vil Appeal Nos 837 and 838 of 1989
From the Judgment and Order dated 1291988 of the High Court of Punjab and Haryana in CWP Nos 6871 and 6485 of 1988 respectively
Kapil Sibal Rajiv Dhawan and Ms Kamini Jaiswal for the Appellants
PP Rao RK Gupta Janendra Lal Ms Purnima Bhat and EC Agarwala for the Respondents
The Judgment of the Court was delivered by DUTT J
Special leave is granted in both these mat ters
Heard learned Counsel for the parties
These two appeals preferred by the appellants Deepak Sibal and Miss Ritu Khanna are directed against the common judgment of the Punjab  Haryana High Court whereby the High Court dismissed the two writ petitions filed by the appel lants and also some other writ 696 petitions challenging the constitutional validity of the rule for admission in the evening classes of the Three Years LLB Degree Course conducted by the Department of Laws of the Punjab University
The impugned rule that was published in the prospectus for the year 1988 89 relating to admission to 150 seats in the evening classes in the Three Year LLB Degree Course is extracted as follows Admission to evening classes is open only to regular employees of GovernmentSemi Govern ment institutions affiliated collegesStatu tory Corporations and Government Companies
A candidate applying for admission to the evening classes should attach No ObjectionPermission letter from his present employer with his application for admission
 It is not disputed that there are 150 seats in the morning classes and another 150 seats in the evening class es
In both the morning and evening classes reservation has been made for scheduled castes scheduled tribes backward classes physically handicapped persons outstanding and defence personnel
In the morning classes out of 150 seats 64 seats are reserved for scheduled castes scheduled tribes backward classes etc
and the remaining 86 seats are allotted to general students selected on merit basis
Simi larly in the evening classes the remaining 86 seats are also reserved for regular employees of GovernmentSemi Government institutions etc
 as mentioned in the impugned rule for admission
The appellant Deepak Sibal passed the Bachelor of Commerce Examination from the University of Punjab in June 1981 securing 615 per cent marks in the aggregate
On June 1 1988 he was appointed to the post of Accountant in Agro Chem Punjab Ltd with effect from June 2 1988 on probation for a period of six months
Agro Chem Punjab Ltd is stated to be a joint venture with Punjab Agro Corporation Ltd Chandigarh an Undertaking of the Punjab Government
On July 18 1988 the appellant Deepak Sibal applied for admission in the evening classes of the Punjab Universi ty for the Three Year LLB Degree Course with a No Objec tion Certificate  from his employer dated July 18 1988
He was granted an interview sometime in the first week of August 1988 but he was not selected
On enquiry he came to know that although his position was 29 in the merit list he was declared ineligible because he was an employee of a 697 Public Limited Company and did not fall within the exclusive categories as mentioned in the impugned rule to which admission in the evening classes was restricted
The other appellant namely Miss Ritu Khanna passed the Bachelor of Arts Examination from the Punjab University securing 4 18 marks out of 650 marks
She was temporarily appointed to the post of Helper in the office of the Direc tor Water Resources Punjab
She also applied for admission in the evening classes of the Three Year LLB Degree Course of the University with all requisite certificates on July 18 1988
She was granted an interview on July 30 1988 and although her position in the merit list was 19 she was not selected for admission on the ground that she was only a temporary employee
Both the appellants being aggrieved by the refusal of the University to admit them in the evening classes of the Three Year LLB Degree Course filed two separate writ petitions in the Punjab  Haryana High Court challenging inter alia the constitutional validity of the impugned rule
Five other writ petitions were also filed by the candidates who were refused admission in the evening classes in view of the impugned rule
At the hearing of the writ petitions before the High Court it was contended on behalf of the petitioners including the appellants that the im pugned rule was violative of Article 14 of the Constitution
The High Court overruled the contention and as stated already dismissed the writ petitions
Hence these two appeals by the two appellants
It is now well settled that Article 14 forbids class legislation but does not forbid reasonable classification
Whether a classification is a permissible classification under Article 14 or not two conditions must be satisfied namely 1 that the classification must be rounded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and 2 that the differentia must have a rational nexus to the object sought to be achieved by the statute in question
By the impugned rule a classification has been made for the purpose of admission to the evening classes
The ques tion is whether the classification is a reasonable classifi cation within the meaning of Article 14 of the Constitution
In order to consider the question as to the reasonableness of the classification it is necessary to take into account the objective for such classification
It has been averred in the written statement of Dr Balram Kumar Gupta Chair man Depart 698 ment of Laws Punjab University the respondent No 2 filed in the High Court that the object of starting evening classes was to provide education to bona fide employees who could not attend the morning classes on account of their employment
The object therefore was to accommodate bona fide employees in the evening classes as they were unable to attend the morning classes on account of their employ ment
Admission to evening classes is not open to the em ployees in general including private sector employees but it is restricted to regular employees of GovernmentSemi Government institutions etc
 as mentioned in the impugned rule
In other words the employees of GovernmentSemi Government institutions etc have been grouped together as a class to the exclusion of employees of private establish ments
It appears that in or about the year 1986 admission to evening classes was open to those who were in bona fide employment including self employed persons
In supersession of that rule the impugned rule was flamed excluding private sector employees and self employed persons
In the counter affidavit filed in this Court on behalf of the respondents by the Registrar of the Punjab University an explanation has been given why the University flamed the impugned rule restricting the admission in the evening classes open to GovernmentSemiGovernment institutions etc
The explanation as given in the counteraffidavit is extracted below It is submitted that since the morning class es are open to all the merit is much higher whereas since the admission to the evening classes is only for regular employees of GovernmentSemi Government etc
the merit goes lower
It is in this view of the matter that in the past also the Department of Law found that various certificates by employees were found to be incorrect and obtained by appli cants only with a view to get admission to the evening classes and thereafter applied for transfer to the morning classes
On account of the past experience it was felt that the admission to the Law Courses in the morning be kept open to all persons whether employed or unemployed but the admission to the evening classes be restricted to only those who will be genuine and regular employee
Since the GovernmentSemi Government and similar other institutions as mentioned in the prospectus are actually involved in lot of litigation it was felt that imparting legal education to the employees of such institutions would be in public 699 interest
It is submitted that it is in view of this practice of issuing of certificates by private employers in the past that the Depart ment of Law was compelled to restrict the admission of students of evening classes as has been done
Thus the respondents have sought to justify the exclu sion of private employees restricting admission to evening classes only to the GovernmentSemi Government and similar other institutions principally on two grounds namely 1 production of bogus certificates of employment from private employers and 2 imparting of legal education to the employees of the GovernmentSemi Government and other insti tutions as mentioned in the impugned rule in public inter est
Besides the above two grounds Mr PP Rao learned Counsel appearing on behalf of the respondent has added two more grounds namely 1 a candidate should have an assured tenure of employment likely to continue for three years and 2 as far as possible there should be no possibility of wastage of a seat
It is submitted that employees of only GovernmentSemi Government institutions etc
have an assured tenure of employment and if the admission in the evening classes is restricted to such employees there would be no possibility of any wastage of a seat and the University will not have to engage itself in finding out whether or not a certificate produced by an employee of a private establish ment is a bogus certificate and whether such employee has an assured tenure of employment likely to continue for three years
In upholding the validity of the impugned rule it has been observed by the High Court that the Government employees have protection of Article 311 of the Constitu tion which non Government employees do not have and that employees of SemiGovernment institutions are also on the same footing
It is apparent that in framing the impugned rule the respondents have deviated from its objective for the start ing of evening classes
The objective was to accommodate in the evening classes employees in general including private employees who were unable to attend morning classes because of their employment
In this backdrop of facts we are to consider the reasonableness of the classification as contem plated by the provision of Article 14 of the Constitution
It is difficult to accept the contention that the Gov ernment employees or the employees of Semi Government and other institutions as mentioned in the impugned rule stand on a different footing from the employees of private con cerns in so far as the question of admission to evening classes is concerned
It is true that the service condi 700 tions of employees of GovernmentSemi Government institu tions etc are different and they may have greater security of service but that hardly matters for the purpose of admission in the evening classes
The test is whether the employees of private establishments are equally in a disad vantageous position like the employees of GovernmentSemi Government institutions etc
in attending morning classes
There can be no doubt and it is not disputed that both of them stand on an equal footing and there is no difference between these two classes of employees in that regard
To exclude the employees of private establishments will not therefore satisfy the test of intelligible differentia that distinguishes the employees of GovernmentSemi Government institutions etc
grouped together from the employees of private establishments
It is true that a classification need not be made with mathematical precision but if there be little or no difference between the persons or things which have been grouped together and those left out of the group in that case the classification cannot be said to be a reasonable one
It is however submitted on behalf of the respondents that the employees of private establishments have been left out as it is difficult for the University to verify whether or not a particular candidate is really a regular employee and whether he will have a tenure for at least three years during which he will be prosecuting his studies in the Three Year LLB Degree Course
It is submitted that in making the classification the surrounding circumstances may be taken into account
In support  of that contention much reliance has been placed on the decision of this Court in Ram Krishna Dalmia vs Shri Justice SR Tendolkar  In that case it has been observed by Das CJ that while good faith and knowledge of the existing condi tions on the part of a legislature are to be presumed if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation
It follows from the observation that surrounding circumstances may be taken into consideration in support of the constitu tionality of a law which is otherwise hostile or discrimina tory in nature
But the circumstances must be such as to justify the discriminatory treatment or the classification subserving the object sought to be achieved
In the instant case the circumstances which have been relied on by the respondents namely the possibility of production by them of bogus 701 certificates and insecurity of their services are not in our opinion such circumstances as will justify the exclu sion of the employees of private establishments from the evening classes
We are also unable to accept the contention of the respondents that such exclusion of the employees of private establishments is justified on the ground of administrative convenience
The decision in Pannalal Binjraj vs Union of India  relied on by the respondents does not in our opinion lay down any such proposition of law
In that case the provision of section 57A of the Income Tax Act 1982 was inter alia challenged as ultra vires Article 14 of the Constitution inasmuch as it was discriminatory
Section 57A confers power on the Commissioner of Income Tax and the Central Board of Revenue inter alia to trans fer any case from one Income Tax Officer to another
It has been observed by this Court that in order to minimise the inconvenience of the assessee the authority concerned may transfer the case of such assessee to the Income Tax Officer who is nearest to the area where it would be convenient for the assessee to attend and if on account of administrative exigencies this is not possible and the assessee requests that the examination of accounts or evidence to be taken should be in a place convenient to him the Income Tax Officer comply with the request of the assessee by holding the hearing at the place requested
It is manifestly clear from the observation that the power of transfer is not exercised for administrative convenience but for the con venience of the assessee
In the instant case there is no question of any administrative inconvenience
The respond ents have not placed any material before the High Court or in this Court as to in how many cases they had come across such bogus certificates produced by private employees during the time the admission to evening classes was open also to private employees
It may be that there were one or two cases of production of bogus certificates but that cannot be a ground for the exclusion of all private employees from the benefit of getting legal education in the evening class es
In the circumstances we are not at all impressed with the contention that in order to avoid production of bogus certificates of employment from the private employers and having regard to the fact that employees of GovernmentSemi Government institutions etc have an assured tenure of employment likely to continue for three years the private employees were excluded for the purpose of admission to the evening classes
By the impugned rule admission to evening classes is restricted to regular employees of Gov ernmentSemi Government 702 institutions etc
There is no material to indicate that by the expression regular employees it is intended to include only those employees who will have an assured tenure of service for three years that is to say co extensive with the period of the Three Year LLB Degree Course
The ex pression regular employees in our opinion normally means bona fide employees
Such bona fide employees may be perma nent or temporary
All that the University can insist is that one should be a bona fide employee and if there be materials for show that a candidate for admission in the evening classes is a bona fide employee the University in our opinion cannot further insist on an assured tenure of service of such an employee for a period of three years
Be that as it may the reason for exclusion of private employ ees on the ground that there may not be an assured tenure of employment likely to continue for three years not only does not stand scrutiny but also is unfair and unjust and cannot form the basis of such an exclusion
In this connection we may also examine another ground restricting the admission in the evening classes to the employees of GovernmentSemi Government and other institu tions as mentioned in the impugned rule namely imparting of legal education to such employees
According to the respondents imparting of legal education to the employees of GovernmentSemi Government and other institutions as mentioned in the impugned rule would be in public interest
Indeed in the counter affidavit filed in this Court on behalf of the respondents by the Registrar of the Universi ty that is also the objective for framing the impugned rule
The counter affidavit is however silent as to why imparting of legal education to the employees of GovernmentSemi Government institutions etc
would be in public interest
It is not understandable why GovernmentSemiGovernment employees in general should be imparted legal education and what sort of public interest would be served by such legal education
It may be that certain sections of Government employees require legal education but surely Government employees in general do not require legal education
A similar rule which was framed by the Government of Kerala reserving 100 per cent seats to Government and quasi Government employees irrespective of their category came to be considered by the Kerala High Court in Jolly vs State of Kerala AIR 1974 Kerala 178
In that case it has been observed by the Kerala High Court that there may be some posts in Government service some even in public corpo rations which may require incumbents who may be able to perform their functions very efficiently with a legal back ground provided to 703 them but this cannot be said of all employees whether of the State Government or Central Government or of the public corporations or Government owned companies
In our opinion there is much force in the observation of the Kerala High Court
It cannot be laid down that only Government employees require legal education and not private employees
Certain private sector employees may require legal education in the interest of the establishments of which they are employees
It is difficult to understand the logic of the rule re stricting admission in the evening classes to employees of GovernmentSemi Government institutions etc
on the plea that such employees require legal education in public inter est
In considering the reasonableness of classification from the point of view of Article 14 of the Constitution the Court has also to consider the objective for such classifi cation
If the objective be illogical unfair and unjust necessarily the classification will have to be held as unreasonable
In the instant case the foregoing discussion reveals that the classification of the employees of Govern mentSemi Government institutions etc
by the impugned rule for the purpose of admission in the evening classes or Three Year LLB Degree Course to the exclusion of all other employees is unreasonable and unjust as it does not sub serve any fair and logical objective
it is however sub mitted that classification in favour of Government and public sector is a reasonable and valid classification
In support of that contention the decision in Hindustan Paper Corpn
Ltd vs Government of Kerala  has been relied on by the learned Counsel for the respondents
In that case it has been observed that as far as Government undertakings and companies are concerned it has to be held that they form a class by themselves since any project that they may make would in the end result in the benefit to the members of the general public
The Government and public sector employees cannot be equated with Government undertak ings and companies
The classification of Government under takings and companies may in certain circumstances be a reasonably classification satisfying the two tests mentioned above but it is difficult to hold that the employees of GovernmentSemi Government institutions etc as mentioned in the impugned rule would also constitute a valid classi fication for the purpose of admission to evening classes of Three Year LLB Degree Course
The contention in this regard in our opinion is without any substance
The next contention of the respondents is that the University being an educational institution is entitled to identify the sources for 704 admission to the evening classes and that has been done by the University by the impugned rule and that cannot be challenged as violative of Article 14 of the Constitution
In support of this contention much reliance has been placed on behalf of the respondents on a decision of this Court in Chitra Ghosh vs Union of India  relating to reservation of seats in a medical college
In upholding such reservation of seats it has been observed by this Court as follows It is the Central Government which bears the financial burden of running the medical col lege
It is for it to lay down the criteria for eligibility
From the very nature of things it is not possible to throw the admis sion open to students from all over the coun try
The Government cannot be denied right to decide from what sources the admission will be made
 This observation in Chitra Ghosh s case has also been relied on by the High Court
It has been contended by the learned Counsel for the respondents that the question of reasonable classification has nothing to do with the identi fication of sources for admission by an educational institu tion
We are unable to accept the contention
It is true that an educational institution is entitled to identify sources from which admission will be made to such institu tion but we do not find any difference between identifica tion of a source and a classification
If any source is specified such source must also satisfy the test of reason able classification and also that it has a rational nexus to the object sought to be achieved
Indeed in Chitra Ghosh s case it has also been observed that if the sources are properly classified whether on territorial geographical or other reasonable basis it is not for the courts to inter fere with the manner and method of making the classifica tion
It is very clear from this observation that the sources must be classified on reasonable basis that is to say it cannot be classified arbitrarily and unreasonably
The principle laid down in Chitra Ghosh s case has been reiterated by this Court in a later decision in DN Chan chala vs State of Mysore 1971 Supp
SCR 608
It has been very clearly laid down by this Court that Government col leges are entitled to lay down criteria for admission in its own colleges and to decide the sources from which admission would be made provided of course such classification is not arbitrary and has a rational basis and a reasonable connection with the object of the rules
Thus it is now well established that a classification by the identification of a source must not be arbitrary but should 705 be on a reasonable basis having a nexus with the object sought to be achieved by the rules for such admission
It follows from the above discussion that the impugned rule with which we are concerned having made a classifica tion which cannot be justified on any reasonable basis must be held to be discriminatory and violative of Article 14 of the Constitution
It is however submitted by Mr PP Rao that in case the Court holds against the constitutional validity of the impugned rule the entire rule may not be quashed but only such portion of it which is found to be discriminatory in nature and as such invalid
It is con tended that if the impugned rule had not restricted the admission to evening classes to the employees of GovernmentSemi Government institutions etc
but had provid ed for admission to regular employees including employees of private sectors the classification would have been a rea sonable one and having a rational nexus to the object sought to be achieved by the rule namely to accommodate the regular employees in the evening classes as they would be unable to attend the morning classes
Accordingly it is submitted that instead of striking down the whole of the impugned rule a full stop may be put after the words regular employees in the impugned rule and the remaining part of the rule after the said words can be struck down as discriminatory and violative of Article 14 of the Constitu tion
If that be done the rule will be read as Admission to evening classes is open only to regular employees
Prima facie it appears that this part which is sought to be retained is not severable from the remaining part of the rule
In RMD Chamarbaugwalla vs Union of India  it has been laid down by this Court that if the valid and invalid provisions are so inextricably mixed up that they cannot be separated from one another then the invalidity of the portion must result in the invalidity in its entirety
In the instant case the invalid portion is inextricably mixed up with the valid portion of the rule and accordingly the entire rule requires to be struck down
Our attention has however been drawn to a later decision of this Court in B Prabhakar Rao vs State of Andhra Pradesh 1985 Supp
SCC 432
In this case a Bench of Three Judges of this Court struck out the word not  from the provisions of clause 31 of Ordinance 24 of 1984 and section 41 of the Act 3 of 1984 so as to bring those provisions to conform to the requirements of Article 14 of the Constitution
We do not think we should try to bring the impugned rule in conformity with the provision of Article 14 of the constitution by putting a full stop after the words regular employees and striking down the remaining part of the impugned rule on the basis of the same principle as in Prabhakar Rao s case supra
For it has 706 been stated by Mr PP Rao learned Counsel for the re spondents that the respondents will frame a fresh rule for admission in the evening classes in conformity with and in the light of the decision of this Court in the instant case
But the next important question is even if the restric tion from the impugned rule is removed and the admission to evening classes is made open to regular or bona fide employ ees including Government and non Government employees whether reservation of cent percent seats in the evening classes for the employees will be justified and reasonable
It has been urged by Mr Kapil Sibal learned Counsel ap pearing on behalf of the appellants that reservation of 100 per cent seats in an educational institution for a specified class of persons is not at all permissible
The University being an autonomous body must be accessible and such access must be based on the principle that those who are the most meritorious must be preferred to those who are less meritorious
This principle is however subject to the provision of Article 15 of the Constitution of India which allows positive discrimination despite the merit principle on the basis that the equality clause will not be meaningful unless equal opportunity is given to such classes enumerated by Article 15 by giving them preferential treatment
Apart from the provision of Article 15 reservation may be made on the basis of doctrine of source only with a view to giving equal opportunity to some disadvantaged classes for their education but learned Counsel submits whether the reserva tion is made under Article 154 of the Constitution or otherwise on the theory of identification of source in any event such reservation cannot be 100 per cent at the cost of merit
In our opinion the above contention is not without force
In this connection we may refer to a decision of this Court in MR Balaji vs State of Mysore 1963 Supp
1 SCR 439
In that case the State of Mysore passed an order reserving 68 per cent of seats in the engineering and medi cal colleges and other technical institutions for the educa tionally and socially backward classes and Scheduled Castes and Scheduled Tribes and left only 32 per cent of seats for the merit pool
In striking down such reservation it was observed by this Court that it would be extremely unreasona ble to assume that in enacting Article 154 Parliament intended to provide that where the advancement of the back ward classes or the Scheduled Castes and Scheduled Tribes was concerned the fundamental rights of the citizens con stituting the rest of the society were to be completely and absolutely ignored
Speaking generally and in a broad way it was observed by this Court 707 that a special provision should be less than 50 per cent and the actual percentage must depend upon the relevant prevail ing circumstances in each case
Thus the provision of Article 154 does not contemplate to reserve all the seats or the majority of the seats in an educational institution at the cost of the rest of the society
The same principle should also apply with equal force in the case of cent percent reservation of seats in educational institutions for a certain class of persons to the exclusion of meritorious candidates
In Pradeep Jain vs Union of India   the question of reservation of seats in medical colleges for MBBS and postgraduate medical courses on the basis of domicile or residential qualification and institutional preference came to be considered by this Court
Bhagwati J as he then was speaking for the Court observed that the effort must always be to select the best and most meritori ous students for admission to technical institutions and medical colleges by providing equal opportunity to all citizens in the country and expressed an opinion that such reservation should in no event exceed the outer limit of 70 per cent which again needs to be reduced
In Pradeep Jain s case supra no reason appears to have been given for the observation relating to the reserva tion of 70 per cent of seats
In a later decision of this Court in Nidamarti Maheshkumar vs State of Maharashtra  a more or less similar question regarding regionwise reservation of seats in medical colleges for admission to MBBS Course also came to be considered and this time Bhagwati CJ speaking for the Court gave the reason for reservation of 70 per cent of seats
It was observed by the learned Chief Justice as follows In the first place it would cause a consider able amount of hardship and inconvenience if students residing in the region of a particu lar university are compelled to move to the region of another university for medical education which they might have to do if selection for admission to the medical col leges in the entire State were to be based on merit without any reservation or preference regionwise
It must be remembered that there would be a large number of students who if they do not get admission in the medical college near their residence and are assigned admission in a college in another region on the basis of relative merit may not be able to go to such other medical college on account of lack of resources and facilities and in the result they 708 would be effectively deprived of a real oppor tunity for pursuing the medical course even though on paper they would have got admission in the medical college
The opportunity for medical education provided to them would be illusory and not real because they would not be able to avail of it
Moreover some diffi culty would also arise in case of girls be cause if they are not able to get admission in the medical college near the place where they reside they might find it difficult to pursue medical education in a medical college situat ed in another region where hostel facilities may not be available and even if hostel facil ities are available the parents may hesitate to send them to the hostels
We are therefore of the view that reservation or preference in respect of a certain percentage of seats may legitimately be made in favour of those who have studied in schools or colleges within the region of a particular university in order to equalise opportunities for medical admission on a broader basis and to bring about real and not formal actual and not merely legal equality
The only question is as to what should be the extent of such reservation or preference
But on this question we derive considerable light from the decision in Pra deep Jain case 1984 3 SCC 654 where we held that reservation based on residence require ment or institutional preference should not exceed the other limit of 70 of the total number of open seats after taking into account other kinds of reservations validly made and that the remaining 30 of the open seats at the least should be made available for admis sion to students on all India basis irrespec tive of the State or the university from which they come
We would adopt the same principle in case of regionwise reservation or prefer ence and hold that not more than 70 of the total number of open seats in the medical college or colleges situate within the area of jurisdiction of a particular university after taking into account other kinds of reserva tions validly made shall be reserved for students who have studied in schools or col leges situate within the region and at least 30 of the open seats shall be available for admission to students who have studied in schools or colleges in other regions within the State
 In Pradeep Jain s case supra although it was stated that the outer limit of such reservation should not exceed 70 per cent of the 709 total number of open seats after taking into account other kinds of reservations validly made yet the Court expressed the view that this outer limit 70 per cent needs to be reduced
In the instant case the respondents have reserved 64 seats out of 150 seats for Scheduled Castes Scheduled Tribes backward classes etc
In our opinion out of the remaining 86 seats reservation of seats for regular or bona fide employees for admission to evening classes shall in no event exceed the limit of 50 per cent
The admission to the remaining 43 seats will be open to general candidates on merit basis
Thus while the respondents will be at liberty to reserve seats for regular or bona fide employees for admission to evening classes such reservation shall not exceed 50 per cent after deducting the number of seats reserved for Scheduled Castes Scheduled Tribes backward classes etc
The only question which remains to be considered is whether the appellants are entitled to any relief
It has been already noticed that the appellant Deppak Sibal was refused admission on the ground that he was an employee of a Public Limited Company which did not fall within the exclu sive categories as mentioned in the impugned rule to which admission to the evening classes was restricted
The appel lant was appointed on probation for a period of six months in Agro Chem Punjab Ltd with effect from June 2 1988
In proof of his appointment the appellant produced before the respondents a certificate of employment dated June 1 1988 issued by the Director of Agro Chem Punjab Ltd According to the respondents the certificate of employment produced by the appellant is not a genuine one inasmuch as the appellant was admitted to the first semester in the LLB Course of the Himachal Pradesh University at Simla on July 12 1988
We fail to understand how it can be said that the certifi cate of employment of the appellant in Agro Chem Punjab Ltd was not a genuine certificate simply because the appellant was admitted in the first semester of the LLB Course of the Himachal Pradesh University on July 12 1983
It is common knowledge that a candidate very often seeks admission in more than one college or university
The appellant also made an application for admission to the LLB Course in Himachal Pradesh University and he was admitted
It may be that after the respondents refused to admit the appellant in the evening classes the appellant had to join LLB Course of the Himachal Pradesh University after giving up his service in Agro Chem Punjab Ltd But when the appellant made the application for admission in the evening classes of the Law Department of the Punjab University he was in employment of Agro Chem Punjab Ltd We do not find any reason to doubt the genuineness of the certificate of em ployment in Agro Chem Punjab Ltd It is 710 the case of the appellant that to prosecute his studies in LLB Course in Himachal Pradesh University will put him to great hardship and inconvenience and it will be convenient for him to prosecute his studies in the University of Pun jab
Similarly the other appellant Miss Ritu Khanna was refused admission by the respondents on the ground that her appointment was purely temporary although her position was 19 in the merit list
It has been already found that the impugned rule is discriminatory and is violative of Article 14 of the Consti tution and as such invalid
The refusal by the respondents to admit the appellants in the evening classes of the Three Year LLB Degree Course was illegal
The appellants are therefore entitled to be admitted in the evening classes
It is however submitted on behalf of the respond ents that all the seats have been filled up and according ly the appellants cannot be admitted
As injustice was done to the appellants it will be no answer to say that all the seats are filled up
For the reasons aforesaid the judgment of the High Court is set aside and the impugned rule for admission in the evening classes is struck down as discriminatory and violative of Article 14 of the Constitution and accordingly invalid
We however make it clear that the striking down of the im pugned rule shall not in any manner whatsoever disturb the admissions already made for the session 1988 89
The re spondents are directed to admit both the appellants in the second semester which has commenced from January 1989 and shall allow them to complete the Three Year LLB Degree Course if not otherwise ineligible on the ground of unsat isfactory academic performance
As was directed by this Court in Ajay Hasia vs Khalid Mujib Sehravardi   the seats allocated to the appellants will be in addi tion to the normal intake of students in the college
Both the appeals are allowed
There will however be no order as to costs
NPV Appeal allowed


Summary:
The appellant assessee a body of individuals purchased two pieces of land in the year 1966
In 1970 it granted a mining lease to a private company an allied concern to extract clay for a period of ten years at a premium of Rs 5 lakhs in addition to payment of royalty
The Income tax Officer construed the lease deed as transferring a lease hold interest in the land in favour of the company and came to the conclusion that the transfer was assessable to capital gains tax
For the purpose of comput ing the extent of tax the Income tax Officer valued the lease hold interest at 58th of the sale price of the entire land computed the cost at acquisition of the lease hold interest say Rs 17040 and after deducting this sum from the sale consideration of Rs5 lakhs determined a sum of Rs482960 as long term capital gains
Being aggrieved by the aforesaid order of the Income tax Officer the assessee preferred an appeal to the Appellate Assistant Commissioner
The Appellate Assistant Commissioner confirmed the assessment but allowed deduction on the entire price of the land on the ground that the cost for the pur pose of ascertaining the capital gains would be the total price of the land paid by assessee
Not being satisfied the assessee preferred an appeal to the Income tax Appellate Tribunal which confirmed the order of the Appellate Commissioner and dismissed the appeal
The High Court on a reference held that the right conferred on 597 the lessee under the lease deed was also a capital asset in the hands of the assessee lessor and that there was a transfer of capital asset for a consideration of Rs5 lakhs
The High Court accordingly answered the reference against the assessee but granted a certificate under section 261 of the Act to appeal to this Court
On behalf of the assessee appellant it was contended 1 that conceptually there is no cost of acquisition  which is attributable to the right of limited enjoyment transferred by the grant of the lease and 2 relying on the decision of this Court in CI T vs BC Srinivas Sherry  SC it was submitted that since the cost of acquisition of the right granted under the lease cannot be determined the computation provisions under the Act cannot apply at all and as such section 45 of the Act is not attracted
On the question whether the grant of a mining lease for a period of ten years by the assessee can give rise to a capital gain taxable under section 45 of the Income tax Act 1961
Dismissing the appeal the Court HELD 1a Section 214 of the Income Tax Act defines capital asset as property of any kind held by an asses see
 What is parted with in the instant case under the terms of the deed is the right to exploit the land by ex tracting clay which right directly flows from the ownership of the land
The said right evaluated in terms of money forms part of the cost of acquiring the land
601C D 1b
If a transfer of a capital asset in section 45 of the Act includes grant of a mining lease for any period then obviously the cost of acquisition of the land would include the cost of acquisition of the mining right under the lease
The grant of a lease being a transfer of an asset there is no escape from the conclusion that there is a live nexus between the cost of acquisition of the land and the right granted under the lease
601G H 602A In the instant case the amount of Rs27260 paid by the assessee was not only the cost of acquiring the land but also acquiring a bundle of rights in the said land including the right to grant lease
602A 1c The apportionment of the cost of acquisition is a question of fact to be determined by the Income tax Officer in each case on the basis of evidence
The determination of the cost of the right to excavate 598 clay in the land in terms of money may be difficult but is nonetheless of a money value and the best valuation possible must be made
In the instant came the Income tax Officer worked out the cost of the lease held interest by adopting the 58th ratio though the Appellate Assistant Commissioner gave the benefit to the assessee of the full price of the land paid by him
602B D 1d Once the cost of lease hold right is determined than there is no difficulty in making apportionment
602E Gold Coast Selection Trust
Ltd vs Inspector of Taxes supp Traders and Mining Ltd vs
CIT  RK Palshikar HUF vs Commissioner of Income Tax MP Nagpur   referred to
2a The value of lease hold rights in the cost of acquisition of land being determinable the computation provision under the Act are applicable and section 45 would he attracted
602E F 2b The date of acquisition of the right to grant lease has to be the same as the date of acquiring the free hold rights
603B CIT vs BC Srinivas Shetty  distinguished