vil Appeal Nos
4068 70 of 1989 etc
9 From the Judgment and Order dated 26888 of the Cen tral Administrative Tribunal Bangalore in Appln
99 1 993 of 1988
For the appearing parties G Ramaswamy Additional Solicitor General Anil Dev Singh 277 UR Lalit CV Subba Rao TC Sharma Ms A Subhashini CS Vaidyanathan SR Setia SR Bhat Mrs VD Khanna R Ramachandran NB Bhat Altar Ahmed and SK Bhattacha rya
The Judgment of the Court was delivered by DUTT J
These special leave petitions have been heard at length and elaborate submissions have been made on behalf of the parties at the preliminary hearing and accordingly we grant special leave in all these matter and proceed to dispose of the same on merits
These appeals have been preferred by the Union of India and some erstwhile Emergency Commissioned Officers for short ECOs  and Short Service Commissioned Officers for short SSCOs  and directed either against the judgment of the learned Single Judge of the Calcutta High Court or against the judgment of the Central Administrative Tribunal Bangalore
The Tribunal has struck down the impugned rules namely rule 32d of the Indian Forest Service Regula tion of Seniority Rules 1968 hereinafter referred to as IFS Regulation of Seniority Rules 1968  and clauses c and d of sub rule 3 of rule 3 of the Indian Police Service Regulation of Seniority Rules 1954 hereinafter referred to as IPS Regulation of Seniority Rules 1954  as ultra vires Articles 14 and 16 of the Constitution of India and has directed the Government of India to assign fresh years of allotment to the ECOs and SSCOs who were some of the respondents before the Tribunal
Before the Calcutta High Court rule 32d of the IPS Regulation of Seniority Rules 1954 was involved and the High Court on a construction of that rule allowed the writ petition of the respondents and set aside the impugned order relating to the year of allotment of ECOs and SSCOs
The period between 111 1962 and 101
1968 is marked by three events namely Indo Chinese War followed by Indo Pakistan War and the proclamation of emergency
These ECOs and SSCOs voluntarily entered the Armed Forces of the Union of India at a time when the security of the nation was in peril due to external aggression
As they were engaged in defending the country by accepting the war service they did not get any opportunity to enter into civil services
The Central Government assured them that after the cessation of emergency they will be rehabilitated in civil life so that they might not 278 suffer on account of their rendering services to the nation
The grievance of the respondents who have been recruited to Indian Forest Service or the Indian Police Service from State Services is that although the ECOs or SSCOs have been recruited in the said All India Services after the respond ents yet their year of appointment has been fixed earlier than the year of allotment of the respondents
At this stage we may refer to the impugned rules
Rule 32d of the IFS Regulation of Seniority Rules 1986 provides as follows 32
The year of allotment of an officer appointed to the Service shall be a      b      c      d Where an officer is appointed to the Service in accordance with rule 7A of the Recruitment Rules deemed to be the year in which he would have been so appointed at his first or second attempt after the date of joining pre commission training or the date of his commission where there was only post commission training according as he qualified for appointment to the Service in his first or second chance as the case may be having been eligible under regulation 4 of the Indian Forest Service Appointment by Competitive Examination Regulations 1967
Explanation
If an officer who qualified himself for appointment to the Service in a particular year could not be so appointed in that year on account of non availability of a vacancy and is actually appointed in the next year then his year of allotment would be depressed by one year
He shall be placed above all the officers re cruited under Rule 7A of the Recruitment Rules and who have the same year of allotment
 Rule 32d refers to rule 7A of the Recruitment Rules which provides inter alia that till January 28 1974 20 per cent of the per 279 manent vacancies in the Indian Foreign Service to be filled by direct recruitment in any year shall be reserved for being filled by ECOs and SSCOs of the Armed Forces of the Union of India who were commissioned after November 1 1962 and who have been released from the Armed Forces after a spell of service
Clauses c and d of sub rule 3 of rule 3 of IPS Regulation of Seniority Rules 1954 provides as follows 33a      d      c The year of allotment of an offi cer appointed to the Service in accordance with rule 7A of the Indian Police Service Recruitment Rules 1954 shall be deemed to be the year in which he would have been so appointed at his first or second attempt after the date of joining pre commission training or the date of his commission where there was only post commission training according as he qualified for appointment to the Service in his first or second chance as the case may be having been eligible under rule 4 of the Indian Police Service Appointment by Competi tive Examination Regulations 1955
Explanation
If an officer who qualified himself for appointment to the Service in a particular year could not be so appointed in that year on account of non availability of a vacancy and is actually appointed in the next year then his year of allotment would be depressed by one year
He shall be placed above all the officers recruited under Rule 7A of the Recruitment Rules and who have the same year of allotment
d The year of allotment of an offi cer appointed to the Service in accordance with rule 7A of the Indian Police Service Recruitment Rules 1954 having been eligi ble under the second proviso to sub regulation iii of Regulation 4 ofthe Indian Police Service Emergency Commissioned and Short Service Commissioned Officers Appoint 280 ment by Competitive Examination Regulations 1971 shall be deemed to be the year in which he would have been so appointed at his first or second attempt after the date of joining pre commission training or the date of his Commission where there was only post comission training and also after the lapse of as many years as would have been necessary for him to complete his studies in the normal course for the award of the educational qualifica tions prescribed for direct recruitment to the Indian Police Service according as he quali fied for appointment to the Service in his first or second chance as the case may be Both the above rules namely IFS Regulation of Senior ity Rules 1968 and IPS Regulation of Seniority Rules 1954 have been framed under All India Services Act 1954 hereinafter referred to as the Act 
The Act before it was amended conferred power on the Central Government to make rules for the regulation of recruitment and the conditions of service of persons appointed to an All India Services
No power was however conferred by the Act on the Central Government to frame rules with retrospective effect
The impugned rules namely rule 32d of the IFS Regulation of Seniority Rules 1968 and clauses c and d of sub rule 3 of rule 3 of IPS Regulation of Seniority Rules 1954 are admittedly retrospective in operation
It is now a settled principle of law that if the statute under which a rule is framed does not confer on the authority concerned the power to make such a rule with retrospective effect the authority will have no power to frame any rule with retro spective effect
The impugned rules with which we are concerned have been made by the Central Government with retrospective effect although there was no such power conferred by the Act in that regard
The All India Services Amendment Act 1975 has been enacted by Parliament for the purpose of validating the impugned rules
By section 2 of the Amendment Act a new sub section 1 A has been inserted after sub section 1 of section 3 of the Act which has been referred to as the principal Act in the Amendment Act
Sub section 1 A pro vides as follows 1 A
The power to make rules conferred by this section shall include the power to give retrospective effect from a 281 date not earlier than the date of commencement of this Act to the rules or any of them but no retrospective effect shall be given to any rule so as to prejudicially affect the inter ests of any person to whom such rule may be applicable
 The provision for validation is contained in section 3 of the Amendment Act and it reads as follows 3
No rule made or purporting to have been made with retrospective effect under section 3 of the principal Act before the commencement of this Act shall be deemed to be invalid or ever to have been invalid merely on the ground that such rule was made with retrospective effect and accordingly every such rule and any action taken or thing done thereunder shall be as valid and effective as if the provisions of section 3 of the principal Act as amended by this Act were in force at all material times when such rule was made or action or thing was taken or done
 The ECOs and SSCOs who are some of the appellants after demobilisation of the military emergency service have been appointed in the Indian Police Service and the Indian Forest Service in 1969
In view of their past service in the army which they had voluntarily joined for the defence of the country during the period between 111
1962 and 101
1968 the impugned rules were framed providing for the year of allotment of such officers appointed in the Indian Police Service or in the Indian Forest Service with retrospective effect from the date they would have been appointed at their first or second attempt after the date of joining pre com mission training or the date of their commission where there was only post commission training
Thus even if an officer has been appointed in an All India Service in 1969 in a regular manner after being selected on the basis of the result of the competitive examination in 1969 his year of allotment will be one or two years after his joining the pre commission training in the army service
Suppose an officer after having been selected for the army service joined his pre commission training in 1963
In 1963 he was therefore eligible for taking a competitive examination for being recruited to an All India Service
If he was not successful he would get a second chance in the next year that is in 1964
If after his release from the army in 1968 he took the competitive examination and successfully competed in such examination and was selected for appoint ment in the first chance
according to the impugned rules his 282 year of all allotment would be 1963
If he was either not successful in his first attempt or did not avail himself of the same he would have another chance to compete in the examination for recruitment in an All India Service in the next year that is in 1969 and if he was successful and appointed his year of allotment would be 1964
In other words and impugned rules give weightage to ECOs and SSCOs of the past services rendered by them in the emergency army service
It has been already noticed that the Tribunal has struck down the impugned rules as ultra vires the provisions of Articles 14 and 16 of the Constitution
According to the Tribunal the impugned rules are discriminatory in nature without any reasonable justification therefore and thus offends against the provisions of Articles 14 and 16 of the Constitution
The same contention has been advanced on behalf of the respondents before us
It has not been disput ed before the Tribunal and also before us that the ECOs and SSCOs formed a definite class distinct from the respondents or other officers of Indian Forest Service and Indian Police Service
In other words it is the admitted position that the classification of ECOs and SSCOs is rounded on an intel ligible differentia which distinguishes them from the re spondents and other officers of Indian Police Service and Indian Forest Service
It has however been strenuously urged that the differentia on which the classification is rounded is lacking in rational relation to the object sought to be achieved by the impugned rules and as such it does not satisfy the test of reasonable classification as contem plated by Article 14 of the Constitution
This is also the view of the Tribunal
We are unable to accept the contention
The impugned rules have been framed with a view to giving weightage to the ECOs and SSCOs in recognition of their past services in the army during the period of emergency
We fail to under stand why the classification has no rational relation to the objects sought to be achieved by the impugned rules
The classification has been made only for the purpose of compen sating the ECOs and SSCOs for their lost opportunity because of their joining the army service and the impugned rules best subserve the purpose
Accordingly we do not think that there is any merit in the finding of the Tribunal and also in the contention of the respondents that the impugned rules are violative of the provisions of Articles 14 and 16 of the Constitution
Both the High Court and the Tribunal have taken the view that although section 3 of the All India Services Amend ment Act 1975 validates the impugned rules purporting to have been made with 283 retrospective effect yet the impugned rules are invalid inasmuch as they prejudicially affect the interests of the respondents
Much reliance has been placed by the respond ents on the provision of the new sub section I A of sec tion 31 of the Act as inserted by section 2 of the Amend ment Act 1975
Sub section 1 A provides inter alia that no retrospective effect shall be given to any rule so as to prejudicially affect the interests of any person to whom such rule may be applicable
The contention of the appel lants is that sub section 1 A is itself not retrospective in operation and as such has no application to the im pugned rules which are retrospective in operation that is before sub section 1 A was inserted in section 3
It is however difficult to accept the contention of the appellants that sub section i A is only prospective and does not apply to the impugned rules which are retro spective in operation
It has been already noticed that the impugned rules have been validated with retrospective effect by section 3 of the Amendment Act which in validating any rule made with retrospective effect under section 3 of the Act provides that no such rule shall be deemed to have been invalid or ever to have been invalid merely on the ground that such rule was made with retrospective effect and accordingly every such rule and any action taken or thing done thereunder shall be as valid and effective as if the provisions of section 3 of the Act principal Act as amended by the Amendment Act were in force at all material times when such rule was made or action or thing was taken or done
In view of section 3 it has to be deemed that provisions of Section 3 as amended by the Amendment Act were in force at all material times when such rule was made
In view of the provisions of section 3 of the Amendment Act sub section 1 A which has been inserted in section 3 of the Act by way of amendment must be deemed to be in force at the time the impugned rules were made
But the question is even though sub section 1 A is deemed to have been there at the time the impugned rules were framed with retro spective effect whether the impugned rules prejudicially affect the interests of the respondents
It is urged on behalf of the respondents that the im pugned rules take away the vested rights of the respondents and consequently prejudicially affect their interests
Accordingly it is submitted that the impugned rules are illegal and cannot operate retrospectively in the face of the provision of sub section 1 A
This contention does not at all impress us
The respondents have been given a partic ular seniority in accordance with the relevant rules
The seniority of the respondents is not taken away or interfered with by the impugned rules
The year of 284 allotment of the respondents remains the same and is not altered to their prejudice
The impugned rules only provide for giving weightage to the ECOs and SSCOs for their past services in the army during the emergency period and their year of allotment will be determined in accordance with the impugned rules
It is however complained that by giving the ECOs and SSCOs a year of allotment which is prior to the year of allotment of the respondents the respondents have become their juniors and their respondents chances of promotion are seriously affected
At this stage we may also notice the contention of Mr Raju Ramachandran learned Counsel appearing on behalf of some of the respondents
It is submitted by the learned Counsel that as the respondents have acquired a particular seniority section 3 of the Act as amended if read as suggested by the army officers would contravene the funda mental rights of the respondents
This extreme contention is not sustainable on the face of it for even assuming that the seniority of the respondents or their chances of promo tion are affected by the impugned rules surely it cannot be said that there has been a contravention of the fundamental rights of the respondents
Nobody has any fundamental right to a particular seniority or to any chance of promotion
It is not the case of respondents that because of the impugned rules their cases for promotion will not be taken into consideration by the authorities
The decision in A Janard hana vs Union of India  has no manner of application to the facts and circumstances of the instant cases
In that case this Court has laid down that it is open to the Government to retrospectively revise service rules it the same does not adversely affect vested rights
Further it has been observed as follows After the promotee is promoted continuously renders service and is neither found wanting nor inefficient and is discharging his duty to the satisfaction of all a fresh recruit from the market years after promotee was inducted in the service comes and challenges all the past recruitments made before he was born in service and some decisions especially the ratio in Jaisinghani s case as interpreted in two BS Gupta s cases gives him an advantage to the extent of the promotee being preceded in seniority by direct recruit who enters service long after the promotee was promoted
When the promotee was promoted and was render ing service the direct recruit may be a schoolian or college
going boy
He emerges from the education institu 285 tion appears at a competitive examination and starts challenging everything that had hap pened during the period when he has had noth ing to do with service
 We have already pointed out that the impugned rules do not affect the vested rights of the respondents adversely
In Janardhana s case this Court was dealing with the ques tion of seniority of promotees vis a vis fresh recruits from the market and observed that when the promotee was promoted and was rendering service the direct recruit might be a schoolian or college going boy
In the instant cases before us the dispute is not between promotees and direct re cruits the latter having no past services to their credit
The ECOs and SSCOs are not in the position of direct re cruits for they have a record of past services in the army which have been taken into consideration for fixing their year of allotment in accordance with the impugned rules
So Janardhana s case has no manner of application to the facts and circumstances of the instant case before us
It is not that for the first time by impugned rules the past services of the ECOs and the SSCOs have been taken into consideration for the purpose of giving them their year of allotment with retrospective effect that is to say on a date earlier than their actual appointment in the Indian Police Service or in the Indian Forest Service as pointed out by Mr G Ramaswamy learned Additional Solicitor Gener al appearing on behalf of the Government appellants
The learned Additional Solicitor General has drawn our attention to the notings in the Government files for the purpose of showing the Government policy to rehabilitate the ECOs and SSCOs in All India Services Central Services and State Services in order to ensure good response and to provide sufficient incentives for those who offered themselves for emergency commissions
These notings start from November 17 1962
It is not necessary for us to make a particular reference to the notings in the Government files
Suffice it to say that in view of the voluntary offer of services by the of youngmen our country to defend the country against foreign aggression the Government took a very sympathetic view and took steps to compensate them after their discharge from the Emergency Commission Service for the opportunity lost by them in joining the All India Services
One thing which is very significant to be mentioned here that although their past services were taken into consideration the Government did not relax the minimum qualifications required for the All India Services
These ECOs and SSCOs had to appear in the competitive tests held by the Union Public Service Commission and they were appointed only 286 after they become successful in such tests
In this connection we may refer to the Office Memoran dum dated January 29 1966 providing for the rehabilitation of the ECOs and SSCOs recruited since November 1 1962 after their release from the Armed Forces
The contents of the Memorandum are in the nature of executive instructions but such executive instructions were followed and were given effect
Paragraph 6 of the Memorandum which deals with seniority and pay reads as follows 6
Seniority and pay
Seniority and pay of those candi dates who are appointed against the reserved vacancies in the All India and Central Serv ices would be determined on the assumption that they entered servicepost at the first opportunity they had after joining for pre Commission training
The principles regarding fixation of pay and seniority laid down in this Ministry s Office Memorandum No F 351162 Ests
E dated the 6th August 1963 read with Office Memorandum of even number dated 15th February 1965 copy enclosed will apply mutatis mutandis to determine the pay and seniority of ex Emergency Commissioned OfficersShort Service Regular Commissioned Officers appointed against the reserved vacan cies
 Thus although the impugned rules were not in existence in 1966 the executive instructions as contained in the Office Memorandum conferred the same benefit as conferred by the impugned rules
In other words it is apparent that the executive instructions have now been adopted as rules framed under the Act
Even otherwise the Released Emergency Com missioned Officers and Short Service Commissioned Officers Reservation of Vacancies Rules 1967 framed by the Presi dent of India under the proviso to Article 309 and clause 5 of Article 148 of the Constitution of India contained similar provisions as to the seniority and pay of ECOs and SSCOs
Indeed the provision of rule 6 relating to seniority of pay of ECOs and SSCOs is somewhat similar to paragraph 6 of the Office Memorandum
The date of commencement of the said rules is significant to be noticed
Under subrule 2 of rule 1 the said rules shall be deemed to have come into force with effect from January 29 1966 which is the date of the said Office Memorandum
It is therefore manifestly clear that the executive instructions as contained in the Office Memorandum have been 287 incorporated in the form of rules framed under proviso to Article 309 and clause 5 of Article 148 of the Constitu tion of India
It is however submitted on behalf of the respondents that in view of the All India Services Conditions of Serv ice Residuary Matters Rules 1960 for short Residuary Rules  the said rules framed under the proviso to Article 309 and clause 5 of Article 148 of the Constitution of India will not apply to persons appointed to an All India Service
The contention in our opinion is not correct for clause a of rule 2 of the Residuary Rules provides that the Central Government may make regulations to regulate any matters relating to conditions of service of persons ap pointed to an All India Service for which there is no provi sion in the rules made or deemed to have been made under the Act and until such regulations are made such matters shall be regulated in the case of persons serving in connection with the affairs of the Union of India by the rules regu lations and orders applicable to officers of the Central Services Class I
Admittedly no rules under the Act were then framed in regard to the seniority of ECOs and SSCOs andor granting them weightage for their past war service and accordingly the rules framed under the proviso to Article 309 and clause 5 of Article 148 of the Constitu tion of India applicable to Class I Officers of the Central Government were also applicable to ECOs and SSCOs relating to their seniority in the All India Services
It is urged on behalf of the appellants that while the benefit of weightage is being conferred on the discharged ECOs and SSCOs way back from 1966 the writ petitions of the respondents should have been dismissed on the ground of inordinate delay and laches
In support of this contention some decisions have been cited by the appellants
Similarly the respondents have also placed reliance on some other decisions of this Court
We do not think that after the writ petitions were entertained by the Calcutta High Court and by the Tribunal and disposed of on merits it will be proper at this stage to dismiss the writ petitions on the ground of inordinate delay or laches
At the same time it should be borne in mind that when a particular rule conferring bene fits on a particular group of Government servants in recog nition of their past services in the army has been in operation for over twenty years this Court will be very slow to interfere with the rule and deprive such group of Government servants of the benefits so conferred on them
This however does not mean that this Court will shut its eyes even though such rules are illegal and are violative of the provisions of Articles 14 and 16 of the Constitution
He have however held that the impugned rules do not offend against or infringe the provi 288 sions of Articles 14 and 16 of the Constitution
Now we may consider the contention of Mr Lalit learned Counsel appearing on behalf of the respondents in the appeal arising out of SLP C No 10105 of 1988
These respondents were in the State Forest Service before 1966 and subsequently absorbed in the Indian Forest Serv ice under the Central Government
It is not disputed that unlike Indian Police Service the Indian Forest Service was constituted much later in the year 1966
It is also not disputed that the respondents were the first batch of incum bents or entrants in the Indian Forest Service
It is sub mitted onbehalf of the respondents that the Indian Forest Service was constituted with the respondents as the initial recruits
We may now refer to some of the provisions of Indian Forest Service Recruitment Rules 1966 hereinafter re ferred to as IFS Recruitment Rules 
Rule 3 of the IFS Recruitment Rules relates to the constitution of the Serv ice
It provides as follows 3
Constitution of the Service
The Service shall consist of the following persons name ly a Members of the State Forest Service recruited to the service at its ini tial constitution in accordance with the provisions of sub rule 1 of rule 4 and b Persons recruited to the service in accordance with the provisions of sub rules 2 to 4 of Rule 4 So under rule 3 the Service consists of members of the State Forest Service recruited to the Service at its initial constitution and persons recruited in accordance with the provisions of sub rules 2 to 4 of rule 4
The next relevant provision is rule 4
Sub rules 1 and 2 of rule 4 which are relevant for our purpose are extracted below 4
Method of recruitment to the Service 1 As soon as may be after the commencement of these rules the Central Government may re cruit to the Service any person from amongst the members of the State Forest Service ad judged suitable in accordance with such regu lations as the Central Government may make in consultation with the State Governments and the commission 289 Provided that no member holding a post referred to in sub clause ii of clause g or rule 2 and so recruited shall at the time of recruitment be allocated to any State cadre other than the cadre of a Union Territo ry
2 After the recruitment under sub rule 1 subsequent recruitment to the Serv ice shall be by the following methods name ly a by s competitive examination aa by selection of persons from amongst the Emergency Commissioned Officers and Short Service Commissioned Officers of the Armed Forces of the Union who were commissioned after the 1st November 1962 but before the 10th January 1968 and who are released in the manner specified in sub rule 1 of rule 7A b by promotion of substantive members of the State Forest Service
 It appears from sub rules 1 and 2 that there are four methods of recruitment
The first method is as con tained in rule 41 that is the initial recruits from the State Forest Service
The other three methods of recruitment have been provided for in sub rule 2 including the re cruitment of ECOs and SSCOs who were commissioned during the period of emergency and released in the manner specified in sub rule 1 of rule 7A
It is  however clear that the recruits under sub rule 2 including the ECOs and SSCOs are recruited after the initial recruits under rule 41
Anoth er thing to be noticed is that the first examination for recruitment in the Indian Forest Service was held by the Union Public Service Commission in 1967
It is strenuously urged by Mr Lalit that as the re spondents were the initial recruit or in other words the Indian Forest Service having been constituted with them no person recruited under rule 42 of the IFS Recruitment Rules can be given seniority over the respondents who are the initial recruits
As the Indian Forest Service itself was constituted in 1966 there is no question of giving seniority to any recruits beyond 1966
It is urged by the learned Counsel that the first 1967 after the constitution of their service there is also no question of lost opportu nity so far as the ECOs and SSCOs are concerned
It is submit 290 ted that if such examinations had started to be held from 1962 then it could be said that the ECOs and SSCOs had lost the opportunity of competing in such examinations in view of their joining the army
Accordingly it is submitted that so far as the Indian Forest Service is concerned the consider ation for giving weightage to the ECOs and SSCOs on the basis of their past services in the army does not apply
Attractive though the contentions are we are unable to accept the same
It is true that the respondents were the initial recruits when the Indian Forest Service was consti tuted in 1966 and that the other recruits including the ECOs and SSCOs entered the service after the respondents but this fact has very little bearing on the question of fixing the year of allotment having regard to the past services of such recruits
The respondents themselves were appointed to the Indian Forest Service in 1966 but they have been given the year of allotment as 1964 12  that is to say long before the Service came into existence
If it is possible in the case of the respondents we fail to understand why it is not possible in the case of other recruits including the ECOs and SSCOs
The grievance of the respondents is that the ECOs and SSCOs having been appointed subsequent to their appointment or in other words they having entered service after the respondents they could not be given a year of allotment prior to that allotted to the respondents
This contention is again misconceived
So far as the respondents are concerned the year of allotment has been granted to them on the basis of certain principles as contained in rule 3 of IFS Regulation of Seniority Rules 1968
The ECOs and SSCOs are however governed by the impugned rules and their year of allotment has been fixed as 1964  which is prior to the year of allotment of the respondents and accordingly the ECOs and SSCOs are senior to the respond ents in the Indian ForeSt Service
In the Indian Police Service also the year of allotment of the ECOs and SSCOs is prior to that of those respondents who are in that Service
We do not think that any invidious discrimination has been made between the ECOs and SSCOs on the one hand and the respondents on the other both in regard to Indian Forest Service and Indian Police Service as contended on behalf of the respondents
As soon as it is found that the ECOs and SSCOs have been classified into a distinct and separate class and that such classification is reasonable no objec tion can be taken to the year of allotment given to them in accordance with the impugned rules
After giving our anxious consideration to the respective contentions of the parties and after considering the different rules and regulations and also the fact that the ECOs and SSCOs had 291 voluntarily offered their services for the defence of the country during the period of emergency disagreeing with the High Court and the Tribunal we are of the view that no illegality has been committed by the Government in framing the impugned rules with retrospective effect
We hold that the impugned rules are quite legal and valid
For the reasons aforesaid the impugned judgments of the High Court and of the Tribunal are set aside and all these appeals are allowed
There will however be no order as to costs in any of these appeals
RN J
Appeals allowed


Summary:
The appellant company was engaged in the manufacture and sale of a malted milk product marketed under the brand name Horlicks
The appellant brought the product within the octroi limits of Bangalore in bulk containers rebottled the same in small bottles and exported the major portion of the rebottled product beyond the octroi limits of Bangalore
The appellants made representation protesting against the levy of octroi on Horlicks in respect of the quantity of the goods which was exported outside the municipal limits after being rebottled and sought refund of the octroi duty on the ground that there was no use or consumption or sale of the said milkfood within the municipal limits and that the imposition of octroi was illegal and unwarranted
The re spondent Corporation rejected the claim
Thereupon the appellant filed a writ petition in the High Court challeng ing the levyretention of the octroi duty on Horlicks ex ported out of the municipal limits
The petition was resisted by the Corporation on two grounds namely i the transferring the Horlicks imported in bulk into bottles amounted to use of the Horlicks within the city and ii the octroi collected was in accordance with law and unless the procedure prescribed under rules 24 and 25 of Bye law 45 framed by the Municipal Corporation under the City of Bangalore Municipal Corporation Act 1949 was followed no obligation or duty was cast on the part of the Corporation to refund any part of the octroi collected
The learned Single Judge allowed the writ petition and held that when the Horlicks powder was transferred into bottles of different sizes 354 the appellant did not use Horlicks within the city of Banga lore
In the appeal the Division Bench agreed with the learned Single Judge on the first point
On the second point however the Division Bench rejected the contention of the appellant that opening or breaking open the drums and putting the powder in the bottles amounted to breaking bulk and as such there was no scope of applying for refund under rule 24 which provided for refund in the case of articles on which octroi duty had been paid and which were subsequently exported beyond the octroi limits without breaking bulk
According to the Division Bench no importance could be attached to the expression without breaking bulk  and the appellant not having applied in accordance with rules 24 and 25 no amount could be refunded
Before this Court the Corporation sought to raise an additional plea that where refund was due in respect of the duties like this the amount could not be refunded because there was possibility of undue enrichment of the claimant
Allowing the appeal this Court HELD 1 Octroi in this case is a duty on the coming in of the raw materials which is payable by the producer or the manufacturer
It is not the duty on going out of the fin ished products in respect of which the duty might have been charged or added to the costs passed on to the consumers
In such a situation no question of undue enrichment  can possibly arise
362G 2 There is no dispute that the Horlicks powder was brought in bulk in drums
After being imported the entirety of the Horlicks powder had not been sold
A part of the powder has been put in the bottles and exported outside the city of Bangalore
361E 3 Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits
364F 4 Indubitably amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits
Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale
364C D 5 In this case putting the powder from the drums to the bottles 355 for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks powder at tracting the levy of octroi
Such amounts therefore cannot be retained by the respondent corporation
362D E CWP No 19873 of 1977 High Court of Punjab Burmah Shell Oil Storage  Distributing Co of India Ltd vs Bel gaum Borough Municipality 1963 2 Supp
SCR 216 referred to
6 Without breaking bulk is not an expression of art nor is it an expression defined in the Act or the rules
It has therefore to be construed in its literal and ordinary sense to the extent possible and construed as it is trans ferring the product from the drums by breaking seal of the drums to bottles cannot be said to be without breaking bulk
Certainly the bulk was broken in the procedure fol lowed
361H 362A E 7 Rule 24 does not apply
In that view rules 25 and 26 have no scope of application
364C Kirpal Singh Duggal vs Municipal Board Ghaziabad  referred to
8 Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution
Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits
So these amounts become collection without the authority of law
The respondent is a statutory authority in the present case
It has no right to retain the amount so far and so much
These are refundable within the period of limitation
364E F