appear to be that the indigenous supplies of DMT and Glycol may not be enough to meet the domestic market requirements if the business is so expanded.
By the time the notification fixing the rates was issued, import duty on DMt had been removed and, therefore, there was no purpose in granting a drawback of customs duty.
In these circumstances, the customs duty was rightly not taken into account in fixing the rate of drawback.
The letter of the Government dated 9.9.76 is only an answer to the assessees ' prayer that its problem may be solved by granting an exemption for DMT from customs duty and refers only to the position after the notification of exemption.
It is not reply to the assessees ' representation in respect of the past which was filed only much later in 1977.
The correspondence in the case is, therefore, of no 303 help to the assessees.
It may also be pointed out that the assessees appear to have imported DMT not because it was not locally available but only because it was able to get it free of cost from the ICI which was a benefit which other manufacturers, if any, could not have enjoyed.
We are, therefore, of opinion that High Court was right in concluding that the rate of drawback in respect of the goods in ques tion was fixed after taking into consideration the aspect of customs duty payable in respect of DMT and that a conscious decision was taken that no relief in this respect should be granted as DMT was available in the Country itself.
It cannot,therefore, be said that this is a case where the fixation is contrary to the terms of rule 3 and that the assessees ' application for determination of a rate in his case should be taken as an application under rule 6.
Rule 6 is also inapplicable for the reason that an application under rule 6 should be made before the export of the manufactured goods which does not seem to be the case here.
The assessees ' reliance on rule 6, therefore, fails.
It is true the fixation of rates of drawback on the average basis indicated in rule 3 could work hardship in individual cases.
Provi sion for this contingency is made in rule 7.
The assessees ' application was rightly treated as one made under this rule and they could, if at all seek relief only if their case fell within its terms.
This rule, unfortu nately does not provide for relief in every case where an individual manufacture has to pay customs and excise duty to a larger extent than that determined for his class of goods.
Relief is restricted only to cases when the margin of difference is substantial and to the extent specified in rule 7.
The High Court has discussed this point at length and demonstrated, by giving necessary figures, how the assessees ' case does not fulfill the term of the rule and this conclusion is not, in fact, challenged by the learned counsel for the appellants.
The Government was, therefore, right in rejecting the appellants ' request made under section 7 of the Drawback Rules.
For the reasons above mentioned, we agree with the High Court that the order of the Central Government rejecting the assessees 'application was well founded and cannot be interfered with.
Learned counsel for the appellants brings to our notice a manual published by the Directorate of Publication.
Ministry of Finance, Department of Revenue explaining the scope of the rules as well as two notifications issued by the Government on 9.6.1978 and 1.2.1982 respectively and submits that the present case falls within the terms of these notifica tions.
We are constrained to point out that these are notifications issued subsequent to the period of the controversy before us: also this 304 is material which was not placed before the authorities or the High Court.
We, therefore, find ourselves unable to permit the assessee to rely upon them at this late stage.
However, having regard to the circumstances and the subsequent policy in the above rules, we think it is a fit case in which the Central Government could consider whether, on equitable grounds, the assessee can be given relief in respect of the customs duty on DMT paid by it.
In this context, it is worthwhile noting that the assessee saved foreign exchange for the country by importing DMT free of cost.
The entire manufactured product has also been exported and earned foreign exchange.
The appellants also apparently gave impetus to other manufacturers for the export of blended fibre on large scale.
If only the appellants had imported the DMT a few months later, they would have been entitled to exemption from customs duty and would not have suffered the present handicap.
They also did obtain the permission of the Government to convert DMT into polyester fibre under customs bond but this could not be implemented for reasons beyond their control.
Having regard to all these circumstances, it would seem only just and fair that the assessees should not be denied a benefit of which all other persons have since availed of.
We, therefore, think that this is a fit case in which the Government should consider, in case the assessees make an application within two months from today, whether the assessees could be granted the relief prayed for, if only on equitable grounds, and pass appropriate orders on such applications.
With the above observations, these appeals are dismissed.
But in the circumstances, we make no order as to costs.
Y. Lal Appeals dismissed.
| IN-Abs | The appellants are manufacturers of Polyester fibre yarn.
They obtained a contract from the Imperial Chemical Industries, Singapore for the supply of the said yarn and the said concern had agreed to supply to the appellants free of cost the di methyl terephthalate (DMT) D required for the manufacture of Polyester staple fibre yarn.
The DMT was required to be converted into polyester fibre, blended with viscose indigenously and shipped to a customer of the ICI in Sri Lanka.
The appellant assessees obtained customs clearance permits for import of 392 tons of DMT and also of 178 tons of viscose stable fibre.
The appellants also obtained permission to convert the imported DMT into polyester fibre under customs bond.
The appellants imported the DMT and paid the customs duty in respect thereof Section 75 of the empowers the Central Government to allow the drawback of the duties of customs chargeable under the Act on any imported materials of a class or description in the manufacture of such goods in accordance with and subject to the rules under sub section (2).
There is an identical provision in section 37 of the Central Excises & Salt Act, 1944 enabling grant of draw back of the excise duty paid in relation to such manufacture.
The Central Government framed the Customs and Central Excise Duties Drawback Rules 1971 enabling drawback being availed of in relation to customs as well as in relation to duties of central excise.
Schedule II to the notification listed the items the export of which entities an assessee to avail of the drawback facility.
DMT as such was not included in the notification in respect of which drawback could have been availed of by the assessees.
The assessee therefore made an application to the Ministry of Finance on 23.3.1977 requesting that since it had paid customs duty on DMT, it was entitled to its drawback, more 289 particularly when its request for the manufacture of the polyester fibre under customs bond had been declined by the customs authorities.
The application filed by the appellants was rejected bY the Central Government on 12.3.1978, though on a representation made by the Members of the Association of manufacturers of Polyester staple fabric a notification had been issued on 2.8.76 under Section 25 of the Customs Act B exempting DMT from Customs duty.
The appellant thereupon filed writ petition in the Delhi High Court which was dismissed by the High Court.
Hence these appeals.
Dismissing the appeals, but recommending to the Central Government to consider the case of the appellants on equitable grounds whether the relief could be granted to it, this Court, HELD: Though Section 75 of the and Section 37 of the Central Excises & Salt Act 1944 empower the Government to provide for the repayment of the customs and excise duties paid by individual manufacturers also, the rules as framed (rule 3 in particular) provide only for a refund of the 'average amount of duty paid on materials, of any particular class or description of goods used for the manufacture of export goods of that class or description by manufacturers generally, except to the extent prescribed under rule 7.
[30OA B].
The rules do not envisage a refund of an amount arithmeticaly equal to the customs duty or central excise duty which may have been actually paid by an individual importer cum manufacturer.
If that had been the statutory intendment, it would have been simple to provide that in all cases where imported raw materials are fully used in the manufacturers of goods which are exported, the assessee would be entitled to a draw back of the customs or excise duties paid by him for the import or on the manufacture.
[300C] There is no controversy that, in this case, the goods exported fall under item 25.
R was sought to be contended that the goods fall under sub item 2501, but this is clearly untenable.
Sub item 2501 represents a residuary category which will not be attracted to the goods which clearly fall under sub item 2502.
The notification prescribes different amounts of drawback under this item depending on the composition of the yarn and the nature of its contents.
It specifies an amount of Rs.43.15 per kg.
as the relief by way of drawback available against the goods with which we are concerned which fall under clause (b) of item 2502.
[30OH 301B] 290 The High Court was right in concluding that the rate of drawback in respect of the goods in question was fixed after taking into consideration the aspect of the customs duty payable in respect of DMT and that a conscious decision was taken that no relief in this respect should be granted as DMT was available in the country itself.
It cannot therefore, be said that this is a case where the fixation is contrary to the terms of rule 3, and that the assessee 's application for determination of a rate in his case should be taken as an application under rule 6.
[303B) Rule 6 is also inapplicable for the reason that an application under rule 6 should be made before the export of the manufacturer 's goods which does not seem to be the case here.
[303C]
|
ivil Appeal Nos.
160 63 of 1990.
From the Order dated 25.9.89 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/1883/85 C, E/2031/85 C, E/ 1468/88 C and E/ 1986/88 C (Order No. 543 546 of 1989 C).
M.L. Lahoty, Mrs. Meeta Sharma and P.S. Jha (NP) for the Appellant.
M. Chander Sekaran, Additional Solicitor General (N.P.).
M. Gouri Shanker Murthy, G. Venkatesh Rao and P. Parameshwaran for the Respondent.
The Judgment of the Court was delivered by 320 S.C. AGRAWAL, J.
These appeals raise for consideration the question as to whether egg trays and other similar products manufactured by the appellant can be regarded as 'Containers ' under the relevant entries in the Central Excise Tariff.
Till February 28, 1986 the excise tariff was contained in the First Schedule to the (hereinafter referred to as 'the old Tariff ') and with effect from March 1, 1986, the excise tariff is contained in the Schedule to the (hereinafter referred to as 'the new Tariff).
The relevant entry in the old Tariff was Item 17.
During the period March 1, 1982 to February, 1983, the said Item 17 read thus: "Paper and paper board, all sorts (including paste board, mill board, straw board, cardboard and corrugated board) and articles thereof specified below, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power (1) Uncoated and coated printing and writing paper (other than poster paper) (2) Paper board and all other kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating, corrugation, creping and design printing), not elsewhere specified.
(a) All sorts of paper commonly known as Kraft paper, including paper and paper board of the type known as Kraft liner or corrugating medium, of a substance equal to or exceedings 65 gram per square metre in each case.
(b) Others.
(3) Carbon and other copying papers (including duplicator stencils) and transfer papers, whether or not cut to size and whether or not put up in boxes.
(4) Boxes, cartons, bags and other packing containers (including flattened or folded cartons, whether or not printed and whether in cartons), whether or not printed and whether in assembled or unassembled conditions." 321 Item 68 of the old Tariff was in the nature of residuary entry.
By notification No. 66/82 CE dated February 28, 1982, the Central Government, in exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, exempted articles of paper or paper board falling under sub item (4) of item 17 of the old Tariff from the whole of the duty of excise leviable thereon.
The said exemption was, however, not applicable to printed boxes and printed cartons (including flattened or folded printed boxes and flattened or folded printed cartons) whether in assembled or unassembled condition.
With effect from March 1, 1983, Item 17 was substituted and during the period March 1, 1983 to February 28, 1986, it read as under: c "Paper and Paper board, all sorts (including pasteboard, mill board, strawboard, cardboard and corrugated board), and articles thereof specified below, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power (1) Paper board and all other kinds of paper (including paper or paper boards which have been subjected to various treatments such as coating, impregnating, corrugation, creping and design printing), not elsewhere specified.
(2) Carbon and other copying papers (including duplicator stencils) and transfer papers, whether or not put up in boxes.
(3) Boxes, cartons, bags and 'Other packing containers (including flattened or folded boxes and flattened or folded cartons), whether or not printed and whether in assembled or unassembled conditions.
" In the new Tariff, the relevant entry under Heading 48.18 in Chapter 48 is as follows: G "48.18 OTHER ARTICLES OF PAPER PULP, PAPER.
PAPERBOARD, CELLULOSE WADDING OR WEES OF CELLULOSE FIBRES: Cartons, boxes, containers and cases (including flattened or folded boxes and flattened or folded cartons), whether in assembled or unassembled condition: 322 4818.11 Intended for packing of match sticks 4818.12 Printed cartons, boxes, containers and cases, made wholly out of paper or paper board of heading No. or sub heading No. 48.04, 4805.11, 4806.19, 4807.91, 4807.92, 48.08 or 4811.10, as the case may be 4818.13 Other printed cartons, boxes and cases 4818.19 Other" 4818.20 Toilet tissues, handkerchiefs and cleansing tissues of paper 4818.90 Other." On products falling under sub Heading 4818.19, the excise duty was nill whereas on products falling under sub Heading 4818.90, the excise duty was payable at the rate of 12%.
M/s. G. Claridge & Company Ltd. the appellant herein manufactures (i) egg filler flats, (ii) egg cartons, (iii) tube light packing trays, (iv) duck egg trays and (v) apple trays.
It filed a classification list for the above goods effective from April 1, 1981 classifying the products under Item 68 of the old Tariff and it was paying duty at the prevailing rate under Item 68.
After the introduction of the revised Item 17 with effect from February 28, 1982/March 1, 1982, the said appellant filed a revised classification list effective from March 1, 1982 for the aforesaid five products seeking classification under Item 17(4) and claiming full exemption from central excise duty under notification dated February 28, 1982.
This classification list was approved by the Assistant Collector of Central Excise, Pune Division on March 11, 1982, but on re examination Department felt that the said products did not merit classification under Item 17(4) but under Item 68 of the old Tariff and a show cause notice dated May 4, 1984 was issued.
After considering the reply of the appellant to the said show cause notice, the Assistant Collector of Central Excise, Pune Division passed an order dated January 28, 1985 whereby he held that 'egg trays ' manufactured by the appellant were correctly classifiable under Item 68 of the old Tariff and not under Item 17(4) and the appellant was required to pay central excise duty at the appropriate rate leviable on all types of egg trays manufactured and cleared from its unit during the period of six months prior to the notice dated May 4, 1984.
The Assistant Collector was of the view that the articles manufactured by the appellant were articles manufactured directly from the pulp and were, therefore, classifiable as 'articles of pulp ' under Item 68.
The said order of the Assistant Collector was reversed in appeal by the Collector of Central Excise 323 (Appeals) by his order dated April 30, 1985 on the view that the products manufactured by the appellant were made out of waste paper and they were classifiable under Item 17(4) as 'articles of paper and paper board '.
Feeling aggrieved by the said order of the Collector (Appeals), the Department filed appeals Nos.
E/1883/85 C and E/2031/85 C before the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'the Appellate Tribunal ').
After the introduction of the new Tariff with effect from March 1, 1986, the appellants filed a classification list classifying their products as 'containers ' falling under sub heading 4818.19 of the new Tariff and since no duty was payable under the said sub heading, the appellants claimed exemption from payment of excise duty on their products.
The said classification list was approved provisionally but subsequently the Assistant Collector, Central Excise issued a show cause notice dated October 16, 1986 proposing to classify the goods under sub heading 4818.90 chargeable to duty @ 12% ad valorem.
After considering the reply to the said show cause notice, the Asstt.
Collector, Central Excise, by his orders dated April 15, 1987 and July 1, 1987 held that the products manufactured by the appellant were not 'containers ' but were 'articles of pulp ' falling under sub heading 4818.90.
The said orders were set aside by the Collector of Central Excise (Appeals) by his orders dated March 22, t988 and June 6, 1988.
The Collector (Appeals) held that the products manufactured by the appellant were 'packing containers ' and classifiable under sub heading orders of the Collector (Appeals), 4818.19.
Feeling aggrieved by the Department filed appeals before the Appellate Tribunal which were registered as Appeals Nos.
E/1468/88 C and E/1986/88 C.
All the above four appeals were disposed by the Appellate Tribunal by a common order whereby the said appeals were allowed.
The Appellate Tribunal held that the products manufactured by the appellant cannot come within the sub classification below containers and were not classifiable under sub heading 4818.19 but were classifiable under sub head ing 4818.90 of the new Tariff and similarly they were not classifiable under item 17(4) or 17(3) of the old Tariff.
The Appellate Tribunal was also of the view that the products manufactured by the appellant are articles of paper because starting raw materials is waste paper.
The Appellate Tribunal has held that the duty demanded by the Assistant Collector for six months prior to the issue of show cause notice dated May 4, 1984, i.e., from November 4, 1983 is legally sustainable and with regard to recovery of the duty for the earlier period from March 1, 1982 by invoking the proviso to Section 11 A(l) of the , the Appellate Tribunal remanded the matter to the Collector (Appeals) for considering the said question.
324 The question which arises for consideration in these appeals is whether the egg trays and other similar products manufactured by the appellants are 'containers ' falling under Item 17(4) of 17(3) of the old Tariff and sub heading 4818.19 of the new Tariff.
The learned counsel for the appellant has urged that the products manufactured by it are 'containers ' and in support of this submission the learned counsel has invited our attention to the meaning of the term 'container ' as contained in the Dictionaries and the Indian Standard Glossary of Terms relating to paper or paper board, packaging materials, Glossary of Packaging Terms (USA) and Glossary of Packaging Terms (Australia).
The submission of the learned counsel is that a 'container ' is a receptacle which holds, restrains or encloses the item to be stored or transported and that the egg tray and other similar products manufactured by the appellant are 'containers ' because they are receptacles for holding, storing and transporting the things kept in them.
It has been urged that a 'tray ' is a shallow lidless container and merely because an egg tray is described as a tray does not mean that it is not a 'container '.
It is contended that egg trays are so designed as to protect the eggs from breakage and that egg trays provide the best mode for storage and transport of eggs.
The learned counsel has submitted that the Appellate Tribunal was in error in proceeding on the basis that egg tray and other similar products manufactured by the appellant cannot be regarded as 'containers ' because when a single egg tray is reversed or turned upside down or tilted sideways vertically at 90% angle, the contents would fall down.
The submission of the learned counsel is that it is not required that a container should be closed from all sides and that a container can also be open.
The expression 'container ' has been thus defined in the dictionaries and Glossaries of Packaging Terms: "Container: One that contains; a receptacle or flexible covering for shipment of goods.
(Abstract from Webster 's New Collegiate Dictionary, 1975) "Container: that which contains that in which goods are enclosed for transport.
(Abstract from Chambers ' 20th Century Dictionary) "Containers Any receptacle which holds, restrains or 325 encloses any article or commodity or articles or commodities to be stored or transported.
(Abstract from Indian Standard Glossary of Terms: 1.8. 4261 1967) "Container.
(1) In general, any receptacle or enclosure used in packaging and shipping.
(2) Relatively large, reusable enclosures to be filled with smaller packages and discrete objects, to consolidate shipments and allow transport on railway flat cars, flatbed trailers, aircraft, in ships ' holds or as deckloads, etc.
(See CARGO TRANSPORTER; CONTAINERIZATION).
(3) Any receptacle for holding a product." [Abstract from Glossary of Packaging Terms (USA)] "Container.
A large box for intermodal transport, containing many smaller boxes of different shapes and sizes as well as individual articles.
[Abstract from Glossary of Packaging Terms (Australia)] The above definitions would show that the expression 'container ' is used in three different senses: in a broad sense, it means a receptacle which contains; in a narrower sense, it means a receptacle in which articles are covered or enclosed and transported; and in a more limited sense, it means enclosure used in shipping or railway for transport of goods.
If used in a broad sense, 'container ' would include a tray because it is a receptacle which contains articles and, therefore, an egg tray would be a 'container '.
But an egg tray would not be a 'container ' in a narrower sense because articles placed in it are not covered or enclosed and they cannot be transported as such.
It is,therefore, necessary to ascertain whether the expression 'container ' in Item 17 of the old Tariff and Heading 48.18 of the new Tariff has been used in the broad sense to include all receptacles or in a narrower sense to mean those receptacles in which the articles are covered or enclosed and transported.
For this purpose, the context in which the word 'container ' has been used in these entries has to be examined.
In Item 17 of the old Tariff, the word 'containers ' is preceded by the words 'boxes, cartons, bags and other packing ' and in Heading 48.18 of the new Tariff, the word 'containers ' is preceded by the words cartons, boxes ' and is followed by the words 'and cases '.
It is a well accepted canon of statutory construction that when two or more words which are susceptible of analogous meaning are coupled together they 326 are understood to be used in their cognate sense.
It is based on the principle that words take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general.
[See: Dr. Davendra M Surti vs State of Gujarat, ; at p. 240].
Considering the expression 'containers ' in the context in which it is used in the relevant tariff items, we are of the opinion that the said expression has to be construed to mean 'packing containers ' which are analogous to boxes and cartons, that is, an enclosed receptacle which can be used for storage and transportation of articles.
Egg trays being receptacles which are not covered or enclosed cannot be used for transportation of articles and, therefore, they cannot be regarded as 'containers ' under the abovementioned entries in the Excise Tariff.
According to the New Encyclopaedia Britannica, the practice followed in the various countries for the packaging of eggs for transport is as follows: "Packaging.
For retail use in the United States, eggs are repackaged in dozen and half dozen paperboard cartons.
In some other countries they are packed with straw or excelsior in long wooden boxes.
In many parts of the world, they are marketed in baskets or boxes and the individual eggs are sold by weight.
Several European countries stamp each egg with a date and number to meet the import restrictions of other nations." [p. 444, Vol. 6, 1974 edition] The Glossary of Packaging Terms (USA) also shows that moulded pulp egg trays are put in a standard case which indicates that the egg trays containing the eggs are put in a case for the purpose of transport.
In other words, the case in which the egg trays are put are `containers ' and not the 'egg tray ' itself.
For the reasons aforesaid, we are of the opinion that the Appellate Tribunal was right in taking the view that the egg trays and other similar products manufactured by the appellant cannot be regarded as `containers ' under the relevant items of the Excise Tariff.
The appeals, therefore, fail and are accordingly dismissed.
There will be no orders as to costs.
R. P. Appeals dismissed.
| IN-Abs | The appellant was a manufacturer of egg trays and other similar items.
Before the introduction of (new Tariff) effective from 1.3.1986, Central Excise and Salt Act, 1944 (old Tariff) was applicable to the relevant products.
The appellant, classifying its product under Item 68 of the old Tariff, was paying duty accordingly.
By Notification dated February 28, 1982, issued under Rule 8(1) of the Central Excise Rules, 1944, the Central Government exempted articles of paper and paper board falling under Item 17(4) of the old Tariff.
The appellant filed a revised classification list for its products seeking classification under item 17(4).
The Asstt.
Collector, Central Excise held the products classifiable as 'articles of pulp ' under Item 68 of the old Tariff, and the appellant was required to pay excise duty accordingly.
On appeal, the Collector (Appeals) reversed the order of the Asstt.
Collector, and held that the products were made out of waste paper and were classifiable under Item 17(4) as 'articles of paper and paper board '.
The Revenue filed appeals before the Customs, Excise and Gold (Control) Appellate Tribunal.
On introduction of the new Tariff, the appellant classified the relevant products as 'containers ' under sub heading 4818.19 and claimed exemption.
The Asstt.
Collector held that the products were not 'containers ' but were 'articles of pulp ' falling under sub heading 4819.90 and accordingly chargeable to duty.
Setting aside the order in 318 appeal, the Collector held that the products were 'packing containers ' and classifiable under sub heading 4818.19.
The Revenue appealed before the Appellate Tribunal, which allowed all the appeals by a common judgment, but remanded the matter to the Collector (Appeals) with regard to the recovery for a certain period.
In the assessee 's appeal to this Court it was contended that the `egg trays ' manufactured by the appellant were 'containers ' under Item 17 and Heading 48.18 of the respective Tariffs; that merely because the egg tray was described as a tray does not mean that it was not a container; and that it was not required that a container should be closed from all sides.
On the question whether: egg trays and other similar products manufactured by the appellant are 'containers ' falling under Item No. 17(4) or 17(3) of the First Schedule to the and Heading 48.18 of the .
Dismissing the appeals, this Court, HELD: 1. 1 'Egg trays ' being receptacles which are not covered or enclosed cannot be used for transportation of articles and cannot be regarded as 'containers ' under Item 17 of the First Schedule to Central Excise and Salt Act, 1944 and Heading 48.18 of the Schedule to .
[326B] 1.2 Moulded pulp egg trays containing the eggs are put in a standard case for the purpose of transport.
The case in which the egg trays are put, are 'containers ' and not the 'egg trays ' itself.
[326E F] 1.3 The expression 'container ' is used in three different senses: in a broad sense, it means a receptacle which contains; in a narrower sense, it means a receptacle in which articles are covered or enclosed and transported; and in a more limited sense, it means enclosures used in shipping or railway for transport of goods.
If used in a broad sense, `container ' would include a tray because it is a receptacle which contains articles and, therefore, an egg tray would be a 'container '.
But an egg tray would not be a 'container ' in a narrower sense because articles placed in it are not covered or enclosed and they cannot be transported as such.
[325D F] 319 1.4 In item 17 of the First Schedule to the word 'containers ' is preceded by the words 'boxes, cartons, bags and other packing ' and in Heading 48.18 of the Schedule to , the word 'containers ' is preceded by the words 'cartons, boxes ' and is followed by the words 'and cases '.
Considering the expression 'containers ' in the context in which it is used in the relevant tariff items, the said expression has to be construed to mean 'packing containers ' which are analogous to boxes and cartons, that is, an enclosed receptacle which can be used for storage and transportation of articles.
[325G, 326A B] Webster 's New Collegiate Dictionary, 1975 Chambers ' 20th Century Dictionary Indian Standard Glossary of Terms Glossary of Packaging Terms (USA) Glossary of Packaging Terms (Australia) New Encyclopedia Britannica, referred to. 2.
It is a well accepted canon of statutory construction that when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense.
It is based on the principle that words take as it were their colour from each other, that is, more general is restricted to a sense analogous to a less general.
[325G H, 326A) Dr. Devendra M. Surti vs State of Gujarat, ; , relied on.
|
n Nos.11757 & 11758 of 1984.
(Under Article 32 of the Constitution of India).
WITH Civil Appeal No. 1124 of 1985.
P.P. Rao, K. Jagan Mohan Rao and Raju Ramachandran for the Petitioners.
V.C. Mahajan, Ms. A Subhashini and R.B. Mishra for the Respondent.
The Judgment of the Court was delivered by KASLIWAL, J.
The above writ petitions and appeal are disposed of by one single order as identical question of law are involved in these cases.
In order to appreciate the controversy we would narrate the facts of the writ petitions.
Shri Des Raj Bhatnagar, Petitioner DES No. 1 and Shri Ved Pal Seth, Petitioner No.2 were employees of the 359 Central Government.
The petitioner No. 1 after serving in various capacities in the Department of food of the Central Government from 24.10.1941 to 31.8.1971 (29 years and 10 months) was permanently absorbed in Food Corporation of India as Assistant on 1st September, 1971 and retired from the Government service.
The petitioner No. 2 after serving the Government in various capacities for the period from 5.11.1947 to 8.2.1972 (20 years and 3 months) was permanently absorbed on 9.2.1972 in Food Corporation of India as Sr. Asstt.
Manager and retired from the Government service.
On absorption in the Food Corporation of India, the petitioners were required to exercise either of the following two options: (a) Receiving the pro rata monthly pension and death cum retirement gratuity as admissible under the rules; and (b) Receiving the pro rata gratuity and a lumpsum amount in lieu of pension worked out with reference to commutation table obtaining on the date from which the pension was to be admissible and under the option order.
The office of the Pay and Accounts Officer, Ministry of Food and Agriculture determined the original pension payable to the petitioners per mensem.
The petitioners were sanctioned original pensions in accordance with the provisions of the Central Civil Service (Pension) Rules, 1972.
In case of petitioner No. 1 the original pension was determined at Rs. 240 per mensem payable from 1st September, 1971.In case of petitioner No. 2 the original pension admissible was determined at Rs.287 per mensem payable from 9.2.1972.
The petitioner No. I received his pension @ Rs.240 per mensem for the period from 1.9.1971 to 29.10.1972.
Petitioner No. 2 received his pension @ Rs.287 per mensem for the period from 9.2.1972 to 16.8.1972.
Under the above Rules maximum of one third of the amount of admissible pension could be commuted.
However, in the case of Government officers including Industrial Management Pool Officers who were opting for permanent absorption in Public Sector Undertakings, an option was given to commute the full amount of their original pension.
The petitioner No. I and petitioner No. 2 commuted their original pensions for a lumpsum of Rs.35,568 and Rs.43,601 on 30.10.1972 and 17.8.1972 respectively.
360 The Third Central Pay Commission was required to make its recommendations in the matter of providing relief to Government pensioners.
The Pay Commission, in order to secure Government pensioners against the continuing erosion in the value of the rupees and to recommend appropriate measures for protecting the pension of Government servants from such erosion on account of the possible increase in the case of living in future and after having considered the matter, recommended that irrespective of the amount of pension drawn by them, pensioners should be given relief at the rate of 5% of their pension subject to a minimum of Rs.5 per mensem and a maximum of Rs.25 per mensem.
The relief at those rates were recommended to be given to the Government pensioners as and when there was a 16 point rise in the 12 months average of the All India Working Class Consumer Price Index ( 1960 100).
The relief for the first time, at these rates was to be paid when the 12th monthly average of this index reached 216.
The said recommendation made by the Pay Commission was duly accepted by the Central Government.
The Ministry of Finance Office Memorandum No. F. 22(8) EV(A)/75 dated 13.2.1976 inter alia, provided that where an officer on his retirement commutes a portion of his pension he is eligible for relief and ad hoc reliefs in pension on the full amount of original pension as admissible to him.
Under the said O.M. the term 'Pension ' includes for the purposes of ad hoc relief the commuted portion of pension, if any.
The case of the petitioners is that according to these Rules, an officer who has commuted any part of this pension and an officer who has not opted for any commutation both receive the full quantum of relief and ad hoc relief on full amount of original pension.
It has thus been contended that for the purposes of grant of the full benefit of relief or ad hoc relief the Rules do not make any distinction between an officer who has sought commutation of his original pension and one who has not sought any such commutation.
The petitioner and other Government servants who opted for commutation of their original pension in accordance with the Rules are being arbitrarily and without just and reasonable cause are deprived of the relief and ad hoc relief on commutation in pursuance of the Office Memorandum dated 13.2.1976.
Though, an officer who commutes one third of his pension gets relief and ad hoc relief on the basis of original amount of his pension but whereas an officer commutes whole of his original pension is deprived of the entire amount of the relief or ad hoc relief.
The petitioners have thus contended that aforesaid Office Memorandum dated 13.2.1976 is vitiated by an inherent discrimination and is violative of Articles 14 and 16 of the Constitution.
361 The petitioners have further submitted that they are entitled to the aforesaid reliefs granted to all other Government pensioners, and the amount of relief to which pensioners are entitled and has been denied to them under the impugned Office Memorandum dated 13.2.
1976 works out to Rs. 13,592 and Rs. 15,040 in case of petitioner No. 1 and petitioner No. 2 respectively upto 29.2.1984.
The Ministry of Finance in their Office Memorandum No. 2(8)/EV/82 dated 10.10.1983 has sanctioned the grant of relief and ad hoc reliefs to Government servants who retired prior to 10th September, 1979 @ 92.5% of their original pension subject to minimum of Rs.93 and maximum of Rs.463 with effect from 1st July, 1983.
This has been done by taking in view the decline in the purchasing power of the rupee and the original sanction being insufficient and meagre to sustain the pensioners.
Apart from the above the petitioners have submitted that they are also entitled to the benefit of Liberalised Pension Formula of 1979,which was introduced vide the Finance Ministry 's Office Memorandum No. F. 19(37)/EV/79 dated 25.5 1979, in respect of the approved pensionable service rendered by them in the Central Government as admissible to other pensioners who retired from Government service between 17.4.1950 to 31.3.1979.
The said Memorandum was made applicable only to those Government servants who retired from service on or after 31.3.1979.
However, this Court in D.S. Nakara & Others vs Union of India, ; held that all Central Government pensioners governed by the Central Civil Service (Pension) Rules, 1972 were entitled to pension w.e.f.
1.4.1979 as computed under the Liberalised Pension Formula irrespective of the date of their retirement.
Placing reliance on the above decision it has been claimed that there should be no discrimination between the applicability of the Liberalised Pension Formula to pre 31.3.1979 pensioners and there is no just and reasonable cause in denying such benefit to the petitioners under the impugned Office Memorandum No. F. 1(3)/EV/83 dated 22.10.1983.
Clause 5 of the Office Memorandum dated 22.10.1983 reads as under: "Central Government employees, who got themselves absorbed under Central Public sector undertaking/autonomous bodies prior to 1.4.1979 and have received/or opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the 362 balance amount of pension left after commuting 1/3rd, of pension, are not entitled to any benefit under these orders as they were not Central Government pensioners as on 1.4.79.
In cases where only a portion of pension has been commuted the pension will have to be enhanced in accordance with these orders with effect from 1.4.1979".
The above clause makes it clear that such Central Government employees, who got themselves absorbed under Central Public Sector Undertakings prior to 1.4.1979 and opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the balance amount of pension left after commuting 1/3rd of pension were not entitled to any benefit as they were not Central Government pensioners as on 1.4.1979.
An identical writ petition No. 1068/1987 under article 32 of the constitution was filed on behalf of the Welfare Association of absorbed Central Government Employees in Public Enterprises and this Court dismissed the said writ petition on April 12, 1990.
In the said writ petition benefit of Judgment of this Court in "Common Cause" a Registered Society & Ors.
vs Union of India, [ ; was claimed but the same was negatived by making a distinction that the Writ Petition "Common Cause" was on behalf of the Government servants who had commuted their pension partially and this Court for the reasons indicated in the judgment came to hold that on the expiry of 15 years from the date of commutation the entire pension revived.
The petitioners were persons who had, at the time of retirement from Government service and entering into public sector had taken the advantage of commuting the entire pension.
They certainly belong to a class different from those whose case was before this Court at the instance of the common cause in Writ Petition Nos.
1955 61 of 1983.
It was further held in the above case that the commutation does bring certain advantages to the committees and the class of Government officers whom the petitioner seeks to represent have derived such benefits. ' We find no reason to take a different view.
The commutation brings about certain advantages.
The commuting pensioner gets a lumpsum amount which ordinarily he would have received in the course of his spread over period subject to his continuing to live.
Thus, two advantages are certainly forthcoming out of commutation (1) availability of a lumpsum amount, and (2) the risk factor.
In the present case the petitioners had not only got 1/3rd of their pension commuted but exercised the option of getting the entire pension commuted and in lieu thereof got a lumpsum.
Such persons cannot fall in 363 the category of Central Government pensioners for the purposes of getting benefit of Liberalised Pension Rules which can be made applicable only to Central Government Pensioners.
It is no doubt correct that the family pension has been allowed in case of the persons like the petitioners but that does not make them entitled to get any benefit given to the pensioners on account of the liberalised Pension Rules taking note of the fallen value of the rupee.
It was contended by Mr. Rao on behalf of the petitioners that the petitioners are not claiming any pension but their contention is that the Liberalised Pension Rules which given benefit to those pensioners who had got their 1/3rd pension commuted should be granted to the petitioners by awarding lumpsum after increasing their pension and calculating such amount in proportion to the increased pension.
We find no force in this contention as the petitioners fall in a different class altogether and are not entitled to claim any benefit granted to Central Government pensioners.
After getting a lumpsum in lieu of entire pension, they do not fall in the class of Central Government pensioners and are not entitled to any benefit granted to Central Government pensioners.
The case of such Central Government pensioners who got their 1/3rd pension commuted also fall in a different class in as much as they get 2/3rd pension, and after 15 years of such commutation or having attained the age of 70 years whichever was later they become entitled to full pension.
Petitioners on the other hand were not entitled to any pension after having received the lumpsum amount in lieu of pension being commuted and having opted to receive such amount in lumpsum at the time of entering the service in Public, Sector Undertaking.
In the above mentioned civil appeal the legal question is identical except that the appellant in this case became a pensioner of the Central Government w.e.f.
1.4.1977 and the pension determined as payable to him was Rs.609 per month and the same was got commuted by the appellant for a lumpsum amount on and from 7.8.1978.
The appellant had exercised the option for absorption in Steel Authority of India Limited (SAIL) a Public Sector Enterprise.
The Writ Petition filed by him before the High Court of Delhi was dismissed on 25.8.1982.
The appellant then filed a S.L.P. against the said order.
This Court had granted special leave on 25.3.1985 and had given a direction to hear the appeal alongwith the writ petition Nos. 11757 & 11758 of 1984.
In the result we find no force in all these cases and the same are dismissed with no order as to costs.
R.P. Petitions and Appeal dismissed.
| IN-Abs | The petitioners, who were Central Government employees, on their absorption in a Central Public Sector Undertaking, retired from Central Government service on different dates prior to 31.3.1979, and commuted their original pension for a lump sum as permissible under the Civil Service (Pension) Rules, 1972.
The Central Government issued O.M. dated 13.2.1976, enabling an officer who commuted a portion of his pension to be eligible for relief and ad hoc reliefs on the full amount of his original pension, but persons who got themselves absorbed in Public Sector Undertakings were not eligible to the said benefits.
Taking note,of the erosion in the value of the rupee, the Government, by O.M. dated 25.5.1979, introduced the Liberalised Pension Formula, benefit of which, by this Court 's decision in D.S. Nakara 's case was extended to all Central Government pensioners irrespective of the dates of their retirement.
In order to implement the said decision, the Government issued O.M. dated 22.10.1983, but the benefit was not given to those persons who got them selves absorbed in Central Public Sector Undertakings and received/opted to receive commuted raise of 1/3rd of pension as well as 357 terminal benefits equal to the commuted value of the balance amount of pension left after such commutation.
The petitioners challenged the validity of the aforesaid O.Ms.
dated 13.2.1976 and 22.10.1983 and contended that for the purposes of grant of the full benefit of relief or ad hoc relief, the Rules do not make any distinction between an officer who has sought commutation of a portion of his original pension and one who has not sought any such commutation; and as the petitioners who opted for commutation of their original pension in accordance with the Rules were being arbitrarily and without just and reasonable cause deprived of the relief, the aforesaid Office Memoranda were vitiated by an inherent discrimination and were violative of Articles 14 and 16 of the Constitution.
The facts of the appeal were identical to those of the petitions except that the appellant came before this Court in appeal against the order of the High Court which dismissed his writ petition.
On the question: whether the petitioners/appellants fell in the category of Central Government pensioners for the purpose of entitlement to the benefit of the Liberalised Pension Formula or did they fall in a different class altogether and were not entitled to get any such benefit, Dismissing the writ petitions and the appeal, this Court, HELD: 1. Clause 5 of O.M. dated 22.10 1983 is clear that such Central Government employees who got themselves absorbed under Central Public Sector Undertakings prior to 1.4.1979 and opted to receive commuted raise for 1/3rd of pension as well as terminal benefit equal to the commuted value of the balance amount of pension were not entitled to any benefit as they were not Central Government Pensioners as on 1.4 1979.
[362B C] 2.Commutation brings about certain advantages.
The person who commutes his pension gets a lump sum which ordinarily he would have received in the course of his spread over period subject to his continuing to live The two advantages of the commutation are the availability of a lump sum and the risk factor.
The allowance of Family Pension to such person does not however make them entitled to get any benefit that is given to the pensioners on account of Liberalised Pension Rules taking note of the fallen value of the rupee.
[362F G, 363A B] 3.1 In the instant case, the petitioners had not only got 1/3rd of 358 their pension commuted but exercised the option of getting the entire pension commuted and in lieu thereof got a lump sum.
Such persons cannot fall in the category of Central Government pensioners for the purposes of getting benefit of the Liberalised Pension Rules which can be made applicable only to Central Government pensioners.
[362G H, 363A] 3.2 The petitioners fell in a different class altogether and were not entitled to claim any benefit granted to the Central Government Pensioners.
After getting a lump sum in lieu of entire pension, they did not fall in the class of Central Government pensioners and were not entitled to any benefit granted to such pensioners.
The case of the Central Government pensioners who got their 1/3rd pension commuted also fail in a different class inasmuch as they got 2/3rd pension, and after 15 years of such commutation or having attained the age of 70 years whichever was later, they became entitled to full pension.
[363C D] "Common Cause" a Registered Society & Ors.
vs Union of India, ; , distinguished.
D.S. Nakara & Ors.
vs Union of India, ; , referred to.
|
Appeal Nos. 936 (NT), 937, 2339 & 2340 of 1988.
From the Judgments and Orders dated 12.8.1987, 3.7.1986, and 22.8.1988 of the Sales Tax Tribunal, Punjab in Misc.
Reference No. 60 of 1986 87, First Appeal No. 379 of 1986 and in Appeal Nos. 46 and 47 of 1987 88.
B V.M.
Tarkunde, R.C. Misra and Ms. Meera Aggarwal for the Appellant.
H.S. Munjral and C.M. Nayar for the Respondent.
c The Judgment of the Court was delivered by AHMADI, J.
the assessee appellant M/s. Mukerian Papers Ltd., is a company engaged in the manufacture of paper at Mukerian in the State of Punjab and is a registered dealer under the Punjab General Sales Tax Act, 1948 ( 'The Act ' hereinafter).
The assessee despatched some part of the manufactured goods outside the State of Punjab for sale on consignment basis.
However, the assessee had not paid the taxes on the taxable raw material consumed in the manufacture of such goods.
A show cause notice was, therefore, issued by the Assessing Authority under section 10(6) of the Act for the assessee 's failure to pay the taxes along with the return as required by section 4B of the Act.
Interest on the tax amount which the assessee had failed to pay was also claimed under Section 11D of the Act.
The assessee disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful or intentional default on the part of the assessee to pay the taxes due under section 4B of the Act as the assesee was under a bona fide belief that no tax was to be paid on the raw material purchased for the manufacture of paper which was ultimately sent outside the State on consignment basis.
This impression,based on the language of the statute, stood confirmed by the subsequent decisions of the Punjab & Haryana High Court in the case of Goodyear India Ltd., 53 STC 163 and Bata India Ltd., 54 STC 226 till those decisions were overruled by the Full Bench decision in Des Raj Pushpak Kumar 's case 58 STC 393.
The assessee further contended that it had acted on legal advice that it was not liable to pay any purchase tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest.
On the other hand it was contended on behalf of the revenue that the two decisions on which the assessee 350 placed reliance were subsequent to the date on which the liability to pay the tax had arisen and hence the assessee could not take shelter under the said two decisions.
The submissions made on behalf of the assessee did not find favour with the Revenue.
The assessee thereupon sought a reference under section 22(1) of the Act but the Presiding Officer of the Tribunal by its order dated 12th August, 1987 rejected the application as he saw no point of law to make a reference to the High Court.
Civil Appeals Nos. 936 and 937 of 1988 arise out of the said order of ]2th August, 1987.
In the other two appals Nos. 2239 and 2240 of 1988 the appellants have come to this Court directly from the Tribunal 's order in appeal without going through the formality of seeking a reference under section 22(1) of the Act in view of the rejection of a similar request by the impugned order of 12th August, 1987.
This Court granted special leave to appeal without insisting on the appellant assessee approaching the High Court in view of the Full Bench decision of that Court in Des Raj 's case.
As the facts are identical and common questions of law arise we have thought it proper to dispose of all the four appeals by this common judgment.
Counsel for the assessee appellant contended that the main question of law involved in this case is concluded by the decision of this Court in M/s. Goodyear India Ltd. vs State of Haryana; , which was an appeal arising from the High Court 's decision in the case of the same assessee reported in (1983) 53 STC 163 to which reference is made hereinabove.
He further pointed out that while deciding the true scope of section 9 of the Haryana General Sales Tax Act, 1974, which, says counsel, is in pari materia with section 4B of our Act, this Court affirmed the High Court 's view expressed in Goodyear India Ltd., 53 STC 163 and Bata India Ltd., 54 STC 226 and disapproved the Full Bench view in Des Raj 's case 58 STC 393.
Counsel for the Revenue, however, placed strong reliance on this Court 's decision in State of Tamil Nadu vs M.K. Kandaswami etc.
, [19761 1 SCR 38 and submitted that the assessee 's case falls within the ratio of the said decision.
But counsel for the assessee pointed out that this Court had considered the ratio of Kandaswami 's case in the subsequent decision and had pointed out that in that case this Court was not concerned with the actual argument with which it was concerned in the subsequent case and, therefore, the decision in the former case is not an authority for the question of law involved in the subsequent case.
In order to appreciate the rival submissions it would, we think, be appropriate to examine the language of section 4B of the Act, which reads as under: "4B. Levy of Purchase tax on certain goods 351 Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule B from any source and (i) uses them within the State in the manufacture.
of goods specified in Schedule B, or B (ii) uses them within the State in the manufacture,of any goods, other than those specified in Schedule B,and sends the goods so manufactured outside the State in any manner other than by way of sale in the course of inter State trade or commerce or in the course of export out of the territory of India; or (iii) uses such goods for a purpose other than that of resale within the State or sale in the course of inter State trade or commerce or in the course of export out of the territory of India, or D (iv) sends them outside the State other than by way of sale in the course of inter State trade or commerce or in the course of export out of the territory of India, and no tax is payable on the purchase of such goods under any other provision of this Act, there shall be levied a tax on the purchase of such goods at such rate not exceeding the rate specified under sub section (1) of section 5 as the State Government may direct.
We may first read the plain language of the section bearing in mind the contextual setting and the objective of the law.
The section seeks to provide for the levy of purchase tax on certain goods specified in to levy a tax on the purchase of goods, other than those Schedule B, which are used in the manufacture of goods specified in Schedule B or in the manufacture of goods, other than those specified in Schedule B and sent outside the State in any manner other than by way of sale in the course of inter State trade or commerce or in the course of export out of Indian territory provided of course no tax is payable on the purchase of such goods under any provision of the Act.
Where a dealer purchases raw material other than the goods referred to in Schedule B and uses the said raw material within the State in the manufacture of goods specified in Schedule B, he becomes liable to purchase tax at the rate specified by the State Government not exceed 352 ing the maximum fixed under section 5(1) provided no tax is paid on such goods under any other provision of the Act.
However, when the raw material is used within the State in the manufacture of goods under than the one specified in Schedule B and the manufacturer 'sends ' the goods so manufactured outside the State in any manner (other than by way of sale in the course of inter State trade or commerce or in the course of export out of India) he becomes liable to pay purchase tax at the rate specified.
To attract this provision the revenue must show that (i) the manufacturer is a dealer liable to pay tax under the Act (ii) he has purchased goods other than those specified in Schedule B from any source (iii) he has used the said goods within the State in the manufacture of any goods other than those specified in Schedule B and (iv) he has sent the goods so manufactured outside the State in any manner other than the one excepted.
Before this provision can be invoked the above requirements must be strictly proved.
The first requirement identifies the tax payer, the second and the third requirements identify the goods liable to tax in the event the fourth requirement of the goods so manufactured being sent outside the State takes place.
Thus the liability to pay purchase tax does not accrue on the purchase of the raw material within the State or its use in the manufacture of goods other than those specified in Schedule B but falls on the dealer when the goods so manufactured are sent outside the State.
To avoid a duplication of the levy the charging clause provides that the purchase tax will be leviable under Section 4B provided it is not leviable on the said goods under any other provision of the Act.
Although the purchase tax is levied on the raw material purchased by the manufacturer, the actual levy is postponed till after the said raw material is consumed in the manufacture of another commercially distinct commodity having its own separate identity and character and is actually sent outside the State.
The relevant date is the date on which the goods are sent outside the State.
The taxable event takes place when the taxable goods are sent outside the State and not before that date notwithstanding the fact that the raw material was purchased and converted into a new commodity long before that date.
In the present case since it is not disputed that the demand of purchase tax is based on the fact that the goods manufactured within the State from raw material purchased earlier had been sent outside the State of sale on consignment basis, we are concerned only with clause (ii) of Section 4B whereunder the tax liability accrues on the date the goods are sent outside the State.
Under Section 4B of the Act the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture 353 of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State.
Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act.
It is, therefore, obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase.
Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State.
And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap.
There is, therefore.
no room for doubt that the liability of tax falls only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture.
That being so, the conclusion is inescapable that the tax though described as a purchase tax is actually a tax on the consignment of the manufactured goods.
Therefore, even though the language of section 4B of the Act is not identical with the relevant part of section 9( 1) of the Haryana Act, it is in substance similar in certain respects.particularly in respect of the point of time when the liability to pay tax arises.
Under that provision, as here, the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch Of the goods outside the State.
We are, therefore, of the opinion that the ratio of the said decision of this Court in Goodyear India Ltd. (supra) applies on all fours to the main question at issue in this case.
In the case of Goodyear India Ltd. (supra), this Court was concerned with the interpretation of section 9(1) and section 24(3) of the Haryana Act.
The facts revealed that the assessee company, which was engaged in the manufacture of automobile tyres and tubes at its factory at Ballabgarh in Haryana, had purchased raw materials from within and outside the State for the manufacture of the said products.
After manufacturing the same, the assessee company despatched some part of the manufactured products to its depots outside the State The revenue sought to recover purchase tax on the raw material purchased in the State and consumed in the manufacture of such goods under section 9(1) of the Haryana Act.
The action of the revenue was challenged in the High Court of Punjab & Haryana.
The High Court held that both on principle and on precedent, a mere despatch of goods to various depots of the assessee company outside the State did 354 not fall within the ambit of the phrase "disposes of the manufactured goods in any manner otherwise than by way of sale" employed in section 9(l)(a)(ii) of the Haryana Act.
The High Court also held that the decision of this Court in Kandaswami (supra) was not an authority for the proposition that a mere despatch of goods outside the State fell within the ambit of the said provision.
This Court while upholding the final order passed by the High Court came to the conclusion that as the tax levied was a tax on consignment of goods, the provisions imposing the said tax were beyond the competence of the State Legislature as the power to impose such tax vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7.
List I, inserted by the 46th Amendment to the Constitution.
This Court also clarified that even before the amendments introduced by the 46th Amendment came into effect, Entry 54, in List 11 of the 7th Schedule read with Article 246(3) of the Constitution conferred power on the State Legislature to impose a tax on sale or purchase of goods and not on the mere consignment of goods, since consignment of goods simpliciter is neither a sale nor purchase or disposal of goods.
Holding that in substance the levy was sought on the consignment of goods, this Court held that it was not liable to tax since the State 's power to tax did not extend that far.
Counsel for the revenue placed reliance on an earlier decision of this Court reported in the case of Kandaswami (supra) which dealt with Section 7A of the Tamil Nadu Act which though not identical was similar to Section 9(1) of the Haryana Act.
The decision in Kandaswami though rendered in the context of an analogous provision was distinguished by this Court in Goodyear India Ltd. on the ground that it did not touch the core of the question at issue in the latter case.
This aspect of the matter is elaborately dealt with in paragraphs 31 to 34 at page 796 of the Report.
We need not dilate on this any more since the correctness of the judgment in Goodyear India Ltd, is not canvassed before us.
This Court, therefore, affirmed the High court 's view in Goodyear India Ltd., 53 STC 163 and Bata India Ltd, 54 STC 226 and disapproved of the Full Bench decision in the case of Des Raj 58 STC 393.
Once it is found that the revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax.
Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand and must be set aside.
355 In the result these appeals succeed.
We allow all these appeals and set aside the decision of the Sales Tax Tribunal, Punjab, in each case.
Any recovery made under the impugned orders will be refunded within a period of three months from today.
Having regard to the facts and circumstances of the case, we make no order as to costs.
B G. N. Appeals allowed.
| IN-Abs | The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods.
The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax.
Interest was also demanded on the tax amount.
The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State.
The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest.
The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act.
But the Tribunal rejected application for reference.
Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal.
On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue.
On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State.
Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State.
Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act.
It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase.
Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State.
And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap.
The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture.
That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1.
[352H; 353A E; 354B] 1.2.
Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises.
Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State.
[353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied.
State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to.
Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax.
Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand.
[354G H] 349
|
TE JURISDICTION: Civil Appeal No. 837. 838 and 839 of 1991.
From the Judgment and Order dated 10.5 1990 of the Delhi High Court in Civil Writ Petition Nos. 1381, 2994 of 1989 and C.R. No. 954 of 1989.
Soli J. Sorabjee, Attorney General, Kapil Sibal, Additional Solicitor General, G.L. Sanghi, Dr. Y.S. Chitale, Harish N. Salve, H.K. Puri, Rajeev Sharma, Ravinder Nath, V.B. Saharya, P.K Jain, Krishna Moorthy Iyer, Prem Malhotra, A.C. Sehgal, Mrs. Urmila Sirur, R.L. Jain, S.K. Tredal, Ms. kitty Kumarmanglam, R.P. Dave, Mrs. Sushma Suri, Ms. M. Biswas and Ashok Mathur for the appearing parties.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Leave granted.
These appeals from the decision of the Delhi High Court raise the question with regard to landlord 's right to evict the tenant under Section 14 B of the Delhi Rent Control Act, 1958 ( 'The Act ') and the corresponding right of the tenant to resist the eviction proceedings.
Section 14 B is a special provision made by the Legislature conferring certain rights to persons belonging to Armed Forces to recover from their tenants immediate possession of the premises for their occupation.
Mahendra Raj, the common petitioner in S.L.P. Nos.
7146 and 11425/90, is a tenant occupying the premises of the respondent Col. Ashok Puri.
The petitioner in SLP No. 7364 is also a tenant, but occupying the premises belonging to the respondent Brig.
V.N. Channa.
In the action for eviction brought by the respondents on the ground that they need the premises for their occupation, the tenants sought leave to contest the application.
But the Rent Controller was not satisfied with the facts disclosed by the tenants in their affidavits and therefore, denied leave to contest the application for eviction.
He considered the affidavits of the parties and accepted the case of the landlord and directed that the tenants shall be evicted.
In the case of Mahendra Raj, the Rent Controller made an order dated 2 September, 1989 inter alia, observing that the landlord is living in a rented house, that he is paying rent of Rs.2,000 p.m., and that he requires the premises for himself and the members of his family.
The eviction order was challenged by the tenant by means of revision petition before the Delhi High Court.
Almost simultaneously, the tenant also filed a writ 370 petition under Article 226 of the Constitution, challenging the validity of Section 14 B.
On 10 May 1990, the High Court dismissed the revision as well as the writ petition.
Against the judgment of the High Court dismissing the writ petition, the tenant has preferred SLP No. 7146 of 1990.
Against the order dismissing the revision petition, the tenant has preferred SLP No. 11425 of 1990.
The tenant in SLP No. 7364 of 1990 has also challenged the order of eviction in a revision petition before the High Court and we are told that the revision is still pending.
Like the other tenant, he has also questioned the validity of Section 14 B before the High Court under Article 226.
The High Court dismissed that petition following the decision in Mahendra Raj 's case.
It would be convenient to refer to the relevant provisions of the Act 'before dealing with the points raised in these cases.
The Act applies to premises which are defined by Section 2(i) as meaning, inter alia, 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 or other purpose.
Section 14 provides that notwithstanding anything to the contrary contained in any other law or contract, no decree or order for the recovery of possession of any premises shall be passed by any Court or Controller in favour of the landlord against a tenant.
This provision is, however, subject to the exceptions provided under several clauses of the proviso.
Section 14(l)(e) allows a decree for ejectment to be passed if the Court or Controller is satisfied that the premises let for residential purposes are required bona fide by the landlord for occupation as a residence for himself or for any member of his family dependent on him, provided that the landlord is the owner of the premises and he has no other reasonably suitable residential accommodation.
The explanation thereunder states that for the purpose of the clause 14(1)(e) "premises let for residential purposes" include any premises which having been let for use as a residence are, without the consent of the landlord, used incidentally for commercial or other purposes.
Section 14(l)(e) is further restricted by sub sections (6) and (7) of Section 14.
Sub section (6) imposes a restriction on the landlord, who has acquired any premises by transfer, not to evict the tenant under Section 14(l)(e) within the period of five years from the date of acquisition.
Sub section (7) imposes an obligation on the Court where an order for eviction is made on the ground specified in Section 14(l)(e) to give the tenant the minimum period of six months for delivery of possession to the landlord.
371 By Act 18 of 1976 the Legislature has introduced certain changes in the Act with effect from 1 December, 1975.
Section 14 A was introduced in Chapter Ill providing certain rights to a person occupying residential premises allotted to him by the Central Government or any other local authority.
If he is required to vacate such residential accommodation on the ground that he owns in the Union Territory of Delhi, a house in his name or in the name of his spouse or dependent children, he could recover immediate possession of his premises let out by him notwithstanding anything contained elsewhere in the Act or any other law for the time being in force.
Simultaneously, Chapter III A was introduced containing Section 25 A to 25 C providing summary trial of the applications filed landlords classified under Section 14 A and also applications filed by any other landlord for bona fide requirement of their premises under Section 14(l)(e).
By the Amending Act 57 of 1988 some more classes of landlords were carved out from the class of general landlords.
Section 14 B to Section 14 D are the provisions.
The released or retired persons from armed forces or the dependents of the member of armed forces who had been killed in action are covered by Section 14 B. They could recover immediate possession of the premises let out by them if they are required for their own residence.
The retired employees of the Central Government and of the Delhi Administration are covered by Section 14 C.
They could recover immediate possession of the premises let out by them if they are needed for their own residence.
The landlords who are widows are covered by Section 14 D with similar right to recover immediate possession of the premises let out by them or by their husband.
These classified landlords are also given the benefit of the summary trial under Chapter III A, by introducing Sections 14 B to 14 D in sub section (1) of Section 25 B. The sub section (1) of Section 25 B as it stands provides that every application by a landlord for recovery of possession of any premises on the ground specified in clause (e) of the proviso to sub section (1) of Section 14, or under Section 14 A or under Section 14 B or under Section 14 C or under Section 14 D shall be dealt with in accordance with the procedure specified in this Section.
There are however, no corresponding amendments to sub sections 2 to 5 of Section 25 B. Omission to make corresponding amendments particularly, to sub sections 4 & 5 of Section 25 B has given rise to the arguments for the petitioners that the tenant 's right to contest the application for eviction on the grounds specified in Section 14(1)(e) cannot be denied even as against the classified landlords falling under Sections 14 B to 14 D.
It 372 was also argued that the classified landlords may prove the facts stated in their respective provisions, but the tenant is entitled to contest the application by disclosing such facts as would disentitle the landlords from obtaining an order of eviction on the grounds specified under Section 14(l)(e).
The acceptance of the submissions urged for petitioners would practically obliterate the purpose and object of classification of landlords under Sections 14 B to 14 D who are carved out from the general landlords.
Indeed, it would render the whole exercise of creating special classes of landlords with specified rights to recover immediate possession of the premises let out by them nugatory.
Before the introduction of Sections 14 B to 14 D, Section 14(l)(e) was the only remedy available to all landlords except those covered under Section 14 A to recover possession of their premises.
The Controller shall give the tenant leave to contest the applications, if the tenant in his affidavit discloses such facts as would disentitle the landlords from obtaining an order for recovery of possession of the premises on the grounds specified under Section 14(l)(e).
It is but natural when the landlord brings an action for recovery of possession of the premises covered under Section 14(l)(e), the tenant has the legitimate right to show that the landlord does not qualify under or satisfy the requirements of Section 14(l)(e).
But today the remedy under Section 14(l)(e) is available only to landlords in general or the landlords who are not classified landlords under Sections 14 B to 14 D.
The classified landlords have been conferred with certain rights which are different from and independent of the rights under Section 14( 1)(e).
For a proper understanding, we may set out Section 14(l)(e), side by side with Section 14 B. Section 14 (1) (e) Section 14 B 14.
Protection of tenant 14.
B Right to recover against eviction.
immediate possession of premises to accrue to members of the armed forces etc.
(1) Notwithstanding anything (1) Where the landlord: to the contrary contained in any other law or contract, (a) is a released or retired no order or decree for person from any armed the recovery of possession forces and the premises let of any premises shall be out by him are required for made by any Court on his own residence; or 373 Controller in favour of the (b) is a dependent of a landlord against a tenant: member of any armed forces who had been killed in action and the premises let Provided that the Controller out by such member are may, on an application made required for the residence to him in the prescribed of the family of such manner make an order for the member, recovery of possession of the premises on one or more of the following grounds Such person or, as the case only, namely may be, the dependent may, within one year from the xxx xxx xxx date of his release or retirement from such armed (e) that the premises let forces or, as the case may for residential purposes are be, the date of death of required bona fide by the such member, or within a landlord for occupation as a period of one year from the residence for himself or for date of commencement of the any member of his family Delhi Rent Control dependent on him, if he is (Amendment) Act, 1988, the owner thereof, or for whichever is later, apply to any person for whose benefit the Controller for the premises are held and recovering the immediate that the landlord or such possession of such premises.
person has no other (2) Where the landlord is a reasonably suitable residen member of any of the armed tial accommodation : forces and has a period of less than one year preceding the date of his retirement and the premises let out by him are required for his own residence after his retirement, he may, at any Explanation: For the time, within a period of one purposes of this clause, year before the date of his 'premises let for retirement, apply to the residential purposes ' Controller for recovering include any premises which the immediate possession of having been let for use as a such premises.
residence are, without the consent of the landlord, (2) Where the landlord is a used incidentally for member of any of the armed commercial or other forces and has a period of purposes." less than one year preceding the date of his retirement and the premises let out by him are required for his own residence after his retirement, he may, at any time, within a period of one year before the date of his retirement, apply to the Controller for recovering the immediate possession of such premises.
(3) Where the landlord referred to in sub section (1) or sub section (2) has let out more than one premises, it shall be open to him to make an application under that sub section in respect of only one of the premises chosen by him.
Explanation: For the purposes of this Section `armed forces ' means an armed force of the Union constituted under an Act of Parliament and includes a member of the police force constituted under Section 3 of the (34 of 1978).
" 374 To make the picture complete we may also read sub sections 6 & 7 of Section 14.
"14(6) Where a landlord has acquired any premises transfer, no application for the recovery of possession of such premises shall lie under sub section (1) on the ground specified in clause (e) of the proviso thereto, unless a period of five years has elapsed from the date of the acquisition.
14(7) Where an order for recovery of possession of any premises is made on the ground specified in clause (e) of the proviso to sub section (1) the landlord shall not be entitled to obtain possession thereof before the expiration of a period of six months from the date of the order.
" Under Section 14(l)(e), the premises let out for residence could be recovered from the tenant, if the landlord requires the premises bona fide for his own occupation or for any member of his family dependent on him.
The eviction could also be sought for any person for whose benefit the premises are held.
The condition being apart from the requirement must be bona fide, there shall be no other reasonably suitable residential accommodation for the landlord or for whose benefit the premises are held.
The explanation to Section 14(1)(e) provides "premises let for residential purposes" include any premises which having been let for use as a residence are without the consent of the landlord, used incidentally for commercial or other purposes.
That means if with the consent of the landlord the premises let for residential purposes are used for commercial or other purposes, the landlord will have difficult task to evict such tenant.
Sub section (6) of Section 14 provides protection to the tenant from being evicted from the premises which are transferred to third parties.
The transferee landlord must wait for five years from the date of the transfer or acquisition before he moves the Court for eviction of the tenant already in occupation of the premises.
Sub section (7) is again a protection to the tenant requiring the Court or the Controller to give a minimum period of six months to vacate from the date of order of eviction.
This is a complete code governing the disposal of application filed under Section 14(1)(e).
Under Section 14 B the right to evict the tenant is available to two categories of persons, (i) The person who has let out the premises and, (ii) the dependent of a member of any armed forces who had let 375 out the premises but killed in action.
In the former case, the premises must be required for his own residence and in the latter, for the residence of the family of such member.
It may be noted that Section 14(l)(e) requires that the premises should have been let for residential purposes but the landlord who seeks eviction need not be the person who has let out.
But Section 14 B narrows down such right.
It is he who has let out alone could evict or the dependent of the person who has let out but since killed in action.
Secondly, Section 14 B uses the expression "the premises let out by him" unlike the expression used in Section 14(l)(e) "the premises let out for residential purposes".
The definition of "premises" under sub section (2)(i) means "any building or part of a building which is or intended to be let, separately for use as a residence or for commercial use or for any other purpose . ".
It is clear that Section 14 B does not require that the premises should have been let out for residential purposes and the purpose of letting out seems to be irrelevant.
But he who has let out alone could seek eviction of his tenant or the dependent of , member of any armed forces who had let out but since killed in action.
Section 14 B also provides the period of limitation for claiming possession of such premises, but no such limitation is provided under Section 14(l)(e).
Sub section (3) of Section 14 B imposes further restriction on the landlord who is having more than one premises.
Such a landlord cannot ask for possession of more than one of the premises but he can choose any one of the premises which he has let out.
Here again we find that there is no such restriction to a landlord covered under Section 14(l)(e) provided the requirement of the landlord is bona fide and he has no other reasonably suitable residential accommodation.
Section 14(l)(e) does not preclude the landlord from seeking eviction of more than one premises provided he establishes the need.
Similar are the provisions in allied Sections 14 C and 14 D.
It will be thus seen that Sections 14 B to 14 D are markedly different from Section 14(1)(e).
Notwithstanding these two independent provisions with specified rights to landlords in general and the classified landlords, Counsel for the tenants argued that Section 14(l)(e) is the weapon of defence for the tenant even against the applications under Sections 14 B or 14 C or 14 D.
The tenant is entitled to leave to contest the application by disclosing such facts in his affidavit which would disentitle the landlord from obtaining an order of eviction under Section 14(l)(e).
This contention is sought to be supported first, by the retention of sub section 376 (5) of Section 25 B without any amendment, second, absence of amendment to SeCtion 25(C)(2).
It was also contended that sub sections 4 & 5 of Section 25 B are a composite scheme and since that scheme has been left untouched the tenant 's right thereunder cannot be denied.
The submission if taken to logical conclusion leads to obvious anomaly which will be indicated presently.
But before we do that it will be necessary to deal with one other contention.
Sub section (1) of Section 25 B provides that every application for the recovery of possession of any premises belonging to persons referred to in sub section (1) of Section 25 B shall be dealt with in accordance with the procedure prescribed "in this Section" meaning thereby entire Section 25 B.
It was also the submission of Dr. Chitale counsel for one of the tenants in these cases.
Mr. Krishna Moorthy Iyer counsel for the Union of India, however, argued that the procedure contemplated under sub section (5) of Section 25 B need not be followed by the Controller with regard to applications filed under Sections 14 B to 14 D. According to counsel when the tenant is duly served of the application filed under Sections 14 B, 14 C or 14 D he has no right to contest the application unless he files an affidavit stating the grounds on which he seeks to contest the application for eviction and obtains leave from the Controller.
It is said that sub section (4) itself authorises the Controller to refuse leave if he is satisfied that the grounds set out in the affidavit of the tenant would not disentitle the landlord to seek eviction.
We do not think that this contention could be accepted.
Indeed, sub section (4) itself provides that the tenant has to obtain leave from the Controller, "as hereinafter provided", which in the context means as provided under sub section (5) the meaning and scope of which will be presently considered.
This is the only sub section under which the Controller could give leave to the tenant to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises.
The argument that the absence of amendments to sub sections 4 and 5 of Section 25 B preserves the tenant 's right to contest the application of even a classified landlord on the grounds specified under section 14(l)(e) would be basically faulty.
If such argument is available in respect of sub sections (4) and (5) of Section 25 B, it must be equally available to sub section (2) of Section 25 B. There is also no corresponding amendment to the summons to be issued under subsection (2) and the form specified in the Third Schedule after the introduction of Section 14 B to 14 D. Third Schedule is in these terms: 377 "The Third Schedule Form of Summons in a case where recovery of possession of Premises is Prayed for on the ground of bona fide requirement or under Section 14 A.
To (Name, description and place of residence of the tenant) Whereas Shri _________________________________has filed an application (a copy of which is annexed) for your eviction from (here insert the particulars of the premises) on the ground specified in clause (e) of the proviso to sub section (1) of Section 14, or under Section 14 A; You are hereby summoned to appear before the Controller within fifteen days of the service hereof and to obtain the leave of the Controller to contest the application for eviction on the ground aforesaid; in default whereof, the applicant will be entitled at any time after the expiry of the said period of fifteen days to obtain an order for your eviction from the said premises.
Leave to appear and contest the application may be obtained or an application to the Controller supported by an affidavit as if referred to in sub section (5) of Section 25 B. Given under my hand and seal.
This_________________ day of_____________________ 19_______ Controller" This form specified in the Third Schedule refers only to applications filed under Section 14(l)(e) or under Section.14A.
Does it mean that the unamended form should be used to issue notice to the tenant even in case where application for eviction is not made under Section 14(l)(e) or 14 A? Is the tenant entitled to claim that he must receive the notice in the unamended form only, since there is no corresponding amendment to the form after introduction of Sections 14 B to 14 D? A wooden reading may furnish him positive answers, but it would be ridiculous.
When an application is filed under Section 14 B, a copy of the application should be sent to the tenant by making necessary amendment to the prescribed form and omitting the other 378 references which are not relevant.
If the application is filed under Section 14 B, the summons should state that the application is filed under Section 14 B and not under Section 14(l)(e) or 14 A. Likewise if the applications are under Sections 14 C to 14 D, the summons should state accordingly.
That would indicate the scope of the defence of the tenant for obtaining leave referred to in sub section (5) of Section 25 B.
Under sub section (5), the tenant could contest the application by obtaining leave with reference to the particular claim in the application of the landlord depending upon whether it is under Section 14 A, 14 B, 14 C or 14 D or under Section 14(l)(e).
The tenant can not be allowed to take up defence under Section 14(l)(e) as against an application under Section 14 B. There cannot be any defence unconnected with or unrelated to the claim or right of the plaintiff or applicant.
That would be against our jurisprudence.
It is unlikely that the Legislature intended the result for which the counsel for the tenant contended.
It will be a mechanical interpretation of the enactment defeating its purpose.
Such an interpretation has never found favour with the Courts which have always adopted a purposive approach to the interpretation of statutes.
Section 14 B and other allied provisions ought to receive a purposeful construction and subsection (5) of Section 25 B should be so construed as to implement the object and purpose of Section 14 B to 14 D.
It is the duty of the Court to give effect to the intention of the Legislature as expressed in Section 14 B to 14 D. True it is not permissible to read words in a statute which are not there, but "where the alternative lies between either supplying by implication words which appear to have been accidentally omitted, or adopting a construction which deprives certain existing words of all meanings, it is permissible to supply the words" (Craies Statute Law, 7th Edition, p. 109).
Similar are the observations in Hameedia Hardware Stores vs B. Mohan Lal Sowcar, [ ; at 524 25 where it was observed that the court construing a provision should not easily read into it words which have not been expressly enacted but having regard to the context in which a provision appears and the object of the statute in which the said provision is enacted the court should construe it in a harmonious way to make it meaningful.
An attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute.
(See: Sirajul Haq Khan & Ors.
vs The Sunni Central Board of Waqf, [ at 1299).
The tenant of course is entitled to raise all relevant contentions as against the claim of the classified landlords.
The fact that there is no 379 reference to the word bona fide requirement in sections 14 B to 14 D does not absolve the landlord from proving that his requirement is bona fide or the tenant from showing that it is not bona fide.
In fact every claim for eviction of a tenant must be a bona fide one.
There is also enough indication in support of this construction from the title of Section 25(B) which states "special procedure for the disposal of applications for eviction on the ground of bona fide requirement.
It was next urged that sub section (6) of Section 14 is also attracted to applications under Section 14 B to 14 D.
This contention overlooks the express wordings of sub section (6).
It refers to premises acquired by transfer and thereby the transferee becoming the landlord.
Such a landlord cannot bring an action for eviction of tenant in possession of the acquired premises within a period of five years from the date of acquisition.
After five years such a landlord can ask for eviction of the tenant under section 14(i)(e).
This is indeed, as we said earlier, a protection to the tenant.
The original landlord who cannot evict the tenant since he has got many houses under his occupation cannot use the device by transferring one of the houses to a third party who could easily evict such a tenant.
The tenant in occupation of the transferred premises gets a protection from eviction for a minimum period of five years.
Section 14 B and other allied provisions refer to the premises let out and not acquired by transfer.
One may become an owner of the premises by transfer but the tenant in occupation of the transferred property cannot be evicted by resorting to sections 14 B to 14 D.
If the transferee wants to evict the tenant of such premises he must take action only under Section 14(l)(e).
Equally, sub section (7) of Section 14 has no application to eviction under Sections 14 B to 14 D. Nor the amended provisions under Section 25(c)(2) would be attracted since it applies exclusively to tenants of the landlords covered under Section 14 A.
But that does not mean that the tenants covered under Sections 14 B to 14 D are not entitled to any time for surrendering possession of the premises.
it is always left to the Controller who is a quasi judicial authority to exercise his discretion having regard to the facts and circumstances of each case.
The Controller must exercise his judicial discretion in every case of eviction and grant a reasonable time to the tenant.
There is one other aspect which requires elucidation.
In Busching Schmitz Private Limited vs P. T. Meighani and Anr., ; this Court while dealing with the scope of Section 14 A and the corresponding right of the tenant to resist the application thereunder, has inter alia, observed that sub section (5) of Section 25 B cannot be equated with Order 37 Rule 3 of the Code of Civil Procedure.
The 380 social setting demanding summary proceeding, the nature of the subject matter and, above all, the legislative diction which has been deliberately designed, differ in the two provisions.
The Controller 's power to give leave to contest the application filed under Section 14(l)(e) or Section 14 A is cribbed by the condition that the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises on the ground specified in the respective sections.
Needless to state, therefore if an application is filed under Section 14 B or 14 C or 14 D, the tenant 's right to contest the application is narrowed down and is restricted to the parameters of the respective sections.
He cannot widen the scope of his defence by relying upon Section 14(l)(e).
We find nothing contrary to our view in Precision Steel & Engineering Works and Anr.
vs Prem Deva Niranjan Deva Tayal, [ Subsection (5) of Section 25 is self contained and Order 37 Rule 3 CPC has no part to play there.
We, therefore, reiterate the views expressed in Basching Schmitz Private Limited case.
The tenant, who is petitioner in SLP No. 11425/90 has suffered an order of eviction which has been confirmed by the High Court in revision.
It is found that his landlord is living in a rented house and is paying a rent of Rs.2,000 p.m. and he requires the premises for himself and the members of his family.
We concur with the view taken by the Controller as affirmed by the High Court.
The landlord cannot be denied possession of his own premises under Section 14 B when he is residing in a rented premises.
Before parting with the case, we have to deal with one other contention which has been specifically raised by Mr. Sanghi.
The counsel argued that the concerned landlord has taken voluntary retirement long earlier and he has become a part of the society just like any other landlord and Section 14 B was not intended to confer such landlord, the special right to recover immediate possession of the premises.
Obvious answer to this contention is found in Section 14 B(1) which states that the persons who have already retired may within one year from the date of their release or retirement from such Armed Forces or, within a period of one year from the date of introduction of Section 14 B, whichever is later apply to the Controller for recovering the immediate possession of their premises.
That is the legislative wisdom.
In this view of the matter, the appeals stand disposed without an order as to costs.
D.R.L. Appeals disposed of.
| IN-Abs | The Delhi Rent Control Act, 1958 was amended by Act 57 of 1988 which introduced Sections 14B to 14D to the Act carving out thereby classified landlords from the general class of landlords with specified rights to recover immediate possession of the premises let out by them if these are required for their own residence.
The released or retired persons from armed forces or the dependents of the member of armed forces killed in action are covered by Section 14B, the retired employees of the Central Government and of the Delhi Administration are covered by Section 14C, and the landlords who are widows are covered by Section 14D.
These classified landlords are also given the benefit of summary trial under Chapter IIIA by introducing Sections 14B to 14D in Sub section (1) of Section 25B, but there are no corresponding amendments to sub sections (2) to (5) of Section 25B.
The two petitioners, who are tenants, were in occupation of the premises belonging to two Army Officers (respondent landlords).
In the 365 action for eviction brought by the landlords on the ground that they needed the premises for their occupation, the tenants sought leave to contest the application which the Rent Controller being not satisfied with the facts disclosed by the tenants in their affidavits denied.
The Rent Controller accepted the case of the landlords and ordered eviction of the tenants.
The two tenants challenged the eviction orders by filing separate revision petitions in the High Court.
They also challenged the validity of Section 14B of the Act before the High Court by means of two separate writ petitions under Article 226 of the Constitution.
The High Court dismissed the writ petition and the revision petition filed by one of the tenants who being aggrieved moved this Court by way of special Leave Petition Nos.
7146 Court following its decision in the first case dismissed the writ petition filed by him, though the revision petition filed by him was still pending.
The tenant challenged the decision of the High Court by preferring Special Leave Petition No. 7364 of 1990 to this Court.
It was contended on behalf of the petitioners that the tenant 's right to contest the application for eviction on the grounds specified in Section 14(l)(e) cannot be denied even as against the classified landlords falling under Sections 14B to 14D.
The tenant is entitled to leave to contest the application by disclosing such facts in the affidavit as would disentitle the landlord from obtaining an order of eviction under Section 14(l)(e).
This is because of retention of sub section (5) of Section 25B without any amendment and absence of amendment to Section 25C(2).
It was also contended that sub sections (4) and (5) of Section 25B are a composite scheme and since that scheme has been left untouched the tenant 's right thereunder cannot be denied.
It was further contended that sub section (6) of Section 14 is attracted to applications under Sections 14B to 14D.
Dismissing the Petitions, the Court, HELD: 1.
Section 14B is a special provision made by the legislature conferring certain rights to persons belonging to Armed Forces to recover from their tenants immediate possession of the premises for their occupation.
[369E] 2.1 The Tenant cannot claim right to contest an application for eviction on the grounds specified in Section 14(l)(e) against the classified landlords falling under Sections 14B to 14D. Acceptance of such a claim would practically obliterate the purpose and object of classification of landlords under Sections 14B to 14D who are carved out from 366 the general landlords; indeed it would render the whole exercise of creating special classes of landlords with specified rights to recover immediate of the premises let out by them nugatory.
[371H 372C] 2.2 The remedy under Section 14(l)(e) is available only to landlords in general or the landlords who are not classified landlords under Sections 14B to 14D.
The classified landlords have been conferred with certain rights which are different from and independent of the rights under Section 14(l)(e).
[372E F] 2.3 Sections 14B to 14D are markedly different from Section 14(1)(e).[375E F] 3.1 The argument that the absence of amendments to sub sections (4) and (5) of Section 25B preserves the tenant 's right to contest the application of even a classified landlord on the grounds specified under Section 14(l)(e) is not sustainable.
Sub section (4) of Section 25B provides that the tenant has to obtain leave from the Controller "as hereinafter provided", which in the contest means as provided under sub section (5).
This is the only sub section under which the Controller could give leave to the tenant to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises.
[376G, F] 3.2 The form specified in the Third Schedule refers only to application filed under Section 14(l)(e) or Section 14A.
Therefore, when an application is filed under Section 14B, a copy of the application should be sent to the tenant by making necessary amendment to the prescribed form and omitting the other references which are not relevant and the summons should state that the application is filed under Section 14B and not under Section 14(l)(e) or 14A. Likewise if the applications are under Sections 14C to 14D, the summons should state accordingly.
That would indicate the scope of defence of the tenant for obtaining leave referred to in sub section (5) of Section 25B. [377G 378A] 3.3 Under sub section (5), the tenant could contest the application by obtaining leave with reference to the particular claim in the application of the landlord depending upon whether it is under Sections 14A, 14B, 14C or 14D or under Section 14(l)(e).
[378B] The tenant cannot be allowed to take up defence under Section 14(l)(e) as against an application under Section 14B. There cannot be 367 any defence unconnected with or unrelated to the claim or right of the plaintiff or applicant.
That would be against our jurisprudence and would be a mechanical interpretation of the enactment defeating its purpose.
The courts have always adopted a purposive approach to the interpretation of statutes.
[378C D] 3.4 Section 14B and other allied provisions ought to receive a purposeful construction and sub section (5) of Section 25B should be so construed as to implement the object and purpose of Sections 14B to 14D.
It is the duty of the Court to give effect to the intention of the legislature as expressed in Sections 148 to 14D. [378E] 4.
The tenant is entitled to raise all relevant contentions as against the claim of the classified landlords.
The fact that there is no reference to the word bona fide requirement in Sections 14B to 14D do not absolve the landlord from proving that the requirement is bona fide or the tenant from showing that it is not bona fide.
In fact every claim for eviction against a tenant must be a bona fide one.
There is also enough indication in support of this construction from the title of section 25B which states "special procedure for the disposal of applications for eviction on the ground of bonafide requirement".
[378H 379B] 5.
Section 14B and other allied provisions refer to the premises let out and not acquired by transfer.
One may become an owner of the premises by transfer but the tenant in occupation of the transferred property cannot be evicted by resorting to Sections 14B to 14D.
If the transferee wants to evict the tenant he must take action only under Section 14(l)(e).
Equally Sub section (7) of Section 14 has no application to eviction under Sections 14B to 14D, nor the amended provisions under Section 25C(2).
But that does not mean that the tenants covered under Sections 14B to 14D are not entitled to any time for surrendering possession of the premises.
It is always left to the Controller who is a quasi judicial authority to exercise his discretion having regard to the facts and circumstances of each case and grant a reasonable time to the tenant.
[379E G] 6.
The Controller 's power to give leave to contest the application filed under Section 14(l)(e) or Section 14A is cribbed by the condition that the 'affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises on the ground specified ' in the respective sections.
Therefore, if an application is filed under Section 14B or 14C or 14D, the tenant 's right to contest the application is narrowed down 368 and is restricted to the parameters of the respective Sections.
He cannot widen the scope of his defence by relying upon Section 14(l)(e).
Subsection (5) of Section 25B is self contained and Order 37 Rule 3 CPC has no part to play there.
[38OB C] Busching Schmitz Private Ltd. vs P.T. Menghani & Anr.,[1977] 2 SCC 835, affirmed and reiterated.
Precision Steel & Engineering Works and Anr.
vs Prem Deva Niranjan Deva Tayal, , harmonised.
The landlord in SLP No. 11425/90 is living in a rented house and is paying a rent of Rs.2,000 p.m. and requires the premises for himself and the members of his family.
The landlord cannot be denied possession of his own premises under section 14B when he is residing in a rented premises.
[38OD E] 8.
The contention that the concerned landlord has taken voluntary retirement long earlier and has become a part of the Society just like any other landlord and Section 14B was not intended to confer such landlord the special right to recover immediate possession of the premises is not maintainable because Section 14B(l) states that the persons who have already retired may within one year from the date of their release or retirement from such Armed Forces or, within a period of one year from the date of introduction of Section 14B, whichever is later, apply to the controller for recovering the immediate possession of their premises.
That is the legislative wisdom.
[38OF G] 9.
True it is not permissible to read words in a statute which are not there, but "where the alternative lies between either supplying by implication words which appear to have been accidentally omitted, or adopting a construction which deprives certain existing words of all meanings, it is permissible to supply the words".
Having regard to the context in which a provision appears and, the object of the statute in which the said provision is enacted, the court should construe it in a harmonious way to make it meaningful.
An attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute.
[378E G] Craies Statute Law, 7th Edition, P. 109; Hameedia Hardware Stores V. B. Mohan Lal Sowcar, ; at 524 25, and Sirajul Haq Khan & Ors.
vs The Sunni Central Board of Waqf, [1959].1 SCR 1287 at 1299, relied upon.
|
Civil Appeal No. 710 of 1991.
From the Judgment and Order dated 8.5.1990 of the Delhi High Court in Civil Writ No. 3257 of 1989.
G.L. Sanghi, Harish N. Salve, H.K. Puri, Rajeev Sharma, Ravinder Nath, V.B. Saharya, P.K. Jain and Prem Malhotra for the Appellants.
Y.S. Chitale, T.S. Krishnamurthy Iyer, R.L. Jain, S.K. Tredal, Kitty Kumarmanglam, R.P. Dave and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
SLP (C) No. 12 1 11 of 1990.
Leave granted.
This appeal raises the question of the validity and interpretation of Section 14 D of the Delhi Rent Control Act, 1958 (hereinafter referred to as the "Act").
In companion matters, we have already pronounced upon the validity and interpretation of Section 14 B of the Act.
Hence, it is not necessary to discuss in this judgment the points which are common to both sections.
These points will be deemed to have been concluded by the said decision.
The only point which remains to be dealt with and is peculiar to Section 14 D is whether to claim possession of such premises under the said Section, the landlady must become a widow after the premises are let out either by herself or her husband.
Section 14 D of the Act reads as follows: "14 D. Right to recover immediate possession of premises to accrue to a widow (1) Where the landlord is a widow and the premises let out by her (2) or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
383 (2) Where the landlord referred to in sub section (1) has let out more than one premises, it shall be open to her to make an application under that sub section in respect of any one of the premises chosen by her.
The object of the Act, as stated in its preamble, is to provide for the control of rents and evictions, and of rates of hotels and lodging houses, and for the lease of vacant premises to Government, in certain areas in the Union Territory of Delhi.
The original Act came into force on February 9, 1959 having received the assent of the President on December 31, 1958.
The working of the Act disclosed certain deficiencies, inconveniences and hardships both to the landlords and the tenants.
Their associations, therefore, made representations.
Various committees and commissions also recommended amendments of certain provisions of the Act.
Considering the grievances of the landlords and the tenants as well as the recommendations of the committees/commissions, the Act was amended in 1988 with the object of (a) rationalising the law by bringing out the balance between the interests of landlords and tenants, (b) giving a boost to house building activity and maintaining the existing housing stock in a reasonable state of repairs, (c) reducing litigation between landlords and tenants and of ensuring expeditious disposal of disputes between them.
By this amendment Sections 14 B to 14 D were added.
The object of Section 14 D is obvious.
It is to assist a vulnerable and needy section of the Society to recover possession of the premises as expeditiously as Possible and without the usual trials and tribulations.
We have already held in the accompanying judgment that classified landlords such as the widow landlady under Section 14 D can apply for possession of the premises under the respective provisions even if the premises are not let for residence.
It is not necessary to repeat the said discussion in this judgment.
Section 14 D makes no distinction between the landladies who become widows before and after letting out of the premises.
It merely says that where the landlady is a widow and the premises are let out by her or by her husband, are required by her for her own residence, she may apply to the Controller for recovering the immediate possession of such premises.
The language of the section in that respect is very clear.
The premises might have been let out by her as a widow or they might have been let out by her husband or even by herself before she had become widow.
The legislature wanted to give a special privilege to the landlady who is a widow notwithstanding whether the premises were let out before or after she became widow.
Such conferment of special benefit on a 384 widow landlady is permissible even under the provisions of Article 15(3) of the Constitution which is an express exception to the provisions of sub clauses (1) and (2) of that Article.
It states that nothing in the said Article shall prevent the State from making any special provision for women and children.
A widow is undoubtedly a vulnerable person in our society and requires special protection.
We further see no merit in the contention that if the benefit given by Section 14 D is allowed to be availed of by widows, they may make a business of it.
There is no warrant for such apprehension.
For, in the first instance, the right to recover possession under Section 14 D can be availed of by the widow only once.
That is a sufficient guarantee against the abuse of the privilege granted by the section.
Secondly, she has to prove her bona fide need for the occupation of the premises in question for her own residence like any other landlord.
Thirdly, the provisions of Section 19 of the Act come into play in her case also, when the order for possession on the ground of bona fide requirement for occupation as residence is made in her favour.
In this view of the matter, we find no substance in this appeal and the same is dismissed with no order as to costs.
Writ Petition No. 902 of 1990 7.
In the view that we have taken above, it is not necessary to admit this writ petition.
The authorities under the Act while disposing of the applications under Section 14 D will have to abide by this decision and not by the decision of the Delhi High Court in Civil Writ No. 2686 of 1989 in the matter of Dr. P.P. Kapur vs Union of India & Ors.
which was brought to our notice and stands overruled.
R.S.S. Appeal dismissed.
| IN-Abs | This appeal has been filed against the judgment of the Delhi High Court whereby the High Court gave the widow landlady the benefit of section 14 D of the Delhi Rent Control Act, 1958 and accordingly granted her the Possession of the premises in question.
Before this Court it was inter alia contended on behalf of the appellant that the relief under section 14 D was available only to a landlady who had become a Widow after the premises were let out either by herself or her husband.
it was further contended that if the benefit given by section 14 D was allowed to be availed by all widows, they may make a business of it.
Dismissing the appeal, this Court, HELD: (1) The legislature w anted to give a special privilege to the landlady who is a widow notwithstanding whether the Premises were let out before or after she became widow.
Such conferment of special benefit on a widow landlady is permissible even under the provisions of Article 15(3) of the Constitution which is an express exception to the provisions of sub clauses (1) and (2) of that Article.
A widow is undoubtedly a vulnerable person in our society and requires special protection.
[383H 384B] (2) Section 14 D can be availed of by the widow only once.
That is a sufficient guarantee against the abuse of the privilege granted by the section.
Secondly, she has to prove her bona fide need for the occupation of the Premises in question for her own residence like any other landlord.
Thirdly, the provisions of section 19 of the Delhi Rent Control Act come to play in her case also, when the order for possession on the ground of bona fide requirement for occupation as residence is made in her favour.
[384C] 382 Dr. P. P. Kapur vs Union of India & Ors.
Delhi High Court, Civil Writ No. 2686 of 1989 overruled.
|
Appeal No. 177 of 1955.
Appeal from the judgment and decree dated September 28, 1953, of the former Nagpur High Court in First Appeal No. 115 of 1951, arising out of the judgment and decree dated July 25, 1951, of the Court of Additional District Judge, Bhandara, in Civil Suit No. 14 A of 1957.
C. B. Aggarwala and Radheylat Aggarwal, for the appellant.
section P. Sinha and section N. Mukherjee, for the respondent.
December 1.
The Judgment of the Court was delivered by 700 KAPUR, J.
This is an appeal against the judgment and decree of the High Court of Nagpur reversing the decree of the Additional District judge dismissing the plaintiff 's suit.
The appellant before us is the defendant Kishori Lal who claimed to be the adopted son, adopted by the husband of the plaintiff, Mst.
Chaltibai who is the respondent in this appeal.
The suit out of which this appeal arises was brought by Mst.
Chaltibai, the widow of Lakshminarayan, a Marwari Aggarwal of the District of Bhandara against Badrinarayan defendant No. 1 and his son Kishori Lal defendant No. 2 now appellant for a declaration that properties in sch.
B & C belonged to her as heir to her deceased husband Lakshminarayan and for possession of the property in schedule D.
The facts of the litigation relevant for the purpose of this judgment are these: Badrinarayan and Lakshminarayan were two brothers the former who was elder was carrying on business at Raipur and the latter who was younger carried on business in the ancestral village named Tirora where it is stated Badrinarayan also was doing some business.
Lakshminarayans first wife died in 1919 leaving a son and a daughter.
In 1922 Lakshminarayan married the respondent Mst.
Chaltibai.
His son died sometime after this marriage and therefore the only remaining child of Lakshminarayan was the daughter Mst.
Jamnabai who was married to one Chotteylal.
On January 6, 1936, Lakshminarayan died of a heart disease leaving his estate which is given in schs.
B, C and D and is valued at about Rs. 30,000.
Although the plaintiff Chaltibai, now respondent, had alleged that Lakshminarayan died suddenly and did not suffer from any heart disease previous to his death, the appellant pleaded that Lakshminarayan developed heart trouble in 1934.
He also pleaded that because of this heart trouble Lakshminarayan became despaired of begetting a son and therefore adopted in Jaisth (May June) 1935 the appellant Kishorilal then aged 13 years who was the youngest of the five sons of his brother Badrinarayan, the others being Mohanlal, Gowardhan, Nandlal and Narayan.
He further pleaded that after 701 his adoption he resided with Lakshminarayan as his adopted son and when Lakshminarayan died he performed his obsequies as such adopted son, was placed on the gaddi and the turban was tied on his head in accordance with the custom of the caste; that he was on the thirteenth day (tervi) taken by the respondent Chaltibai in her lap from Badrinarayan with the consent and in the presence of the relations of Lakshmi narayan on the thirteenth day of the death of Lakshminarayan ; that he entered into possession of the estate of the deceased Lakshminarayan and was recognised as his adopted son even by the respondent who continued to accept and treat him as such upto 1946; and in 1942 the respondent performed his (the appellant 's marriage).
After he attained majority he managed the estate himself and there was a partition in the family of Badrinarayan on October 30, 1943, in which the appellant, because of his having been given out in adoption in another family, received no share.
The respondent in the plaint denied both the adoption and the treatment or acceptance of the appellant as an adopted son.
She also stated that she was an illiterate purdanashin woman who was not conversant with the management of business and after the death of her husband she reposed full confidence in Badrinarayan who assured her that he would properly look after her affairs, business and property and consequently Badrinarayan took over the management of the estate and the account books and also looked after court work.
At his instance she (the respondent) signed certain papers without understanding them or without knowing their contents and sometimes she even signed blank papers.
The appellant and his father Badrinarayan then attempted to oust her from the business and the estate of her husband which led to disputes between the parties and proceedings under ss.107 & 145 of the Code of Criminal Procedure were started, a receiver was appointed and the Magistrate by an order dated May 19, 1947, directed the parties to have their rights decided by a civil court.
This order was unsuccessfully challenged by the appellant in revision.
In the criminal case the appellant, it is 702 alleged, asserted that he had been adopted by Lakshminarain six months prior to his death, a fact which the respondent Chaltibai denied in her plaint.
On these pleadings the court framed four issues and the two relevant issues for the purpose of this appeal are : (1)Did the deceased Lakshminarayan validly adopt the defendant No. 2 in the bright fortnight of Jyestha (June), 1935 A. D. ? (b) Was the adoption valid according to law ? (2) Had the plaintiff all along recognised the adoption as valid and legal and had she been treating defendant No. 2 as Lakshminarayan 's son all along ? (b) If so, result ? The trial court dismissed the suit.
It held the adoption proved but found against the appellant on the question of estoppel.
The High Court on appeal reversed the finding as to the factum of adoption but upheld the finding on the question of estoppel.
It was of the opinion that the respondent was not estopped on account of any misrepresentation made by her and that there was no such conduct on her part which deprived her of her right of bringing the present suit and that both parties knew that there was no adoption in fact.
The appeal was therefore allowed.
The defendant Kishorilal has brought this appeal to this Court under a certificate of the High Court and the judgment of the High Court is assailed on several grounds: Firstly, it was urged that the evidence produced in support of the adoption proved that the appellant was adopted by Lakshminarayan six months before his death.
Secondly, the doctrine of estoppel was relied upon, estoppel on the ground that the respondent Chaltibai had represented in previous legal proceedings and in various ways by execution of docu ments and by her actions that the appellant was the adopted son of Lakshminarayan.
She had put him in possession as owner of all the estate of Lakshminarayan, and had given up her own claim to heirship to his estate and as a result of this conduct and representations made by the respondent the appellant had 703 altered his possession (i) by being completely transplanted from his real father 's family into another family and (ii) by being deprived of his share of the properties in his natural family.
Thirdly, it was argued that because of her admission that the appellant was the adopted son of Lakshminarayan and his heir the burden was on her to show that he was not the adopted son.
And fourthly, it was submitted that having regard to the long course of conduct of the respondent Chaltibai in treating the appellant as the adopted son of Lakshminarayan the evidence produced should be appraised in such a manner as to hold it sufficient for proving the adoption.
There is no formal deed of adoption, the appellant therefore sought to prove it by the evidence of six witnesses who were.
his real brother Mohanlal, his natural father Badrinarayan and two relations Narsingdas and Shankarlal, a neighbour Chattarpatti who is some kind of a physician and Kishorilal himself appeared in support of his case.
A seventh witness Sobharam was produced to prove an admission by Lakshminarayan that he had adopted the appellant.
The story of the adoption as disclosed by the evidence for the appellant was that as Lakshminarayan had no son of his own he asked his brother Badrinarayan to give his youngest son in adoption to which he agreed and the adoption took place at the house of Lakshminarayan at Tirori in the month of Jyaistha 1935 about six months before the death of Lakshminarayan.
The formalities of adoption, according to this evidence, consisted of placing the appellant as a son not in lap of the adoptive mother but of Lakshminarayan who put a tilak on the appellant 's forehead and tied a turban on his head.
This was followed by distribution of pansupari to the persons assembled who were Narasingdas and Shankarlal who were from outside Tirora, Raman and Jivan Singh who were servants of Lakshminarayan, Chhatarpatti a neighbour and Bhaiyalal who has not been examined and there was also present Mohanlal a real brother of the appellant.
Some other persons were also present by the appellant but they are not witnesses in the case and Badrinarayan and Mohanlal did 704 not mention their presence.
No religious ceremony was performed and there was no priest though witness Narsingdas stated that a priest was present at the adoption ceremony and ganesh puja was performed.
The evidence also shows that no invitations were sent to the brotherhood, friends or relations and besides the persons mentioned above no one else was present and thus no publicity was given to the adoption.
None of the relations of the respondent were invited or were present although she had brothers and sisters and they were married.
Even the respondent Chaltibai was not present at the ceremony of adoption.
It is stated that she was in some inner room.
And after the formalities of adoption Lakshminarayan himself put the adopted son in the lap of the respondent Chaltibai.
The adoption was not followed by any feast nor was any photograph taken and no presents were given to the adopted son.
Lakshminarayan did not consult any priest as is usual for fixing an auspicious day for adoption.
Although the defendants were allowed to amend their written statement they gave no details of the adoption by Lakshminarayan beyond saying that it was in the month of Jyaistha 1935 but what date it was not mentioned.
The parties are Aggarwals and belong to a commercial community who maintain complete and detailed accounts.
Although Badrinarayan who was defendant No. 1 chose to put in accounts of January 20, 1936, in connection with what he expended on the tervi (thirteenth) day ceremony after the death of Lakshminarayan yet he filed no such accounts showing the date when he and his son the appellant came to Tirora from Raipur for the purposes of adoption or when they went back.
No contemporary document of any kind has been produced to show when the adoption took place or what was expended by Badrinarayan nor have the accounts of Lakshminarayan who ac cording to the appellant himself maintained account books been produced to show as to the expenses of whatever little ceremony was observed on the date of the adoption.
The account produced by Badrinarayan shows the amount expended on the occasion of 705 thirteenth day ceremony after the death of Lakshminarayan on betel leaves, milk, betelnuts and also what was paid at the house of Lakshminarayan including the amount paid for the turban for the reading of the garud puran or what was paid to Kesu (which we are told is a pet name of Kishorilal) for touching the feet of the elders.
The significance of this fact has not been explained by the appellant.
I As an adoption results in changing the course of succession, depriving wives and daughters of their rights and transferring properties to comparative strangers or more remote relations it is necessary that the evidence to support it should be such that it is free from all suspicion of fraud and so consistent and probable as to leave DO occasion for doubting its truth.
Failure to produce accounts, in circumstances such as have been proved in the present case, would be a very suspicious circumstance.
The importance of accounts was emphasised by the Privy Council in Sootrugun vs Sabitra (1) ; in Diwakar Rao vs Chandanlal Rao (2) ; in Kishorilal vs Chunilal (3); in Lal Kunwar vs Charanji Lal (4) and in Padamlal vs Fakira Debya (5).
The oral evidence of witnesses deposing to the factum of adoption is both insufficient and contradictory.
Beyond their being agreed on the question of taking the appellant in adoption by Lakshminarayan the witnesses are not in accord as to the details of the adoption or as to the ceremonies or as to the usual feast following it.
The giving of presents is the only detail on which they are agreed, they all deposed that no presents were given.
As to what happened in regard to the taking of the appellant in her lap by the respondent after the death of Lakshminarayan the witnesses are not in accord.
There is disagreement as to its date how it came about and why.
The adoption during the lifetime of Lakshminarayan is contradicted by a document dated January 24, 1938, a sale deed by the respondent Chaltibai in favour of the (1) (1834) 2 Knapp.
(2) Calcutta 201 (P.C.).
(3) (1908) 36 I.A. 9.
(4) (1909) 37 I.A. 1, 7.
(5)A.I.R. 193, (P.C.) 84.
89 706 Firm Ganeshram Fatteh Chand the family firm of witness Narsingdas.
Therein the adoption of the appellant is stated to have taken place after the death of Lakshminarayan and was by (Chaltibai respondent under the authority of her deceased husband and with the consent of the whole family.
This document was witnessed by the natural father Badrinarayan.
No satisfactory explanation of this wholly different adoption being mentioned in a deed executed only two years after the death of Lakshminarayan has been given by the appellant, except this that whether he was adopted by Lakshminarayan in his lifetime or after his death by the respondent Chaltibai, he would be the adopted son of Lakshminarayan and therefore this discrepant recital in the sale deed was of little consequence.
This argument ignores the case set up by the appellant in his written statement and the utter lack of evidence of the authority of the husband or of the assent of his kinsmen which was neither pleaded nor proved.
Another circumstance which casts a great deal of doubt on the adoption set up by the appellant is that after the adoption the appellant went back to Raipur where his natural father was residing.
Although Badrinarayan stated that after the adoption the appellant lived with his adoptive father, this is negatived by the evidence produced by the appellant himself which is to the effect that he went back to school at Raipur and returned to Tirora on the day Lakshminarayan died.
The High Court also found that he left for Raipur after the obsequies and returned three or four months later.
The school leaving certificate shows that he was a student in the school at Tirora from June 22, 1936 to June 30, 1937, and there he was entered as the son of Badrinarayan.
Taking all these facts into consideration the High Court, in our opinion, has cor rectly held that the factum of adoption by Lakshminarayan has not been established.
It was next argued on behalf of the appellant that even though the evidence produced in support of the adoption might be unsatisfactory and not sufficient to establish the factum of adoption the respondent in this 707 case was estopped from setting up the true facts of the case inasmuch as she represented in the former document and legal proceedings and in various other ways that the appellant was the adopted son of the deceased Lakshminarayan and thereby caused him to change his position by being transferred from the family of Badrinarayan to that of Lakshminarayan.
These documents will be discussed later.
In this case both the parties were aware of the truth of the facts and consequently the doctrine of estoppel was inapplicable.
It cannot be said that the respondent by her own words or conduct wailfully caused the appellant to believe the existence of a certain state of things i.e. adoption by Lakshminarayan and induced him to act on that belief so as to alter his position and therefore she could not be concluded from averring a different state of things as existing at the same time.
See Pickard vs Sear (1) and Square vs Square (2 ).
The Privy Council in Mohori Bibi vs Dhurmdas Ghogh (3 ) held that there can be no estoppel where the truth of the matter is known to both the parties.
Therefore when both the parties are equally conversant with the true facts the doctrine of estoppel is inapplicable.
The documents giving rise to the plea of estoppel were four and the appellant also relied on the acts of the respondent which will be referred to later.
The first document was an application dated March 21, 1936, for a succession certificate which was filed by the respondent as " guardian mother " of the appellant Kishorilal.
The necessity for this application arose because in order to get insurance money on a policy taken out by the deceased Lakshminarayan a succession certificate had to be obtained.
The High Court came to the conclusion that there was no evidence to show that the respondent Chaltibai 's signatures were obtained on the document after it was explained to her, the document was in English and she was not conversant with that language.
Two other drafts were made for the application for this succession certificate which (1) ; ; (2) (3) (1902) 30 I.A. 114.
708 are both on the record.
In these two drafts Badrinarayan is shown as " guardian uncle " of the appellant Kishorilal.
Although Badrinarayan was reluctant to do so he had to admit the existence of these two drafts but added that he had instructed Jivan Singh a servant of Lakshminarayan not to file the application till after he had consulted a Mr. P. section Deo, a pleader and after he had consulted him the application was filed but with Chaltibai as guardian.
This document in para.
3 sets out the names of the relations of the deceased.
They were the widow Chaltibai, the daughter Jamnabai, the brother Badrinarayan and the four sons of Badrinarayan.
In this column the appellant Kishorilal was not shown as a relative of the deceased.
In a later paragraph it was stated that the petitioner i. e. the appellant Kishorilal claimed the certificate as the adopted son of the deceased Lakshminarayan.
On the finding of the High Court that the document was not explained to the respondent Chaltibai it cannot be said that it established any admission, much less estoppel.
This document did not contain any admission which would necessarily show that Kishorilal appellant was adopted by Lakshminarayan during his lifetime.
The next document relied upon is a bahi entry in a Mathura Panda 's book dated July 21, 1944.
The story is that the respondent Chaltibai visited Mathura on her way back from Badrinarayan and the Panda of the family made an entry in his bahi after making enquiries from her showing the appellant Kishorilal as the adopted son.
The entry is signed by her.
This document is contradicted by another entry in the same Panda 's bahi which is stated to have been made at the instance of Mohanlal, the eldest brother of the appellant on March 2, 1947, about 2 1/2 years after the pre vious entry.
In the later entry the appellant Kishorilal was shown as the son of Badrinarayan and not the adopted son of Lakshminarayan.
Whether the document the previous Bahi entry was at the instance of the respondent Chaltibai or not is not material because it does not advance the case of the appellant.
This document also does not show that the appellant 709 was adopted by Lakshminarayan.
Then there is a document adhikar patra dated May 4, 1946, by which a dispute between the appellant and the respondent was referred to the arbitration of 7 persons.
It was signed by the appellant and the respondent and it was therein recited: " Relations between us mother and son have become strained in connection with some matters.
it is very necessary to remove the same".
In another portion of the document also words used are "between us the mother and the son".
This document also was not accepted by the High Court as containing an admission because even at the time of its execution the respondent Chaltibai was denying the adoption of Kishorilal which was proved by the testimony of two of the panches (arbitrators) themselves.
It cannot be said therefore that this document represented correct state of affairs but even if it did it cannot be treated as an admission by the respondent that the appellant was adopted by Lakshminarayan.
Lastly there is the deed of sale dated January 24, 1938, wherein the respondent had recited that the appellant Kishorilal was adopted by her husband ,in accordance with his wishes and consent of the entire family ".
This recital negatives the whole case of the appellant as set up in his written statement that he was adopted by Lakshminarayan during his lifetime.
In his written statement he bad only pleaded his having been placed in the lap of the respondent Chaltibai as confirmatory of his adoption by Lakshminarayan.
The documents mentioned above do not support the plea that the appellant had been led.
to alter his position through a belief in any misrepresentation made by the respondent Chaltibai as to his having been adopted by Lakshminarayan.
And he cannot be allowed to set up a case different to his case in the written statement nor can he be allowed to prove his title as an adopted son on such different case.
See Tayammaul vs Sashachalla Naiker (1), Gopeelal vs Mussamat Chandraolee Buhajee (2 ).
The correct rule of estoppel applicable in the case of adoption is that it (1) (1865) 10 M.I.A. 429.
(2) (1872) SUPP.
I.A. 131.
710 does not confer status.
It shuts out the mouth of certain persons if they try to deny the adoption, but where both parties are equally conversant with the true state of facts this doctrine has no application.
Two further facts which the appellant 's counsel relied upon to support his plea of estoppel were: (1) his being allowed to perform the obsequies of Lakshminarayan and (2) the performance of his marriage by the respondent Chaltibai as his adoptive mother.
If the adoption itself is disproved these two facts will not add to the efficacy of the plea of estoppel which otherwise is inapplicable: Dhanraj vs Sonabai (1).
The appellant relied on Rani Dharam Kunwar vs Balwant Singh (2) which was a case where the adoptive mother, the Rani had herself in a previous proceeding pleaded that she had authority to adopt and the Privy Council were of the opinion that the question could be decided on its own facts without recourse to the doctrine of estoppel, although they did not differ from the view of the courts below as to the applicability of the doctrine of estoppel.
That was not a case of the parties being equally conversant with the true facts and further there was a finding that the person claiming to be the adopted son was as a matter of fact adopted.
In our view there is no substance in the plea of estoppel raised by the appellant.
Whatever the acts of the respondent Chaltibai, what.
ever her admissions and whatever the course of conduct she pursued qua the appellant Kishorilal they could not amount to estoppel as both parties were equally conversant with the true facts.
In none of the four documents which are signed by her, is there any admission that Kishorilal was adopted by her husband during his lifetime.
On the other hand in the sale deed dated January 24, 1938, she recited an adoption by herself which is not the adoption that the appellant relied upon in support of his case.
The other documents i. e. the application for succession certificate and the arbitration agreement and the entry in the Panda 's bahi are all consistent with the recital in the sale deed and do not establish the case (1) (1925) 52 I.A. 231, 243.
(2) (1912) 39 I.A. 142, 148.
711 of the appellant as to the adoption by Lakshminarayan himself.
It was then argued for the appellant that the course of conduct of the respondent and her various acts of admission and the treatment of the appellant as an adopted son by the respondent and other members of the family gave rise to a strong inference that he (the appellant) was adopted as aleged by him and the evidence should have been so appraised as to support that inference.
Particular emphasis was placed by counsel for the appellant on the fact that soon after the death of Lakshminarayan it was given out that the appellant was his adopted son and this assertion was continuously made in many transactions and documents.
These documents, the course of conduct of Chaltibai respondent in treating the appellant as the adopted son of Lakshminarayan and the length of the appellant 's possession of Lakskminarayan 's estate, it was contended, showed that he was the adopted son of Lakshminarayan.
It was also submit ted that the admissions shifted the onus on to the respondent on the principle that what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted, the fact admitted must be taken to be established: Chandra Kunwar vs Narpat Singh (1).
The question of onus loses its efficacy because it was never objected to in the courts below and evidence having been led by the parties, at this stage the court has to adjudicate on the material before it.
And admissions are not conclusive, and unless they constitute estoppel, the maker is at liberty to prove that they were mistaken or were untrue: Trinidad Asphalt Company vs Coryat (2).
Admissions are mere pieces of evidence and if the truth of the matter is known to both parties the principle stated in Chandra Kunwar 's case (1) would be inapplicable.
And in this case there is no admission by the respondent of the appellant 's adoption by her husband in his lifetime.
Such admissions that there are cannot help the case of the appellant or support a different appraisal of the evidence of the factum of (1) (1906) 34 1.
A. 27.
(2) 712 adoption or establish an adoption which is otherwise disproved.
In order to properly appreciate the effect of these admissions it is necessary to consider the circumstances under which these various documents were executed and the acts done or the admissions made.
At the death of Lakshminarayan the respondent was 24 or 25 years old surrounded by the family of Badrinarayan whose interest it was to foist an adoption on her.
Her own relations do not seem to have taken much interest in her or her affairs.
She was thus a widow, lonely and dependent upon her husband 's relations.
The trial Court described her as a pardanashin woman.
Although Badrinarayan himself denied that he was managing the estate of Lakshminarayan, Narsingdas one of the appellant 's witnesses stated that Badrinarayan was doing so and Badrinarayan admitted that he looked after the court cases though at the request of the respondent.
It is with this back.
ground that the evidence has to be considered and weighed.
Any admission made by a widow situated as the respondent was would necessarily carry very little weight: Padamlal vs Fakira Debya (1).
Besides the four documents above mentioned the appellant Kishorilal relied on the following facts as instances of admissions and conduct of the respondent Chaltibai.
The first is the performance of obsequies by the appellant and the subsequent taking of the appellant in her lap by the respondent.
The mere fact of performance of these funeral rites does not necessarily support an adoption.
The performance of these rites frequently varies according to the circumstances of each case and the view and usage of different families.
The evidence led by the appellant him self shows that in the absence of the son, junior relations like a younger brother or a younger nephew performs the obsequial ceremonies.
As was pointed out by the Privy Council in Tayamal 's case (2) the performance of funeral rites will not sustain an adoption unless it clearly appears that the adoption itself was performed under circumstances as would render it (1) A.I.R. 1931 (P.C.) 84.
(2) (1865) 10 M.I.A. 429.
713 perfectly valid.
But then it was submitted that the taking by the respondent of the appellant in her lap coupled with the performance of obsequies was a clear proof of her acceptance of the appellant 's adoption by her deceased husband.
This again is slender basis for any such inference as Badrinarayan himself stated that it was not customary amongst them for the widow to take the adopted son in her lap and in this particular case it was only done as she desired it.
As proof of adoption by Lakshminarayan this piece of evidence has no value because that is not the case of the appellant; and as showing confirmatory process it is valueless in the absence of evidence sufficient to establish the adoption by Lakshminarayan which in this case is lacking.
The appellant 's residing with Lakshminarayan after his adoption and after the death of Lakshminarayan with the respondent was next relied upon by counsel for the appellant As we have already said the appellant had not proved that he was residing with Lakshminarayan after his adoption; on the contrary the evidence shows that he left Tirora soon after his alleged adoption and did not return till after the death of Lakshminarayan.
And then again he returned to Raipur and returned to Tirora after about four or five months.
The mere fact that he continued to reside with the respondent since would not in this case prove adoption, because in the school register he was shown as the son of Badrinarayan and continued to be so shown upto June 30, 1937, and mere residence of a young nephew with a widowed and young aunt is no proof of adoption by her husband in the absence of satisfactory evidence of the factum of adoption.
The appellant, it was next contended, was in possession of the properties of Lakshminarayan after the latter 's death and his name was brought on the record in all civil and revenue proceedings.
As we have said above, Badrinarayan took over the management of the estate of Lakshminarayan and was looking after the conduct of the court cases.
If in those circumstances the mutations were made in the name of the 90 714 appellant or suits were brought in his, name or even if he took out licences in his name would be matters of small consequence.
It is not shown that at the time of the mutations the respondent was present or was represented or the suits were brought with her knowledge and it appears that all this was done because the management of the estate as well as the conduct of the cases in courts was in the hands of Badrinarayan.
Then the fact that after he attained majority, the appellant was managing the estate and was recognised by everybody as its owner also is of little consequence because as far as the respondent was concerned somebody had to manage the property, whether it was Badrinarayan or the appellant Kishorilal to her it made no difference.
It may also be mentioned here that in the mutation order passed by the Tehsildar on April 8, 1936, which related to 3As.
share of Mouza Jabartola the mutation entry was made in favour of the respondent and not in the name of the appellant and in the jamabandi papers relating to different holdings in some places the appellant is shown under the guardianship of his mother Chaltibai and in other places under the guardianship of Badrinarayan as his uncle.
A great deal of stress was laid by the appellant on the fact that his marriage was performed by the respondent Chaltibai and she purported to do so as his adoptive mother.
The performance of the marriage itself does not prove adoption, which is otherwise disproved, and as a circumstance supporting the inference of adoption set up by the appellant it is wholly neutral.
At the most the circumstances relied upon by the appellant may be acts of acquiescence attributed to the respondent but they would be important only if they were brought to bear upon the question which depended upon preponderance of evidence.
If the facts are once ascertained, presumption arising from conduct cannot establish a right which the facts themselves disprove: See Tayamal 's case (1) at p. 433.
Presumptions cannot sustain an adoption even though (1)(1865) 10 M.I.A. 429.
715 it might have been acquiesced in by all concerned when as in the present case, the evidence shows that the adoption did not take place.
Another fact on which the appellant relied was that on October 30, 1933, Badrinarayan, his wife and his sons partitioned their family property.
That is not an act of the respondent and cannot affect her rights if they are otherwise enforceable.
On the whole we are of the opinion that the judgment of the High Court is sound and that this appeal should be dismissed with costs.
Appeal dismissed.
| IN-Abs | The respondent filed a suit for declaration and possession of certain properties left by her deceased husband L.
The appellant contested the suit on the grounds that L had adopted him as his son six months before his death In addition to the oral evidence of adoption the appellant alleged that he performed the obsequies of L as such adopted son, that on the thirteenth day after the death of L he was taken by the respondent in her lap, that he entered into possession of the estate of L, that the 699 respondent performed his marriage and that he was recognised as the adopted son of L even by the respondent.
The appellant further pleaded that the respondent was estopped from challenging his adoption by her representations in previous legal proceedings and in documents and on account of the fact that the appellant had by this adoption lost his share of the properties in his natural family.
The respondent denied both the adoption and the treatment of acceptance of the appellant as the adopted son of L.
The trial Court dismissed the suit holding the adoption proved.
On appeal the High Court held the adoption was not proved and decreed the suit.
Both Courts held that the respondent was not estopped from challenging the adoption.
Held, that the High Court.
had correctly held that the adoption of the appellant by L had not been established.
As an adoption results in changing the course of succession, the evidence to support it should be such that it should be free from all suspicion of fraud and so consistent and probable as to leave no occasion for doubting its truth.
Held further, that the.
respondent was not estopped from disputing the adoption.
The correct rule of estopped applicable in the case of adoption is that it does not confer status; it only shuts the mouths of certain persons if they try to deny the adoption.
But where both parties are conversant with the true state of facts the doctrine of estopped has no application.
Admissions made by a party are not conclusive, and unless they constitute estopped, the maker is at liberty to prove that they were mistaken or were untrue.
Presumptions arising from the conduct of a party cannot sustain an adoption even though it might have been acquiesced in by all concerned when the evidence shows that the adoption did not take place.
Mohori Bibi vs Dhurmdas Ghosh, (1902) 30 I.A. 114, relied upon.
|
tition No. 443 of 1988.
(Under Article 32 of the Constitution of India).
Rajiv K. Garg and N.D. Garg for the Petitioner.
Soli J. Sorabjee, Attorney General, M. Chandrasekharan and P. Parmeswaran for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
This is an application under Article 32 of the Constitution.
Northern Corporation is the petitioner in the instant application and the Union of India, the Collector of Customs and the Assistant Collector of Customs (Bond Department) are the respondents.
On 11th May, 1983, the licensing authority issued import licence No. 2959845 for Rs.20, 12,729 in favour of M/s Industrial Cable India Ltd., Rajpura.
The licence holder transferred the same in favour of M/s Metalic metal Indus tries.
The transferee licence holder issued a letter of authority in favour of the petitioner for the import of MSCR defective sheets or coils.
The letter of authority was issued on 21st May, 1984.
The petitioner herein placed order on M/s Sayani Enter prises Pvt.
Ltd., Singapore for the supply of MSCR defective sheets or coils on 30th May, 1984.
The foreign supplier shipped the material in three consignments and the goods arrived at the Bombay Port on 12th June, 1984.
The clearing agent of the petitioner filed bills of entry on 30th July, 1984 for warehousing under section 59 of the .
1962 (hereinafter referred to as 'the Act '), and the same was allowed.
The goods were bounded on 7th August, 1984.
It may be mentioned that the rate of duty on the day was 60% + 40% + Rs.650 per M.T. and 10% C.V.D.
The total duty on the consignment was assessed as Rs.26,20,109.55.
624 On 21th August, 1984, the petitioner 's clearing agent filed six bills of entry for ex bond clearance.
However, the bills of entry were returned with the remark that "please obtain no objection from the income tax".
This was endorsed on 24th August, 1984.
The petitioner states that thereafter he came to know that the income tax authorities had imposed ban under section 132(1) of the Income Tax Act, 1961.
The petitioner asserted that he was ever ready and willing, rather was anxious, to get the material on payment of the then prevailing customs duty.
However, due to circumstances beyond the control of the petitioner, that it to say, by the order of the Income Tax Authorities the goods could not be released.
This factor was not of the petitioner 's making, according to the petitioner. ' On 30th March, 1988, the Income Tax Department issued the necessary no objection certificate, thus lifting the ban.
On 4th April, 1988, the petitioner 's agent contacted the customs authority for clearance of the goods.
The duty as is prevalent now is Rs.5,000 per M.T. + addl.
duty 45% and C.V.D. at Rs.325 per M.T.
The total duty came to a very large sum of money.
The demand, according to the petitioner, was arbitrary, illegal and unconstitutional.
The instant writ was filed under Article 32 of the Constitution on 16th April, 1988 and on 22nd April, 1988, this Court passed the following order: "Pending notice, there will be limited stay to the extent that the goods name, "MSCR defective sheets/coils" which have arrived at Bombay Port per S.S. "SEA PRIMROSE" will be released forthwith on petitioner 's paying customs and other duties as leviable on 21.8.84.
In addition to the above payment the petitioner will deposit Rs.5 lakhs and for the balance amount petitioner will furnish surety (which may consist of ITC bond but excluding cash/bank guarantee/NSC/FDR) to the satisfaction of the Collector of Customs.
" We directed that the notice should be given to the revenue authority to appear before us.
Learned Attorney General had appeared pursuant to the notice on behalf of the respond ents.
It is contended on behalf of the respondents that for the payment of duty, the liability of the petitioner to pay the duty is the duty at the time of clearance of the goods.
Our attention was drawn to section 15(1)(b) of the Act which postulates that the rate of duty and tariff valuation, if any, applicable 625 to any imported goods, shall be the rate and valuation in force, in case the goods are cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse.
Section 15 of the Act reads as under: "section 15.
Date for determination of rate of duty and tariff valuation of imported goods.
(1) The rate of duty and tariff valuation, if any, applica ble to any imported goods, shall be the rate and valuation in force (a) in the case of goods entered for home con sumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actual ly removed from the warehouse; (c) in the case of any other goods, on the date of payment of duty: Provided that if a bill of entry has been present ed before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards.
(2) The provisions of this section shall not apply to bag gage and goods imported by post." Learned Attorney General laid emphasis on the expression "actually removed" in clause (b) of section 15(1) of the Act.
Our attention was also drawn to section 16 of the Act which reads as under: "section 16.
Date for determination of rate of duty and tariff valuation of export goods.
(1) The rate of duty and tariff valuation, if any, applica ble to any export goods, shall be the rate and valuation in force (a) in the case of goods entered for export under 626 section 50, on the date"on which the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51; (b) in the case of any other goods, on the date of payment of duty.
(2) The provisions of this section shall not apply, to baggage and goods exported by post.
" It was contended on behalf of the revenue that in view of the aforesaid, it would not be possible for the petition er to clear the goods on payment of duty on the date when the petitioner was actualling expressed willingness to remove the goods.
Our attention was drawn to the decision of this Court in Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142.
In that case,the appellant stored on December 22, 1965 in the Customs warehouse, goods import ed by him under a licence, and cleared them on various dates between September 1, 1966 and February 20, 1967.
Under protest, they paid customs duty at the enhanced rates in accordance with the amended provisions.
Later, they claimed rebate alleging that since the consignments had been re ceived, stored and assessed to duty much before the promul gation of the Ordinance, they were liable to pay duty at the rate prevailing on the date of warehousing.
Their appeals and revision were unsuccessful.
In appeal to this Court it was contended that the material change in section 15 being only the substitution of the words "the rate of duty" the customs authorities were not entitled to take into account the new rate of exchange at the appreciated value of currency in respect of the consignments stored in the warehouse prior to the coming into force of the Ordinance.
Dismissing the appeal, this Court held that the customs authorities were right intaking the view that the rate of duty applicable to the imported goods should be determined according to the law prevalent on the date they were actually removed from the warehouse.
Section 15(1)(b) clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actually removed from the ware house.
Under section 49 and importer may apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance and he may be permitted to do so; and section 68 provides that an importer of any warehoused goods may clear them if the import duty leviable on them has been paid.
In that case, it was found that as the goods were removed from the warehouse after the amending Ordinance had come 627 into force, the customs authorities and the Central Govern ment were right in taking the view that the rate of duty applicable to the imported goods should be determined ac cording the law prevalent on the date these were actually removed from the warehouse.
Mr. Garg, appearing for the petitioner, on the other hand contended before us that his client was willing indeed to pay the duty when the goods crossed the customs barrier and were in the process of being cleared, but could not be cleared because of the prohibitory orders of the Income Tax Department under section 102 of the .
In that light, it was not possible, Mr. Garg contended, for the Income Tax Department to claim enhanced duty due to facts which were not for the fault of the petitioner.
In view of the language used in section 15(1)(b) of the Act, it is difficult to accept this contention specially in the light of the expression used 'actually removed '.
It must be ac cepted that the prohibitory orders, arbitrary or not, would postpone the date of clearance and as such would postpone the determination of the duty.
Therefore, it is difficult to accept Mr. Garg 's contention.
However, there is a far more serious objection in enter taining this application under Article 32 of the Constitu tion.
Article 32 of the Constitution guarantees the right to move the Supreme Court for enforcement of fundamental rights.
If there is breach of the fundamental rights, the petitioner can certainly have recourse to Article 32 of the Constitution provided other conditions are satisfied.
But we must, in all such cases, be circumventive of what is the right claimed.
In this case, the petitioner as such has no fundamental fight to clear the goods imported except in due process of law.
Now in the facts of this case, such clear ance can only be made on payment of duty as enjoined by the .
In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the .
The petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law.
There is procedure provided by law for determination of the payment of customs duty.
The reve nue has proceeded on that basis.
The petitioner contends that duty at a particular rate prevalent at a particular date was not payable.
The petitioner cannot seek to remove the goods without payment at that rate or without having the matter determined by the procedure envisaged and enjoined by the law for that determination.
The petitioner without seeking to take any relief within the procedure envisaged under the Act had moved this Court for breach of fundamental right.
This is not permissible and should never be 628 entertained.
In a matter of this nature where liability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute for which elaborate procedure is pre scribed, it cannot conceivably be contended that enforcing of those provisions of the Act would breach fundamental right which entitle a citizen to seek recourse to Article 32 of the Constitution.
We are, therefore, clearly of the opinion that relief under Article 32 of the Constitution is wholly inappropriate in the facts and the circumstances of this case.
It has further to be reiterated that for enforce ment of fundamental right which is dependent upon adjudica tion or determination of questions of law as well as ques tion of fact without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of the fundamental right.
Whenever a person complains and claims that there is a violation of law, it does not automatically involve breach of fundamental right for the enforcement of which alone Article 32 of the Constitution is attracted.
It appears that the facts of this nature require elaborate procedural inves tigation and this Court should not be moved and should not entertain on these averments of the Article 32 of the Con stitution.
This position is clearly well settled, but some times we are persuaded to accept that an allegation of breach of law is an action in breach of fundamental right.
In this connection, reference may be made to the decision of this Court in Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, where this Court observed at p. 842 of the report as under: "In my opinion, the correct answer to the two questions which have been referred to this larger Bench must be in the negative.
An order of assessment made by an authority under a taxing statute which is intra vires and in the undoubted exercise of its jurisdiction cannot be challenged on the sole ground that it is ,passed ,on a misconstruction of a provision of the Act or of a notification issued thereunder.
Nor can the validity of such an order be questioned in a petition under article 32 of the Constitution.
The proper remedy for correcting an error in such an order is to pro ceed by way of appeal, or if the error is an error apparent on the face of the record, they by an application under article 226 of the Constitution.
It is necessary to observe here that article 32 of the Constitution does not give this Court an appellate jurisdiction Such.
as is given by articles 132 to 136.
Article 32 guarantees the right to a constitutional remedy and relates only to the enforcement of the rights conferred 629 by Part 111 of the Constitution.
Unless a question of the enforcement of a fundamental right arises, article 32 does not apply.
There can be no question of the enforcement of a fundamental fight if the order challenged is a valid and legal order, in spite of the allegation that it is errone ous.
I have, therefore, come to the conclusion that no question of the enforcement of a fundamental fight arises in this case and the writ petition is not maintainable.
" In the aforesaid view of the matter, we are clearly of the opinion that Article 32 of the Constitution should not have been resorted to and this application does not lie under Article 32 of the Constitution.
However, it appears that this Court has passed an order on 22nd April, as indicated hereinbefore.
It is stated that the goods have been cleared pursuant to that order.
The revenue would be at liberty to take appropriate action in accordance with law for the recovery of the dues.
This writ petition is accordingly disposed of.
N.P.V. Petition disposed of.
| IN-Abs | The petitioner Corporation imported certain goods.
The goods were bounded.
and could not be got released due to the ban imposed by the Income Tax authorities, under Section 132(1) of the Income Tax Act.
Subsequently after the ban was lifted, the petitioner approached the authorities for clearance of the goods, but the customs authorities demanded payment of customs duty at the enhanced rate which was prevailing at the time of clearance.
Hence the petition er filed a Writ Petition before this Court challenging the demand as arbitrary.
illegal and unconstitutional.
It was contended that though the petitioner was willing to clear the goods on payment of the then prevailing custom duty, the goods could not be cleared due to circumstances beyond its control, by the order of the Income Tax authori ties and, therefore, the authorities could not claim en hanced duty.
On behalf of the respondents it was contended that in view of Section 15(1)(b) of the , especially the expression "actually removed" used therein, the liability of the petitioner to pay the duty was the duty at the time of clearance of the goods.
Disposing of the Writ Petition, this Court, 622 HELD: 1.
Section 15(1)(b) of the clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actu ally removed from the warehouse.
Therefore, in view of the language used in Section 15(1)(b) of the Act, specially in the light of the expression 'actually removed ' the petition er was liable to pay excise duty at enhanced rate prevailing on the date the goods were cleared.
The prohibitory orders, arbitrary or not, would postpone the date of clearance, and as such would postpone the determination of the duty.
[626F; 627C] Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142, relied on.
2.1 Recourse to article 32 of the Constitution can be had if there is a breach of the fundamental rights, provided the other conditions are satisfied.
BUt in a matter where li ability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute, for which elaborate procedure is prescribed, enforcing of those provisions of the Act would not breach fundamental right and, without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of fundamental right.
Whenever a person complains and claims that there is a violation of law, it does not involve breach of fundamental right for the en forcement of which alone article 32 of the Constitution is attracted.
[627E; 628A D] Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, relied on.
2.2 In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the .
[627F] In the instant case, the petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law.
There is procedure pro vided by law for determination of the payment of customs duty.
The revenue has proceeded on that basis.
The petition er cannot seek to remove the goods without payment at that rate or without having the matter determined by the proce dure envisaged and enjoined by the law for that determina tion.
The petitioner, without seeking to take any relief within the procedure envisaged under the Act, had moved this Court for breach of funda 623 mental right.
This is not permissible and should never be entertained.
[627F H] Relief under Article 32 of the Constitution is there fore, wholly inappropriate in the facts and circumstances of the instant case.
[628B]
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